Ghana

Politics:

• Analysis

  Ghana politics: Quick View - Cabinet size criticised

  Event

  The size of John Mahama's cabinet has sparked criticism.

  Analysis

  Ghana's president, John Mahama, announced 26 new cabinet appointees on March 26th-including deputies, this takes the total to 86. The size of the cabinet has been widely criticised as leading to a bloated ministerial list, but also on the grounds of cost-Ghana's budget deficit reached 12% of GDP in 2012, double the original official forecast-and the potential impact on the power of the National Assembly. Members of parliament (MPs) who are on the ministerial payroll are all but guaranteed to vote for any government measure, and they will no longer be able to fulfil the standard MP's role of scrutinising government legislation. There are also question marks over what role the new appointees will actually fulfil. A number of ministries that previously had one deputy minister now have two, but it is doubtful whether the workload of departments such as Children and Social Protection will merit this.

  Opponents also suggest that the appointment of so many ministers and deputies is designed to minimise criticism of Mr Mahama's presidency from within the ruling National Democratic Congress. However, the president has been facing plenty of criticism from other sources. After the president described members of the local media as "very lazy", the communications director of the opposition New Patriotic Party, Nana Akomea, responded by blaming Ghana's difficulties on the president's "laziness". Opponents may seek to portray the appointment of so many new ministers as an attempt to reduce Mr Mahama's own workload.

  March 28, 2013

• Background

  Ghana: Constitution and institutions

  Constitutional changes

  Ghana's first constitution at independence in 1957 was based on the UK system of multiparty parliamentary democracy. However, it was changed within three years when Ghana became a republic. In 1964 the CPP government instituted a one-party state and the 1960 constitution was amended. Constitutional arrangements were further transformed under seven more changes of government.

  The present constitution, which established the Fourth Republic, was introduced in 1992, when Ghana held its first multiparty elections since 1979. Much of it is based on the US system, vesting executive power in a president who is elected by universal suffrage every four years. Tenure is limited to two terms. The cabinet is appointed by the president, and is approved by the legislature. From the 2004 election, the number of members of parliament (MPs) in the single parliamentary chamber has been raised to 230, from 200, reflecting the growth in population since the previous level was set, in 1987. MPs are elected on a first-past-the-post basis. Candidates represent parties or may stand as independents.

  Well-respected judiciary

  The chief justice, who is nominated by the president and approved by parliament, heads the judiciary. The judiciary is seen as largely independent of political influences, but there have been some accusations from the NDC that the judiciary is biased towards the government. This is not surprising considering that when it was in opposition the NPP also considered the judiciary biased towards the then NDC government. The courts are used extensively for civil, business and criminal cases. In 2001, as part of a process to speed up judiciary processes, the chief justice established Fast Track High Courts. Ghana's judiciary is relatively well respected and independent, but its reputation continues to suffer from the political interference of previous decades.

  September 10, 2007

• Structure

  Ghana: Political structure

  Official name

  Republic of Ghana

  Form of state

  Unitary republic

  Legal system

  A new constitution, based on the US model, was approved by referendum in April 1992

  National legislature

  Parliament; 230 members elected by universal suffrage every four years

  National elections

  December 2012 (presidential and parliamentary); next elections December 2016

  Head of state

  President, elected by universal suffrage for a maximum of two four-year terms; John Mahama won the December 2012 presidential election

  National government

  Cabinet, appointed by the president; new cabinet formed in February 2009

  Main political parties

  National Democratic Congress (NDC), the ruling party; New Patriotic Party (NPP), the main opposition party; other parties include People's National Convention (PNC), Convention People's Party (CPP) and National Reform Party (NRP)

