Stability enables progress and economic growth in Ghana

 

Boasting one of the region’s largest and most advanced markets, Ghana has long been a diplomatic and economic heavyweight in West Africa. In 1957 it was the first sub-Saharan country to gain its independence, and since then has developed into a stable and vibrant democracy that is the envy of many on the continent. Its stability has also allowed it to play a growing role in regional and international affairs, particularly as an active member of multilateral organisations such as the African Union and ECOWAS.

History

The Republic of Ghana takes its name from the Ghana Empire, which ruled over a large territory comprising portions of present-day Mauritania and Mali from the fourth century CE until the mid-13th century. Ghana, or “warrior king”, was the title of the empire’s rulers, who became rich from their central position in the trans-Saharan gold and salt trade. This same trade brought the Akan people, who make up the largest ethnic group in present-day Ghana, to the southern, coastal regions of the modern country.

Attracted by the promise of wealth, the Portuguese arrived in the 15th century and built a number of forts along the coast designed to monopolise the trade in gold, ivory and slaves. They were soon joined by the Dutch, British and Danes, who also looked to gain from the trade in the region’s rich natural resources. The British, who named the area the Gold Coast because of large deposits, gradually gained the upper hand and made it a crown colony in 1874.

During the 20th century, growing affluence and educational levels fuelled a civil rights movement which called for more freedoms. When Kwame Nkrumah, an American and British-trained lawyer and leading proponent of pan-Africanism, formed the Convention People’s Party (CPP) in 1949, he set about building a mass following that would lead to independence. After gaining the majority in a newly formed legislative assembly in 1951, the CPP was able to force concessions from the British, who finally agreed to the country’s independence in 1956. Ghana then became an independent state in 1957.

Independence

Nkrumah became president of the nation and embarked upon a programme of rapid industrialisation designed, in part, to strengthen the state so that it could serve as a platform to promote his pan-African ideal of the total liberation of the continent from colonial rule.

These projects, combined with increasingly authoritarian tendencies, resulted in a military coup in 1966 and the transferring of power to a Second Republic in 1969, which was overthrown in 1972 and replaced with another military-backed government that eventually gave way to the Third Republic in 1979. This iteration saw the rise of a group of young military officers and their leader, Flt Lt Jerry John Rawlings, who was at the forefront of another coup in 1981 and subsequently banned all opposition parties.

After leading for nearly 12 years, growing domestic and international pressure compelled Rawlings to reinstate multiparty democracy, and in 1993 the Fourth Republic was born. He was elected president as part of the National Democratic Congress party, retaining the position until his second term expired in 2001. When his handpicked successor, John Atta Mills, lost to the candidate for the opposition New Patriotic Party (NPP), John Kufuor, in the 2000 election, it was the first time in Ghana’s history that one elected president peacefully succeeded another. After another defeat in 2004, Mills was finally elected in 2008 and served until his death in 2012, when his vice-president, John Dramani Mahama, took over. Mahama won the presidential vote in December of that year and was up for re-election in 2016, an election which he lost to Nana Akufo-Addo, a human rights lawyer and leader of the NPP, which gained 53.85% of the vote.

Geography & Climate

Ghana is a country of 238,533 sq km located on the Gulf of Guinea between Côte d’Ivoire and Togo, with Burkina Faso to its north. While smaller than some of the other leading players in Africa, its well-developed, 539-km coastline and abundant natural resources more than make up for it. Indeed, the country enjoys sizeable amounts of oil and gas, gold, cocoa, timber, industrial diamonds, bauxite, manganese, fish, rubber, hydropower, silver, salt and limestone. The majority of resources, particularly petroleum products, gold and timber, can be found in the western regions.

Ghana’s geography is dominated by grasslands mixed with coastal shrublands and forests. Some 69.1% of land is used for agriculture – broken down into 20.7% arable land, 11.9% permanent crops and 36.5% permanent pasture – 21.2% is forest and the remaining 9.7% is classified as “other”. It is also home to the world’s largest artificial lake by surface area, Lake Volta, which was created in 1965 by damming the White Volta and Black Volta rivers. The Akosombo Dam, also known as the Volta Dam, provides electricity for most of the country.

