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| History
and Political situation |
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Ghana is generally considered
to be one of the most stable countries in Africa, although
its political history has been turbulent, with ten civilian
and military governments since Independence in 1957. In
1979, junior officers led by Flt Lt J J Rawlings seized
power, handing over four months later to Dr Hilla Limann
and the civilian government of the People's National Party.
But disillusionment with this regime led Rawlings to take
power again on 31 December 1981. He abolished the Constitution,
dissolved Parliament, proscribed all political parties,
and became Chairman of the PNDC (Provisional National
Defence Council).
By 1992, calls for greater democracy coincided with pressure
for political reform and in March the PNDC announced its
timetable for a return to constitutional rule. A new Constitution
was endorsed by referendum in April 1992 and at the subsequent
presidential elections Rawlings won 58% of the vote. Ghana's
Fourth Republic was inaugurated on 7 January 1993. In
December 1996 President Rawlings was re-elected for a
second, and final term of office, winning just over 57%
of the vote.
Parliamentary and presidential elections took place in
December 2000. After a second round in the Presidential
elections John Kufuor, the candidate of the opposition
New Patriotic Party (NPP), defeated the candidate of the
ruling National Democratic Congress (NDC), John Atta-Mills,
by a margin of 56% to 44%. The NPP won the largest number
of seats in Parliament (100 out of 200), followed by the
NDC (92), Independents (4), People's National Congress
(3) and Convention People's Party (1).
Kufuor was inaugurated as President on 7 January 2001
in a smooth and exemplary transfer of power. He has warned
Ghanaians to expect a period of austerity as he attempts
to reinvigorate an economy which is suffering from low
prices for its key exports (cocoa, coffee) and the high
oil price, which is inflating the import bill and using
up scarce foreign exchange.
Political relations with Britain are warm, as exemplified
by the successful State Visit to Ghana in November 1999
of Her Majesty the Queen and HRH Prince Philip. Robin
Cook, Secretary of State for Foreign and Commonwealth
Affairs, accompanied the Royal Couple. Other recent visitors
to Ghana include:
- Tony Blair, Prime Minister,
February 2002
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- Baroness Amos, Spokesperson
on International Development, House of Lords,
January 2001(Baroness Amos is now Minister of
State for Africa in the Foreign and Commonwealth
Office)
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- Clare Short, Secretary
of State for International Development, February
2001
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- Brian Wilson, Minister
of State, Foreign and Commonwealth Office, March
2001 President Rawlings made a successful official
visit to the UK in July 1995 and a private visit
in September 2000. Ministers, parliamentarians,senior
officials and other high-level Ghanaians pay
regular visits to the UK.
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| The most notable recent
visit have been : |
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- Otumfuo Osei Tutu II,
the Asantahene, who paid his first official
visit since becoming King of the Ashanti, to
the UK in May 2000.
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- Mr John Mahama, ex-Minister
of Communications, to Wilton Park in July 2000.
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| Trade
Statistics |
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The UK is Ghana's main non-oil trading partner and is
second (behind Italy) in the league of OECD exporters
to Ghana. UK exports to Ghana over the last 5 years
peaked at a high of £279 million in 1996. In 2001,
they were worth £144 million.
