Economy in better shape; reforms improve outlook - Ghana

The Ghanaian economy has improved steadily since the introduction of its Economic Recovery Program in 1983. From 1983 to 1991, real GDP growth has averaged 5 percent a year; inflation has declined from 123 to 18 percent; and the overall balance-of-payments position has been reversed from a large deficit to a significant surplus. Key reforms have included trade liberalization, state enterprise rehabilitation, infrastructural improvements, and policies to encourage private savings and investment. Even a stock market was established in order to promote the development of medium- and long-term capital.

U.S. exports 1991 - $142.0 million

U.S. imports 1991 - $151.6 million

Aside from domestic policies, the health of Ghana's economy is largely a function of world market prices for oil, gold, cocoa, and timber. Oil is Ghana's primary import, and the other commodities are its main exports. Since agriculture accounts for 50 percent of GDP, weather conditions also are a significant factor affecting the economy. In 1991, an abundant harvest, lower world oil prices after the Gulf War, and increased gold and timber production more than offset declining world market prices for cocoa and gold. Increased efficiency in the agricultural sector, relatively stable world market prices for gold and oil, continued increases in gold and timber production, and a recovery of the manufacturing sector at the end of 1992 should enable Ghana to meet its goal of 5.5 percent annual GDP growth through 1994.

U.S. exports to Ghana rose by 21 percent from 1988 to 1991, led by industrial chemicals, petroleum and coal products, and construction machinery. The Economic Section of the U.S. Embassy in Accra has identified additional market opportunities for American-made light commercial/utility vehicles, construction and mining equipment, agricultural tractors, and computers. The potential for this market can be demonstrated by the fact that, of the top 12 U.S. exports to Ghana in 1991, four are items that were not exported to Ghana at all in 1988.

The strong interest in U.S. products and technology is unfortunately constrained by low purchasing power and a lack of available credit. However, Ghana's firm adherence to its Economic Recovery Program has assured it continued access to international development assistance. Foreign aid totaled $570 million in 1990 and is expected to continue. Where sales are not linked to external funding, price and financing are key considerations.

For further information, contact the Commerce Department's Ghana Desk at (202) 377-4388.

COPYRIGHT 1992 U.S. Government Printing Office
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