Country Office Contacts
Main Office Contact:

Kennedy Fosu
Communications Officer

Plot #3
Corner of Independence Ave & 10th Street
Ridge, Accra, Ghana

In Washington:
Sergiy V. Kulyk
Country Program Coordinator

1818 H Street NW
Washington DC 20433

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Ghana Overview

Ghana has evolved into a stable and mature democracy throughout the last two decades. The country continues to show good performance on democratic governance, arising from strong multi-party political system, growing media pluralism and strong civil society activism. The most recent elections were held in December 2012 with the Electoral Commission declaring the candidate for the National Democratic Congress (NDC) party, the incumbent President John Mahama, as the winner with 50.7% of the vote. NDC also won a parliamentary majority. However, the presidential election result was contested in the courts by the main opposition New Patriotic Party (NPP). The election results were upheld in August 2013, after an eight-month battle in the Supreme Court of Ghana. The opposition peacefully abided by the ruling upholding President John Mahama's victory, confirming the trend of stronger governance and democratic consolidation. The New Patriotic Party (NPP) candidate in the 2008 and 2012 elections, Nana Akufo Addo, announced on March 20th 2014, his intention to seek the party's presidential candidacy for the 2016 election.

On press freedom, Ghana progressed from 41st to 30th position out of 179 countries and 3rd in Africa according to the ‘Reporters Without Borders’ 2013 Press Freedom Index report. The 2012 report of the World Wide Governance Indicators places Ghana between the 50th and 60th percentile on political stability, government effectiveness, and regulatory quality, rule of law, control of corruption and voice and accountability. This performance reflects the positive effects of an improving environment for democratic governance, coupled with a gradual improvement in the effectiveness of public institutions and persistent economic growth, resulting in Ghana attaining a lower middle income status.

The country’s economy slowed down to an estimated 5.5% in 2013 and is expected to remain at the same level in 2014. Nevertheless, Ghana’s growth prospects are positive in the long-term. Growth in 2014 is expected to remain modest at around 5% but it is projected to recover in 2016 when Ghana commences the production of gas and explores its new oil fields, barring any macroeconomic instability. Headline inflation breached the monetary policy target of 9% ±2 for 2013. The consumer price inflation increased from 10.1 % in January 2013 to reach 13.5% in December 2013 and 14.0 % in February 2014. The rise was driven by the non-food inflation while food inflation remained flat despite erratic rainfall in 2013.

Private capital flows (including FDI) fell as a percent of GDP from 7.4% in 2012 to 6.6% ($2.92billion) in 2013. Foreign direct investment (net) declined by 0.8% of GDP while medium and long term loans declined by 0.4% of GDP in 2013. Net international reserves fell from US$3.2 billion in December 2012 to $2.1 billion by end 2013 and $ 1.7 billion by January 2014 covering only less than one month of imports of goods, services and factor payments.

Recent Economic Developments

Ghana faces significant macroeconomic challenges in 2014 as its fiscal and current account deficits remain very high. Economic growth reduced to 0.3% (year on year) in the third quarter of 2013, while inflation is on the rise. The stock of public debt reached close to 60% of GDP in 2013. Increased volatility in global financial markets since mid-2013 and a sharp decline in international commodity prices led to a 16% depreciation of the Ghanaian cedi against the US dollar in 2013, and 17% in 2014. Ghana’s net international reserves have also declined significantly, covering less than one month of imports of goods and services by the end of February 2014.

The high fiscal deficit, which reached 10.9% of GDP in 2013, remains the biggest source of vulnerability of the Ghanaian economy, and does not include accumulation of new arrears. The main drivers of the deficit in 2013 were the high wage bill, increased interest costs, the energy subsidy, and a shortfall in revenue collection. The government has taken some measures to reduce fiscal deficit. These include a 2.5 percent increase in the VAT rate, moratorium on the award of new contracts, and adjustment in utility tariffs and petroleum product prices. However, the deficit is projected to come down to around 10% of GDP.

The large fiscal deficit was financed mostly domestically, though the government issued a Eurobond for $1 billion in August 2013. The domestic financing of the deficit is possible due to the Bank of Ghana’s (BoG) accommodative credit policy as it expanded net credit to the government and to public enterprises. The monetary expansion was sterilized by increasing open market operations, and BoG also raised its policy rate by 200 bps to 18% in February 2014 to control inflation and arrest the depreciation of cedi. Interest rates on 91-day Treasury bills reached 23.5% by mid-March and the sovereign spreads on the Eurobond maturing in 2017 have oscillated between 650 and 700 basis points since February.

