Ghana Background Notes

Contributed By RealAdventures

U.S. Department of State
Background Notes: Ghana, January 2002
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.
Climate: Tropical.
Nationality: Noun and adjective--Ghanaian(s).
Population (2000 est.): 19.53 million.
Density: 82/sq. km. (212/sq. mi.).
Annual growth rate (2000 est.): 1.87%.
Ethnic groups: Akan, Ewe, Ga, Moshi-Dagomba.
Religions: Christian 35%, indigenous beliefs 31%, Muslim 27%, other 7%.
Languages: English (official), Akan 44%, Mole-Dagbani 16%, Ewe 13%,
Ga-Adangbe 8%. Education: Years compulsory--9. Literacy--64.5%.
Health: Infant mortality rate (2000 est.)-- 57.4/1,000. Life
expectancy--57.4 yrs.
Work force: 4 million: Agriculture and fishing--54.7%; industry--18.7%;
sales and
clerical--15.2%; services, transportation, and communications--7.7%;
Type: Democracy.
Independence: March 6, 1957.
Constitution: Entered into force January 7, 1993.
Branches: Executive--President popularly elected for a maximum of two
four-year terms. Legislative--unicameral Parliament popularly elected for
four-year terms. Judicial--Independent, Supreme Court Justices nominated by
President with approval of Parliament. Subdivisions: 10 regions. Council of
State--Presidential-appointed consultative body of 25 members required by
the Constitution. Political parties: New Patriotic Party, National
Democratic Congress, People's Convention Party, National Convention Party,
People's National Convention, et alia.
Suffrage: Universal at 18.
Flag: Three horizontal stripes of red, gold, and green, with a black star in
the center of the gold stripe.
GDP (1997): $6.01 billion.
Real GDP growth rate (1997): 5.5%.
Per capita GDP (1997): $340.
Inflation rate (1997): 27%.
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 (1997): Exports--$1.6 billion: cocoa ($600
million), aluminum, gold, timber, diamonds, manganese. Imports--$1.9
billion: petroleum ($272 million), food, industrial raw materials,
machinery, equipment. Major trade partners--U.K., Germany, U.S., Nigeria.
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, known as the
"Ashanti," produces most of the country's cocoa, minerals, and timber. North
of this belt, the country varies from 91 to 396 meters (300-1,300 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 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 universities is by examination
following completion of senior secondary school. School enrollment totals
almost 3 million.
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
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.
Post-Independence Politics
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
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.
Post-Nkrumah Politics
The leaders of the February 24 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
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
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 are appointed by the
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 of that
year. 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 face legal challenges.
In the December 7, 2000 elections, John A. Kufuor of the New Patriotic Party
(NPP), won the largest share of the presidential vote with 48.17% of the
vote, compared to 44.54% for Rawlings' vice president and hand-picked
successor, John Atta Mills of the NDC. The NPP also won 100 of the 200 seats
in Parliament. The NDC won 92 seats, while independent and small party
candidates won eight seats. In the December 28 run-off election, with
pledges of support from the other five opposition parties, Kufuor defeated
Mills by winning 56.73% of the vote and the NPP picked up one additional MP
by winning a by-election, giving them 100 seats and a majority in
Parliament. Both rounds of the election were observed, and declared free and
fair, by a large contingent of domestic and international monitors.
President Kufuor took the oath of office on January 7, 2001, becoming the
first elected president in Ghana's history to succeed another elected
The 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 the 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, a 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.

