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INDIVIDUAL POLICIES

1. Freedom From Internal Control

The Constitution provides for freedom of peaceful assembly, freedom of speech, freedom of press and its likes and that the government generally respects all these rights. The government does not require permit for demonstrations. However Parliament passed a public law in late 1994 requiring that organizers of ” special events” or ” processions” should inform the police of their intention at least five days in advance so that the police can institute precautionary measures.

SOURCE: Human rights, country report on human rights practices: Ghana

2. Freedom of Speech

Until 1997 the government of Ghana continued to pressure the media. The opposition political parties and others, frequently criticize the government and the government has allowed more control of print and electronic media to be transferred to the private sector. There are more than a dozen newspapers including two government -owned dailies, two government-owned weeklies, and several privately owned. Most newspapers circulate only in the capital and many of the smaller private newspapers are available only in the big cities. There is one government owned and 12 private FM radio stations in the capital and in all there are about 42 private FM station nationwide. The independent stations air a wide range of viewpoints. There are 12 regional television stations in Accra, Kumasi, and Takoradi, and one government – owned station that broadcast nationwide. Ghana has six Internet providers in the country. There services help people express their freedom of speech.

Source: Ghana Country report on human rights practices for 1999, Author; US department of states commission; 2, personal.

3. Effective, Fair Police Force:

The police force of Ghana is under the jurisdiction of eight-member Police Council, which is responsible for maintaining law and order. Although the security apparatus is controlled by and responsive to the government, monitoring, supervision and education of the police remain poor. Police in Ghana use excessive force, resulting in a number of extra judicial killing as well as injuries, although the use of rubber bullets and water cannons improved the ability to manage crowd & control situations without killings or serious injuries.

Source: Ghana Country report on human right practices for 1999, and www.ghanaweb.com

4. Currency:

The unit of currency is the cedi, which is divided into 100 pesewas. With the decline in the cedi, the use of the pesewas has ceased. Also, it has been made legal to use foreign currency to conduct business in Ghana. Especially, the British Pounds and the U.S. dollars.

Source: Country Commercial Guide for Ghana, 2, Personal

5. Commercial Banks:

There are eleven commercial banks in Ghana. The largest bank in the country is Ghana Commercial Bank and SSB Bank with net worth’s of approximately $30 million and $80 million respectively, were state controlled. Until recently the banking sector was dominated by state – owned institutions and showed few signs of competition. Within the last two years, however two state -owned banks have been privatized under the government’s divestiture implementation program. Commercial banks offer services such as current and saving accounts, telegraphic transfers, safe custody deposits, sales of traveler’s checks and foreign transactions including the establishment of letters of credit. They also lend money to business and entrepreneurs.

Source: Commercial guide for Ghana, Author by US state department.

6. Communication System:

Ghana’s telecommunication systems are good by the continental standard. Ghana has about 141, 000 telephone lines which is currently service the people. The service providers are Ghana Telecom Limited, and westel (US company). There are also three mobile phone service operators. Most private people own communication centers that provide pay phone services this are found in all major cities and a few are found in rural cities.

Source: Commercial guide for Ghana, 2, personal.

7. Transportation:

Ghana has about 40,000km of main roads (one -fourth of which are paved). This makes it a little difficult for most Ghanaians farmers who live in rural areas to bring there goods to town. Sometimes after harvest, they have to wait for days before they can bring in the products to town, due inadequate roads. These have contributed to the country’s poor economic growth, because agriculture is the country’s backbone in economic growth. There are two ports in Ghana, Tema and Takoradi port. The ports are connected by a triangular 953km rail system linking the major cites, Kumasi, Takoradi and Accra-Tema. The waterways are Volta, Ankobra, and Tano rivers, which provide 168km of perennial navigation for launches and lighters. The Lake Volta provides 1125 km of arterial and feeder waterways.

Air transport plays a great rule in the country. Ghana has one international airport and three other domestic airports. International air transportation to Accra is currently offered by Ghana Airways and more than 17 other international airlines.

