Republic of Ghana
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 (250,000 est.), Sekondi-Takoradi (200,000 est.).
Terrain: Plains and scrubland, rainforest, savanna.
Nationality: Noun and adjective--Ghanaian(s).
Population (2001 est.): 19.7 million.
Density: 82/sq. km. (212/sq. mi.).
Annual growth rate (2003 est.): 5.2%.
Ethnic groups: Akan, Ewe, Ga, Moshi-Dagomba.
Religions: Christian 69%, indigenous beliefs 8.5%, Muslim 15.6%, other .07%, no religion 6.2%.
Languages: English (official), Akan 49%, Mole-Dagbani 16%, Ewe 13%, Ga-Adangbe 8%, Guan 4%, others 10%.
Education: Years compulsory--9. Literacy--72.6%.
Health: Infant mortality rate (2003 est.)--55/1,000. Life expectancy--56.9 yrs.
Work force (4 million): Agriculture and fishing--54.7%; industry--18.7%; sales and clerical--15.2%; services, transportation, and communications--7.7%; professional--3.7%.
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 presidentially 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 (2002): $5.9 billion.
Real GDP growth rate (2003): 5.2%.
Per capita GDP (2002): $298.
Inflation rate (2003): 23.6%.
Natural resources: Gold, timber, diamonds, bauxite, manganese, fish.
Agriculture: Products--cocoa, coconuts, coffee, pineapples, cashews, pepper, other food crops, rubber. Land--70% arable and forested.
Business and industry: Types--mining, lumber, light manufacturing, fishing, aluminum, tourism.
Trade (2001): Exports--$1.6 billion: cocoa ($437 million), aluminum, gold, timber, diamonds, manganese. Imports--$2.2 billion: petroleum ($533 million), food, industrial raw materials, machinery, equipment. Major trade partners--U.K., Germany, U.S., Nigeria, Togo, France, Netherlands, Spain.
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 pretertiary education programs in West Africa. Since 1987, the Government of Ghana has increased its education budget by 700%. Basic education's share has grown from 45% to 60% of that total.
Students begin their 6-year primary education at age six. Under educational reforms implemented in 1987, they pass into a junior secondary school system for 3 years of academic training combined with technical and vocational training. Those continuing move into the 3-year senior secondary school program. Entrance to one of the five Ghanaian public universities is by examination following completion of senior secondary school. School enrollment totals almost 3 million. Ghana's first private Catholic university opened in 2003 in Sunyani. There are several other small private universities.
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. The first recorded English trading voyage to the coast was made by Thomas Windham 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 comprising 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 110 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, the powers of the chief of state were held by a presidential commission led by Brigadier A.A. Afrifa. 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, a 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 among 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. One-third of the assembly members were appointed by the government.
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 Rawling's 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 stands at 103 of the 200 seats in Parliament, while the NDC holds 89 and independent and small party members hold eight. Presidential and parliamentary elections are slated for December 2004. President Kufuor will run against the NDC's John Atta Mills in a repeat of the 2000 contest.
GOVERNMENT AND POLITICAL CONDITIONS
The 1993 constitution that established the Fourth Republic provided a basic charter for 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 powersharing. 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 presidentially appointed ministers of state must be appointed from among members of Parliament.
Legislative functions are vested in Parliament, which consists of a unicameral 200-member body plus the speaker. 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 war time, 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 A. Kufuor appears to enjoy broad support among the Ghanaian population as it pursues a domestic political agenda based upon public commitment to the rule of law, basic human rights, and free market initiatives. So far, the government has taken steps to strengthen freedoms of expression by repealing colonial-era criminal libel laws, dropping a number of libel suits against journalists, abolishing sometimes abusive community tribunals, and introducing legislation to establish a juvenile justice system. As part of its anti-corruption efforts the Kufuor government has pursued some high-profile cases (most still ongoing), including the prosecution of its Minister of Youth and Sports and several former high-level government officials. On September 3, 2002, Ghana inaugurated its National Reconciliation Commission, a South Africa-style commission established to investigate human rights abuses under Ghana's former military regimes.
