Ghana: lies, damn lies and estimates

New oil, Chinese investment, stable government, highest growth in the world: Ghana is a new success story. But be careful with the exact figures.

While all countries revise their GDP numbers and other accounts, Ghana’s revision of the data takes some beating. The Q2 GDP figure was reported in September as 33.5 per cent. The new figure? 16.4 per cent, less than half. Other numbers given for individual sectors are even further reduced.

Industry growth: 40.4 per cent, down from 84.2. Manufacturing growth? It wasn’t 100.8 per cent as first reported, but 11.2 per cent. Trade actually shrank 2.4 per cent, rather than the 32 per cent growth previously announced.

As Absa capital said in a note on Tuesday:

The downward revisions will have a significant impact on growth projections – our projections (after the initial GDP release on 22 September) indicated previously that real GDP growth of well over 15 per cent was likely in 2011; however, the latest revision means that may dip below 15 per cent.

In fairness, other sectors have been revised upwards: agriculture was slightly higher than previously thought, and livestock sector’s growth was revised upwards from -50 per cent to 4.9 per cent.

Yvonne Mhango, analyst at Renaissance Capital said that she wasn’t entirely surprised: “We weren’t too comfortable that the numbers were that accurate. We thought there was a high forecast risk and we didn’t swallow the numbers for the first half of the year.”

But Mhango pointed out that this is the first year that Ghana has issued these figures, and that teething troubles were somewhat understandable.

So should investors be put off if the data is liable to be revised so wildly? No, says Mhango: “This is still the fastest growth story on the continent – it just may grow by 15 to 20 per cent rather than 30.”

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