REPUBLIC OF GHANA

Profile / Geography / People / History / Government /
Economy / U.S.-Ghanaian Relations / Additional Information

PROFILE

Geography

Area: 238,538 sq. km. (92,100 sq. mi.); about the size of Illinois and Indiana combined.

Cities: Capital--Accra (metropolitan area pop. 3 million est.). Other cities--Kumasi (1 million est.), Tema (250,000 est.), Sekondi-Takoradi (200,000 est.).

Terrain: Plains and scrubland, rain forest, savanna.

Climate: Tropical.

People

Nationality: Noun and adjective--Ghanaian(s).

Population (1997 est.): 17.7 million.

Density: 74/sq. km. (192/sq. mi.).

Annual growth rate (1996 est.): 2.3%.

Ethnic groups: Akan, Ewe, Ga.

Religions: Christian 35%, indigenous beliefs 31%, Muslim 27%, other 7%.

Languages: English (official), Akan 44%, Mole-Dagbani 16%, Ewe 13%, Ga-Adangbe 8%.

Education: Years compulsory--9. Literacy--64.5%.

Health: Infant mortality rate (1996 est.)-- 80/1,000. Life expectancy--56 yrs.

Work force: 4 million: Agriculture and fishing--54.7%. Industry--18.7%. Sales and clerical--15.2%. Services, transportation, and communications--7.7%. Professional--3.7%.

Government

Type: Democracy.

Independence: March 6, 1957.

Constitution: Entered into force January 7, 1993.

Branches: Executive--President popularly elected for a maximum of two four-year terms. Legislative--unicameral Parliament popularly elected for four-year terms. Judicial--Independent, Supreme Court Justices nominated by President with approval of Parliament.

Subdivisions: 10 regions.

Political parties: National Democratic Congress, New Patriotic Party, People's Convention Party, National Convention Party, People's National Convention, et alia. Names, slogans, and symbols of parties existing prior to 1992 are banned by law.

Suffrage: Universal at 18.

Flag: Three horizontal stripes of red, gold, and green, with a black star in the center of the gold stripe.

Economy

GDP (1997): $6.01 billion.

Real GDP growth rate (1997): 5.5%.

Per capita GDP (1997): $340.

Inflation rate (1997): 27%.

Natural resources: Gold, timber, diamonds, bauxite, manganese, fish.

Agriculture: Products--cocoa, coconuts, coffee, pineapples, cashews, pepper, other food crops, rubber. Land--70% arable and forested.

Business and industry: Types--mining, lumber, light manufacturing, fishing, aluminum, tourism.

Trade (1997): Exports--$1.6 billion: cocoa ($600 million), aluminum, gold, timber, diamonds, manganese. Imports--$1.9 billion: petroleum ($272 million), food, industrial raw materials, machinery, equipment. Major trade partners--U.K., Germany, U.S., Nigeria.

Official exchange rate (Dec. 1997): 2,295 cedis=US$1.

Fiscal year: Calendar year.

GEOGRAPHY

Ghana is located on West Africa's Gulf of Guinea only a few degrees north of the Equator. Half of the country lies less than 152 meters (500 ft.) above sea level, and the highest point is 883 meters (2,900 ft.). The 537-kilometer (334-mi.) coastline is mostly a low, sandy shore backed by plains and scrub and intersected by several rivers and streams, most of which are navigable only by canoe. A tropical rain forest belt, broken by heavily forested hills and many streams and rivers, extends northward from the shore, near the Cote d'Ivoire frontier. This area, known as the "Ashanti," produces most of the country's cocoa, minerals, and timber. North of this belt, the country varies from 91 to 396 meters (300-1,300 ft.) above sea level and is covered by low bush, park-like savanna, and grassy plains.

The climate is tropical. The eastern coastal belt is warm and comparatively dry; the southwest corner, hot and humid; and the north, hot and dry. There are two distinct rainy seasons in the south--May-June and August-September; in the north, the rainy seasons tend to merge. A dry, northeasterly wind, the Harmattan, blows in January and February. Annual rainfall in the coastal zone averages 83 centimeters (33 in.).

