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| >> AFR Regional Overview >> Ghana Overview | |||||||||
IntroductionGhana continues to play a key role in promoting economic and political stability and respect for human rights in West Africa, as well as a key role in all major U.S. Government foreign policy priorities in the sub-region. Ghana's regional peacekeeping and conflict resolution efforts demonstrate its commitment to peace and security in the sub-region. Ghana enhanced its stature as a role model of democratic reform by successfully holding national elections in December when power was transferred (both the presidency and control of parliament) to the opposition party. Ghana has become the United States' third largest trading partner in sub-Saharan Africa (after Nigeria and South Africa), and is increasingly viewed as a center of innovation in information technology. The Development ChallengeThe new Government of Ghana (GOG) has committed itself to reversing the declining economic conditions in the country. Currently, Ghana, with a population of 18.4 million and a per capita income of $390, ranks 134th out of 174 countries on the United Nations' Human Development Index, which measures major social development indicators such as life expectancy and adult literacy, classifying it as a low-income country. Ghana faces daunting challenges on the economic front due to adverse economic conditions that have existed since late 1999 - low world market prices for principal exports of gold and cocoa and a high import price for crude oil. These external shocks are having a deep impact on macro-economic stability due to poor fiscal and monetary policies. A combination of high domestic inflation, low revenue collection, collapsing exchange rates, public sector overspending and huge debt servicing make it difficult to achieve sustainable economic growth. The previous government, preoccupied with winning the national elections, failed to address fundamental structural problems noted above. Prohibitively high interest rates, high fiscal deficits, an inability to attract sufficient domestic and internal investment capital, low labor productivity, and counterproductive economic policies and regulations are inhibiting private sector growth. Growing corruption in the public sector continues to erode confidence in Ghana as an investment opportunity. The new government has embarked on major policy reforms to address the economic malaise and the pervasive culture of corruption. To reverse the negative macroeconomic trends, the new administration will have to demonstrate a high level of commitment to fiscal, monetary, and financial market reform, and reduction of the role of government in the economy. Those reforms include broader and more efficient revenue collection, liberalization of foreign exchange, cutting government spending, privatizing state-owned enterprises, reforming the civil service, and reducing government regulation of the economy. Further reforms are also required to increase access to health services and basic education as well as decentralize and make more efficient public health and education services. Favorable weather and good domestic food production have mitigated some of the adverse effects of the deteriorating economy. Further reductions in the population growth rate (currently 2.6 % per annum) and the ability to maintain a low rate of HIV/AIDS infection (the present rate is less than 5%) are essential if Ghana is to achieve its medium-term development objectives. Other DonorsAssistance to Ghana, in the form of grants and concessional loans from over 20 multilateral and bilateral donors is estimated at $819 million for Year 2000. The United States ranked third among bilateral donors in 2000 and contributes about 7% of total development assistance to Ghana. Donor assistance focuses on infrastructure, economic growth and poverty alleviation, education, health, and family planning and decentralization. Other major donors to Ghana include the World Bank, the International Monetary Fund (IMF), Japan (the largest bilateral donor), Great Britain (second largest bilateral donor), the European Union, the Netherlands, Germany, France, Denmark and Canada. FY 2002 ProgramUSAID/Ghana's strategy supports the new Government of Ghana goal of poverty eradication through private sector-led growth. The program focuses on 1) reducing population growth; 2) diversifying the economy while focussing on import/export trade; 3) increasing the number of Ghanaians employed by the market economy; it is expected that these efforts will to generate greater amounts of investment, higher incomes and improved living standards. Improvements in education and health as well as citizen participation in democratic processes are essential to achieving this accelerated economic growth. The program is implemented through four Strategic Objectives (SOs). The SO1Trade and Investment Reform Program will continue to support sustainable private sector-led growth through a range of policy reforms and with direct support to private enterprise. Even under adverse macro-economic conditions, growth has been realized in non-traditional export (garments/textiles/handicrafts) earnings assisted by USAID. USAID also will continue to support new energy development as critical to increased growth rates, and supports development of the West African Gas Pipeline. In addition, in FY 2002 USAID will assume a coordinating role for expanded assistance to the development of the West African Power Pool. Finally, USAID will support a private sector awareness program on the economic impact of HIV/AIDS. SO2's Quality Improvements in Primary Schools Program (QUIPS) achieved significant results during the past year and in FY 2002 will work with the Ministry of Education to move from pilot efforts to institutionalizing QUIPS activities (improved teaching practices and teacher supervision, education management, community participation and improved learning environments) into the national school system for all 110 districts in the country. Nation-wide test scores for English and mathematics were significantly higher in QUIPS than in non-QUIPS schools. Improved Family Health (SO3) programs have made significant contributions toward improving the health of Ghanaians. In FY 2002, USAID will support integrated case management of childhood illness, polio eradication, strengthening of routine immunization, nutrition and vitamin A supplementation. USAID will continue to support an anti-malaria program launched in FY 2001. Through HIV/AIDS funds, USAID will address the epidemic with a well-coordinated array of prevention activities, including a high profile media campaign and behavior change activities. Family planning will be promoted through a new multi-media campaign aimed at generating demand for family planning services and tools and a new initiative to place public health nurses in the community who will integrate child survival and family planning services. The main focus of the Democracy and Governance Program (SO4) is to strengthen the legislature, decentralization and anti-corruption. In FY 2002, USAID will continue to work on anti-corruption, accountability and transparency issues. In addition to continuing to build capacity of local civil society organizations (CSOs), USAID also will support activities that enable these CSOs to play a crucial role vis-à-vis local government in promoting transparency. The use of information technology to improve citizen access to information increased significantly. USAID will also continue to provide legislative expertise to the Ghanaian parliament and promote the clarification of parliamentary procedures. USAID also plans to assist the Electoral Commission in carrying out its mandate to redistrict parliamentary constituencies. The Food for Peace program will continue to be a fully integrated component of the USAID's Country Strategic Plan (CSP) for Ghana. Food for Peace resources will support agro-forestry-for example, the intercropping of trees with cereal crops to prevent soil erosion-and agricultural production, and will continue to support small and micro-enterprise, and micro-credit programs. Significant expansion of the QUIPS primary education program in the northern regions will continue to be achieved with Food for Peace resources, through both monetization and direct food distribution. Food for Peace is also supporting programs to improve nutritional practices and sanitation. Activity Data Sheets
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