i. Domestic Revenue

As a percentage of GDP, domestic revenue has registered a smooth and steady growth. However, domestic revenue as a percentage of GDP declined from 23.9% to 22.3% in 2006, just below the 2006 target of 23.5%. In 2006 domestic revenue was ¢25,360.1 billion against a budget estimate of ¢26,438.8 billion.

The outturn for overall total government receipts amounted to ¢41,357.1 billion, against the budget estimate of ¢43,468.2 billion. Total revenue and grants in 2006 amounted to ¢31,917.7 against an outturn of ¢28,256.4 billion registered for 2005. This shows a 13% increase over the outturn for 2005. The relatively high outturn of total receipts recorded is mainly due to receipts from the Multilateral Debt Relief Initiative (MDRI) totaling ¢1,980.4 billion.

ii. Overall Budget Deficit

The overall budget balance recorded a deficit equivalent to 7.7% of GDP compared to the budget estimate of 4.5% of GDP. The domestic primary balance also recorded a deficit of 1.9% of GDP against the budget estimate of a deficit of 1.4% of GDP. As a result, the main fiscal anchor–domestic debt-to-GDP ratio was 10.1% against a target of 8.7% for 2006.

Although one cannot assign the increase in the deficit to a given expenditure item, a comparison of the numbers before and after the fiscal slippage indicates that the decline in the revenue to GDP ratio was equivalent to just under two-thirds of the widening in the deficit. Lower revenues were due primarily to tax exemptions granted on imports. The other one-third increase in the deficit can be assigned to public sector pay increases and to energy subsidies. As a result, the domestic debt to GDP ratio, which has been the cornerstone of fiscal policy over the last few years, is estimated to have risen to 13.8% by end of 2006, up from 10.8% at end of 2005. While part of the increased deficit was financed by issuing government bonds, a large fraction of these bonds were purchased by foreign investors. The latter meant that less pressure than expected was placed on domestic resources, allowing the Bank of Ghana to maintain its policy of gradually reducing interest rates in line with the decline in inflation.

i. Exchange Rate

In 2006, the cedi maintained its relative stability against the major international currencies though the British Pound and the Euro strengthened due to international market developments. The cedi depreciated by 9.5% against the British Pound and 7.8% against the Euro, while a moderate depreciation of was recorded against the US dollar. The underlying reasons for the relatively stable exchange rate were the improved private remittances through formal channels, foreign exchange liquidity on the forex market, and sound fiscal and monetary policies which allowed a build-up in external reserves, International recognition of the cedi was finally established in October 2006 with the first euro-cedi bond issued offshore by the Africa Development Bank (AfDB).

ii. Balance of Payments

Provisional data indicate that the balance of payments (BOP) recorded a surplus of US$178.8 million compared to the surplus of $84.34 million in 2006. This improvement is attributed to strong export performance, strong growth in remittances, donor resources and debt relief.

iii. Foreign Reserves

The Bank of Ghana accumulated net international reserves in 2006, and as a result the level of gross international reserves went up to US$2 billion which was enough to provide cover for 3.2 months of imports of goods and services.

iv. External Debt

Ghana’s total medium and long-term external debt as at end 2005 stood at US$6,347.9 million. This amount was reduced significantly to US$2,143.79 million in 2006, as a result of a 66 % debt reduction secured under the Multilateral Debt Relief Initiative (MDRI).

The composition of external debt remains largely the same as in 2005 as the country continues to hold more of multilateral debt, amounting to about US$1,359.2 million (constituting 63.4% of total external debt), of which the World Bank contributes about 44.3%. Bilateral debt constitutes about US$610.49 million (representing 28.5%) of total external debt with the remaining US$174.1 million (representing 8.1%) ascribed to commercial debt. External debt service as a percentage of exports of goods and services declined from 5.8% in 2005 to 3.17% in 2006 which is still higher than the target of 2.3%.

i. Domestic Debt Stock

The Public Domestic Debt (excluding ¢4,952.3 billion interest bearing revaluation stock and other long-term stocks held by Bank of Ghana) stood at ¢17,061.2 billion or 15.21% of GDP. This represents an increase of ¢3,420.2 billion or 25.2% over the stock of ¢13,631.0 billion in 2005. Factors which account for the increase in the domestic debt include the following:

• lower-than-projected receipts from tax revenues and divestiture proceeds;

• delays in inflows and non-receipt of some pledged funds from the Multi-Donor Budget Support;

• unanticipated demand and agitation for higher wages by the public sector workers.

• unanticipated transfers to SOE’s such as TOR and VRA on account of under-recovery and higher oil requirements respectively.

ii. Domestic Debt Servicing

By end-September 2006, domestic debt service amounted to ¢11,396.1 billion, made up of a redemption of ¢9,554.0 billion and ¢1,842.1 billion interest payment, compared to ¢15,133.1 billion during the same period in 2005. This represented an overall reduction of ¢3,737.0 billion (24.7 %) over the 2005 level.

i. Improving Expenditure Management

Develop a more Effective Data Collection Mechanism:

Considerable progress was made in the implementation of the BPEMS especially in the areas of deployment of 3 modules (general ledger, accounts payable and purchase ordering) in the entire 8 pilot MDAs and the complete and uninterrupted connectivity of the pilot MDAs through Fibre Optic Wide Area Network.

In June 2006, the Integrated Personnel and Payroll Database (IPPD2) was successfully used to pay the salary of the Health Sector Structure (HSS) workers following the introduction of a new pay structure. This was followed by the migration of Pension Payment and the Audit Service Payroll in July 2006. The rest of the Ghana Government Payroll including some pilot subvented agencies were migrated onto the IPPD2 in October 2006.

Ensure Transparency in use of Statutory Funds:

To improve the Cash Management System, the Controller and Accountant General’s Department has successfully operationalised a re-aligned treasury system under which MDAs at the regional level are being serviced exclusively by the Regional Treasuries and the Departments and Agencies at the District level are also being serviced by District Treasuries.

Each Ministry now has one Consolidated Fund sub-account which services the Ministry and its Departments and Agencies at the national level. One Consolidated Fund sub-account has also been created for each of the 10 Regional Coordinating Councils which serves all the Departments, Agencies, and Institutions at the Regional level. In addition, 138 Consolidated Fund sub-accounts have been opened for each of the District Assemblies.

Departmental allocations for MDAs are now being lodged into the respective sub-consolidated fund bank accounts. These measures have been put in place to improve the Cash Management System in the Public Sector.

To ensure judicious, economic, and efficient use of state resources, the Public Procurement Board developed Standard Tender Documents and Manuals for Entity Tender Committees and re-assessed 100 entities to ensure that the entities adhered fully to the provisions in the Public Procurement Act. A margin of preference document to support local businesses has been prepared. A website for the Board was developed and launched in 2006.

Enforce Budget Controls on SOEs:

The Controller and Accountant General’s Department has established Financial Monitoring Units at the Headquarters and Regional Directorates. This is to ensure effective and efficient fiscal decentralisation.

The Ministry of Finance and Economic Planning (MoFEP) has strengthened the capacity of the Public Expenditure Monitoring Unit to track fund releases for the timely implementation of all government and donor funded projects, as well as ensuring that expenditures are consistent with the budget estimates and growth targets. But there has been less progress in enforcing budget controls over the State Owned Enterprises (SOEs). At present the State Enterprises Commission (SEC) receives only individual reports from the SOEs, but neither consolidate them, nor prepare reports on SOE accounts for the Ministry of Finance and Economic Planning.

The Central Government and the District Assembly Charts of Accounts have been reviewed and harmonised into a common chart of accounts to facilitate comprehensive and timely financial reporting.

Promote Effective Dept Management

The overall thrust of Government’s domestic debt management policy in 2006 was to build capacity for improved debt management as well as to broaden and deepen the operations of the domestic money market. The key objectives of improving domestic debt management include the following:

• lowering of borrowing costs;

• containing the growth of the domestic debt;

• lengthening the maturity profile of domestic debt to reduce the rollover/refinancing risk;

• improvement in Public Sector Borrowing Requirements (PSBR) determination and daily/weekly forecasting;

• continuing improvement in the efficiency of Government debt financing through the use of public auctions and stable issuance.

Monitor Size of Domestic Debt:

Government continue to improve upon the achievements made in 2005 for the purposes of meeting the key objectives of:

• reducing the cost of borrowing (lower interest rates) of the various debt instruments. The average Treasury Bill Rate fell from 13.79% in September 2005 to 10.37% in September 2006. The volume of refinancing fell from ¢19.9 trillion to ¢11.0 trillion or from ¢383.0 billion to ¢211.0 billion per week;

• improving the forecasting of Public Sector Borrowing Requirement (PSBR) as a result of the completion of the electronic linkage of Government Accounts at the Bank of Ghana (BoG) to the Ministry of Finance & Economic Planning (MoFEP) and the Controller & Accountant-General’s Department (CAGD). Daily account balances and outstanding bills are being factored into the determination of the weekly PSBR.

Restructure Domestic Debt Stock:

The following key achievements were made in 2006:

• shifting towards the longer end of the market by increasing the level of outstanding medium-term instruments. Medium-term funding increased by ¢3,285.1 billion or 43.6%, that is, the balance outstanding as at the end of September 2006 stood at ¢10,818.1 billion compared to ¢7,533.0 billion in September 2005; and

• listing of the 2-year fixed rate treasury note and 3-year fixed rate treasury bond on the Ghana Stock Exchange (GSE), which took place in October 2006 to boost trading in these securities.

Reduce Stock of Domestic Debt (20% of Projected HIPC Relief Funds Applied to Domestic Debt Stock Reduction):

Planned expenditures incurred from the HIPC relief funds for 2006 came to a total of ¢2,277.74 billion out of which ¢455.5 billion was applied to offset the domestic debt. As at the end of September 2006 total domestic debt payments amounted to ¢96.98 billion.

ii. Improve Fiscal Resource Mobilization

Minimise Revenue Leakages in all Collecting Agencies:

The Ministry of Finance and Economic Planning in collaboration with National Security Agencies embarked on operations to curtail leakages in the revenue collection system of ten MDAs. The positive effect of this exercise was that some defaulting companies which understated their shipping quantities started paying amounts owed to government. Illegal operators arrested in respect of false vehicle licensing, issue of false passport, business registration certificate and birth certificates were prosecuted.

