Country Report May 2000 © the Economist Intelligence Unit Limited 2000 2 Ghana
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COUNTRY REPORT Ghana May 2000 The Economist Intelligence Unit 15 Regent St, 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 50 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 our digital portfolio, where our latest analysis is updated daily; through printed subscription products ranging from newsletters to annual reference works; through research reports; and by organising conferences and roundtables. The firm is a member of The Economist Group. 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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 Contents 3 Summary 4 Political structure 5 Economic structure 5 Annual indicators 6 Quarterly indicators 7 Outlook for 2000-01 7 Political forecast 8 Economic policy outlook 10 Economic forecast 13 The political scene 16 Economic policy 20 The domestic economy 20 Economic trends 21 Agriculture 22 Industry and mining 24 Financial services 25 Infrastructure and other services 26 Foreign trade and payments List of tables 10 International assumptions summary 12 Forecast summary 17 The 2000 budget: selected macroeconomic and fiscal targets 18 Government finances, 1999 19 Government finances, 2000-02 19 Discretionary expenditure, 2000 20 Real GDP growth by sector, official estimates 22 Agricultural growth 22 Industrial growth 24 Ashanti Goldfields 26 Traditional exports 27 External debt stock, end-1998 EIU Country Report May 2000 © The Economist Intelligence Unit Limited 2000 2 Ghana List of figures 13 Gross domestic product 13 Real exchange rates 20 Inflation 20 Fuel prices 21 Exchange rate 26 Cocoa prices . EIU Country Report May 2000 © The Economist Intelligence Unit Limited 2000 Ghana 3 May 2nd 2000 Summary May 2000 Outlook for 2000-01 The vice-president, John Evans Atta Mills, remains the clear favourite to become the presidential candidate of the ruling National Democratic Congress (NDC) in the election scheduled for December 8th 2000. With exceptionally weak international cocoa prices, cocoa exports are forecast to fall by 33% from US$542m in 1999 to US$360m in 2000, recovering slightly to US$417m in 2001. Similarly in the case of gold, solid output growth will continue despite only modest increases in the gold price. This should raise total gold exports from an estimated US$694m in 1999, to US$711m in 2000 and US$780m in 2001. Fiscal pressures will be high in 2000, with the combined effects of exceptionally low cocoa prices, only marginally better gold prices and the continued fall of the cedi. The political scene John Evans Atta Mills has now formally declared his intention to stand as the presidential candidate of the NDC. One of the National Patriotic Party’s founding members and most prominent officials, Kwame Pianim, has resigned from the party in order to spend more time working for national reconciliation. Hopes for a broad opposition alliance to challenge the NDC have been fading. Economic policy Ghana will continue with its current adjustment programme which runs up to May 2002. The government released its budget in early February, predicting real GDP growth of 5% in 2000. The World Bank has withdrawn a loan of US$100m for a major water project, claiming it was awarded under opaque circumstances, which has cooled relations between the government and donors just three months after a successful donor consultative meeting in late November 1999. The domestic economy Inflation is reported to have increased to 14.9% in February 2000, with the cedi at C3,832:US$1. The cedi continued to fall, reaching C4,500:US$1 in April. In March of the 1999/2000 cocoa buying season, reported cumulative purchases of cocoa were 396,106 tonnes more than in the entire previous season. Ashanti Goldfields (AGC) has sold a 50% stake in the Geita mine in Tanzania. AGC claims that Geita will be producing 150,000 oz of gold in the second half of 2000, which will and rise to around 500,000 oz annually once the mine is running at full capacity. Foreign trade and According to recently released data in the World Bank’s Global Development payments Finance (formerly World Debt Tables), Ghana’s total external debt stock had risen to US$6.88bn by end-1998, from US$6.35bn a year earlier. Editor: Christopher Eads Editorial closing date: May 2nd 2000 All queries: Tel: (44.20) 7830 1007 Fax: (44.20) 7830 1023 Next report: Full schedule on www.eiu.com/schedule EIU Country Report May 2000 © The Economist Intelligence Unit Limited 2000 4 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 National elections December 1996 (presidential and parliamentary); next elections due 8th December 2000 Head of state President, elected by universal suffrage for a maximum of two four-year terms; currently Jerry John Rawlings, now in his second term National government Cabinet, partly appointed by the president in February-May 1997; major reshuffle in January 2000 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 Convention Party (CP); the People’s Convention Party (PCP); United Ghana Movement (UGM). The National Reform Party was formed in July 1999 by a breakaway faction of the NDC President Jerry John Rawlings Vice-president John Atta Mills Key ministers Attorney-general & justice Obed Asamoah Communications John Mahama Defence EKT Donkoh Education Ekwow Spio-Garbrah Employment & social welfare Mohammed Mumuni Environment, science & technology Cletus Avoka Finance Richard Kwame Peprah Food & agriculture Joseph Owusu-Acheampong Foreign affairs Victor Gbeho Health Kwame Danso Boafa Interior Nii Okaidja Adamafio Lands & forestry Christine Amoako-Nuamah Local government Cecilia Johnson Mines & energy John Frank Abu Parliamentary affairs Kwabena Adjei Roads & transport Edward Salia Tourism Mike Gizo Trade & industries Dan Abodakpi Works & housing Issac Adjei-Mensah Youth & sports Enoch Teye Mensah Central bank governor Kwabena Duffour EIU Country Report May 2000 © The Economist Intelligence Unit Limited 2000 Ghana 5 Economic structure Annual indicators 1995 1996 1997 1998 1999 GDP at market prices (C bn) 7,418 10,385 14,113 17,364 20,874a Real GDP growth (%) 4.5 5.2 4.2 4.7 4.2b Consumer price inflation (av; %) 74.3 34.0 27.9 19.4 12.5b Population (m) 17.34 17.83 18.34 18.86 19.40a Exports fobc (US$ m) 1,431 1,571 1,490 1,813 1,835 Imports fobc (US$ m) 1,678 1,937 2,128 2,563 2,508 Current-account balance (US$ m) –145 –324 –541 –350 –567 Reserves excl gold (US$ m) 697.5 828.7 508.0d 377.0 450.0 Total external debt (US$ m) 5,872 6,202 5,982 6,884 7,152 External debt-service ratio, paid (%) 21.4 23.5 27.4 24.6 20.6 Cocoa productiond (‘000 tonnes) 404 323 409 390 410a Gold production (m fine oz) 1.6 1.6 1.7 2.3 2.4a Exchange rate (av; C:US$) 1,200 1,637 2,050 2,314 2,647e April 10th 2000 C4,500:US$1 Origins of gross domestic product 1997 % of total Components of gross domestic product 1997 % of total Agriculture, forestry & fishing 36.6 Private consumption 80.0 Industry 25.4 Government consumption 12.4 Manufacturing 9.2 Gross domestic investment 23.6 Services 28.7 Exports of goods & services 19.8 GDP at factor cost 100.0 Imports of goods & services –36.5 GDP at market prices 100.0 Principal exports 1998 US$ m Principal imports 1990 US$ m Gold 682 Capital goods 544 Cocoa beans & products 621 Intermediate goods 356 Timber & products 172 Fuel & energy 210 Consumer goods 124 Main destinations of exports 1998f % of total Main origins of imports 1998f % of total Togo 12 Nigeria 14 UK 12 UK 12 Italy 11 Italy 9 Netherlands 8 US 7 US 7 Spain 6 a Official estimate.