© 2000 International Monetary Fund
Production: IMF Graphics Section
Figures: Lai Oy Louie
Typesetting: Alicia Etchebarne-Bourdin
Cataloging-in-Publication Data
Ghana: economic development in a democratic environment/Sérgio Pereira Leite…[et al.]–Washington, D.C.: International Monetary Fund, 2000.
-
p. cm. —(Occasional paper; ISSN 0251–6365; 199)
-
Includes bibliographical references.
-
ISBN 1–55775–960–X
1. Ghana—Economic conditions. 2. Finance—Ghana. I. Pereira Leite, Sérgio. II. Occasional paper (International Monetary Fund); no. 199.
HC1060.G4273 2000
338.9667–dc21
00—050608
Price: US$20.00
(US$17.50 to full-time faculty members and students at universities and colleges)
Please send orders to:
International Monetary Fund, Publication Services
700 19th Street, N.W., Washington, D.C. 20431, U.S.A.
Tel: (202) 623-7430 Telefax: (202) 623-7201
E-mail: publications@imf.org
Internet: http://www.imf.org
Contents
-
Abbreviations Used
-
Preface
-
I Overview
-
Economic Development and Democracy
-
The Revolutionary Phase: 1981–91
-
The Democratic Phase: 1992 to the Present
-
The Paper in Brief
-
-
II Poverty Reduction Strategy
-
Institutional Structure for Reducing Poverty
-
Programs to Reduce Poverty
-
Poverty Monitoring and Indicators
-
Lessons and the Challenge Ahead
-
-
III Patterns of Growth
-
Sources of Output
-
Investment
-
Sources of Growth
-
-
IV Cocoa Reforms: An Experiment in Participatory Decision Making
-
Cocoa Trends in the Last Decade
-
Marketing Arrangements and Early Reforms
-
A Participatory Approach to Cocoa Reforms
-
Next Steps and Conclusions
-
-
V Fiscal Performance and Reforms
-
Fiscal Impact of the 1992 Election
-
Developments After the 1992 Election
-
Fiscal Impact of the 1996 Election
-
Developments After the 1996 Election
-
External Shock Ahead of the 2000 Elections
-
Conclusion
-
-
VI Coping with Painful Choices: Public Sector Reforms
-
Early Reform Efforts
-
Recent Reform Efforts
-
Lessons Learned and the Future of Public Sector Reform
-
-
VII Divestiture: Obstacles and Achievements
-
The Divestiture Implementation Committee and the Early Efforts
-
Recent Divestiture Experience: 1993–99
-
Summary and Conclusions
-
-
VIII Financial Sector Issues
-
The Banking System and Its Evolution
-
Structure of the Banking System
-
How Far Have the Reforms Gone?
-
Lessons Learned and Next Steps
-
-
IX External Competitiveness
-
Evolution of the Exchange Rate System
-
Traditional Competitiveness Indicators
-
Competitiveness Indicators for Ghana
-
Conclusions
-
-
X The Road to 2020
-
Main Elements of Ghana—Vision 2020
-
Results of the First Phase
-
Reformulation of Ghana—Vision 2020
-
Lessons Learned
-
-
References
-
Boxes
-
2.1. Program of Action to Mitigate the Social Costs of Adjustment (PAMSCAD)
-
3.1. Growth of Nontraditional Exports, 1986–98
-
4.1. The Medium-Term Cocoa Development Strategy
-
4.2. Cocoa Export and Tax Revenue
-
5.1. The Medium-Term Expenditure Framework
-
6.1. Decentralization Efforts
-
6.2. The Public Sector Reinvention and Modernization Strategy
-
7.1. Divestiture Procedures
-
7.2. The Ghana National Petroleum Corporation
-
7.3. Divestiture of Strategic Companies
-
8.1. The A-life Fraud
-
8.2. Rural Finance in Ghana
-
8.3. The Social Security and National Insurance Trust
-
9.1. Exchange Rate Arrangements, 1983–97
-
-
Tables
-
2.1. Incidence of Poverty by Region
-
3.1. Gross Domestic Product by Sector
-
3.2. Comparison of Ghana with Other Leading Agricultural Countries in Sub-Saharan Africa
-
3.3. Comparison of Ghana with Other Leading Manufacturing Countries in Sub-Saharan Africa
-
3.4. Gross Domestic Product by Expenditure Category
-
3.5. Comparison of Ghana with Leading Countries in Sub-Saharan Africa by Investment-GDP Ratio
-
3.6. Comparison of Ghana with Leading Countries in Sub-Saharan Africa by Productivity of Capital
-
4.1. Distribution of Proceeds of Cocoa Exports in Selected Cocoa-Producing Countries
-
5.1. Central Government Revenue and Grants
-
5.2. Central Government Expenditure
-
5.3. Economic Classification of Central Government Expenditure and Net Lending
-
5.4. Central Government Budgetary Operations and Financing
-
7.1. Divestiture of State Enterprises
-
7.2. Selected Divestitures Outside the DIC Framework
-
8.1. Chronology of the Banking System
-
8.2. Indicators of the Size and Concentration of the Banking Sector
-
8.3. Selected Banking System Indicators as of December 1998
