A Development Economist and a Fellow at the Institute of Economic Research and Public Policy (IERPP), Dr Frank Bannor, has said that an alarming point from the 2025 mid-year budget concerns the services sector.
In paragraph 63, the Minister of Finance, while presenting the budget on Thursday, July 24, stated that “Industry sector, constituting the largest share of the economy at 46.8%, grew by 3.4% in the first quarter of 2025, contributing 20.6% to the overall first quarter growth.”
But explaining why this is concerning, Dr Bannor said at a press conference in Accra on Wednesday, July 30, that “Compared to Q4 of 2024, the Services sector achieved the highest real GDP growth of 6.3 per cent. Now, why is this significant?
“The service sector is a vital driver of Ghana’s economic growth, consistently making up the largest portion of the country’s Gross Domestic Product (GDP).”
He added, the services sector comprises eleven sub-sectors: Trade, Repair of Vehicles, Household Goods, Hotels and Restaurants, Transport and Storage, Real Estate, Professional, Admin and Support Services, Other Personal Services Activities, Public Administration, Defence and Social Security, Education, Health and Social Work, and Information and Communication Technology.
One primary importance of the service sector lies in its role as a major job generator. Various service-related industries employ a significant portion of the workforce, he said.
“This helps reduce unemployment rates and contributes to the economic well-being of individuals and families. Therefore, a decline in the sector’s growth means people are losing their source of livelihood, thereby worsening their living conditions.”
Dr Bannor also criticised the Finance Minister for not commenting on oil revenue in the presentation of the 2025 mid-year budget.The Finance Minister was expected to touch on the declining oil revenue, but he did not do that.
Dr Bannor said, “Another important area that the minister failed to provide an update on to Ghanaians had to do with revenue from the oil and gas sector.
“Oil revenue accrued in the 1st half of 2025 is $370.6m compared to the first half of 2024, which stood at $840m. What could have caused this sharp decline in revenue? What are the possible implications? Why is the Minister silent on such a critical development?”
The Minister of Finance made a claim that non-oil GDP growth picked up strongly, growing at 6.8% in the first quarter of 2025 compared to the growth rate of 4.3% in the same period in 2024.The non-oil GDP growth is the highest since 2018,’ he said.
However, Dr Bannor indicated that data from the Ghana Statistical Service shows that this claim is false and misleading.
“The provisional quarterly real GDP growth rate without oil and gas (Non-oil GDP) for Q3 2024 is 8%. Therefore, the claim that the non-oil GDP growth rate of 6.8% is the highest since 2018 cannot be true,” he said.