Review and Revise Existing Taxes, Fees and User Charges:

The IRS implemented the Venture Capital Tax Incentive and reduced the corporate tax rate from 28% in 2005 to 25% in 2006. The Service also extended Loss Carry Forward to cover agro-processing, tourism and ICT industries. The one-off Amnesty on penalties and sanctions for self-disclosure of unreported taxes for the first 6 months of the year was implemented by the service. The tax stamp programme designed to widen the tax net, especially to cover the informal sector, was re-launched in September 2006. In the area of personal income tax relief, the tax bands for income earners were expanded and modified. The taxation of overtime income was also fully implemented.

The VAT Service operationalised the VAT Refunds Scheme and by July 2006, 654 refunds had been processed. The full impact of the scheme was expected to be felt by the end of 2006.

The VAT Service has initiated steps to implement a Flat Rate Scheme (FRS) at 3.0% of sales value for the informal sector without recourse to input VAT claims as programmed in the 2006 budget. It is hoped that most of the difficulties of the sector will be addressed by the FRS which will be closely monitored to ensure its success.

Strengthen Revenue Collection Institutions:

The automation of IRS operations was initiated on a pilot basis by installing the Tanzania version of ITAX software. The system is to be adapted and staff to be trained for full operationalisation.

The automation of operation of transit regime was also launched on a trial basis in September 2006 and it is expected to be in full operation by the beginning of 2007. This is intended to ensure that cargo entered in transit through Ghana duly leave Ghana for the entered destination. The import of this measure is to stop the diversion of transit goods into the Ghanaian market without the corresponding revenue inflows.

Strengthen MMDAs for Improved Tax Collection:

As part of its initiative towards improving the generation of Non Tax Revenue, the Ministry of Finance and Economic Planning (MoFEP) released an amount of ¢4.8 billion to 16 MDAs to enable them implement revenue enhancement measures, including revenue monitoring, training of revenue collectors, provision of equipment, public education, and improvement in compliance with statutory provisions.

i. Improve Liquidity Management

The year-on-year growth rate of reserve money at the end of the third quarter was 32.3% compared with 19.3% in the third quarter 2005. Seasonally adjusted, annual growth in reserve money at the end of the review period was 16.4%, which is below the 32.3% growth in the actual series.

Available data for the year 2006 shows that the annual growth rate of broad money supply, which includes foreign currency deposits (M2+) was 39.1% compared to 18.6% in the third quarter period of last year. The growth in broad money was evenly reflected in its components even though the domestic currency component dominated. Broad money excluding foreign currency deposits (M2) increased by 39.1% in 2006, compared to 22.5% in September 2005.

ii. Improve The Institutional, Legal and Regulatory Framework

The law on Collateral Enforcement and Truth in Lending was reviewed. The following bills were prepared and submitted to Parliament for consideration and enactment:

• Credit Reporting Bill (passed in 2006);

• National Insurance Bill (passed in 2006);

• Foreign Exchange Bill (passed in 2006);

• Central Securities Depository Bill (in Parliament);

• Apex Bank Regulations (in Parliament); and

• Insolvency Bill (passed in 2006).

It is expected that these instruments would enable the private sector to have access to more capital and more diversified sources of capital and access to financial services including micro finance, etc.

iii. Deepen the Capital Market

Implement Schemes to Increase Long-Term Savings/Funds:

Implementation of capital market development policies is showing results. This is indicated by the shifting maturity composition of government debt with an increasingly large percentage of investors moving from short-term to medium-term instruments. However, the current yield curve which is limited to 3 years does not provide a strong signal for financial institutions to lengthen the terms of their loans to the private sector.

Building on the success of the medium term instrument, the Ministry of Finance listed 2 and 3 year medium term bonds on the Ghana Stock Exchange as part of measures to develop the secondary market for Government debt securities. Furthermore, the preparatory work on the establishment of an International Financial Services Centre is in its advanced stages.

Expand Bond Markets:

In 2006 the Securities and Exchange Commission (SEC) consolidated its existing MOU with the capital market regulator in Nigeria. Another MOU with the Financial Services Board (FSB) of South Africa was to be signed before the end of this year. This will encourage sharing of information and cross listings between South Africa and Ghana.

In September 2006, the Securities and Exchange Commission approved the listing of Ecobank Transnational Incorporated (ETI) on the Ghana Stock Exchange. ETI was simultaneously listed on all the stock exchanges in the sub-region–Ghana, Nigeria and Cote d’Ivoire. This brings to 3, the number of cross-listed stocks on the GSE.

iv. Strengthen the Financial Sector

The Ministry of Finance and Economic Planning established a Financial Services Division to be responsible for policy formulation and the development of Ghana’s Financial Sector.

Facilitate the Development of Database for Credit Management:

The numbering of houses and naming of streets under the current initiative to implement a National Identification System has commenced.

Reduce Bank of Ghana Secondary Reserve Requirements:

The Bank of Ghana (BOG) secondary reserve requirement for banks was abolished during the year.

Promote Competition in the Financial System to Reduce High Interest Rates:

To promote fair and competitive interest rates, the Bank of Ghana has directed all bank and non-bank financial institutions with effect from January 1, 2007 to publish in all advertisements for loans as well as disclose transparently to all prospective borrowers, the Annual Percentage Rate (APR) of interest applicable to their loans, including loan processing and administration fees.

Create a more Diversified Financial Sector and Improve Access to Financial Service

For this policy objective, it was expected that there would be an increase in long-term savings, increase in savings as percentage of GDP, as well as an increase in credit to the private sector as a share of domestic credit.

As part of the efforts aimed at creating a more diversified financial sector and improving access to financial services, the Government continued to implement the blueprint for the financial sector deregulation as follows:

• The Central Securities Depository (CSD) is now operational with the bill submitted for parliamentary approval to make it possible for equities to be admitted into the depository;

• The Long Term Savings (LTS) bill was passed along with the subsequent appointment of the respective Boards of the Venture Capital Trust Fund and the Long term savings scheme. The Chief Executive Officer of the Venture Capital has also been appointed;

• The Insurance Bill was laid in parliament before the end of 2006 to ensure efficiency and competitiveness of the insurance industry. This is expected to support innovation and risk management in pursuit of capital market development in the country;

• the Legislative Instrument on ARB Apex Bank Regulation is in Parliament; and

• the credit reporting bill has been passed.

In 2006, government initiated preparatory work on the establishment of an International Financial Services Centre (IFSC) in Ghana. The centre will enable Ghana to provide specialised financial services for offshore customers in the areas of banking, insurance, securities, leasing and other non-bank financial services.

To deepen the financial system, Bank of Ghana, in collaboration with the banks, is spearheading the introduction of a National Payments System (NPS) to ensure delivery of financial services to the unbanked, underbanked and banked segments of the population under a common payment system framework.

In 2004, the Venture Capital Trust Fund Act was passed to provide a vehicle for SMEs to raise equity and quasi-equity capital. The Venture Capital Trust Fund has signed 2 investment agreements with venture capital finance companies. However, government is working to enable more venture capital finance companies participate in the scheme.

i. Improve Import Competitiveness

A study on the impact of tariff on companies is underway to inform the improvement of the incentive regime for businesses and the development of methodology for computing the “Effective Rate of Protection” for local industries. Single corridor and 100% inspection for customs clearance of textile imports was instituted.

ii. Diversify and Increase the Export Base

Promote new areas of Competitive Advantage:

Group export Marketing Schemes were implemented by Ghana Export Promotion Council (GEPC) for associations of vegetable growers. Confirmed orders of ¢20.24 billions (US$2.2 million) for fruits, vegetables, medicinal plants and seeds, garments, fish and wood, secured through government facilitated trade missions.

MOTIPSD&PSI has established 3 Export Trade Houses (ETH) namely Ghana Export Trade Company Ltd (Gextraco), Ghana Trade Centre (GTC) and Ghanextrade. The ETH serves as commercial intermediaries between SME suppliers and buyers located in different countries by helping to identify and select markets, evaluate client products and related materials, negotiate export contracts as well as providing promotional support to Ghanaian SMEs.

Engage Fully in Multilateral Trading Negotiations:

Ghana continued to play a strong role within continental and sub-regional groups in all international trade negotiations for a.

Ghana is an active member of the World Trade Organization (WTO) which aims at achieving improved, secure and predictable market access opportunities in a more equitable international trading system. At the ongoing Doha Development Round, Ghana together with other developing countries are negotiating a secured development oriented outcome, particularly the cotton initiative, the elimination of trade distortions and the reduction of tariffs and non-tariff measures in industrial products. Ghana together with other West African countries is engaged in the negotiation of the WTO-compatible Economic Partnership Agreement (EPA) with the European Union (EU) to replace the existing non-reciprocal preferential trade regime in the Cotonou Partnership Agreement (CPA).

The EPA is expected be more supportive of the West African integration processes, assist in the achievement of broader development goals, enhance the productive capacity of West African countries and accelerate their integration into the global trading system.

Take Full Advantage of Preferential Access to Markets such as AGOA, EU-ACP:

National working groups were constituted to coordinate preparations for Ghana hosting of the AGOA Forum in 2007 and UNCTAD in 2008; lobbying by African Ministerial Group led to third country fabric provision of AGOA being extended from2007 to 2012 by US Senate and Congress.

iii. Institute Mechanisms to Manage External Shock

As at the end of 2006 the level of international reserves was about US$2.0 billion, enough to cover more than three months of imports of goods and services.

Status of Selected Indicators:

The focus of policies on support to private sector are to; (i) improve Ghana’s position in global and regional markets, (ii) enhance efficiency and accessibility of national markets, (iii) strengthen firms competency and capacity to operate effectively and efficiently, (iv) enhance government capacity for private sector policy formulation, implementation, and monitoring and evaluation, (v) facilitate private sector access to capital, (vi) facilitate the removal of institutional and legal bottlenecks, (vii) facilitate innovation and entrepreneurship, (viii) accelerated development of strategic sectors, and (ix) supportive and mindset change of the population towards the private sector.

The key indicators selected for monitoring progress towards the attainment of these objectives include:

• ease of doing business ranking;

• FDI net inflows;

• private fixed investment (as % GDP);

• number of days for register a business;

• the number of days spent on resolving commercial disputes; and

• domestic credit to the private sector as a percentage of GDP.