Headline inflation reached 14.0% in February, up from 13.5% registered in December 2013. Consumer price inflation breached the monetary policy target of 9% ± 2 for 2013. Inflation has been on rise since January 2013 and the rising trend is expected to continue due to adjustments in prices of petroleum and utilities, rising prices of imported products due to the devaluation of the Ghanaian cedi, and strong demand pressures from the fiscal expansion. Producer price inflation reached 27%% in February 2014.

Ghana’s current account deficit increased to 13.2% of GDP in 2013, from 12.2% of GDP in 2012. Despite positive capital flows (private debt and FDI in particular), net international reserves declined to USD$2.1 billion by end December 2013. By January 2014, net reserves had fallen to USD 1.7 billion, equivalent to less than one month of imports of goods, services and factor payments. Concerns over the loss of reserves and currency depreciation led to strict regulation on transactions and holdings of foreign currency in Ghana starting in February 2014.

Ghana’s GDP growth slowed down to an estimated 5.5% in 2013 and is expected to remain subdued in 2014. Nevertheless, Ghana’s growth prospects are positive in the long-term, as suggested by econometric models which predict average per capita growth rates of 4 to 6 percent for 2014-24. However, the predictions are subject to uncertainty associated with the expected trends and volatility of the drivers of growth: investment, mineral and oil rents, and macroeconomic factors such as inflation and government spending.

Last Updated: Apr 10, 2014

A new World Bank Group Country Partnership Strategy (CPS) was endorsed by the Bank in September 2013. The objective of the Ghana Country Partnership Strategy FY13-FY16 is to assist government to sustain economic growth, accelerate poverty reduction and enhance shared prosperity in a sustainable manner. The CPS seeks to support Ghana to consolidate its transition to lower middle income status, address sources of inequality, and help pave the way to access to 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 pillars are anchored in the Ghana Shared Growth Development Agenda pillars of competitiveness and employment, vulnerability and resilience, and governance and public sector capacity, which together reflect the Ghanaian government’s strategic goals of diversifying the economy and sustaining high rates of growth, reducing poverty and inequality in access to basic services and opportunities, and strengthening governance while mitigating and managing risks. The CPS is also aligned with the compact between the government and its development partners.

The total World Bank Group exposure is approximately $3.49 billion. The current portfolio consists of $2.47 billion of credits and grants from the International Development Association (IDA), $309 million from the Multilateral Investment Guarantee Agency (MIGA), and committed exposure in Ghana is $871 million from the International Finance Corporation (IFC) or $925 million including B-loan and syndicated loan exposures. Disbursed and outstanding exposure in Ghana is $535 million from the IFC or $590 million including B-loan and syndicated loan exposures. Close coordination between the members of the World Bank Group (WBG) will be essential in delivering the agreed CPS program to achieve reductions in extreme poverty and enhance shared prosperity during the next four years.

The strategy incorporates a substantial current IDA portfolio consisting of 24 operations during the CPS period for a total commitment of $1.743 billion in addition to  five regional operations with an additional net commitment of $639 million. The investment operations are in infrastructure, human development and competitiveness. Infrastructure accounts for approximately 56% of net commitments and investments with a focus on trunk, urban and feeder roads, urban and rural water and sanitation, and energy. Human development represents 9% of net commitments and is concentrated in support for the national social protection network, the modernization of the National Health Insurance Authority, and the strengthening of vocational training.

Ghana is an important stakeholder in the regional projects. Ghana is an essential part of 5 regional projects in West Africa, in transport, energy, agriculture and trade, for a total amount of about $639 million in commitments. In transport, two regional corridors are being supported jointly with other donors, the Abidjan Lagos corridor along the coast, and the Bamako Ouagadougou Tema corridor. In energy, Ghana is an essential player for the West Africa Power Pool which has laid out a power transmission grid that interconnects the region. In agriculture, the West Africa Agricultural Productivity Program is disseminating innovative approaches to local crops. Also shared with the other members is part of the West Africa Regional Fisheries Project. Going forward, the key area of engagement on the regional agenda for Ghana is trade and the elimination of non-tariff barriers in intra-ECOWAS trade, particularly in agriculture, manufacturing and services.

Last Updated: Apr 10, 2014

The recently completed Country Assistance Strategy Completion Report assesses the progress that the World Bank assistance to Ghana in the financial years from FY08-FY12. Progress towards the FY08-FY11 Country Assistance Strategy (CAS) outcomes has largely been positive, the most important is the achievement of macroeconomic stability, for instance has – with the rebased gross domestic product (GDP), non-oil GDP fiscal deficit (cash basis, before arrears) been reduced from 8% of GDP in 2008, to 4% in 2009 and finally to 2.4% in 2011. Advances were also seen in agriculture through Agricultural Development Policy lending. In agricultural crop production where the yield in key staples increased substantially: maize: from 1.50 to 1.89 mt/ha (26%) rice: from 2.00 to 2.71 mt/ha (36%) sorghum: from 0.98 to 1.28 mt/ha (31%) millet: from 0.83 to 1.24 (49%) cassava: from 12.20 to 15.43 mt/ha (26%). Application of fiscal models in the natural resources governance sector has allowed modification of the method of calculating royalties and removal of certain allowable deductions for the mining companies, and has given support to proposals to revise regulations, including an increase from three% to five% royalty payments.

