Economic and Political Overview

flag Ghana Ghana: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Ghana was consistently placed among Africa’s ten fastest-growing economies since 2017, but in 2020, falling oil prices and the Covid-19 pandemic outbreak plunged the country into economic recession. According to IMF estimates, GDP growth decreased from 6.5% in 2019 to 0.4% in 2020. Supported by a strong cocoa season and mining and services activity, economic growth rebounded to 4.7% in 2021, and is expected to further accelerate to 6.2% in 2022 before slowing down to 4.7% in 2023. Lower oil production level, the emergence of new Covid-19 variants and increasing pressure on debt levels amid the loss of access to international financial markets are the major risks identified by Focus Economics.

Ghana was hit hard by the Covid-19 pandemic and the collapse in export revenues from oil and cocoa. The government put in place a support plan, the Coronavirus Alleviation Programme, worth 3% of GDP (Coface), which helped contain the effects of the pandemic but deteriorated public finances. The economic outlook improved in 2021 as activity started to recover, but the country’s public accounts remained under pressure. Public debt continued to rise, from an estimated 78.9% GDP in 2020 to 83.5% GDP in 2021, and is forecast to further soar to 84.9% GDP in 2022 and 86.4% GDP in 2023 (IMF). Ghana is classified at high risk of debt distress. In January 2022, Fitch Ratings degraded Ghana’s sovereign credit ratings. The debt is driven in part by exceptional energy and financial sector costs. Indeed, government arrears to the energy sector represent 1% of GDP each year (Coface). Debt interests payment weights heavily on the fiscal deficit, which amounted to an estimated -13.9% GDP in 2021 (down from -15.2% GDP in 2020) (IMF). Higher tax revenue and external demand for oil, gold and cocoa should help narrow the fiscal deficit to -10.5% GDP in 2022. The partial monetisation of the deficit fuelled inflation, which reached an estimated 9.9% in 2020 (IMF). As food prices spiked, inflation remained high in 2021 (9.3%) and is expected to slightly decrease to 8.8% in 2022 and 8% in 2023 (IMF). To revive the economy and attract investment, the authorities have adopted the COVID-19 Alleviation and Revitalisation of Enterprises Support (CARES) initiative, a GHS 100 billion programme over 2020-2023 30% financed by the government (Coface). Recurrent power cuts have led the Ghanaian Government to launch an energy diversification strategy, mainly by increasing the share of renewable energy and building nuclear plants. The government remains committed to the Energy Sector Recovery Programme (2019-2023) established in collaboration with the World Bank. Fiscal consolidation remains the priority, as illustrated by the additional 20% cut in the 2022 budget spending announced in January.

Despite Ghana's solid performance in terms of economic growth, the country is facing high inequalities, increasing poverty and unemployment. Ghana was ranked 138th in the 2020 Human Development Index. According to World Bank estimates, unemployment rate in the country was around 4.5% in 2020.

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 70.0179.1676.0070.0973.00
GDP (Constant Prices, Annual % Change) 0.55.43.62.83.9
GDP per Capita (USD) 22222
General Government Gross Debt (in % of GDP) 79.182.190.787.889.2
Inflation Rate (%) 9.910.027.220.914.7
Current Account (billions USD) -2.13-2.50-3.99-3.09-3.30
Current Account (in % of GDP) -3.0-3.2-5.3-4.4-4.5

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

Ghana, Africa’s largest gold producer, is rich in natural resources and benefits from a fertile soil. Agriculture represents 19.3% of GDP (World Bank), and employs 30% of the country’s workforce. Arable lands cover approximately 57% of the country's total land area (FAO). Most of the cultivated lands (95%) consist of small and medium-sized farms (up to 10 hectares). Crops vary considerably depending on the region. In the forest zone (southwest), tree crops, including cocoa, oil palm, coffee and rubber, are common. Maize, legumes, cocoyam or yam, with tobacco and cotton are among the most harvested crops in the middle belt of the country. Tobacco and cotton are also harvested in the north of the country, in addition to sorghum, millet, cowpeas and groundnuts. While livestock production is important, particularly in the north, Ghana still imports meat and dairy products to meet demand.