Source: The world fact book 2000, and Commercial guide for Ghana.

8. Education:

Ghana like most West African countries, struggles to provide its citizens with even basic educational facilities. Ghana currently spends approximately 30% of its budget on education but unfortunately that is not enough. Most large villages have affordable primary schools but junior secondary and senior secondary schools are more expensive and are geographically distant from most students. Ghana has five excellent universities both public and private with variety of programs offered. Though, a variety of social and economic factors limit availability to student long before the application process.

The illiteracy rate in Ghana is over 40%, due to the restrictions of poverty and the familial necessity of child’s assistance around the home or farm restrict the majority of children form attending lower level schools. The number of student who go to attend senior secondary school (sss) is extremely small. The male’s enrollment level to senior secondary is 34.8% compare to females level at 24.0%. However the government is making efforts to push in more money in the education system, also with the help of some foreign originations.

Source: http://www.ghanaeducation.org/academic, personal.

9. Social Mobility:

Ghana’s current Socio- economic environment allows individuals to use their full potential to create wealth. The government is trying to separate politics from business, which makes it better for individual investors to cross the ethnic line drawn by government and invest outside their ethnic origin where there are opportunities The new government of Ghana has indicated to bring all Ghanaians together no matter your background so far as you fit you position. Source: Personal

10. Foreign Currency Transactions

There are no restrictions on import and export of foreign currencies provided they & declared at the point of entry and exchanged for local currency the cedis, legally through banks and forex bureaus. The exchange rate as of February 2005 is 7,300 is to a US 1 dollar. Source: Personal

11. Cultural, Language Homogeneity:

Ghana has a highly diverse population. About 44% of them speak Akan. The Akans make about two-fourth of the population. However there are about 52 different ethnic groups in Ghana. English is the country’s official language and is mostly spoken along with Akan. Since most Ghanaians speak English and Akan, it has made it easy for people to conduct businesses at will in Ghana. Other languages such as Ga, Moshi-Dagomba, Ewe, and Akan are taught in school. French is another language taught in schools since it is the official language of all three neighboring countries.

Source: The world fact book 2000–Ghana.

12. Domestic Budget Management:

Ghana achieved real economic growth of 4.6% in 1998 in spite of an energy crisis that slowed down economic activity in the first half of the year. The 1998 growth rate was a slight improvement over the 4.2% recorded in 1997. The government remains under heavy pressure from international institutions and donors to adhere to a policy of fiscal discipline in renewed growth. The government of Ghana, in collaboration with the Ghana central bank, has been able to lower inflation to 9.4%, the lowest since 1985, as well as effecting a fall in interest rates.

Source: Country Commercial Guide for Ghana

13. Institutional Stability: 2.0

Ghana was under one political party for the past 20 years. During those years there was a lot of corruption in the government, school s, Courts, law enforcement, etc; Also there were a lot of changes made, which resulted to the weakness of most institutional capacity. As Ghana under goes new Presidencies a lot of changes are going to be made, this will result in restructuring of many government organizations to suit the new government.

Source: Personal

14. Political Effectiveness:

The government of Ghana aims to balance and share all the country’s resources to all part of the nation to build a strong economic growth for the country. All regional capitals are given the due share of the central government and regional capital budget to help each region project good growth. In the past, infrastructure shortcomings created substantial impediments to domestic productivity and discouraged foreign direct investment due to this effect political effectiveness project on the country.

Source; Commercial Guide for Ghana, personal

15. Government Debt:

Ghana decided to join the Heavily Indebted Poor Countries (HIPC); two months after the new elector government took power. Ghana debt was estimated about $6 billion and over. According to the minister of finance, the president directed that the country join HIPC to get the country of its debt and put the economy back on track.

