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An economist says that the reopening of the Kotoka International Airport to international flights could boost the country’s economy beyond the 0.9% projected by the government to around 1.5% of Gross Domestic Product for this year.
Professor Peter Quartey said the opening of the airport will stimulate aggregate demand and have a significant impact on the hospitality subsector, including hotels and conferences.
“Although the budget projected a GDP growth of 0.9%, I am optimistic that it is likely that we will achieve a GDP growth of around 1.5% given the scenario we have outlined,” said the Director of the Institute of Statistical, Social and Economic Research. said.
The country revised its growth rate from 6.8% to 0.9% this year, due to the significant impact of Covid-19 on the economy despite registering a growth rate of 4.9% in the first quarter of this year.
The coronavirus pandemic has affected economic activities, with subsectors such as hospitality, personal service activities and education being some of the most affected.
The closure of the airport and land borders also significantly affected aggregate supply and demand within the economy as a whole.
Hotels, congresses, trips and excursions were practically paralyzed for about four months, while imports and part of the exports of non-traditional exports fell significantly due to low demand.
Some companies also downsized when the pandemic began, and others ran shift systems due to low revenues but increased expenses.
But Professor Quartey is optimistic that economic activities will recover between now and the rest of the year, but wants people to observe the Covid-19 security protocols.
“In the first place, it will bring income, then a certain level of imports and exports is carried out through air cargo and some are through airports.
“Then they will find out that we have the Ghana Revenue Authority even stationed at the airport; the essence is that they collect revenue. So it is likely to generate income for the country.
“So of course, the hospitality industry -the hotels etc- when foreigners come, conferences are held, others come and stay for tourism and many other things, they will surely be spending money.
“Hotels and other activities generate income, people get jobs, and of course they also pay taxes. These are all means by which revenue is generated, tax revenue is generated and then the airport itself earns revenue to run its operations. “
So in general, an increase in the growth rate could positively influence the sales of companies, among others, in the future.
Ghana’s economy grew by 4.9% in the first quarter of 2020, provisional figures from the Ghana Statistical Service have revealed. This compares with a 6% growth rate of the Gross Domestic Product during the same period in 2019.
According to the GSS, the services sector registered the highest growth rate of 9.5%, followed by the agricultural sector, which expanded by 2.8% and the industrial sector by 1.5%.
The main subsectors that drove GDP growth in GDP from January to March 2020 were information and communications, manufacturing, education and public administration and defense, social security.