The results of data analysed indicate that, the number of days to register business, domestic credit to the private sector as a ratio of GDP and the number of days spent on resolving commercial disputes exceeded the respective targets set for 2006, and showed a significant improvements over the 2005 levels. These, subsequently, have contributed to enhancing the environment for doing business, FDI net inflows, as well as the level of economic activities which all experienced an improvement over the 2005 situation. The ease of doing business ranking improved from 102^nd in 2005 to 94^th out of a 175 countries assessed in 2006. Additionally Ghana was rated among the top 10 reformers on the ease of doing business, while the Bank of Ghana Composite Index of Economic Activities (CIEA), which is an index of eight economic indicators and measures the level of confidence of businesses in the economy, increased from 225.4% in 2005 to 285.7% in 2006. The FDI net inflows increase from US$144.97 million in 2005 to US$434.50 million in 2006 (an increase of 200%).

Table 3.1:

Private Sector Development

Source: MOTIPPSI/BOG, 2006

Table 3.1:

Private Sector Development

INDICATOR	Target in 2006	Indicator Level at 2004	Indicator Level at 2005	Indicator Level at 2006	Progress towards target
1. Ease of Doing Business ranking	Within the first 55 countries in the world by 2009	Na	102	94	Slow Progress toward target, with high prospect for improved business environment. The Bank of Ghana Composite Index of Economic Activities (CIEA) indicates that economic activities are on the increase, showing the confidence of economic agents in the economy.
2. Complementary Indicator: Composite Index of Economic Activities (CIEA)
CIEA–Nominal Movement =	Na	188.96%	225.39%	285.69%
CIEA–Year-on-Year growth (Nominal) =	Na	14.26%	19.28%	26.8%
CIEA–Real Movement =	Na	144.91%	160.43%	140.17%
CIEA–Year-on-Year growth (Real) =	Na	7.98%	10.71%	−12.6%
3. FDI net inflows (in millions of US$)	Na	139.27	144.97	434.50	No baseline target, but there was a significant improvement over the previous year’s level
4. Number of days for registering a Limited Liability Company	7	Na	14	5	Target exceeded
5. The number of days for resolving a commercial disputes	175	195	185	90	Target exceeded
6. Domestic credit to the private sector as ratio of GDP	19.6% by 2009	13.1%	14.9%	18.0%	Substantial progress towards target

Source: MOTIPPSI/BOG, 2006

View Table

Table 3.1:

Private Sector Development

INDICATOR	Target in 2006	Indicator Level at 2004	Indicator Level at 2005	Indicator Level at 2006	Progress towards target
1. Ease of Doing Business ranking	Within the first 55 countries in the world by 2009	Na	102	94	Slow Progress toward target, with high prospect for improved business environment. The Bank of Ghana Composite Index of Economic Activities (CIEA) indicates that economic activities are on the increase, showing the confidence of economic agents in the economy.
2. Complementary Indicator: Composite Index of Economic Activities (CIEA)
CIEA–Nominal Movement =	Na	188.96%	225.39%	285.69%
CIEA–Year-on-Year growth (Nominal) =	Na	14.26%	19.28%	26.8%
CIEA–Real Movement =	Na	144.91%	160.43%	140.17%
CIEA–Year-on-Year growth (Real) =	Na	7.98%	10.71%	−12.6%
3. FDI net inflows (in millions of US$)	Na	139.27	144.97	434.50	No baseline target, but there was a significant improvement over the previous year’s level
4. Number of days for registering a Limited Liability Company	7	Na	14	5	Target exceeded
5. The number of days for resolving a commercial disputes	175	195	185	90	Target exceeded
6. Domestic credit to the private sector as ratio of GDP	19.6% by 2009	13.1%	14.9%	18.0%	Substantial progress towards target

Source: MOTIPPSI/BOG, 2006

Key Policy Measures and Strategies:

The following policy measures and strategies were pursued in 2006:

Improve Ghana’s Competitiveness in the Global Market

Trade Policy:

The Trade Sector Support Programme (TSSP), commenced fully in 2006. By the end of the year, all the major planned interventions were underway in nine out of the ten components of the TSSP. Preparations for the implementation of the remaining component (IPR) are at an advanced stage. The status of actions taken on the key components of the programme is as follows:

• Multilateral Trade Negotiations

  • - Key stakeholders were consulted and regularly briefed on the progress of negotiations by the multilateral and regional trade teams during the year under review. EPA and ECOWAS CET impact assessments were carried out to inform negotiation strategy, as well as strengthening the overseas trade offices with additional staff and equipment to support Ghana’s trade negotiation teams. An Inter-Institutional Committee has been reconstituted and is expected to be fully operational in 2007, while national working groups were constituted to coordinate preparations for Ghana’s hosting of the AGOA Forum in 2007 and UNCTAD XII in 2008. The lobbying by African Ministerial Group led to third country fabric provision of AGOA being extended from 2007 to 2012 by US Senate and Congress.

• Trade Facilitation

  • - The coordinating functions of the MOTIPSD/PSI over the programmes of key institutions facilitating trade was strengthened through regular inter-agency meetings. The extension of the GCNet connectivity to key MDAs (BoG, GSS, MOTIPSD/PSI, IRS, VAT, GSB, GIPC, Minerals Commission, VELD and GEPC) enhanced online inter-agency information sharing. The extension of GCNet to key border points which has enabled more declarants across the country to lodge customs declarations electronically. Other activities undertaken in this area include successful piloting of transit trade tracking system; remote entry system made fully operational and users trained; a Valuation Appeal Committee established to review petitions on valuations; competition introduced into the provision of cargo handling services; measures implemented to improve port security; fee structure for port services and WTO valuation procedures under review; and involvement of private companies in port services increased and inland container depots being established to ease congestion and facilitate the clearance of goods at Tema port.

• Import-Export Regime

  • - A study on the impact of tariffs on companies was commenced in 2006 to inform the improvement of the incentive regime for businesses and the development of a methodology for computing the ‘Effective Rate of Protection’ for local industries. A training and capacity building programme on trade contingency measures has been implemented and a single corridor for 100% inspection for customs clearance of textile imports instituted. Preparatory work is underway to develop and institute a Tariff Review Mechanism (Tariff Board), and to revise customs procedures and documentation in the Ghana Free Zones area.

• Production Capacity

  • - The formulation of an Industrial Policy commenced in 2006 and is expected to continue in 2007. Preparatory committee to guide the development of a Future Skills Advisory Group has been established, while the technical assessment of upgrading requirements for existing and proposed Craft Villages has been completed. Also a number of companies engaged in agro-processing (oil palm, cassava, sorghum, tomatoes, sugar, horticulture), garments manufacturing, salt production and crafts production were actively supported to expand production capacity.

• Export Trade Support Services

  • - Group Export Marketing schemes were implemented by the Ghana Export Promotion Council (GEPC) for associations of vegetable growers. Confirmed orders of ¢20.24 billion (US$2,200,000) for fruits, vegetables, medicinal plants and seeds, garments, fish and wood products was secured through Government-facilitated trade missions, exhibitions and buyer-seller meetings. Government supported the establishment of three Export Trade Houses to promote the establishment of commercial intermediaries between SME suppliers and buyers located in different countries. Pineapple exporters were provided with financial assistance to introduce the market-preferred MD2 variety. An export trade information centre located in Accra was made fully operational during the year. This facility is expected to be upgraded to host the launching of an online multi-purpose trade information system under the MSME project. A Foreign Trade and Investment programme was commenced with the appointment of representatives in the US and India.

• Finance and Investment

  • - Credit from the Export Development and Investment Fund (EDIF) to exporters increased steadily. The mandate of the fund was extended to support non-export companies in key strategic areas. As at October 2006, EDIF has provided ¢155.2 billion of financial support to the Non-Traditional export sector.

Quality Standards:

Highlights of progress made are as follows:

• the Sanitary and Phyto-sanitary (SPS) and Technical Barrier to Trade (TBT) National Enquiry Points at Plant Protection Regulatory Services Directorate (PPRSD) and Ghana Standards Board (GSB) have been fully equipped, with a contractor selected for the development of an interactive website to provide access to technical information for exporters;

• a Joint Publication Agreement has been signed between the GSB and the International Trade Centre to customise and publish a guidebook to SPS and TBT requirements for Ghanaian exporters;

• a Quality Management Steering Committee established to commenced work on the development of Quality Management training syllabi for SMEs, the establishment of a professional body for Quality Management practitioners in Ghana and to institute procedures for administering a National Quality Award Scheme;

• stakeholder consultative workshops were organised on the Standards Bill and the Food and Drugs Bill in 2006; agreement has been reached with Parliament to consider and pass the two Bills concurrently;

• the Ghana Standards Board (GSB) has been restructured into commercial and core divisions, with technical experts being recruited to assess the upgrading requirements of selected laboratories;

• negotiations were conducted with the Foreign Agricultural Service of the US Department of Agriculture to support the development of a National Alert System for Ghana.

Investment Promotion:

Key achievements made in this area in 2006 are as follows:

• the third draft of the revised GIPC Act 478 was completed and is further to be benchmarked against models of best practice to ensure that the law provides Ghana with a competitive edge as a preferred investment destination when it is passed;

• a new Tourism Investment Law, Act 1817 was launched by the GIPC and the Ministry of Tourism and Diasporan Relations in March 2006. The new Law seeks to promote investment in various activities in the tourism value chain through the granting of fiscal incentives and benefits;

• as part of its efforts to increase private investment across the regions of the country, the GIPC collaborated with the respective Regional Coordinating Councils in organizing investment Promotion Seminars/Fora in 8 regions to educate local and prospective investors on the investment climate in Ghana including the opportunities, incentives and guarantees available;

• the GIPC registered a total of 114 investment projects with an estimated investment outlay of US$2.22 billion. The significant increase in the value of registered projects during the first half of the year was as a result of the projected value of investments by the ALCOA group in the aluminium and bauxite sectors;

• the GIPC also supported investors to secure the relevant permits and approvals for the operation of their businesses and continued to provide advisory, hand-holding and liaison services to investors;

• the Centre hosted 21 Trade and Investment missions during the period from USA, India, Nigeria, Thailand, UK, Cote d’Ivoire, Sweden, The Netherlands, Gabon, Brussels, China, Japan, United Arab Emirates and Canada among others;

• GIPC collaborated with UNCTAD and the Japan Bank for International Cooperation in launching the ‘Blue Book’ for Investment in Ghana which recommends 12 priority measures, to be implemented over a one-year period, to improve the investment climate in Ghana; and

• four technology transfer agreements were registered in 2006, with the aim of transferring selected categories of technology (including professional, technical and management services, trade marks and technical assistance) to beneficiary local enterprises in Ghana.

