Country Report Ghana August 2008

Outlook for 2008-09

• Ghana's political scene will be dominated by the forthcoming presidential and legislative elections in December 2008.
• The main opposition party, the National Democratic Congress (NDC), appears unified and focused on regaining the presidency at the 2008 election.
• Real GDP growth is forecast to remain robust, at 6.3% in 2008 and 6% in 2009, as the mining sector continues to grow strongly.
• Election-related spending and continuing high oil prices are expected to push average inflation to 16% in 2008, before lower domestic food prices and government spending help it to fall to 11.7% in 2009.
• Robust growth of imports will continue to widen the trade gap, pushing the current-account deficit to 12.7% of GDP in 2008. Forecast slower growth of imports and strong current transfers in 2009 are expected to help the current-account deficit to narrow slightly to 12.3% of GDP.

Monthly review

• The Electoral Commission (EC) has reopened the voters' register for people who have turned eighteen and others who have yet to register.
• Tsatsu Tsikata, a high-profile member of the NDC, has been found guilty of corruption in a controversial trial that has called the independence of the judiciary into question.
• The IMF and other donors voiced concern over the widening fiscal deficit and rising inflation at a consultative group meeting in June.
• In an attempt to reduce government consumption the government has announced a 50% cut in some of the programmed expenditure of Ministries, Departments and Agencies (MDAs) for the rest of 2008.
• Higher expenditure and poorer revenue performance combined to widen the budget deficit to 3.8% of GDP for the first half of 2008, compared with 2% of GDP for the same period in 2007.
• Year on year inflation reached 18.4% in June and shows little signs of slowing. Discouragingly, historical data show a similar inflationary trend taking place around the December 2000 elections when inflation exceeded 40%.
• The Ghana Cocoa Board (Cocobod) has projected a total harvest of 700,000 tonnes for the full 2007/08 crop year (October-September).
• In July the government announced a deal to sell 70% of Ghana Telecom to British company, Vodafone, for US$900m. Considerable opposition to the deal has been voiced by opposition and civil society groups.