Economy of Ghana

Economy of Ghana
Currency Cedi (GH₵)
Calendar year 1 January to 31 December
Statistics
GDP

Increase $116 billion (2015 estimate, PPP)[1]

Increase $70 billion (2014 estimate, nominal)[2]
GDP growth
 8.5% (Q3 – 2013)[3]
8.2% (2012 est.)[4]
GDP per capita
 Increase $1,381 (2015 estimatehttps://www.facebook.com/mohd.ramzi.3939, PPP)[lower-alpha 1][5]
Increase $3,500 (2014 estimate, nominal)[lower-alpha 1][2]
GDP by sector
 Increase Services: 50.6% (2013);[6]
Increase Industry: 28.1% (2013);[6]
Decrease Agriculture: 21.3% (2013)[6]
Increase 14.5% (2014 March)
Population below poverty line
 Decrease 3% (2013 est.)
19.2 (2009)
Labor force
 Increase 12.83 million (2012 est.)
Labor force by occupation
 Increase Services: 28% (2011 est.);
Increase Industry: 20% (2011 est.);
Decrease Agriculture: 52% (2011 est.)
Unemployment Decrease 1.9%[7]
Average gross salary
 Increase ¢29,669.16 / $10,483.8 (per year)[lower-alpha 2]
Increase ¢2,472.43 / $873.65 (per month)[lower-alpha 2]
Main industries
Decrease 67th (2014)[8]
External
Exports Steady $13.73 billion (2012 est.)
Export goods

Gold Bullion 44% (2013)[9]

Main export partners
Imports Increase $17.56 billion (2012 est.)
Import goods
 Military technology
Industrialization equipment
Main import partners
FDI stock
 Decrease $4.9 billion (2012)[11]
Increase $46.4 billion (1 July 2014 est.)
Public finances
Increase 61% of GDP (2014 est.)
Revenues Increase 9.282 billion (2012 est.)
Expenses Increase 14.13 billion (2012 est.)

All values, unless otherwise stated, are in US dollars.

The economy of Ghana has a diverse and rich resource base, including the manufacturing and exportation of digital technology goods, automotive and ship construction and exportation, and the exportation of diverse and rich resources such as hydrocarbons and industrial minerals. These have given Ghana one of the highest GDPs per capita in Africa.[12][13] Owing to a GDP rebasement, in 2011 Ghana became the fastest growing economy in the world; differences with neighboring economies are likely to be overstated due to underfunded statistical agencies in surrounding countries.

The Ghanaian domestic economy in 2012 revolved around services, which accounted for 50% of GDP and employed 28% of the work force. Besides the industrialization associated with minerals and oil, industrial development in Ghana remains basic, often associated with plastics (such as for chairs, plastic bags, razors and pens).[14]

Ghana embarked on a currency re-denomination exercise, from Cedi (¢) to the new currency, the Ghana Cedi (GH¢) in July 2007. The transfer rate is 1 Ghana Cedi for every 10,000 Cedis. Ghana embarked upon an aggressive media campaign to educate the public about what re-denomination entails. Value added tax is a consumption tax administered in Ghana. The tax regime which started in 1998 had a single rate but since September 2007 entered into a multiple rate regime. In 1998, the rate of tax was 10% and amended in 2000 to 12.5%. The top income tax and corporate tax rates are 25%. Other taxes included with value-added tax (VAT), are national health insurance levy, and a capital gains tax. The overall tax burden amounts to 12.1% of Ghana's total domestic income, and the budget of Ghana has fallen to the equivalent of 39.8% of GDP.[15] Ghana is Africa’s second-biggest gold producer (after South Africa) and second-largest cocoa producer. It is also rich in diamonds, manganese ore, bauxite, and oil. Most of its debt was canceled in 2005, but government spending was later allowed to balloon. Coupled with a plunge in oil prices, this led to an economic crisis that forced the government to negotiate a $920 million extended credit facility from the IMF in April 2015.[16]

Manufacturing

Ghana's industrial base is relatively advanced. Import-substitution industries include electronics manufacturing. Rlg Communications is the first indigenous African company to assemble laptops, desktops, and mobile phones, and is West Africa's biggest information and communications technology (ICT) and mobile phone manufacturing company.[17]