Principal Government Officials
President--John Agyekum Kufuor
Vice President-- Alhaji Mahama Aliu
Minister of Foreign Affairs--Hackman Owusu-Agyeman
Minister of Defense--Dr. Kwame Addo-Kufuor
Minister for Presidential Affairs and Chief of Staff--Jake Obetsebi-Lamptey
Minister of Communications and Transport --F.K. Owusu Adjapong
Minister of Finance--Yaw Osafo Maafo
Minister of Agriculture--Courage E.K Quashigah
Minister of Justice and Attorney General--Nana Akufo-Addo
Minister of Local Government--Kwadwo Baah-Wiredu
Minister of Energy--Albert Kan Dapaah
Minister of Trade and Industry--Kofi Apraku Minister of Mines, Land, and
Minister of Economic Planning--Dr.Kwesi Nduom
Minister of Works and Housing--Kwabena Bartels
Minister of Education--Prof. Christopher Ameyaw-Akumfi
Minister of Women's Affairs--Gladys Asmah
Minister of Media Relations--Elizabeth Ohene
Chief Justice of the Supreme Court--Justice Isaac Kobina Abban
Speaker of Parliament--Justice Daniel F. Annan
First Deputy Speaker--Freddie Blay
Second Deputy Speaker--Kenneth Dzirasah
Majority Leader--J.H. Mensah
Deputy Majority Leader--Papa Owusu Ankomah
Minority Leader--Alban Bagbin
Deputy Minority Leader--I.K. Adjei
Ambassador to the United States--Alan Kyeremateng
Permanent Representative to the United Nations--Nana Effah-Apenteng

Ghana maintains an embassy in the United States at 3512 International Drive,
NW., Washington, D.C. 20008 (tel. 202-686-4500). Its permanent mission to
the United Nations is located at 19 E. 47th Street., New York, N.Y. 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 seven-year life, but signs of natural
gas are being studied for power generation, while 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 1999), and the Ghanaian Government has placed great emphasis upon
further tourism support and development.
Economic 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 are a major source of foreign exchange for Ghana.
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
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
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;
unemployment and underemployment, particularly among urban youth;
deterioration in the transport network; and continued foreign exchange
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 infrastructural 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
The economy's response to these reforms was initially hampered by the
absorption of one 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 have 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 is scheduled for March 1998.
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 medium-term macroeconomic forecast assumes political stability,
successful economic stabilization, and the implementation of a policy agenda
for private sector growth, and adequate public spending on social services
and rural infrastructure. The ninth Consultative Group Meeting for Ghana
ended November 5, 1997 after deliberations in Paris. Twenty-four countries
and donor entities were represented at this meeting called by the World Bank
on behalf of the Ghanaian Government. The World Bank announced that, of the
targeted disbursement level of $1.6 billion sought from the donor community
for 1998-99, they foresaw only a $150 million shortfall in commitments, and
that this shortfall would be easily realized should Ghana rapidly enact its
macroeconomic program.
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 has set in motion a program to reintroduce a VAT bill,
with implementation in 1998 after an extensive public education campaign.
Ghana is active in the United Nations and many of its specialized
agencies--including the World Trade Organization--the Nonaligned Movement,
the Organization of African Unity (OAU), and the Economic Community of West
African States. Generally, it follows the consensus of the Nonaligned
Movement and the OAU on economic and political issues not directly affecting
its own interests. 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. Ghana maintains friendly relations with all states, regardless of
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. In addition,
there is an active bilateral international military and educational 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 imports many of its supplies from,
and exports almost all the aluminum ingots to, the United States. With a
replacement value of more than $600 million, U.S. investments in Ghana form
one of the largest stocks of foreign capital. VALCO--90% owned by Kaiser,
and 10% by Reynolds--is by far the biggest investment, but other important
U.S. companies operating in the country include Mobil, Coca Cola, S.C.
Johnson, Ralston Purina, Star-Kist, A.H. Robins, Sterling, Pfizer, IBM,
Carson Products, 3M, Pioneer Gold, Stewart & Stevenson, Price Waterhouse,
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. In late 1997, Nuevo Petroleum
concluded an oil exploration agreement accounting for the last of Ghana's
offshore mineral rights zones. Two other U.S. oil companies, Sante Fe and
Hunt, also are engaged in offshore exploration.
U.S. development assistance to Ghana in fiscal year 1997 totaled $52
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 agroforestry, small
business development, health education, and water sanitation, as well as
youth development.
Principal U.S. Officials
Ambassador--Kathryn Dee Robinson
Deputy Chief of Mission--G. Dennise Mathieu
Director, USAID Mission--Frank Young
Defense Attaché -- Lt. Col. Dean Bland
Public Affairs Officer--Brooks Anne Robinson
Political Chief--Stephanie Sullivan
Economic Chief--Michael Owen
Administrative Chief--Isiah Parnell
Consul--Mike Schimmel
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.
[end of document]

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