Strategic Export Sectors:

A draft framework document which was completed in the last quarter of 2005, as a basis for agreeing on operational guidelines and action plans for PSI with key stakeholders, including DPs, was reviewed and implemented in 2006.

Enhance Efficiency and Accessibility of National Markets

Financial Sector Reforms:

The implementation of the Financial Sector Strategic Plan (FINSSP) under the MOFEP is of critical importance to the national strategy for growth and private sector development in Ghana.

Highlights of the implementation of FINSSP in 2006 included the following:

• two and three year medium term Bonds were listed on the stock exchange, as part of measures to develop the secondary market for Government Debt Securities. Preparatory work on the establishment of an International Financial Services Centre is in advanced stages. The Centre will position Ghana to provide specialised financial services for offshore customers in the areas of banking, insurance, securities, leasing and other non-bank financial services;

• discount Houses were completely phased out and the regulations guiding investment management service providers were harmonised;

• the laws on Collateral Enforcement and Truth in Lending was reviewed;

• the BoG commenced the installation of a fully integrated banking and ERP solution.

• the first phase of the automation of the banking and financial systems of 12 rural community banks was completed;

• the Venture Capital Trust Fund was established and made operational. The Fund has signed 2 investment agreements with venture capital finance companies and to encourage more venture capital finance companies to participate in the scheme the government announced an enhancement of the tax incentives including;

  • - the extension of the 5year full exemption from corporate income tax, dividend tax and capital gains tax for eligible venture capital finance companies to 10 years;

  • - the expansion of the 100% chargeable income deduction granted to financial institutions which invest in venture capital finance companies to include all corporate and individual investors who invest in venture capital financing companies;

  • - tax exemptions on distributions of interest, dividends and capital gains to investors in venture capital finance companies, in addition to the fact that losses from disposal of the shares of a venture investment may be carried forward for a period of up to 5 years after disposal.

• under the Financial Sector Strategic Plan (FINSSP) the following Bills were submitted to Parliament for consideration and enactment:

  • - Credit Reporting Bill (passed in 2006)

  • - National Insurance Bill (passed in 2006)

  • - Foreign Exchange Bill (passed in 2006)

  • - Central Securities Depository Bill (in Parliament)

  • - Apex Bank Regulations (in Parliament)

  • - Insolvency Bill (passed in 2006)

In addition, the Securities and Exchange Commission (SEC) consolidated its existing Memorandum of Understanding (MOU) with the capital market regulator in Nigeria in 2006. The Securities and Exchange Commission also approved the listing of Ecobank Transnational Incorporated (ETI) on the Ghana Stock Exchange. ETI was simultaneously listed on all stock exchanges in the sub-region including Ghana, Nigeria and Cote d’Ivoire, bringing to 3, the number of cross-listed stocks on the Ghana Stock Exchange. Another MOU with the Financial Services Board (FSB) of South Africa is expected to be signed before the end of 2007, with the expectation that it will encourage sharing of information and cross listings between South Africa and Ghana.

Public Sector Reform:

The programme of activities outlined to the be implemented in 2006 by the Ministry of Public Sector Reform’s focused on four main areas, which were considered critical in improving the quality and speed, and reducing the cost of service delivery to the private sector namely:

• the implementation of priority activities arising out of the recommendations of the Institutional Review exercise conducted with PSD-related MDAs to inform the implementation of the PSDS;

• the establishment of Clients Services Units in key PSD-related MDAs;

• the implementation of Customer Charters; and

• the delivery of culture change programmes for public servants interfacing with the private sector.

Under the strategy of establishing Client/Customer Service Units in key PSD-related MDAs, twenty-three MDAs signed MoUs in September 2006 with MPSR, in addition to the three main revenue agencies (CEPS, VAT and IRS), to guide the establishment and operations of their Clients/Customer Service Units.

The twelve (12) selected MDAs that regularly interface with the private sector commenced implementation of their institutional review recommendations in July 2006 and are expected to focus on simplifying administrative procedures and improving transparency in their operations and provide greater access to information by the private sector

The highlights of other activities undertaken to improve the quality of service delivery include:

• the establishment of 3-member Project Implementation Teams (PITs) in the participating MDAs, headed by DMDs, Deputy CEOs, Deputy Directors

• delivery of a training programme on “Total Customer Care” to staff of CSUs in March 2006.

• the launch of a Customer Satisfaction Survey in April 2006

• support to the development of new customer-friendly facilities at DVLA in July 2006.

• training programme on Leadership of the Civil Service in collaboration with GIMPA.

Internal Revenue Service (IRS)–Implementation of FIAS Recommendations:

In line with the recommendations of the Foreign Investment Advisory Service (FIAS) in relation to the IRS, four areas of activity were outlined for implementation in 2006. The highlights of achievements are as follows:

• a significant reduction of tax registration in IRS to 3 days, though the process of company registration and taxation registration are yet to be fully integrated;

• the use of manuals by all the 50 District Offices of IRS as part of the measures to intensify and enforce the use of Tax Collection Manual; and

• the launch of Tax Stamps in 2006.

Customs Reforms–Customs, Excise and Preventive Service (CEPS):

The following activities were undertaken in 2006 in this area:

• customs procedures have been simplified and remote entry system for customs declarations is fully operational. The implementation of the GCNet programme has eliminated the reliance on discretion in determining valuations, with an Appeals Committee established at MOTIPSD/PSI to handle petitions;

• GCNet was connected to more MDAs, border points and other users;

• about 75% of port operations are managed by private sector companies with GPHA maintaining only 25% of stevedoring operations;

• a study of Ghana’s compliance with WTO valuation procedures has been undertaken, based on which a capacity building programme will be organised for CEPS officials;

• CEPS conducted workshops to train its officials in trade facilitation; and

• the Government engaged the services of consultants to carry out a comprehensive review of the excise duty. The rationalisation of the excise tax regime has focused on achieving simplicity in administration and enforcement, ensuring a steady stream of revenue, discouraging tax evasion and smuggling, curtailing the consumption of harmful products and removing the distortions.

Business Registration Reforms:

The Registrar-General’s Reform Strategy aims to provide a customer friendly business registration services which are close to the client either by location or through on-line services. The highlights of activities implemented in 2006 include the following:

• name searches and retrieval of information on registered companies reduced from 2 days to 5 minutes. This has led to marked improvement in processing registration documents from 7 days to about 3 days;

• training of staff in the use of electronic workflows has been completed with businesses registered with the right classification;

• the installation of the network infrastructure has been competed;

• user training in data conversion software was conducted for staff of RGD;

• the RGD gained access to the Tax Identification Number (TIN) Office network and can call up TIN numbers but still these have to inserted on RGD forms manually;

• work on establishment of a customer-friendly front office was commenced and tenders for the construction are currently being evaluated; and

• regional offices in Kumasi and Takoradi have been furnished and staffed, as part of the process of RGD’s decentralisation programme. The two regional branches serve as collection and distribution points and would become fully operation when fully equipped and connected to the Head office via a wide area network.

It is anticipated that when the RGD starts using the electronic registration workflow fully, the turnaround for registration of companies could be reduced further. RGD’s database is to be classified into sectors and sub-sectors, to enable RGD analyze business data on a sector by sector basis and to facilitate information sharing with other MDAs.

Judicial Service Reforms:

The objective of the commercial court reform programme is to ensure speedy dispute resolution of commercial disputes and the enforcement of contracts. The establishment of the commercial court to deal exclusively with business and commercial disputes has recorded significant progress in reducing the number of days it takes to hear and dispose of cases. Alternative Dispute Resolution (ADR) has also been introduced in court procedures as part of the dispute resolution process. The focus of the courts is the restoration of confidence of the business community in the judicial system.

Out of 740 cases filed before the Commercial courts between March 2005 and October 2006, about 42% were related to restructuring of commercial debts, 25% were about banking and financial services; and 14% were about business documents and contracts. The remaining included 5% intellectual property rights cases, 4% other claims of a commercial nature, 3% tax matters and about 10% other cases (including commercial fraud (0-5%), carriage of goods by sea, land or pipeline (3%), applications under the Companies Code (2%)). Activities implemented in 2006 include:

• a review of the rules of the Supreme Court and Court of Appeal;

• training for Commercial Court Judges;

• ICT Training for Commercial Court staff;

• hosting of regional sensitizations workshops for about 220 lawyers and entrepreneurs in the Volta, Greater Accra, Eastern, Central, Western, Ashanti, Brong-Ahafo, Northern, Upper East and Upper West; and

• calling back and clearing the backlog of land cases through “Registrar’s Summons” (advertisements).

Business Law Reform:

Some progress was made in the implementation of the Business Law Reform by the BLD, particularly in the ongoing revision of the Companies Code. The mandate of the Business Law Division (BLD) of the Attorney General’s Office was to research, review and update business laws of Ghana. It is also to disseminate business laws and to liaise with other government agencies in business promotion and development. The institutional review exercise had recommended that the mandate of the Division was too broad and had to be refocused to be able to make an impact given the resources and expertise available in the Division.

Consequently the Business Law Division was scrapped and some of its functions integrated into the Ministry of Justice and Attorney-General during the course of the year. The Business Law programme has been taken up by a programme implementation team in the Ministry. The team is to work with a Committee of Experts to be appointed to draw up a detailed work programme. In addition in 2007 a Senior Programme Manager will be recruited to coordinate and support the implementation of the programme, working in collaboration with relevant MDAs.

Strengthen Firms’ Competence and Capacity

Preparatory activities commenced to conduct a survey on the informal sector and the development of a Business Development Services (BDS) best practice framework, which should provide the basis for productivity related firm-level capacity building interventions in key strategic sectors. This is linked to the areas of intervention already supported under the MSME Project.

Government of Ghana has granted exemptions to 66 active pharmaceutical ingredients to further encourage local pharmaceutical industries to increase the supply of locally produced drugs and support the current National Health Insurance Scheme.

A Micro Credit Fund of US$50.00 million was launched in September 2006 with the establishment of the head office of MASLOC and 9 decentralized regional offices. About ¢154.00 billion was extended as micro credit in 2006 and this has benefited over 103,000 borrowers in various sectors, especially agriculture, fisheries and micro enterprise

Under the Rural Enterprises Project a total of 13 new Business Advisory Centres were established and 376 graduate apprentices supported to obtain the NVTI certificate. The Business Development Services component of the programme organised a total of 69 training sessions and reached out to 1,934 entrepreneurs. Seventy master-craft persons were given skills training, and Business Opportunities Identification Surveys (BOIS) were undertaken in 13 new districts.