Ghana began its automotive industry with the construction of a prototype robust SUV, named the SMATI Turtle 1, intended for use in the rough African terrain. It was designed and manufactured by the Artisans of Suame Magazine Industrial Development Organization. Urban electric cars have been manufactured in Ghana since 2014.[18][19]

As of 2012 there were four major companies in the textiles sector: Akosombo Textiles Limited, Tex Style Ghana Limited, Printex Ghana, and Ghana Textile Manufacturing Company.[20]

Ghana National Petroleum Corporation and Ghana Oil Company deal with crude oil and gas exploration, exploitation, and refining.[21]

Telecommunications

Ghana's telecommunications statistics indicated that as of 2013 there are 26,336,000 cell-phone lines in operation.[22] Competition among mobile-phone companies in Ghana is an important part of the telecommunications industry growth of Ghana, with companies obtaining more than 80 per 100 persons as mobile phone and fixed-line phone users.[23]

The mass media of Ghana is among the most liberal in Africa, with Ghana ranking as the 3rd freest in Africa and 30th most free in the world on the worldwide press freedom Index. Chapter 12 of the Constitution of Ghana guarantees freedom of the Ghanaian press and the independence of the mass media, and Chapter 2 prohibits censorship.[24] Ghanaian press freedom was restored in 1992.[24]

Ghana was one of the first countries in Africa to achieve the connection to the World Wide Web.[25] In 2010, there were 165 licensed internet service providers in Ghana and they were running 29 of the fiber optic, and authorized networks VSAT operators were 176, of which 57 functioned, and 99 internet operators were authorized to the public, and private data and packet-switched network operators were 25.[26]

Private banking

See also: Banks in Ghana

The financial services in Ghana have seen a lot of reforms in the past years. The Banking (Amendment) Act 2007 included the awarding of a general banking license to qualified banks, which allows only indigenous Ghana offshore banks to operate in country Ghana. Indigenous Ghana private bank Capital Bank was the first to be awarded the general banking license in Ghana as well as indigenous Ghana private banks UniBank, National Investment Bank and Prudential Bank Limited. It has therefore become possible for Ghanaian non-resident individuals or residents and foreign companies or indigenous Ghana companies to open indigenous Ghana offshore bank accounts in Ghana.[15] Indigenous Ghana retail and savings banks include Agricultural Development Bank of Ghana, CAL Bank, GCB Bank Ltd, Home Finance Company and UT Bank as well as indigenous Ghana savings and loan institutions ABii National and Savings and Loans Company.[15]

Stock exchange

Main article: Ghana Stock Exchange

The Stock Exchange of Ghana is one of the largest in Africa, with a market capitalization of GH¢ 57.2 billion or CN¥ 180.4 billion in 2012. South Africa's JSE Limited is the largest.[27]

Imports and Exports

Ghana has the 92nd largest export economy in the world. The top exports of Ghana are Crude Petroleum ($2.66B), Gold ($2.39B), Cocoa Beans ($2.27B), Cocoa Paste ($382M) and Cocoa Butter ($252M). Its top imports are Refined Petroleum ($2.18B), Crude Petroleum ($546M), Gold ($428M), Rice ($328M) and Packaged Medicaments ($297M). With top destinations reaching Switzerland ($1.73B), China ($1.06B), France ($939M), India ($789M) and the Netherlands ($778M). The top import origins are China ($4.1B), the Netherlands ($1.58B), the United States ($1.1B), Nigeria ($920M) and India ($668M).[28]

Energy

Ghana hydropower and solar energy electricity generation industries, and the oil and gas industry

As of December 2012, Ghana gets 97% of its energy from hydropower and exports some of this to neighboring countries.

Solar energy

Ghana has aggressively begun the construction of solar plants across its sun-rich land in an aim to become the first country to get 6% of its energy from solar energy generation by 2016. The biggest photovoltaic (PV) and largest solar energy plant in Africa, the Nzema project will be able to provide electricity to more than 100,000 homes.[29] This 155 megawatt plant will increase Ghana's electricity generating capacity by 6%.

