For the most current version of this Note, see Background Notes A-Z.
Area: 238,538 sq. km. (92,100 sq. mi.); about the size of Illinois and Indiana combined.
Cities: Capital--Accra (metropolitan area pop. 3 million est.). Other cities--Kumasi (1 million est.), Tema (500,000 est.), Sekondi-Takoradi (370,000 est.).
Terrain: Plains and scrubland, rainforest, savanna.
Nationality: Noun and adjective--Ghanaian(s).
Population (2010 est.): 24 million.
Density: 88/sq. km. (247/sq. mi.).
Population growth rate (2010 est.): 1.9%.
Ethnic groups: Akan 45.3%, Mole Dagbon 15.2%, Ewe 11.7%, Ga-Dangme 7.3%, other groups 20.4%.
Religions: Christian 68.8%, Muslim 15.9%, traditional 8.5%, other 0.7%, none 6.1%.
Languages: English (official), Akan (which includes Asante Twi, Akwapim Twi, Akyem, and Fanti) 49%, Mole-Dagbani 16%, Ewe 13%, Ga-Adangbe 8%, Guan 4%, others 10%.
Education: Years compulsory--9. Literacy--57.9%.
Health: Infant mortality rate (2010 est.)--51.2/1,000. Life expectancy--61.3 yrs. for women, 58.9 yrs. for men
Work force (11.1 million): Agriculture and fishing--47.9%; industry and transport--16.2%; sales and clerical--19.3%; services--5.9%; professional--8.9%; other--1.8%.
Independence: March 6, 1957.
Constitution: Entered into force January 7, 1993.
Branches: Executive--president popularly elected for a maximum of two 4-year terms; Council of State, a presidential appointed consultative body of 25 members required by the constitution. Legislative--unicameral Parliament popularly elected for 4-year terms. Judicial--independent Supreme Court justices nominated by president with approval of Parliament.
Subdivisions: Ten regions.
Political parties: New Patriotic Party, National Democratic Congress, Convention People's Party, People's National Convention, others.
Suffrage: Universal at 18.
GDP (2009): $15.51 billion.
Real GDP growth rate (2009): 3.5%.
Per capita GDP (2009): $671.
Inflation rate (consumer prices, Government of Ghana data as of September 2009): 9.44%.
Natural resources: Gold, oil, timber, diamonds, bauxite, manganese, fish.
Agriculture: Products--cocoa, wood manufactures, pineapples, cashews, spices, other food crops, rubber. Land--70% arable and forested.
Business and industry: Types--mining, lumber, light manufacturing, fishing, aluminum, tourism.
Trade (2009): Exports--$5.72 billion: gold, cocoa, timber, industrial diamonds, manganese ore, tuna. Imports--$8.44 billion: petroleum, food, industrial raw materials, machinery, equipment. Major trade partners--Nigeria, China, U.S., U.K., Netherlands, Cote d’Ivoire, France, India.
Fiscal year: Calendar year.
Ghana is located on West Africa's Gulf of Guinea only a few degrees north of the Equator. Half of the country lies less than 152 meters (500 ft.) above sea level, and the highest point is 883 meters (2,900 ft.). The 537-kilometer (334-mi.) coastline is mostly a low, sandy shore backed by plains and scrub and intersected by several rivers and streams, most of which are navigable only by canoe. A tropical rain forest belt, broken by heavily forested hills and many streams and rivers, extends northward from the shore, near the Cote d'Ivoire frontier. This area produces most of the country's cocoa, minerals, and timber. North of this belt, the country varies from 91 to 396 meters (300 ft.-1,300 ft.) above sea level and is covered by low bush, park-like savanna, and grassy plains.
The climate is tropical. The eastern coastal belt is warm and comparatively dry; the southwest corner, hot and humid; and the north, hot and dry. There are two distinct rainy seasons in the south--May-June and August-September; in the north, the rainy seasons tend to merge. A dry, northeasterly wind, the Harmattan, blows in January and February. Annual rainfall in the coastal zone averages 83 centimeters (33 in.).
Volta Lake, the largest manmade lake in the world, extends from the Akosombo Dam in southeastern Ghana to the town of Yapei, 520 kilometers (325 mi.) to the north. The lake generates electricity, provides inland transportation, and is a potentially valuable resource for irrigation and fish farming.
Ghana's population is concentrated along the coast and in the principal cities of Accra and Kumasi. Most Ghanaians descended from migrating tribes that probably came down the Volta River valley at the beginning of the 13th century. Ethnically, Ghana is divided into small groups speaking more than 50 languages and dialects. Among the more important linguistic groups are the Akans, which include the Fantis along the coast and the Ashantis in the forest region north of the coast; the Guans, on the plains of the Volta River; the Ga- and Ewe-speaking peoples of the south and southeast; and the Moshi-Dagomba-speaking tribes of the northern and upper regions. English, the official and commercial language, is taught in all the schools.