Enhance Government Capacity for Private Sector Policy Formulation, Implementation, Monitoring and Evaluation

As part of the processes towards strengthening public-private partnership a public-private dialogue unit was created at the MOTIPSD/PSI in 2006. The unit undertook a number of activities particularly in the area of budget preparation, which led to some far-reaching pro-PSD measures by Government in the 2007 Budget Statement and Economic Policy. These activities were in the form of pre-budget consultations which took the form of:

• - Bi-monthly breakfast meetings with the private sector and selected MDAs

• - Bi-annual Trade and Industry Forums

• - Annual PSD Conference

• - Ghana Investors’ Advisory Council (GIAC) is currently under review.

A Policy Regulatory Impact Assessment (PRIA)/ Programme Intervention Evaluation Template (PIET) tools was approved by government as part of the Central Governance Programme.

Status of Selected Indicators:

Agricultural sector policies under the GPRS II are focused on ensuring: (i) sustainable increase in agricultural productivity and output to support industry and provide stable income for farmers; (ii) food security for all and increase the access of the poor to adequate food and nutrition; and (iii) the development and strengthening of the requisite institutional capacity to support increased productivity.

The key indicators selected to monitor progress towards implementation of policies include:

• the percentage change in the yield of selected traditional crops;

• percentage change in volume of export and the value of non traditional crops;

• percentage of cultivated lands under irrigation;

• the share of credit to agriculture, forestry and fisheries by Deposit Money Banks (excluding cocoa);

• per capita production of key staple foods (crops);

• farm and non-farm household incomes;

• ratio between subsistence crop/livestock and commercial crop/livestock farming; and

• percentage change in agro-processing and agro-business enterprises and micro-enterprises registered.

Key result from a review of the sector performance is as follows:

i. Sustainable Increase in Agricultural Productivity and Output:

The overall agriculture sector growth rate in 2006 has been estimated to be about 5.7% and contributed about 35.8% to the GDP. This was more than the GPRS II target of 5.2%, but less than the growth rate of 6.6% anticipated in the 2006 budget statement. This shortfall has been attributed to the inability of the cocoa sub-sector to achieve the target set under the budget statement, even though the 2005/06 production represents the highest in the history of Ghana.

A total quantity of 740,458 metric tonnes of cocoa was declared purchased at the end of the 2005/2006 season. This represents an increase of 23.0% over the 601,922 metric tonnes achieved in the 2004/05 crop season and surpasses the record production of 736,629 metric tonnes in 2003/04. These consistently high production volumes achieved since 2002/03 are the result of continuous support to the cocoa sector.

The performance of the sector in terms of the yield of the key staples however recorded a decline in 2006, in addition to the fact that the target set for 2006 could not be attained. This situation has been attributed largely to farmers resort to land expansion instead of investing in yield improvement activities (see Box 3.1). Also the value and volume of selected non-traditional export crops showed the same declining pattern except in the case of banana, where the volume exported exceeded its targets in 2006. The export of pawpaw and mango begun to decline in 2005 and has worsened in 2006, while export of pineapple, even though below target, recorded a positive trend since 2005 in both volume and value.

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Area under Cultivation for Major Staples

(2005-2006)

Citation: IMF Staff Country Reports 2009, 237; 10.5089/9781451815023.002.A001

Source: MOFA, 2006

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Available estimates on livestock production show that the rate of growth in the production of the various species has increased by an average of 4% over the 2005 figures (cattle sheep- 3.2%, goat -5%, pigs -3% and poultry- 8.8%), though sufficient data are not available to assess the changes in productivity during the year under review. It is estimated that a total of 1,392, 000 cattle, 3,314,000 sheep, 3,997,000 goat, 477,000 pigs and 34,030,000 poultry were raised in 2006, while a total of 183,099 head and 185,277 head of live animals (cattle, sheep and goats) were imported in 2005 and 2006 respectively. This represents increases of 14.1% and 15.4% respectively over the 2004 levels (160,539 heads base year). The bulk of these imports (about 99.8%) originated from the Sahelian countries of Burkina Faso; Mali and Niger.

Table 3.2a:

Productivity of Crops and Livestock

Source: MOFA, 2006

Table 3.2a:

Productivity of Crops and Livestock

INDICATOR	Target in 2006	Indicator Level at 2004	Indicator Level at 2005	Indicator Level at 2006	Progress towards target
1. Change in yield of selected traditional crops and productivity of livestock.					Targets not achieved Yield of all the selected staple crops declined, except rice.
Maize =	0.39	−0,05	0.01	−0.08
Rice (milled) =	1.17	- 0.03	- 0.02	0.02
Cassava =	0.57	- 0.48	0.56	- 0.56
Yam =	0.49	0.64	0.58	0.11
Plantain =	1.5	0.34	1.61	−0.38
Cocoa =	0.10	Na	0.46	0.46
Poultry =	0.11	Na	0.11	Na
Sheep =	0.05	Na	0.03	Na
Goat =	0.04	Na	0.04	Na
Cattle =	0.01	Na	0.01	Na
2. Percentage change in export volume and value of non traditional crops.					With the exception of volume of the banana exported, non of the targets set for the selected non-traditional crops was not attained
i. Pawpaw
Volume = (3,751,947Kgs in 2004)	200	95.77	−14.40	−54.0
Value = (US$1,226,695 in 2004)	200	66.49	−11.85	−35.0
ii. Mango
Volume = (375,911Kgs in 2004)	400	60.38	8.33	−52.0
Value = (US$163,850 in 2004)	400	51.59	−17.88	−34
iii. Pineapple
Volume = (71,804,617Kgs in 2004)	400	59.05	−74.41	196
Value = (US$13,316,459.48 in 2004)	400	53.49	−42.07	33.0
iv. Banana
Volume = (725,365Kgs in 2004)	1500	99.53	53.94	1,830
Value = (US$208,938 in 2004)	1500	−7.82	119.65	1,291

Source: MOFA, 2006

View Table

Table 3.2a:

Productivity of Crops and Livestock

INDICATOR	Target in 2006	Indicator Level at 2004	Indicator Level at 2005	Indicator Level at 2006	Progress towards target
1. Change in yield of selected traditional crops and productivity of livestock.					Targets not achieved Yield of all the selected staple crops declined, except rice.
Maize =	0.39	−0,05	0.01	−0.08
Rice (milled) =	1.17	- 0.03	- 0.02	0.02
Cassava =	0.57	- 0.48	0.56	- 0.56
Yam =	0.49	0.64	0.58	0.11
Plantain =	1.5	0.34	1.61	−0.38
Cocoa =	0.10	Na	0.46	0.46
Poultry =	0.11	Na	0.11	Na
Sheep =	0.05	Na	0.03	Na
Goat =	0.04	Na	0.04	Na
Cattle =	0.01	Na	0.01	Na
2. Percentage change in export volume and value of non traditional crops.					With the exception of volume of the banana exported, non of the targets set for the selected non-traditional crops was not attained
i. Pawpaw
Volume = (3,751,947Kgs in 2004)	200	95.77	−14.40	−54.0
Value = (US$1,226,695 in 2004)	200	66.49	−11.85	−35.0
ii. Mango
Volume = (375,911Kgs in 2004)	400	60.38	8.33	−52.0
Value = (US$163,850 in 2004)	400	51.59	−17.88	−34
iii. Pineapple
Volume = (71,804,617Kgs in 2004)	400	59.05	−74.41	196
Value = (US$13,316,459.48 in 2004)	400	53.49	−42.07	33.0
iv. Banana
Volume = (725,365Kgs in 2004)	1500	99.53	53.94	1,830
Value = (US$208,938 in 2004)	1500	−7.82	119.65	1,291

Source: MOFA, 2006

In order to track the progress made in enhancing the environment for agricultural productivity and reducing risk associated with agriculture, three main indicators were identified. These are the share of credit to agriculture, percentage of cultivated lands under irrigation, and percentage change in agro-processing and agro-business enterprises and micro-enterprises registered.

Available data indicates that the target for the share of credit to agriculture, fisheries, and forestry (excluding cocoa) in 2006 could not be attained, in addition to the fact that it fell short of the 2005 level by 1.4%. The decline in this indicator began in 2004 and has continued to date, thereby reducing the opportunities for increased investment by the private sector into agriculture.

Similarly the percentage of cultivated lands under irrigation declined marginally in 2006 by 0.05% from the 2005 level and also fell short of the target set for 2006 by 0.12%. Currently, the total cultivated lands under formal irrigation amounts to 14,928 hectares, out of which 82% are in the Greater Accra, Volta and Upper East Regions. However, it is estimated that most of the irrigated area is held by small-scale operators in the non-formal sector, and concentrated around and in urban areas where water is used either from river, wells, drainage and collecting tanks. Available statistics indicate a total developed area of 45,000 ha under non-formal irrigation.

The assessment of progress made towards modernizing agriculture beyond production within the value chain could not be completed due to inadequate data to calculate the percentage change in agro-processing and agro-business enterprises established.

