Situated in the Gulf of Guinea on Africa’s western seaboard, the natural resources of Ghana and its emergence as a stable democracy have established the country as a prominent player in the region. It is the world’s second-largest exporter of cocoa, behind neighbouring Côte d’Ivoire, and one of the continent’s largest gold producers. Furthermore, recently discovered reserves of oil and gas have powered the economy to double-digit growth over the past decade.
The prominent role played by raw material exports, combined with an income-sensitive population and stubborn poverty levels in the northern regions of the country, have created complications, but Ghana has made significant progress in recent years and has begun to build the necessary foundations for long-term growth.
The country has played a central role in African diplomacy for decades, having been one of the first states to gain independence on the continent and serving as one of the key centres of pan-Africanism thought during the post-independence era. That role has continued in recent years, with Ghana playing a central role in regional organisations like ECOWAS and the African Union.
The state of Ghana, which takes its name from the medieval Ghana Empire of West Africa, located 500 miles north of the country’s present location, has a storied commercial history.
Once known as the Gold Coast, it has been a key trading centre for centuries and has been home not only to a number of major ethnic groups but also the centre of the Ashanti Empire.
By 1901 much of the territory of modern-day Ghana was conquered and brought under British rule. This geographical settlement coincided with a period of agriculture-based economic expansion, which saw Ghana establish itself as the source of half the world’s cocoa production.
However, with new affluence came political unrest, and the country played a key role in the anti-colonial independence movement that swept across the continent in the aftermath of World War II. The drive for independence began in earnest with the establishment of the Convention People’s Party (CPP), led by Kwame Nkrumah, which won the 1951 election by an overwhelming majority. The CPP, led by Nkrumah, fought alongside other nationalist parties against British executive power until independence was gained in 1957. The final settlement saw the merger of the Gold Coast and British Togoland to form the state of Ghana, with Nkrumah — now a leading proponent of pan-Africanism and a hero of continental nationalism — installed as prime minister.
Nkrumah’s drive to rapidly industrialise the new state was interrupted by the first of several military coups in 1966, and the following years saw a succession of leaders from the military-backed National Liberation Council and the Supreme Military Council, as well as some successful runs by independents. This “Second Republic” gave way to the “Third Republic” in 1979, when Flt. Lt. Jerry John Rawlings took power, outlawing political parties. By 1992 multi-party politics was restored with the introduction of a new constitution, and President Rawlings served his last two terms between the years 1993 and 2001 as the first president of the “Fourth Republic”.
In 2000 Rawlings’ vice-president, John Atta Mills, was defeated in the presidential election by John Kufuor, the candidate from the opposing New Patriotic Party. Kufuor’s victory marked the first time in Ghana’s history that an elected president succeeded another elected president.
After unsuccessfully contesting the 2004 election, Mills recaptured the presidency in 2008, serving until his death in office in 2012. He was succeeded by his vice president, John Dramani Mahama, who subsequently was re-elected in December of that year.
Geography & Climate
With a total area of 238,533 sq km, Ghana is approximately the size of the UK, or a little smaller than the US state of Oregon. Situated near the equator, the country has a warm and tropical climate with a relatively stable temperature throughout the year, although recurrent drought in the north negatively affects agricultural activities.
Ghana’s geography is roughly divided into three distinct regions: coastal, forest and northern savannah. Grasslands mixed with coastal shrublands dominate the country’s territory, while the western areas feature small mountain ranges. The tropical region of the west is also the location of much of the nation’s natural resources, such as minerals, gold, timber and reservoirs of oil and gas.
It is usually hot and dry in the country’s north, hot and humid in the south-west and comparatively dry and warm in the eastern coastal region.
According to the most recent census, carried out in 2012, the population of Ghana stands at around 25m people, giving the country an overall population density of 78 persons per sq km. The majority of its inhabitants — around 70% — lives in the southern part of the country. A rapidly increasing population means that approximately 39% of Ghanaians were under the age of 15 in 2012.