Primary and junior secondary school education is tuition-free and mandatory. The Government of Ghana's support for basic education is unequivocal. Article 39 of the constitution mandates the major tenets of the free, compulsory, universal basic education (FCUBE) initiative. Launched in 1996, it is one of the most ambitious pre-tertiary education programs in West Africa. Since the early 1980s, Government of Ghana expenditures on education have risen from 1.5% to nearly 3.5% of GDP. Since 1987, the share of basic education in total education spending has averaged around 67%. The units of the Ministry of Education, Science and Sports (MOESS) responsible for education are: the Ghana Education Service (GES), which administers pre-university education; the National Council on Tertiary Education; the National Accreditation Board; and the National Board for Professional and Technician Examinations (NABPTEX). The West African Examinations Council (WAEC), a consortium of five Anglophone West African Countries (Ghana, Nigeria, Sierra Leone, Gambia, and Liberia) is responsible for developing, administering, and grading school-leaving examinations at the secondary level.
Since 1986, pre-tertiary education in Ghana includes 6 years of primary education, 3 years at the junior secondary school level, and 3 years at the senior secondary school level. A new educational reform, beginning September 1, 2007, introduced 2 years of kindergarten education beginning at age 4 and increased the 3 years senior secondary to 4 years. Successful completion of senior secondary school leads to admission eligibility at training colleges, polytechnics, and universities. In 2006 there were approximately 5.1 million students attending schools at these three levels: 68% at the primary level, 23% at the junior secondary level, and 10% at the senior secondary level. There were over 600 public senior secondary schools in Ghana that graduated a total of 90,000 students in 2004, representing a huge expansion over the old system (which was transformed in 1987), which consisted of 300 institutions graduating 27,000 students a year. However, access to each successive level of education remains severely limited by lack of facilities. About 99.1% of junior secondary school graduates are able to gain admission to senior secondary schools, and only about 34.4% of senior secondary school graduates are able to gain admission to universities and polytechnics, plus another 10%-20% to diploma-level postsecondary education. Private secondary schools play a very small role in Ghana, with only a handful of institutions offering international curricula such as the British-based A-levels, International Baccalaureate, and U.S. high school. Combined, they graduate fewer than 200 students a year.
Entrance to one of the five Ghanaian public universities is by examination following completion of senior secondary school. There are now five public and 12 private degree-granting universities in Ghana, along with 10 public polytechnics offering the British Higher National Diploma (HND), a 3-year tertiary system in applied fields of study. Ghana's first private Catholic university opened in 2003 in Sunyani. The polytechnics also offer vocational, non-tertiary diploma programs. In addition, there are approximately 40 teacher-training colleges and 15 nurses' training colleges. Private tertiary education is a recent but rapid development in Ghana, meticulously regulated by the National Accreditation Board. Over 84,078 undergraduates are now enrolled in secular degree-granting programs in 17 public and private universities, 29,047 students enrolled in polytechnics, and 26,025 trainees enrolled in teacher training colleges.
The history of the Gold Coast before the last quarter of the 15th century is derived primarily from oral tradition that refers to migrations from the ancient kingdoms of the western Soudan (the area of Mauritania and Mali). The Gold Coast was renamed Ghana upon independence in 1957 because of indications that present-day inhabitants descended from migrants who moved south from the ancient kingdom of Ghana. The first contact between Europe and the Gold Coast dates from 1470, when a party of Portuguese landed. In 1482, the Portuguese built Elmina Castle as a permanent trading base. Thomas Windham made the first recorded English trading voyage to the coast in 1553. During the next three centuries, the English, Danes, Dutch, Germans, and Portuguese controlled various parts of the coastal areas.
In 1821, the British Government took control of the British trading forts on the Gold Coast. In 1844, Fanti chiefs in the area signed an agreement with the British that became the legal steppingstone to colonial status for the coastal area.
From 1826 to 1900, the British fought a series of campaigns against the Ashantis, whose kingdom was located inland. In 1902, they succeeded in establishing firm control over the Ashanti region and making the northern territories a protectorate. British Togoland, the fourth territorial element eventually to form the nation, was part of a former German colony administered by the United Kingdom from Accra as a League of Nations mandate after 1922. In December 1946, British Togoland became a UN Trust Territory, and in 1957, following a 1956 plebiscite, the United Nations agreed that the territory would become part of Ghana when the Gold Coast achieved independence.