Source:http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=13983

16. Economic Statistics.

Ghana is well endowed with natural resources, Ghana has twice the per capital output of the poorer countries in West Africa. Even so, Ghana remains dependent on international financial and technical assistance. Gold, timber, and cocoa production are major source of foreign exchange. The domestic economy continues to revolve around subsistence agriculture, which accounts for 40% of GDP and employs 60% of the work force, mainly small landholders. In 1995-97, Ghana made mixed progress under a three-year structural adjustment program in cooperation with the IMF. On the minus side, public sector wage increases and regional peacekeeping commitments have led to continued inflationary deficit financing, depreciation of the cedis and rising public discontent with Ghana austerity measures. A rebound in gold price is likely to push growth over 5% in 2005-06

Source: http://www.cia.gov/cia/publications/factbook/geos/gh.html

17. Central Bank:

Ghana’s banking system is based on a number of banks and non – bank financial institutions, including the Bank of Ghana which is the Central Bank. The Central Bank has the responsibility of advising the government on implementation of interest rates and control of monetary policy. To ensure systematic development of banking system, the central bank (GoB), in addition to its traditional functions it also has the responsibility for ensuring that banking is responsive to the need of the public and businesses. The bank of Ghana may engage with other banks and financial institutions in the discount, rediscount, purchase or sale of duly signed, and endorsed bills of exchange, promissory not, acceptances and other credit entrustments.

SOURCE: http://www. Ghana-embassy.org/financial_institutions.html Author: Ghana Embassy.

18. Private Property.

The laws of Ghana recognize the right of foreign and domestic private entities to own and operate enterprises. However foreign entities are by law prohibited from engaging in certain business activities in Ghana, eg: pitied trading, and also under the Minerals and Mining Law non – Ghanaian cannot engage in small-scale growth. Private entities may freely acquire and dispose of their interest in Ghana. The legal system recognizes and enforces secured interest in property protection.

The protection of intellectual property is an evolving area of law in Ghana. Progress has been made in recent years to afford protection under both international and local laws. Ghana is a member of the World Intellectual Property Organization (WIPO) and the English- speaking African Regional Industrial Organization (ESARIPO). The courts have been pro- active in the protection of intellectual property rights.

SOURCE: Country Commercial Guide for Ghana 1999

19. Protection of Public Health and Safety:

Health services in Ghana are provided by the central government, local institutions, Christian missions (nonprofit agencies,), and a relatively small number of private practitioners.According to the United Nations, about 62.9% of the country’s total population in 1984 depended on the government health centers for medical care. The government of Ghana has been working hard to improve health conditions in the country. Like the rest of the sub -Saharan African countries, Ghana has the full range of diseases. According to World Health Organization (WHO). Most of these diseases are contributed by the poor sanitation facilities and also acquired through insect bites,which is common in rural areas. Over the years, the administrative branches of the Ministry of Health have worked closely with city, town, and village councils in educating the people in sanitation matters. Sanitation advances have been made in the urban areas and not the rural communities where the majority of the population lives.

SOURCE: http://www.ghanaweb.com/ghanahomepage/newsarchive/artikel.php/ID=13592, http://Icweb.loc.gov/cgi-bin/query/r?frd/cstdy:@field(DOCID+gh0064

20. High Wage Policies

The government of Ghana set a legal minimum daily wage in 1999 is 2900cedis (=about 80cents in us dollar). Ghana recently joins the Heavily Indebted Poor Countries (HIPC). Their initiative was vary of the country’s poor per capital income. The Ghanaian Trades Union Congress (TUC) strongly opposed the decision. According to the secretary -general of the Trade Union Congress the decision will affect the labor force in the country. Ghana has a labor force of 4.1 million in which 54% belong to the agricultural and fishing force, 15% is sales and clerical, industry employees make 18.7%, services, transportation, and communication employees make 7.7% and professionals such as doctors, and engineers makes 3.7%. Ghana has a low professional employment due to its low GDP per capital. The GDP per capital in 2000 was $390 US dollars.