Table 3.2b:

Improving the Environment for Agricultural Productivity

Source: MOFA, 2006

Table 3.2b:

Improving the Environment for Agricultural Productivity

INDICATOR	Target in 2006	Indicator Level at 2004	Indicator Level at 2005	Indicator Level at 2006	Progress towards target
1. Percentage of cultivated lands under irrigation	0.33%	Na	0.26%	0.21%	Target not attained
(Area developed for irrigation/ha)	(23,500)		(19,000)	(14,928.5)	Regional distribution: Ashanti ‒ 188 Brong Ahafo ‒ 236 Central ‒ 386 Greater Accra ‒ 5,147 Northern ‒ 690 Upper East ‒ 3,690 Upper West ‒ 115.5 Volta ‒ 3,463 Eastern ‒ 603 Western ‒ 60 Total ‒ 14,928.5
2. The Share of Credit to Agriculture, forestry and Fishing by Deposit Money Banks (excluding Cocoa)	≥10%	8.1%	6.2%	4.8%	Target not achieved
3. Percentage changed in agro-processing and agro-business enterprises and micro-enterprises established	Na	Na	Na	Na	Data not available to evaluate the indicator

Source: MOFA, 2006

View Table

Table 3.2b:

Improving the Environment for Agricultural Productivity

INDICATOR	Target in 2006	Indicator Level at 2004	Indicator Level at 2005	Indicator Level at 2006	Progress towards target
1. Percentage of cultivated lands under irrigation	0.33%	Na	0.26%	0.21%	Target not attained
(Area developed for irrigation/ha)	(23,500)		(19,000)	(14,928.5)	Regional distribution: Ashanti ‒ 188 Brong Ahafo ‒ 236 Central ‒ 386 Greater Accra ‒ 5,147 Northern ‒ 690 Upper East ‒ 3,690 Upper West ‒ 115.5 Volta ‒ 3,463 Eastern ‒ 603 Western ‒ 60 Total ‒ 14,928.5
2. The Share of Credit to Agriculture, forestry and Fishing by Deposit Money Banks (excluding Cocoa)	≥10%	8.1%	6.2%	4.8%	Target not achieved
3. Percentage changed in agro-processing and agro-business enterprises and micro-enterprises established	Na	Na	Na	Na	Data not available to evaluate the indicator

Source: MOFA, 2006

ii. Food Security and Increase the Access of the Poor to Adequate Food and Nutrition:

An analysis of available data indicates that farm incomes constitute nearly 61% of all household incomes of most farmers in 2006. Data are not available to determine how much changed has occurred between 2005 and 2006, however significant progress has been made to achieve the target set for 2006. Significantly, efforts made at moving towards commercial farming is yielding limited results as the target set to attain subsistence-commercial farming ratio of 2.5 in 2006 could not be met. Instead the subsistence-commercial farming ratio currently stands at 3.16, which has an important implication for the agriculture modernisation effort.

For agriculture to continue to be able to lead growth and poverty reduction, priority efforts to modernize agriculture are 1) to increase the share of commercial agriculture by both expanding farm size and intensifying farm; 2) add value to production by promoting and consolidating the agricultural non farm value chain, in particular the agro-processing and agro-business sector; 3) facilitate timely access to credit and mechanization to motivate increased production and investment in commercial agriculture.

In terms of the per capita production of key staple foods, which is an important indicator of the level of food security, the data indicate that some significant progress was made in 2006 as at least 50% of the selected products exceeded their target. Out of the thirteen selected staple crops, livestock and fish products monitored seven exceeded their respective targets, while five of all the products fell short of the 2005 levels, though two of these have achieved their targets.

Table 3.2b:

Farm Household Incomes and Food Security

Source: MOFA, 2006

Table 3.2b:

Farm Household Incomes and Food Security

INDICATOR	Target in 2006	Indicator Level at 2004	Indicator Level at 2005	Indicator Level at 2006	Progress towards target
1. Per capita production of key staple foods (crops), livestock and fish; (in kg/Annum, except * which is in live animal/annum)
Maize =	45.0	55	55	54	At least 50% of target attained (Five out of eight selected staple crops, and two out of five of the selected livestock and fish products exceeded their respective targets)
Rice (milled) =	25.0	7	11	11
Sorghum =	15.0	14	14	14
Millet =	8.0	7	9	7
Cassava =	400.0	464	445	436
Yam =	180.0	185	182	194
Plantain =	110	113	130	131
Cocoa =	21.0	Na	15.3	33.5
Poultry* =	1.7	Na	1.49	1.52
Sheep* =	0.17	Na	0.16	0.15
Goat* =	0.21	Na	0.20	0.18
Cattle* =	0.07	Na	0.07	0.63
Fish =	0.022	Na	0.21	0.29
2. Farm Household incomes	60%	-	-	61%	Target exceeded in 2006
Non-farm Household income	40%			39%
3. Ratio between subsistence crop/livestock and commercial crop/livestock farming	2.5	-	-	3.16	Target not achieved

Source: MOFA, 2006

View Table

Table 3.2b:

Farm Household Incomes and Food Security

INDICATOR	Target in 2006	Indicator Level at 2004	Indicator Level at 2005	Indicator Level at 2006	Progress towards target
1. Per capita production of key staple foods (crops), livestock and fish; (in kg/Annum, except * which is in live animal/annum)
Maize =	45.0	55	55	54	At least 50% of target attained (Five out of eight selected staple crops, and two out of five of the selected livestock and fish products exceeded their respective targets)
Rice (milled) =	25.0	7	11	11
Sorghum =	15.0	14	14	14
Millet =	8.0	7	9	7
Cassava =	400.0	464	445	436
Yam =	180.0	185	182	194
Plantain =	110	113	130	131
Cocoa =	21.0	Na	15.3	33.5
Poultry* =	1.7	Na	1.49	1.52
Sheep* =	0.17	Na	0.16	0.15
Goat* =	0.21	Na	0.20	0.18
Cattle* =	0.07	Na	0.07	0.63
Fish =	0.022	Na	0.21	0.29
2. Farm Household incomes	60%	-	-	61%	Target exceeded in 2006
Non-farm Household income	40%			39%
3. Ratio between subsistence crop/livestock and commercial crop/livestock farming	2.5	-	-	3.16	Target not achieved

Source: MOFA, 2006

Key Policy Measures and Strategies

The attainment of the overall objective of the Growth and Poverty Reduction Strategy (GPRS II) is anchored in the agricultural sector showing strong growth. The following policy interventions were prioritised for implementation during the year under review.

Crops Sub-Sector

The Grains and Legumes Development Board (GLDB) under the National Seed Support Service produced 55 mt of foundation seed maize, processed 500 mt of certified maize seed, 8 mt of sorghum and 25 mt of rice foundation seeds for planting; while another 200 mt of maize grains was processed for storage. In the North, three warehouses were established at Tamale and Yendi for grain storage.

The Inland Valley Rice Development Project extended credit to 905 farmers, in addition to providing technical support to farmers in the areas of land and water management techniques in the 17 project districts. 850 farmers with average holding of 0.4 ha were assisted to plant 340 hectares of rice under the Nerica Rice Dissemination Project.

The Irrigation Company of the Upper Region (ICOUR) facilitated the production of 200 tons of paddy rice seed, 1,800 tons of rice grains and also cropped 220 hectares of millet and 34 hectares of soybeans at its Vea and Tono dam sites. In addition, the Ministry assisted farmers in the North in land preparation and supply of seeds for the establishment of 10,000 hectares of cotton.

Legumes

GLDB produced foundation seeds to enhance farmers’ access to viable and high yielding leguminous seeds in the minor rainy season. As a result, 20 mt of foundation seed groundnuts was produced to enable farmers’ access rosette resistant groundnut seeds. Also 1,572 hectares of cashew fields was established with the assistance of the Cashew Development Project, while 9,000 unproductive cashew trees (90 hectares) within the 10 Project Districts were stumped and grafted with scion materials taken from trees with desirable characteristics to increase yields.

In collaboration with the Crop Research Institute (CRI), technological packages were developed to enhance cashew production. The packages include vegetative propagation techniques, development of a strategy for canopy substitution and control of cashew diseases.

Root and Tubers

Under the Root and Tubers Improvement and Marketing Programme 40 trained farmers were supplied with 10,000 mother yams for multiplication into minisetts for planting. The GLDB produced 100,000 units of yam setts at the Kintampo and Ejura nurseries.

To reduce the risk associated with over-dependence on rainfall for agriculture purposes, nine irrigation schemes located in various parts of the country are currently being rehabilitated. A total of 1,896 ha of irrigable land will be made available for the cultivation of maize, vegetables and rice upon the completion of the rehabilitation programme.

Horticulture

The rehabilitation of Shed 9 at Tema Port under the Horticultural Export Industry Initiative (HEII) and the implementation of the Export Marketing Quality Awareness Project in four regions namely, Greater Accra, Eastern, Central and Volta Regions has taken off. GLDB also produced about 15,000 citrus seedlings for sale to farmers.

Another initiative is the distribution of about 1.8 million MD2 pineapple plantlets to smallholder farmers through the collaborative rapid sucker multiplication scheme. The scheme aims at enhancing access of smallholders to the MD2 variety that is currently in high demand on the export markets.

Livestock Sub-Sector

To boost livestock production, fodder banks were established under the Livestock Development Project to ensure the availability of fodder for livestock, in addition to carrying out a reconnaissance survey of 44 selected dugout sites and 28 selected boreholes sites.

Three training sessions for 3,500 farmers in 33 Districts were conducted to strengthen farmers capacity to identify, prevent and control such diseases like new castle, rabies, African swine fever and foot and mouth disease.

To effectively control an endemic poultry disease such as new castle in rural poultry about 2.5 million I₂ vaccines were produced by the Veterinary Central Laboratory at Pong Tamale and over 700,000 rural poultry were treated with the product.

A total of 80 Farmer Based Organizations were strengthened to enable them access business development services including credits and grants. Research Extension Liaison Committees (RELCs) involving farmers were strengthened through their participation in planning sessions and on-farm adaptive trials.

The Cocoa Industry

A total of 358 km of feeder roads were rehabilitated at a total contract cost of ¢92.7 billion in the cocoa growing areas of Ashanti, Brong Ahafo, Central and Western regions.

The Cocoa Diseases and Pests Control Programme continued with a total expenditure of ¢564.9 billion during the year. In total, 742,213 cocoa farms and 514,361 cocoa farmers had their farms sprayed with either fungicides or insecticides against the black pod disease and capsid respectively. The programme employed 50,765 youth from local communities within the six cocoa growing regions for the spraying exercise. The total area covered was 1,948,101 hectares made up of 800,000 hectares under the black pod control and 1,148,101 hectares under the capsid control.

To assist cocoa farmers acquire houses, the government through the Ghana Cocoa Board voted an amount of ¢5.0 billion as seed fund for a housing scheme and accordingly released ¢1.0 billion out of the fund for the commencement of the pilot phase in the Western Region. The Department of Rural Housing has started the construction of 10 houses, which are all three bedroom units with the necessary amenities and rain water harvesting system. The 10 houses are being built in three townships in three Districts of the Western Region namely, Enchi in the Aowin-Suaman Distrct, Afranse in the Wassa Akropong District and Yawmatwa in the Bia District.

Government partnered the Agricultural Development Bank (ADB) to successfully launch in September, 2006 a special package for cocoa farmers under the “ADB Farmers Golddrive” aimed at assessing cocoa farmers as well as other farmers acquire means of transport.

Dissemination of Technology

Through support under AgSSIP funding, sixty-four technologies were released by research to the Extension Services Directorate of MOFA for dissemination to farmers during the year 2006. A total of 41 technologies were demonstrated by DADU/RADU throughout the regions, made up of 15 technologies for crops, 13 for livestock, six for fisheries and seven for other technologies.

