Latest Fitch report shows coronavirus may cause a fall in Ghana’s growth rate

Latest Fitch report shows coronavirus may cause a fall in Ghana’s growth rate

- Fitch, an international rating agency has indicated that Ghana's growth rate could fall below the intended target of 6.5%

- Fitch explained that African countries would generally record reduced growth levels due to the coronavirus

- It added that the fall could be traced to the reduction in world oil prices following actions taken by OPEC

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An international rating agency, Fitch, has predicted that Ghana’s growth rate is likely to fall from 6.5% to 6.2%.

The 0.3% fall in the growth rate has been attributed to the effects of the coronavirus on the economy.

Fitch explained that it, therefore, expects the real Gross Domestic Product (GDP) to also expand by 6.2%.

READ ALSO: Gold mining firms predict boom as coronavirus lead to slowdown in several economies

Per a Business Insider report, Fitch’s analysed the impact of the coronavirus on sub-Saharan economies and concluded that Africa’s oil producers countries could record reduced growths and export earnings.

The reason for the decline, it has been revealed, is the sharp decline in global oil prices as a result of the Organisation of Petroleum Exporting Countries (OPEC) to agree on additional production cutbacks.

The countries expected to be affected by this new development include Nigeria, Angola, South Sudan, Congo Brazzaville, Equatorial Guinea, Gabon, Ghana, Chad and Cameroon.

Fitch went on to say that the reduction in the growth in the production of hydrocarbons could lead to a deceleration of the real GDP growth.

Oil is responsible for about a third of Ghana’s export of goods and forms a key component in the country’s capital generation agenda.

The rating agency, however, indicated that the impact would be less, compared to Nigeria, Angola or South Sudan.

This is because Ghana enjoys the benefits of a strong service sector and there is an ever-increasing demand for services as well as an increase in the mining and manufacturing sectors.

For the year 2020, the World Bank predicted Ghana would have an economic growth rate of 6.8%, per its January 2020 Global Economic prospects Report.

The International Monetary Fund (IMF) meanwhile estimates that the rate could be 7.5%.

In other news, The Ghana Civil Aviation Authority (GCAA) has estimated a 20% reduction in revenue as the number of flights allowed into Ghana reduces.

According to the GCAA, the coronavirus has negatively affected its operations and it may, therefore, have to resort to other means to make up for the shortfall.

GCAA’s Director-General, Ing. Simon Allotey, explained that the company depends largely on charges levied on passengers.

READ ALSO: Hope for possible cure for coronavirus leads to boom in world markets

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