Country Report 3Rd Quarter 1996 © the Economist Intelligence Unit Limited 1996 2 Ghana
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COUNTRY REPORT Ghana 3rd quarter 1996 The Economist Intelligence Unit 15 Regent Street, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 40 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The EIU delivers its information in four ways: through subscription products ranging from newsletters to annual reference works; through specific research reports, whether for general release or for particular clients; through electronic publishing; and by organising conferences and roundtables. The firm is a member of The Economist Group. London New York Hong Kong The Economist Intelligence Unit The Economist Intelligence Unit The Economist Intelligence Unit 15 Regent Street The Economist Building 25/F, Dah Sing Financial Centre London 111 West 57th Street 108 Gloucester Road SW1Y 4LR New York Wanchai United Kingdom NY 10019, USA Hong Kong Tel: (44.171) 830 1000 Tel: (1.212) 554 0600 Tel: (852) 2802 7288 Fax: (44.171) 499 9767 Fax: (1.212) 586 1181/2 Fax: (852) 2802 7638 Electronic delivery EIU Electronic Publishing New York: Lou Celi or Lisa Hennessey Tel: (1.212) 554 0600 Fax: (1.212) 586 0248 London: Moya Veitch Tel: (44.171) 830 1007 Fax: (44.171) 830 1023 This publication is available on the following electronic and other media: Online databases CD-ROM Microfilm FT Profile (UK) Knight-Ridder Information World Microfilms Publications (UK) Tel: (44.171) 825 8000 Inc (USA) Tel: (44.171) 266 2202 DIALOG (USA) SilverPlatter (USA) Tel: (1.415) 254 7000 LEXIS-NEXIS (USA) Tel: (1.800) 227 4908 M.A.I.D/Profound (UK) Tel: (44.171) 930 6900 Copyright © 1996 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author’s and the publisher’s ability. However, the EIU does not accept responsibility for any loss arising from reliance on it. ISSN 1350-7052 Symbols for tables “n/a” means not available; “–” means not applicable Printed and distributed by Redhouse Press Ltd, Unit 151, Dartford Trade Park, Dartford, Kent DA1 1QB, UK Ghana 1 Summary Ghana 3rd quarter 1996 August 13, 1996 Political and economic structures pages 2-3 Outlook: The president, Jerry Rawlings, appears set to win December’s election, thanks to opposition divisions over leadership issues. The inflation picture is improving but the fiscal outlook remains uncertain. pages 4-6 The political scene: The government has stepped up its preparations for the presidential and legislative elections. Opposition parties have protested at higher deposits and the reopening of the electoral register. Six political parties appear set to contest the polls; two have been disqualified. The Nkrumahist PCP-NCP alliance has named its presidential candidate: the current vice-president, Kow Arkaah. Factions have become identifiable within the ruling NDC. pages 6-11 The economy: The inflation rate has slowed. A report in a British newspaper has painted a gloomy long-term prognosis for the economy. There is conflict- ing information on new investment, but investment start-ups appear good by regional standards. pages 11-14 Agriculture: Bullish cocoa forecasts have been vindicated, and the 1996-97 outlook is good. Prospects for 1997 earnings appear reasonable. Donor pressure in favour of liberalisation has caused a row over the preservation of cocoa quality. Cocobod has maintained its anti-deregulation position. Ghana is processing an increasing amount of cocoa at home and selling more by-products abroad. pages 15-17 Mining: AGC’s profits are down 3%, but hedging has saved the day. The company continues its expansion drive. More investors have arrived from Australia and Canada, and existing Australian investors are expanding their stakes. pages 17-18 Infrastructure and health: The World Bank is preparing a $50m loan to back reforms in the health sector. The government has announced plans to license a second national telecoms operator to compete with Ghana Telecom, as the government’s two-year telecoms programme continues. page 19 Foreign trade, aid and payments: Debt rose only marginally in 1995, although central bank data conflict with World Bank figures. An Accra-based think-tank has shed light on smaller export sectors; non-traditional exports have expanded, with the EU the leading destination. Switzerland has been the major export destination in the first quarter. Tourism earnings have risen, but analysts have stressed remaining deficiencies. pages 20-22 Statistical appendices pages 23-24 Editors: Andrew Manley; Gill Tudor All queries: Tel: (44.171) 830 1007 Fax: (44.171) 830 1023 EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 