Thursday, June 29, 2017 9:40 AM / FBNQuest Research
Ghana elected a new president in December. Nana Akufo-Addo had contested the two previous elections unsuccessfully, in 2008 and 2012, and promised that his New Patriotic Party (NPP) would launch a series of reforms.
His campaigning offered a familiar narrative on governance but did not pledge a change agenda in as many words. However, we attended the UK-Ghana Trade and Investment Forum 2017 in London yesterday, and noted the many parallels to draw with Nigeria.
The NPP plans to improve the business environment by creating incentives and removing what it calls front-loaded costs. Ghana currently occupies the no 108 slot out of 190 countries in the World Bank Group’s Ease of Doing Business index, and Yofi Grant, the chief executive of the Ghana Investment Promotion Centre, is looking to lift the ranking by 50 places.
Another focus is land reform. The digital mapping of the country is due for completion this year.
A target is food self-sufficiency. Annual food imports are running at US$2.2bn.
Economists are familiar with the correlation between fiscal slippage and the electoral cycle in Ghana. The government is looking to enshrine fiscal discipline in law. In this instance Nigeria has already acted with the Fiscal Responsibility Act of 2007.
The NPP government is cementing its economic ties with China. A delegation has recently returned from Beijing, having signed MoUs for US$15bn.
Yaw Osafo-Maafo, the senior minister, noted that a transporter of goods from Accra to Nigeria had to pass through 78 checkpoints. All but one of the ten obstacles in Ghana have been removed. The Economic Community of West African States (ECOWAS) has 350 million consumers, and the minister was keen for the organization to add economic integration to its successes in peacekeeping.
The impact of the commodity price downturn has been less severe than in Nigeria. GDP growth of 3.6% last year was the worst performance for 20 years but the authorities see a recovery to 6.3% this year and an average of 7.5% over the next five years. Grant was keen to cite the EY Attractiveness Index 2017, which has Ghana at no 1 in West Africa and no 4 in the continent.
We should mention a policy initiative from the Ghana government with a competitive edge. This is to create a sub-regional hub in Accra with a particular focus on pharmaceuticals, air transport, tourism and ECOWAS.
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