Tables

Table 1. Ghana: Summary and Time Frame for Macroeconomic and
Structural Adjustment Policies, 1998–2000

Policy Area	Objectives and Targets	Strategies and Measures	Timing of Measures	Technical Assistance Requirements
I. Fiscal Policies
A. Overall objective	Promote macroeconomic stability.	Achieve an increase in the domestic primary budget surplus from 0.3 percent of GDP in 1996 to 3.2 percent of GDP in 1997 and 4.3 percent of GDP in 1998, and about 5 percent in 1999-2000.	1998-2000
B. Revenue	Improve domestic revenue mobilization. Strengthen tax administration.	Table in Parliament legislation to create a central revenue authority.	March 1998
		Establish a central revenue authority	June 1998
		Ensure that no discretionary tax and customs exemptions can be granted without parliamentary approval. Implement an exemptions monitoring and reporting system, to ensure transparency and control.	1998
	Restructure tax system in favor of expenditure-based taxation. Promote incentives for private investment.	Introduce a VAT replacing the sales tax and extending coverage to services and retail sectors.	1998	IMF, 1998 DFID, 1998 WB, 1998-9
		Complete the assignment of taxpayer identification numbers to the targeted group of taxpayers.	June 1998
		Simplify the tax system and convert specific excises to ad valorem rates.	Budget 1998
		Harmonize the withholding tax on dividends and on interest.	Budget 1998
		Gradually reduce cocoa taxation (see Agriculture)	1998-2000
		Announce application of import withholding tax to importers not registered for the VAT, in accordance with the tax law	1999-2000
		Adjust income tax brackets for inflation.	1999-2000
C. Expenditure	Improve efficiency and effectiveness of public expenditure through improved allocation and management of public resources.	Reduce total spending relative to GDP, as per program.	1998-2000
		Begin monthly projection of cash flow for the budget and monitor outturns as the basis for managing the public sector borrowing requirement.	March 1998
		Complete medium-term expenditure framework (MTEF) for priority sectors of education, health, and roads. Prioritize investment projects consistent with macroeconomic objectives and budget constraints.	June 1998	DFID, WB, 1998-99
		Cabinet approval of budget ceilings for priority sectors and of the guidelines for the 1999 budget.	September 1998
		Manual testing and phased implementation of BPEMS system to all ministries and spending units.	1998-2000	WB, 1998-2000
D. Local government	Develop capacity at the local government level to assist the government in its decentralization initiative.	Develop action plan for decentralization, including the design of financial and administrative arrangements.	1998	CIDA, 1998
II. Public Sector Reform	Achieve a smaller and more effective public service.	Remedy operational deficiencies of the Integrated Personnel and Payroll Database (IPPD) System.	June 1998	WB, 1998 DFID, 1998
		Launch rationalization of the regulatory regime for subvented agencies.	Budget 1998	WB, 1998
		Launch rationalization of the size and pay structure of civil service and subvented agencies.	Budget 1998	WB, 1998
		Identify subvented agencies to be reincorporated into the budget, privatized or closed.	September 1998
	Accelerate and expand divestiture program.	From the divestiture list of state-owned enterprises (SOE) offer for sale an additional 20 SOEs and at least two of the following: the State Housing Corporation, State Insurance Corporation, and Mim Timber processing plant.	1998	WB, 1998-2000
III. Monetary Policy and Financial Sector Reform	Reduce inflation through monetary restraint.	Control monetary growth through targeting of reserve money, as per program.	1998-2000
	Encourage the mobilization of financial savings and encourage net inflows of capital.	Maintain positive real interest rates on bank deposits through appropriately tight liquidity management.	1998-2000
	Enhance the effectiveness of the system of indirect monetary control and develop the secondary market in domestic debt instruments.	Strengthen open market operations through the use of wholesale auction of treasury bills and refrain from signaling indicative cutoff prices.	1998-2000	IMF, 1998
		Introduce a centralized book-entry system at the Bank of Ghana.	June 1998
		Expand instruments of liquidity management to include repurchase agreements initiated by the Bank of Ghana.	June 1998
		License appropriate number of primary dealers.	1998-2000	IMF, 1998
		Review liquidity ratios with a view to reducing them to levels needed for prudential purposes.	1998-2000
	Improve efficiency of financial sector by accelerating financial sector reforms and promoting greater competition through divestiture.	Divest 60 percent of the shares of the National Investment Bank.	1998	WB, 1998
