Ghana

Ghana, the “shining star” of Africa at independence in 1957, experienced political and economic shocks that led to a deterioration of living standards. From the mid nineties, macroeconomic stability has improved considerably and Ghana’s democratic gains were impressive. At the moment, Ghana faces no external threats and plays a key stabilising role in the otherwise troubled West African Region.

The country’s Growth and Poverty Reduction Strategy provides an agriculture-led industrialisation strategy aiming to achieve middle income status by 2015, with a proposed change in the economy through diversification from traditional cocoa to other cash crops for export markets, and recognising transport’s importance in serving economic development and growth. The GPRS advocates regional integration and recognises south-south trade as engines for growth, but the plan also suggests ‘interventionism’ in support of the private sector with not enough emphasis on the importance of civil service reform and budget processes improvement.

Ghana must address governance, private sector competitiveness and human development issues to achieve equitable growth and to reduce poverty in the context of sustainable development. Civil society involvement and increased accountability are key drivers of political governance reforms. Other risks, which could limit Ghana’s growth or have a potential destabilising effect, are unsustainable external commercial borrowing, the current energy crisis, and a spill-over effect stemming from further instability in neighbouring countries.

Income poverty levels have declined and Ghana is well placed to meet some of the MDGs by 2015. However, non-income dimensions of poverty point to continued weaknesses in human and social development. Of most concern are key infant and child health indicators and persistently high maternal health mortality. Poor management of natural resources is estimated to cost the country at least 1.1% of GDP every year, although Ghana has started addressing these issues by joining global initiatives such as FLEGT and EITI.

In the Harmonisation and Aid Effectiveness framework, most of Ghana’s Development Partners including the EC have worked out a Joint Assistance Strategy as a response strategy aimed at fully aligning the DPs’ support on the Country’s National Development Strategies. Within this context, the EC and Government of Ghana proposed to concentrate their cooperation strongly on “Transport Connectivity and Regional Integration”, “Governance through support to decentralisation, civil society and non-executive bodies” and “General Budget Support”.

In transport, the aim is to further clear the maintenance backlog of the trunk road network, and to provide access to markets and social services in rural areas (feeder roads through decentralisation). If deemed a priority in the sector strategic plan, EC may consider whether it is opportune to invest in urban areas, ports, harbours and railways.

In governance, the aim is to establish a more effective, transparent and accountable decentralised local government system; to engage civil society in national dialogue and decision making; and to strengthen the practice of democracy, particularly redressing the imbalance of power and resources between the executive branch and the legislature. With general budget support, the aim is to support the Government’s macroeconomic stability and reform programme, thus contributing to poverty reduction, economic growth, equitable access to social services and improvement in public finance management. General Budget Support is provided in the context of the Multi-Donor Budgetary Support Programme (MDBS).

Non-focal sectors will cover Trade Facilitation, Regional Integration and support for Economic Partnership Agreements (including ICT); Migration, Security and the Diaspora; Natural Resources Management (including FLEGT); and the Technical Cooperation Facility.