Ghana - Economic analysis of government's policies, investment climate and political risk.






GHANA: Economic Policy Analysis

This site presents an analysis of Ghana's government's economic policies compared to a list of 34 economic policies as prepared by student Mr. Emmanuel Ossei-Boateng with the McKeever Institute of Economic Policy Analysis (MIEPA)in the Spring of 2001. To read the analysis scroll through this site. To learn more about the background policies, click here

Introduction and Policy Recommendations

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Several foreign born students living in California have completed a study of their home country governments' economic policies as compared to the MIEPA list of policies as outlined above. The study on Ghana is shown below. The ratings herein are based on the following rating scale:


5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 1996. Used herein with permission]

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Comparison of Ghana's economic policies to MIEPA criteria as prepared by native student of Ghana, Mr. Emmanuel Ossei-Boateng, studying in Berkeley in Spring, 2001.



        1               3.0           9.0             15.0        60 %

        2               4.0          12.0             15.0        80

        3               1.0           3.0             15.0        20

        4               1.0           3.0             15.0        20

        5               3.0           9.0             15.0        60

        6               4.0          12.0             15.0        80

        7               3.5          10.5             15.0        70

        8               2.0           6.0             15.0        40

        9               2.5           7.5             15.0        50

        10              2.5           7.5             15.0        50

        11              3.5          10.5             15.0        70

        12              3.5          10.5             15.0        70

        13              2.0           4.0             10.0        40

        14              3.0           6.0             10.0        60

        15              2.0           4.0             10.0        40

        16              4.0           8.0             10.0        80

        17              3.5           7.0             10.0        70

        18              2.5           6.0             10.0        50

        19              0.5           1.0             10.0        10

        20              2.0           4.0             10.0        40

        21              3.5           7.0             10.0        70

        22              3.5           7.0             10.0        70

        23              1.0           2.0             10.0        20

        24              1.0           2.0             10.0        20

        25              1.0           2.0             10.0        20

        26              1.0           2.0             10.0        20

        27              1.0           2.0             10.0        20

        28              4.0           8.0             10.0        80

        29              1.5           3.0             10.0        30

        30              2.5           2.5              5.0        50

        31              4.0           4.0              5.0        80

        32              1.0           1.0              5.0        20

        33              3.5           3.5              5.0        70

        34              3.0           3.0              5.0        60

   TOTAL               84.5          189.5           375.0        50.5%
                      =====          ======          =====        =====

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1. Freedom From Internal Control: 3.0

The Constitution provides for freedom of peaceful assembly, freedom of speech, freedom of press and its likes and that the government generally respects all this rights. The government does not require permit for demonstrations. However Parliament passed a public law in late 1994 requiring that organizers of " special events" or " processions" should inform the police of their intention at least five days in advance so that the police can institute precautionary measures. The law also provides for curfews and arrest without warrants in specific instances were the demonstrations might cause dangerous incidents were People State to abuse other people and properties.

SOURCE: Human rights, country report on human rights practices: Ghana

2. Freedom of Speech: 4 .0

The constitution of Ghana provides for the freedom of speech and in practice these provision is respected. Until 1997 the government of Ghana continued to pressure the media. The opposition political parties and other frequently criticize the government and the government has allowed more control of print and electronic media to be transferred to the private sector. There are more than a dozen newspapers including two government –owned dailies, two government–owned weeklies, and several privately owned. Most newspapers circulate only in the capital and many of the smaller p private newspapers are available only in the big cities. There is one government owned and 12 private FM radio stations in the capital and in all there are about 42 private FM station nationwide. The independent stations air a wide range of viewpoints. There are 12 regional television stations in Accra, Kumasi, and Takoradi, and one government – owned station that broadcast nationwide. Ghana has six Internet providers in the country. There services help people express their freedom of speech.

Source: Ghana Country report on human rights practices for 1999, Author; US department of states commission; 2, personal.

3. Effective, Fair Police Force: 1.0

The police force of Ghana is under the jurisdiction of eight-member Police Council, which is responsible for maintaining law and order. Although the security apparatus is controlled by and responsive to the government, monitoring, supervision and education of the police remain poor. Police in Ghana use of excessive force has resulted in a number of extra judicial killing as well as injuries, although the use of rubber bullets and water cannons improved the ability of manage crowd control situations without killings or serious injuries. On May 3 2001, during a soccer game riot, police in Ghana tried to stop the riot by using tern gases which ended up killing about 120 people and injuring many others as a result.

