Country Report Ghana December 2008

Outlook for 2009-10

• We expect Ghana's forthcoming presidential election in December 2008 to go to a second round, as neither main candidate is likely to secure the 50% of the vote needed to avoid a run-off.
• The main opposition party, the National Democratic Congress (NDC), appears unified in its efforts to regain the presidency.
• Regardless of who wins the December elections, economic policy is expected to remain focused on reducing inflation and boosting investment.
• Real GDP growth is forecast to rise from 5.8% in 2009 to 6% in 2010, supported by investments in the nascent oil sector and lower inflation.
• The cessation of election-related spending and lower oil prices are expected to cause average inflation to fall to 11.7% in 2009. In 2010 tighter fiscal policy and lower domestic food prices will help to lower inflation to 10.8%.
• Forecast lower prices for Ghana's main exports (gold and cocoa), coupled with a slowdown in the growth of remittances, are expected to cause the current-account deficit to widen to 14.6% of GDP in 2009 and 15% of GDP in 2010.

Monthly review

• Presidential candidates for the New Patriotic Party (NPP), Convention People's Party (CPP), National Democratic Congress (NCD) and People's National Convention (PNC) took part in two debates in late October-November.
• It has generally been agreed that the surprise winner of the debates was the CPP's Paa Kwesi Nduom, with front-runners Nana Akufo-Addo (NPP) and John Atta Mills (NDC) tied for second place.
• The president, John Kufuor, has officially unveiled the controversial new presidential complex, estimated to have cost around US$50m.
• Confusion has surrounded the government's claim to have agreed the sale of state-owned Volta Aluminum Company (Valco) to an international consortium, which claims that no deal has been agreed.
• The government's narrow fiscal deficit reached 4.2% of GDP in the first nine months of 2008, up from 2.1% of GDP in the same period of 2007.
• The cedi has continued its depreciation against the US dollar, reaching GH1.1787:US$1 in mid-November.
• The share of current transfers accruing to private individuals in January-September has fallen compared with the same period in 2007a possible sign that the global economic crisis is reducing workers' remittances from abroad.

This report covers the following industry codes:
SIC Code: 1;49;10
NAICS Code: 11;22;212