Development Challenge

With a population of 22 million, Ghana is a stable, democratic country with a free press, independent judiciary and an active civil society, and possesses considerable growth potential. Over the past few years, the Government of Ghana has pursued aggressive economic reforms, which have resulted in a significant decline in inflation and a steady Gross Domestic Product (GDP) growth needed to strengthen the economy and improve the private sector.

Key development trends are positive and include: GDP growth of 6.2 in 2007 up from 5.2 percent in 2003; a decline in the poverty rate from 51.7 percent in 1992 to 36.4 percent in 2006; HIV/AIDS adult prevalence rate around 2 percent over the last decade and currently 1.9 percent, down from 2.2 in 2006 and well below levels in neighboring countries; and primary school enrollment in 2007 of about 92 percent compared to 80 percent in 2002. In June 2007, two companies discovered offshore oil. Production estimates of 200,000 barrels per day could bring considerable revenue to Ghana's budget and increase the government's capacity to invest in people and reduce poverty.

Despite the fact that Ghana has made significant advances, daunting challenges remain. Ghana's governance systems and practices are highly centralized and suffer from limited citizen participation. Civil society groups also lack advocacy skills and resources to advocate for their needs and interests. In addition, inadequate separation of powers among the executive, legislature and judiciary, and lack of vigorous efforts to combat corruption are significant impediments to development.

Agriculture employs 56 percent of the workforce, but a vast majority of farmers are subsistence smallholders. They lack access to improved methods, credit, market information and linkages to the private sector. Environmental degradation, especially in forests is taking an increase toll on Ghana's ability to sustain livelihoods. Natural resource stocks are degraded by levels equivalent of 10 percent of GDP per year and resource depletion is reducing GDP growth potential by an estimated one percent annually.

Health care delivery in rural communities presents a critical challenge to development. Maternal and infant deaths are high and under-five mortality has not changed in the last ten years. The mortality of children under five has remained at 111 per 1,000 live births. Malaria is the cause for 40 percent of outpatient visits as well as 25 percent of deaths of children under five years of age. The HIV/AIDS prevalence rate among high-risk groups, such as commercial sex workers, is as high as 60 percent. In the northern regions, most people live on substantially less than $1 a day and have limited access to clean drinking water and sanitation facilities. 

Another critical development challenge is in education. Only 16 percent of students have the reading comprehension at grade level. In addition, girls make up 60 percent of the primary level students who are out of school.

Combating food insecurity is another challenge for Ghana, especially in the three northern regions. Low and erratic rainfall, poor soils, and low agricultural productivity are key factors to food insecurity in Ghana. These factors are worsened by the subsistence nature of farming practices. Low incomes, inadequate education and poor health status also contribute to food insecurity. Most households lack stable foods for several months of the year, leading to high rates of malnutrition.

To accelerate equitable economic growth and deepen democratic gains, Ghana must modernize agriculture, strengthen citizen participation in local governance, improve access to quality education, lower maternal and child mortality rates, and improve security along its borders. Oil revenue management, expenditure control, and institutional capacity are challenges which the Government of Ghana is addressing.

USAID/Ghana's Response

The United States of America through USAID supports Ghana's Poverty Reduction Strategy by strengthening decentralized governance systems, promoting private sector competitiveness, improving health care delivery, enhancing access to quality basic education, and increasing food security to benefit all Ghanaians. In developing a Country Strategic Plan (2004-2010) to achieve these objectives, USAID/Ghana worked closely with the Government of Ghana and development partners. Funding levels have averaged around $37 million per year from 2004 to 2007, plus an additional $22.5 million in food aid. In 2008, however, additional resources to prevent and control malaria and to increase access to quality basic education have raised funding to approximately $61 million.