SOURCE: Country Commercial guides for Ghana, www.ghanaweb,com/GhanaHomePage/NewsArchive/artikel.php?ID=13983

21. Foreign Trade Impact.

Ghana GDP is approximately $7. 2 billion, its export and import in 2004 were estimated at $7.4 billion, which makes about 60% of the GDP. Out of the $7.4 billion export was estimate at $2.8 billion and import was $2.6 billion, imports were 60% – of the total merchandise trade.

SOURCE; www.ghanaweb.com/GhanaHomePage/ghana/gh_ general.html

22. Protection of Foreign Currency Earning Enterprises.

Ghana exports primary commodities such as cocoa, gold, timber, tune, bauxite and aluminum. The government has a few exception restriction on its commodities export, military hardware, antiques and collator’s items more than 50 years. These items require special permit and certification. With these exceptions there are no control on exports, however the Ghana Cocoa Marketing Board monopolizes the exportation of cocoa, since it is the major export commodity. Also exporters are entailed to 100% refund for duty paid on imported imputes used in processing of exported goods. Firms involved in exports enjoy some fiscal incentives such as tax holidays.

SOURCE; National Trade Estimates Report on Foreign Trade Barriers, 2, Country Commercial Guide for Ghana.

23. Pro-Business Climate: 4.0/5.

Generally, Ghanaian business customs are similar to those of the U.S, but they are a bit formal. English is the official language and it is used in most business transaction. Urban Ghanaians mostly speak some English. Ghanaian businessmen wear business suit during working. Ghanaians can facilitate business transactions. In return, they may ask for some favor, which is normal. This behavior in some case goes beyond proper business ethics. Work and residence permit is issued to expatriates employed by companies in Ghana against immigration quotas, that is the number of non-Ghanaians a business may employ.

SOURCE; Country Commercial Guide for Ghana 2, Personal.

24. Government Enterprises.

Since 1989, there has been a steady and serious effort on the part of the GOG to privatize over 300 state – owned enterprises which were not profitable, it has been able to do so, about 40% shares of the major mining company in the country is owned private citizens. Ghana offers potential investors a stable; multiparty democratic environments as well as a commitment to practice market liberalization. Ghana’s divestiture program, its priority for free enterprises and private sector initiative, as well as various tax incentives to attract foreign capital..

SOURCE; Country Commercial Guide for Ghana

25. Protection of Domestic Enterprises from Government Mandated Costs.

The attitude of the Government of Ghana can be described as pro-business, because of its seriousness about becoming the gateway between West African and the rest of the world. The government offers potential investors a stable, multiparty democratic environment as well as a commitment to the philosophy and practice of market liberalization. These ideas as also contribute to better laws on worker safety regulation. The government has a divestiture program with priority for free enterprise and private sector initiative as well as various low tax incentives and loans to attract more domestic and foreign capital. The Ghana market is opened to all qualified supplies. However the investment code exclude foreign investors from participating in four economic sectors that are reserved for Ghanaians: petty trading, the operation of taxi service, lotteries (excluding soccer pools), and the operation of beauty salons and barber shops.

SOURCE: National trade estimates report on foreign trade barriers.

WEAKNESSES & THE CORRECTIVE MEASURES EMPLOYED.

1. General Policy Framework

Ghana operates in a free market environment under a popularly elected civilian government. In December 2000, opposition leader John Agyekum Kufuor was elected President, marking the first time in Ghanaian history in which one democratically elected President replaced another. A UK-trained lawyer with longstanding ties with the United States, President Kufuor has called for greater foreign investment and pledged a “zero tolerance” for corruption. An independent judiciary acts as the final arbiter of Ghanaian laws. Since 1983 Ghana has pursued an economic reform agenda aimed generally at reducing government involvement in the economy and encouraging private sector development. This has made the country one of the most open-market economies in the sub-region. The current government’s economic program is focusing on the development of Ghana’s private sector, which has been historically weak. Roughly two-thirds of some 300 state-owned enterprises have been sold to private owners since a divestiture program began in the early 1990s. The government’s monopoly on the export of cocoa was removed in 1999, but full liberalization of this market has not yet been implemented. An economic downturn due primarily to external shocks began in late 1999, worsened in 2000, and has not abated. Despite several years of economic reform the country still remains vulnerable to terms of trade shocks. The three major commodities – gold, cocoa, and timber -contribute over 70 percent of Ghana’s foreign exchange earnings. The relatively low price of cocoa coupled with the increase in crude oil price in 2000 caused a large increase in trade loss.