Ghana has a warm and tropical climate that is relatively stable throughout the year, despite dry and dusty harmattan winds from the Sahara Desert for the first three to four months of the year. The southeast coast is warm and comparatively dry, the southwest is hot and humid, and the north is hot and dry, often suffering from recurrent droughts that negatively affect agricultural yields in the region.

Demographics

The 2010 census put the population of Ghana at 24.7m. According to the Ghana Statistical Service, the figure had risen to 27.9m by September 2015, growing at 2.5% per year, data from the 2012 National Population and Housing Census shows. The majority of citizens live in the south of the country, and nearly 54% live in urban areas. The largest city and capital, Accra, has a population of around 2.3m, and the second-largest, Accra, counts 2m inhabitants. With more than 38% of the population under the age of 14, Ghana should see sustained population growth for the foreseeable future.

The country is made up of a number of ethnic groups. According to the 2010 census data, the largest are Akan, which make up 47.5% of the population, Mole-Dagbani (16.6%) and Ewe (13.9%), but others such as Ga-Dangme, Gurma, Guan and Grusi are also well represented. The official language of Ghana is English but others are widely spoken, most notably Asante Twi dialect (16%), Ewe (14%) and Fante (11.6%).

Religious affiliations, too, are diverse. Christians are the religious majority, accounting for 71.2% of the population and dominating the south, while Muslims make up 17.6% and are concentrated in the north and large urban centres. Some 5.2% of the population follows traditional indigenous religions. While there have been a few instances of flare-ups in ethnic tensions, they have been relatively small in scale, and confined to the northern part of the country.

Development

Human development indicators are better in Ghana than in many other parts of sub-Saharan Africa, but there remains room for progress. According to figures from the World Health Organisation (WHO), as of 2015 life expectancy at birth was 62.4 years, placing Ghana 25th in Africa. Infant mortality in 2015 was at 42.8 deaths per 1000 live births. Total health expenditures represented 3.6% of GDP in 2014, the latest year for which data is available, according to the WHO, which may account for the country’s relatively weak showing with respect to life expectancy. There are only 0.1 physicians and 0.9 hospital beds per 1000 people.

Education indicators are more impressive, with 6% of GDP going towards it. UNESCO figures show the literacy rate is also relatively high at 76.6%, although there is some gender discrepancy, with the rate at 82% for males compared to 71.4% for females.

Economy

The post-colonial era saw consolidation of the country’s economy and remarkable increases in the standard of living for many Ghanaians. In fact, strong economic growth helped to reduce Ghana’s poverty rate from 52.6% of the population in 1991 to 24.2% in 2012, according to the World Bank. While an abundance of natural resources has, for the most part, underwritten these improvements – Ghana is the second-biggest producer of gold in Africa and a major exporter of both cocoa and crude petroleum – recent efforts to spur development in others sectors have met with some success. Transportation, construction and telecommunications have all expanded over the past few years, and others, such as agribusiness, have considerable scope for growth.

The strongest-performing sector of Ghana’s economy is services, followed by agriculture and industry. According to government statistics, in 2015 the services sector grew by 5.7% and expanded its position in the economy, accounting for 54.4% of GDP, up from 51.9% in 2014 (see Economy chapter). The fastest-growing subsectors in services in 2015 were health and social work, which achieved growth of 15.5%, and information and communication, at 13.4%.

Agriculture and industry also gained ground in 2015, expanding by 2.4% and 1.2%, respectively, although 2015 growth estimates for agriculture were well down on the 4.6% expansion the sector witnessed in 2014. While growth in the industrial sector lagged behind that of agriculture, its share of the economy is greater, representing 25.3% of GDP in 2015.

Non-oil GDP also expanded in 2015, up 4.1% compared to 3.9% in 2014. Diversification has come into sharper focus recently, as reduced global commodity prices have put a dent in export revenues. This, combined with under-par management of public finances, forced the government to negotiate a three-year extended credit facility with the IMF worth 664.2m special drawing rights (about $918m) in April 2015.

Forecast

The government is in the process of implementing the reforms required under the terms of the deal, laying the groundwork for future sustained growth. In fact, the IMF projected a 3.3% increase in GDP for 2016, compared to an estimated 3.9% in 2015, and a jump of 7.4% in 2017. Therefore, despite facing a level of economic uncertainty, many people feel that the country is on the right track.

 

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