		Offer for sale the Reinsurance Corporation after commercial restructuring.	December 1998	WB, 1998
		Strengthen banking supervision.	1998-2000	IMF, 1998 WB, 1998
IV. External Sector Policy
A. Exchange System	Broaden and deepen the foreign exchange market.	Encourage transactions among market participants by facilitating flow of information regarding market conditions.	1998
B. External Debt Management	Reduce external debt service burden.	Strictly limit new short-term borrowing and adhere to ceilings envisaged in the program regarding new nonconcessional public and publicly guaranteed borrowing. Publish list of guaranteed loans in the budget documents.	1998-2000
	Regularize relations with external creditors.	Intensify efforts to conclude bilateral agreements with Paris Club creditors regarding the deferred arrears.	1998
C. Trade Policy	Ensure that trade system enhances external competitiveness.	Reduce distortions through reduction of zero-rating and exemptions, and other measures.	1998
V. Sectoral Policies
A. Petroleum Sector Reforms		Offer for sale GNPC's non-oil-related assets.	March 1998
		Replace uniform national pump prices with uniform ex-regional depot wholesale prices.	March 1998
		Reduce GNPC's debt to the Bank of Ghana to    — ¢  18 billion    — zero	March 1998 June 1998
		Offer for sale Tema Oil Refinery Ltd. and the Ghana Oil Company Ltd.	June 1998	WB, 1998
		Restructure GNPC and relieve it of all functions unrelated to hydrocarbon and energy-related activities.	1998
		Decontrol retail petroleum prices (ex-depot) subject to safety and competition standards, followed by the fully competitive operation of TOR.	1998-2000	WB, 1998
		Rationalize institutional responsibilities for hydrocarbon exploration to increase transparency.	1998
B. Agriculture Environment	Liberalize the cocoa sector.	Increase farmers' share in f.o.b. price of cocoa to:		WB, 1998-2000
		56 percent	June 1998
		58 percent	June 1999
		60 percent	June 2000
		Identify two-year program of cost-cutting measures for the Cocoa Board to support at least one half of the intended increase in the share of the producers.	March 1998
		Offer for sale the Produce Buying Company (PBC).	June 1998
		Unify extension services of the Cocoa Board and Ministry of Agriculture.	June 1998	WB, 1998-99
	Ensure conservation of natural resources and protection of the environment.	Strengthen extension services to implement soil fertility program.	1998-2000
		Increase stumpage fees to reduce subsidies for wood processing and preserve forest resources.	1998-2000	WB, 1998-2000
		Establish a national integrated water management program with further strengthening and development of the institutional and regulatory framework.	1998-2000	WB, 1998-2000
C. Infrastructure
a. Urban    Infrastructure	Increase coverage, quality, and efficiency of water supply, sanitation, waste management, and drainage.	Increase coverage, quality, and efficiency of water supply, sanitation, waste management, and drainage.	1998-2000	WB, 1998-2000
		Increase private sector participation and cost recovery in water supply, sanitation, waste management, and drainage.	1998-2000	WB, 1998-2000
b. Rural    Infrastructure	Expansion in coverage of feeder roads and market infrastructure.	Expand and improve feeder road network and village market infrastructure.	1998-2000	WB, 1998-2000
c. Power	Ensure the financial viability of the power sector.	Increase electricity tariffs to restore and maintain the financial viability of power utilities.	1998-2000	WB, 1998-2000
d. Roads	Improve the road network.	Implement road improvement program as agreed under the donor-supported Highway Sector Investment Program.	1998-2000	WB, 1998-2000
e. Rail	Improve operational efficiency and financial viability.	1998-2000	WB, 1998-2000
f. Ports	Improve operational efficiency and capacity.	Increase participation of the private sector in port management and operations.	1998-2000
D. Human Resource Development
a. Education	Improve the quality of schooling, equity of access, and management efficiency and increase the literacy rate.	Implement the donor-supported Basic Education Sector Improvement Program.	1998-2000	WB, DFID, USAID, and others, 1998-2000
b. Health	Improve health outcomes.	Implement the donor-supported Health Sector Investment Program.	1998-2000	WB, 1998-2000
VI. Statistical issues	Improve quality and timeliness of statistics.	Begin publishing new national consumer price index.	March 1998
		Publish revised and updated national accounts (sources and uses) for 1995 and 1996.	March 1998
		Allocate resources and improve quality and timeliness of national accounts and price, balance of payments, public finance (including debt), and monetary statistics.	1998-2000	IMF, WB, DFID, and others, 1998-2000