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| UK
TRADE WITH GHANA (£ MILLION) |
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1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
2001 |
| UK
Exports |
191 |
240 |
279 |
270 |
222 |
175 |
169 |
144 |
| UK
Imports |
139 |
164 |
189 |
135 |
155 |
154 |
100 |
134 |
| Balance |
52 |
76 |
90 |
135 |
67 |
21 |
69 |
10 |
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| Source: Overseas Trade
Statistics of the UK |
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| Shares
of Ghana's Imports of Goods: 2000 |
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US$
Min |
%
Share |
| 1. Nigeria |
600 |
19.1 |
| 2. Italy |
360 |
11.6 |
| 3. UK |
279 |
9 |
| 4. USA |
204 |
6.6 |
| 5. Cote d'Ivoire |
148 |
4.8 |
| 6. Germany |
139 |
4.5 |
| 7. Netherlands |
136 |
4.4 |
| 8. China |
117 |
3.8 |
| 9. France |
117 |
3.8 |
| 10. South Africa |
106 |
3.4 |
| Total
Imports |
3,113 |
100.0 |
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| Source:
IMF Direction of Trade, DTI/ES Statistics |
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| Top
10 UK exports to Ghana 2000 |
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£
000 |
| Tobacco and tobacco manufactures
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22,653 |
| Road vechicles |
10,392 |
| General industry
machinery and equipment, nes and machine parts nes |
8,965 |
| Specialised industrial machinery |
7,126 |
| Electrical machinery, apparatus
and appliances, nes and electrical parts thereof
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6,877 |
| Telecommunication and sound
recording and reproducing apparatus |
6,710 |
| Manufactures of metals nes |
5,126 |
| Power generating machinery
and equipment |
4,885 |
| Textile fibres |
4,542 |
| Essential oils and resinoids
and perfume materials; toilets, polishing and cleaning
preparations |
4,542 |
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Total Trade 144,409 |
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| Top
UK 10 Imports from Ghana 2000 |
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£
000 |
| Coffee, tea, cocoa, spices
and manufactures thereof |
28,162 |
| Fish,(not marine mammals),
crustaceans, molluscs, & aquatic invertebrates
and preparations thereof |
21,739 |
| Vegetables and fruit |
10,109 |
| Cork and wood |
7,405 |
| Non-ferrous metals |
6,566 |
| Metalliferous ores and metal
scrap |
5,301 |
| Furniture and parts thereof;
bedding, mattresses, supports, cushions and similar
stuffed furnishings |
4,755 |
| Power generating machinery
and equipment |
2,633 |
| Cork and wood manufactures
(excl. furniture) |
2,401 |
| Fixed vegetable fats and oil;
crude, refined or fractionated |
1,284 |
| Oil seeds and oleaginous fruit |
1,409 |
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| Standard
of living |
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The general
standard of living in Ghana, particular in the north of
the country is not high . Ghana has a per capita income
of about US$434 (est. 2000). In 1997, the Government adopted
a medium-term development plan to elevate Ghana to the
status of a middle-income country by 2020. To achieve
this, Ghana will need to diversify the economy away from
reliance on gold and cocoa (which together account for
over 70% of export earnings). To its credit, Ghana is
attempting to build up an industrial base through the
establishment of free zones. The "Gateway Programme"
seeks also to encourage foreign expertise to use Ghana
as an access point for land locked countries to the north.
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| Public
Expenditure |
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The March
2001 Budget was rather austere, with a promise of a more
ambitious budget later in the year if the macro-economic
situation improved and after an extensive audit of Government
machinery and processes had been undertaken.
The worsening economic situation in Ghana was highlighted
in the budget announcement by Finance Minister Yaw Osafo-Maafo
that Ghana is to join the heavily indebted poor countries
(HIPC) initiative. This will allow the country to apply
for debt cancellation but it is also likely to have negative
implications for the country's relatively good credit
standing.
Under HIPC, a debt reduction programme packaged by the
International Monetary Fund and World Bank, the nation
is expected to receive an amount of US$1 billion over
a five-year period to finance its poverty reduction programme.
The 2001 budget is predicated on targets of:
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- end-of-period inflation
of 25%;
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- overall broad budget
deficit equivalent to 5.2% of GDP;
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- overall balance
of payments surplus of $165.2 million (through
accumulation of external reserves despite falling
world prices for major exports);
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- price stability
as goal of monetary policy, including monetary
growth rate of 32%;
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- widening of tax
net and establishment of tax courts to fast-track
prosecution of defaulters;
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- establishing private/public
partnerships for industrial development, Tourism
Development Fund, promotion of small enterprise
and enhanced trade relations, improved revenue
collection at customs posts, and streamlined
customs clearances to attract investment
and private sector growth;
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- action against defaulters
on Government loans and taxes;
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- establishment of
an Economic Policy Co-ordination Committee of
officials from key ministries and the Bank of
Ghana;
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- audit of parastatals
and of the Divestiture Implementation Committee.
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| Source: Foreign and Commonwealth
Office and Business Africa magazine |
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| Area
and geographical features |
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Area: 238,
305 sq. and extends 680 km north to south. The country
is bordered to the south by the Gulf of Guinea, with Togo
on its eastern side and Cote d Ivoire on the west. Burkina
Faso borders the country to the north.
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| Population |
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The population
of Ghana is approximately 19.2 Million with approximately
42% aged 14 years or less and only 3% over 65. Average
life expectancy is 56 years for men and 58.8 years for
women.
