Population 24.926 million
GDP 40.124 US$ billion
@rating
country
Business climate
assessment
| 2010 | 2011 | 2012(e) | 2013(f) | |
|---|---|---|---|---|
|
GDP growth (%)
|
8.0 |
14.4 |
8.2 |
7.8 |
|
Inflation (yearly average) (%)
|
10.7 |
8.7 |
9.8 |
10.9 |
|
Budget balance (% GDP)*
|
-9.6 |
-6.2 |
-7.7 |
-5.3 |
|
Current account balance (% GDP)
|
-8.4 |
-9.2 |
-9.1 |
-7.0 |
|
Public debt (% GDP)
|
46.3 |
43.4 |
44.9 |
41.1 |
| (e) Estimate (f) Forecast * grants excluded |
||||
STRENGTHS
- Considerable agricultural (cocoa) and mineral (oil, gold) resources
- Financial support (United Kingdom, United States, China and IMF)
- Institutional and political stability
- Freedom and security generally ensured
- Corruption reduced and good quality commercial information available
WEAKNESSES
- Dependence on raw materials (cocoa, gold and now oil)
- Proximity to a weak Ivory Coast
- Public finances insufficiently under control
- Inadequate transport and energy infrastructures
- Financially weakened public companies
Risk assessment
Vigorous growth
After a surge linked to the beginning of the exploitation of the Jubilee oil field in 2011, growth slowed but remained vigorous in 2012 and will stabilise in 2013. Mining (gold) will remain steady and oil production will continue to increase, even though the level of production (86,000 barrels a day in October 2012) will have difficulty reaching the target initially set (120,000 barrels a day). The agricultural sector (25% of GDP) will be less buoyant, as unfavourable weather conditions have affected harvests (cocoa). Services (telecommunications, construction) will continue to support growth and investment in infrastructures will continue.
The high price of imported goods is fuelling inflation, which will be driven up in 2013 by rising consumption. The depreciation of the cedi against the dollar (17% over 2012) is expected to continue in 2013 due to large fiscal and current account deficits, but will be eased by favourable economic prospects. Moreover, Ghana is encouraging the use of its currency to the detriment of the dollar: since May 2012 deposits of Ghanaian banks with the Central bank are required to be denominated in cedis (and not 50% in dollars and 50% in cedis). The “dedollarisation” process (also followed by the DRC, Angola and Zambia among others) will, however, be slow.
Public finances in need of improvement
The fiscal deficit, still high in 2012, is expected to narrow in 2013. Fiscal revenues from the mining sector will grow as a result of increased production and the introduction of a windfall profits tax. State revenues will rise due to increased contributions resulting from broadening the tax base and raising corporation tax (from 25% to35%). Furthermore, the government will be able to draw on 70% of income from oil exploitation, with the remainder allocated to sovereign funds (Heritage Fund and Stabilisation Fund).
Budget reform will, however, be hampered by the spending increase occasioned by the prospect of elections due in December 2012 and civil service wage rises (42% of fixed expenditure). Domestic payment arrears owed by the government, in particular to the banking sector, are being adjusted, and are due to be discharged by 2015.
Falling current account deficit due to exports
Exports will grow appreciably in 2013, helped by the increase in oil and gold production (40% of export revenues) and the high prices which will make up for the expected fall in revenues from cocoa exports. But imports, particularly of capital goods will increase more rapidly than exports. Purchases of services and dividend transfers will sustain the current account deficit, while remittances from emigrant workers are limited by the economic situation in the countries where expatriate Ghanaians live (chiefly the United States and the United Kingdom). The current account balance will improve but will remain in deficit. Ghana can count on the FDI flow attracted by the country’s abundant reserves (gold, oil and gas). Moreover, the success of the Central Bank’s bond issues in 2012 is witness to investor interest. Ghana is also making use of debt. Its status as a middle-income country gives it access to loans not arising from concessional aid (€3bn agreed by China). The vigour of the economy, however, is cause for optimism regarding its ability to repay its external debt.
Smooth political transition after the president’s death
John Dramani Mahama who has held the Presidency since the death of President Atta Mills in July 2012 has been elected in December 2012 and its Party (National Democratic Congress) obtained the majority of seats in the Parliament. The vote, regarded as free and transparent by international observers, will nevertheless be challenged before justice by the leader of the opposition party (New Patriotic Party NPP). In any case, the new President will have to meet the expectations of the population, particularly concerning the management and redistribution of the oil revenues.
A relatively favourable business despite some shortcomings
Tensions between Ghana and the Ivory Coast, which led to the closing of the border for several days in September 2012, will continue to undermine the security situation in this area.
Ghana benefits from a relatively favourable business climate, though progress in fighting corruption is still to be made. There are still shortcomings regarding access to credit (under-developed financial systems), the ineffectiveness of the administrative apparatus and the registration of property.
