Economy of Ghana

The economy of Ghana has a diverse and
rich resource base, including the manufacturing and exportation of digital
technology goods, automotive and ship construction and exportation, and the
exportation of diverse and rich resources such as hydrocarbons and
industrial minerals. These have given Ghana one of the highest GDPs per capita
in Africa. Owing to a GDP rebasement, in 2011 Ghana became the fastest growing
economy in the world; differences with neighboring economies are likely to be
overstated due to underfunded statistical agencies in surrounding
countries. The Ghanaian domestic economy in 2012
revolved around services, which accounted for 50% of GDP and employed
28% of the work force. Besides the industrialization associated with
minerals and oil, industrial development in Ghana remains basic, often associated
with plastics. Ghana embarked on a currency
re-denomination exercise, from Cedi to the new currency, the Ghana Cedi in July
2007. The transfer rate is 1 Ghana Cedi for every 10,000 Cedis. Ghana embarked
upon an aggressive media campaign to educate the public about what
re-denomination entails. Value added tax is a consumption tax administered in
Ghana. The tax regime which started in 1998 had a single rate but since
September 2007 entered into a multiple rate regime. In 1998, the rate of tax
was 10% and amended in 2000 to 12.5%. The top income tax and corporate tax
rates are 25%. Other taxes included with value-added tax, are national health
insurance levy, and a capital gains tax. The overall tax burden amounts to 12.1%
of Ghana’s total domestic income, and the budget of Ghana has fallen to the
equivalent of 39.8% of GDP. Manufacturing
Ghana’s industrial base is relatively advanced. Import-substitution industries
include electronics manufacturing. Rlg Communications is the first indigenous
African company to assemble laptops, desktops, and mobile phones, and is West
Africa’s biggest information and communications technology and mobile
phone manufacturing company. Ghana began its automotive industry with
the construction of a prototype robust SUV, named the SMATI Turtle 1, intended
for use in the rough African terrain. It was designed and manufactured by the
Artisans of Suame Magazine Industrial Development Organization. Urban electric
cars have been manufactured in Ghana since 2014.
As of 2012 there were four major companies in the textiles sector:
Akosombo Textiles Limited, Tex Style Ghana Limited, Printex Ghana, and Ghana
Textile Manufacturing Company. Ghana National Petroleum Corporation and
Ghana Oil Company deal with crude oil and gas refining.
Telecommunications Ghana’s telecommunications statistics
indicated that as of 2013 there are 26,336,000 cell-phone lines in
operation. Competition among mobile-phone companies in Ghana is an
important part of the telecommunications industry growth of Ghana, with companies
obtaining more than 80 per 100 persons as mobile phone and fixed-line phone
users. The mass media of Ghana is among the
most liberal in Africa, with Ghana ranking as the 3rd freest in Africa and
30th most free in the world on the worldwide press freedom Index. Chapter
12 of the Constitution of Ghana guarantees freedom of the Ghanaian press
and the independence of the mass media, and Chapter 2 prohibits censorship.
Ghanaian press freedom was restored in 1992.
Ghana was one of the first countries in Africa to achieve the connection to the
World Wide Web. In 2010, there were 165 licensed internet service providers in
Ghana and they were running 29 of the fiber optic, and authorized networks
VSAT operators were 176, of which 57 functioned, and 99 internet operators
were authorized to the public, and private data and packet-switched network
operators were 25. Private banking
The financial services in Ghana have seen a lot of reforms in the past years.
The Banking Act 2007 included the awarding of a general banking license to
qualified banks, which allows offshore banks to operate in the country.
Barclays Bank, Limited was the first to be awarded the general banking license
in Ghana. It has therefore become possible for non-resident individuals
and foreign companies to open offshore bank accounts in Ghana.
=Stock exchange=The Stock Exchange of Ghana is the third
largest in Africa, with a market capitalization of GH¢ 57.2 billion or
CN¥ 180.4 billion in 2012. South Africa’s JSE Limited is the largest.
Energy As of December 2012, Ghana gets 97% of
its energy from hydropower and exports some of this to neighboring countries.
=Solar energy=Ghana has aggressively begun the
construction of solar plants across its sun-rich land in an aim to become the
first country to get 6% of its energy from solar energy generation by 2016.
The biggest photovoltaic and largest solar energy plant in Africa, the Nzema
project will be able to provide electricity to more than 100,000 homes.
This 155 megawatt plant will increase Ghana’s electricity generating capacity
by 6%. Construction work on the GH¢740 million
and the fourth-largest solar power plant in the world is being developed by Blue
Energy, a renewable energy investment company, majority owned and funded by
members of the Stadium Group, a large private asset and development company
with GB£2.5 billion under management. The project director is Douglas Coleman,
from Mere Power Nzema Ltd, Ghana. Unlike many other solar projects in
Africa that use concentrated solar power, solar plants will use PV
technology to convert sunlight directly into electricity. Installation of more
than 630,000 solar PV modules began by the end of 2013, with electricity being
generated early in 2014. It is due to reach full capacity at the end of 2015.
=Wind energy=Ghana has Class 4–6 wind resources and
high-wind locations, such as Nkwanta, the Accra Plains, and Kwahu and Gambaga
mountains. The maximum energy that could be tapped from Ghana’s available wind
resource for electricity is estimated to be about 500–600 GWh/year. To give
perspective: in 2011, per the same Energy Commission, the largest Akosombo
hydroelectric dam in Ghana alone produced 6,495 GWhrs of electric power
and, counting all Ghana’s geothermal energy production in addition, the total
energy generated was 11,200 GWhrs in that year. These assessments do not take
into consideration further limiting factors such as land-use restrictions,
the existing grid and accessibility. Wind energy has potential to contribute
significantly to the country’s energy industry. 10% can certainly be attained
in terms of installed capacity, and about 5% of total electric generation
potential from wind alone.=Bio-energy=
Ghana has put in place mechanisms to attract investments into its biomass and
bio-energy sectors to stimulate rural development, create jobs and save
foreign exchange. The vast arable and degraded land mass
of Ghana has the potential for the cultivation of crops and plants that
could be converted into a wide range of solid and liquid bio-fuels, as the
development of alternative transportation fuels could help Ghana to
diversify and secure its future energy supplies. Main investments in the
bio-energy subsector existed in the areas of production, are transportation,
storage, distribution, sale, marketing and exportation.
