Development Challenge Other Donors FY2001 Program / Activity & Budget Information Summary Tables Program Summary Work Force Data Program/Sector Summary USAID Search: Ghana Previous Years' Activities 2000, 1999, 1998, 1997 Thursday, 09-Nov-2000 13:55:40 EST

Introduction

Ghana plays a key role in promoting economic and political reform and respect for human rights, which are U.S. Government foreign policy priorities in the sub-region. Ghana has also committed significant resources of its own to regional peacekeeping and conflict resolution efforts, and taken a lead role in supporting the African Crisis Response Initiative - also important U.S. foreign policy concerns. Ghana has been a role model in the sub-region for democratic reform, first with the 1996 elections putting it on the path toward consolidating democracy and now with the Year 2000 elections ushering in the first change of president through the electoral process. Ghana has become the United States' third largest trading partner in sub-Saharan Africa (after Nigeria and South Africa).

The Development Challenge

The Government of Ghana (GOG) has committed itself to achieving middle-income country status by the year 2020. Currently, Ghana ranks 134 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. Achieving middle-income status will require annual real economic growth rates of over 8% between now and 2020 (significantly higher than current growth estimated to be 4.7% in 1999), as well as major improvements in social indicators such as literacy, life expectancy and infant mortality. This in turn requires overcoming fundamental structural problems such as chronic high inflation, inability to attract sufficient domestic and international investment capital, low labor productivity/underdeveloped human resource base, and counterproductive economic policies and regulations. Further reductions in the population growth rate (currently 2.9% per annum) and the ability to maintain a low rate of HIV/AIDS infection (present rate is less than 5%) are essential if Ghana is to achieve its medium-term development objectives.

The combined effects of recent highly unfavorable developments in Ghana's macroeconomic environment including lower than anticipated revenue collection, rising oil prices and energy costs, and falling commodity prices for principle exports (gold and cocoa) will place severe pressure on Ghana's necessary and often painful reform agenda. These reforms include broader and more efficient tax revenue collection, liberalization of foreign exchange, cutting government spending, privatization of state-owned enterprises, public sector reform, and economic policy changes to reduce government regulation of the economy. Staying on track with reforms has contributed to an inflation rate of 13% for 1999, down from 16% in 1998 and 21% in 1997. Further reforms are required to increase access to health services and basic education as well as decentralization and rationalization of public health and education services. On the democracy and governance front, Ghana's civil society has grown and evolved greatly in the past six years as democracy consolidates itself. Recently, there has been an increased public awareness of corruption with concomitant government commitment to implementing an anti-corruption strategy. Government must become more responsive to those it is intended to serve. The GOG has established two independent anti-corruption commissions, which are also constituent members of a recently formed anti-corruption coalition of public, private, and religion organizations.

USAID assistance to Ghana is designed to contribute directly to several of the major U.S. foreign policy interests set forth in the State Department's International Affairs Strategic Plan. USAID focuses on four sectors: (1) private sector growth promotes the goals of expanded free markets, increased trade and economic growth; (2) the education sector promotes increased literacy and human resource development; (3) the health sector promotes the slowing of world population growth, improvements in human health, and slowing the spread of infectious diseases; and (4) the democracy sector promotes the development and spread of participatory elected democracy and respect for basic human rights. The 1999 Mission Performance Plan (MPP) includes a goal reflecting USAID support for consolidation of Ghana's democracy including support for the Year 2000 elections, an area in which USAID has a leading role. USAID's P.L. 480 Title II activities support the Mission's Humanitarian Assistance goal, while the preservation work in tropical forests under the private sector activity supports the Environment goal. USAID's family planning, HIV/AIDS prevention and child survival components under the health activity support the Mission's Population and Health goals. Additionally, private sector and education activities support the Mission's Broad-Based Growth goal.

Other Donors

Assistance to Ghana, in the form of grants and concessional loans from over 20 multilateral and bilateral donors, totals over $750 million per year (a declining trend in real terms). The United States ranked second in bilateral donors in 1999 and contributes about 8% of that amount. Donor assistance focuses on structural adjustment, economic growth and poverty alleviation, human resource development, primary education, health sector reform, and family planning and government decentralization. Major donors to Ghana include, in addition to the United States, the World Bank, the IMF, Japan (the largest bilateral donor), the European Union, Great Britain, the Netherlands, Germany, France, Denmark and Canada.

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