 
 
Table 2. Ghana: Selected Economic and Financial Indicators 1994-2000

	1994	1995	1996 Act.	1997 Prel.	1998 Proj.	1999 Proj.	2000 Proj.
	(Annual percentage change, unless otherwise specified)
National income and prices
Real GDP	3.8	4.5	5.2	3.0	5.6	5.8	5.8
Real GDP per capita	0.7	1.4	2.1	-0.1	2.5	2.7	2.7
Nominal GDP (in billions of cedis)	4,950	7,418	10,385	13,863	17,655	20,378	22,873
Nominal GDP	34.7	49.9	40.0	33.5	27.3	15.4	12.2
GDP deflator	29.8	43.4	33.1	29.6	20.6	9.1	6.1
Consumer price index (annual average)	24.9	59.5	45.6	27.9	15.5	8.0	5.3
Consumer price index (end of period)	34.2	70.8	32.7	20.8	11.0	5.5	5.0
External sector
Exports, f.o.b.	15.3	16.7	9.8	-3.8	9.7	14.3	10.1
Imports, f.o.b.	-8.6	6.8	14.5	-6.5	9.8	9.3	6.4
Export volume	2.6	0.3	12.5	-2.7	7.5	11.2	6.7
Import volume	-12.4	-0.5	13.8	-3.3	10.3	7.4	4.9
Terms of trade	3.1	7.3	-3.0	2.2	2.6	1.1	1.7
Nominal effective exchange rate1	-17.7	-23.5	-26.8	. . .	. . .	. . .	. . .
Real effective exchange rate1	-17.6	14.9	12.2	. . .	. . .	. . .	. . .
Cedis per US dollars1	957	1,200	1,637	2,050	. . .	. . .	. . .
Government budget
Domestic revenue	68.8	62.4	26.1	22.5	29.2	18.0	12.9
Total expenditure	44.2	45.5	43.5	11.2	24.2	2.4	9.7
Current expenditure	33.9	36.7	46.5	23.1	17.1	0.1	10.2
Capital expenditure and net lending 2	60.9	57.3	40.1	-3.4	35.3	5.5	9.0
Money and credit 3
Net domestic assets4	20.5	15.8	30.3	33.4	9.5	-1.1	-0.2
Credit to government 4	-5.9	6.6	12.8	22.4	9.2	0.0	-4.4
Credit to the rest of the economy 4	23.1	15.0	15.7	18.2	7.2	4.0	3.9
Broad money (including foreign       currency deposits)5	53.0	40.8	39.7	40.8	18.0	12.0	11.0
Reserve money	78.9	35.1	44.3	33.8	11.4	12.0	11.0
Velocity (GDP/average broad money)	5.2	5.4	5.1	4.9	5.1	5.1	5.1
Treasury bill rate in percent;       (end of period)	29.5	40.5	42.8	40.0	. . .	. . .	. . .
	(In percent of GDP, unless otherwise specified)
Investment and saving
Gross investment	16.9	18.6	18.6	16.0	17.9	18.1	19.5
of which: private	3.1	4.1	5.0	5.4	5.5	7.5	8.0
Gross national saving	11.8	16.3	13.6	12.7	13.7	14.3	15.8
of which: private	7.1	9.4	9.3	10.7	8.3	7.6	8.1
Government budget
Domestic revenue	19.7	21.4	19.2	17.6	18.3	18.7	18.8
Total grants	3.7	3.8	3.0	0.9	2.9	1.7	1.6
Total expenditure2	32.8	31.8	32.6	27.2	27.5	24.4	23.8
Overall balance (commitment basis)	-9.3	-6.7	-10.4	-8.6	-6.3	-4.0	-3.4
Domestic primary balance	0.8	1.6	0.3	3.3	3.8	3.8	3.9
Divestiture receipts	5.2	1.4	1.4	0.8	0.8	0.1	0.1
External sector
Current account balance6	-5.1	-2.3	-5.0	-3.3	-4.2	-3.9	-3.7
Current account balance7	-9.0	-6.5	-8.3	-6.4	-7.3	-6.6	-5.4
External debt outstanding	94.5	95.0	97.3	93.6	95.2	92.0	87.7
External debt service, including to the Fund	7.3	9.2	7.5	8.2	8.7	8.1	6.7
(in percent of exports of goods and        nonfactor services)	27.4	35.8	27.4	32.9	33.2	28.9	23.4
(in percent of government revenue)	36.9	42.0	38.7	46.2	47.7	43.3	34.4
	(In millions of U.S. dollars, unless otherwise specified)
Current account balance6	-265	-142	-320	-220	-290	-287	-295
Overall balance of payments	164	284	-13	-25	-40	-133	-119
External payments arrears (end of year)	135	100	0	0	0	0	0
Gross international reserves (end of period)	593	710	606	466	478	573	653
(in months of imports, c.i.f.)	4.1	4.6	3.4	2.8	2.7	2.9	3.1
Sources: Ghanaian authorities; and Fund staff estimates and projections.
1Annual average data.
2Including capital outlays financed through external project aid and transfers to the local authorities.
3From December 1996, the coverage was increased from 11 to 17 banks.
4In percent of broad money at the beginning of the period.
5The program for 1996 was based on broad money excluding foreign currency deposits. The programmed growth was 5 percent, and the outturn was 34.2 percent.
6Including official grants.
7Excluding official grants.

