Economy
From The Report: Ghana 2014
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A few years ago, Ghana’s economy was one of the fastest growing in the world, with GDP growth rates stretching above 14%. But there has been a noticeable change from the unconstrained optimism of recent years. Ghana has missed fiscal deficit targets that, if lower than five years ago, are nonetheless creeping upwards, and the country is beset by rising inflation and a weak currency. As a result, in August 2014, after half a decade of impressive growth, the government entered negotiations with the IMF for fiscal relief. While Ghana is in a difficult position at the moment, its problems are seen as manageable, and the expectation is that the proposed IMF assistance package will help improve the country’s competitiveness on the global market without any undue disruptions.

This chapter contains interviews with Mona Helen K Quartey, Deputy Minister of Finance; Mawuena Trebarh, CEO, Ghana Investment Promotion Centre (GIPC); and Donald Kaberuka, President, African Development Bank.

Articles from this Chapter

Overview

Despite real difficulties, the country has made major strides and is in a better position to clear hurdles
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A few years ago, Ghana’s economy was one of the fastest growing in the world, with GDP growth rates stretching above 14%. 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. Although Ghana’s economy is still growing apace – GDP was up 6.7% in the first quarter of 2014 year-on-year and mid- to long-term fundamentals remain very attractive – the euphoria is beginning…

Interview

OBG talks to Mona Helen K Quartey, Deputy Minister of Finance
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Interview:Mona Helen K Quartey What impact does the transition to lower-middle-income country (LMIC) status have on a nation’s ability to mobilise foreign financing? MONA HELEN K QUARTEY: Ghana became a LMIC following the rebasing of GDP in 2010. The implications for external resource mobilisation are manifold. It has led to a reduction in very soft and long-term aid inflows and attendant fiscal and balance of payments challenges. Grants and concessional financing are becoming scarce. Two…

Interview

OBG talks to Mawuena Trebarh, CEO, Ghana Investment Promotion Centre (GIPC)
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Interview:Mawuena Trebarh What impact is Ghana’s short-term and cyclical instability having on investor interest? MAWUENA TREBARH: Despite Ghana’s challenges in 2014 in terms of currency depreciation, investors have remained interested in the country and it remains a safe and secure investment destination. In addition to political stability and streamlined investment procedures, Ghana possesses a robust legal and regulatory framework. According to the World Bank’s 2014 “Doing Business”…

Interview

OBG talks to Mawuena Trebarh, CEO, Ghana Investment Promotion Centre (GIPC)
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Interview:Mawuena Trebarh What impact is Ghana’s short-term and cyclical instability having on investor interest? MAWUENA TREBARH: Despite Ghana’s challenges in 2014 in terms of currency depreciation, investors have remained interested in the country and it remains a safe and secure investment destination. In addition to political stability and streamlined investment procedures, Ghana possesses a robust legal and regulatory framework. According to the World Bank’s 2014 “Doing Business”…

Analysis

Getting spending under control and straightening out fiscal policies will be key
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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 from 10.9% in 2013 and 11.8% in 2012. The chief causes of the deficit are a higher wages bill, higher…

Analysis

The great divide: The government focuses on distributing resources more equitably
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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, rural and more remote areas. The difference between the two regions has implications for the future…

Analysis

Working together: New trade agreements offer brighter prospects for cooperation
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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 grouping. Long Road It is the final stage in a lengthy process. In 2000 the Cotonou Agreement was…

Interview

OBG talks to Donald Kaberuka, President, African Development Bank
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Interview:Donald Kaberuka What challenges do sub-Saharan African (sSA) governments face in terms of financial management? DONALD KABERUKA: In the past six years African governments have been good examples of prudent public financial management – better examples than their European peers. For instance, Côte d'Ivoire’s overall fiscal deficit was at a mere 2.3% of GDP in 2013. However, sSA countries can be at risk if the deficit is financed by domestic borrowing, as this increases interest…