Overview

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Context
Strategy
Results
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Ghana sits on the Atlantic Ocean and borders Togo, Cote d'Ivoire, and Burkina Faso. It has a population of about 29.6 million (2018). 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, with radio being the medium with the greatest reach. Factors such as these provide Ghana with solid social capital.
Two and a half years after being elected president in a peaceful election, President Akuffo-Addo has marked some successes implementing some of its promises such as planting for food and jobs and free secondary education. But he also faces challenges fulfilling some of his election pledges—including setting up a factory in each of the nation’s 216 districts, one dam for every village and providing free high school education.
Recent Economic Developments and Outlook
Recent Developments. Ghana’s economy continued to expand in 2019 as the first quarter gross domestic product (GDP) growth was estimated at 6.7%, compared with 5.4% in the same period of last year. Non-oil growth was also strong at 6.0%. The relatively high quarterly growth was driven by a strong recovery in the services sector which grew by 7.2% compared with 1.2% in 2018.
The government continued with its fiscal consolidation efforts in 2019 even though there were still challenges in meeting the revenue targets. Fiscal performance for the first half of 2019 showed an overall budget deficit (on cash basis) of 3.3% of GDP higher than the target of 2.9% of GDP. This is because the revenue shortfalls of 1.6% of GDP was higher than expenditure cuts of 1% of GDP.
Private sector credit grew stronger, supported largely by the well-capitalized banking sector. Inflation continued to be in single digits in the first six months of 2019; gradually rising from 9% in January to 9.5% in April 2019 but reduced to 9.1% in June 2019 mainly driven by low food inflation.
Ghana’s current account in the first half of 2019 was estimated at a surplus of 0.1% of GDP supported by favorable trade conditions of Ghana’s three main export commodities—oil, gold and cocoa, resulting in a trade surplus of 2.8% of GDP. The current account surplus, combined with significant inflows to the capital and financial accounts, resulted in an overall balance of payments surplus equivalent to 1.9% of GDP. With the issuance of the $3 billion Eurobond in March 2019, the international reserves significantly improved in 2019 with Gross International Reserves (GIR) of $8.6 billion (equivalent to 4.3 months of import cover) at the end of June 2019.
The Ghana cedi came under considerable pressure in the first quarter of 2019, due to high demand, as importers sought to restock their supplies but, in the second quarter, the domestic currency market became relatively calmer. The Ghana cedi cumulatively depreciated by 8.2% in the year to July 18, 2019.
Outlook: Economic growth is projected to increase to 7.6% in 2019. Non-oil growth is expected to accelerate to 6% as the government’s new policies in the agriculture sector and the promotion of agribusiness begin to take effect. Inflation is expected to remain within the Central Bank’s target range of 6-10% over the medium term.
The pace of fiscal consolidation is expected to slow in 2019 and the overall fiscal deficit is projected at 4.5% of GDP in 2019 and, in the medium term, it will remain within fiscal rule ceiling of 5% of GDP.
Risks and Challenges: Maintaining a fiscal consolidation stance and staying on a sustainable path through the 2020 election cycle will be a challenge over the next two years. Also, Ghana’s energy sector is in dire financial conditions and without remedy, this poses serious fiscal risks in the coming years. The sector is facing high costs from excess power capacity and natural gas supply, which are exacerbating the existing revenue gap. An Energy Sector Recovery Program (ESRP), approved in May 2019, provides an action plan to the government to bring the sector back into financial balance over the next five years.

Last Updated: Sep 26, 2019
The World Bank Group's Country Partnership Strategy (CPS) FY2013-2018 was endorsed by the Bank in September 2013. The CPS' objective was to assist the government to sustain economic growth, accelerate poverty reduction, and enhance shared prosperity in a sustainable manner.
Lessons from the CPS and the 2018 Systematic Country Diagnostic (SCD) will inform a new Country Partnership Framework (CPF) beyond FY20. The new CPF, seeks to help Ghana consolidate its transition to the status of a lower-middle-income country, address sources of inequality, improve human capital services and build stronger economic and management institutions and increase agriculture productivity and improve the business climate for industrialization. The CPF under preparation is based on three pillars: improved human capital especially in lagging areas; job intensive and sustainable economic growth and more effective and transparent governance and service delivery. These are anchored in the Ghana Coordinated Program of Economic and Social Policies Agenda, which include economic development, social development, environment, infrastructure and human settlement, as well as governance, corruption and public accountability.
The total WBG exposure is approximately $5.091.5 billion, with a current portfolio of $2.1 billion of credits and grants from the International Development Association (IDA). The current International Development Association portfolio consists of 23 national operations with a total commitment of$2,057.57 million, and two regional operations with additional net commitment of $84 million in higher education. Of this, 42.3% has been disbursed with $1.125 million undisbursed.

