Ghana

Politics:

• Analysis

  Ghana politics: Still shining

  Ghana's election: Still shining

  Despite disputes over an election result, Ghana is still a success story

  A RUNDOWN booth in Accra, Ghana's capital, houses the Kwame Nkrumah bookshop, where Cubist pictures of the country's first president lean against a dusty window pane. A photograph of Nkrumah's socialist and pan-African books stands on an otherwise empty shelf. The sad state of the bookshop, the only publisher and distributor of the former president's books in Africa, underlines the irrelevance today of the ideological divisions of Ghana's past.

  In Ghana's presidential and parliamentary elections, decided on December 7th, the arguments were not about ideas but about the results. The incumbent, John Mahama, won by a whisker, with 50.7% of the vote. His opponent, Nana Akufo-Addo of the New Patriotic Party, claims that technical glitches which prolonged voting allowed the ruling National Democratic Congress to tamper with the votes. Mr Akufo-Addo says he will contest Mr Mahama's victory in court. His party has urged its supporters to take to the streets. In the elections in 2008 he lost by less than one percentage point but accepted the result.

  Mr Mahama's victory was surprising. Neither candidate was expected to get more than 50% of the vote, the threshold for an outright win. But observers from the African Union and the Economic Community of West African States, the most influential regional club, said the result was fair.

  Ghana's economy is forecast to grow by just over 8% this year, and its democracy is widely praised. Mr Mahama was sworn in as president in July after the death of his predecessor, John Atta Mills, in an impressively smooth transition. If the current dispute can be settled in court and does not spill into the streets, the opposition's challenge will pose little threat to the country's democratic credentials. "Ghana must demonstrate its political maturity by going through the legal process," says George Ayittey, an economist in Accra.

  Assuming the result is upheld, Mr Mahama will now have to get on with governing. He has promised to fight corruption, tackle youth unemployment and use Ghana's oil wealth to develop infrastructure and industry. One measure of Ghana's success is that his opponent would have pledged just the same.

  December 15, 2012

• 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)

  President: John Dramani Mahama

  Vice-president: Kwesi Bekoe Amissah-Arthur

  Key ministers

  Note: this was the pre-election cabinet

  Communications: Haruna Iddrisu

  Defence: Lieutenant-General JH Smith (retired)

  Education: Lee Ocran

  Employment & social welfare: Moses Asaga

  Energy: Joe Oteng Adjei

  Environment, science & technology: Hani Sherry Ayittey

  Finance & economic planning: Kwabena Duffuor

  Food & agriculture: Kwesi Awhoi

  Foreign affairs, regional integration & Nepad: Alhaji Mohammed Mumuni

  Health: Alban Bagbin

  Interior: William Kwasi Aboah

  Justice & attorney-general: Benjamin Kunbuor

  Lands & natural resources: Mike Hammah

  Local government & rural development: Samuel Ofosu Ampofo

  Roads & highways: Joe Gidisu

  Trade & industry: Hannah Tetteh

  Transport: Collins Dauda

  Water resources, works & housing: Enoch Tei Mensah

  Central bank governor

  Henry Kofi Wampah (acting)

  December 13, 2012

• Outlook

  Ghana: Key developments

  Outlook for 2013-17

  • The December presidential election was close, with the losing side alleging vote fixing. However, the impact on political stability into the early part of the forecast period should be limited given Ghana's strong democratic credentials.
  • The president, John Mahama, faces a challenging policy environment following his election victory, in particular managing the revenue and high expectations arising from the emerging oil sector.
  • Economic policy during the first half of the forecast period will centre on reducing the fiscal deficit and repaying domestic arrears that have built up. However, as elections in 2016 draw closer, fiscal discipline is expected to slip.
  • Policy focus will shift towards developing the business environment, reducing poverty and extending support for the private sector-especially the non-oil sector. Progress will be mixed, slowed by a weak bureaucracy.
  • 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 7.5% in 2013-17.
  • Strong agricultural performance and lower international commodity prices should allow a gradual fall in inflation to 7.8% 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 11.2% of GDP in 2013 to 8.8% of GDP in 2017, although declining gold prices in 2015-17 will slow the pace of this decline.

  Review

  • Mr Mahama was re-elected president winning 50.7% of the vote on December 7-8th against the 47.7% of his main rival, Nana Akufo-Addo. The results of the parliamentary election remained to be confirmed at publication.
  • Some in the opposition have claimed that parts of the voting were fixed, although most observers were happy with the conduct of the election.
  • Ghana, Côte d'Ivoire and the UN have signed a Tripartite Commission final communiqué, agreeing to repatriate Ivorian refugees in Ghana. This should help diffuse tensions between the two neighbours.
  • The government has been playing up the positive role of the mining sector in the economy. This was with the elections in mind, given that the sector has been criticised locally in the past for not contributing enough in taxes.
  • The local manufacturing sector has struggled in recent years and officials believe that it could export more regionally. However, problems at home, including unreliable power supplies, have made operations difficult.

  December 13, 2012

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

  
  

  

  December 13, 2012

• 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 heavily influenced by the aftermath of the December 2012 elections at which John Mahama was re-elected president. Some of Mr Mahama's rivals have alleged fraud in the vote-counting process, and this will contribute to an increase in tensions. However, all sides have called for calm, and although isolated outbreaks of unrest are possible, overall stability is expected to be maintained. Indeed, the democratic process is considered to be sufficiently well embedded in Ghana to ensure the avoidance of election-related unrest even anywhere close to the scale seen in Côte d'Ivoire during 2011 or in Kenya in 2007-08.