The four territorial divisions were administered separately until 1946, when the British Government ruled them as a single unit. In 1951, a constitution was promulgated that called for a greatly enlarged legislature composed principally of members elected by popular vote directly or indirectly. An executive council was responsible for formulating policy, with most African members drawn from the legislature and including three ex officio members appointed by the governor. A new constitution, approved on April 29, 1954, established a cabinet comprised of African ministers drawn from an all-African legislature chosen by direct election. In the elections that followed, the Convention People's Party (CPP), led by Kwame Nkrumah, won the majority of seats in the new Legislative Assembly. In May 1956, Prime Minister Nkrumah's Gold Coast government issued a white paper containing proposals for Gold Coast independence. The British Government stated it would agree to a firm date for independence if a reasonable majority for such a step were obtained in the Gold Coast Legislative Assembly after a general election. This election, held in 1956, returned the CPP to power with 71 of the 104 seats in the Legislative Assembly. Ghana became an independent state on March 6, 1957, when the United Kingdom relinquished its control over the Colony of the Gold Coast and Ashanti, the Northern Territories Protectorate, and British Togoland.
In subsequent reorganizations, the country was divided into 10 regions, which currently are subdivided into 138 districts. The original Gold Coast Colony now comprises the Western, Central, Eastern, and Greater Accra Regions, with a small portion at the mouth of the Volta River assigned to the Volta Region; the Ashanti area was divided into the Ashanti and Brong-Ahafo Regions; the Northern Territories into the Northern, Upper East, and Upper West Regions; and British Togoland essentially is the same area as the Volta Region.
After independence, the CPP government under Nkrumah sought to develop Ghana as a modern, semi-industrialized, unitary socialist state. The government emphasized political and economic organization, endeavoring to increase stability and productivity through labor, youth, farmers, cooperatives, and other organizations integrated with the CPP. The government, according to Nkrumah, acted only as "the agent of the CPP" in seeking to accomplish these goals.
The CPP's control was challenged and criticized, and Prime Minister Nkrumah used the Preventive Detention Act (1958), which provided for detention without trial for up to 5 years (later extended to 10 years). On July 1, 1960, a new constitution was adopted, changing Ghana from a parliamentary system with a prime minister to a republican form of government headed by a powerful president. In August 1960, Nkrumah was given authority to scrutinize newspapers and other publications before publication. This political evolution continued into early 1964, when a constitutional referendum changed the country to a one-party state. On February 24, 1966, the Ghanaian Army and police overthrew Nkrumah's regime. Nkrumah and all his ministers were dismissed, the CPP and National Assembly were dissolved, and the constitution was suspended. The new regime cited Nkrumah's flagrant abuse of individual rights and liberties, his regime's corrupt, oppressive, and dictatorial practices, and the rapidly deteriorating economy as the principal reasons for its action.
The leaders of the February 24, 1966 coup established the new government around the National Liberation Council (NLC) and pledged an early return to a duly constituted civilian government. Members of the judiciary and civil service remained at their posts and committees of civil servants were established to handle the administration of the country. Ghana's government returned to civilian authority under the Second Republic in October 1969 after a parliamentary election in which the Progress Party, led by Kofi A. Busia, won 105 of the 140 seats. Until mid-1970, a presidential commission led by Brigadier A.A. Afrifa held the powers of the chief of state. In a special election on August 31, 1970, former Chief Justice Edward Akufo-Addo was chosen President, and Dr. Busia became Prime Minister.
Faced with mounting economic problems, Prime Minister Busia's government undertook a drastic devaluation of the currency in December 1971. The government's inability to control the subsequent inflationary pressures stimulated further discontent, and military officers seized power in a bloodless coup on January 13, 1972.
The coup leaders, led by Col. I.K. Acheampong, formed the National Redemption Council (NRC) to which they admitted other officers, the head of the police, and one civilian. The NRC promised improvements in the quality of life for all Ghanaians and based its programs on nationalism, economic development, and self-reliance. In 1975, government reorganization resulted in the NRC's replacement by the Supreme Military Council (SMC), also headed by now-General Acheampong.
Unable to deliver on its promises, the NRC/SMC became increasingly marked by mismanagement and rampant corruption. In 1977, General Acheampong brought forward the concept of union government (UNIGOV), which would make Ghana a non-party state. Perceiving this as a ploy by Acheampong to retain power, professional groups and students launched strikes and demonstrations against the government in 1977 and 1978. The steady erosion in Acheampong's power led to his arrest in July 1978 by his chief of staff, Lt. Gen. Frederick Akuffo, who replaced him as head of state and leader of what became known as the SMC-2.
Akuffo abandoned UNIGOV and established a plan to return to constitutional and democratic government. A Constitutional Assembly was established, and political party activity was revived. Akuffo was unable to solve Ghana's economic problems, however, or to reduce the rampant corruption in which senior military officers played a major role. On June 4, 1979, his government was deposed in a violent coup by a group of junior and noncommissioned officers--Armed Forces Revolutionary Council (AFRC)--with Flt. Lt. Jerry John Rawlings as its chairman.
