Investment environment in Ghana

1. Investment environment in Ghana Paul Hare p.g.hare@hw.ac.uk & Felicia Owusu Fofie f.owusu@hw.ac.uk

2. Introduction • Why Ghana? • Politically - Stability 4th republican constitution in 1992. Hope of Africa? - multi-party democracy • Economically - progress towards establishing a market-based economy • Legally - rule of law to boost its trade and investments and protecting intellectual property rights.

3. Introduction continued • Why Ghana? • Socially - combating corruption, producing policies to reduce poverty, increasing avenues for primary health care, providing better educational opportunities, protection of human rights and workers’ rights as well as trying to limit certain child labour practices • Culturally – it ascribes to certain informal rules and norms with strong religious beliefs

4. Introduction continued • What in Ghana? • Chosen the manufacturing sector which accounts for 69% of the Ghanaian economy • Wood and furniture industry which accounts for 19 % of the manufacturing sector • And the food processing industry which accounts for 12% of the manufacturing sector • Use empirical social research to investigate how investments have been selected and located

5. Introduction continued • From the map below it is easy to classify Ghana as one of the minorities of the developing countries that are now at the “bottom of the global economic system” Collier (2007)

6. Introduction continued • Ghana and countries bordering it have two or three of the characteristics of a failing state described by Paul Collier; • Conflict trap • Natural resource trap • Landlocked with bad neighbours • Bad governance

7. Efforts • It opted for debt relief under the Heavily Indebted Poor Country (HIPC) programme in 2002, and reached its ccompletion Point in 2004. • It prepared and begun to implement a comprehensive Growth and Poverty Reduction Strategy (GPRS), maintain macroeconomic stability and undertake key structural reforms and social measures.

8. Efforts continued • It has adopted a framework that attracts most development partner assistance which encompasses • Private sector competitiveness • Human resource development • Good governance and civic responsibility

9. Attracted attention • Attracted the attention of IMF’s Multilateral Debt Relief Initiative which approved 100 percent relief on all debt incurred by Ghana to the IMF before January 1, 2005 that remained outstanding. • This means a total of US$381 million, or US$316 million excluding remaining assistance under the HIPC Initiative in debt relief become available in early January in 2006 to allow Ghana to increase spending in priority areas to reduce poverty, promote growth, and to make progress towards achieving the MDGs

10. Outcomes • In spite of its economic progress in the last decade with high and sustained growth, it is believed fiscal indicators have worsened sharply. • The IMF notes fiscal deficit, including grants of about 5 percent of GDP, rose to just below 10 percent of GDP in 2007 and increased further in 2008. • This is coupled with a rise in Government debt despite the recent debt relief that helped reduce the debt burden from 77 percent of GDP in 2005 to below 40 percent of GDP in mid-2006

11. Our question • 51 years into independence, are there indications that Ghana is determined to reach middle-income status? • What barriers or obstacles hold Ghana back from performing even more strongly on the road to middle-income status? • What kind of strategy and policy should Ghana and its partners pursue to achieve key development objectives? • Finally, where is Ghana expected to be in 2015 in terms of income, poverty reduction, and progress towards fulfilling the main MDG?

12. Answers • We hope to interview some industrialists, firm owners, policy makers and some elite politicians to find answers to these questions!!!!!!!

13. References • Collier, P. 2007. The Bottom Billion: Why the Poorest Countries are Failing and What Can be Done About it Oxford: Oxford University Press. • DFID 2004. UK welcomes Ghana's debt relief. DFID - London. p. 1. • International Monetary Fund. 2008. Ghana: 2008 Article IV Consultation-Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Ghana. Washington: International Monetary Fund.

14. References • World Bank. 1999. World development Indicators. Washington DC: World Bank. • World Bank - Ghana. 2008. Country Brief World Bank. • World Bank. 2007. Background and Ghana ’s Current Growth Context. World Bank.