Volta Lake, the largest man-made lake in the world, extends from the Akosombo Dam in southeastern Ghana to the town of Yapei, 520 kilometers (325 mi.) to the north. The lake generates electricity, provides inland transportation, and is a potentially valuable resource for irrigation and fish farming.

PEOPLE

Ghana's population is concentrated along the coast and in the principal cities of Accra and Kumasi. Most Ghanaians descended from migrating tribes that probably came down the Volta River valley at the beginning of the 13th century. Ethnically, Ghana is divided into small groups speaking more than 50 languages and dialects. Among the more important linguistic groups are the Akans, which include the Fantis along the coast and the Ashantis in the forest region north of the coast; the Guans, on the plains of the Volta River; the Ga- and Ewe-speaking peoples of the south and southeast; and the Moshi-Dagomba-speaking tribes of the northern and upper regions. English, the official and commercial language, is taught in all the schools.

Primary and junior secondary school education is tuition-free and mandatory. The Government of Ghana support for basic education is unequivocal. Article 39 of the Constitution mandates the major tenets of the free, compulsory, universal basic education (FCUBE) initiative. Launched in 1996, it is one of the most ambitious pre-tertiary education programs in West Africa. Since 1987, the Government of Ghana has increased its education budget by 700%. Basic education's share has grown from 45% to 60% of that total.

Students begin their 6-year primary education at age six. Under educational reforms implemented in 1987, they pass into a junior secondary school system for 3 years of academic training combined with technical and vocational training. Those continuing move into the 3-year senior secondary school program. Entrance to one of the five Ghanaian universities is by examination following completion of senior secondary school. School enrollment totals almost 3 million.

HISTORY

The history of the Gold Coast before the last quarter of the 15th century is derived primarily from oral tradition that refers to migrations from the ancient kingdoms of the western Soudan (the area of Mauritania and Mali). The Gold Coast was renamed Ghana upon independence in 1957 because of indications that present-day inhabitants descended from migrants who moved south from the ancient kingdom of Ghana.

The first contact between Europe and the Gold Coast dates from 1470, when a party of Portuguese landed. In 1482, the Portuguese built Elmina Castle as a permanent trading base. The first recorded English trading voyage to the coast was made by Thomas Windham in 1553. During the next three centuries, the English, Danes, Dutch, Germans, and Portuguese controlled various parts of the coastal areas.

In 1821, the British Government took control of the British trading forts on the Gold Coast. In 1844, Fanti chiefs in the area signed an agreement with the British that became the legal steppingstone to colonial status for the coastal area.

From 1826 to 1900, the British fought a series of campaigns against the Ashantis, whose kingdom was located inland. In 1902, they succeeded in establishing firm control over the Ashanti region and making the northern territories a protectorate. British Togoland, the fourth territorial element eventually to form the nation, was part of a former German colony administered by the United Kingdom from Accra as a League of Nations mandate after 1922. In December 1946, British Togoland became a UN Trust Territory, and in 1957, following a 1956 plebiscite, the United Nations agreed that the territory would become part of Ghana when the Gold Coast achieved independence.

The four territorial divisions were administered separately until 1946, when the British Government ruled them as a single unit. In 1951, a constitution was promulgated that called for a greatly enlarged legislature composed principally of members elected by popular vote directly or indirectly. An executive council was responsible for formulating policy, with most African members drawn from the legislature and including three ex officio members appointed by the governor. A new constitution, approved on April 29, 1954, established a cabinet comprising African ministers drawn from an all-African legislature chosen by direct election. In the elections that followed, the Convention People's Party (CPP), led by Kwame Nkrumah, won the majority of seats in the new Legislative Assembly. In May 1956, Prime Minister Nkrumah's Gold Coast government issued a white paper containing proposals for Gold Coast independence. The British Government stated it would agree to a firm date for independence if a reasonable majority for such a step were obtained in the Gold Coast Legislative Assembly after a general election. This election, held in 1956, returned the CPP to power with 71 of the 104 seats in the Legislative Assembly. Ghana became an independent state on March 6, 1957, when the United Kingdom relinquished its control over the Colony of the Gold Coast and Ashanti, the Northern Territories Protectorate, and British Togoland.

