Economy
From The Report: Ghana 2019
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Ghana is the second-biggest producer of gold on the African continent, and the world’s second-largest cocoa producer. The country is also home to one of the largest discoveries of oil in recent decades, the production of which is providing the government with a useful revenue stream and driving growth in associated sectors. Nevertheless, the country faces considerable economic challenges with the biggest one arising from its 2019 departure from the IMF’s support framework. Developing the economy while staying within the government’s defined limits for fiscal deficits and external debt remain key challenges. The government’s revised tax policies, however, are likely to strengthen revenue streams and reduce the need to cut expenditures to remain within the targeted fiscal deficit limit. Despite the broadly positive outlook, Ghana’s continued dependence on cocoa, gold and oil exports leaves it vulnerable to volatility in international commodity prices. The government’s longer-term plan to develop other areas of the economy, therefore, is crucial to eliminating this downside risk. This chapter contains interviews with Ken Ofori-Atta, Minister for Finance; Yofi Grant, CEO, Ghana Investment Promotion Centre; Seth Twum Akwaboah, CEO, Association of Ghana Industries; and Reeta Roy, CEO and President, Mastercard Foundation.

Articles from this Chapter

Overview

Fiscal discipline: Regulators guard against price downturns in commodities through greater oversight and revenue management
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Ghana is the second-biggest producer of gold on the African continent, and the world’s second-largest cocoa producer. The country is also home to one of the largest discoveries of oil in recent decades, the production of which is providing the government with a useful revenue stream and driving growth in associated sectors. Nevertheless, the country faces considerable economic challenges: Ghana is heavily reliant on the export of commodities – gold, oil and cocoa – for foreign earnings, leaving…

Interview

Preparing the ground: Ken Ofori-Atta, Minister of Finance, on fiscal stability and financing for economic development
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Interview : Ken Ofori-Atta How do you assess the public sector’s institutional capacity in maintaining macroeconomic gains? KEN OFORI-ATTA: The institutional capacity of the public sector has always been strong, and was further strengthened by implementation of the 2016 Public Financial Management Act. The act ensures prudent financial management within a clearly defined macro-fiscal framework, and seeks to maintain the improvements we have made in key indicators. We have also committed ourselves…

Analysis

Cooperative effort: An updated legal framework for the public-private model will help the state continue to spread risk and save revenue
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One way in which Ghana is looking to accelerate investment projects and private sector initiatives is through an enhancement of the pubic-private partnership (PPP) framework, which enables the state to minimise capital costs and shift development risk and managerial responsibility out of its hand. The country has recently signalled its intention to harness investor capital for development purposes across a wide economic spectrum, which will encompass large-scale infrastructure projects such as hospitals,…

Interview

Natural appeal: Yofi Grant, CEO, Ghana Investment Promotion Centre, on expanding investment opportunities
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Interview :Yofi Grant How is Ghana’s current macroeconomic stability translating into increased capital inflows? YOFI GRANT: The global investor community is keenly observing the positive performance of the economy. Key macroeconomic indicators are improving, with the debt-to-GDP ratio down from 56.8% of rebased GDP in 2017 to 55.5% in 2018, the current account deficit falling from 9% to 6.5% and inflation dropping from 15.4% to single digits. In addition, for the first time since 1998…

Analysis

Finding relief: Partnering with international agencies, offering issuances and implementing new strategies should help curb debt
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The level of public debt is a closely observed metric in Ghana. For the past 30 years the country has travelled something of a debt roller coaster, recovering from one liquidity crunch only to be faced with another. The first dip came in the late 1990s, when the nation’s debt repayments as a proportion of revenue reached 20%, which was widely viewed as an unsustainable level. Ghana was not alone in this predicament: a debt crisis across the developing world was becoming a source of concern for…

Analysis

On firm footing: Recent macroeconomic indicators point to potential for robust growth in 2019
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The economy registered positive growth in 2018, albeit at a slower rate than in the year prior. Real GDP expanded 5.4% year-on-year (y-o-y) in the first half of 2018 compared to 7.8% in the same period of 2017, according to the budget statement presented to Parliament in November 2018. Momentum picked up between July and September, when GDP registered its highest quarterly growth for the year, at 7.4% – against 8.7% in 2017 – according to the most recent report from the Ghana Statistical Service…

Interview

Industrial nation: Seth Twum Akwaboah, CEO, Association of Ghana Industries, on harnessing and improving access to finance
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Interview :Seth Twum Akwaboah How is an integrated aluminium industry contributing to the country’s industrialisation? SETH TWUM AKWABOAH: Since 2017, there have been exciting changes in the Ghanaian economy. The continued growth of oil and gas has transformed the makeup of industry and has driven a growth in oil field services, but this is well documented. Less so are the budding bauxite, alumina and aluminium industries. This represents real industrialisation and will provide a serious…

Interview

Transforming the future: Reeta Roy, CEO and President, Mastercard Foundation, on creating opportunities in business, agriculture and entrepreneurship for the growing younger workforce
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Interview :Reeta Roy How can international institutions function to support Ghana’s future development? REETA ROY: International institutions must understand that African leaders, entrepreneurs and young people have solutions to the challenges they face. This means we need to listen to those who have the greatest stake in the economic and social outcomes of the continent. Mastercard Foundation’s Young Africa Works strategy, for instance, is one possible way of addressing youth unemployment…