Economy & Industry
A stable economy
Over the last two decades Ghana has prospered under a stable democratic system of government.
EconomyEconomyIn this video…one boy talks about his understanding of Ghana’s economy and improvements since Ghana’s new government.
The economy has grown annually by around six percent each year, making it one of the undisputed successes in Africa. Nevertheless, some parts of the country remain extremely poor, particularly in the north.
With improved economic stability and transparency, Ghana now qualifies for substantial debt relief measures. These include assistance from the World Bank, the International Monetary Fund and the debt ‘forgiveness’ plan agreed by the Group Eight leading industrial countries in 2005.
Agriculture is the major sector
The most important sector for Ghana is agriculture, which employs over half the population.
Other key agricultural exports include sugar, cashew and shea nuts, palm oil, cocoa butter and rubber.
The country is the second largest producer of cocoa beans in the world. Cocoa nets earnings of nearly one billion dollars annually from the global market for chocolate.
A large part of the government’s revenue comes from various taxes and duties on this crop. However, small-scale farmers who grow the cocoa can struggle to make enough money to invest in planting new trees and protect them against diseases.
Historically, wood was also an important export material. But the conservation of Ghana’s forests is now a key concern. Tougher restrictions are reducing the number of trees which can be felled.
Retaining a fair share
In 2008, gold exports were valued at 2.2 billion dollars. However, Ghana’s government received only around 116 million dollars – 5% of that wealth.
Gold mining in Ghana has a history dating back to the 15th century. To this day, the country remains Africa’s second largest producer of the metal. Much of the gold wealth goes to the foreign mining companies. But custom duties on gold look set to increase.
Other mineral resources mined in Ghana include diamonds, manganese and bauxite.
Ghanaians were delighted when significant new oil reserves were found off the coast in 2007. This oil discovery is likely to earn the country 1.2 billion dollars each year, providing an important boost to the economy.
Ghana’s government is determined to ensure oil profits go to the state and the country does not fall prey to the ‘curse of the black gold’, where only a few get rich. The Petroleum Revenue Management Act of 2011 lays down that 50-70% of oil revenue will go to the state budget and most will be spent on 12 priority areas such as povery reduction and education. Because the oil reserves will only last a couple of decades, some of the revenues will be put aside into a ‘heritage fund’ for when the oil runs out.