The economy’s second quarter performance, released by the Ghana Statistical Service (GSS), shows that the services sector continues to be the fastest growing, and the largest contributor to Gross Domestic Product (GDP).
The figures indicate that growth rates for the first and second quarters of this year for the services sector were 7.1 and 6 percent respectively, an improvement from the 6 and 4.7 percent recorded in the same period in 2015.
Last year, the services sector’s contribution to the overall economy increased to 54.4 percent from the previous year’s figure of 51.7percent, whereas agriculture and industry contributed 20.3 and 25.3 percent.
Commenting on the development, Dr. Eric Osei-Assibey, Senior Lecturer at the University of Ghana, said even though the industrial sector should have been the most vibrant in the economy, the taking over by the services sector is an indication that the country’s economy is maturing.
“It is a normal progression for a developing country. Of course, we should have gone through the industrialization stage first. But as a country, we did not do well with regard to our industrialisation. The advent of information and communication technology seems to have upstaged the industrial efforts.
So we didn’t have much choice than to allow the services sector to take over. For the services sector to take over the economy shows that the economy is maturing and conforming to the global paradigm,” he told the B&FT in an interview.
Dr Osei-Assibey, however, warned that if the trend continues and there is no commensurate growth in the industrial sector, the unemployment gap will continue to widen.
“We have jumped one step but it is not too bad. The only problem is that the services sector is very sophisticated and requires highly technological input and so if you have excess supply of labour, then that becomes a problem because there will be greater number of people becoming unemployed,” he said.
The Vice-Chancellor of the University of Ghana, Professor Ebenezer Oduro Owusu, also told the B&FT recently that the growth of the services sector is also because students are studying in humanities more than in the sciences.
If the industrial and agriculture sectors have to pick up, more attention needs be given to science education, he said.
“Most people are moving from studying science to humanities. The ratio of science students to humanities is 30 :70. And this is because the services sector is driving the economy. Even those who have read science eventually end up going into the service sector. And this is very bad for the future of this country because this country will develop very well based on its science and technology backbone,” Prof. Oduro said.
Further analysis of the figures, spanning 2009 to date, shows that the services sector is the largest contributor to GDP, and growth rate in the sector, with the exception of 2009 and 2011, outpaced the other two sectors, agriculture and industry, for at least, two quarters every year.
In 2010, the services sector grew by an annual rate of 9.8 percent compared to 5.3 for agriculture and 7 percent for industry. That same year, the services sector’s contribution to GDP increased to 51.1 from the 49.2 percent recorded in 2009.
The following year, 2011, the production of oil resulted in industry out-pacing the other two sectors in terms of growth rate. However, the services sector maintained its position as the largest contributor to GDP with 49.1percent.
The sector further showed its resilience in 2012 when it grew by 12.1percent whereas agriculture and industry grew by 2.3 and 11percent respectively, taking its overall contribution to GDP to 49.1 percent, compared to the 22.9 and 28 percent for agriculture and industry correspondingly.
In 2013, even though growth was lower than the previous year, it still, at 10.3percent, outpaced agriculture and industry, which recorded 6.6 and 5.2percent respectively.
This took the services sector’s contribution to GDP to 50.6 percent, while agriculture and industry recorded 21.6 and 27.7 percent respectively.
In 2014, however, the services sector was overtaken by the agriculture sector in terms of growth, but still contributed to more than half of the country’s GDP.
The sector grew by 4.1 percent as compared to the agriculture and industry, which grew by 5.2 and 3.9 percent respectively.
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