Also the following technologies were disseminated in all regions, each one benefiting more than 20,000 farmers: i) row planting for optimum production; ii) correct use of agro chemical; iii) improved crop varieties; iv) seed planting material production and multiplication technique; v) pest/disease recognition; vi) post harvest of food grain; and vii) soil fertility improvement and management.

Mechanisation and Equipment

Tractors and tillers for land preparation were distributed to farmers during the year. Other agricultural equipment distributed to farmers included 55 units of 20 MT ProCocoon storage facilities. The beneficiaries were trained in the use of and basic maintenance practices on the distributed equipment and machinery. Due to lack of funds, the planned rehabilitation of the five animal traction centres were not be implemented. Out of the new 1,000 boreholes planned for 2006, only 20 boreholes were drilled and eight were equipped.

Status of Selected Indicators:

To reduce overdependence on marine fisheries which has reached optimum sustainable yield, the focus of policies under this broad area included: (i) the development of aquaculture infrastructure including fish hatcheries; (ii) promote private investment in aquaculture; and (iii) utilize irrigation systems and other impounded reservoirs for aquaculture; and ensure value addition of fisheries products to improve fisheries contribution to Ghana’s GDP.

The key indicators selected to monitor progress towards the attainment of the objectives, in this regard, include:

• total fish production;

• quantity of fish produced per hectare of pond per year; and

• total surface of pond/cage/pen under fish farming

Indicators selected in this policy area were to track; (i) trends in fish production in the country, (ii) level of productivity in aquaculture, and (iii) trends in aquaculture development. Analysis of the data shows that the marine fisheries sub-sector has started showing signs of recovery, recording an estimated 3.6% growth in 2006 following a decline in 2005. Total surface water under fish farming increased from 231.4 ha in 2005 to 508.58 ha in 2006, thereby exceeding its target in 2006. However the quantity of fish produced per hectare of pond per year stagnated at 1.5tons/ha/yr, falling short of its target in 2006. Over the same period the production of fish from ponds accounted for about 19.877 mt in 2006 (with nearly 90% coming from the Ashanti and Eastern regions alone), while culture based fisheries accounted for 18.54 mt.

Table 3.3:

Fisheries and Aquaculture Development

Source: MOFI, 2006

Table 3.3:

Fisheries and Aquaculture Development

INDICATOR	Target in 2006	Indicator Level at 2004	Indicator Level at 2005	Indicator Level at 2006	Progress towards target
2. Total Fish Production (mt)
a. Marine	Na	352405.19	322,789.48	334,409.9	No Initial target for assessment
b. Inland Capture fisheries	Na	Na	Na	14,481	Regional distribution (Kg):
c. Harvesting of Ponds	Na	3,500	6,900	19.877	Ashanti ‒ 9,378.1 Brong Ahafo ‒ 1,167.5 Central ‒ 376.36 Greater Accra ‒ Nil Northern ‒ Nil Upper East ‒ Nil Upper West ‒ Nil Volta ‒ Nil Eastern ‒ 8,411 Western ‒ 544 Total ‒ 19,876.96
d. Import	Na	Na	166,003.1	165,559.7
3. Quantity of fish produced per hectare of pond per year	2 Tons/ ha/yr	1.3	1.5	1.5	Target not attained
4. Total surface water Area under fish farming	250ha	200	231.4	508.58	Target exceeded Disaggregations: Total # of Ponds = 3,472 Functional ponds = 3,234 Total # of farmers = 1,597

Source: MOFI, 2006

View Table

Table 3.3:

Fisheries and Aquaculture Development

INDICATOR	Target in 2006	Indicator Level at 2004	Indicator Level at 2005	Indicator Level at 2006	Progress towards target
2. Total Fish Production (mt)
a. Marine	Na	352405.19	322,789.48	334,409.9	No Initial target for assessment
b. Inland Capture fisheries	Na	Na	Na	14,481	Regional distribution (Kg):
c. Harvesting of Ponds	Na	3,500	6,900	19.877	Ashanti ‒ 9,378.1 Brong Ahafo ‒ 1,167.5 Central ‒ 376.36 Greater Accra ‒ Nil Northern ‒ Nil Upper East ‒ Nil Upper West ‒ Nil Volta ‒ Nil Eastern ‒ 8,411 Western ‒ 544 Total ‒ 19,876.96
d. Import	Na	Na	166,003.1	165,559.7
3. Quantity of fish produced per hectare of pond per year	2 Tons/ ha/yr	1.3	1.5	1.5	Target not attained
4. Total surface water Area under fish farming	250ha	200	231.4	508.58	Target exceeded Disaggregations: Total # of Ponds = 3,472 Functional ponds = 3,234 Total # of farmers = 1,597

Source: MOFI, 2006

Key Policy Measures and Strategies:

In pursuit of the policy objectives of the fisheries sub-sector the following measures were implemented in 2006:

• draft fisheries regulations intended to give effect to the Fisheries Act, Act 625 of 2002 to streamline activities in the fishing industry were prepared for parliamentary approval. Also a series of training courses in fish farming was organised for 280 people selected from all regions in the country;

• five community dams in the Upper West Region (Zinni, Boti, Kupulma, Kokoli and Nimoro) covering 21hectare were stocked with 824,354 fish species, which are made up of Oreochromis niloticus, Heterotis spp, Auchenoglanis occidentalis, Sarotherodon galileus, and Tilapia zilli;

• Two public hatcheries in Ashaiman and Cadbury Hall were very active during the year under review, while most of the private hatcheries also produced fry and fingerlings for sale to farmers all over the country. By the end of the year, Ashaiman had produced 220,288 fingerlings of Oreochromis niloticus out of which 167,288 had been sold to fish farmers, 327, 000 catfish fry, had been produced by MOFI at Cadbury Hall in Kumasi for farmers. Two main private hatcheries in the Ashanti Region, Kumah Farms and Gyan-Fosu farms produced a total of 84,000 fingerlings/fry of tilapia and clarias for stocking;

• agreement for the training of two small scale fingerling producers in all regions was concluded in Kumasi;

• training of fish farmers which started in 2005 at the Kumah Farms Complex continued with the development of fish farming skills of 300 youth, drawn from the Central, Eastern, greater Accra, Brong Ahafo, Northern, Upper West, Upper East and Volta regions;

• pond construction gangs were also trained at Assin Kumasi in the Central region, of which 15 of the participants were drawn from the nearby villages, and 13 were prison officers from the various prison camps. The programme was also used to demonstrate and train sixteen prisoners in practical pond construction;

• a needs assessment was conducted for the Wassa West Fish Farmers Association (WWFFA) to provide financial assistance for members to expand operations and complete cold storage facility, undertake study tour for commercial for farmers, training in various aspects of fish farming and the acquisition of earth moving machines for pond construction;

• the process to rehabilitate the hatchery at Ashaiman begun with the signing of contract during the year under review. The Water Research Institute was also awarded a contract for the completion of the Dormaa Ahenkro Fish hatchery, while advertisement for expression of interest by consultants in the development of a reservoir and canals for the Wassa West Fish Farmers Association at Tarkwa was posted in the national dailies.

• sea trials of the trammel net were conducted in the Western and Greater Accra regions from inshore vessels during the year under review of which;

  • - mean catch rates off Tema (Eastern part of shelf) was approximately 1.36kg/hour

  • - mean catch rates off Sekondi (Western part of shelf) was approximately 2.0kg/hour

A total of 338 outboard motors costing ¢7.842 billion were also distributed to fishermen under a special credit scheme (known as work and pay tools) to enhance fishing in the country. The Ministry of Fisheries through the Rural Banks also advanced a ¢4.0 billion Micro-credit support to 3,000 fish processors, to enhance the processing, distribution and marketing of fish, while a Spanish grant was obtained for the establishment of cold storage and fish processing facilities at James Town, Mumford, New Takoradi, Moree, Shama, Winneba, Senya Bereku, Nyanyano and Teshie, in collaboration with the private sector.

Status of Selected Indicators:

The focus of the medium term policy under this broad area is to (i) secure the current natural resources through the promotion of sustainable natural resource management practices and the restoration of degraded natural resources, (ii) improve the environmental and natural resource governance through the building of the requisite institutions and strengthening of the regulatory framework; (iii) ensure that benefits are equitably distributed to resource owners; and (iv) take advantage of opportunities existing under the various regional and global arrangements to build the linkages toward the management of natural resources.

To track progress towards implementation, the following indicators were selected:

• cost of environmental degradation as a ratio to GDP (lands, forests, fisheries);

• rate of deforestation;

• number of Timber Utilisation Contracts (TUCs) awarded;

• number of Social Responsibility Contracts (SRC) signed;

• percentage change in resource spent on Corporate Social Responsibility, including alternative livelihood programmes;

• hectares of degraded forest, mining, dry and wet lands rehabilitated/restored;

• proportion of timber royalties going to resource owners; and

• time taken to register land.

A review of the data shows limited progress in most of the indicators. The cost of environmental degradation keeps increasing, accounting for nearly 6% of GDP in 2006 (up from 5.5% in 2005), while hectares of degraded forest, mining, dry and wet lands rehabilitated or restored is not keeping pace with targets. The number of timber utilisation contracts awarded through competitive and transparent process in the area of natural forest and plantation timber also fell short of both the target and the 2005 level, while the number of social responsibility agreements (SRAs) signed followed the same pattern. Out of 103 SRAs (Consist of 67 for natural forest and 36 for plantation), only 18 could be signed (consisting of 4 for natural forest and 14 for plantation).

Significant progress has been made with respect to the proportion of timber royalties going to resource owners in both on-reserve and off-reserve areas in 2006. Also the time taken to register land improved significantly during the year, reducing from 12months in 2005 to about 7months in 2006. This has been attributed largely to the establishment of deed registries in Sekondi, Koforidua, Sunyani and Tamale.