Principal Government Officials
President--John Agyekum Kufuor
Vice President--Alhaji Mahama Aliu
Senior Minister--Joseph Henry (J.H.) Mensah
Minister of Foreign Affairs--Nana Akufo-Addo
Minister of Defence--Kwame Addo-Kufuor
Minister of Finance--Yaw Osafo Maafo
Minister of Trade, Industry and Special Presidential Initiatives--Alan Kyerematen
Minister of Justice and Attorney General--Papa Owusu Ankomah
Minister of Interior--Hackman Owusu-Agyeman
Minister of Information--Nana Akomea
Minister of Manpower Development and Employment--Yaw Barimah
Minister of Communications and Technology--Albert Kan-Dapaah
Minister of Education, Youth and Sports--Kwadwo Baah-Wiredu
Minister of Energy--Paa Kwesi Nduom
Minister of Environment and Science--Kassim Kasanga
Minister of Food and Agriculture--Courage E.K. Quashigah
Minister of Girl Child Education--Christine Churcher
Minister of Health--Kawku Afriyie
Minister of Local Government--Kwadwo Adjei-Darko
Minister of Lands and Forestry--Dominic Fobih
Minister of Mines--Cecilia Bannerman
Minister of Parliamentary Affairs and Majority Leader--Felix K. Owusu Adjapong
Minister of Roads and Highways--Richard Winfred Anane
Minister of Ports, Harbours and Railways--Christopher Ameyaw-Akumfi
Minister of Private Sector Development--Kwamena Bartels
Minister of Regional Cooperation and NEPAD--Kofi Konadu Apraku
Minister of Tourism and Modernisation of the Capital City--Jake Obetsebi-Lamptey
Minister of Women and Children's Affairs--Gladys Asmah
Minister of Works and Housing--Alhaji Mustapha Iddris Ali (nominated)
Minister of State for Tertiary Education--Elizabeth Ohene
Minister of State in the Ministry of Education, Youth and Sports--Rashid Bawa
Minister of State in the Ministry of Trade, Industry and Special Presidential Initiative--Ishmael Ashitey
Western Region--Joseph Boahen (J.B.) Aidoo
Ashanti Region--Sampson K. Boafo
Northern Region--Ernest A. Debrah
Central Region--Isaac Edonsar Edumadze
Upper East Region--Salifu Mahama
Eastern Region--Osaafo Mensah
Upper West Region--Sahanun Mogtari
Volta Region--Kwasi Owusu-Yeboah
Greater Accra Region--Ibrahim C. Quaye
Brong Ahafo Region--Nana Kwadwo Seini
Chief Justice of the Supreme Court—Justice George Acquah
Speaker of Parliament--Peter Ala Adjatey
First Deputy Speaker--Freddie Blay
Second Deputy Speaker--Kenneth Dzirasah
Minority Leader--Alban Bagbin
Ambassador to the United States—Fritz Kwabena Poku
Permanent Representative to the United Nations--Nana Effah-Apenteng
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).
By West African standards, Ghana has a diverse and rich resource base. The country is mainly agricultural, however, with a majority of its workers engaged in farming. Cash crops consist primarily of cocoa and cocoa products, which typically provide about two-thirds of export revenues, timber products, coconuts and other palm products, shea nuts, which produce an edible fat, and coffee. Ghana also has established a successful program of nontraditional agricultural products for export, including pineapples, cashews, and pepper. Cassava, yams, plantains, corn, rice, peanuts, millet, and sorghum are the basic foodstuffs. Fish, poultry, and meat also are important dietary staples.
Minerals--principally gold, diamonds, manganese ore, and bauxite--are produced and exported. The only commercial oil well has been closed after producing 3.5 million barrels over its 7-year life, but exploration continues for other oil and gas resources.