  Key ministers

  President: John Dramani Mahama

  Vice-president: Kwesi Bekoe Amissah-Arthur

  Communications: Edward Omane Boamah

  Defence: Mark Woyongo

  Education: Jane Naana Opoku Agyemang

  Employment & Labour Relations: Nii Armah Ashietey

  Energy & petroleum: Emmanuel Armah Kofi Buah

  Environment, science, technology & innovation: Oteng Agyei

  Finance & economic planning: Seth Terkper

  Food & agriculture: Clement Kofi Humado

  Foreign affairs: Hanna Tetteh

  Health: Sherry Ayitey

  Interior: Kwesi Ahwoi

  Justice & attorney-general: Marietta Brew Appiah-Oppong

  Lands & natural resources: Inusah Fuseini

  Local government & rural development: Oppong Fosu

  Roads & highways: Amin Sulemana

  Trade & industry: Haruna Iddrisu

  Transport: Dzifa Attivor

  Water resources, works & housing: Collins Dauda

  Central bank governor

  Henry Kofi Wampah (acting)

  March 20, 2013

• Outlook

  Ghana: Key developments

  Outlook for 2013-17

  • We do not expect the legal challenge to the December 2012 presidential election to worsen political stability significantly. The Supreme Court is likely to uphold the result given a lack of evidence of systematic malpractice.
  • The court's rejection of the case would anger opposition supporters and could trigger isolated unrest, although it would be unlikely to lead to widespread instability given the general population's respect for the rule of law.
  • A greater threat to social stability is unhappiness at the rate of improvement in living standards. The president, John Mahama, needs to balance managing new revenue with the high expectations arising from the nascent oil sector.
  • Fiscal policymaking will be made difficult by the large deficit that opened up in 2012. The government will need to bring this down to avoid a worsening of economic stability.
  • Strong domestic economic prospects across most sectors will be tempered by global uncertainty in the early part of the forecast period. Nevertheless, growth should average 7.4% in 2013-17.
  • Robust agricultural performance and lower international commodity prices should allow a gradual fall in inflation to 7.9% in 2014, before an upturn in 2015-17 as commodity prices increase and policy loosens ahead of elections.
  • Strong export growth will bring down the current-account deficit during the forecast period, from 12.3% of GDP in 2012 (estimated) to 8.7% of GDP in 2017, although declining gold prices in 2015-17 will slow the pace of this decline.

  Review

  • The largest opposition party boycotted Mr Mahama's state-of-the-union address as part of their continuing refusal to accept the presidential election result. If they boycott all parliamentary business, policymaking will suffer.
  • The Ghanaian government has pledged to strengthen bilateral ties with Iran, and an opaque old transaction between the two countries has been revealed. Both events could harm Ghana's relations with the West.
  • Ghana's media played an important role during the 2012 elections. The underlying diversity of views presented in the Ghanaian media is a key aspect of the country's stability.
  • The 2013 budget has been presented. Lax fiscal management could harm Ghana's international reputation if public expenditure is not better controlled. The fiscal deficit was revealed to have ballooned to over 12% of GDP in 2012.
  • The Jubilee oilfield is approaching its full potential of 120,000 b/d, and the production of electricity from Ghana's gas reserves should begin later this year.

  March 20, 2013

Economy:

• Background

  Ghana: Economic background

  Main economic indicators, 2006
  (Actual unless otherwise indicated)
  Real GDP growth (%)	6.0(a)
  Consumer price inflation (av; %)	10.9
  Current-account balance (US$ m)	-627.9(a)
  Exchange rate (year-end: US$)	9,235.3
  Population (m)	22.6
  External debt (year-end; US$ m)	3,318.8(a)
  (a) Economist Intelligence Unit estimate.
  Sources: Economist Intelligence Unit; IMF, International Financial Statistics.

  Download text file (csv format)

  September 10, 2007

• Structure

  Ghana: Economic structure

  Data and charts: Annual trends charts

  
  

  

  March 20, 2013

• Outlook

  Ghana: Country outlook

  Ghana: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  POLITICAL STABILITY: The prospects for political stability in the early part of the forecast period will be influenced by the legal challenge to the December 2012 presidential election, at which John Mahama of the National Democratic Congress (NDC) was re-elected. The opposition New Patriotic Party (NPP) has launched judicial proceedings, alleging fraud in the vote-counting process, and this will contribute to an increase in tension. However, all sides have called for calm and overall stability is expected to be maintained, although isolated outbreaks of unrest are possible--particularly in NPP strongholds should, as seems likely, its court case be rejected owing to a lack of evidence. Indeed, the democratic process is considered to be sufficiently well embedded and judicial processes trusted widely enough by the general population for Ghana to avoid the sort of election-related unrest seen in Côte d'Ivoire during 2011. Nevertheless, the court case has the potential to drag on for some time, possibly years; Mr Mahama's defence team has called almost 5,000 witnesses, for example. Therefore, although they are not expected to threaten political stability, judicial proceedings could prove to be a persistent distraction for policymakers.