Through the Land Administration Project, the turn-around time for land title registration has been reduced from more than six months to 2.5 months. In energy supply, the national electrification rate increased from 58% in 2011 to 66%. In health, the infection rate of infants born to HIV-infected mothers was reduced from 30% in 2004 to 5.2% in 2011.

In primary education, completion rate increased from 83.2% in 2009 to 91.6% in 2011, but quality remains low. The improvements in access to education across the country have been supported by the World Bank-financed Ghana Partnership for Education project. The Council for Technical and Vocational Education and Training (COTVET) was established to improve skills from workers on a demand driven basis with support from the Ghana Skills and Technology Development Project.

Under the Ghana Social Opportunities Project, the Livelihood Empowerment Against Poverty Program (LEAP) targeting system was put in place to reach out to the extreme poor.

There has been significant progress in the Information and Communications Technology (ICT) sector. The combined efforts of government’s proactive policy and regulatory interventions, support from the World Bank Group and other development partners, and highly competitive private sector is translating into increased investment, impressive telephone penetration rate of over 80% in July 2011 (from 60% in 2010 and less than three% in 2003), over 50% decrease in local and international call rates, and a threefold reduction in internet access prices from $3 to less than $1/hr. ICT jobs increased 53% to 5,000. The e-Ghana project is contributing to these achievements by supporting critical applications, skills development, and regulatory institutions.

Weaker progress was registered in private sector development, transport, sanitation, and public sector reform. For instance, the ratio of (credit of the private sector) and credit to the private sector and claims on government, including claims on public sector enterprises and cocoa financing) reached 55% and fell short of the target of 70%. In transport, as an example, the percentage of road in good condition (International Roughness Index (IRI) <4.5) on the Tema – Ouagadougou portion of Corridor increased from 50% to 55% but the target was set at 80%. In sanitation, approximately 50,000 people were provided with sanitation facilities but the target was set at 100,000 people. Also the targets in public sector reform on improved consolidation and comprehensiveness of reliable government fiscal reports, based on GFSM2001 reporting standards, for quality economic decision making was not met and in the related sector of evidence-based policy-making was not met, i.e. Annual Progress Reports (APRs) were not available for all sectors with gender disaggregation of key indicators by 2012.

Overall, out of a total of the 54 indicators selected to measure progress towards achieving the CAS objectives, 61% show good progress (partially achieved), with 44% of the indicators having reached their target.

Last Updated: Apr 10, 2014

Ghana is a leader in the Aid Effectiveness agenda. The government and its development partners renewed their partnership under the Compact for 2012-2021, as an effort to reduce the transaction cost of everyone while delivering aid. For budget support, there is a Multi-Donor Budget Support (MDBS) group that coordinates the matrix of policy action among all development partners. The budget support provided accounts for about 25% of aid currently but as high as 40% in recent years. The coordination architecture for budget support is complex and intensive in transactions (about 37 active sector and thematic working groups, a multi-donor budget support group pulling the work of the working groups into a common matrix, a Heads of Missions group who provides political guidance, a Heads of Cooperation who provides operational guidance on priorities and trade-offs, and the MDBS which focuses on budget support. The number of players in this structure is large - about eight donor organizations as well as most government ministries participate in this process. Leveraging the strong complementarities within the World Bank Group to support Ghana to achieve and sustain more inclusive growth is essential. Aid dependency is relatively diminishing in Ghana and will likely continue to decline. But the need to mobilize increasing volumes of non-concessional financing for infrastructure and to mobilize domestic and external private investment capital and expertise to propel economic growth and diversification will take on increased importance. At the same time the role of development partners, including the World Bank Group, in helping Ghana expand and strengthen social service delivery and strengthen institutional capacity to manage the economy and safeguard against risks and shocks will continue to be critical. IDA, IBRD, IFC, and MIGA are ideally placed to work together to support Ghana in this respect with concessional IDA resources to be targeted primarily towards activities with high social returns, while resources from IFC and MIGA will be targeting more commercially viable activities.