In subsequent reorganizations, the country was divided into 10 regions, which currently are subdivided into 110 districts. The original Gold Coast Colony now comprises the Western, Central, Eastern, and Greater Accra Regions, with a small portion at the mouth of the Volta River assigned to the Volta Region; the Ashanti area was divided into the Ashanti and Brong-Ahafo Regions; the Northern Territories into the Northern, Upper East, and Upper West Regions; and British Togoland essentially is the same area as the Volta Region.

Post-Independence Politics

After independence, the CPP government under Nkrumah sought to develop Ghana as a modern, semi-industrialized, unitary socialist state. The government emphasized political and economic organization, endeavoring to increase stability and productivity through labor, youth, farmers, cooperatives, and other organizations integrated with the CPP. The government, according to Nkrumah, acted only as "the agent of the CPP" in seeking to accomplish these goals.

The CPP's control was challenged and criticized, and Prime Minister Nkrumah used the Preventive Detention Act (1958), which provided for detention without trial for up to 5 years (later extended to 10 years). On July 1, 1960, a new constitution was adopted, changing Ghana from a parliamentary system with a prime minister to a republican form of government headed by a powerful president. In August 1960, Nkrumah was given authority to scrutinize newspapers and other publications before publication. This political evolution continued into early 1964, when a constitutional referendum changed the country to a one-party state.

On February 24, 1966, the Ghanaian Army and police overthrew Nkrumah's regime. Nkrumah and all his ministers were dismissed, the CPP and National Assembly were dissolved, and the constitution was suspended. The new regime cited Nkrumah's flagrant abuse of individual rights and liberties, his regime's corrupt, oppressive, and dictatorial practices, and the rapidly deteriorating economy as the principal reasons for its action.

Post-Nkrumah Politics

The leaders of the February 24 coup established the new government around the National Liberation Council (NLC) and pledged an early return to a duly constituted civilian government. Members of the judiciary and civil service remained at their posts and committees of civil servants were established to handle the administration of the country.

Ghana's government returned to civilian authority under the Second Republic in October 1969 after a parliamentary election in which the Progress Party, led by Kofi A. Busia, won 105 of the 140 seats. Until mid-1970, the powers of the chief of state were held by a presidential commission led by Brigadier A.A. Afrifa. In a special election on August 31, 1970, former Chief Justice Edward Akufo-Addo was chosen president, and Dr. Busia became prime minister.

Faced with mounting economic problems, Prime Minister Busia's government undertook a drastic devaluation of the currency in December 1971. The government's inability to control the subsequent inflationary pressures stimulated further discontent, and military officers seized power in a bloodless coup on January 13, 1972.

The coup leaders, led by Col. I.K. Acheampong, formed the National Redemption Council (NRC) to which they admitted other officers, the head of the police, and one civilian. The NRC promised improvements in the quality of life for all Ghanaians and based its programs on nationalism, economic development, and self-reliance. In 1975, a government reorganization resulted in the NRC's replacement by the Supreme Military Council (SMC), also headed by now-General Acheampong.

Unable to deliver on its promises, the NRC/SMC became increasingly marked by mismanagement and rampant corruption. In 1977, General Acheampong brought forward the concept of union government (UNIGOV), which would make Ghana a non-party state. Perceiving this as a ploy by Acheampong to retain power, professional groups and students launched strikes and demonstrations against the government in 1977 and 1978. The steady erosion in Acheampong's power led to his arrest in July 1978 by his chief of staff, Lt. Gen. Frederick Akuffo, who replaced him as head of state and leader of what became known as the SMC-2.

