Ghana’s booming mining sector propels faster economic growth

Ghana’s economy grew at a faster pace in the first quarter, buoyed by its strongest industrial-sector performance in nearly two years as higher mining output helped cushion the impact of rising energy and food costs stemming from the war in Iran.

Gross domestic product grew an annual 6.4% in the three months through March, compared with 5.8% in the prior quarter, Government Statistician Alhassan Iddrisu told reporters in the capital, Accra, on Wednesday. The economy expanded 1.6% in the quarter, he said.

The data highlights the resilience of Africa’s largest gold miner, with higher metal prices and a series of policy reforms helping the economy weather the fallout from the US-Israeli war on Iran that began on Feb. 28. Finance Minister Cassiel Ato Forson has lifted this year’s growth forecast to more than 6% from 4.8% previously.

Industry was the standout performer, with growth accelerating to 6.9% from 1.9%, boosted by stronger output in the gold and oil-and-gas subsectors. Services growth slowed to 7.1% from 8.6%, while agriculture expanded 4% from 5.3%.

The economy is also benefiting from lower inflation and borrowing costs, supported by a stronger fiscal performance under a $3 billion International Monetary Fund program secured in 2023 to restore debt sustainability after the country defaulted a year earlier.

Inflation quickened for a second consecutive month to 3.7% in May, fanned by higher fuel costs stemming from the conflict in the Middle East. Even so, it was below the 18.4% recorded a year earlier.

The central bank last month left its benchmark rate at 14%, pausing an easing cycle that has more than halved borrowing costs from 28% a year ago.

(By Ekow Dontoh)