Table 3.4:

Restoration of Degraded Environment and natural Resource Management

Source: MLFM, 2006

Table 3.4:

Restoration of Degraded Environment and natural Resource Management

INDICATOR	Target in 2006	Indicator Level at 2004	Indicator Level at 2005	Indicator Level at 2006	Progress towards target
1. Cost of environmental degradation as a ratio to GDP (lands, forests, fisheries)	5%	Na	5.5%	6%1	Target not achieved
2. Rate of deforestation	(−1.3%) <10,00 ha/annum	65,000 ha/annum	Current Forest = 5,517,000ha (−1.7%)	Na	Statistics on current rate of deforestation not available
3. Number of Timber Utilisation Contracts (TUCs) awarded
a. Natural Forest:	167 Consists of: Conversion to TUC’s = 100 Ratified TUC’s = 42 Next Comp. Bidding (Nat. Foests) = 25		6 TUCs signed and ratified by parliament	4 TUCs signed and ratified by parliament	Target not achieved
b. Plantation:	36	17 Plantation TUCs signed	Na	16 TUCs signed	Target not achieved Competitive bidding for 27 TUCs of plantation timber to be held by end of march, 2007
4. The number of Social Responsibility Contracts (SRC) signed	103 Consist of: SRA (Nat. Forests) = 67 SRA (Plantation) = 36	53 Consist of: Nat. Forest replacement = 36 SRA (Plantation) = 17	8 Consist of: SRA (Nat. Forests) = 6 SRA (Plantation) = 2	18 Consist of: SRA (Nat. Forests) = 4 SRA (Plantatio n) = 14	Target not achieved Stakeholder consultation are on-going to facilitate the signing of SRAs
5. Hectares of degraded forest, mining, dry and wet lands rehabilitated/ restored
a. Forest	20,000 ha	16,000ha	16,800ha	17,500ha	Target not achieved due to limited financial resource
b. Mining	238ha by 2009	168ha	Na	Na	Data not available to assess progress. Technical document developed for labour intensive physical reclamation
6. Proportion of timber royalties going to resource owners	50:50 for on-reserve royalties (i.e. 50% for forestry commission and 50% for resource owners)	60:40	60:40	50:50	Target achieved (The sharing of royalties from timber resources have been reviewed in favour of resource owners both on- and off-reserve. Currently, the Forestry Commission receives 50% of timber royalties from forest reserves while the resource owners also receive 50%)
	40:60 for off-reserve royalties	60:40	40:60	40:60	Target Achieved (Similarly, the sharing of royalties outside forest reserves is now 40% for the Forestry Commission and 60% for the resource owners)
7. Statistical Overview of the Mineral Sector
a. Mineral Production
Gold (thousand ounces)	2,500	2,029.97	2,138.94	2,423.27	Significant progress made toward target
Diamonds	1,000.0	905.34	1,065.92	967.86
Bauxite	760.00	498.06	606.70	753.32
Manganese	1,800.00	1,597.09	1,719.59	1,607.178
b. Labour
Large Scale	22,000	21,505	21,916	21,950	Significant progress made toward target
Small Scale (legal & illegal)*	600,000	500,000	540,000	570,000
c. Foreign Direct Investments (in million U.S. $)	1,000	665.86	744.050	900.0	Significant progress made toward target
d. Mineral Rights Granted (Mining Lease, Prospecting, Reconnaissance, Salt, Quarry, Clay, Sand Winning, Small Scale Gold/Diamond, Mica)	200	131	152	189	Significant progress made toward target
7. Time to register land	8mths	36 mths	12 mths	7 mths	Target exceeded (The drastic reduction is due to the establishment of deed registries in four areas Sekondi, Koforidua, Sunyani and Tamale).

Source: MLFM, 2006

View Table

Table 3.4:

Restoration of Degraded Environment and natural Resource Management

INDICATOR	Target in 2006	Indicator Level at 2004	Indicator Level at 2005	Indicator Level at 2006	Progress towards target
1. Cost of environmental degradation as a ratio to GDP (lands, forests, fisheries)	5%	Na	5.5%	6%1	Target not achieved
2. Rate of deforestation	(−1.3%) <10,00 ha/annum	65,000 ha/annum	Current Forest = 5,517,000ha (−1.7%)	Na	Statistics on current rate of deforestation not available
3. Number of Timber Utilisation Contracts (TUCs) awarded
a. Natural Forest:	167 Consists of: Conversion to TUC’s = 100 Ratified TUC’s = 42 Next Comp. Bidding (Nat. Foests) = 25		6 TUCs signed and ratified by parliament	4 TUCs signed and ratified by parliament	Target not achieved
b. Plantation:	36	17 Plantation TUCs signed	Na	16 TUCs signed	Target not achieved Competitive bidding for 27 TUCs of plantation timber to be held by end of march, 2007
4. The number of Social Responsibility Contracts (SRC) signed	103 Consist of: SRA (Nat. Forests) = 67 SRA (Plantation) = 36	53 Consist of: Nat. Forest replacement = 36 SRA (Plantation) = 17	8 Consist of: SRA (Nat. Forests) = 6 SRA (Plantation) = 2	18 Consist of: SRA (Nat. Forests) = 4 SRA (Plantatio n) = 14	Target not achieved Stakeholder consultation are on-going to facilitate the signing of SRAs
5. Hectares of degraded forest, mining, dry and wet lands rehabilitated/ restored
a. Forest	20,000 ha	16,000ha	16,800ha	17,500ha	Target not achieved due to limited financial resource
b. Mining	238ha by 2009	168ha	Na	Na	Data not available to assess progress. Technical document developed for labour intensive physical reclamation
6. Proportion of timber royalties going to resource owners	50:50 for on-reserve royalties (i.e. 50% for forestry commission and 50% for resource owners)	60:40	60:40	50:50	Target achieved (The sharing of royalties from timber resources have been reviewed in favour of resource owners both on- and off-reserve. Currently, the Forestry Commission receives 50% of timber royalties from forest reserves while the resource owners also receive 50%)
	40:60 for off-reserve royalties	60:40	40:60	40:60	Target Achieved (Similarly, the sharing of royalties outside forest reserves is now 40% for the Forestry Commission and 60% for the resource owners)
7. Statistical Overview of the Mineral Sector
a. Mineral Production
Gold (thousand ounces)	2,500	2,029.97	2,138.94	2,423.27	Significant progress made toward target
Diamonds	1,000.0	905.34	1,065.92	967.86
Bauxite	760.00	498.06	606.70	753.32
Manganese	1,800.00	1,597.09	1,719.59	1,607.178
b. Labour
Large Scale	22,000	21,505	21,916	21,950	Significant progress made toward target
Small Scale (legal & illegal)*	600,000	500,000	540,000	570,000
c. Foreign Direct Investments (in million U.S. $)	1,000	665.86	744.050	900.0	Significant progress made toward target
d. Mineral Rights Granted (Mining Lease, Prospecting, Reconnaissance, Salt, Quarry, Clay, Sand Winning, Small Scale Gold/Diamond, Mica)	200	131	152	189	Significant progress made toward target
7. Time to register land	8mths	36 mths	12 mths	7 mths	Target exceeded (The drastic reduction is due to the establishment of deed registries in four areas Sekondi, Koforidua, Sunyani and Tamale).

Source: MLFM, 2006

Key Policy Measures and Strategies:

Status of Selected Indicators:

As part of the strategic growth framework of the GPRS II, the trade and industry sector was expected to play a complementary role, as well as act as catalyst towards the long term objective of an agro-industrial economy. Within this strategic objective, policy interventions implemented in the sector are expected to: (i) ensure proper integration of the nation’s production sector into the domestic market, (ii) enhance access to export markets, (iii) increase industrial output and improve the competitiveness of domestic industrial products, (iv) strengthen the legal, regulatory and institutional framework to support industrial production and trade, and (v) ensure the health, safety and economic interest of consumers. In this regard, the following key indicators were selected to monitor progress towards implementation of the policies:

• percentage change in value of non-traditional exports (NTE);

• average number of days for clearing goods from the nations ports;

• manufacturing value added share in GDP;

• share of manufacturing in total export;

• composite index of competitive industrial performance (CIP); and

• time taken to get duty drawback

Out of these five indicators, two exceeded their targets in 2006, while the status of the remaining could not be determined due to inadequate data or lack of initial target. The total value of non-traditional export amounted to U.S$892.88 million in 2006, constituting an increment of about 15% over the previous year’s figure of U.S$777.59, thereby exceeding the 10% target set for 2006. Subsequently the share of manufacturing in total export has also seen a significant improvement over the 2005 figure of 1.3%. However the manufacturing value added share of GDP declined in 2006, constituting only 8.8% compared to the 8.9% observed in 2005.

On the other hand, the average number of days for clearing goods from the nation’s ports improved from 4 days in 2005 to 2 days in 2006, thereby exceeding its target for 2006. The status of indicators on the time taken to get duty drawbacks as well as the composite index of competitive industrial performance (CIP) could not be adequately analysed because of lack of data.

Table 3.5:

Promotion of Trade and Industrial Development

Source: MOTIPPSI, 2006

Table 3.5:

Promotion of Trade and Industrial Development

INDICATOR	Target in 2006	Indicator Level at 2004	Indicator Level at 2005	Indicator Level at 2006	Progress towards target
1. Percentage change in non-traditional exports (NTE) = (Value in Million US$)	10%	16.5% (705.0)	10.3% (777.59)	15% (892.88)	Target exceeded
2. Average number of days for clearing goods from the nations ports	3days	7days	4days	2days 6 hours at the airports	Target exceeded
3. Industrial Sector performance:
a. Manufacturing value added share in GDP	Na	9.0%	8.9%	8.8%	Baseline target not available, but results are mix compared to previous year.
b. share of manufacturing in total export	Na	1.6%	1.3%	14.2% (Prov.)
4. Time Taken to get duty drawback	6wks	Na	6mnths	Na	Lack of data to evaluate indicator

Source: MOTIPPSI, 2006

View Table

Table 3.5:

Promotion of Trade and Industrial Development

INDICATOR	Target in 2006	Indicator Level at 2004	Indicator Level at 2005	Indicator Level at 2006	Progress towards target
1. Percentage change in non-traditional exports (NTE) = (Value in Million US$)	10%	16.5% (705.0)	10.3% (777.59)	15% (892.88)	Target exceeded
2. Average number of days for clearing goods from the nations ports	3days	7days	4days	2days 6 hours at the airports	Target exceeded
3. Industrial Sector performance:
a. Manufacturing value added share in GDP	Na	9.0%	8.9%	8.8%	Baseline target not available, but results are mix compared to previous year.
b. share of manufacturing in total export	Na	1.6%	1.3%	14.2% (Prov.)
4. Time Taken to get duty drawback	6wks	Na	6mnths	Na	Lack of data to evaluate indicator

Source: MOTIPPSI, 2006