The AFRC executed eight senior military officers, including former chiefs of state Acheampong and Akuffo; established Special Tribunals that, secretly and without due process, tried dozens of military officers, other government officials, and private individuals for corruption, sentencing them to long prison terms and confiscating their property; and, through a combination of force and exhortation, attempted to rid Ghanaian society of corruption and profiteering. At the same time, the AFRC accepted, with a few amendments, the draft constitution that had been submitted; permitted the scheduled presidential and parliamentary elections to take place in June and July; promulgated the constitution; and handed over power to the newly elected President and Parliament of the Third Republic on September 24, 1979.
The 1979 constitution was modeled on those of Western democracies. It provided for the separation of powers between an elected president and a unicameral Parliament, an independent judiciary headed by a Supreme Court, which protected individual rights, and other autonomous institutions, such as the Electoral Commissioner and the Ombudsman. The new President, Dr. Hilla Limann, was a career diplomat from the north and the candidate of the People's National Party (PNP), the political heir of Nkrumah's CPP. Of the 140 members of Parliament, 71 were PNP. The PNP government established the constitutional institutions and generally respected democracy and individual human rights. It failed, however, to halt the continuing decline in the economy; corruption flourished, and the gap between rich and poor widened. On December 31, 1981, Flight Lt. Rawlings and a small group of enlisted and former soldiers launched a coup that succeeded against little opposition in toppling President Limann.
The PNDC Era
Rawlings and his colleagues suspended the 1979 constitution, dismissed the President and his cabinet, dissolved the Parliament, and proscribed existing political parties. They established the Provisional National Defense Council (PNDC), initially composed of seven members with Rawlings as chairman, to exercise executive and legislative powers. The existing judicial system was preserved, but alongside it the PNDC created the National Investigation Committee to root out corruption and other economic offenses; the anonymous Citizens' Vetting Committee to punish tax evasion; and the Public Tribunals to try various crimes. The PNDC proclaimed its intent to allow the people to exercise political power through defense committees to be established in communities, workplaces, and in units of the armed forces and police. Under the PNDC, Ghana remained a unitary government.
In December 1982, the PNDC announced a plan to decentralize government from Accra to the regions, the districts, and local communities, but it maintained overall control by appointing regional and district secretaries who exercised executive powers and also chaired regional and district councils. Local councils, however, were expected progressively to take over the payment of salaries, with regions and districts assuming more powers from the national government. In 1984, the PNDC created a National Appeals Tribunal to hear appeals from the public tribunals; changed the Citizens' Vetting Committee into the Office of Revenue Collection; and replaced the system of defense committees with Committees for the Defense of the Revolution.
In 1984, the PNDC also created a National Commission on Democracy to study ways to establish participatory democracy in Ghana. The commission issued a "Blue Book" in July 1987 outlining modalities for district-level elections, which were held in late 1988 and early 1989, for newly created district assemblies. The government appointed one-third of the assembly members.
The Fourth Republic
Under international and domestic pressure for a return to democracy, the PNDC allowed the establishment of a 258-member Consultative Assembly made up of members representing geographic districts as well as established civic or business organizations. The assembly was charged to draw up a draft constitution to establish a Fourth Republic, using PNDC proposals. The PNDC accepted the final product without revision, and it was put to a national referendum on April 28, 1992, in which it received 92% approval. On May 18, 1992, the ban on party politics was lifted in preparation for multi-party elections. The PNDC and its supporters formed a new party, the National Democratic Congress (NDC), to contest the elections. Presidential elections were held on November 3 and parliamentary elections on December 29, 1992. Members of the opposition boycotted the parliamentary elections, however, which resulted in a 200-seat Parliament with only 17 opposition party members and two independents.
The constitution entered into force on January 7, 1993, to found the Fourth Republic. On that day, Flt. Lt. Jerry John Rawlings was inaugurated as President and members of Parliament swore their oaths of office. In 1996, the opposition fully contested the presidential and parliamentary elections, which were described as peaceful, free, and transparent by domestic and international observers. In that election, President Rawlings was re-elected with 57% of the popular vote. In addition, Rawlings' NDC party won 133 of the Parliament's 200 seats, just one seat short of the two-thirds majority needed to amend the constitution, although the election returns of two parliamentary seats faced legal challenges.
The December 2000 elections ushered in the first democratic presidential change of power in Ghana's history when John A. Kufuor of the New Patriotic Party (NPP) defeated the NDC's John Atta Mills--who was Rawlings’ Vice President and hand-picked successor. Kufuor defeated Mills by winning 56.73% of the vote, while the NPP picked up 100 of 200 seats in Parliament. The elections were declared free and fair by a large contingent of domestic and international monitors. After several by-elections were held to fill vacated seats, the NPP majority stood at 103 of the 200 seats in Parliament, while the NDC held 89 and independent and small party members held eight.