Source: Ghana Country report on human right practices for 1999, and

4. Currency: 1.0

The unit of currency is the cedi, which is divided into 100 pesewas. With the decline in the cedi, the use of the pesewas has ceased. Also it has made it legal to use foreign currency to conduct business in Ghana. Especially the British Pounds and the US dollars.

Source: Country Commercial Guide for Ghana, 2, Personal

5. Commercial Banks: 3.0

There are eleven commercial banks in Ghana. The largest bank in the country is Ghana Commercial Bank and SSB Bank with net worth's of approximately $30 million and $80 million respectively, were state controlled. Until recently the banking sector was dominated by state – owned institutions and showed few signs of competition. Within the last two years, however two state –owned banks have been privatized under the government’s divestiture implementation program. Commercial banks offer services such as current and saving accounts, telegraphic transfers, safe custody deposits, sales of traveler’s checks and foreign transactions including the establishment of letters of credit. They also lend money to business and entrepreneurs.

Source: Commercial guide for Ghana, Author by US state department.

6. Communication System: 4.0

Ghana’s telecommunication systems are good by the continental standard. Ghana has about 141, 000 telephone lines which is currently service the people. The service providers are Ghana Telecom Limited, and westel (US company). There are also three mobile phone service operators. Most private people own communication centers that provide pay phone services this are found in all major cities and a few are found in rural cities.

Source: Commercial guide for Ghana, 2, personal.

7. Transportation: 3.5

Ghana has about 40,000km of main roads (one –fourth of which are paved). This makes it a little difficult for most Ghanaians framers who live in rural areas to bring there good to town because sometimes after harvest they have to wait for days before they can bring in the products to town, due inadequate roads. These have contributed to the country’s poor economic growth, because agriculture is the country backbone in economic growth. There are two ports in Ghana, Tema and Takoradi port. The ports are connected by a triangular 953km rail system linking the major cites, Kumasi, Takoradi and Accra-Tema. The waterways are Volta, Ankobra, and Tano rivers, which provide 168km of perennial navigation for launches and lighters. The Lake Volta provides 1125 km of arterial and feeder waterways.

Air transport plays a great rule in the country. Ghana has one international airport and three other domestic airports. International air transportation to Accra is currently offered by Ghana Airways and more than 17 other international airlines. Some common ones are British Air, KLM, and Lufthansa. They provide service from Accra to Europe and other parts of Africa and Middle East. Ghana Airways currently offers direct flights from Accra to New York with an additional route directly to Atlanta.

Source: the world fact book 2000, and Commercial guide for Ghana.

8. Education: 2.0

Ghana like most West African countries, struggles to provide its citizens with even basic educational facilities. Ghana currently spends approximately 30% of its budget on education but unfortunately that is not enough. Most large villages have affordable primary schools but junior secondary and senior secondary schools are more expensive and are geographically distant from most students. Ghana has five excellent universities both public and private with variety of programs offered. Though variety of social and economic factors limits availability to student long before the application process.

The illiteracy rate in Ghana is over 40%, due to the restrictions of poverty and the familial necessity of child’s assistance around the home or farm restrict the majority of children form attending lower level schools. The number of student who goes on to attend senior secondary school (sss) is extremely small. The male's enrollment level to senior secondary is 34.8% compare to females level at 24.0%. However the government is making efforts to push in more money in the education system, also with the help of some foreign originations.

Source:, personal.

9. Social Mobility: 2.5

Ghana’s current Socio- economic environment allows individuals to use their full potential to create wealth. Unlike before the government is trying to serpent politics from business, which makes it better for individual investors to cross the ethnic line drawn by government and invest outside their ethnic origin where there is opportunities. This days the when recruiting manpower and promotion in the government jobs ethnic is no more a factor. The new government of Ghana has indicated to bring all Ghanaians together no matter your background so far as you fit you position. He believes in equal opportunity for all.

Source: Personal

10. Freedom From Outside Control: 2.5

Ghana in 1957 became the first country in colonial Africa to gain its independence. Although after its independence their colonial master the British moved in close relationship to help the country build its self-well. This relationship is still in shape but not has strong as before. Ghana now has closer relation with the US and the west especially in responding to economic growth and involvement. The US has influence in the country is enormously economically.

Source: Personal

11. Foreign Currency Transactions: 3.5

There are no restrictions on import and export of foreign currencies provided they declared at the point of entry and exchanged for local currency the cedis, legally through banks and forex bureaus. The exchange rate as of February 2001 is 7,300 is to a US 1 dollar.

