Ghana & Development
Ghana is a peaceful and stable democracy with a population of about 26 million. Over the last decade, Ghana has enjoyed increasingly stable and deepening democratic governance. Multiple successive successful elections have strengthened the effectiveness of key national institutions, enhanced investor confidence, and anchored the new economy in an environment for positive growth.
In late 2010, Ghana was re-categorised as a lower middle-income country. The economy continues to be fueled by extractives and agriculture commodities, bolstered by recent oil and gas exploitation, with accompanying vulnerability to global market prices.
Ghana was the first country in Sub-Saharan Africa to meet the Millennium Development Goal (MDG) of halving extreme poverty. The proportion of its population living below the poverty line of US$1.25 a day declined from 51.7% to 28.5% between 1901 and 2006, and the poverty level was estimated to be 24% in 2012/13. However, there remain significant disparities in poverty levels between social groups, between urban and rural areas, and between the northern and southern regions, while rising income inequality has the potential to undermine gains in poverty reduction.
Democracy and economic development has increased political leadership at regional and international levels. Former President John Dramani Mahama served as Chairman of the Economic Community of West African States (ECOWAS) from February 2013 through May 2015.
Despite the notable progress, a number of development challenges remain. These include large fiscal deficits and balance of payments difficulties, inefficiencies in the use and management of public funds and other national resources, infrastructure gap, slow pace of job creation, and growing inequality in socio-economic and spatial development.
Ghana’s macroeconomic difficulties were exacerbated by crude oil prices falling to half of the benchmark revenue projection of US$99 in Ghana’s 2015 Budget, compelling the Ministry of Finance to reduce Government investment and development expenditures. High interest rates driven by domestic Government borrowing, currency depreciation, and electricity rationing stalled business growth. In April 2015, with the aim of stabilising the economy, Ghana signed onto a 3-year Extended Credit Facility arrangement with the IMF. This programme spans the 2016 election and is intended to counter the trend of government pre- and post-election spending spikes.
To address the challenges facing the country and ensure that economic growth benefits all Ghanaians, the Government of Ghana is developing the 40-year Long-Term National Development Plan for Ghana (2018-2057). This broad vision will be implemented through successive 5-year medium term plans. The current Ghana Shared Growth and Development Agenda, GSGDA II (2014–2017) provides a consistent set of development policy objectives and strategies for economic transformation and social development.