Ghana 

Ghana country policy

Policy established 14 July 2010

• Case-by-case assessment
• DSA/DSF: Public buyers at least 35% concessional
• Public buyers: ORIO facility

Country class: 6

Landenplafond voor nieuwe zaken EUR 100 mln, waarvan EUR 50 mln gereserveerd voor ORIO transacties

Benutting per 15 juli 2010: EUR O

Country ceiling for new business EUR 100 mln, of which 50 mln for ORIO transactions

Used as at 15 July 2010: EUR 0

Ghana country facts

Atradius Dutch State Business Economic Research 
Country Report last updated :  17 September 2009   

Country :  GHANA 

Political Situation
New President Since Decmber 2008

Head of state
John Atta Mills (National Democratic Congress), since december 2008.

Form of government
NDC government.

Internal Economic Situation
Economic Growht Slows; Still High

General situation
Economic growth slows to 4.7% from 7.3% last year due to weaker private consumption, investments and reduced government spending. Support comes from a good performance of its main export products (cacao and gold), strong activity in the construction and services sector. Besides investments in the oil sector and mining sector will support economic growth. The weak cedi and expansionary government spending cause inflation to increase sharply to 20% this year from an already high level in 2008 (16,5%). This keeps interest rate high and restrains borrowing from the private sector. Expected is that oil production will start at the end of 2010.
 
Monetary policy has somewhat contra dictionary policy aim: combating high inflation and stimulate growth. The Bank of Ghana has raised interest rate to combat inflation despite pressure from government to foster economic growth. The cedi will remain under downward pressure. Ghana has a large current account deficit and limited foreign reserves to support the cedi in the foreign exchange market.
Qualification econ. management
Good.

External Economic Situation
Debt Is Increasing Rapidly

Main sources of foreign exchange
Cocoa (38% of goods exports), gold (30%), timber (8%), remittances.

Main foreign markets
Netherlands 13%, UK 8%, US 7%, France 6%

Main expenses of foreign exchange
Oil (18% of goods imports), capital equipment, food.
 
Balance of payments 
High current account deficit narrows this year slightly as oil import bill and capital imports slowdown. Exports are supported by good performance of main export products.
External economic situation
The high CA deficit makes the cedi vulnerable for external shocks as the foreign reserves are limited to support the cedi in the foreign exchange market. Solvency is deteriorating. Risks remain, especially for the medium term: dependence on aid, heavy reliance on commodity exports (gold, cocoa) and high and volatile world energy prices.