Ghana - Economy



Ghana's economy is led by the agricultural sector, which accounted for about 35% of GDP and employed 65% of the labor force in 2001. Its key crops are cassava, coco-yams (taro), plantains, and yams. Maize, millet, sorghum, rice, and groundnuts are also important staple crops. Agricultural crops which are sold for export include coffee, bananas, palm nuts, copra, limes, kola nuts, shea nuts, rubber, cotton, and kenaf. Cocoa, however, is the dominant export crop; in 2000–2001, cocoa production was estimated to be around 400,000 metric tons. The civil war in Côte d'Ivoire that began in 2002 contributed to a marked rise in cocoa prices, but it was unknown if this development would result in a long-term shift in the cocoa market.

Ghana produces meat, but not enough to satisfy local demand. The fishing industry, likewise, produces only about half of local demand.

Ghana has significant deposits of gold, and important new investments were made in this sector in 1992. In that year, earnings from gold exports exceeded those of cocoa for the first time, and continued to do so through 2003. Industrial diamonds are also produced. Ghana is a modest oil producer and refines petroleum products. Bauxite deposits are substantial but largely unexploited: the aluminum smelter at Tema uses bauxite imported from Jamaica. Significant manganese production occurs at Nsuta.

In addition, tourism and timber are growth areas. Timber reserves, however, are declining due to large-scale deforestation that is both legally approved and illegal. With respect to tourism, infrastructure and communications outside the main cities are poor, but tourism has become the country's third largest source of foreign currency.

Prior to 1990, the economy was dominated by over 300 state-owned enterprises. Although over 150 of these firms had been privatized by 1996, the overall pace of privatization has been slow. The economy is also hampered by poor roads and an inadequate telecommunications sector. Inflation has also been a problem peaking at 70% in 1995 before receding to about 21% by the end of 2001. Inflation has been fueled by undisciplined spending by parastatals and large public sector wage increases, which have added substantially to the government's budget deficit. In an attempt to contain inflation, the government has pursued a high interest rate policy. The economy grew at 4.5% in 1995, up from 3.8% in 1994, due to increased gold production and a good cocoa harvest. The economy continued at a growth rate of 4.2% in 2001. Ghana remains heavily reliant on international assistance from the World Bank, its largest donor. Most aid is tied to progress in the privatization program. Ghana in 2001 applied for a debt reduction package under the Heavily Indebted Poor Countries Initiative set up by the World Bank and the IMF; Ghana was to receive $875 million over three years.

The 373-mile (600-km) West Africa Gas Pipeline, for which Ghana will provide a supply point in Tema, was to be constructed in 2003, with an estimated capacity of 11 million cu m (400 million cu ft) a day.

The government under John Agyekum Kufuor that came to power in 2000 was dedicated to privatization and encouraging foreign investment. Kufuor declared his administration to usher in the "Golden Age of Business."

Also read article about Ghana from Wikipedia

User Contributions:

1
Kiara Banks
i THINK ITS COOL! wE NEED MORE INFO ON ITS ECONOMY BECAUSE WITH OUT MORE WE WON'T HAVE ENOUGH INFO FOR OUR PROJECT. I really think you need to add more
2
linda asare
cocoa production in Ghana increased in 2001 due to the introduction of free cocoa spraying by the Kufuor administration.with this type of initiatives cocoa production can increase to benefit the country.

Comment about this article, ask questions, or add new information about this topic: