Overview

  • Ghana sits on the Atlantic Ocean facing south and borders Togo, Cote d'Ivoire, and Burkina Faso. It has a population of about 28 million (2016). In the past two decades, it has taken major strides toward democracy under a multi-party system, with its independent judiciary winning public trust. Ghana consistently ranks in the top three countries in Africa for freedom of speech and press freedom, with strong broadcast media in particular and radio the medium with the greatest reach. Factors like these provide Ghana with solid social capital.

    In December 2016, Nana Dankwa Akufo-Addo of the opposition New Patriotic Party was elected President in a peaceful election. Akufo-Addo and his vice-president, Mahumdu Bawumia, were sworn-in in January 2017, and a cabinet and ministers-of-state appointed. The size of their victory clears the way for them to carry out their political agenda, but significant economic challenges remain. The goodwill the government has earned is not inexhaustible; many Ghanaians are watching how it delivers on its promises in its first year. It started with free senior high school education, and President Akufo-Addo has pledged to reduce Ghana's budget deficit and cut waste in all sectors of public life.

    Recent Economic Developments

    Ghana’s economic performance improved in the first half of 2017, after substantial fiscal slippage in 2016. The fiscal deficit for the first half of 2017 was 2.7% of GDP—on track to meet its target of 3.5% of GDP. Revenues underperformed and were 14.9% below their target, but the government cut both its recurrent and capital expenditure to keep its fiscal consolidation program on track. This underperformance was to be reversed in the second half of 2017 as policies, announced in March, took effect. These were supported by the World Bank through technical assistance to the Ghana Revenue Authority. Ghana's total debt had increased from $29.2 billion (73.1% of GDP) at the end of 2016, to $31.7 billion (68.1% of GDP) in 2017, reflecting a slowdown in the rate of external debt accumulation, as well as higher GDP growth. 

    Ghana’s economy expanded for the third, successive quarter in March 2017, to 6.6% up from 4.4% the previous year. The industry sector recorded the highest growth of 11.5%, compared to 1.8% in 2016, with significant contributions of this from mining and petroleum. The agriculture sector grew by 7.6%, up from 5% the previous year, driven by good performances in the crops, fisheries, and cocoa sub-sectors. However, growth in the services sector slowed to 3.7% from 6.6%, due to slower growth in information, communication, and finance. Non-oil growth slowed to 3.9% from 6.3% in the same period of 2016.

    The inflation rate continued to moderate itself, allowing the central bank to reduce its policy rate. Headline year-on-year inflation was 12.3% in August, a slight uptick from 11.9% in July but continuing a decreasing trend overall since September 2016. This created room for monetary policy easing and the Bank of Ghana cut the policy rate by a cumulative 450 basis points to 21.5% in July. Consequently, the 91-day Treasury-bill rate fell from 16.81% in December 2016 to 12.10% in June 2017; and the rates on the 182-day Treasury-bill rate moved from 18.5% to 13.28% over the same period. Thus, broad money expanded by 23.7% in the first five months of 2017, up from 16.8% in 2016. Outstanding credit to the private sector grew by 16.2% in May 2017, against 10.1% for the same period in 2016.

    The external sector further improved as the cedi continued to stabilize and the reserve buffer expanded. The June 2017 trade balance turned out a surplus of $1.43 billion, equivalent to 3.1% of GDP from a deficit of 3.3% the previous year. This was attributed to export earnings, especially from gold, cocoa, and oil. After a sharp decline in the value of the cedi in January (due to demand caused by seasonal factors), pressure has eased with improved liquidity and increased reserves. Gross International Reserves went up from $4.9 billion, equivalent to 2.7 months of imports, at the end of December 2016, to $5.9 billion in June 2017, equivalent to 3.4 months of imports.

    Ghana’s near term economic prospects are good but challenges remain. Overall GDP is projected to rebound to 6.1% in 2017. The rebound is expected to be driven primarily by an increase in oil production. Also, gold output will likely remain high and cocoa production is expected to grow to above 900,000 tons. However, non-oil growth is expected to slow to 4.3%. Inflation is expected to fall within its target range of 6-10% by 2018, allowing for more monetary policy easing and lower interest rates to spur private investment.

    The fiscal deficit target of 6.3% of GDP for 2017 is expected to be met. In addition, if met, the targeted 2.5 percentage points primary balance adjustment, could help reduce the debt stock from 73.4% to 70.5% by December 2017. Considering that Ghana is already placed at high risk of suffering debt distress, any further fiscal slippage could have a significant adverse impact on the debt dynamics. Ghana still faces high financing costs in both the domestic and external markets.

    Ghana’s economic performance over the medium term lies in its ability to regain and sustain its economic stabilization program through a return to fiscal consolidation. The Ghanaian authorities have expressed their commitment to embark on a steep path of fiscal consolidation; their half-year fiscal performance is evidence of this.

    Ghana is also likely to continue to face high domestic and external financing costs as its debt expands and global interest rates rises. In addition, the government faces other major challenges: high youth unemployment; ongoing delays in the resolution of debt incurred by energy state-owned enterprises; and the high cost of electricity and need to match capacity and demand for its supply.

    Last Updated: Oct 05, 2017

  • The World Bank Group's (WBG's) Country Partnership Strategy FY2013-2018 (CPS) was endorsed by the Bank in September 2013. The CPS's objective is to assist the government to sustain economic growth, accelerate poverty reduction, and enhance shared prosperity in a sustainable manner. It seeks to help Ghana consolidate its transition to the status of a lower-middle-income country, address sources of inequality, and help pave the way to access funds from the International Bank for Reconstruction and Development (IBRD). The CPS program is based on three pillars: improving economic institutions, improving competitiveness and job creation, and protecting the poor and vulnerable. In turn, these are anchored in the Ghana Shared Growth Development Agenda pillars of competitiveness and employment, vulnerability and resilience, and governance and public sector capacity.

    The total WBG exposure is approximately $4.1 billion, with a current portfolio of $2 billion of credits and grants from the International Development Association (IDA). The strategy incorporates a substantial current IDA portfolio, consisting of 20 operations for a total commitment of $2 billion, in addition to four regional operations with an additional net commitment of $383 million. Regional projects in West Africa are in transport, energy, agriculture, higher education, and trade.

    Last Updated: Oct 05, 2017

  • The results presented here reflect just a couple of active projects. Through the Land Administration Project, out of a backlog of 62,633 cases of land title applications, 53,479 have been cleared. The number of registered land transactions (deeds and titles) increased from a total of 6,288 in 2011 to a total of 80,109 as of June. As part of the Decentralized Land administration services to ease congestion in the Center, the establishment of seven Client Services and Access Units to enhance a speedy response to client needs has led to significant progress in the reduction of the time it takes to deliver service, thereby reducing the registration of Land deeds from 3 to 1.5 months, and for Title registration from 7 to 4 months. An automated Ghana Enterprise Land Information System is also being developed to improve efficiency in the provision of land services. As many as 51 Customary Land Secretariats have been established and are operational under the management of Traditional Authorities, and recorded about 35,890 land rights issues by the end of June 2017.

    Under the Ghana Social Opportunities Project, the Livelihood Empowerment Against Poverty Program has seen an increase from the 39,146 beneficiaries’ households in 2010 to 213,048 households made up of 943,842 direct beneficiaries as of December 2016 (56% of whom were female beneficiaries, against a target of 30%). In the poorest regions of the country, 792 km of 251 feeder roads have been constructed, while 214 small earth dams and dugouts, and 2,550 hectares of degraded public/community land have also been completed through tree planting and other biodiversity-restoration activities.

