Economical overview
Ghana's economy is based on gold, oil and
cocoa production. The country is also in the process of
developing a natural gas industry. The oil sector
provides good revenue to the state, but creates few jobs
for the Ghanaians. The vast majority of residents rely
on agriculture instead.
Ghana was early called the Gold Coast, and the
country has long been exporting gold and cocoa on a
large scale. In 2014, Ghana was the world's second
largest cocoa producer (after the Ivory Coast) and one
of Africa's most important gold exporters.
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Countryaah.com:
Major imports by Ghana, covering a full list of top products imported by the country and trade value for each product category.
In 2010, Ghana began extracting oil from a field
called Jubilee. One year later, the country's GDP growth
became one of the highest in the world, thanks to oil
revenues. In the same year, Ghana was upgraded from
low-income countries to lower-middle-income countries by
the UN. Extraction of natural gas began in November 2014
(see Natural Resources and Energy).
An initial review of how the oil money was used,
carried out in 2013 by the Africa Center for Energy
Policy in Accra, showed that the promised major
investments in infrastructure, payments on foreign debt
and agricultural development were only partially
realized. In 2012, as much as 18 percent of the state's
use of oil money went to nonproductive administration,
for example in the presidential office. Initial
renovation of bridges and roads had not been completed
in several cases because the government's efforts were
too limited, said the report. In addition, Parliament
had failed to clog loopholes in tax legislation, which
caused the state to lose hundreds of millions of SEK
through missing tax revenue.
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Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including GHA which represents the country of Ghana.
Gap between south and north
Even before oil and gas was found, Ghana was one of
the countries in sub-Saharan Africa that was considered
to have the best political and economic conditions to
get out of poverty. However, there is an old divide
between southern Ghana, with most of the natural
resources and the largest investments, and northern
Ghana, which is drier, poorer and more sparsely
populated. In recent times, governments have tried to
reduce the differences by expanding the electricity grid
in the north, raising the level of education there and
improving the roads from north to south.
At independence in 1957, Ghana was one of Africa's
most prosperous countries with the world's largest cocoa
exports. Two decades later, the country was one of the
world's ten poorest, with a huge foreign debt. Behind
the downturn was economic neglect and corruption, but
also a decline in the price of cocoa. The country's
economy is vulnerable to shifts in world market prices
and weather.
Tightening according to the World Bank and
International Monetary Fund (IMF) model began in the
1980s and continued after democratization in the 1990s.
The changes sometimes led to mass protests but could
mainly be implemented. Among other things, close to 300
of 350 state-owned companies were sold or wound up.
The measures followed economic growth in the late
1990s. It gained even more momentum after John Kufuor
won the democratically run presidential election in
2000. High gold and cocoa prices contributed to the
upturn. In 2006, the World Bank ranked Ghana as the
ninth in the world in terms of improved business
climate.
Lower middle income country
By then, the Kufuor government had also managed to
reduce its budget deficit and inflation, which fell from
40 percent in 2000 to 11 percent in 2006. International
debt relief more than halved Ghana's foreign debt to $
3.3 billion in 2006.
Growth continued to be good in 2007 and 2008, but the
situation hardened as world market prices for fuel and
food were raised. The government responded with
subsidies and abolished import duties. At the same time,
demand for Ghana's export goods fell as the global
financial crisis intensified, and in 2009, money
transfers from guest workers abroad decreased. They had
accounted for more than a tenth of the country's GDP.
Both debt and budget deficits increased. To keep track
of progress made, Ghana received $ 1.2 billion in
interest-free loans from the World Bank in 2009.
The transition to middle income country 2011 made it
more difficult for Ghana to obtain loans from the IMF
and the World Bank. The same year, the country borrowed
$ 3 billion from China's development bank instead. The
money was intended to go towards developing a natural
gas industry and improving infrastructure such as roads,
railways and ports.
Ghana was one of the emerging economies that in 2013
saw its currency lose in value as international
investors returned to the US market after signs that the
US economy was recovering. In February 2014, the
Ghanaian central bank was forced to regulate the
handling of foreign currency to protect its own cedin.
Despite this, cedin lost more than a third of its value
in relation to the dollar between January and August
2014.
Economic downturn
In 2014, there were several signals that the
country's economy was facing downward, partly as a
result of falling oil prices. Ghana fought against
excessive inflation, and growing deficits in the state
budget were combated with frozen salaries for civil
servants, increased fuel prices and increased tax
collection, which triggered popular dissatisfaction.
The Mahama government's promises of plenty of new
jobs and higher living standards for the Ghanaians came
to shame. Estimates show that about six million jobs
must be created within the next two decades. This
corresponds to more than half the current workforce.
Despite the weak economic development, Ghana received
praise from the outside world when the country in 2014
was able to demonstrate that it has managed to live up
to the UN Millennium Development Goal of halving extreme
poverty.
In order to create more jobs and improve living
conditions for the majority of people, oil income and
aid money must be invested in agriculture, where most of
the working people are found. The IMF has assisted with
poverty reduction programs and in February 2015, the
loan agency granted a loan of about $ 940 million to
Ghana to overcome the large budget deficit. Not least,
the Treasury is burdened by very high public wage costs
and a foreign debt, which in relation to the gross
domestic product (GDP) increased from 46 percent in 2012
to 65 percent in 2014.
FACTS - FINANCE
GDP per person
US $ 2,202 (2018)
Total GDP
US $ 65,556 million (2018)
GDP growth
6.3 percent (2018)
Agriculture's share of GDP
19.7 percent (2017)
Manufacturing industry's share of GDP
10.9 percent (2017)
The service sector's share of GDP
42.3 percent (2017)
Inflation
9.3 percent (2019)
Government debt's share of GDP
59.3 percent (2018)
External debt
US $ 22,022 million (2017)
Currency
Cedi
Merchandise exports
US $ 13,835 million (2017)
Imports
US $ 12 648 million (2017)
Current account
- USD 2,003 million (2017)
Commodity trade's share of GDP
42 percent (2018)
Main export goods
oil, gold, cocoa, wood products, manganese, diamonds
Largest trading partner
Netherlands, UK, France, USA, China, Nigeria, Ivory
Coast
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