Industry accounts for 29.7% of GDP and employs 21% of the workforce. It is dominated by mining, lumbering, light manufacturing, aluminium smelting, food processing, cement production, small commercial ship building and petroleum. Gold, bauxite and manganese mining plays a key role thanks to the country's rich subsoil resources. Rich bauxite reserves coupled with high hydro stocks provide strong potential for aluminium smelting. Ghana also has a relatively sophisticated automotive industry and exports cars to other parts of Africa.
The service sector is the largest component of the economy comprising 45% of GDP and employing 49% of the workforce (World Bank). The banking sector has developed and modernized in recent years but has more room to grow. Telecommunications is the main service sector due to a rapid growth of mobile phone users and the emergence of mobile payment technologies.
 
Ghana's economy was hit by the COVID-19 pandemic. The manufacturing, oil production and service sectors (except telecommunications) were among the most impacted (Coface), while the agriculture sector remained resilient.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 29.8 21.0 49.2
Value Added (in % of GDP) 18.2 34.7 42.6
Value Added (Annual % Change) 7.4 -3.6 1.5

Source: World Bank - Latest available data.

 

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Monetary Indicators 20162017201820192020
Ghanaian Cedi (GHS) - Average Annual Exchange Rate For 1 MUR 0.110.130.140.150.14

Source: World Bank - Latest available data.

 
 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
59,2/100
World Rank:
101
Regional Rank:
11

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Ghana is very open to foreign trade that represented 68% of GDP in 2020 (World Bank). The government wants to create an economic environment that facilitates the development of the private sector thus guarantying transparent trades and promoting competitiveness in foreign markets. Ghana mainly exports gold and other ore and gems, oil, cocoa, nuts, woods, fish, and horticultural products. The country mainly imports vehicles, rice and other food products, cement, oil, medicines and capital goods.

Ghana is a member of the World Trade Organisation and of the ECOWAS. It has also signed numerous partnership agreements, including with the EU. The European Union also supports the Ghana “Beyond Aid” program aimed at reshaping trade dynamics between the country and developed economies. Customs duties are not high but they are applied to every imported product. Ghana is using the common external customs tariffs of the ECOWAS. The import of some products such as mercury soap, hazardous wastes or contaminated products is prohibited.

Ghana's main clients are China, Switzerland, India, South Africa, and the Netherlands. The Netherlands is its main client for horticultural products. Ghana's main suppliers are China (18.2% of total imports), the United States, the United Kingdom, India and Belgium.
 
According to WTO data, in 2020 Ghana exported goods for a total value of USD 14.47 billion while it imported goods with a total value of USD 12.43 billion. Regarding services, Ghana exported USD 8.06 billion worth of services while it imported 10.16 billion worth of services. In 2020, despite the decrease in oil and cocoa exports and the impact of the COVID-19 pandemic, gold revenues and declining imports fuelled a substantial trade surplus (Coface).

 
Foreign Trade Indicators 20172018201920202021
Imports of Goods (million USD) 12,64713,13413,41112,42913,629
Exports of Goods (million USD) 13,83514,94315,66814,47214,727
Imports of Services (million USD) 8,4788,96110,94810,15512,338
Exports of Services (million USD) 6,4707,5639,8708,0589,174
Imports of Goods and Services (Annual % Change) 7.94.61.7n/an/a
Exports of Goods and Services (Annual % Change) 16.510.36.7n/an/a
Imports of Goods and Services (in % of GDP) 38.536.535.3n/an/a
Exports of Goods and Services (in % of GDP) 35.335.435.8n/an/a
Trade Balance (million USD) 1,1871,8092,257n/an/a
Trade Balance (Including Service) (million USD) -1,686-706-1,316n/an/a
Foreign Trade (in % of GDP) 73.871.971.1n/an/a