Akuffo abandoned UNIGOV and established a plan to return to constitutional and democratic government. A Constitutional Assembly was established, and political party activity was revived. Akuffo was unable to solve Ghana's economic problems, however, or to reduce the rampant corruption in which senior military officers played a major role. On June 4, 1979, his government was deposed in a violent coup by a group of junior and non-commissioned officers--Armed Forces Revolutionary Council (AFRC)--with Flt. Lt. Jerry John Rawlings as its chairman.

The AFRC executed eight senior military officers, including former chiefs of state Acheampong and Akuffo; established Special Tribunals that, secretly and without due process, tried dozens of military officers, other government officials, and private individuals for corruption, sentencing them to long prison terms and confiscating their property; and, through a combination of force and exhortation, attempted to rid Ghanaian society of corruption and profiteering. At the same time, the AFRC accepted, with a few amendments, the draft constitution that had been submitted, permitted the scheduled presidential and parliamentary elections to take place in June and July, promulgated the constitution, and handed over power to the newly elected president and parliament of the Third Republic on September 24, 1979.

The 1979 constitution was modeled on those of Western democracies. It provided for the separation of powers among an elected president and a unicameral parliament, an independent judiciary headed by a Supreme Court, which protected individual rights, and other autonomous institutions, such as the Electoral Commissioner and the Ombudsman. The new president, Dr. Hilla Limann, was a career diplomat from the north and the candidate of the People's National Party (PNP), the political heir of Nkrumah's CPP. Of the 140 members of parliament, 71 were PNP.

The PNP government established the constitutional institutions and generally respected democracy and individual human rights. It failed, however, to halt the continuing decline in the economy; corruption flourished, and the gap between rich and poor widened. On December 31, 1981, Flight Lt. Rawlings and a small group of enlisted and former soldiers launched a coup that succeeded against little opposition in toppling President Limann.

The PNDC Era

Rawlings and his colleagues suspended the 1979 constitution, dismissed the president and his cabinet, dissolved the parliament, and proscribed existing political parties. They established the Provisional National Defense Council (PNDC), initially composed of seven members with Rawlings as chairman, to exercise executive and legislative powers. The existing judicial system was preserved, but alongside it the PNDC created the National Investigation Committee to root out corruption and other economic offenses, the anonymous Citizens' Vetting Committee to punish tax evasion, and the Public Tribunals to try various crimes. The PNDC proclaimed its intent to allow the people to exercise political power through defense committees to be established in communities, workplaces, and in units of the armed forces and police. Under the PNDC, Ghana remained a unitary government.

In December 1982, the PNDC announced a plan to decentralize government from Accra to the regions, the districts, and local communities, but it maintained overall control by appointing regional and district secretaries who exercised executive powers and also chaired regional and district councils. Local councils, however, were expected progressively to take over the payment of salaries, with regions and districts assuming more powers from the national government. In 1984, the PNDC created a National Appeals Tribunal to hear appeals from the public tribunals, changed the Citizens' Vetting Committee into the Office of Revenue Collection and replaced the system of defense committees with Committees for the Defense of the Revolution.

In 1984, the PNDC also created a National Commission on Democracy to study ways to establish participatory democracy in Ghana. The commission issued a "Blue Book" in July 1987 outlining modalities for district-level elections, which were held in late 1988 and early 1989, for newly created district assemblies. One-third of the assembly members are appointed by the government.

Under international and domestic pressure for a return to democracy, the PNDC allowed the establishment of a 258-member Consultative Assembly made up of members representing geographic districts as well as established civic or business organizations. The assembly was charged to draw up a draft constitution to establish a fourth republic, using PNDC proposals. The PNDC accepted the final product without revision, and it was put to a national referendum on April 28, 1992, in which it received 92% approval. On May 18, 1992, the ban on party politics was lifted in preparation for multi-party elections. The PNDC and its supporters formed a new party, the National Democratic Congress (NDC), to contest the elections. Presidential elections were held on November 3 and parliamentary elections on December 29 of that year. Members of the opposition boycotted the parliamentary elections, however, which resulted in a 200 seat Parliament with only 17 opposition party members and two independents.