Construction work on the GH¢740 million (GB£248 million) and the fourth-largest solar power plant in the world is being developed by Blue Energy, a renewable energy investment company, majority owned and funded by members of the Stadium Group, a large private asset and development company with GB£2.5 billion under management. The project director is Douglas Coleman, from Mere Power Nzema Ltd, Ghana.[29]

Unlike many other solar projects in Africa that use concentrated solar power, solar plants will use PV technology to convert sunlight directly into electricity.[29] Installation of more than 630,000 solar PV modules began by the end of 2013, with electricity being generated early in 2014.[29] It is due to reach full capacity at the end of 2015.[29]

Wind energy

Wind turbines on a wind farm

Ghana has Class 4–6 wind resources and high-wind locations, such as Nkwanta, the Accra Plains, and Kwahu and Gambaga mountains. The maximum energy that could be tapped from Ghana's available wind resource for electricity is estimated to be about 500–600 GWh/year.[30] To give perspective: in 2011, per the same Energy Commission, the largest Akosombo hydroelectric dam in Ghana alone produced 6,495 GWhrs of electric power and, counting all Ghana's geothermal energy production in addition, the total energy generated was 11,200 GWhrs in that year.[30] These assessments do not take into consideration further limiting factors such as land-use restrictions, the existing grid (or how far the wind resource may be from the grid) and accessibility.[30] Wind energy has potential to contribute significantly to the country's energy industry. 10% can certainly be attained in terms of installed capacity, and about 5% of total electric generation potential from wind alone.[30]

Bio-energy

Hybrid Sorghum plantation field

Ghana has put in place mechanisms to attract investments into its biomass and bio-energy sectors to stimulate rural development, create jobs and save foreign exchange.[31]

The vast arable and degraded land mass of Ghana has the potential for the cultivation of crops and plants that could be converted into a wide range of solid and liquid bio-fuels, as the development of alternative transportation fuels could help Ghana to diversify and secure its future energy supplies.[31] Main investments in the bio-energy subsector existed in the areas of production, are transportation, storage, distribution, sale, marketing and exportation.[31]

The goal of Ghana regarding bio-energy, as articulated by its energy sector policy, is to modernize and examine the benefits of bio-energy on a sustainable basis.[31] Biomass is Ghana's dominant energy resource in terms of endowment and consumption, with the two primary bio-fuels consumed being ethanol and biodiesel.[31] To that effect, the Ghana ministry of Energy in 2010 developed its energy sector strategy and development plan.[31] Highlights of the strategy include sustaining the supply and efficient use of wood fuels while ensuring that their utilization does not lead to deforestation.[31] The plan would support private sector investments in the cultivation of bio-fuel feedstock, the extraction of bio-oil, and refining it into secondary products, thereby creating financial and tax incentives. The Ghana Renewal Energy Act provides the necessary fiscal incentives for renewable energy development by the private sector, and also details the control and management of bio-fuel and wood fuel projects in Ghana.[31] The Ghana National Petroleum Authority (NPA) was tasked by the Renewable Energy Act 2011 to price Ghana's bio-fuel blend in accordance with the prescribed petroleum pricing formula.[31]

The combined effects of climate change and global economic turbulence had triggered a sense of urgency among Ghanaian policymakers, industry and development practitioners to find sustainable and viable solutions in the area of bio-fuels.[31]

Brazil, which makes ethanol from maize and sugarcane, is currently the world's largest bio-fuel market.[31]

Energy consumption

Electricity generation is one of the key factors in achieving the development of the Ghanaian national economy, with aggressive and rapid industrialization; Ghana's national electric energy consumption was 265 kilowatts per capita in 2009.[32][33] Shortages of electricity have led to dumsor (blackouts),[34] increasing the interest in renewables.[35]

Hydrocarbon and mining

Ghanaian mineral resources: bauxite, diamond, timber and manganese
Ghana petroleum and commodities; exports in percentage.