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2019
China 16.7%
Switzerland 14.7%
India 14.2%
South Africa 11.8%
Netherlands 5.8%
See More Countries 36.8%
Main Suppliers
(% of Imports)
2019
China 18.2%
United States 9.4%
United Kingdom 6.6%
India 5.6%
Belgium 5.1%
See More Countries 55.2%

Source: Comtrade, Latest Available Data

 
 

Main Products

16.8 bn USD of products exported in 2019
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 37.0%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 31.3%
Cocoa beans, whole or broken, raw or roastedCocoa beans, whole or broken, raw or roasted 11.0%
Cocoa paste, whether or not defattedCocoa paste, whether or not defatted 2.4%
Manganese ores and concentrates, incl. ferruginous...Manganese ores and concentrates, incl. ferruginous manganese ores and concentrates, with a manganese content of >= 20%, calculated on the dry weight 2.1%
See More Products 16.1%
10.4 bn USD of products imported in 2019
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 8.4%
Motor vehicles for the transport of goods, incl....Motor vehicles for the transport of goods, incl. chassis with engine and cab 4.2%
RiceRice 3.6%
Cement, incl. cement clinkers, whether or not...Cement, incl. cement clinkers, whether or not coloured 3.1%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 2.3%
See More Products 78.4%

Source: Comtrade, Latest Available Data

 
 

To go further, check out our service Import Export Flows.

 
 

Main Services

Source: United Nations Statistics Division, Latest Available Data

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Sources of General Economic Information

Ministries
Ministry of Finance
Ministry of Trade and Industry
Ministry of Energy
Statistical Office
Ghana Statistical Service
Central Bank
Bank of Ghana
Stock Exchange
Ghana Stock Exchange
Search Engines
Ghana Web
Google Ghana
Economic Portals
Ghana Trade

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Political Outline

Current Political Leaders
President: Nana Addo Dankwa AKUFO-ADDO (since 7 January 2017) ; the president is both chief of state and head of government
Next Election Dates
Presidential: December 2024
Parliament: December 2024
Main Political Parties
New Patriotic Party: Ruling party, centre-right, liberal conservative
National Democratic Congress: main opposition, social democratic
People's National Convention: socialism
Progressive People's Party: social liberalism
Type of State
Constitutional Democratic Republic.
Executive Power
Executive power is exercised by the government. The President of Ghana is both head of state and head of government. Their term length is four years and can only be renewed once. The president appoints the vice president and ministers; however, at least half of them must come from the Parliament.
Legislative Power
Legislative power is vested in the Parliament. The Parliament of Ghana bears similarities with the British Parliament and its members are elected through simple majority (or First Past the Post) voting system. Ghana is divided into 275 constituencies each electing one member of the parliament. Members serve four-year terms.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
30/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
2/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID19 pandemic evolution and the most up-to-date statistics on the COVID19 disease in Ghana, please visit the Ghana Health Service COVID-19 Dashboard with the official data.

For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures
To find out about the latest public health situation in Ghana and the current sanitary measures in vigour, please consult the Ghana Health Service COVID-19 Dashboard.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
Ghana has placed no restrictions on imports or exports.

For a general overview of trade restrictions due to COVID-19 pandemic, please consult  the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan
For information on the economic recovery scheme put in place by the Ghanaian government to address the impact of the COVID19 pandemic on the Ghanaian economy, the Ministry of Finance proposed to parliament the Coronavirus Alleviation Programme.

For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Ghanaian government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Ghana in the IMF’s Policy Tracker platform.

Support plan for businesses
For information on the local business support scheme established by the Ghanian government to help small and medium-sized companies to deal with the economic impacts of the COVID19 epidemic on their activity, the Ministry of Finance proposed to parliament the Coronavirus Alleviation Programme.

For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters
There are no specific support plans for exporters in Ghana so far. For future possible up-to-date information please visit the website of the Ghanaian Ministry of Trade & Industry. Exporters may qualify for assistance under the Coronavirus Alleviation Programme.
 

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Latest Update: November 2022