The goal of Ghana regarding bio-energy, as articulated by its energy sector
policy, is to modernize and examine the benefits of bio-energy]on a sustainable
basis. Biomass is Ghana’s dominant energy resource in terms of endowment
and consumption, with the two primary bio-fuels consumed being ethanol and
biodiesel. To that effect, the Ghana ministry of Energy in 2010 developed its
energy sector strategy and development plan. Highlights of the strategy include
sustaining the supply and efficient use of wood fuels while ensuring that their
utilization does not lead to deforestation. The plan would support
private sector investments in the cultivation of bio-fuel feedstock, the
extraction of bio-oil, and refining it into secondary products, thereby
creating financial and tax incentives. The Ghana Renewal Energy Act provides
the necessary fiscal incentives for renewable energy development by the
private sector, and also details the control and management of bio-fuel and
wood fuel projects in Ghana. The Ghana National Petroleum Authority was tasked
by the Renewable Energy Act 2011 to price Ghana’s bio-fuel blend in
accordance with the prescribed petroleum pricing formula.
The combined effects of climate change and global economic turbulence had
triggered a sense of urgency among Ghanaian policymakers, industry and
development practitioners to find sustainable and viable solutions in the
area of bio-fuels. Brazil, which makes ethanol from maize
and sugarcane, is currently the world’s largest bio-fuel market.
=Energy consumption=Electricity generation is one of the key
factors in achieving the development of the Ghanaian national economy, with
aggressive and rapid industrialization; Ghana’s national electric energy
consumption was 265 kilowatts per capita in 2009. Shortages of electricity have
led to dumsor, increasing the interest in renewables.
Hydrocarbon and mining Ghana has 5 billion barrels to 7 billion
barrels of petroleum in reserves. A large oilfield which contains up to 3
billion barrels of sweet crude oil was discovered in 2007. Oil exploration is
ongoing and the amount of oil continues to increase. Ghana produces crude oil,
as of 15 December 2010, and until June 2011, Ghana exploited around 120,000
barrels per day and is expected to increase production up to 2.5 million
barrels per day in 2014. Ghana has vast natural gas reserves, which is used by
many foreign multinational companies operating in Ghana. The hydrocarbon
industry has had major implications for regional and urban development in Ghana
and these are likely to substantially increase in the years to come
Mining has gained importance in the Ghanaian economy since the turn of the
21st century, with a growth of around 30% in 2007. The main mining extractions
are bauxite, gold, and the phosphates. Tourism
The Ministry of Tourism has placed great emphasis upon further tourism support
and development. Tourism contributed to 4.9% of GDP in 2009, attracting around
500,000 visitors. Tourist destinations include Ghana’s many castles and forts,
national parks, beaches, nature reserves, landscapes and World Heritage
buildings and sites. In 2011, Forbes magazine ranked Ghana
eleventh friendliest country in the world. The assertion was based on a
survey of a cross-section of travelers in 2010. Of all the countries on the
African continent that were included in the survey, Ghana ranked highest.
To enter Ghana, it is necessary to have a visa authorized by the Government of
Ghana, except for certain entrepreneurs on business trips.
Agriculture Ghana National Agricultural Export is
the government arm that operates, maintains, and oversees the planting of
cocoa, cashews, and other crops for export. Since its inception, it has
drastically assisted the government in boosting agricultural sales.
Agribusiness accounts for a small fraction of the gross domestic product.
The main harvested crops are corn, plantain, rice, millet, sorghum, cassava
and yam. Unlike the agricultural livestock, forestry, and fishing
sectors, the crop sector is key to the Ghanaian agricultural industry.
Ghana: Vision 2020 and industrialization With the economic program “Ghana: Vision
2020”, Ghana intends to achieve its goals of accelerated economic growth and
improved quality of life for all its citizens, by reducing poverty through
private investment, rapid and aggressive industrialization, and direct and
aggressive poverty-alleviation efforts. These plans were forcefully reiterated
in the 1995 government report, Ghana: Vision 2020. Nationalization of
state-owned enterprises continues, with about two-thirds of 300 parastatal
enterprises owned by the government of Ghana. Other reforms adopted under the
government’s structural adjustment program include increasing exchange rate
controls and increasing autarky and increasing restrictions on imports.
The Ghana: Vision 2020 forecast assumes political stability; successful economic
stabilization; the implementation of Ghana: Vision 2020 policy agenda on
private sector growth; and aggressive public spending on social services,
infrastructure, and industrialization. It projection states that Ghana’s goals
of reaching high-income economy status and newly industrialized country status
will be easily realized between 2020 and 2039.
Economic transparency The judicial system of Ghana deals with
corruption, economic malpractice and lack of economic transparency. Despite
significant economic progress, obstacles do remain. Particular institutions need
reform, and property rights need improvement. The overall investment
regime in Ghana lacks market transparency. Tackling these issues will
be necessary if Ghana’s rapid economic growth is to be maintained.
See also Savings and Loans Company
Footnotes References
External links Google Earth Map of the oil and gas
infrastructure in Ghana World Bank Trade Summary Statistics

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