Ghana has 5 billion barrels (790×10^6 m3) to 7 billion barrels (1.1×10^9 m3) of petroleum in reserves. A large oilfield which contains up to 3 billion barrels (480×10^6 m3) of sweet crude oil was discovered in 2007.[36] Oil exploration is ongoing and the amount of oil continues to increase.[37] Ghana produces crude oil, as of 15 December 2010, and until June 2011, Ghana exploited around 120,000 barrels per day and is expected to increase production up to 2.5 million barrels per day in 2014.[38][39] Ghana has vast natural gas reserves, which is used by many foreign multinational companies operating in Ghana.[40] The hydrocarbon industry has had major implications for regional and urban development in Ghana and these are likely to substantially increase in the years to come [41]

Mining has gained importance in the Ghanaian economy since the turn of the 21st century, with a growth of around 30% in 2007.[42] The main mining extractions are bauxite,[43] gold (Ghana is one of the largest gold producers in the world),[44] and the phosphates.[45]

Tourism

Main article: Tourism in Ghana
Tourism destinations in Ghana.[46]

The Ministry of Tourism has placed great emphasis upon further tourism support and development. Tourism contributed to 4.9% of GDP in 2009, attracting around 500,000 visitors. Tourist destinations include Ghana's many castles and forts, national parks, beaches, nature reserves, landscapes and World Heritage buildings and sites.[47][48]

In 2011, Forbes magazine ranked Ghana eleventh friendliest country in the world. The assertion was based on a survey of a cross-section of travelers in 2010. Of all the countries on the African continent that were included in the survey, Ghana ranked highest.[49]

To enter Ghana, it is necessary to have a visa authorized by the Government of Ghana, except for certain entrepreneurs on business trips.[50]

Agriculture

Main article: Agriculture in Ghana

Ghana National Agricultural Export is the government arm that operates, maintains, and oversees the planting of cocoa, cashews, and other crops for export. Since its inception, it has drastically assisted the government in boosting agricultural sales. Agribusiness accounts for a small fraction of the gross domestic product.[51] The main harvested crops are corn, plantain, rice, millet, sorghum, cassava and yam.[52] Unlike the agricultural livestock, forestry, and fishing sectors, the crop sector is key to the Ghanaian agricultural industry.[53]

Ghana: Vision 2020 and industrialization

Economy of Ghana Vision 2020 logo

With the economic program "Ghana: Vision 2020", Ghana intends to achieve its goals of accelerated economic growth and improved quality of life for all its citizens, by reducing poverty through private investment, rapid and aggressive industrialization, and direct and aggressive poverty-alleviation efforts.[54] These plans were forcefully reiterated in the 1995 government report, Ghana: Vision 2020.[54] Nationalization of state-owned enterprises continues, with about two-thirds of 300 parastatal enterprises owned by the government of Ghana.[54] Other reforms adopted under the government's structural adjustment program include increasing exchange rate controls and increasing autarky and increasing restrictions on imports.[54]

The Ghana: Vision 2020 forecast assumes political stability; successful economic stabilization; the implementation of Ghana: Vision 2020 policy agenda on private sector growth; and aggressive public spending on social services, infrastructure, and industrialization. It projection states that Ghana's goals of reaching high-income economy status and newly industrialized country status will be easily realized between 2020 and 2039.[54][55]

2013 exportations to[9][10] 2013 importations from[9][10]
Country Percentage Country Percentage
Sunyani Cocoa House and Theobroma cacao; Ghana is projected to become the largest producer of cocoa in the world.[55][56][57]
Ghana gold bars; Ghana is the 7th largest producer of gold in the world.[58]
 South Africa 46.89%  China 12.46%
 Netherlands 12.32%  Nigeria 11.76%
 India 5.49%  United States 8.86%
 United Kingdom 3.57%  Belgium 5.15%
 Malaysia 3.32%  India 4.35%
  Switzerland 2.76%  United Kingdom 3.93%
Others 25.65% Others 53.49%

Economic transparency

Further information: Corruption in Ghana

The judicial system of Ghana deals with corruption, economic malpractice and lack of economic transparency.[15] Despite significant economic progress, obstacles do remain. Particular institutions need reform, and property rights need improvement. The overall investment regime in Ghana lacks market transparency. Tackling these issues will be necessary if Ghana's rapid economic growth is to be maintained.[15]

See also

Footnotes

  1. 1 2 2014 GDP per capita of Ghana 20 million Ghanaian people population.
  2. 1 2 2014 Average gross salary of Ghana 20 million Ghanaian people population.
For the current Gh¢ versus Worldwide exchange rates, see current Currency Converter Results at Exchange-Rates.org.