Pipeline Projects

In fiscal year 2014, the Bank intends to deliver projects to address the country’s competitiveness challenges, a financial sector reform program, the continuation of the support to the National Health Insurance, modernization of government systems under the Information and Communications Technology (ICT) for transformation, and a program to help deal with issues of youth employment.

Trust Funds

As of end-March 2014 Ghana has 55 trust funds, 66% of the currently active trust funds are Bank-executed, the majority of which are funding analytical work, IFC advisory services and, in some cases, supervision of major programmatic trust funds. Major programmatic trust funds going into the CPS period include multi-donor trust funds for energy, education, fisheries, land, transport, and the REDD.

MIGA Operations

MIGA currently supports five active projects in Ghana (power, manufacturing, telecoms, water and sanitation and oil and gas) with total net exposure of $309 million.

The power sector project guarantees a loan provided by Société Générale Canada Branch (SGCB) to the government to finance the completion of the Takoradi 3 Power Plant which will expand the existing Takoradi T1/T2 power plant complex in the Ghanaian district of Sharma Ahanta facility. The expansion of the Takoradi 3 Power Plant will allow it to feed more electricity to Ghana’s national grid, allowing broader and more reliable access to power.

Efforts to bolster the energy sector are essential to avoid blackouts, such as the ones Ghana experienced in 2008. As such the project fits into the government’s power sector plans, which specifically seek to increase installed capacity from 2000 megawatts to 5000 megawatts and enable Ghana to become a net exporter of electricity to neighboring countries by 2015. MIGA’s support for the project is also aligned with the World Bank Group’s Country Partnership Strategy for Ghana, which urges the strengthening and expansion of the country’s power generation and distribution systems The manufacturing project supports the establishment of a greenfield company, Takoradi Renewable Energy Ltd. in Ghana, that will produce biomass from rubber trees in plantations in the country's western region. The woodchips produced from the trees will be exported through the Takoradi port to European markets for biomass power generation. The project is expected to benefit the local community by providing about 70 additional jobs and alleviating primary forest deforestation. In addition, the introduction of biomass to Ghana's economy will introduce new business opportunities.

The project also facilitates the replanting and rehabilitation of rubber trees, thereby improving the sector's sustainability. 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, modernization of agriculture, sustainable natural resource management, and investment in infrastructure. The project was underwritten through MIGA's Small Investment Program. The telecoms project, underwritten in 2005, provided insurance coverage for a $110 million equity investment into Scancom Ltd. of Ghana by Investcom Holding S.A. of Luxembourg for the expansion and upgrade of Scancom’s network in Ghana, with the goal of increasing population coverage and alleviating network congestion. The project is expected to provide positive development impact through increased coverage and more affordable rates that also facilitate small business development, as entrepreneurs gain access to a critical communications medium as well as direct impact through the creation of create additional jobs and opportunities for professional development.

MIGA currently supports the construction and operation of a seawater desalination plant in Accra by Befesa Desalination Developments Ghana Ltd. which aims to improve the security and quality of the water supply in the Teshie-Nungua area of the city. MIGA is currently considering two new projects to support access to water and sanitation, consistent with the government’s strategies and priorities.

The Gas and Oil Capacity Building Project, also underwritten in 2005, guarantees the equity investments in the West African Gas Pipeline Company Limited, covering a portion of Ghana’s contractual obligations for the West African Gas Pipeline Project. The project is expected to supply cheaper, cleaner energy and improve the reliability of energy systems in Ghana, Benin, and Togo, thus lowering the cost of power and improving the competitiveness of goods and services. Moreover, this project supports ongoing efforts to increase economic integration in West Africa and was the first in the region to develop regional exports of natural gas. The Multilateral Investment Guarantee Agency (MIGA) guarantee is accompanied by an International Development Association (IDA) partial risk guarantee to the West African Gas Pipeline Company for $50 million in respect to Ghana’s obligation to make certain payments. In addition, MIGA currently has proposed two new projects in the oil and gas and the water sectors for FY13.

IFC Country Strategy and Operations

The International Finance Corporation (IFC) in Ghana has a strategy in place that seeks to increase competitiveness of the private sector, and committed exposure is $871 million for IFC's own account, or $925 million including B-loan and syndicated loan exposures. Disbursed and outstanding exposure in Ghana is $535 million for IFC's own account, or $590 million including B-loan and syndicated loan exposures. The investments and advisory services include infrastructure services, such as power, water and sanitation, financial sector, small and medium enterprise (SME) access to finance, and it also includes the development of commercial agriculture. It also has investments in the real sectors, such as manufacturing, tourism, mining, and health and education. It also includes investments that have a positive effect on the climate change agenda.

Last Updated: Apr 10, 2014


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

*Amounts include IBRD and IDA commitments

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