Front Matter Page

©2000 International Monetary Fund

January 2000

IMF Staff Country Report No. 2

Ghana: Selected Issues

This Selected Issues report on Ghana was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with this member country. As such, the views expressed in this document are those of the staff team and do not necessarily reflect the views of the Government of Ghana or the Executive Board of the IMF.

International Monetary Fund

Washington, D.C.

Front Matter Page

INTERNATIONAL MONETARY FUND

GHANA

Selected Issues

Prepared by a staff team consisting of Sérgio Pereira Leite (head), A. Pellechio, L. Zanforlin, and V. Prokopenko (all AFR); R. Khemani (PDR); and D. Kar (TRE)

Approved by the African Department

November 5, 1999

Contents

• I. Growth, Savings, and Investment

  • A. Introduction

  • B. Sources of Output

  • C. Investment and Savings

  • D. An Analysis of Growth Patterns

• Text Figures

• 1. Real GDP per Capita and Inflation, 1960–98

• 2. Savings, Investment, and Current Account, 1975–98

• 3. Ghana Aid Flows, 1975–98

• 4. Foreign Trade and Current Account, 1975–98

• 5. Agricultural Sector and Real GDP, 1975–96

• 6. Per Capita GDP and Per Capita Exports, 1966–98

• Text Tables

• 1. Gross Domestic Product by Sectors, 1975–98

• 2. Top Ten Countries by Agriculture in Sub-Saharan Africa, 1970–94

• 3. Top Ten Countries by Manufacture in Sub-Saharan Africa, 1965–95

• 4. Gross Domestic Product by Expenditure Category, 1975–98

• 5. Top Ten Countries by Investment-to-GDP Ratio in Sub-Saharan Africa, 1970–96

• 6. Top Ten Countries in Productivity of Capital in Sub-Saharan Africa, 1970–95

• 7. Top Ten Countries by Gross Domestic Savings in Sub-Saharan Africa, 1975–95

• 8. Debt Service and Aid, 1975–95

• II. Ghana’s Nontraditional Exports: Performance and Prospects

  • A. Introduction

  • B. Performance of Nontraditional Exports, 1986–98

  • C. Main Nontraditional Exports

  • D. Government Policies in Support of Exports

  • E. Conclusion

• Text Figures

• 7. Commodity Prices of Traditional Exports, 1963–98

• 8. Export Unit Value for Manufactures, 1974–98

• 9. Performance Indicators on Nontraditional Exports, 1986–98

• 10. Destination of Nontraditional Exports

• Text Boxes

• 1. Financing Nontraditional Exports—A Success Story

• Text Tables

• 9. Major Nontraditional Exports, 1986–98

• 10. Performance Indicators on Major Nontraditional Exports, 1986–98

• 11. Destination of Nontraditional Exports, 1986–98

• 12. Selected Nontraditional Exports with High Potential for Growth

• III. Medium-Term Fiscal Sustainability Analysis

  • A. Introduction

  • B. Stylized Model

  • C. The Original Medium-Term Outlook

  • D. The Baseline Scenario

  • E. A Fiscal Strategy to Address the 1999 External Shock

  • F. Domestic Debt Fund

  • G. Shortfall in External Assistance

  • H. Resilience of Program to Shocks

  • I. Concluding Observations

• Text Figures

• 11. Benchmark and Revised Program, 2000–07

• 12. Domestic Debt Fund, 2000–07

• 13. External Assistance Shortfall

• 14. Higher Inflation, 2000–07

• 15. Higher Real Interest Rate, 2000–07

• Text Boxes

• 2. Public Domestic Debt: Selected African Countries, 1998

• Text Tables

• 13. Fiscal Sustainability Analysis, 2000–07

• IV. Ghana’s Social Insurance System: Operation and Policy Issues

  • A. Introduction

  • B. Structure and Operation of SSNIT

  • C. Actuarial Evaluation of SSMT Operations

  • D. SSNIT’s Portfolio and Investment Policy

  • E. Policy Issues Facing SSNIT

• Text Figures

• 16. Dependency and Expense Ratios for SSNIT

• Text Boxes

• 3. SSNIT’s Student Loan Program

• Text Tables

• 14. SSNIT Contributions and Benefits, 1995–2007

• 15. SSNIT Total Expenditures, 1995–2007

• 16. SSNIT Projected Operations, 1995–2007

• V. Stock Exchange

  • A. Introduction

  • B. Background

  • C. Overview of the Present Situation

  • D. Conclusion

• Text Figures

• 17. Ghana: Stock Exchange Indicators, 1990–98

• Text Boxes

• 4. Ashanti Goldfields Company

• Text Tables

• 17. GSE Performance Statistics

• 18. Africa: Performance of Stock Exchanges, 1998

• VI. Ghana’s Divestiture Program: Obstacles and Achievements

  • A. Introduction

  • B. The Divestiture Implementation Committee and the Early Efforts

  • C. Recent Divestiture Experience, 1993–99

  • D. Summary and Conclusions

• Text Figures

• 18. Number of State-Owned Enterprises, 1992–99

• 19. Divestiture Proceeds, 1992–99

• Text Boxes

• 5. Divestiture Procedures

• 6. Ghana National Petroleum Corporation

• 7. Divestiture of Strategic Companies

• Text Tables

• 19. Divestiture of State-Owned Enterprises, 1989-September 1999

• 20. Divestiture of State-Owned Enterprises Outside the DIC, 1989-September 1999

• VII. Rural Finance in Ghana

  • A. Introduction

  • B. Evolution of Rural Finance in Ghana

  • C. Constraints

  • D. Next Steps

  • E. Conclusion

• Text Figures

• 20. Distribution of Outstanding Loans and Advances of Rural Banks by Sector, 1996–98

• Text Boxes

• 8. Rural Financial Intermediation in Upper East Region (UER)

• 9. Semiformal and Informal Financial Services in Upper East Region (UER)

• Text Tables

• 21. Outstanding Agricultural Portfolio of ADB per Sub-Sector, 1998

• 22. Regional Distribution of Rural Banks in Ghana

• 23. Important Financial Indicators of Rural Banks, 1993–98

• VIII. Poverty Incidence and Reduction in Ghana

  • A. Introduction

  • B. Poverty Profile for Ghana

  • C. Fiscal Policies and Impacts

  • D. Institutional Structure for Reducing Poverty

  • E. Public Policies, Strategy, and Programs for Reducing Poverty

  • F. Issues

• Text Figures

• 21. Development Diamonds, 1995

• 22. Factor Contribution to Social Expenditure, 1995–99

• Text Boxes

• 10. Characteristics of Poverty in Ghana

• 11. Program of Action to Mitigate the Social Costs of Adjustment (PAMSCAD)

• Text Tables

• 24. Gini Coefficient in Selected African Countries

• 25. Benefit Incidence of Public Spending on Education in Selected African Countries