 the economy |
 SECTOR DEVELOPMENTS |
Ghana, a developing country, envisages to become a middle income economy by the year 2020. Ghana's economy is dominantly a primary commodity exporting one. It is also basically agricultural. The Agricultural Sector contributed 40.2% to GDP in 1999 (excluding net indirect taxes) and grew by 3.9%, compared with a growth of 5.1% in 1998. The Forestry and Logging Sub-Sector grew by 6.8% in 1999, a drop of 3.2 per centage points below the 1998 levels. Crops and Livestock Sub-Sector grew by 4.7% in 1999 whilst the Fishing Sub-Sector grew by only 1%. Cocoa Production and Marketing Sub-Sector recorded a decline of 0.5% in 1999, compared with an increase of 11.1% in 1998. This was as a result of a decline in production and a lower export price.
The Services Sector, the fastest growing sector in the economy contributed 32.1% to GDP in 1999 and grew by 5.01% in the same year. In 1998, it grew by 6%. Under this sector, the Wholesale and Retail Trade Sub-Sector grew by 6.49%; Restaurants and Hotels by 6.5%; Transport, Storage and Communications by 5.96%; Community, Social and Personal Services 5.94%; Finance, Insurance, Real Estate and Business Services, 4.02%, Government Services, 4.0% whilst Producers of Private Non Profit Services Sub-Sector grew by 4.13%.
The Industrial Sector's share of GDP in 1999 was 27.7%. It achieved a 4.9% growth in 1999, an improvement of 1.7 per centage points over the 1998 figure. The Electricity and Water Sub-Sector registered strong growth of 7.8%, followed by Construction, 5.5%; manufacturing, 4.8%; and Mining and Quarrying, 3.0%.
| ECONOMIC RECOVERY PROGRAMME (ERP) |
In the 1980s, Ghana undertook an Economic Recovery Programme (ERP) aimed at overhauling the economy from a controlled one to a market oriented and private sector led one. The ERP has since been sustained through a series of comprehensive macro-economic and structural adjustment reforms including the rehabilitation of economic and social infrastructure, the liberalisation of imports, diversification of exports, an accelerated privatisation programme, the passage of pro-business investment laws, an aggressive programme to attract foreign direct investment, and deregulation of the foreign exchange regime, (easy remittance of dividends, profits and fees abroad).
Another important area of the economy which has witnessed a major restructuring is the banking and financial sector. The Financial Sector Adjustment Programme (FINSAP) launched in the late 1980s has led to an upsurge of banking activities and intense competition among the major banks. The banks which account for 68% of the financial sector experienced a 49.7% growth in 1999. An additional spin-off of the restructuring has been the emergence in 1994 of the Ghana Stock Exchange (GSE), to raise long term capital for Ghanaian businesses. It is one of the most successful emerging stock markets in Africa, registering a growth rate of 40.7% between 1995-99.
The reforms on the whole have achieved an appreciable measure of success with the result that real GDP that was on a decline for sometime now has been stabilised and has been averaging about 4.5% over the past decade. However, in 1999 Ghana experienced an external trade shock resulting from a continuing low cocoa prices, uncertain world market conditions of gold and high oil prices. One result of the unfavourable terms of trade in 1999 was that the inflation rate which actually registered a single digit level by mid-1999 rose to about 13.8% by December 1999.
The government's long term policy of sustainable growth and poverty reduction are however still on course and in order to consolidate the gains of the ERP, it recognised the need for medium term macroeconomic strategies that are consistent with the vision of raising the economy to a middle income status as contained in its blueprint for national development called 'Ghana Vision 2020'. To achieve this, fiscal policy measures introduced recently have focused on Central government expenditure restraint, zero deficit financing and the rationalisation of the tax regime through the introduction of the valued added tax (VAT), in 1998.
There is in addition, the privatisation of state owned enterprises, and to date, about two hundred (200) such entities have been divested under the programme. Similarly, three (3) banks that were not meeting the capital adequacy ratios established by the Central Bank have been liquidated in 1999 and two (2) new banks have entered the market. Internal cocoa marketing has also been privatised and shares of the Produce Buying Company, the largest state owned cocoa purchasing company were offered for sale on the Ghana Stock Exchange in 1999.
| THE GATEWAY PROJECT |
The future looks promising for the economy, especially when viewed against recent developments like the establishment in 1998 of the Ghana Trade and Investment Gateway Project (GHATIG) which aims to attract a critical mass of export-oriented investors to Ghana and make her the trade and investment hub in West Africa. The project further seeks to support the private sector development and operation of an export free zone by providing financing for investment in off-site infrastructure. Additionally, it is to enhance the performance of frontline institutions like Ghana Investment Promotion Centre (GIPC), Customs, Immigration, Ghana Free Zones Board and the Environmental Protection Agency and also re-engineer them into proactive trade and investment facilitators.