2 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; 200 members elected by universal suffrage every four years Last elections: November 1992 (presidential); December 1992 (legislative) Next elections due: December 1996 (presidential and legislative) Head of state: president, elected by universal suffrage for a maximum of two terms; currently Jerry Rawlings National government: cabinet, appointed by the president in April 1993; reshuffled in March 1996 Main political parties: Progressive Alliance (PA), the ruling coalition, consisting of the National Democratic Congress (NDC—the majority party) and the Every Ghanaian Living Everywhere (EGLE) Party. Opposition parties include: the New Patriotic Party (NPP); the People’s National Convention (PNC); the National Convention Party (NCP); the People’s Convention Party (PCP) Vice-president Kow Arkaah Secretaries of state defence Mahama Iddrisu education Harry Sawyer employment & social welfare David Sarpong Boateng environment, science & technology Christine Amoako Nuamah finance, economic planning, mines & energy Richard Kwame Peprah food & agriculture Steve Obimpeh foreign affairs, justice & attorney-general Obed Asamoah health Eunice Brookman Amissah information Kofi Totobi Quakyi interior Emmanuel Osei Owusu lands & forestry Kwabena Adjei local government & rural development Kwamena Ahwoi parliamentary affairs Joseph Owusu Acheampong trade & industry Ibrahim Adam transport & communications Edward Salia Ministers (not of cabinet rank) roads & highways Ato Quarshie tourism Vida Amaadi Yeboah works & housing Kobina Fosu youth & sports Enoch Teye Mensah Chairman of the Bank of Ghana Godfried K Agama EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 Ghana 3 Economic structure Latest available figures Economic indicators 1991 1992 1993 1994 1995a GDP at market prices C bn 2,575 3,009 3,949 5,117a 8,253 Real GDP growth % 5.2 3.6 4.8 3.8 4.5 Consumer price inflation % 17.3 10.9 25.0 24.9 59.6b Population m 15.48 15.96 16.45 17.11 17.69 Exports fobc $ m 998 986 1,064 1,236 1,465d Imports fobc $ m 1,319 1,457 1,728 1,580 1,700d Current account $ m –251 –375 –558 –264 –182d Reserves excl gold $ m 550.2 319.9 409.7 661.0 697.5b Total external debt $ m 4,351 4,477 4,835 5,389 5,750 External debt-service ratio % 27.3 28.4 24.7 24.6 25.0 Cocoa productione ’000 tons 240 305 255 290 380 Gold production m fine oz 0.9 1.1 1.4 1.5 1.6 Exchange rate (av) C:$ 367.8 437.1 649.1 956.7 1,200.4b August 9, 1996 C1,680:$1 Origins of gross domestic product 1993 % of total Components of gross domestic product 1993 % of total Agriculture, forestry & fishing 47.6 Private consumption 89.7 Mining & industry 16.0 Government consumption 11.7 Manufacturing 8.5 Gross domestic investment 14.8 Services 36.4 Change in stocks 0.1 GDP at factor cost 100.0 Exports of goods & services 19.6 Imports of goods & services –35.8 GDP at market prices 100.0 Principal exports 1994a $ m Principal imports 1990 $ m Gold 549 Capital goods 544 Cocoa beans & products 305 Intermediate goods 356 Timber 165 Fuel & energy 210 Consumer goods 124 Main destinations of exports 1994f % of total Main origins of imports 1994f % of total Germany 14 Nigeria 16 UK 12 UK 15 USA 12 Italy 8 Togo 8 Japan 6 a EIU estimates. b Actual. c Balance-of-payments basis. d Government estimate. e Crop years beginning in October of calendar years. f Based on partners’ trade returns; subject to a wide margin of error. EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 4 Ghana Outlook Election preparations As preparations accelerate for the legislative and presidential elections on accelerate— December 7, the president, Jerry Rawlings, and the ruling National Democratic Congress (NDC) are maintaining the political initiative. They are weathering the internecine constituency battles and the resulting deselection of over 75 MPs, who have exposed party rifts by accusing the powerful first lady, Nana Konadu Rawlings, of hijacking the selection process. The president’s failure to be seen addressing corruption allegations against senior ministers has reduced his following, but not enough to outweigh institutional advantages which any challenger will be hard put to beat. A skilful election campaign has Mr Rawlings on (state) television every night, opening schools and clinics, digging feeder roads, dispensing roofing sheets, and campaigning for develop- ment. Having already used visits to the USA and Asia, and involvement in Liberia’s peace talks, to emphasise his international stature, he recently hosted a conference on foreign investment in Africa to broaden his appeal among Ghana’s business community—and foreign investors.