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History And Political Situation Area And Geographical Features
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Standard Of Living Climate

History and Political situation
Ghana is generally considered to be one of the most stable countries in Africa, although its political history has been turbulent, with ten civilian and military governments since Independence in 1957. In 1979, junior officers led by Flt Lt J J Rawlings seized power, handing over four months later to Dr Hilla Limann and the civilian government of the People's National Party. But disillusionment with this regime led Rawlings to take power again on 31 December 1981. He abolished the Constitution, dissolved Parliament, proscribed all political parties, and became Chairman of the PNDC (Provisional National Defence Council).

By 1992, calls for greater democracy coincided with pressure for political reform and in March the PNDC announced its timetable for a return to constitutional rule. A new Constitution was endorsed by referendum in April 1992 and at the subsequent presidential elections Rawlings won 58% of the vote. Ghana's Fourth Republic was inaugurated on 7 January 1993. In December 1996 President Rawlings was re-elected for a second, and final term of office, winning just over 57% of the vote.

Parliamentary and presidential elections took place in December 2000. After a second round in the Presidential elections John Kufuor, the candidate of the opposition New Patriotic Party (NPP), defeated the candidate of the ruling National Democratic Congress (NDC), John Atta-Mills, by a margin of 56% to 44%. The NPP won the largest number of seats in Parliament (100 out of 200), followed by the NDC (92), Independents (4), People's National Congress (3) and Convention People's Party (1).

Kufuor was inaugurated as President on 7 January 2001 in a smooth and exemplary transfer of power. He has warned Ghanaians to expect a period of austerity as he attempts to reinvigorate an economy which is suffering from low prices for its key exports (cocoa, coffee) and the high oil price, which is inflating the import bill and using up scarce foreign exchange.

Political relations with Britain are warm, as exemplified by the successful State Visit to Ghana in November 1999 of Her Majesty the Queen and HRH Prince Philip. Robin Cook, Secretary of State for Foreign and Commonwealth Affairs, accompanied the Royal Couple. Other recent visitors to Ghana include:

  • Tony Blair, Prime Minister, February 2002
  • Baroness Amos, Spokesperson on International Development, House of Lords, January 2001(Baroness Amos is now Minister of State for Africa in the Foreign and Commonwealth Office)
  • Clare Short, Secretary of State for International Development, February 2001
  • Brian Wilson, Minister of State, Foreign and Commonwealth Office, March 2001 President Rawlings made a successful official visit to the UK in July 1995 and a private visit in September 2000. Ministers, parliamentarians,senior officials and other high-level Ghanaians pay regular visits to the UK.
The most notable recent visit have been :
  • Otumfuo Osei Tutu II, the Asantahene, who paid his first official visit since becoming King of the Ashanti, to the UK in May 2000.
  • Mr John Mahama, ex-Minister of Communications, to Wilton Park in July 2000.

Trade Statistics

The UK is Ghana's main non-oil trading partner and is second (behind Italy) in the league of OECD exporters to Ghana. UK exports to Ghana over the last 5 years peaked at a high of £279 million in 1996. In 2001, they were worth £144 million.


UK Exports
UK Imports
Source: Overseas Trade Statistics of the UK
Shares of Ghana's Imports of Goods: 2000

US$ Min
% Share
1. Nigeria
2. Italy
3. UK
4. USA
5. Cote d'Ivoire
6. Germany
7. Netherlands
8. China
9. France
10. South Africa
Total Imports
Source: IMF Direction of Trade, DTI/ES Statistics
Top 10 UK exports to Ghana 2000

£ 000
Tobacco and tobacco manufactures
Road vechicles
General industry machinery and equipment, nes and machine parts nes
Specialised industrial machinery
Electrical machinery, apparatus and appliances, nes and electrical parts thereof
Telecommunication and sound recording and reproducing apparatus
Manufactures of metals nes
Power generating machinery and equipment
Textile fibres
Essential oils and resinoids and perfume materials; toilets, polishing and cleaning preparations
Total Trade 144,409
Top UK 10 Imports from Ghana 2000

£ 000
Coffee, tea, cocoa, spices and manufactures thereof
Fish,(not marine mammals), crustaceans, molluscs, & aquatic invertebrates and preparations thereof
Vegetables and fruit
Cork and wood
Non-ferrous metals
Metalliferous ores and metal scrap
Furniture and parts thereof; bedding, mattresses, supports, cushions and similar stuffed furnishings
Power generating machinery and equipment
Cork and wood manufactures (excl. furniture)
Fixed vegetable fats and oil; crude, refined or fractionated
Oil seeds and oleaginous fruit

Standard of living

The general standard of living in Ghana, particular in the north of the country is not high . Ghana has a per capita income of about US$434 (est. 2000). In 1997, the Government adopted a medium-term development plan to elevate Ghana to the status of a middle-income country by 2020. To achieve this, Ghana will need to diversify the economy away from reliance on gold and cocoa (which together account for over 70% of export earnings). To its credit, Ghana is attempting to build up an industrial base through the establishment of free zones. The "Gateway Programme" seeks also to encourage foreign expertise to use Ghana as an access point for land locked countries to the north.

Public Expenditure

The March 2001 Budget was rather austere, with a promise of a more ambitious budget later in the year if the macro-economic situation improved and after an extensive audit of Government machinery and processes had been undertaken.

The worsening economic situation in Ghana was highlighted in the budget announcement by Finance Minister Yaw Osafo-Maafo that Ghana is to join the heavily indebted poor countries (HIPC) initiative. This will allow the country to apply for debt cancellation but it is also likely to have negative implications for the country's relatively good credit standing.