Ghana’s population comprises a diverse array of ethnic groups. While English has been established as the official language, the nation has more than 100 indigenous tongues, the largest of which is Asante (spoken by 16% of the population), followed by Ewe (14%) and Fante (11.6%).
However, while there have been isolated incidents of ethnic tension since independence, largely confined to the northern part of the country, Ghana has managed to avoid significant ethnic conflict. Christians are the religious majority, accounting for 71.2% of the population, with the Pentecostal/Charismatic tradition representing the largest single element. Muslims make up the second-largest religious group in the country, at around 18% of the population, followed by traditional indigenous religions (5%). Geographically, the southern region is predominantly Christian, while the larger urban areas and northern regions have a large Muslim population.
This increase in population size has been accompanied by significant improvements in living conditions. According to the UN Development Programme, in 2006 Ghana became the first country in the region to reduce the number of people living below the poverty line to under 30% of the population — a key Millennium Development Goal — and as of 2011 it has been considered by the World Bank to be a middle-income country. Life expectancy, meanwhile, has increased from 49.3 in 1970 to 61 in 2012, which is by far the highest in West Africa.
The national literacy rate stands at around 71% of the population, although there are wide regional discrepancies: according to a 2010 national analytical report carried out by the Ghana Statistical Service, Greater Accra reported the highest literacy rate of 89.3%, followed by Ashanti (82.6%) and the Eastern region (81.0%). The literacy rate in the Northern region, however, stood at just 37.2%.
Ghana is West Africa’s second-largest economy after Nigeria, with a GDP of $38.65bn in 2014, according to the World Bank. The 2007 discovery of oil in the offshore Jubilee Field has driven the nation’s economic expansion in recent years, pushing GDP growth as high as 14%. The recent boom has created investment opportunities in a wide range of sectors, most especially in power and electrical supply, where the government aims to achieve universal electrification by 2020; oil and gas; telecommunications (particularly in the provision of switching and transmission equipment); transportation (where there is a high demand for used vehicles from the US and Europe); heavy equipment (such as earth-moving units required by the construction sector); and agricultural sectors.
More recently a cooling of economic growth, which saw Ghana post a GDP rise of 4% in 2014, has compelled the government to revisit its spending plans: the nation has adopted a stance of fiscal consolidation since late 2014, the success of which was made apparent in June 2015 when the fiscal deficit narrowed more than budget projections (see Economy chapter). Inflation, however, remains high despite a tightening of monetary policy and a slowdown in economic activity. In August 2015, inflation increased to 17.3% from 16.4% in the preceding January. This was largely due to a sharp currency depreciation and fuel price adjustments.
Although natural resources play a key role in Ghana’s economy, the country produces a range of commodities, helping reduce the impact of any external shocks.
Agriculture composed around 20% of GDP in 2014. The bulk of this was accounted for by the crops segment, which was worth 76.8% of the sector total, with the single-largest crop, cocoa, accounting for 10% of sector GDP on its own. Other key agricultural crops include fruits, cereals, grains, cotton, cassava and yam. Forestry and logging was the next-largest contributor to the agriculture sector, accounting for 11.8% of the total, followed by livestock (5.9%) and fishing (5.5%).
Mining also plays an large part in Ghana’s economy, particularly in terms of exports. In 2014 the mining and quarrying sector accounted for around 10% of GDP, although much of this was due to oil and gas. In terms of export value, in 2013 gold exports generated $4.2bn, compared to $3.2bn for oil and $1.3bn for cocoa, making mining the largest contributor to foreign currency reserves. For its part, oil and gas current accounts for around 7.5% of GDP, a significant achievement considering production only began in 2010.
Despite the slowdown in economic growth, Ghana’s outlook remains positive. The World Bank expects GDP to rebound in 2016 to reach 5.9%, and climb again in 2017 to 8.2%. While reduced commodity prices and ongoing fiscal reform remain as key challenges, the nation’s young and increasingly well-educated labour market, combined with debt-restructuring assistance being provided by development partners such as the World Bank and IMF, underpin this assessment.
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