Ghana's industrial base is relatively advanced compared to many other African countries. Import-substitution industries include textiles; steel (using scrap); tires; oil refining; flour milling; beverages; tobacco; simple consumer goods; and car, truck, and bus assembly. Tourism has become one of Ghana's largest foreign income earners (ranking third in 2003 at $600 million), and the Ghanaian Government has placed great emphasis upon further tourism support and development.
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. The plant has been closed for production since May 2003.
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. To rationalize, the National Liberation Council abandoned unprofitable projects, and some inefficient state-owned enterprises were sold 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 began declining 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 one-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; unemployment and underemployment, 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 and productivity, exports, and transport improvements. Import austerity was imposed and external payments arrears cut. However, declining cocoa production combined with falling cocoa prices, 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. Increased fiscal and monetary discipline was imposed to curb inflation and to focus on priorities. 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, 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 and decline in foreign aid. In 1985, the country absorbed an additional 100,000 expellees from Nigeria. In 1987, cocoa prices began declining again; however, initial infrastructural repairs, improved weather, and producer incentives and support revived output in the early 1990s. 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.
Since an initial August 1983 IMF standby agreement, the economic recovery program has been supported by three IMF standbys and two other credits totaling $611 million, $1.1 billion from the World Bank, and hundreds of millions of dollars more from other donors. In November 1987, the IMF approved a $318-million, 3-year extended fund facility. The second phase (1987-90) of the recovery program concentrated on economic restructuring and revitalizing social services. The third phase, focused on financial transparency and macroeconomic stability, began in March 1998.
Ghana opted to seek debt relief under the Heavily Indebted Poor Country (HIPC) program in March 2001 and reached decision point in February 2002. Ghana, the International Monetary Fund (IMF) and the World Bank Group's International Development Association (IDA) agreed in February 2002 to support a comprehensive debt reduction package for Ghana under the enhanced HIPC Initiative. Total relief from all of Ghana's creditors is worth approximately $2.18 billion. HIPC debt relief will be delivered over a 20-year period and will cover on average 67% of debt-service obligations to multilateral lending institutions and bilateral creditors. The Government of Ghana, working with multilateral lending institutions, developed a detailed plan for the use of funds made available through debt relief under the enhanced HIPC Initiative. The plan directs HIPC Initiative relief toward increased expenditures on education, health, programs to improve services and infrastructure in the rural sector, and improved governance. A portion of the relief will be used to reduce further the heavy burden of domestic public debt. As part of the agreed-upon plan, Ghana in 2002 and 2003 raised electricity, fuel and municipal water rates to market prices, and took additional revenue-enhancing measures (i.e., more taxes) to stabilize its fiscal position. Given its current program, Ghana should reach HIPC completion point by the end of the third quarter 2004.
Ghana intends to achieve its goals of accelerated economic growth, improved quality of life for all Ghanaians, and reduced 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 and have been forcefully reiterated in the 1995 government report, "Ghana: Vision 2020." Privatization of state-owned enterprises continues, with about two-thirds of 300 parastatal enterprises sold to private owners. Other reforms adopted under the government's structural adjustment program include the elimination of exchange rate controls and the lifting of virtually all restrictions on imports. The establishment of an interbank foreign exchange market has greatly expanded access to foreign exchange.
The government repealed a 17% value-added tax (VAT) shortly after its introduction in 1995, which resulted in widespread public protests. The government reverted to several previously imposed taxes, including a sales tax. The government reintroduced a 10% VAT in 1998 after an extensive public education campaign. The VAT was raised to 12.5% in 2000. The government has added another 2.5% in its 2003 budget, but this is not yet being collected.