Principal commercial centres and towns
Accra 1.7 million
Kumasi 420,000
Tema 240,000
Tamale 200,000
Takoradi 120,000
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| Climate
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Situated just
north of the equator, Ghana's climate is generally tropical
and humid, with daily temperatures usually only varying
between 23C and 30C (86F). There are two rainy seasons,
March to July and September to October. June is the wettest
month in the capital Accra with average rainfall of 235
mm, while December is the driest with 18 mm.
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| Economic
Overview |
Ghana has a per capita income of about US$405. Past economic
growth has been uneven: 1997 - 4.3%, 1998 - 5.3%, 1999 - 3.9%,
2000 - 3.7%, 2001 an estimated 4.2%.
More than a decade after the government led the way in the
African structural adjustment process, poverty in Ghana remains
pervasive and full economic recovery elusive. But the country
has potential. It is relatively rich in minerals (gold, bauxite,
manganese and diamonds) and timber, though timber reserves
are declining as a result of large-scale deforestation both
officially sanctioned and illegal. Sizeable amounts of oil
and gas have yet to be confirmed. Agriculture is of prime
importance, occupying 65%* of the workforce. The government
is keen to modernise this sector, responsible for 35%* of
GDP. An African Development Fund report of September 2000
estimates that agriculture operates at only 20%* of its potential.
(*Source: African Development Bank)
Tourism has potential and tourist accommodation is gradually
being improved. But outside the main cities, infrastructure
and communications are poor. The Ghanaian government does
not have funds to invest in tourism; thus external investment
will be in the shape of Private Finance.
The Economic Recovery Programme began in 1983 and has helped
to restore macro-economic stability in Ghana. In their "Vision
2020" document, the former government declared an intention
to achieve an accelerated growth rate of 8-10% in the medium
term. However, the new Government has decided to bring in
a new strategy, Vision 2010, with new targets. For now, an
overall growth rate of more than 5% is required to achieve
substantial improvement in the economy and so reduce existing
poverty levels. But annual GDP growth over the past few years
has been disappointing, averaging only 4.3%. So far the spread
of benefits from economic reform has been uneven. The recent
Ghana Living Standards Survey has shown an overall reduction
in poverty, but an increase in some rural areas.
Successive governments have recognised the importance of attracting
Foreign Direct Investment and encouraging private sector development.
They have re-stated their commitment to the privatisation
of state owned enterprises.
The inflation and interest rate continued its download path,
and the cedi reasonably maintained its value against the dollar
and other major currencies. The rate of inflation is significantly
declined frm 40.5% at the begining of 2001 to 21.3% at the
end of the year.
Oil prices have dropped whilst the price of gold and cocoa
have stabilsed, though they are both thought to be on the
low scale. The economy grew at an estimated 4.2% in 2001.
The macroeconomic environment continued improving into the
fourth quarter of 2001.
The new Government (elected in December 2000) has made a promising
start, indicating a determination to re-establish Ghana as
a base for legal and profitable business, revive the rural
economy, and restore monetary and fiscal stability. Both in
the Public and Private Sectors there is an air of optimism
after the setbacks of late 1999 and 2000. The west Africa
Gas Pipeline will finally be constructed in 2003. The 600km
pipeline will link lagos to takoradi,(Ghana with a supply
point in tema (Ghana). The pipeline will have an estimated
capacity of 400m cubic feet a day and is expected to supply.
In March 2001 Finance Minister Yaw Osafo-Maafo announced that
Ghana has applied for assistance under the heavily indebted
poor countries (HIPC) initiative, a debt reduction programme
packaged by the International Monetary Fund and World Bank.
Under HIPC, external debt is cancelled to enable countries
to use savings to fund poverty eradication programmes. If
the application is successful, Debt Relief International has
calculated that Ghana could expect to receive debt relief
of $875m over 3 years. HIPC status could also have negative
implications for the country's relatively good credit standing.
The Department for International Development(DFID) 56.7m in
in aid to Ghana in 1999, 26% of total net oda. Ghana has signed
on to be part of a second Single Monetary Zone in the West
African sub-region by 2003. The stability in exchange rates,
which the single monetary zone will bring, will serve to make
Ghana even more attractive as an investment destination.
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