Country Report Ghana October 2008

Outlook for 2009-10

• 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 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 from 16.4% in 2008 to 11.7% in 2009. In 2010 tighter fiscal policy and lower domestic food prices will help to lower inflation to a forecast 10.8%.
• Forecast slower growth of imports and healthy current transfers are expected to narrow the current-account deficit to 12.4% of GDP in 2009, before higher imports and lower exports combine to widen it to 13.9% of GDP in 2010.

Monthly review

• Political campaigning appears to be bringing issues surrounding ethnic identity to the fore in Ghana. Both of the main parties, the ruling New Patriotic Party (NPP) and the opposition NDC, are accusing the other of stoking the ethnic flame.
• The National Enforcement Body (NEB) of the Political Parties Code of Conduct has stated its alarm at the blatant breaches of the code committed by the competing political parties in the run-up to the December polls.
• Former president Jerry Rawlings has held a closed door meeting with personnel who were in charge of various security agencies during his presidency, raising concern and suspicion among some political observers.
• In mid-September the minister of state at the Ministry of Finance and Economic Planning, Anthony Osei Akoto, announced that the government of Ghana plans to issue a seven-year, US$300m bond within the month.
• For the second month running, lower domestic food prices have helped to slow inflation, which fell from 18.3% in July to 18.1% in August.
• High inflation and the weakening cedi are causing an increased dollarisation of savings in the banking system.
• The government has increased the producer price of cocoa by 36% to GH¢1,632/tonne (US$1,406/tonne) for the 2008/09 season in an effort to discourage smuggling.

Source: Country Report