Ghana is active in the United Nations and many of its specialized agencies, the World Trade Organization, the Nonaligned Movement, the African Union (AU), and the Economic Community of West African States (ECOWAS). Generally, it follows the consensus of the Nonaligned Movement and the AU on economic and political issues not directly affecting its own interests. Ghana plays an increasingly active role in subregional affairs. In February 2002, its former Deputy Foreign Minister, Mohammed Ibn Chambas, assumed the office of ECOWAS Executive Secretary. Then in February 2003, President Kufuor became the Chairperson of ECOWAS heads of state, taking on a strong role in the Cote d'Ivoire and Liberian peace and reconciliation process. He was reelected to a second year in December 2003. Ghana has been extremely active in international peacekeeping activities under UN auspices in Lebanon, Afghanistan, Rwanda, the Balkans, and Pakistan, in addition to an 8-year subregional initiative with its ECOWAS partners to develop and then enforce a cease-fire in Liberia. In January 2003, Ghana sent a company of troops to Cote d'Ivoire as part of the ECOWAS stabilization force, and another contingent to Liberia in July of 2003; the United States provided logistical assistance to Ghana in these effort. Ghana maintains friendly relations with all states, regardless of ideology.
The United States has enjoyed good relations with Ghana at the 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.
After a period of strained relations in the mid-1980s, U.S.-Ghanaian official relations are stronger than at any other time in recent memory. Ghanaian parliamentarians and other government officials have through the U.S. International Visitor Program acquainted themselves with U.S. congressional and state legislative practices and 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. is facilitating the development of an interoperable peacekeeping capacity among African nations. U.S.-Ghanaian military cooperation continues under the new 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. The Office of the President of Ghana worked closely with the U.S. Embassy in Accra to establish an American Chamber of Commerce to continue to develop closer economic ties in the private sector.
The United States is among Ghana's principal trading partners. The American privately owned Valco aluminum smelter imported many of its supplies from, and exported almost all the aluminum ingots to, Europe and the United States. U.S. investments in Ghana form one of the largest stocks of foreign capital, with a replacement value of more than $600 million. Valco--90% owned by Kaiser, and 10% by Reynolds--has been by far the biggest investment. Recently the Government of Ghana agreed to purchase Valco from Kaiser Aluminum after protracted negotiations over power tariffs.
Other important U.S. companies operating in the country include ACS, ExxonMobil, Coca Cola, S.C. Johnson, Ralston Purina, Star-Kist, A.H. Robins, Sterling, Pfizer, IBM, Carson Products, 3M, Pioneer Gold, Motorola, Stewart & Stevenson, PriceWaterhouseCoopers, Great Lakes Shipping, and National Cash Register (NCR). Several U.S. firms recently made or are considering investments in Ghana, primarily in gold mining, wood products, and petroleum-for example, U.S. mining giant Newmont is entering Ghana's mining field with a $700 million investment. In late 1997, Nuevo Petroleum concluded an oil exploration agreement accounting for the last of Ghana's offshore mineral rights zones. Several other U.S. oil companies also are engaged in offshore exploration, but thus far have turned up little.
U.S. development assistance to Ghana in fiscal year 2003 totaled more than $50 million, divided between small business enterprise, health, education, and democracy/governance programs. 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 150 volunteers in Ghana. Almost half work in education, and the others in various fields such as agro-forestry, small business development, health education, and water sanitation, as well as youth development.
Principal U.S. Officials
Ambassador--Mary Carlin Yates
Deputy Chief of Mission—Jerry Lanier
Director, USAID Mission--Sharon Cromer
Defense Attach�-Lt Col Thomas Bruce
Public Affairs Officer--David Queen
Political Counselor--Scott Ticknor
Economic Counselor--Chris Landberg
Management Counselor—Judith Francis
Deputy Consul--Simon Hankinson
The U.S. Embassy is located on Ring Road East, near Danquah Circle, Accra (tel. 233-21-775347/8/9). The mailing address is P.O. Box 194, Accra, Ghana. For American citizen services and visa questions, the Embassy consular section telephone number is 233-21-776602.
For the most current version of this Note, see Background Notes A-Z.