  ELECTION WATCH: Mr Mahama was re-elected as Ghana's president, securing 50.7% of the votes following the election of December 7-8th. As expected, the presidential election was extremely tight, with voters polarised between Mr Mahama and his rival, Nana Akufo-Addo, who gained 47.7% of the vote. No other candidate secured more than 0.6%. What was more surprising was that Mr Mahama was able to exceed 50% of the vote in the first round, meaning that the anticipated run-off vote that would have taken place at the end of December will not now occur. Results of the concurrent parliamentary election had not been confirmed at time of publication. However, indications are of another close race between the two main parties, with the ruling National Democratic Congress (NDC) having a slight edge.

  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. However, the recent development of links with China, backed by Chinese funding for infrastructure projects, has led to a shift in emphasis in Ghana's international relations. 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. Meanwhile, regional relations will remain broadly benign. There will be greater focus on Ghana's relations with the government of Côte d'Ivoire, owing to rebels opposed to the Ivorian government apparently operating from within Ghana and the fact that the countries' maritime border area contains significant hydrocarbons resources. Both of these issues will be sources of tension from time to time, although the Economist Intelligence Unit expects co-operation between the governments and for relations to remain amicable. Relations with the region's largest economy, Nigeria, are also subject to periods of tension, often over the large Nigerian diaspora working in Ghana and the competition they provide to locals. However, overall ties will remain close, with co-operation on security and energy matters likely.

  POLICY TRENDS: Policy focus will include improving public expenditure management and increasing revenue collection, as well as developing the business environment, reducing poverty and extending credit and support for the private sector, especially the non-oil sector. A potentially contentious issue that the government will need to tackle is that of trying to improve revenue collection under the mining sector tax regime. Progress on all fronts slowed ahead of the 2012 elections, but the reform process will pick up after their conclusion. This pick-up would be slower if the NDC were unable to secure a parliamentary majority to back up Mr Mahama's presidential victory. Although the NDC and the opposition New Patriotic Party (NPP) are not widely separated in their economic ideologies, their fierce rivalry would likely mean that policy progress would stall amid political bickering.

  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 industrial performance, 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 7.5% in 2013-17.

  INFLATION: With fiscal policy expected to tighten in 2013-14 and international commodity prices remaining relatively flat, inflation should edge down from the high base set in 2012 amid a large public-sector pay increase. However, the decline will be slowed by a weakening currency and strong consumption growth. After falling from an estimated average of 9.1% in 2012 to 7.8% in 2014, inflation is forecast to rise in 2015-17. 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: Although the cedi is expected to continue to weaken over the forecast period, the rate of depreciation will slow in 2013-14 because of strong domestic economic performance, especially as oil revenue increases. However, the pace of decline will begin to pick up in 2015-17, in line with our medium-term forecast for gold prices. Buoyed by loose monetary policy in the US and economic uncertainty in Europe, the high price of Ghana's largest export commodity will boost foreign-exchange earnings in 2013-14. However, 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 to the 2016 Ghanaian elections and expectations of higher inflation towards the end of the forecast period, the cedi is forecast to depreciate to an average of GH¢2.60:US$1 by 2017 from an estimated GH¢1.81: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 over US$6.5bn 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 tumble, 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 2016), but total export growth will slow to an annual average of 4.6% in 2015-17, compared with growth of 8.4% in 2012-14.

  December 10, 2012

• 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	7.3	7.6	7.4	7.5	7.2	7.6
  Gross agricultural production growth	3.0	3.2	4.5	5.0	5.0	5.5
  Consumer price inflation (av)	9.1	8.2	7.8	8.0	8.4	8.6
  Consumer price inflation (end-period)	8.8	8.4	7.6	8.5	8.6	8.5
  Short-term interbank rate	14.0	13.8	13.0	12.0	12.5	13.5
  Government balance (% of GDP)	-7.0	-6.2	-5.1	-4.4	-4.9	-4.5
  Exports of goods fob (US$ bn)	13.8	15.5	16.6	17.7	18.3	19.2
  Imports of goods fob (US$ bn)	17.9	19.3	20.7	22.1	23.5	24.9
  Current-account balance (US$ bn)	-4.9	-4.4	-4.5	-4.6	-4.8	-4.8
  Current-account balance (% of GDP)	-13.2	-11.2	-10.5	-9.7	-9.4	-8.8
  External debt (year-end; US$ bn)	11.6	13.1	14.5	15.8	17.2	18.5
  Exchange rate GH¢:US$ (av)	1.81	1.99	2.09	2.20	2.39	2.60
  Exchange rate GH¢:¥100 (av)	2.28	2.41	2.41	2.48	2.59	2.84
  Exchange rate GH¢:€ (end-period)	2.45	2.55	2.64	2.86	3.14	3.37
  Exchange rate GH¢:SDR (end-period)	2.99	3.08	3.20	3.40	3.74	4.02
  a Economist Intelligence Unit estimates. b Economist Intelligence Unit forecasts.

  Download the numbers in Excel

  Download text file (csv format)

  December 13, 2012

View detailed map

Country Briefing

Land area

238,537 sq km

Population

24.82m (2011, estimate)

Main towns

Population in '000 (2010, World Gazetteer)

Accra (capital): 2,450

Kumasi: 1,928

Tamale: 467

Achiaman: 289

Takoradi: 274

Cape Coast: 183

Teshie: 182

Tema: 179

Obuasi: 173

Sekondi: 156

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

March 01, 2012