These factors led to a severe shortage of foreign exchange, rapid depreciation of the cedi against the dollar by about 60 percent, and an upsurge of inflation from 14 percent at the end of December 1999 to 41 percent at the end of December 2000. Imbalances caused by the terms of trade shocks were further exacerbated by heavy government spending and borrowing in the run-up to the December 2000 elections.

The former government’s hesitation to respond appropriately in an election year, especially to the rising cost of the supply of utility services and petroleum products, caused or contributed to an overall budget deficit of about 8.5 percent of GDP in 2000 compared to 6.5 percent of GDP recorded in 1999. The government resorted to heavy domestic borrowing to make up for shortfalls from mainly non-tax revenue. To arrest inflation and the fast depreciating cedi, the Bank of Ghana (BOG), the central bank, pursued a tight monetary policy, increasing the primary reserve ratio from eight to nine percent. Heavy domestic borrowing by the government and the BOG’s measures sent domestic lending rates from about 37 percent to about 50 percent. Real economic growth in 2000 was 3.3 percent, which followed the declining trend of 4.4 percent in 1999, and 4.7 percent in 1998. The new government took immediate steps to restore macroeconomic stability. It introduced measures to monitor and control expenditures, increase revenue mobilization, restructure short-term domestic debt, and seek debt relief under the HIPC initiative. To stem the accumulation of debts by the utilities and the oil refinery, the government took a bold step by significantly increasing fuel, water, and energy tariffs. The government’s measures have yielded some positive results, as the cedi has remained stable since the beginning of 2001 and inflation and interest rates, though still high, have declined significantly. The government appears to be committed to sustaining this trend.

2. Exchange Rate Policy

The foreign exchange value of the Ghanaian cedi is established independently through the use of the Interbank Market and Foreign Exchange bureaus, and currency conversion is easily accessible. However, the BOG dominates the Interbank Market by controlling the supply of large amount of surrendered proceeds from gold and cocoa. Ghana fully accedes to Article IV of the IMF convention on free current account convertibility and transfer. In general, the exchange rate regime in Ghana does not have any particular impact on the competitiveness of U.S. exports.

3. Structural Policies

Ghana progressively lowered import quotas and surcharges as part of its structural adjustment program. Tariff structures are being adjusted in harmony with the ECOWAS Trade Liberalization Program. Import licensing was eliminated in 1989, but for some items such as drugs, an import permit is required. Imported goods currently enjoy generally unfettered access to the Ghanaian market.

The government professes strong support for the principle of free trade, and is an active participant in the WTO. However, it is also committed to the development of competitive domestic industries with exporting capabilities. The government is expected to continue to support domestic private enterprise with various financial incentives. Ghanaian manufacturers frequently seek stronger protective measures and complain that Ghana’s tariff structure places local producers at a competitive disadvantage relative to imports from countries enjoying greater production and marketing economies of scale. Reductions in tariffs have increased competition for local producers and manufacturers while reducing the cost of imported raw materials. The government has announced plans to introduce an anti-dumping bill to Parliament to curb the import of “inferior” goods as a response to several complaints from consumers. The government in 2001 reduced the 20 percent special tax on some of the 32 selected

“non-essential” imported goods to 10 percent and removed the tax completely on the rest. Major U.S. imports still affected by the tax are frozen meat and poultry. This tax no longer applies to used clothing, powdered milk, paper and plastic products. A 0.5 percent ECOWAS levy on all imports from non-ECOWAS countries and 0.5 percent Export Development and Investment Fund (EDIF) levy on all imports were introduced in 2000 and 2001 respectively. The standard import duty rate was lowered from 25 percent to 20 percent in 2000.

