The economy is in a dramatic slowdown. The Ghana Statistical Service has projected 2014 growth to fall to 4.2% from the 7.1% targetted.

This is the slowest rate of expansion since 2009, when the economy grew at 4%. It also represents a sizeable drop in growth of 3.1 percentage points.

It is evident that the energy crisis and instability of the macroeconomy have taken a huge toll on economic activities, with consumer and business confidence at very low levels.

The last time the country’s GDP growth fell below five percent was in 2009, when the economy grew at 4%. Since then the economy has been growing considerably, recording 7.3 percent in 2013.

Annual inflation was unchanged at 17.0 percent in December, underlining the fiscal problems that have prompted government to engage in talks with the International Monetary Fund on a financial assistance programme

Many business leaders have met the GDP figures as announced by the Ghana Statistical Service with disappointment, and said it marks a significant decline from the optimism of 2011 when growth appeared set to move into double-digits.

In 2011, Ghana’s GDP growth of 13.6 percent was regarded as the fastest in the world on the back of starting commercial production of oil the previous year.

Now, the decline in GDP threatens to further weaken Ghana’s credit rating. Fitch, the credit rating agency, recently warned that the country’s currency may further fall if negotiations between the government and the IMF for a bailout continue to drag, which would make borrowing more costly.

Some analysts have opined 2015 will also be a difficult year as the government, which has projected a GDP growth of 3.9 percent, begins to implement austere policies aimed at tackling the country’s wide budget deficit of 9.8 percent. Meanwhile, the World Bank has forecast a more optimistic GDP growth of 4.5 percent for Ghana this year.

What all this means is that the government must get the fiscal programme with the IMF running quickly in order to build some confidence to spur economic activity. If a credible programme is agreed that also addresses the new fiscal risks which have emerged -- such as the decline of oil prices -- it may possibly begin to bear fruit before the end of 2015.

The energy supply deficit, which has resulted a load-management of power, also appears far from over in spite of the start of gas production to feeds the thermal plants of the country’s main power generators’ -- VRA and Asogli.

Government’s revenue target is also a concern to policymakers, as it is feared the slump in oil prices on the world market will also affect the budget programme.

The Deputy Government Statistician, Baah Wadieh who made the GDP announcement, noted at a news conference in Accra that the agriculture sector recorded the highest annual growth rate of 5.2%, while the services and industry sectors recorded growth rates of 4.1% and 3.9 % respectively.

The services sector, which had the highest share of 51.7% of the annual GDP, was followed by the industry sector with 28.4% and agriculture sector at 19.9%.

The services sector recorded the highest growth of 10.3%, followed by industry 6.6%, and agriculture 5.2%. Mr. Wadieh said the GDP for the third quarter of 2014 stood at 5.1 percent year-on-year compared to revised GDP of 4.6 percent in the same period, with the industry sector recording the highest growth of 8.1 percent followed by the agriculture sector with 4.4 percent, while the services sector netted a growth rate of 3.5 percent.

“The key findings of the activities’ performance in the third quarter of 2014 compared with the same period in 2013 included financial and insurance activities, information and communication, fishing, public administration and mining and quarrying.

“The most notable performance of the quarter on quarter seasonally-adjusted growth-rates are financial and insurance activities, information and communication,” he said.

He explained that economic activities in the mining and quarrying sub-sector within the industry sector increased by 3.3 percentage points from a negative of 0.8 percent growth recorded in the second quarter of 2014.

The manufacturing sub-sector recorded a positive growth of 0.8 percent over the second quarter of 2014 negative growth of 2.4 percent, and construction also recorded a positive growth of 2 percent compared with the second quarter figure of 0.8 percent.

The oil GDP estimate at current prices for the third quarter of 2014 was GH¢31,418.1million compared to GH¢25,951.9million for the second quarter of 2014.

The non-oil GDP at current prices for the third quarter of 2014 was GH¢29,635.9million compared to GH¢24,090.7million for the second quarter of 2014.

The country faced a fiscal crisis last year as the budget deficit surged, putting pressure on the cedi currency which slumped 31 percent against the dollar -- helping drive inflation upward.

Food inflation in the same month rose to 6.8 percent, an increase of 0.2 percentage points from 6.6 percent in November 2014.

“The year-on-year non-food inflation rate is more than three-and-half times higher than the food inflation rate,” Mr. Wadieh said. The main drivers for the non-food inflation rate were housing, water, electricity, gas and other fuels, which dropped by 35.2 percent, and transport -- which was, however, up by 30.8 percent.

The price-drivers for the food inflation rate were coffee, tea and cocoa, mineral water, soft drinks, fruit and vegetable juices, among others.

The year-on-year inflation for imported items was more than one-and-half times higher than the inflation rate for locally produced items.

The Northern Region recorded the highest regional year-on-year inflation rate of 19.0 percent while the Upper West Region recorded the lowest of 13.6 percent.

Four regions, Northern, Eastern, Central and Greater Accra recorded inflation rates above the national average of 17.0 percent.