  ELECTION WATCH: Election observers--both domestic and international--generally praised the conduct of the December 2012 elections, which saw Mr Mahama re-elected narrowly as Ghana's president, with 50.7% of the vote, and his NDC secure 148 of the 275 seats in parliament. However, the NPP accused the NDC of conspiring with the electoral commission "to falsify the election results". The Economist Intelligence Unit expects the Supreme Court to reject the claims owing to a lack of evidence, but in the unlikely event that the court finds in favour of the NPP, it has the power to remove Mr Mahama from the presidency. Fresh elections may therefore be needed, the results of which would probably again be close.

  INTERNATIONAL RELATIONS: The government will maintain good relations with Ghana's major trading partners and donors throughout the forecast period--especially the US and the UK, both of which have a large Ghanaian diaspora. Relations with Western donors have been damaged by recent slippages in fiscal management and the government will need to remedy these policy deficiencies to rebuild donor confidence and maintain their financial assistance. In addition, recent moves to develop links with Iran as the government attempts to scale up foreign direct investment could harm Western ties. With US and European sanctions in place against Iran, Ghana could be tainted by association. Meanwhile, links with China will increase, backed by Chinese funding for infrastructure projects. The government will need to be careful in its dealings with China, as resentment is growing over the expanding presence of Chinese workers in the local economy.

  POLICY TRENDS: Mr Mahama and his new government face an extremely challenging policy environment. They need to repair the damage done by profligate fiscal policy prior to the 2012 elections when large public-sector pay increases and underperforming tax revenue saw the deficit balloon to 12.1% of GDP. Bringing this back down will be a policy priority. However, this task will be made difficult by various issues. The economic policy team need to manage the high expectations arising from the nascent oil and gas sector. The president and his policymaking team will be faced with the challenge of weighing up the merits of competing demands on revenue while also combating corruption.

  ECONOMIC GROWTH: Economic growth is expected to remain robust throughout the forecast period. The government will attempt to extend its success in boosting cocoa production to the wider agricultural sector, especially in the forestry and fishing subsectors, which have underperformed in recent years. The expansion of gold mines and the development of the oil and gas subsector will lead to continued strong performance in industry, which will be the fastest-growing sector. Meanwhile, robust expansion is also expected in the services sector--particularly in telecommunications and construction. Stronger ties with China will contribute to growth, especially in infrastructure development and resource extraction. Overall, annual real GDP growth is forecast to average a strong 7.4% in 2013-17.

  INFLATION: The high base set for prices in 2012 amid a large public-sector pay increase and generally high international commodity prices should allow for a fall back in inflation in 2013. However, loose fiscal policy will remain an issue, and inflation will not decline by much, from an average of 9.1% in 2012 to 8.9% in 2013. Further moderate declines are expected in 2014-15, amid slightly tighter policy and largely flat international prices, with inflation averaging 8%. Inflation is then forecast to rise in 2016-17. This will be the result of both an upturn in prices for many of Ghana's imports and looser policy around the 2016 elections. Inflation is forecast to reach an average of 8.6% in 2017.

  EXCHANGE RATES: Buoyed by loose monetary policy in the US and economic uncertainty in Europe, the high price of gold, Ghana's largest export commodity, will boost foreign-exchange earnings in 2013-14. This will stem the pace of depreciation of the cedi, although the wide current-account deficits and likely investor alarm at fiscal policy will still push the cedi downwards. As global economic performance improves and the prospect of monetary tightening leads investors out of gold, prices are expected to fall significantly in 2015-17. Coupled with the political uncertainty connected with the 2016 Ghanaian elections and expectations of higher inflation towards the end of the forecast period, the pace of cedi depreciation will pick up again. Overall, we forecast a depreciation averaging around 7% a year (but higher later in the forecast period). However, as the cedi has been historically susceptible to short, sharp drops in value, depending on investor sentiment, the depreciation we forecast may be concentrated more in one year than the next. The cedi is forecast to depreciate to an average of GH¢2.58:US$1 by 2017 from an estimated GH¢1.80:US$1 in 2012.