In December 2004, eight political parties contested parliamentary elections and four parties, including the NPP and NDC, contested presidential elections. This election was reported to have a remarkable turnout of 85.12% according to the Election Commission. Despite a few incidents of intimidation and minor irregularities, domestic and international observers judged the elections generally free and fair. There were several isolated incidents of election-related violence, but the election was generally peaceful in most of Ghana. John Agyekum Kufuor was re-elected president with 52.45% of the vote against three other presidential candidates, including former Vice-President John Atta Mills of the NDC. Thirty constituencies were created in the period between the 2000 and 2004 elections, resulting in a 230-member Parliament. On March 6, 2007, Ghana celebrated its 50th anniversary since becoming independent. As the first African nation to win its struggle for independence, Ghana hosted delegations from around the world during its year-long Jubilee event.
Ghana held presidential and legislative elections on December 7, 2008. Eight candidates contested the election but none of the candidates achieved over 50% of the vote. A runoff was held between NPP candidate Nana Akufo Addo and NDC candidate John Atta Mills on December 28, 2008. After voting was conducted in the last voting district on January 2, John Atta Mills emerged as the winner along with his vice president, John Mahama, with a margin of just over 40,000 votes. The new administration was sworn into office on January 7, 2009.
GOVERNMENT AND POLITICAL CONDITIONS
The 1993 constitution that established the Fourth Republic provided a basic charter for the republican democratic government. It declares Ghana to be a unitary republic with sovereignty residing in the Ghanaian people. Intended to prevent future coups, dictatorial government, and one-party states, it is designed to establish the concept of power sharing. The document reflects lessons learned from the abrogated constitutions of 1957, 1960, 1969, and 1979, and incorporates provisions and institutions drawn from British and American constitutional models. One controversial provision of the constitution indemnifies members and appointees of the PNDC from liability for any official act or omission during the years of PNDC rule. The constitution calls for a system of checks and balances, with power shared between a president, a unicameral parliament, an advisory Council of State, and an independent judiciary.
Executive authority is established in the Office of the Presidency, together with his Council of State. The president is head of state, head of government, and commander in chief of the armed forces. He also appoints the vice president. According to the constitution, more than half of the presidential-appointed ministers of state must be appointed from among members of Parliament.
Legislative functions are vested in Parliament, which consists of a unicameral 230-member body plus the Speaker. In practice, legislative powers are highly constrained by Article 108 of the constitution, which prohibits Parliament from initiating any bill that has financial implications. To become law, legislation must have the assent of the president, who has a qualified veto over all bills except those to which a vote of urgency is attached. Members of Parliament are popularly elected by universal adult suffrage for terms of 4 years, except in wartime, when terms may be extended for not more than 12 months at a time beyond the 4 years.
The structure and the power of the judiciary are independent of the two other branches of government. The Supreme Court has broad powers of judicial review. It is authorized by the constitution to rule on the constitutionality of any legislation or executive action at the request of any aggrieved citizen. The hierarchy of courts derives largely from British juridical forms. The hierarchy, called the Superior Court of Judicature, is composed of the Supreme Court of Ghana, the Court of Appeal, the High Court of Justice, regional tribunals, and such lower courts or tribunals as Parliament may establish. The courts have jurisdiction over all civil and criminal matters.
The government of John Atta Mills appears to enjoy broad support among the Ghanaian population as it pursues a domestic political agenda. The ruling NDC is a social democratic party that seeks to harness the power of the free market to protect worker rights and reduce poverty, while supporting the rule of law and basic human rights. The government inherited a fiscal crisis when it took office; in addition to focusing on the economy, President Mills has pursued an anti-corruption agenda and has announced plans to review the 1993 constitution and support decentralization. President Mills has expressed a willingness to confront Ghana's problem with narcotics trafficking. As part of its anti-corruption efforts the Mills government has required senior government officials to comply with the assets declaration law, changed the regulation to require public disclosure of assets, pledged greater transparency in government procurement, and fired a minister for misusing public funds.
Principal Government Officials
President--John Atta Mills
Vice President--John Mahama
Minister of Foreign Affairs--Alhaji Mohammed Mumuni
Minister of Defense--Joseph Henry Smith
Minister of Finance and Economic Planning--Kwabena Duffuor
Minister of Trade and Industry--Hannah Tetteh
Minister of Justice and Attorney General--Betty Mould-Iddrisu
Minister of Interior--Martin Amidu
Chief Justice of the Supreme Court--Georgina Theodora Wood
Speaker of Parliament--Joyce Bamford-Addo
Ambassador to the United States--Daniel Ohene Agyekum
Permanent Representative to the United Nations--Leslie Kojo Christian
Ghana maintains an embassy in the United States at 3512 International Drive, NW, Washington, DC 20008 (tel. 202-686-4500). Its permanent mission to the United Nations is located at 19 E. 47th Street, New York, NY 10017 (tel. 212-832-1300).