Source: Personal

12. Border Control: 3.5

Ghana shares borders with three costal countries, namely Cote d’Ivorie, Togo, Burkina Faso, and the Gulf of Guinea. Ghana has demonstrated its ability to avoid the influence of the neighboring countries. Ghana has done this through having diplomatic dialog with its neighbors. Despite Ghana’s efforts to clamp down on small scale of contraband, unregulated export of cocoa, gold, import used clothing, alcohol and other consumer goods.

Source: Personal

. Cultural, Language Homogeneity: 2.0

Ghana has a highly diverse population. About 44% of them speak Akan. The Akans make about two-fourth of the population. However there are about 52 different ethnic groups in Ghana. English is the country’s official languages and is mostly spoken along with Akan. Since most Ghanaians somehow speak English and Akan it has made it easy for people to conduct businesses will in Ghana. Other languages such as Ga, Moshi-Dagomba, Ewe, and Akan are taught in school. French is another language taught in schools since it is the official language of all three neighboring countries.

Source: The world fact book 2000—Ghana; personal

14. Domestic Budget Management: 3.0

Ghana achieved real economic growth of 4.6% in 1998 in spite of an energy crisis that slowed down economic activity in the first half of the year. The 1998 growth rate was a slight improvement over the 4.2% recorded in 1997. The government remains under heavy pressure from international institutions and donors to adhere to a policy of fiscal discipline in other for renewed growth. The government of Ghana, in collaboration with the Ghana central bank, has been able to lower inflation to 9.4%, the lowest since 1985, as well as effecting a fall in interest rates.

Source: Country Commercial Guide for Ghana

15. Institutional Stability: 2.0

Ghana was under one political party for the past 20 years. During those years there were a lot of corruptions in the government, school s, Courts, law enforcement, and the other government organizations. Also there were a lot of changes made, which resulted to the weakness of most institutional capacity. As Ghana under goes new Presidencies a lot of changes are going to be done, this will result in restructuring of many government organizations to suit the new government.

Source: Personal

16. Honest Government: 4.0

The new government of Ghana has a vision, which seem to help and sustain support among Ghanaians and their economy. The vision is to carry out the old regime, which was corrupted, and restore a zero Torrance regime, which will not turreted corruption in its cabinet.

Source: personal

17. Common Laws: 3.5

The administration and implementation of legal system in Ghana is set for every citizen on the basis that you are qualify to do you appointment. The administration of justice is uniform in all parts of the country it is control by all the three branches of the government. The criteria for appointing judges are base on their qualifications. The qualifications for a judge is his/her well understanding of the laws of the land and also his /her education background. This make the legal system effective were the rule of law in the country is abide.

Source: Personal

18. Political Effectiveness: 2.5

The government of Ghana project to balance and share all the country’s resources to all part of the nation to build a strong economic growth for the country. All regional capital is given the due share of the central government and regional capital budget to help each region project good growth. In the past infrastructure shortcomings created substantial impediments to domestic productivity and discouraged foreign direct investment due to this effect political effectiveness project on the country.

Source; Commercial Guide for Ghana, personal

19. Government Debt: 0.5

Ghana decided to join the Heavily Indebted Poor Countries (HIPC); two months after the new elector government took power. Ghana debt was estimated about $6 billion and over. According to the minister of finance, the president directed that the country join HIPC to get the country of its debt and put the economy back on track.


20. Economic Statistics: 2.0

Ghana is well endowed with natural resources, Ghana has twice the per capital output of the poorer countries in West Africa. Even so, Ghana remains dependent on international financial and technical assistance. Gold, timber, and cocoa production are major source of foreign exchange. The domestic economy continues to revolve around subsistence agriculture, which accounts for 40% of GDP and employs 60% of the work force, mainly small landholder. In 1995-97, Ghana made mixed progress under a three-year structural adjustment program in cooperation with the IMF. On the minus side, public sector wage increases and regional peacekeeping commitments have led to continued inflationary deficit financing, depreciation of the cide and rising public discontent with Ghana austerity measures. A rebound in gold price is likely to push growth over 5% in 2000-01


21. Central Bank: 3.5

Ghana’s banking system is based on a number of banks and non – bank financial institutions, including the Bank of Ghana which is the Central Bank. The Central Bank has the responsibility of advising the government on implementation of interest rates and control of monetary policy. To ensure systematic development of banking system, the central bank (GoB), in addition to its traditional functions it also has the responsibility for ensuring that banking is responsive to the need of the public and businesses. The bank of Ghana may engage with other banks and financial institutions in the discount, rediscount, purchase or sale of duly signed, and endorsed bills of exchange, promissory not, acceptances and other credit entrustments.

SOURCE: http://www. Author: Ghana Embassy.

22. Private Property: 3.5

The laws of Ghana recognize the right of foreign and domestic private entities to own and operate enterprises. However foreign entities are by law prohibited from engaging in cretin business activities in Ghana, example pitied trading, and also under the Minerals and Mining Law non – Ghanaian cannot engage in small-scale growth. Private entities may freely acquire and dispose of their interest in Ghana. The legal system recognizes and enforces secured interest in property protection.

The protection of intellectual property is an evolving are of law in Ghana. Progress has been made in recent years to afford protection under both international and local laws. Ghana is a member of the World Intellectual Property Organization (WIPO) and the English- speaking African Regional Industrial Organization (ESARIPO). The courts have been pro- active in the protection of intellectual property rights.

SOURCE: Country Commercial Guide for Ghana 1999

23. Protection of Public Health and Safety: 1.0

Health services in Ghana are provided by the central government, local institutions, Christian missions (nonprofit agencies,), and a relatively small number of private practitioners. According to the United Nations, about 62.9% of the country’s total population in 1984 depended on the government health centers for medical care. The government of Ghana has been working hard to improve health conditions in the country. Like the rest of the sub –Saharan African countries, Ghana has the full range of diseases. According to World Health Organations (WHO), some common diseases include, cholera, typhoid, measles, infectious hepatitis, and malaria. Most of these diseases are contribute by the poor sanitation facilities and also acquired through insect bites which is common in rural areas. To reduce the country’s infant mortality rate further, the government initiated the Expanded Program on Immunization in February 1989 as part of a ten-year health action plan to improve the delivery of health services. Over the years, the administrative branches of the Ministry of Health have work closely with city, town, and village councils in educating the people in sanitation matters. Sanitation advances have been made in the urban areas and not the rural communities where the majority of the population lives.

The first AIDS case was reported in march 1986, in February 2001, the new Ghanaian President indicated that HIV/AIDS was becoming a serious problem, more than 300000 cases of HIV positive have been reported. He also indicated in his first state of nation address to parliament, that the HIV/AIDS is crippling national economies and undermining businesses.


24. High Wage Policies: 1.0

The government of Ghana set a legal minimum daily wage in 1999 is 2900cedis (=about 80cents in us dollar). Ghana recently joins the Heavily Indebted Poor Countries (HIPC). Their initiative was vary of the country’s poor per capital income. The Ghanaian Trades Union Congress (TUC) strongly opposed the decision. According to the secretary –general of the Trade Union Congress the decision will affect the labor force in the country because the country is going to be even poor then it is now. Ghana has a labor force of 4.1 million in which 54% belong to the agricultural and fishing force, 15% is sales and clerical, industry employees make 18.7%, services, transportation, and communication employees make 7.7% and professional such as doctors, and engineers makes 3.7%. Ghana has a low professional employment due to its low GDP per capital. The GDP per capital in 2000 was $390 US dollars. Due to this factor most Ghanaian professional have travel abroad to earn their income.

SOURCE: Country Commercial guides for Ghana, www.ghanaweb,com/GhanaHomePage/NewsArchive/artikel.php?ID=13983

25. Environmental Protection: 1.0

Ghana has abundant natural resources, which serves, as the springboard for the country’s industrialization effort. In the process of exploding resource to meet social economic needs, adequate care has not been taken to protect the land resources. These have therefore caused the country some environmental problems, which problems include, deforestation, desertification, and soil degradation. Other problem such as air and water pollution associated with the industrialization is also on the raise. In March of 1988, the government of Ghana imitated a major effort to put these issues on his priority agenda, to exercise a strategy to address the issue.


26. Strong Army: 1.0

Ghana has the soldiers but not the certificated hardware to protect its land. It has professional military branches including, Army, Navy, Air Force, National Police Force, Palace Guard and a Civil Defense. The military manpower military age is 18 years of age, the availability is male age 15-49; 4739526 (2000est) However the manpower fit for service is 15-49: 2629954 (2000est) and the reaching age annually is 196549(2000est). The Ghana military is mainly males. The military expenditure for the 1999 facial year was $53 million, which was 0.7% of the annual GDP

SOURCE:; Personal

27. Foreign Trade Impact: 1.0

Ghana GDP is approximately $7. 2 billion, its export and import in 1999 were estimated at $4.4 billion, which makes about 60% of the GDP. Out of the $4.4 billion export was estimate at $1.8 billion and import was $2.6 billion, imports were 60% - of the total merchandise trade. The merchandise trade balance of 1999E was - $0.8 BILLION and 2000E; -$0.9 BILLION.