In July, 2000 the government increased the Value-Added Tax (VAT) from 10 percent 12.5 percent to specifically fund education.

4. Debt Management Policies

In March 2001, opted for debt relief under the enhanced Heavily Indebted Poor Country (HIPC) Initiative. Ghana is expected to reach HIPC Decision Point by December 2001 and the Government estimates a total of US$ 700 million in debt write off at the end of 2004 when the country reaches its HIPC Completion Point. The government is also seeking debt relief from the Paris Club. There is currently a suspension in the payments of non-multilateral debts.

Ghana’s total outstanding external debt was approximately US$ 5.9 billion at the end of the first quarter of 2001. Outstanding long-term debt was about US$ 5.4 billion (about 92 percent of total debt), of which US$ 1.6 billion and US$ 3.8 billion were owed to bilateral and multilateral institutions respectively. Ghana’s domestic debt in mid-2001 was estimated to be some US$ 1.8 billion, almost all in short-term instruments. The government was attempting to severely limit additional domestic borrowing, and to restructure the existing debt into longer-term instruments. The government has announced plans to utilize receipts from the divestiture of state-owned enterprises to reduce the country’s debt stock.

5. Significant Barriers to U.S. Exports

Import licenses: Ghana eliminated its import licensing system in 1989 but retains a ban on the importation of a narrow range of products that do not affect U.S. exports. Ghana is a member and active participant in the WTO.

Services Barriers: The Ghanaian investment code proscribes foreign participation in the following sectors: small-scale wholesale and retail sales, taxi and car rental services with fleets of fewer than ten vehicles, lotteries, and barber and beauty shops. Current insurance law requires at least 40 percent Ghanaian ownership of insurance firms in Ghana.

Investment Barriers: Although the investment code incentives are relatively attractive, bureaucratic bottlenecks can delay the launching of new projects. The investment code guarantees free transferability of dividends, loan repayments, licensing fees and repatriation of capital. It also provides guarantees against expropriation or forced sale and delineates dispute arbitration processes. Foreign investors are not subject to differential treatment on taxes, access to foreign exchange and credit, or importation of goods and equipment. Separate legislation covers investments in mining and petroleum and applies equally to foreign and Ghanaian investors.

6. Export Subsidies Policies

The Government of Ghana does not directly subsidize exports. Exporters are entitled to a 100 percent refund for duty paid on imported inputs used in the processing of exported goods. Bonded warehouses have been established which allow importers to avoid duties on imported inputs used to produce merchandise for export. Firms involved in exports enjoy some fiscal incentives such as tax holidays and preferential tax/duty treatment on imported capital equipment. Firms under the export processing zones all benefit from the same incentives.

e. Acceptable Conditions of Work: In 1991, a Tripartite Commission composed of

representatives from government, organized labor, and employers established minimum standards for wages and working conditions. The daily minimum wage combines wages with customary benefits such as a transportation allowance. The current daily minimum wage is cedis 5,500, about 75 cents at the present rate of exchange, a sum that does not permit a single wage earner to support a family. A much-vaunted, government-commissioned study on civil service reform (including a serious revision of grades and salary levels) was implemented in June 1999. By law the maximum workweek is 45 hours, but collective bargaining has established a 40-hour week for most unionized workers.

f. Rights in Sectors with U.S. Investment: U.S. investment in Ghana is concentrated in the primary and fabricated metals sectors (gold mining and aluminum smelting), food and related products (tuna canning and beverage bottling), petroleum marketing, data processing, and telecommunications. Labor conditions in these sectors do not differ significantly from the norm, except that wage scales in the formal metals and mining sectors are substantially higher than elsewhere in the Ghanaian economy. U.S. firms have a good record of compliance with Ghanaian labor laws.