Ghana is officially known as the Republic of Ghana, is one of the most important countries in West Africa. Ghana is located near the Golf of Guinee and the Atlantic Ocean, and it is spread on a surface of 238,535 km² with a population of almost 28 million people, Ghana is dependent on a lot of imports and exports. The neighbors of this African country are Ivory Coast, Burkina Faso, and Tago but the fact that is near the ocean makes it an important geopolitical area as well. Ghana economic growth is becoming more and more noticeable from one year to another.
This country represents the second most economically developed country in West Africa, and it keeps getting better. It represents a positive example for other African countries, and it also creates new opportunities for international trading. Let’s see how the economy of Ghana reached this high level and how they discovered the recipe for success!
A Great Economy Is Based On Great Import-Export Business
The economy of Ghana was built step by step by developing the import-export business department at a national and international level. You might wonder what types of exports helped boost Ghana’s economy so much and the answer is simple: cocoa, gold, and oil. Exports of oil, gas, and cocoa represent 75 percent of the entire exports sustained by Ghana. Cocoa is the main crop cultivated in Ghana, and it is a high success regarding import-export businesses. Locals consume a lot of cocoa as well in more than one form. They incorporate it into beauty products and different lotions meant to take care of the skin but also enhance beauty.
This country is blessed with such resources, and it can sustain many others by exporting them wisely all over the world. The entire planet needs gold and oil, and cocoa is becoming popular as well. People use cocoa raw or as part of chocolate recipes, and different dishes and they are looking to get it cheap and in large quantities. These aspects work in favor of Ghana’s economy and national development.
When it comes to how developed is Ghana compared to other countries, the differences tend to be pretty significant, and they all work in favor of Ghana. Ghana is doing great at exploring their opportunities while other African countries are in poverty mainly because the lack of resources that they can explore or the lack of funds.
Ghana economy is in a continuous development thanks to other factors as well. The country is based on a democratic system and free elections which allows it to have different approaches when it comes to international trading and having a booming economy.
The import-export trades made on Ghana’s market brought the GDP of the country to be increased by 15 percent in 2011 and 7.9 percent in 2012. And the growth continued in the following years with hopes for even a better economy in the next decade. Ghana GDP is supposed to be highly maintained by foreign investments as well as import-export trades which should bring the country a high level of economic stability.
The local plans of the government in Ghana include developing different services and increasing the production of oil and gas. If these plans are successful, the country will be able to increase the number of international trades and become an important economic factor on the international market. With such indicators of economic development, it is no surprise that locals have high expectations when it comes to Ghana’s future economy.
But even if Ghana is enjoying a growing economy and a full development, its external debt remains unpaid and even increased from one year to another. The fiscal deficit reached almost 11.5% of GDP in 2012, and this can have tremendous consequences for the country. The main reason is that the government is investing in the public sector and the production of oil and gas with hopes of a better economy. While this works locally, it doesn’t make Ghana have an easy fiscal future based on such political decisions. This deficit is not a new one either.
Ghana has been in debts for the past decade mainly in front of capital imports. The weakened currency of Ghana modified the price of imports by increasing them, and this had a direct effect on the local level of inflation which increased as well. Ghana’s central bank is still fighting to maintain a good functionality by increasing interest rates by 15 percent while they are struggling with the weak currency. But even if such aspects don’t reflect the great economy that Ghana seems to have, it is all due to bad management of the funds when it comes to investing in different sectors within the country.
Ghanaians are not as poor as you might think
The economic growth had a direct impact on the citizens of Ghana who until some years ago lived in tremendous poverty. Nowadays, the poverty was reduced to less than 30 percent of the entire population which is a significant change. People live in ways that afford them to feed their family and even educate their children.
Even if certain services and items are still considered luxury ones, Ghana can safely say it reached a level of development that allows its people to live a decent life. Even if 52 percent of people in Ghana live with less than 2 USD per day, things used to be a lot worse in the history of the country.
Since the local economy started to grow, a middle class appeared as well, formed of people who are not extremely poor, but they can’t be considered rich either. One in four people is now living with around 4 USD at a minimum and 20 USD at maximum per day. Considering that prices are also kept lower than in other countries, and many people live in the rural environment, this is not exactly as bad as it sounds.
Increasing the level of life for the population in Ghana has a direct effect on credits and loans offered by local banks. People afford to invest in personal projects such as building a house or save money using the banking system. And things could get even better shortly. When we talk about Ghana, we talk about millions of people struggling to enjoy a better life and develop their opportunities within their home country.
Ghana Economic Outlook is Very Promising
When it comes to the future, analysts and politicians are optimistic about Ghana economic outlook, and they even expect to become one of the richest countries in Africa. Since Ghana is connected to the Atlantic Ocean, even more, import-export opportunities could be developed based on its geo-economical position. Ports will be developed to support international trading and facilitate foreign exporters to break into Ghana’s market. Ghana facts show an increased interest in the development of these shores and the sector of transportation of different goods through the ocean.
