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 in particular, and radio the medium with the greatest reach. Factors such as these provide Ghana with solid social capital.
A year after being elected President in a peaceful election, President Akufo-Addo has had some challenges. fulfilling 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. Though the government has started implementing some of its promises, such as planting for food and for jobs, and the free secondary education. The authorities need to pay attention to proper
Recent Economic Developments
Ghana’s economic performance improved significantly in 2017 after a difficult 2016. The fiscal deficit dropped to 6% of gross domestic product (GDP) in 2017 from 9.3% in 2016, underpinned by serious fiscal consolidation efforts. Despite that total revenue (including grants) underperformed by 1.1% of GDP, the fiscal turnaround was achieved primarily through expenditure cuts (1.3% of GDP), which were imposed on recurrent and capital expenditures. The government also capped transfers to Earmarked Funds at 25% of tax revenues. The primary balance improved from a deficit in 2016 to a surplus of 0.8% of GDP in 2017. The debt to GDP ratio is estimated at 69.2% in December 2017 down from 73.4% in 2016 reflecting a slowdown in the rate of external debt accumulation, as well as higher GDP growth. Domestic revenue mobilization is a key priority for the government, and the World Bank supports these efforts through technical assistance to the Ghana Revenue Authority.
According to the Ghana Statistical Service latest numbers released in April 2018, Ghana’s economy is estimated to have expanded by 8.5% in 2017 from 3.6% a year ago driven by the mining and oil sectors. Oil production rose strongly because the Offshore Turret Remediation Project was deferred from 2017 to 2018. In addition to this one-off effect, gold output remained high, and while cocoa production levels remained stable. Still, non-oil growth declined to 4.8% from 5.1% in 2016 as growth in the services sector decelerated in 2017.
The external sector improved, the cedi remained stable, while the foreign reserves rose. End-2017 data show a substantial narrowing of the current account deficit due to the large surplus in the trade balance and higher private transfers. This reflects stronger performance in earnings from oil, gold, and cocoa, while imports were subdued. The trade balance improved to a surplus equivalent to 2.3% of GDP at end 2017 (from a deficit in 2016). The current account deficit narrowed to 4.6% of GDP (US$2.1 billion) from 6.7% of GDP) a year ago. Gross international reserves were estimated at US$ 7.6 billion, equivalent to 4.5 months of imports, up from US$6.2 billion equivalent to 3.1 months in 2016.
Last Updated: Apr 19, 2018