Economy
From The Report: Ghana 2016
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The Ghanaian economy is strongly correlated to global commodities such as cocoa, gold and oil, which are the three main sources of income and foreign currency. Price swings for these three resources, increased spending on domestic public sector wages, an electricity shortage and other external factors have combined to slow the pace of development in recent years, leading to a depreciating currency and a budget shortfall. According to provisional statistics, GDP for 2014 was estimated at $33.4bn, indicating year-on-year growth of 4%, while non-oil GDP totalled $31.12bn. New offshore oil and gas fields are expected to accelerate economic growth starting in 2016, with energy set to contribute 2% to GDP in 2016 and 4.1% by 2017.

This chapter includes interviews with Seth Terkper, Minister of Finance, and Mawuena Trebarh, CEO, Ghana Investment Promotion Centre (GIPC).

Articles from this Chapter

Overview

Pushing ahead: Despite recent challenges, the government is looking to overcome dropping energy prices
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The Ghanaian economy is strongly correlated to global commodities such as cocoa, gold and oil, which are the three main sources of income and foreign currency. Price swings for these three resources, increased spending on domestic public sector wages, an electricity shortage and other external factors have combined to slow the pace of development in recent years, leading to a depreciating currency and a budget shortfall. The short-term challenges have overshadowed a more encouraging long-term development…

Analysis

Toeing the line: Increased discipline and transparency is expected to benefit the tighter budget
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The finalisation of a $918m borrowing programme through the IMF in April 2015 means Ghana’s economic trends over the short and medium terms will be predictable and structured, featuring a series of just-published targets and objectives. The government and the IMF have agreed to a three-year plan to address challenges. The process is called the Ghana Shared Growth and Development Agenda and features a mix of policy changes, expenditure rules and legal reforms. Many of these moves are ones the country…

Analysis

Closing the gap: The government is working on tightening foreign exchange markets
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Rising external pressures, as well as a drop in key foreign currency earners and export revenues have caused the Ghanaian cedi to struggle in recent years. The combination of internal and external challenges includes the country’s balance sheet, commodity prices, the cost of imported oil and gas for power generation, and the rising demand for imported consumer goods. As of June 1, 2015 the cedi had dropped 21% on the year, trading at GHS4.1050 making it the worst performer against the dollar among…

Interview

Prudent development: OBG talks to Seth Terkper, Minister of Finance
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Interview:Seth Terkper How would you describe the role of the Ghana Infrastructure Investment Fund (GIIF)? SETH TERKPER: The GIIF is a sovereign wealth fund that has been established as a corporate body with the aim of protecting the medium-term prospects of the Ghanaian economy and consolidating its middle-income status. The Petroleum Management Act allocates about 50-60% of the country’s annual oil revenues to the fund to scale-up infrastructure development by leveraging public and private…

Analysis

Gaining ground: New foreign-currency issuances and a debt management strategy are providing a new way forward
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A macroeconomic overhaul is currently under way in Ghana, including in its borrowing practices. A shift is being made to reduce bond issuance in the domestic market, to extend the overall maturity of its existing debt profile and to lower the debt-toGDP ratio, which stood at 65.3% at the end of the first quarter of 2015, according to statistics from the central bank, the Bank of Ghana (BoG). The statistic tells the story of how the country’s approach to debt has changed. It had hoped to leverage…

Analysis

Opening up: Along with its neighbours, the country is looking to expand trade with Europe
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The signing of a free trade agreement between ECOWAS and the EU in 2014 marked a milestone for the West African bloc after years of negotiations. The Economic Partnership Agreement (EPA) will give ECOWAS members almost completely tariff-free access to EU markets with only a partial reciprocation. The new trade deal was ratified in October 2014. Looking To Trade Access for consumers to affordable imports is important for markets like Ghana, particularly as household consumption rises. According…

Interview

Global and local: OBG talks to Mawuena Trebarh, CEO, Ghana Investment Promotion Centre (GIPC)
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Interview:Mawuena Trebarh Where are the biggest opportunities for investors to participate in Ghana’s economic growth? MAWUENA TREBARH: Ghana has for a long time been relying on primary commodities like gold, bauxite, cocoa and crude oil as drivers of economic growth. These products accounted for over 80% of its exports with very little contribution from industry. The country however has embarked on extensive reform with the objective of revitalising our industrial structures by developing…