The government already allocates funds to support these types of developments and increase the potential of the area. Port of Takoradi is one of the more important ports in Ghana and the Ghana Ports and Harbours Authority is trying to find new ways to make it compete with greater international ports. It will not only facilitate import export trades but also increase the number of jobs for locals that need a salary to maintain their families.
Port of Saltpond, Port of Elmina and Port of Tema are the other three major ports of Ghana, responsible for a variety of trades and uncommercial transports. Developing these ports will also increase the level of fishing as a rising industry in Ghana and a new opportunity for exports.
But the best outlook when it comes to Ghana’s economy is based on exploring other goods and products that can be exported to foreign countries all over the world. Ghana is rich in gems, minerals and different crystals that need to be explored and sold to other countries including the United States.
The government made an economic plan known as “Ghana Vision 2020” which is implemented to support the local economy and the country’s relationships with other areas. Against its name, the plan is spread over a timeframe between 2020 and 2029 and has a main goal of transforming the country into the most developed African country. Even farther than that, the government hopes to make Ghana a highly industrialized country by 2039.
Ghana’s economy is similar to Taiwan’s economy regarding a digital market. The digital technology goods are a new trend on the African market and even more so in Ghana. Exporting such devices brings a lot more income than exporting other common goods but also the production implies more investments. Industrial minerals are another trend that increases the economy of Ghana especially because they can be found as natural resources and they need minimal investment. Some minerals are even specific to Ghana’s market, and that increases their value on the international market.
The real estate market of Ghana became an important factor and contributor to the local economy. Especially in the urban areas of the country where people need to buy or build houses and establish offices which keeps the fund circulating on the market. Foreign construction companies are also tempted to invest in the real estate market in Ghana because they see the great perspectives that it offers.
Accra, Kumasi, Sekondi-Takoradi, and Tema are the most developed urban areas in south Ghana, and there are plenty of opportunities in areas like these which can have a direct impact on the country’s economy. The main advantages that help the real estate market of Ghana are the tropical climate and the political stability which allows plenty of investments in this field. The government is supporting the private sector of constructions and housing, which leaves space for the development of the entire industry, for both the benefit of the people and private companies.
When it comes to the level of corruption in Ghana, there is still work to be done in this field. Transparency International’s Corruption Perception Index placed Ghana on position 63 out of 177 countries which are not drastic but is not a positive outcome either. Ghana ranked similarly to Saudi Arabia and Cuba regarding corruption.
Interesting Facts about Ghana
An interesting fact about Ghana is that it was the first African country to launch a mobile cellular network in 1992. It was a complete revolution regarding technology for the locals and contributed to future economic aspects of the country.
In the past years, local bureaucracy was reduced in a significant way which made it easy for foreigners to open their businesses in Ghana and develop serious investments. Unlike other African countries, Ghana also facilitated the import-export process by simplifying the documents needed in the legal aspect of it.
The local government is determined to eliminate the majority of taxes regarding fuel, and even all of them shortly. This measure would be somewhat risky but also unique in a positive way especially for people living in Ghana.
The surface that Ghana is spread on is smaller than Oregon, but that doesn’t make the country less important and with fewer chances of development. Its population is not a significant one compared to other African countries, but it does very well regarding production and development. The capital City of Ghana in Accra, and it has a population of approximately 2.273 million people, being a highly industrialized area compared to other African cities.
Akuapem Twi, Asante Twi, Dagaare, Dagbani, Dangme, Ewe, Ga, Gonja, Kasem, Fante, Nzema, Wasa, Talensi, Frafra are the main languages spoken in Ghana. But the official language remains English which makes it easy for foreigners to visit the country and even invest in it and develop a lifestyle.
The religion in Ghana is split between Christianity, Islam and other cults that are not so developed. This variety makes Ghana a developed country from a cultural point of view, encouraging people to support their beliefs and stand by their religion.
The life expectancy is a little low compared to other countries, and it doesn’t go above 67 years of age for people living in proper conditions and without significant medical problems. However, if the economy keeps developing, the health industry will be developing as well, and the life expectancy might increase in the next decade. Or so is the government hoping by increasing the locals’ lifestyle and opportunities to treat their medical conditions by having access to pharmaceutical products and specialized medical assistance.
The agricultural land of Ghana reaches almost 70 percent of its entire surface, and the right investments will develop different productions of local goods which will come handy for people in Ghana. Different crops will also create new export opportunities and bring more income into the country if an agricultural plan and specialized people sustain it.
Exports reach a value of $11.06 billion per year and some years this value gets even higher. But the government is aiming to reach almost $20 billion in the next years based on improved export strategies and simplified bureaucracy so; the future looks great for Ghana’s economy.