  EXTERNAL SECTOR: The current-account deficit is expected to come down during the forecast period, but the pace of that decline will slow in 2015-17 as gold prices fall back. The price of gold, traditionally a safe-haven asset, will remain very high by historical standards in 2013-14. Gold exports will average more than US$6.3bn in 2013-14, nearly ten times the amount received as recently as 2002. Meanwhile, Ghana's other major exports, cocoa and oil, although not as strong as gold, will perform robustly. The situation in 2015-17 is much less favourable, as gold prices are forecast to fall back, which will have a negative impact on revenue from Ghana's gold exports. Oil and cocoa will take up some of the slack (oil will overtake gold as the largest export by value in 2017), but total export growth will slow.

  March 25, 2013

• Forecast

  Ghana: 5-year forecast summary

  Outlook for 2013-17: Forecast summary

  Forecast summary
  (% unless otherwise indicated)
  	2012a	2013b	2014b	2015b	2016b	2017b
  Real GDP growth	7.1	7.5	7.4	7.5	7.2	7.5
  Gross agricultural production growth	2.6	3.2	4.5	5.0	5.0	5.5
  Consumer price inflation (av)	9.1	8.9	7.9	8.0	8.5	8.6
  Consumer price inflation (end-period)	8.8	9.1	7.9	8.5	8.5	8.5
  Short-term interbank rate	14.0c	13.8	13.0	12.0	12.5	13.5
  Government balance (% of GDP)	-12.1	-8.5	-6.6	-6.3	-7.7	-6.7
  Exports of goods fob (US$ bn)	13.7c	15.0	16.1	17.2	18.0	18.9
  Imports of goods fob (US$ bn)	17.9c	19.3	20.8	22.5	24.2	26.2
  Current-account balance (US$ bn)	-4.9c	-4.9	-5.2	-5.5	-6.0	-6.7
  Current-account balance (% of GDP)	-12.3c	-11.0	-9.7	-9.0	-8.8	-8.7
  External debt (year-end; US$ bn)	13.1c	15.4	17.9	20.1	22.0	23.9
  Exchange rate GH¢:US$ (av)	1.80	1.94	2.05	2.16	2.36	2.58
  Exchange rate GH¢:¥100 (av)	2.24	2.09	2.17	2.25	2.42	2.67
  Exchange rate GH¢:€ (end-period)	2.47	2.63	2.73	2.79	3.12	3.35
  Exchange rate GH¢:SDR (end-period)	2.89	3.03	3.16	3.30	3.69	3.96
  a Actual. b The Economist Intelligence Unit forecasts. c The Economist Intelligence Unit estimates.

  Download the numbers in Excel

  Download text file (csv format)

  March 20, 2013

View detailed map

Country Briefing

Land area

238,537 sq km

Population

24.97m (2011, IMF estimate)

Main towns

Population in '000 (2012, estimates, World Gazetteer):

 Accra (capital): 2,291

 Kumasi: 1,989

 Tamale: 538

 Achiaman: 285

 Takoradi: 261

 Cape Coast: 217

 Teshie: 172

 Tema: 161

 Sekondi: 145

Climate

Tropical

Weather in Accra (altitude 27 metres)

Hottest months, March, April, 23-35°C; coldest month, August, 22-27°C; driest month, January, 15 mm average rainfall; wettest month, June, 178 mm average rainfall

Languages

English (official), Twi, Ewe, Fante, Ga, Hausa

Measures

Metric system

Currency

Cedi (GH¢) = 100 pesewas

Time

GMT

Public holidays

January 1st, March 6th (Independence Day), Good Friday, Easter Monday, May 1st (Labour Day), July 1st (Republic Day), December 6th (Farmers' Day) December 25th-26th

January 22, 2013