The Constitution entered into force on January 7, 1993, to found the Fourth Republic. On that day, Flt. Lt. Jerry John Rawlings was inaugurated as President and members of Parliament swore their oaths of office. In 1996, the opposition fully contested the presidential and parliamentary elections, which were described as peaceful, free, and transparent by domestic and international observers. In that election, President Rawlings was re-elected with 57% of the popular vote. In addition, Rawlings' NDC party won 133 of the Parliament's 200 seats, just one seat short of the two-thirds majority needed to amend the Constitution, although the election returns of two parliamentary seats face legal challenges.

GOVERNMENT

The Constitution that established the Fourth Republic provided a basic charter for republican democratic government. It declares Ghana to be a unitary republic with sovereignty residing in the Ghanaian people. Intended to prevent future coups, dictatorial government, and one-party states, it is designed to establish the concept of powersharing. The document reflects lessons learned from the abrogated constitutions of the 1957, 1960, 1969, and 1979, and incorporates provisions and institutions drawn from British and American constitutional models. One controversial provision of the Constitution indemnifies members and appointees of the PNDC from liability for any official act or omission during the years of PNDC rule. The Constitution calls for a system of checks and balances, with power shared between a president, a unicameral parliament, a council of state, and an independent judiciary.

Executive authority is established in the Office of the Presidency, together with his Council of State. The president is head of state, head of government, and commander in chief of the armed forces. He also appoints the vice president. According to the Constitution, more than half of the presidentially appointed ministers of state must be appointed from among members of Parliament.

Legislative functions are vested in Parliament, which consists of a unicameral 200-member body plus the Speaker. To become law, legislation must have the assent of the president, who has a qualified veto over all bills except those to which a vote of urgency is attached. Members of Parliament are popularly elected by universal adult suffrage for terms of four years, except in war time, when terms may be extended for not more than 12 months at a time beyond the four years.

The structure and the power of the judiciary are independent of the two other branches of government. The Supreme Court has broad powers of judicial review. It is authorized by the Constitution to rule on the constitutionality of any legislation or executive action at the request of any aggrieved citizen. The hierarchy of courts derives largely from British juridical forms. The hierarchy, called the Superior Court of Judicature, is composed of the Supreme Court of Ghana, the Court of Appeal, the High Court of Justice, regional tribunals, and such lower courts or tribunals as Parliament may establish. The courts have jurisdiction over all civil and criminal

matters.

Principal Government Officials

President--Flt. Lt. Jerry John Rawlings (ret.)

Vice President--Dr. John Atta Mills

Minister of Foreign Affairs--James Victor Gbeho

Minister of Defense--Alhaji Mahama Iddrisu

Minister of Communications--Amb. Ekwow Spio-Garbrah

Minister of Finance--Kwame Peprah

Minister of Food and Agriculture--Dr. Kwabena Adjei, MP

Minister of Justice--Dr. Obed Yao Asamoah

Minister of Local Government and Rural Development--Kwamena Ahwoi

Minister of Mines and Energy--Ferdinand Ohene-Kena

Minister of Trade and Industry--John Frank Abu, MP

Chief Justice of the Supreme Court--Justice Isaac Kobina Abban

Speaker of Parliament--Justice Daniel F. Annan

First Deputy Speaker--Kenneth Dzirasah

Second Deputy Speaker--Freddie Blay

Majority Leader--J.H. Owusu-Acheampong

Deputy Majority Leader--Alhaji M. A. Seidu

Minority Leader--J.H. Mensah

Deputy Minority Leader--Gladys Asmah

Ambassador to the United States--Koby Koomson

Permanent Representative to the United Nations--Jack Wilmont

Ghana maintains an embassy in the United States at 3512 International Drive, NW., Washington, D.C. 20008 (tel. 202-686-4500). Its permanent mission to the United Nations is located at 19 E. 47th Street., New York, N.Y. 10017 (tel. 212-832-1300).