Ghana has a relatively diverse and rich natural resource base. Minerals--principally gold, diamonds, manganese ore, and bauxite--are produced and exported. A major oil discovery off the coast of Ghana in 2007 has led to significant international commercial interest in Ghana. According to industry experts, within 5 years, Ghana is likely to be the third-largest producer of oil in West Africa. Timber and marine resources are important but declining resources.
Agriculture remains a mainstay of the economy, accounting for more than one-third of GDP and about 55% of formal employment. Ghana’s primary cash crop is cocoa, which typically provides about one-third of all export revenues. Other products include timber, coconuts and other palm products, shea nuts, and coffee. With donor support, Ghana also has established a successful program of nontraditional agricultural products for export including pineapples, cashews, and peppers. Cassava, yams, plantains, corn, rice, peanuts, millet, and sorghum are basic foodstuffs grown for local consumption. In addition to domestic produce, fresh vegetables are also imported from Burkina Faso. Fish, poultry, and meat also are important dietary staples.
Ghana's industrial base is relatively advanced compared to many other African countries. However, additional scope exists for value-added processing of agricultural products. Industries include textiles, apparel, steel (using scrap), tires, flour milling, cocoa processing, beverages, tobacco, simple consumer goods, and car, truck, and bus assembly. Industry, including mining, manufacturing, construction and electricity, accounts for about 30% of GDP.
With higher commodity prices, gold and cocoa are the top two export revenue earning sectors for Ghana. The country's largest source of foreign exchange is remittances from workers abroad.
Ghana's post-independence economic story has been a difficult one, but over the last 20 years, political stability and economic growth has been the long-term trend. Ghana is on track to meet the Millennium Development goal of halving extreme poverty by 2015. Real GDP growth averaged 4% in the mid-1980s and has increased to about 5% over the past decade. Inflation has steadily declined after a rapid increase in 2009. The macroeconomy remains under pressure from large fiscal and trade deficits.
At independence, Ghana had a substantial physical and social infrastructure and $481 million in foreign reserves. The Nkrumah government further developed the infrastructure and made important public investments in the industrial sector. With assistance from the United States, the World Bank, and the United Kingdom, construction of the Akosombo Dam was completed on the Volta River in 1966. Two U.S. companies built Valco, Africa's largest aluminum smelter, to use power generated at the dam. Aluminum exports from Valco used to be a major source of foreign exchange for Ghana, but an investment dispute beginning in 2001, followed by sale back to the government, has led to sporadic operation in recent years, and it was closed again in March 2007 due to the country's energy crisis.
Many Nkrumah-era investments were monumental public works projects and poorly conceived, badly managed agricultural and industrial schemes. With cocoa prices falling and the country's foreign exchange reserves fast disappearing, the government resorted to supplier credits to finance many projects. By the mid-1960s, Ghana's reserves were gone, and the country could not meet repayment schedules. The National Liberation Council responded by abandoning unprofitable projects and selling some inefficient state-owned enterprises to private investors. On three occasions, Ghana's creditors agreed to reschedule repayments due on Nkrumah-era supplier credits. Led by the United States, foreign donors provided import loans to enable the foreign exchange-strapped government to import essential commodities.
Prime Minister Busia's government (1969-72) liberalized controls to attract foreign investment and to encourage domestic entrepreneurship. Investors were cautious, however, and cocoa prices declined again while imports surged, precipitating a serious trade deficit. Despite considerable foreign assistance and some debt relief, the Busia regime also was unable to overcome the inherited restraints on growth posed by the debt burden, balance-of-payments imbalances, foreign exchange shortages, and mismanagement.
Although foreign aid helped prevent economic collapse and was responsible for subsequent improvements in many sectors, the economy stagnated in the 10-year period preceding the NRC takeover in 1972. Population growth offset the modest increase in gross domestic product, and real earnings declined for many Ghanaians.
To restructure the economy, the NRC, under General Acheampong (1972-78), undertook an austerity program that emphasized self-reliance, particularly in food production. These plans were not realized, however, primarily because of post-1973 oil price increases and a drought in 1975-77 that particularly affected northern Ghana. The NRC, which had inherited foreign debts of almost $1 billion, abrogated existing rescheduling arrangements for some debts and rejected other repayments. After creditors objected to this unilateral action, a 1974 agreement rescheduled the medium-term debt on liberal terms. The NRC also imposed the Investment Policy Decree of 1975--effective on January 1977--that required 51% Ghanaian equity participation in most foreign firms, but the government took 40% in specified industries. Many shares were sold directly to the public.
Continued mismanagement of the economy, record inflation (more than 100% in 1977), and increasing corruption, notably at the highest political levels, led to growing dissatisfaction. The post-July 1978 military regime led by General Akuffo attempted to deal with Ghana's economic problems by making small changes in the overvalued cedi and by restraining government spending and monetary growth. Under a 1-year standby agreement with the International Monetary Fund (IMF) in January 1979, the government promised to undertake economic reforms, including a reduction of the budget deficit, in return for a $68 million IMF support program and $27 million in IMF Trust Fund loans. The agreement became inoperative, however, after the June 4 coup that brought Flight Lieutenant Rawlings and the AFRC to power for 4 months.
