While the headlines on Ghana’s 2015 budget focus on the short-term impacts of fiscal tightening, the proposed changes should have a positive bearing on the overall economy over time. The budget deficit has grown rapidly in recent years, after reaching a low of 4.3% in 2011. Combined with a shortfall in the current account of 12% of GDP, the twin deficits have raised concerns over the country’s…
The most prominent example of Ghana’s efforts to strengthen south-south cooperation and diversify both its trade and investment links can be seen in the evolution of its relationship with China. Ghana’s links with China date back to the 1960s, and Accra has long supported the country in a number of its international imbroglios, including the campaign for re-entry into the UN and the border war…
In spite of the country’s challenging fiscal situation (see Economy chapter), Ghana has been one of Africa’s best-performing economies in recent years, having seen significant jumps in both headline growth and capital inflows. Recent oil discoveries, combined with sustained prices for cocoa and gold, led to an influx of capital and boosted activity in a range of sectors, from telecoms to construction.…
Ghana’s national currency, the cedi, is derived from the Akan word for the cowry shells used as currency during the days when Ghana was referred to as the Gold Coast. The current version of the cedi is the third printing of the currency since independence. Yet, if ECOWAS succeeds in its plan for a unified currency bloc, the latest version of the cedi, introduced in 2007, will be the last. Instead,…
Although Ghana’s economic fundamentals have improved immensely in recent years, benefitting from the discovery of oil as well as reforms in everything from revenue collection to subsidy structures, the public sector balance sheet has for decades been a stubbornly challenging issue. In the first half of 2014, the budget shortfall totalled 4.2% of GDP, above the official forecast of 4.1%, though down…
Economic development in Ghana has been uneven. The areas in the north – the Northern Region, the Upper West Region and the Upper East Region – have historically been less well off and have tended to benefit less from growth than the rest of the country. It is a persistent disparity that is now beginning to get considerable attention: new government measures target improved conditions in poorer,…
In 2014 the trade bloc ECOWAS, of which Ghana is a member, approved an economic partnership agreement (EPA) with the EU, one of Ghana’s main trade partners. The deal follows a decade of arduous trade negotiations, with particular concerns about competitiveness. Ghana and Côte d’Ivoire each initialled interim EPAs in 2007, but those agreements are to be replaced by the new one with the regional…
As in many African markets, much of Ghana’s population remains unbanked. Previous asset freezes, limited infrastructure, regional income disparities, a large informal sector and an elevated poverty rate have all combined to limit the ability of the broader population to access financial services. Estimates by GIZ and the World Bank suggest that some 70% of the population does not have a bank account.…
Small and medium-sized enterprises (SMEs) play an important role in Ghana’s economy, accounting for around 90% of all businesses, according to a 2013 survey on the banking sector by PwC. A 2010 study by the University of Ghana reported that SMEs account for 70% of GDP, although PwC says this figure fell to around 49% by 2012, largely due to the commencement of oil and gas production in commercial…
Regulation of banking in Ghana has evolved considerably over the years. In a little more than two decades, the banking system went from being heavily state-led and state-controlled to being more lightly and deftly supervised. Laws, rules, notices and guidelines have encouraged best practices, sound management and prudent lending, and it has been a significant and successful transition. Challenges,…