ECONOMY

By West African standards, Ghana has a diverse and rich resource base. The country is mainly agricultural, however, with a majority of its workers engaged in farming. Cash crops consist primarily of cocoa and cocoa products,which typically provide about two-thirds of export revenues, timber products, coconuts and other palm products, shea nuts, which produce an edible fat, and coffee. Ghana also has established a successful program of nontraditional agricultural products for export, including pineapples, cashews, and pepper. Cassava, yams, plantains, corn, rice, peanuts, millet, and sorghum are the basic foodstuffs. Fish, poultry, and meat also are important dietary staples.

Minerals--principally gold, diamonds, manganese ore, and bauxite--are produced and exported. The only commercial oil well has been closed after producing 3.5 million barrels over its seven-year life, but signs of natural gas are being studied for power generation, while exploration continues for other oil and gas resources.

Ghana's industrial base is relatively advanced compared to many other African countries. Import-substitution industries include textiles; steel (using scrap); tires; oil refining; flour milling; beverages; tobacco; simple consumer goods; and car, truck, and bus assembly.

Tourism has become one of Ghana's largest foreign income earners (ranking third in 1997), and the Ghanaian Government has placed great emphasis upon further tourism support and development.

Economic Development

At independence, Ghana had a substantial physical and social infrastructure and $481 million in foreign reserves. The Nkrumah government further developed the infrastructure and made important public investments in the industrial sector. With assistance from the United States, the World Bank, and the United Kingdom, construction of the Akosombo Dam was completed on the Volta River in 1966. Two U.S. companies built Valco, Africa's largest aluminum smelter, to use power generated at the dam. Aluminum exports from Valco are a major source of foreign exchange for Ghana.

Many Nkrumah-era investments were monumental public works projects and poorly conceived, badly managed agricultural and industrial schemes. With cocoa prices falling and the country's foreign exchange reserves fast disappearing, the government resorted to supplier credits to finance many projects. By the mid-1960s, Ghana's reserves were gone, and the country could not meet repayment schedules. To rationalize, the National Liberation Council abandoned unprofitable projects, and some inefficient state-owned enterprises were sold to private investors. On three occasions, Ghana's creditors agreed to reschedule repayments due on Nkrumah-era supplier credits. Led by the United States, foreign donors provided import loans to enable the foreign exchange-strapped government to import essential commodities.

Prime Minister Busia's government (1969-72) liberalized controls to attract foreign investment and to encourage domestic entrepreneurship. Investors were cautious, however, and cocoa prices began declining again while imports surged, precipitating a serious trade deficit. Despite considerable foreign assistance and some debt relief, the Busia regime also was unable to overcome the inherited restraints on growth posed by the debt burden, balance-of-payments imbalances, foreign exchange shortages, and mismanagement.

Although foreign aid helped prevent economic collapse and was responsible for subsequent improvements in many sectors, the economy stagnated in the 10-year period preceding the NRC takeover in 1972. Population growth offset the modest increase in gross domestic product, and real earnings declined for many Ghanaians.

To restructure the economy, the NRC, under General Acheampong (1972-78), undertook an austerity program that emphasized self-reliance, particularly in food production. These plans were not realized, however, primarily because of post-1973 oil price increases and a drought in 1975-77 that particularly affected northern Ghana. The NRC, which had inherited foreign debts of almost $1 billion, abrogated existing rescheduling arrangements for some debts and rejected other repayments. After creditors objected to this unilateral action, a 1974 agreement rescheduled the medium-term debt on liberal terms. The NRC also imposed the Investment Policy Decree of 1975--effective on January 1977--that required 51 % Ghanaian equity participation in most foreign firms, but the government took 40% in specified industries. Many shares were sold directly to the public.

Continued mismanagement of the economy, record inflation (more than 100% in 1977), and increasing corruption, notably at the highest political levels, led to growing dissatisfaction. The post-July 1978 military regime led by General Akuffo attempted to deal with Ghana's economic problems by making small changes in the overvalued cedi and by restraining government spending and monetary growth. Under a one-year standby agreement with the International Monetary Fund (IMF) in January 1979, the government promised to undertake economic reforms, including a reduction of the budget deficit, in return for a $68 million IMF support program and $27 million in IMF Trust Fund loans. The agreement became inoperative, however, after the June 4 coup that brought Flight Lieutenant Rawlings and the AFRC to power for 4 months.