SOURCE; general.html

28. Protection of Foreign Currency Earning Enterprises: 4.0

Ghana exports primary commodities such as cocoa, gold, timber, tune, bauxite and aluminum. The government has a few exception restriction on its commodities export, military hardware, antiques and collator’s items more than 50 years. These items require special permit and certification. With these exceptions there are no control on exports, however the Ghana Cocoa Marketing Board monopolizes the exportation of cocoa, since it is the major export commodity. Also exporters are entailed to 100% refund for duty paid on imported imputes used in processing of exported goods. Firms involved in exports enjoy some fiscal incentive such as tax holidays.

SOURCE; National Trade Estimates Report on Foreign Trade Barriers, 2, Country Commercial Guide for Ghana.

29. Management of Foreign Currency Budget: 1.5

Ghana’s merchandise trade balance was - $0.9billion (1999E), which indicates that Ghana government, is spending more than what the country produce.

30. Layers of Collective Action: 2.5

Until 1992 most Ghanaians didn't have much say in their economic issues of their country. Then the country was under military ruling and whatever the dictator said was right. Things some why changed after the 1992, when the constitution was approved? Ghanaians began to have say, eventhough they have says. Ministers are appointing by the government but local politicians are vote into office by the people.

SOURCE: HTTP//; personal

31. Pro-Business Climate: 4.0

Generally, Ghanaian business customs are similar to those of the U.S, but they are a bit formal. English is the official language and it is used in most business transaction. Urban Ghanaians mostly speak some English. Ghanaian businessmen wear business suit during working. It is easy to make friends in Ghana who can facilitate business transactions. In return, they may ask for some favor, which is normal. This behavior in some case goes beyond proper business ethics. Work and residence permit is issued to expatriate employed by companies in Ghana against immigration quotas, that is the number of non-Ghanaians a business may employ.

SOURCE; Country Commercial Guide for Ghana 2, Personal.

32. Government Enterprises: 1.0

Since 1989, there has been a steady and serious effort on the part of the GOG to privatize over 300 state - owned enterprises which were not profitable, it has been able to do so, about 40% shares of the major mining company in the country is owned private citizens. Ghana offers potential investors a stable; multiparty democratic environments as well as a commitment to practice market liberalization. Ghana's divestiture program, its priority for free enterprises and private sector initiative, as well as various tax incentives to attract foreign capital..

SOURCE; Country Commercial Guide for Ghana

33. International Security Agrements: 3.5

Ghana enjoys relationships with many powerful nations such as the U.S.A, Cuba, and North Korea. Despite the warm bilateral relationship, the disproportion between size and wealth of this countries, Contributes frequently to divergent perspectives regarding global and regional political, military, economic and trade issues. Ghana in the past has exercised a position of leadership within the sub western Sahara region. It is a member of the Economic Community of West African State and they play a significant role. Its monitoring group is (ECOMOG), a peacekeeping force. The headquarters of defense commission of the Organization of African Unity (OAU) is in Ghana.


34. Protection of Domestic Enterprises from Government Mandated Costs: 3.0

The attitude of the Government of Ghana can be described as pro-business, because of its seriousness about becoming the gateway between West African and the rest of the world. The government offers potential investors a stable, multiparty democratic environment as well as a commitment to the philosophy and practice of market liberalization. These ideas as also contribute to better laws on worker safety regulation. The government has a divestiture program which priority for free enterprise and private sector initiative as well as various low tax incentives and loans to attract more domestic and foreign capital. The Ghana market is opened to all qualified supplies. However the investment code exclude foreign investors from participating in four economic sectors that are reserved for Ghanaians: petty trading, the operation of taxi service, lotteries (excluding soccer pools), and the operation of beauty salons and barber shops.

SOURCE: National trade estimates report on foreign trade barriers,


All the information and conclusions in each country analysis are solely the responsibility of the individual student and have not been verified, corrected, checked for copyright infringement or evaluated in any way by MIEPA or Mike P. McKeever. You are solely responsible for the results of any use you make of the information and conclusions in these studies. Use them at your own risk as interesting supplemental information only instead of seasoned judgements about the policy factors contained herein. Each student has granted permission for his or her work to be displayed here under his or her own name or wishes to remain anonymous and have either created a pen name or used no name at all; if you wish to contact them for any reason, forward your request to MIEPA and the student will be notified of your interest.

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