Production of fruit juice for export to the European market (Asamankese, Ghana)

Economic situation Good prospects and big challenges

In the medium term, the economic outlook for Ghana is good. In recent years, major oil and gas reserves have been discovered off the coast. Since then, oil has become the country’s second most important export and, in the coming years, production is due to be increased considerably.

Ghana has been a member of the Extractive Industries Transparency Initiative (EITI) since 2010.

However, the highly mechanised extractive sector with its sophisticated technologies creates few new jobs. Economic performance in labour-intensive sectors such as agriculture and the manufacturing industry has been poor and stagnating for decades.

The sale of cocoa generates considerable income, for Ghana is the world’s second largest cocoa producer, after Côte d'Ivoire. Starting in 2010, the country has begun to export significant volumes of other agricultural products such as pineapples and mangos as well. This is an important step towards reducing its economic dependence on individual export goods.

Challenges

Ghana's economic growth is subject to major fluctuations: Over the past ten years, the figures have been between 3.7 (2016) and 14 percent (2011). In 2017, the Ghanaian economy grew by 8.5 percent. For 2018, the International Monetary Fund (IMF) is forecasting growth of 6.3 percent.

The economic challenges facing the country include high inflation, a high level of state debt and heavy fluctuations in foreign direct investment. An IMF programme is meant to help implement public spending reforms, reduce subsidies and create greater transparency.

Investment climate

The current reluctance on the part of investors could have been caused by new laws and regulations which are viewed as potentially detrimental to investment. Further obstacles to investment are bureaucratic hurdles, uncertainties relating to the acquisition of land and to the enforcement of legal claims, and the lack of fully trained workers and adequate transport infrastructure. The World Bank report "Doing Business 2018", which assesses the business climate in 190 countries, placed Ghana at number 120, far below its ranking in previous years.

Corruption is a major problem, particularly in the government, the police and the judiciary. On the Corruption Perceptions Index published by Transparency International, Ghana is ranked 81st out of the 180 countries rated. The appointment in February 2018 of a special state prosecutor for corruption cases could be a turning point.

Development potential

The current government headed by President Nana Akufo-Addo has set itself the ambitious goal of making Ghana’s economy able to stand on its own feet and ending the country’s reliance on development assistance in the medium term ('Ghana beyond aid' vision). In the current United Nations Human Development Index (HDI), Ghana is ranked 142nd out of 189 countries – a good position compared with other African countries.

Besides the extraction of gas and oil, cocoa production and gold mining, further growth sectors are the construction industry and the production of consumer goods. Big potential that is currently not being used sufficiently is also to be found in the agricultural sector.

Civil society in Ghana actively uses the freedoms it has, playing its part in the country’s further democratisation. There are around 6,000 registered non-governmental organisations (NGOs) in the country.