In September 1979, the civilian government of Hilla Limann inherited declining per capita income; stagnant industrial and agricultural production due to inadequate imported supplies; shortages of imported and locally produced goods; a sizable budget deficit (almost 40% of expenditures in 1979); high inflation, "moderating" to 54% in 1979; an increasingly overvalued cedi; flourishing smuggling and other black-market activities; unemployment and underemployment, particularly among urban youth; deterioration in the transport network; and continued foreign exchange constraints.

Limann's PNP government announced yet another (2-year) reconstruction program, emphasizing increased food production and productivity, exports, and transport improvements. Import austerity was imposed and external payments arrears cut. However, declining cocoa production combined with falling cocoa prices, while oil prices soared. No effective measures were taken to reduce rampant corruption and black marketing.

When Rawlings again seized power at the end of 1981, cocoa output had fallen to half the 1970-71 level and its world price to one-third the 1975 level. By 1982, oil would constitute half of Ghana's imports, while overall trade contracted greatly. Internal transport had slowed to a crawl, and inflation remained high. During Rawlings' first year, the economy was stagnant. Industry ran at about 10% of capacity due to the chronic shortage of foreign exchange to cover the importation of required raw materials and replacement parts. Economic conditions deteriorated further in early 1983 when Nigeria expelled an estimated 1 million Ghanaians whohad to be absorbed by Ghana.

In April 1983, in coordination with the IMF, the PNDC launched an economic recovery program, perhaps the most stringent and consistent of its day in Africa, aimed at reopening infrastructural bottlenecks and reviving moribund productive sectors--agriculture, mining, and timber. The largely distorted exchange rate and prices were realigned to encourage production and exports. Increased fiscal and monetary discipline was imposed to curb inflation and to focus on priorities. Through November 1987, the cedi was devalued by more than 6,300%, and widespread direct price controls were substantially reduced.

The economy's response to these reforms was initially hampered by the absorption of one million returnees from Nigeria, the onset of the worst drought since independence, which brought on widespread bushfires and forced closure of the aluminum smelter and severe power cuts for industry and decline in foreign aid. In 1985, the country absorbed an additional 100,000 expellees from Nigeria. In 1987, cocoa prices began declining again; however, initial infrastructural repairs, improved weather, and producer incentives and support revived output in the early 1990s. During 1984-88 the economy experienced solid growth for the first time since 1978. Renewed exports, aid inflows, and a foreign exchange auction have eased hard currency constraints.

Since an initial August 1983 IMF standby agreement, the economic recovery program has been supported by three IMF standbys and two other credits totaling $611 million, $1.1 billion from the World Bank, and hundreds of millions of dollars more from other donors. In November 1987, the IMF approved a $318-million, 3-year extended fund facility. The second phase (1987-90) of the recovery program concentrated on economic restructuring and revitalizing social services. The third phase, focused on financial transparency and macroeconomic stability is scheduled for March 1998.

Ghana intends to achieve its goals of accelerated economic growth, improved quality of life for all Ghanaians, and reduced poverty through macroeconomic stability, higher private investment, broad-based social and rural development, as well as direct poverty-alleviation efforts. These plans are fully supported by the international donor community and have been forcefully reiterated in the 1995 government report, Ghana: Vision 2020. Privatization of state-owned enterprises continues, with about two-thirds of 300 parastatal enterprises sold to private owners. Other reforms adopted under the government's structural adjustment program include the elimination of exchange rate controls and the lifting of virtually all restrictions on imports. The establishment of an interbank foreign exchange market has greatly expanded access to foreign exchange.