Under HIPC, a debt reduction programme packaged by the International Monetary Fund and World Bank, the nation is expected to receive an amount of US$1 billion over a five-year period to finance its poverty reduction programme.

The 2001 budget is predicated on targets of:

  • real GDP growth of 4%;
  • end-of-period inflation of 25%;
  • overall broad budget deficit equivalent to 5.2% of GDP;
  • overall balance of payments surplus of $165.2 million (through accumulation of external reserves despite falling world prices for major exports);
  • price stability as goal of monetary policy, including monetary growth rate of 32%;
  • widening of tax net and establishment of tax courts to fast-track prosecution of defaulters;
  • establishing private/public partnerships for industrial development, Tourism Development Fund, promotion of small enterprise and enhanced trade relations, improved revenue collection at customs posts, and streamlined customs clearances to attract investment and private sector growth;
  • action against defaulters on Government loans and taxes;
  • establishment of an Economic Policy Co-ordination Committee of officials from key ministries and the Bank of Ghana;
  • audit of parastatals and of the Divestiture Implementation Committee.
Source: Foreign and Commonwealth Office and Business Africa magazine

Area and geographical features

Area: 238, 305 sq. and extends 680 km north to south. The country is bordered to the south by the Gulf of Guinea, with Togo on its eastern side and Cote d Ivoire on the west. Burkina Faso borders the country to the north.


The population of Ghana is approximately 19.2 Million with approximately 42% aged 14 years or less and only 3% over 65. Average life expectancy is 56 years for men and 58.8 years for women.

Principal commercial centres and towns

Accra 1.7 million
Kumasi 420,000
Tema 240,000
Tamale 200,000
Takoradi 120,000


Situated just north of the equator, Ghana's climate is generally tropical and humid, with daily temperatures usually only varying between 23C and 30C (86F). There are two rainy seasons, March to July and September to October. June is the wettest month in the capital Accra with average rainfall of 235 mm, while December is the driest with 18 mm.

Economic Overview

Ghana has a per capita income of about US$405. Past economic growth has been uneven: 1997 - 4.3%, 1998 - 5.3%, 1999 - 3.9%, 2000 - 3.7%, 2001 an estimated 4.2%.

More than a decade after the government led the way in the African structural adjustment process, poverty in Ghana remains pervasive and full economic recovery elusive. But the country has potential. It is relatively rich in minerals (gold, bauxite, manganese and diamonds) and timber, though timber reserves are declining as a result of large-scale deforestation both officially sanctioned and illegal. Sizeable amounts of oil and gas have yet to be confirmed. Agriculture is of prime importance, occupying 65%* of the workforce. The government is keen to modernise this sector, responsible for 35%* of GDP. An African Development Fund report of September 2000 estimates that agriculture operates at only 20%* of its potential.

(*Source: African Development Bank)

Tourism has potential and tourist accommodation is gradually being improved. But outside the main cities, infrastructure and communications are poor. The Ghanaian government does not have funds to invest in tourism; thus external investment will be in the shape of Private Finance.

The Economic Recovery Programme began in 1983 and has helped to restore macro-economic stability in Ghana. In their "Vision 2020" document, the former government declared an intention to achieve an accelerated growth rate of 8-10% in the medium term. However, the new Government has decided to bring in a new strategy, Vision 2010, with new targets. For now, an overall growth rate of more than 5% is required to achieve substantial improvement in the economy and so reduce existing poverty levels. But annual GDP growth over the past few years has been disappointing, averaging only 4.3%. So far the spread of benefits from economic reform has been uneven. The recent Ghana Living Standards Survey has shown an overall reduction in poverty, but an increase in some rural areas.

Successive governments have recognised the importance of attracting Foreign Direct Investment and encouraging private sector development. They have re-stated their commitment to the privatisation of state owned enterprises.

The inflation and interest rate continued its download path, and the cedi reasonably maintained its value against the dollar and other major currencies. The rate of inflation is significantly declined frm 40.5% at the begining of 2001 to 21.3% at the end of the year.

Oil prices have dropped whilst the price of gold and cocoa have stabilsed, though they are both thought to be on the low scale. The economy grew at an estimated 4.2% in 2001. The macroeconomic environment continued improving into the fourth quarter of 2001.

The new Government (elected in December 2000) has made a promising start, indicating a determination to re-establish Ghana as a base for legal and profitable business, revive the rural economy, and restore monetary and fiscal stability. Both in the Public and Private Sectors there is an air of optimism after the setbacks of late 1999 and 2000. The west Africa Gas Pipeline will finally be constructed in 2003. The 600km pipeline will link lagos to takoradi,(Ghana with a supply point in tema (Ghana). The pipeline will have an estimated capacity of 400m cubic feet a day and is expected to supply.

In March 2001 Finance Minister Yaw Osafo-Maafo announced that Ghana has applied for assistance under the heavily indebted poor countries (HIPC) initiative, a debt reduction programme packaged by the International Monetary Fund and World Bank. Under HIPC, external debt is cancelled to enable countries to use savings to fund poverty eradication programmes. If the application is successful, Debt Relief International has calculated that Ghana could expect to receive debt relief of $875m over 3 years. HIPC status could also have negative implications for the country's relatively good credit standing.

The Department for International Development(DFID) 56.7m in in aid to Ghana in 1999, 26% of total net oda. Ghana has signed on to be part of a second Single Monetary Zone in the West African sub-region by 2003. The stability in exchange rates, which the single monetary zone will bring, will serve to make Ghana even more attractive as an investment destination.

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