Time to shine: Strong political and economic foundations for growth
One of West Africa’s most politically stable countries, with equally strong macroeconomic fundamentals, Ghana has a relatively high per capita GDP due in part to its sizeable gold and cocoa production, which will increase in the coming years as the country begins to pump its modest oil reserves. The economy quadrupled in size during the 2000s and a comparatively low level of risk has helped attract investors looking to establish a regional base. With a robust democracy and an established reputation for multilateral diplomacy, Ghana has also positioned itself as a champion of regional stability and integration.
GEOGRAPHY: At 238,535 sq km, Ghana is the world’s 81st largest country by size. Located on the west coast of Africa, the country has 539 km of coastline and is bordered by Burkina Faso to the north, Côte d’Ivoire to the west and Togo to the east. The Gulf of Guinea lies to the south of Ghana.
The capital is Accra, which is also the nation’s largest city with a population of over 3.96m. Other major cities include Kumase, Tamale and Takoradi.
Situated near the equator, Ghana has a tropical climate with a rainy season lasting from around April until September in the north and March to October in the south. March is the hottest month, with temperatures averaging 28°C in Accra, although temperatures do not vary much over the course of the year. Ghana’s terrain is predominantly flat lowlands, including beaches, plains and plateaux.
Towards the western border of the country, a thick swathe of hilly tropical rainforest stretches north from the coast. The region is rich in commodities and is responsible for the vast majority of the Republic’s timber, mineral and gold production. Three tributaries of the Volta River run through the country and into Lake Volta, which with a surface area of 8482 sq km is the world’s largest reservoir.
PEOPLE: Home to 24m inhabitants, Ghana is the 47th largest country by population in the world and the 12th largest in Africa. Around 37% of Ghanaians are under the age of 15, and 50% live in urban areas. Life expectancy is 59 years for men and 61 years for women. Ghana has more than 100 ethnic groups: around half of the country is Akan, this group is followed by Mole-Dagbon (15.2%), Ewe (11.7%) and Ga-Dangme (7.3%). While English is the official national language, most people speak an indigenous language as their first tongue, the most prevalent of which are Asante, Ewe and Fante.
Christianity is the dominant religion, practiced by up to 69% of the population. However, Islam and animism also have sizeable followings.
RECENT HISTORY: Gold Coast and British Togoland were merged in 1957 to create modern Ghana, the first independent former colonial nation in Sub-Saharan Africa. Kwame Nkrumah, who had orchestrated Ghana’s liberation from the British, became the country’s first prime minister. A proponent of pan-Africanism and a hero with continent-wide popularity, he aimed to rapidly industrialise the country, but was deposed by a military coup in 1966.
Several more coups occurred before 1981, when Flt. Lt. Jerry Rawlings took power and outlawed political parties, which were restored in 1992 under a new consitution. Heading the centre-left National Democratic Congress party, President Rawlings stepped down after serving two four-year terms, the most permitted by the Ghanaian constitution.
In 2000, Rawling’s vice-president, John Atta Mills, was defeated in the presidential election by the candidate from the opposing New Patriotic Party, John Kufuor. Under his eight-year rule, Ghana’s GDP quadrupled from $4bn to almost $16bn. After unsuccessfully contesting the 2004 election, Mills recaptured the presidency in 2008.
POLITICS: Ghana is a multi-party democratic republic with elections held every four years. The country is divided into 10 administrative regions: Ashanti, Brong-Ahafo, Central, Eastern, Greater Accra, Northern, Upper East, Upper West, Volta, and Western. The political system, which is outlined in the 1993 revision of the constitution, is divided between a strong executive, a unicameral legislature composed of a 230-member parliament and an independent judiciary, based on the British court system.
MAJOR POLITICAL PLAYERS: John Atta Mills: Former national tax commissioner and vice-president under Rawlings, Mills clinched the 2008 presidential election with 50.23% of the vote. Educated at the London School of Economics, he is a former professor who publicly espouses the social welfare values of Kwame Nkrumah.
John Kufuor: A long-standing fixture of Ghanaian liberal-democrat politics, Kufuor is ineligible to run for the office of president following two terms in office, but he continues to wield influence in his party and is involved in a number of pan-continental development initiatives Nana Akufo-Addo: The current leader of the centre-right New Patriotic Party, Akufo-Addo, a lawyer by trade, narrowly lost the most recent presidential election in a second-round runoff, and is expected to seek office again in 2012.
FOREIGN RELATIONS: Kwame Nkrumah’s pan-Africanism continues to be a driving force for modern diplomacy in Ghana, which is a member of the African Union, the UN and the Economic Community of West African States (ECOWAS). The Republic enjoys solid relations with the US, benefitting from strong commercial and trade ties.
Ghana contributes the most manpower of any African country to multinational peacekeeping operations, with troops deployed to to European and Middle Eastern nations such as Kosovo, Georgia and Lebanon. The nation has also sent peacekeeping troops as part of an ECOWAS force to nearby Liberia. Relations with Togo and Côte d’Ivoire have been strained since the demarcation of the modern state of Ghana, with the neighbouring countries having been accused of harbouring rebels during Ghana’s past military coups. However, as of 1989 the Ghana- Côte d’Ivoire border is open, and Ghana-Togo relations are said to be improving.
ECONOMY: Political stability has become a hallmark of Ghana’s investment profile and together with a low crime rate, competitive wages, solid fiscal indicators, and a qualified labour pool, the republic has emerged as an increasingly alluring destination for foreign investors looking to move into West Africa. Ghana has relatively high production value for a West African nation, with per capita output of $1500 in 2009 and real GDP of around $36bn. In the midst of the global economic turndown, GDP growth registered at 3.5% in 2009 due to strong cocoa and gold exports, down from 7.3% the previous year.
The ratio of public debt to GDP stood at 55.2% in 2009, due in part to foreign borrowing for infrastructure projects. Fiscal management is still considered a challenge for Ghana, and the IMF has instructed the country to reduce spending in the short-term. The country is a member of the WTO.
The agricultural sector is Ghana’s largest revenue generator, accounting for around a third of GDP in 2009 and over half of the formal employment. Cocoa is the country’s main agricultural commodity, but a diverse base of mineral and timber resources has also helped underpin Ghana’s growth in previous decades, with gold, diamonds, and bauxite accounting for significant percentages of the country’s export mix.
With the discovery of sizeable hydrocarbon deposits off the coast, Ghana has channeled capital towards the development of an offshore oil sector. Daily production is currently negligible, but reserves have been estimated as high as 2bn barrels which, while modest, would catapult the country into the top five producers on the continent. The first consignment of light sweet crude was lifted from the country’s major offshore oil field, Jubilee, at the start of January 2011. The national currency is the cedi. The consumer inflation rate increased to 19.3% in 2009 after reaching 16.5% in 2010.
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