In September 1979, the civilian government of Hilla Limann inherited declining per capita income, stagnant industrial and agricultural production due to inadequate imported supplies, shortages of imported and locally produced goods, a sizable budget deficit (almost 40% of expenditures in 1979), high inflation, "moderating" to 54% in 1979, an increasingly overvalued cedi, flourishing smuggling and other black-market activities, high unemployment, particularly among urban youth, deterioration in the transport network, and continued foreign exchange constraints.
Limann's PNP government announced yet another (2-year) reconstruction program, emphasizing increased food production, exports, and transport improvements. Import austerity was imposed and external payments arrears cut. However, cocoa production and prices fell, while oil prices soared. No effective measures were taken to reduce rampant corruption and black marketing.
When Rawlings again seized power at the end of 1981, cocoa output had fallen to half the 1970-71 level and its world price to one-third the 1975 level. By 1982, oil would constitute half of Ghana's imports, while overall trade contracted greatly. Internal transport had slowed to a crawl, and inflation remained high. During Rawlings' first year, the economy was stagnant. Industry ran at about 10% of capacity due to the chronic shortage of foreign exchange to cover the importation of required raw materials and replacement parts. Economic conditions deteriorated further in early 1983 when Nigeria expelled an estimated 1 million Ghanaians who had to be absorbed by Ghana.
In April 1983, in coordination with the IMF, the PNDC launched an economic recovery program, perhaps the most stringent and consistent of its day in Africa, aimed at reopening infrastructure bottlenecks and reviving moribund productive sectors--agriculture, mining, and timber. The largely distorted exchange rate and prices were realigned to encourage production and exports. The government imposed fiscal and monetary discipline to curb inflation. Through November 1987, the cedi was devalued by more than 6,300%, and widespread direct price controls were substantially reduced.
The economy's response to these reforms was initially hampered by the absorption of 1 million returnees from Nigeria, compounded by the decline of foreign aid and the onset of the worst drought since independence, which brought on widespread bushfires and forced closure of the aluminum smelter and severe power cuts for industry. In 1985, the country absorbed an additional 100,000 expellees from Nigeria. In 1987, cocoa prices declined again; however, infrastructure repairs, improved weather, and producer incentives and support revived output. During 1984-88 the economy experienced solid growth for the first time since 1978. Renewed exports, aid inflows, and a foreign exchange auction eased hard currency constraints.
While the reforms caused substantial shocks in some sectors, particularly agriculture and textiles, the overall effects were positive and helped bring about a measure of economic stabilization and recovery. However, a big drop in world cocoa and gold prices hurt growth and, in the face of pending elections, spurred government spending, leading to an increased deficit, falling currency and high inflation at the time a new government led by John Agyekum Kufuor took office in 2000.
The economy performed well under the Kufuor administration, but Ghana's fundamental vulnerabilities remained. Solid macroeconomic management coupled with major debt relief, large inflows of donor resources, and relatively high cocoa and gold prices have been the keys to the steady improvements in real GDP growth, which in 2004 topped 5% for the first time in a decade and reached an estimated 6.2% in 2006. Further debt relief, continued large aid inflows, favorable commodity prices, and $4 billion in gross annual remittances--this figure includes remittances from individuals as well as non-governmental organizations (NGOs) and embassies; individual remittances were estimated at about $1.9 billion in 2008--put Ghana in a stronger balance of payments position.
Ghana was recognized for its economic and democratic achievements in 2006, when it signed a 5-year, $547 million anti-poverty compact with the United States' Millennium Challenge Corporation. The compact focuses on accelerating growth and poverty reduction through agricultural and rural development. The compact has three main components: enhancing the profitability of commercial agriculture among small farmers; reducing the transportation costs affecting agricultural commerce through improvements in transportation infrastructure, and expanding basic community services and strengthening rural institutions that support agriculture and agri-business. The compact is expected to contribute to improving the lives of one million Ghanaians.
Ghana's stated goals are to accelerate economic growth, improve the quality of life for all Ghanaians, and reduce poverty through macroeconomic stability, higher private investment, broad-based social and rural development, as well as direct poverty-alleviation efforts. These plans are fully supported by the international donor community.
Key economic challenges include: overcoming infrastructure bottlenecks, especially in energy and water; poor management of natural resources; improving human resource capacity and development; establishing a business and investment climate that encourages and allows private sector-led growth, and privatizing remaining state-owned enterprises, several of which are significant budget liabilities.