References

  1. ↑ Data. "GDP, PPP (current international $)". Data.worldbank.org. Retrieved 2014-07-15.
  2. 1 2 "Ghana". International Monetary Fund. Retrieved 22 January 2014.
  3. ↑ "Ghana Q1 year-on year growth 8.7 pct – stats office". cnbc.com. CNBC. 27 June 2012. Retrieved 3 July 2012.
  4. ↑ "Ghana: The World's Fastest Growing Economy in 2011". Press Centre, The presidency, Republic of Ghana. 1 January 2011. Retrieved 13 June 2011.
  5. ↑ Data. "GNI per capita, PPP (current international $)". Data.worldbank.org. Retrieved 2014-07-15.
  6. 1 2 3 "Provisional Gross Domestic Product 2013" (PDF). September 2013. Retrieved 9 July 2014.
  7. ↑ "Ghana living standards" (PDF). October 2013. Retrieved 30 June 2012.
  8. ↑ "Ease of doing business index rank 2014". doingbusiness.org. 2014.
  9. 1 2 3 4 "The Observatory of Economic Complexity: Ghana". atlas.media.mit.edu. Retrieved 20 April 2013., "Ghana Major Trade Partners". countries.bridgat.com. Retrieved 20 April 2013.
  10. 1 2 3 4 "Ghana Major Trade Partners". countries.bridgat.com. 2013.
  11. ↑ Dontoh, Ekow (6 February 2013). "Ghana's Foreign Direct Investment Fell on Vote Concerns". bloomberg.com. Bloomberg. Retrieved 20 April 2013.
  12. ↑ "New fuel for faster development". worldfolio.co.uk. Retrieved 12 October 2013.
  13. ↑ "The Top 5 Countries for ICT4D in Africa". ictworks.org. Retrieved 12 October 2013.
  14. ↑ "Obama's Ghana trip sends message across Africa". CNN. 10 July 2009.
  15. 1 2 3 4 5 "Ghana Economy". heritage.org. Retrieved 20 April 2013.
  16. ↑ The Heritage Foundation. "Ghana's Economy". Heritage. Retrieved 17 May 2016.
  17. ↑ "Rlg wants to create a million jobs". standard.gm. 22 April 2014. Retrieved 10 July 2014.
  18. ↑ Kofi Adu Domfeh (13 April 2013). "Ghana's model vehicle unveiled by Suame Magazine artisans". Modernghana.com. Retrieved 25 September 2013.
  19. ↑ "Ghana's model car attracts Dutch government support". Myjoyonline.gh. 15 July 2013. Retrieved 25 September 2013.
  20. ↑ Daily Graphic Newspaper. "What Will Save Ghana's Textile Industry?". Government of Ghana. Retrieved 10 July 2014.
  21. ↑ "Ghana National Petroleum Corporation" (PDF). ghanaoilwatch.org. Retrieved 10 July 2014.
  22. ↑ "Ghana records 26 million mobile SIM subscribers". gh.pctechmag.com. 28 March 2013. Retrieved 24 April 2013.
  23. ↑ "Ghana: mobile users top 25 million". itnewsafrica.com. IT News Africa. 13 February 2013. Retrieved 24 April 2013.
  24. 1 2 Ghana culture and media "Country Facts". Accessed 6 February 2013.
  25. ↑ Ghana: Internet Usage and Telecommunications Report. Internet World Stats. Accessdate 24 April 2013.
  26. ↑ Atteneri Nabila Benítez Trujillo. Information of Telecommunications in Ghana (in Spanish). Proexca, 2010. Accessdate 24 April 2013.
  27. ↑ "Ghana Market Update" (PDF). www.icbuk.com. Intercontinental Bank. Retrieved 26 March 2012.:13
  28. ↑ OEC. "Ghana Imports and Exports". Atlas Media. Retrieved 13 May 2016.
  29. 1 2 3 4 5 Adam Vaughan (4 December 2012). "Africa's largest solar power plant to be built in Ghana". The Guardian. London. Retrieved 21 April 2013., Matt McGrath (4 December 2012). "Ghana solar energy plant set to be Africa's largest". BBC News. Retrieved 21 April 2013.
  30. 1 2 3 4 "Renewable Energy – what is Ghana's wind power potential". arrakis-group.com. Retrieved 23 April 2013.
