Country Report 3Rd Quarter 1999 © the Economist Intelligence Unit Limited 1999
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COUNTRY REPORT Ghana The full publishing schedule for Country Reports is now available on our web site at http://www.eiu.com/schedule. 3rd quarter 1999 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 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. 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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 6 Outlook for 1999-2000 11 Review 11 The political scene 14 Economic policy 16 The economy 18 Agriculture 20 Mining and industry 23 Energy 23 Health 24 Finance 25 Foreign trade, aid and payments 28 Quarterly indicators and trade data List of tables 9 Forecast summary (domestic) 10 Forecast summary (external) 15 Ghana’s domestic payment arrears 17 Inflation 18 FDI inflows into Africa 19 Domestic cocoa processing 20 Gold output by major producers 21 Ashanti Goldfields Company: production and results 23 Diamond output 24 HIV/AIDS in Africa: comparative estimates 25 Ghana Stock Exchange: selected shares 26 Ghana’s trade with the US 28 Quarterly indicators of economic activity 29 Foreign trade 30 Direction of trade List of figures 10 Gross domestic product 10 Real exchange rates 16 Population 18 Cocoa prices 20 Gold prices EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 . Ghana 3 August 16th 1999 Summary 3rd quarter 1999 Outlook for 1999-2000: Calls for a truth and reconciliation commission will haunt the ruling NDC and could influence the nomination for President Rawlings’s successor. The 2000 elections will be close but the NDC will hold on to power. Ethnicity is not expected to be an election issue, but growing labour unrest may pose some problems for the authorities. Higher government spending is expected to lead to an increase in the fiscal deficit. GDP growth is forecast at 5% in 1999 and 5.5% in 2000, and annual average inflation will rise to 14% in 1999 and 15% in 2000. Falling world prices for gold and cocoa will lead to a decline in export earnings, widening the current-account deficit to $285m in 1999 and $360m in 2000. The cedi will depreciate further this year but will remain stable in real terms in 2000. The political scene: The 20th anniversary of the coup that brought President Rawlings to power has rekindled memories of those who suffered. Rivalry be- tween the main political parties has intensified. The NRP has been officially registered and promptly accused the NDC of harassment, while the CP remains in disarray. National roadblocks have been established in an attempt to cut crime. Students have threatened to protest as labour unrest continues to rise. Economic policy: The World Bank has provided support for economic reforms, focusing on privatisation. VAT revenue has been on target, but the government’s payment arrears have remained a cause for concern. An export zone has been launched and a census is expected to be conducted next year. The economy: The government’s GDP figures have come under some scru- tiny. Inflation has fallen into single digits but interest rates remain high. The currency has started to decline. FDI inflows increased between 1993 and 1997. Sectoral trends: Low cocoa prices could lead to co-operation with Côte d’Ivoire. Ghana is keeping producer prices high, which has led to an increase in smuggling. Cocoa processing has suffered from the 1998 electricity crisis. Gold production rose by 40% in 1998. Labour strife has reduced production at AGC. Diamond production rose by 200% in 1998. The regional gas pipeline project may be cancelled. Fertility rates have been declining, while a UN report shows a low incidence of HIV. Finance: A stock broker has been expelled from the GSE and the stockmarket has continued to slump. Foreign aid, trade and payments: Trade with the US fell in 1998 but timber exports rose. Fish exports also increased, despite a ban by the EU which has now been lifted. Editor: Piers Haben All queries: Tel: (44.20) 7830 1007 Fax: (44.20) 7830 1023 Next report: Our next Country Report will be published in November EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 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 7th 1996 (presidential and legislative); next elections due in 2000 Head of state President, elected by universal suffrage for a maximum of two four-year terms; currently Jerry John Rawlings, serving a second term National government Cabinet, partially appointed by the president in February-May 1997; last major reshuffle in January 1998 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 Agriculture Joseph Owusu-Acheampong Attorney-general & justice Obed Asamoah Communications John Mahama Defence E K T Donkoh Education Ekwow Spio-Garbrah Employment & social welfare Mohammed Mumuni Environment, science & technology Cletus Avoka Finance Richard Kwame Peprah Food & agriculture Kwabena Adjei Foreign affairs Victor Gbeho Health Samuel Nuamah-Donkor Interior Nii Okaidja Adamafio Lands & forestry Christine Amoako-Nuamah Local government Kwamena Ahwoi Mines & energy Fred Ohene Kena Parliamentary affairs Kwabena Adjei Roads & transport Edward Salia Tourism Mike Gizo Trade & industries John Frank Abu Works & housing Issac Adjei-Mensah Youth & sports Enoch Teye Mensah Central bank governor Kwabena Duffour EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 Ghana 5 Economic structure Latest available figures Economic indicators 1994 1995 1996 1997 1998a GDP at market prices (C bn) 4,950 7,418 10,385 14,113 17,200 Real GDP growth (%) 3.6 4.5 5.2 5.1 4.6b Consumer price inflation (av; %) 24.9 74.3 34.0 27.9 19.4c Population (m) 16.86 17.34 17.83 18.34 18.75 Exports fobd ($ m) 1,238 1,431 1,571 1,490 1,820 Imports fobd ($ m) 1,580 1,678 1,937 2,128 2,098 Current-account balance ($ m) –255 –145 –324 –541 –255 Reserves excl gold ($ m) 583.9 697.5 828.7 508.0b 378.2c Total external debt ($ m) 5,464 5,872 6,202 5,982 6,120 External debt-service ratio, paid (%) 22.9 21.4 23.5 27.4 26.6 Cocoa productione (‘000 tonnes) 290 404 323 409 390b Gold production (m fine oz) 1.5 1.6 1.6 1.7 2.3b Exchange rate (av; C:$) 957 1,200 1,637 2,050 2,314c August 13th 1999 C2,620:$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 100.0f Imports of goods & services –36.5 GDP at market prices 100.0g Principal exports 1997 $ m Principal imports 1990 $ m Gold 579 Capital goods 544 Cocoa beans & products 470 Intermediate goods 356 Timber & products 172 Fuel & energy 210 Consumer goods 124 Main destinations of exports 1997h % of total Main origins of imports 1997h % of total Togo 13 UK 15 UK 12 Nigeria 14 Germany 10 US 10 US 9 Germany 6 France 7 Spain 5 a EIU estimates.