Ghana is active in the United Nations and many of its specialized agencies, as well as the World Trade Organization, the Nonaligned Movement, the African Union (AU), and the Economic Community of West African States (ECOWAS). Generally, Ghana follows the consensus of the Nonaligned Movement and the AU on economic and political issues that do not directly affect its own interests. Ghana has played an increasingly active role in sub-regional affairs including prominent roles in ECOWAS and the African Union.
Ghana is a critically important peacekeeping partner; it is the largest African peacekeeping contributor nation to multinational peacekeeping operations (PKO) and the sixth-largest among all peacekeeping contributing nations. Currently Ghana has 3,267 peacekeepers deployed to UN peacekeeping operations. It has large contingents deployed in Democratic Republic of the Congo (D.R.C.), the Darfur region of Sudan, Lebanon, Liberia, and Cote d’Ivoire, with smaller contingents deployed in Chad, Western Sahara, Kosovo, Southern Sudan, and Georgia. Ghana contributes military and police personnel to UN peacekeeping operations outside of Africa, including nearly 900 troops to the UN Interim Force in Lebanon. The United States provides military support to Ghana through a variety of programs, including the International Military Education and Training (IMET) program and the African Contingency Operations Training and Assistance (ACOTA) program. President Mills has been a key ally on all major security initiatives in the region including counterterrorism.
The United States has enjoyed good relations with Ghana at a nonofficial, personal level since Ghana's independence. Thousands of Ghanaians have been educated in the United States. Close relations are maintained between educational and scientific institutions, and cultural links, particularly between Ghanaians and African-Americans, are strong.
Through the U.S. International Visitor Program, Ghanaian parliamentarians and other government officials have become acquainted with U.S. congressional and state legislative practices and have participated in programs designed to address other issues of interest. The U.S. and Ghanaian militaries have cooperated in numerous joint training exercises, culminating with Ghanaian participation in the African Crisis Response Initiative, an international activity in which the U.S. facilitated the development of an interoperable peacekeeping capacity among African nations. U.S.-Ghanaian military cooperation continues under the successor African Contingency Operations Training and Assistance program; Ghana was one of the first militaries to receive ACOTA training in early 2003. In addition, there is an active bilateral International Military Education and Training program. Ghana also is the site of a U.S.-European Command-funded Exercise Reception Facility that was established to facilitate troop deployments for exercises or crisis response within the region. The facility is a direct result of Ghana's partnership with the United States on a Fuel Hub Initiative. Ghana is one of few African nations selected for the State Partnership Program, which will promote greater economic ties with U.S. institutions, including the National Guard.
The United States is among Ghana's principal trading partners. There is an active American Chamber of Commerce in Accra. Major U.S. companies operating in the country include Newmont, Cargill, ADM, Kosmos Energy, Anadarko, DHL, FedEx, UPS, KPMG, ACS, Coca Cola, S.C. Johnson, Ralston Purina, Star-Kist, A.H. Robins, Sterling, Pfizer, IBM, 3M, Motorola, Stewart & Stevenson, PriceWaterhouseCoopers, United Airlines, Delta Air Lines, and National Cash Register (NCR).
The discovery of major oil reserves in deep water in the Gulf of Guinea has led numerous international petroleum exploration firms to enter the Ghanaian market, and many other firms involved in oil and gas auxiliary services express an interest in starting operations in the country. Mining companies and agri-businesses from the U.S. increased their investments in Ghana recently. Political stability, overall sound economic management, a low crime rate, competitive wages, and an educated, English-speaking workforce have increased Ghana's potential to serve as a West African hub for American businesses.
U.S. development assistance to Ghana is implemented by the U.S. Agency for International Development (USAID), the African Development Foundation, Millennium Challenge Corporation, and others. USAID-managed development assistance to Ghana in fiscal year 2010 totaled more than $138 million, supporting the country in strengthening local governance, improving basic health care, enhancing access to quality basic education, and increasing food security to benefit all Ghanaians. Ghana was the first country in the world to accept Peace Corps volunteers, and the program remains one of the largest. Currently, there are more than 160 volunteers in Ghana. Almost half work in education, and the others in agro-forestry, small business development, health education, water sanitation, and youth development. Ghana's $547 million compact with the Millennium Challenge Corporation is the most recent achievement in the U.S.-Ghanaian development partnership.
Principal U.S. Officials
Ambassador--Donald G. Teitelbaum
Deputy Chief of Mission--Julie Furuta-Toy
Director, USAID--Cheryl Anderson
Defense Attaché--LTC Jason Turner
Senior Commercial Officer--Heather Byrnes
Public Affairs Officer--Mary Scholl
Political Chief--Vernelle Trim
Economic Chief--Philip Cummings
Management Counselor--Teresa Stewart
Deputy Consul--Kevin Lewis
The U.S. Embassy is located at 24 4th Circular Road, Cantonments, Accra (tel. 233-302-741-000). The mailing address is P.O. Box 194, Accra, Ghana. For American citizen services and visa questions, the Embassy consular section telephone number is 233-302-741-100.