-
8.4. Selected Banking System Indicators as of December 1999
-
-
Figures
-
2.1. Poverty Gap by Region
-
2.2. Incidence of Poverty by Main Economic Activity of Household
-
3.1. Real GDP per Capita and Inflation Across Political Regimes
-
3.2. Saving, Investment, and the Current Account
-
3.3. GDP Per Capita and Exports Per Capita
-
3.4. Agricultural Sector and Real GDP
-
4.1. World Cocoa Production and Yields
-
4.2. World Market Shares in Cocoa Production
-
4.3. Cocoa Prices Received by Ghana and Côte d’Ivoire
-
4.4. Distribution of Cocoa Export Revenue in Ghana and Côte d’Ivoire
-
5.1. Central Government Finances
-
7.1. State Enterprise Divestitures
-
7.2. Divestiture Proceeds
-
8.1. Financial Deepening Ratios
-
9.1. Real Effective Exchange Rates
-
9.2. Real Effective Exchange Rates Based on Unit Labor Cost Indices
-
9.3. External Competitiveness of Ghana and Four Neighboring Countries
-
The following symbols have been used throughout this paper:
-
… to indicate that data are not available; n.a. to indicate not applicable;
-
— to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;
-
– between years or months (e.g., 1998–99 or January-June) to indicate the years or months covered, including the beginning and ending years or months;
-
/ between years (e.g.. 1998/99) to indicate a crop or fiscal (financial) year.
“Billion” means a thousand million.
Minor discrepancies between constituent figures and totals are due to rounding.
The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not States, but for which statistical data are maintained and provided internationally on a separate and independent basis.
Abbreviations Used
ADB |
Agricultural Development Bank |
BHC |
Bank for Housing and Construction |
BPEMS |
Budget and Public Expenditure Management System |
CPI |
Consumer Price Index |
CWIQ |
Core Welfare Indicators Questionnaire |
DACF |
District Assemblies Common Fund |
DIC |
Divestiture Implementation Committee |
ERP |
Economic Reform Program |
GCB |
Ghana Commercial Bank |
GLSS |
Ghana Living Standards Survey |
GNPC |
Ghana National Petroleum Corporation |
GUSS |
Ghana Universal Salary Structure |
IMCPR |
Inter-Ministerial Committee on Poverty Reduction |
IPPD |
Integrated Personnel and Payroll Database |
NCD |
National Commission for Democracy |
NDPC |
National Development Planning Commission |
NIB |
National Investment Bank |
NIRP |
National Institutional Renewal Program |
NOC |
National Oversight Committee |
NPRP |
National Poverty Reduction Program |
NGO |
nongovernmental organization |
PAMSCAD |
Program of Action to Mitigate the Social Costs of Adjustment |
PBC |
Produce Buying Company |
PSAC |
Private Sector Adjustment Credit |
PUFMARP |
Public Financial Management Reform Program |
PUSERMOS |
Public Sector Reinvention and Modernization Strategy |
REER |
real effective exchange rate |
SAPRI |
Structural Adjustment Participatory Review Initiative |
SDR |
special drawing right |
SEC |
State Enterprise Commission |
SIF |
Social Investment Fund |
SSNIT |
Social Security and National Insurance Trust |
TCOP |
Technical Committee on Poverty |
TWG-PR |
Thematic Group on Poverty Reduction |
UNDP |
United Nations Development Programme |
VAT |
value-added tax |
Preface
This occasional paper is based on staff background papers prepared for the 1998 and 1999 consultations between the International Monetary Fund and Ghana. The information in this occasional paper primarily pertains to the period since Ghana’s return to multiparty democracy in 1992 through December 1999. The authors would like to acknowledge the support and encouragement of the Ghanaian authorities and the IMF Executive Director for Ghana, Abbas Miraihor. The paper was prepared by a staff team led by Sérgio Pereira Leite and Anthony Pellechio and composed of Girma Begashaw, Stefania Fabrizio, Joachim Harnack, and Luisa Zanforlin. The authors would like to acknowledge the contributions of Andrew Mvumbe, T. Kanai, Ritha Khemani, Périn Saint-Ange, and Dev Kar, as well as the comments of Paul Acquah, Rocio Castro, GuenterHeidenhof, and Amor Tahari and the research assistance of Luca Bandiera. They would like to thank Maureen Burke and John Maynard for invaluable assistance.
The opinions expressed in the paper are those of the authors and should not be construed as necessarily representing the views of the Government of Ghana or the International Monetary Fund.