Country Report Ghana February 2009

Outlook for 2009-10

• The new president, John Atta Mills, and his ruling National Democratic Congress (NDC) will spend the next several months consolidating power and re-establishing themselves after being out of power since 2001.
• A key question is how the NDC will wield its new power against the former ruling New Patriotic Party (NPP). The NDC may look to investigate and arrest prominent NPP members on charges of corruption.
• The new government's economic policy is expected to remain focused on reducing inflation and boosting economic growth and investment.
• Real GDP growth is forecast to ease to 5.2% in 2009 on the back of weaker credit growth and external demand, before recovering modestly to 5.4% in 2010, supported by investments in the nascent oil sector and lower inflation.
• After a steep fall in 2008, the cedi looks to be closer to its appropriate level against the US dollar. The stronger dollar and lower foreign-exchange earnings will see the cedi continue a gradual slide against the US currency in 2009-10.
• Lower oil prices and the cessation of election-related spending 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 an average of 10.8%.
• Forecast lower import prices are expected to offset slower growth in exports and remittances, helping to reduce the current-account deficit to 12.8% of GDP in 2009 and 13.5% of GDP in 2010.

Monthly review

• Justice Joyce Bamford-Addo made history when she was elected as the first woman to assume the office of the speaker of parliament.
• At the end of January Mr Atta Mills submitted his nominations for cabinet ministers to parliament—the vetting process could take several weeks.
• The retirement package for the outgoing president, John Kufuor, has been criticised as being excessive and an affront to poor Ghanaians.
• Ghana has invited the IMF for exploratory talks with a view to accessing concessionary financing options for its increasing deficits.
• Initial outturn estimates for the 2008 budget indicate massive overspending, resulting in a fiscal deficit of 12.2% of GDP, more than three times the budget target of 4% of GDP.
• The government has announced that it will be reviewing last year's sale of a 70% stake in the state-owned Ghana Telecom to UK-based Vodafone to ensure that the sale was conducted properly and in the best interests of the country.

This report covers the following industry codes:
SIC Code: 53;60;48
NAICS Code: 44;52;517