Last Updated: Sep 26, 2019
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 2017. As part of decentralizing land administration services to ease congestion, seven Client Services and Access Units have been established, enhancing speedy responses to clients. This has led to significant progress in the reduction of the time it takes to deliver service, thereby reducing the registration of land deeds from three months to two months, and title registration from seven months to four months. An automated Ghana Enterprise Land Information System is being developed to improve efficiency in the provision of land services. A total of 87 Customary Land Secretariats have been established, and are operational under the management of Traditional Authorities, and more than 40,000 land rights issues were recorded by the end of June 2017. Support to the judiciary has also led to six, additional dedicated Land Courts in Accra, three more regional Land Courts in Sekondi, Kumasi and Tamale, and one sub-regional Land Court to serve the port city of Tema.
Under the Ghana Commercial Agricultural Project’s Matching Grants Scheme, which provides grants to eligible agribusinesses working with out-growers for land preparation and operating capital, over 6,000 ha of farmland have been developed where crop yields have jumped: rice has gone from a baseline of 1.5 metric tons per ha to 3.8 metric tons per ha in 2017. New irrigation systems and post-harvest warehouses have been built and over 9,300 smallholder farmers (40% women) have been directly supported through nucleus farms to improve their agronomic practices. The project is expected to increase irrigated area by more than 8,000 ha to benefit some 30 medium and large-scale agribusinesses and 14,000 smallholder farmers in target areas.
With support from the Secondary Education Improvement Project (SEIP), Ghana has increased the number of seats available to students in senior high schools in underserved districts by at least 37,000 seats and provided over 10,000 scholarships to students in these areas – driving increases in both transition and completion rates, particularly amongst the poorest income quintiles. Education attainment has increased among the poorest 40% in targeted districts from a baseline of 8.4% in 2014 to 13.52% in 2016-17. In 2014 when the SEIP started, the proportion of students from the poorest in deprived districts targeted by the SEIP who accessed secondary education was 8.40%. This proportion has increased to 13.52% in 2017.The transition rate from Junior High School 3(JHS3) to Senior High School 1 in low performing schools in deprived districts has increased from 39% in 2014-15 to 64% in 2017-18. SHS3 completion rates overall have increased from 81.7% in 2014-15 to 84.1% in 2017-18. The proportion of beneficiary schools obtaining 6 credits and above on the WASSCE (secondary school completion exam) has also increased from 10.7% in 2014-15 to 15.27% in 2016-17; among girls the increase was from 9.5% to 14.36%% for the same period.

Last Updated: Sep 26, 2019
The World Bank country program in Ghana was coordinated with other development partners through the preparation of the Systematic Country Diagnostic (SCD). Subsequent to the end of the Country Partnership Strategy (CPS) FY13 -FY 18, the World Bank Group prepared a Systematic Country Diagnostic (SCD) in March 2018. The SCD was prepared based on countrywide consultations on emerging priorities and these will inform the new Country Partnership Framework (CPF) currently under preparation.
The consultations brought together partners in civil society, development partners,academia, 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 active gross exposure of $442.3 million. MIGA's support is aligned with the first pillar of the CPS, which calls for Job Intensive and Sustainable Growth 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 third largest exposure in Africa in terms of committed investment volume. As of June 2019, it had committed $1,259.5 million of its own account in Ghana. IFC’s current program in Ghana consists of 26 projects, comprising of investments in infrastructure, manufacturing, agribusiness, and services, and financial institutions. 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. Through financial intermediaries, IFC provides small and medium enterprises (SMEs) access to credit, 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.
In advisory services, it has implemented over $32 million worth of projects related to trade and competitiveness, financial markets, health, energy, and environmental and social governance. IFC is also committed to improve Ghana’s business environment with dedicated activities focusing on: modernizing the legal framework; facilitating trade at Ghana Port and along corridors, improving government transparency and effectiveness, improving capacity coordination of private sector facing institutions, and strengthening public-private dialogue mechanism.

Last Updated: Sep 26, 2019

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

*Amounts include IBRD and IDA commitments

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