  31. 1 2 3 4 5 6 7 8 9 10 11 "Renewable". energymin.gov.gh. Retrieved 23 April 2013., Shao Hai Jun (5 October 2012). "Ghana to attract investment into bio-energy sector". china.org.cn. Xinhua: China Internet Information Center. Retrieved 23 April 2013., "Ghana to attract investment into bio-energy sector". wacee.net. Retrieved 23 April 2013.
  32. ↑ "The sector of electricity in Ghana". Proexca (in Spanish). Canary Island. 2011. Retrieved 23 April 2013.
  33. ↑ "Consumption of Electrical Energy (kWh per capita)". World Bank (in Spanish). Retrieved 23 April 2013.
  34. ↑ "I've been named 'Mr Dumsor' in Ghana – Prez Mahama tells Ghanaians in Germany - See more at:". Graphic Online. Graphic Communications Group Limited (G.C.G.L). 21 January 2015. Retrieved 2 March 2015.
  35. ↑ Agbenyega, E. (10 April 2014). "Ghana's power crisis: What about renewable energy?". graphic.com.gh. Retrieved 8 February 2015.
  36. ↑ Ghana's increasing Oil Reserves and New Discoveries. news.yahoo.com. 22 December 2007. Retrieved 22 December 2007.
  37. ↑ RIGZONE – Kosmos Makes Second Oil Discovery Offshore Ghana
  38. ↑ "Ghana already produces oil". GuinGuinBali (in Spanish). Retrieved 21 April 2013.
  39. ↑ "Ghana to produce 80,000 barrels of crude oil per day next week". Ghana Oil Watch. Retrieved 21 April 2013.
  40. ↑ "Guide to Natural Gas in Ghana" (PDF). Bureau of Economic Geology. Retrieved 21 April 2013.
  41. ↑ Obeng-Odoom F, 2014, Oiling the Urban Economy: Land, Labour, Capital, and the State in Sekondi-Takoradi, Ghana, Routledge, London
  42. ↑ "Ghana, the best student of the classroom". Mondial Nieus (in Spanish). Retrieved 21 April 2013.
  43. ↑ MBendi. "Bauxite Mining in Ghana-Overview". Information Services. Retrieved 28 December 2011.
  44. ↑ "Gold in Ghana 2011 market". Proexca (in Spanish). Canary Islands. Retrieved 21 April 2013.
  45. ↑ "Ghana" (PDF). University of Guelph. Retrieved 20 April 2013.
  46. ↑ "Trade Expo International". UniqueTtrustex. Retrieved 19 April 2013.
  47. ↑ "Asante Traditional Buildings". Unesco. World Heritage Centre. Retrieved 20 April 2013.
  48. ↑ "Forts and Castles, Volta, Greater Accra, Central and Western Regions". Unesco. Retrieved 20 April 2013.
  49. ↑ "Forbes: Ghana is eleventh friendliest nation". www.vibeghana.com. Retrieved 31 May 2011.
  50. ↑ Harvard quotation. Belda. 2004. :24
  51. ↑ "Members". ONU (in Spanish). Retrieved 21 April 2013.
  52. ↑ "Agriculture in Ghana (Facts and figures)" (PDF). 2009. Retrieved 21 April 2013.
  53. ↑ "Ghana". Natureduca (in Spanish). Retrieved 21 April 2013.
  54. 1 2 3 4 5 "Ghana – Vision 2020" (PDF). ndpc.gov.gh. Retrieved 10 July 2014.
  55. 1 2 "Is Ghana Entering A Sweet, Golden Era?". Africanbusinessmagazine.com. African Business. Retrieved 10 July 2014.
  56. ↑ "Ghana will reclaim top spot in cocoa production -Prez Mahama". Graphic.com.gh. Daily Graphic. 5 November 2013. Retrieved 10 July 2014.
  57. ↑ Jedwab, Rémi; Moradi, Alexander (2012). "Revolutionizing Transport: Modern Infrastructure, Agriculture and Development in Ghana". London School of Economics. Retrieved 15 June 2013. Two railway lines were built between 1901 and 1923 to connect the coast to mining areas and the large hinterland city of Kumasi. This unintendedly opened vast expanses of tropical forest to cocoa cultivation, allowing Ghana to become the world's largest producer.
  58. ↑ Dave Brown. "Top 10 Gold Producers". Gold Investing News. Retrieved 19 April 2013.
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