| REGIONAL ECONOMIC INTERGRATION |
Another recent development of significance is the move by the 15 members of the Economic Community of West African States (ECOWAS), spearheaded by Nigeria and Ghana, to speed up the process of integrating the economies of the regional grouping that has a population of over 250 million. In a declaration signed in Accra on April 20, 2000 by Nigeria, Ghana, Sierra Leone, Guinea, and Gambia, it has been decided that a second monetary zone will be created for the community by January 2003 with a single monetary currency emerging by year 2004. Perhaps, the best example of promoting regional economic growth and development is the formation of the West African Gas Pipeline Project (WAGP) by Nigeria, Ghana, Benin and Togo. The project, which is expected to serve as a catalyst for increased investment in West Africa for growth and employment generation, is a 21st century infrastructural project that seeks to supply cheap, clean and reliable energy (gas) from fields in the Western Delta of Nigeria, using an 800 kilometre pipeline with a throughput of about 100 – 120 million cubic feet of gas. The pipeline is expected to pass through Benin and Togo to Ghana. The gas reserves in Nigeria is estimated at 40 trillion cubic feet.
| ECONOMIC INDICATORS |
* Population (2000 provisional figures, Ghana Statistical
Service) 18,412,247
* Life Expectancy (African Competitiveness Report
2000-2001) 57.5
* GDP Nominal (1999) Cedis 4,956.9 billion
* GDP Per Capita (1999) US$346
* Real GDP Growth (1999) 4.4%
* Inflation (1999) (End of period = 13.8%); annual
average 12.4% |
GROSS DOMESTIC PRODUCT
(AT CONSTANT 1993 PRICES)
(BILLION CEDIS)
YEAR GDP REAL GROWTH(%)
1995 4160.0 4.0
1996 4351.2 4.6
1997 4533.9 4.2
1998 4746.7 4.7
1999 4956.9 4.4
Source: (Bank of Ghana, 1999)
TRADE
* External Debt (end Dec.1999) US$5959.96 million
* Domestic Debt (1999) Cedis 5,797.3 billion
* Debt Service Ratio (including IMF, 1999) 0.25
* Debt Service Ratio (excluding IMF,1999) 0.22
* Exports f.o.b (1999) US$2116.6 million
* Imports f.o.b (1999) US$3,228.1 million
Source: (Bank of Ghana, 1999)
Major Exports (1999)
* Cocoa
* Minerals (Gold, Diamonds and Manganese etc)
* Timber, and wood products
* Aluminium products
* Pineapples
* Tuna
* Prepared or preserved fish
* Petroleum Oil
Major Export Destinations (1999)
United Kingdom
Togo
Netherlands
USA
Germany
Japan
Nigeria
Major Imports (1999)
* Plant, Machinery and Spares
* Petroleum Products
* Raw Materials and Other Intermediate Goods
Major Import Origins (1999)
Nigeria
United Kingdom
Cote D'Ivoire
USA
Germany
Netherlands
Japan
Tourism
* Tourist Arrivals (1999) 372,000
* Receipts US$342 million
* Number of Hotels 767 (2 star and above, excluding
budget hotels)
* Number of Rooms 10,896
* Number of Beds 14,445
Star Rated Accommodation Facilities in Ghana - end 1999
¨ Five Star - 1
¨ Four Star - 2
¨ Three Star - 15
¨ Two Star - 67
¨ One - 97
¨ Guest Houses - 73
Source: (Bank of Ghana/Ministry of Tourism)
Communication Service Providers (2000)
* National Fixed Network Operators 2
* Rural Operator 1
* Mobile Cellular Operators 3
* Internet Service Providers 12 in operation (29
registered)
* Pagers Providers 7
* Public Data Service Providers 9
* VSAT Data Network Operators 14
* Free on Air Television Stations 3
* Commercial VHF (FM) Stations 49 (On Air); 58 (Authorised)
* Pay Per View Cable/Satellite (Accra) 3 (On Air);
7 (Authorised)
* Pay Per View Subscription
Satellite Rebroadcasting TV 7
Source: National Communication Authority, April 2000)
For all enquiries contact
THE CHIEF EXECUTIVE
Ghana Investment Promotion Centre,
P.O.Box M193, Accra, Ghana.
Tel: (233)-(21)-66 5125 - 9.
Fax: (233)-(21)-66 3801.
E-mail: gipc@ghana.com
Website: http://www.gipc.org.gh |
