This country profile was published in November 2008 in our annual 'Africa in 2009' issue. The next edition, 'Africa in 2010' will be on sale 23 November 2009.

Click on the drop-down menu above to see Ghana's Top Companies and Top Banks.

January 2009 will see a new government take over power after the fifth successive democratic elections in December 2008. The New Patriotic Party (NPP), having held power since 2001, is promising continuity. The National Democratic Congress (NDC) is eager for change. Among its many promises, the NPP says it will finally fulfil an earlier commitment that all 170 district, municipal and metropolitan chief executives should be elected rather than appointed by the president, while the NDC wants a cap on the number of judges the president can appoint to the Supreme Court.


As Ghanaians wait for the promised 2010 start of an oil boom, there is a short-term prospect of an economic slowdown, implying that big-spending promises made at election time will be put on hold. The 7% real GDP growth target for 2008 may turn out to be a high point, as the economy starts to feel the effects of the global financial crisis. But two years after the signing of a $547m US Millennium Challenge Compact (MCC), disbursements will begin on big ticket projects such as a six-lane highway on the outskirts of Accra, which former-President John Kufuor decided should be named after the last inhabitant of the White House.


Remittances from the diaspora, which fuelled the unprecedented construction boom in recent years, will also slow. Food will still be expensive for the average family and so there will be pressure to extend social programmes. But the economy will be cushioned by cocoa, gold and timber income, even as commodity prices fall back from the highs of 2008. Hopes are high for oil output from the 1.8bn barrel offshore Jubilee Field, and the preparations for the new oil industry should give a $2.5bn investment boost in 2009 alone. More discoveries are expected from the Teak and Tweneboa fields. 


Few economists can confidently predict the effects of the global financial meltdown. But the statistics show the economy performed impressively in 2008. Analysts suggest that this will continue, unless there is another exogenous shock like the oil price spike of 2008. In the first nine months of 2008 the cedi depreciated by 17.2% against the US dollar, and 9.41% to the euro, but held its own against sterling, and appreciated by 8.33% against the CFA franc.
Inflation rose sharply from the start of 2008, reflecting food price pressures, but appears to have peaked at 18.4% in July, and was trending downwards at year’s end. The Ghana Stock Exchange ended the year in bearish mood, but posted a market return of 37% in the first half of 2008, making it the world’s best performing bourse at the time.


Cheap and stable hydro-power from the Akosombo and Kpong dams will remain in bountiful supply as there is plenty of water in Lake Volta for now – the level at year-end less than two metres below the maximum. This will be good news for the hard-pressed gold mining companies, especially AngloGold Ashanti, which has pledged to invest $135m in its Obuasi deep mine, and also for the Volta Aluminium Company (Valco), whose smelter has been forced to shut down at great cost since March 2007, and which is now a wholly government-owned venture.


Valco hopes to find a foreign joint venture partner with the technical expertise to advance the company’s ambitious plans to create a vertically-integrated aluminium industry. The capital to restart the smelter will be small by comparison with the investment needed to start mining bauxite from Nyinahin and Kyebi, to construct an alumina refinery, to build a railway line and to provide the 350 MW of power needed to keep Valco in 24/7 operation. Potential suitors include Vale of Brazil, Norsk Hydro and the UK/Australian mining giant Rio Tinto. China Datang Corporation, one of China’s leading power generators, is also said to be in the running for a stake.


The MCC cash will be welcomed by farmers in the long-neglected Afram Plains, originally designed to be the bread-basket of southern Ghana using the latest irrigation techniques and water from Lake Volta. Citrus farmers – especially those in the export trade – will begin to see results from the investment in new cold-chain facilities. But access to lucrative European markets will remain problematic if the World Trade Organisation’s Doha round continues to stall. 


Money from the promised $25m Northern Development Fund will begin to flow to the three northern regions, the most deprived parts of the country. But a much larger sum will be needed to make a significant impact. The long-awaited single-spine salary structure should bring some relief to hard-pressed public servants and big improvements are expected in the efficiency of urban transport and sanitation.


Cape Coast is leading the way with plans to turn plastic waste into power, and the Kumasi Metropolitan Assembly has similar ideas. But after 15 years of power sector reforms, no Ghanaian entrepreneur has been able to establish an independent power project. Two are now close. Togbe Afede XIV’s 560 MW Sunon Asogli joint venture with China’s Shenzhen Energy Group will move closer to starting operations after a number of setbacks, including a land dispute with Valco, and the failure of the West African Gas Pipeline to deliver gas to Tema and Takoradi from Nigeria. Nana Brew-Butler’s 350 MW Cenpower project is also still in the development phase, but supply of the power plant is imminent, and it will be able to run on a variety of fuels.
Having seen six energy ministers during the eight years of the Kufuor administration, the sector urgently requires policy continuity and vastly improved technical capacity, not just in power but also in oil and gas. A repeat of the load-shedding of two years ago would be a disaster for the new government. The new transmission entity GRIDCo will gradually assume the functions currently under the Volta River Authority (VRA), allowing VRA to concentrate on hydro-power.


This is crucial in view of the imminent diversion of the waters of the Black Volta at Bui. The $620m Bui dam will supply 400 MW of power when complete, and diversion of the river will temporarily reduce inflows into Lake Volta.


Investment inflows are expected to slow following the $900m boost provided by the sale of Ghana Telecom to Vodafone. There will be increased competition and lower prices in the telecommunications market as Zain (formerly Celtel) and Mike Adenuga’s Glo enter the market, taking the number of mobile operators from four to six. 

Looking forward to the oil boom

With $3.2bn expected to be invested in Ghana’s offshore Jubilee oilfield by the consortium of Tullow Oil, Kosmos Energy, Anadarko, Sabre Oil and Gas, and the Ghanaian-owned EO Group, the twin city of Sekondi-Takoradi and its port will continue to boom as businessmen and speculators vie for prime land on which to build offices, shops, banks and hotels. 


A new National Petroleum Oversight Authority, if passed by parliament, will begin to take shape in readiness for the first phase of development. Legislation is being prepared to give Ghanaians a share in the service industries associated with the new oil and gas activity such as insurance. 


Food and catering services will be reserved for Ghanaian companies, and other categories will be open to competitive tendering, subject to licensing from the Ghana National Petroleum Corporation (GNPC), including such sectors as rig repair, marine supply services, helicopter services, tank rentals, metal works, ICT, banking and other financial services. By the end of 2008, 23 companies, 12 of which had majority Ghanaian ownership, had been registered as sub-contractors for the nascent oil industry. GNPC will soon become a limited liability company, and its focus will be limited to technical and upstream operations.