The medium-term macroeconomic forecast assumes political stability, successful economic stabilization, and the implementation of a policy agenda for private sector growth, and adequate public spending on social services and rural infrastructure. The ninth Consultative Group Meeting for Ghana ended November 5, 1997 after deliberations in Paris. Twenty-four countries and donor entities were represented at this meeting called by the World Bank on behalf of the Ghanaian Government. The World Bank announced that, of the targeted disbursement level of $1.6 billion sought from the donor community for 1998-99, they foresaw only a $150 million shortfall in commitments, and that this shortfall would be easily realized should Ghana rapidly enact its macroeconomic program.

The government repealed a 17.% value-added tax (VAT) shortly after its introduction in 1995, which resulted in wide-spread public protests. The government reverted to several previously imposed taxes, including a sales tax. The government has set in motion a program to reintroduce a VAT bill, with implementation in 1998 after an extensive public education campaign.

U.S.-GHANAIAN RELATIONS

The United States has enjoyed good relations with Ghana at the nonofficial, personal level since Ghana's independence. Thousands of Ghanaians have been educated in the United States. Close relations are maintained between educational and scientific institutions, and cultural links, particularly between Ghanaians and African-Americans, are strong.

After a period of strained relations in the mid-1980s, U.S.-Ghanaian official relations are stronger than at any other time in recent memory. Ghanaian parliamentarians and other government officials have through the U.S. International Visitor Program acquainted themselves with U.S. Congressional and state legislative practices and participated in programs designed to address other issues of interest. The U.S. and Ghanaian militaries have cooperated in numerous joint training exercises, culminating with Ghanaian participation in the African Crisis Response Initiative, an international activity in which the U.S. is facilitating the development of an interoperable peacekeeping capacity among African nations. In addition, there is an active bilateral international military and educational training program. The Office of the President of Ghana worked closely with the U.S. Embassy in Accra to establish an American Chamber of Commerce to continue to develop closer economic ties in the private sector.

The United States is among Ghana's principal trading partners. The American privately owned VALCO aluminum smelter imports many of its supplies from, and exports almost all the aluminum ingots to, the United States. With a replacement value of more than $600 million, U.S. investments in Ghana form one of the largest stocks of foreign capital. VALCO--90% owned by Kaiser, and 10% by Reynolds--is by far the biggest investment, but other important U.S. companies operating in the country include Mobil, Coca Cola, S.C. Johnson, Ralston Purina, Star-Kist, A.H. Robins, Sterling, Pfizer, IBM, Carson Products, 3M, Pioneer Gold, Stewart & Stevenson, Price Waterhouse, Great Lakes Shipping, and National Cash Register (NCR). Several U.S. firms recently made or are considering investments in Ghana, primarily in gold mining, wood products, and petroleum. In late 1997, Nuevo Petroleum concluded an oil exploration agreement accounting for the last of Ghana's offshore mineral rights zones. Two other U.S. oil companies, Sante Fe and Hunt, are also engaged in offshore exploration.

U.S. development assistance to Ghana in fiscal year 1997 totaled $52 million, divided between small business enterprise, health, education, and democracy/governance programs. Ghana was the first country in the world to accept Peace Corps volunteers, and the program remains one of the largest. Currently, there are more than 150 volunteers in Ghana. Almost half work in education, and the others in various fields such as agroforestry, small business development, health education and water sanitation, as well as youth development.

Principal U.S. Officials

Ambassador--Edward Brynn

Deputy Chief of Mission--Sharon Lavorel-Rutherford

Director, Peace Corps--Harriet Lancaster

Public Affairs Officer--Brooks Robinson

Acting Director, USAID Mission--Thomas Hobgood

Consul--Rudolph Boone

Administrative Chief--Perry Adair

Political Chief--Stephanie Sullivan

Economic Chief--Robert Merrigan

The U.S. Embassy is located on Ring Road East, near Danquah Circle, Accra (tel. 233-21-775347/8/9). The mailing address is P.O. Box 194, Accra, Ghana. For American citizen services and visa questions, the Embassy Consular Section telephone number is 233-21-776602.

ADDITIONAL INFORMATION:

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