    The program thus effectively created 7,879,360 person days of employment, against a target of 9,5000,000. Labor-Intensive Public Works direct project beneficiaries numbered 165,860 against the target 190,000, out of which 61% were female (the target was 50%). In addition to improvements in reach, the projects have benefited from the strengthening of the country's social protection system, with the introduction of management information systems, electronic payments, and the establishment of the Ghana National Household Registry.

    The Information and Communication Technology sector has been supported by the progressive policies and regulatory interventions of the government, and by the WBG and development partners under the e-Ghana and e-Transform projects. A vibrant private sector bolsters investments and offers innovative products and services to consumers. By 2016, mobile phone penetration exceeded 100% in Ghana, compared to 1% in 2000. Greater availability of high-speed internet and falling wholesale prices are helping a growing domestic industry of business process outsourcing and information technology-enabled services. The local industry creates jobs for the country’s youth, as well as economic output and export revenue. The ICT sector in Ghana produced 8,700 jobs, and export revenue of $72 million. 

    Last Updated: Oct 05, 2017

  • The World Bank country program in Ghana is coordinated with other development partners. The WBG carried out a Performance and Learning Review to assess the progress of the Ghana–WBG Country Partnership Strategy (CPS) for FY13–16 that had extended the strategy end date from FY16 to FY18. The review brought together partners in civil society, development, the private sector and government. Similar partnerships were demonstrated during the preparation of the Ghana: Policy Agenda for Growth and Shared Prosperity. Partners reviewed their development plans and revamped the architecture for donor coordination and dialogue to recognize the emerging importance of the private sector and newer, non-traditional partners.

    Multilateral Investment Guarantee Agency (MIGA) Operations

    MIGA currently insures four active projects in Ghana, supporting power, telecoms, clean water, and oil and gas supply, with total gross exposure of $265 million. MIGA's support is aligned with the first pillar of the CPS, which calls for raising private sector competitiveness through engagements in private and financial sector development, the modernization of agriculture, sustainable natural resource management, and investment in infrastructure.

    International Finance Corporation (IFC) Country Strategy and Operations

    Ghana is IFC’s 3rd largest exposure in Africa in terms of committed investment volume. As of December 2016, it had committed $1.81 billion of its own account in Ghana. IFC’s current program in Ghana consists of 31 projects, led by investments in infrastructure (74%), followed by manufacturing, agribusiness, and services (14%), and financial institutions, or FIs (11%). IFC’s infrastructure strategy is to support the entire energy value chain from generation to transmission and distribution. It also includes support to port logistics. In FIs, IFC provides small and medium enterprises (SMEs) access to credit by partnering with FIs, as well as by supporting trade finance, capital markets, and financial infrastructure development. IFC also seeks to leverage its investments in the financial sector to support value chains in agribusiness, as well as tourism and commercial real estate.

    The IFC has a $219 million investment pipeline that spans agribusiness, infrastructure (renewable energy), and services (finance and education). In advisory services, it has implemented over $41 million worth of projects ($6.4 million from its own funds) related to trade and competitiveness, financial markets, health, energy, and environmental and social governance. 

    Last Updated: Oct 05, 2017

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LENDING

Ghana: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments

MULTIMEDIA



PHOTO GALLERY

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In Depth

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Oct 11, 2017

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Watch, listen and click through the latest videos, podcasts and slideshows highlighting the World Bank’s work in Sub-Saharan Africa.

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Doing Business in Ghana

The Doing Business report provides objective measures of business regulations and their enforcement. See where your country ranks.

Additional Resources

Country Office Contacts

Main Office Contact
Plot #3
Corner of Independence Ave & 10th Street
Ridge, Accra, Ghana
+233-30-221-4100
Accra, Ghana
Kennedy Fosu
Communications Officer
+233-30-221-4142
kfosu@worldbank.org
Washington
Laura Kullenberg
Country Program Coordinator
1818 H Street NW
Washington DC 20433
USA
lkullenberg@worldbank.org