 

 
Table 3. Ghana: Selected Social and Demographic Indicators

	Latest single year			Same region/ income group
	1970–75	1980–85	1990–95	Sub-Saharan Africa	Low income
Area
Total land area (square kilometers)			328,540
Agricultural land (in percent of total)			41.0
Population
Total population, midyear (millions)	9.8	12.6	17.1	583.4	3,179.9
Growth rate (annual average in percent)	2.2	3.7	2.6	2.8	1.6
Urban population (population in percent)	30.1	32.3	36.3	31.1	28.6
Total fertility rate (births per woman)	6.6	6.5	5.1	5.7	3.2
Population age structure (percent)
0-14 years			43.0
15-64 years			53.0
65 and above			4.0
Life expectancy at birth (years)
Total	50.0	53.0	59.0	52.0	63.0
Male	48.0	52.0	57.0	51.0	62.0
Female	52.0	55.0	61.0	54.0	64.0
Mortality
Infant (per thousand live births)	107.0	98.0	73.0	92.0	69.0
Under age 5 (per thousand live births)	. . .	. . .	116.0	157.0	104.0
Adult (aged 15-59)
Male (per 1,000 population)	. . .	. . .	320.0	433.0	244.0
Female (per 1,000 population)		. . .	253.0	359.0	211.0
Maternal (per 100,000 live births)	. . .	1,000.0	742.0	. . .	. . .
Income
GNP per capita (US$)	300.0	360.0	350.0	490.0	430.0
Consumer price index (1990=100)	. . .	31.0	323.0	. . .	. . .
Food price index (1990=100)	. . .	26.0	307.0	. . .	. . .
Income/consumption distribution
(percent of income or consumption)
Lowest quintile	. . .	. . .	7.9	. . .	. . .
Highest quintile	. . .	. . .	42.2	. . .	. . .
Social indicators
Public expenditure (percent of GDP)
Health	. . .	. . .	1.6	. . .	. . .
Education	3.6	1.9	3.4	. . .	. . .
Social security and welfare	. . .	. . .	. . .	. . .	. . .
Health and nutrition
Access to safe water          (percent of population)
Total	35.0	. . .	56.0	47.0	53.0
Urban	86.0	57.0	76.0	. . .	. . .
Rural	14.0	40.3	46.0	. . .	. . .
Per capita supply (1993)
Calories (per day)			2,141	. . .	. . .
Protein (grams per day)			34	. . .	. . .
Immunization rate (percent under 12 months)
Measles	. . .	. . .	68	60	77
DPT	. . .	22	71	58	80
Child malnutrition (percent under 5 years)	. . .	. . .	27	. . .	42
Labor force
Total labor force (in millions)			8
Participation rate (in percent)
Total			47
Male			44
Female			51
Education (1993)
Enrollment rates (in percent of age group)
Primary enrollment			76
Female			70
Secondary enrollment			36
Female			28
Literacy (in percent of population    15 years and older)			60
Poverty incidence (percent of population       below the poverty line)1		1987–88	1992
National head count index		36.9	31.4
Urban head count index		41.9	26.7
Rural head count index		36.4	34.3
Sources: Ghana Statistical Service, Quarterly Digest of Statistics; IMF, International Financial Statistics; and the World Bank.
1Poverty line estimated at Cedi 132,230 per year as at mid-1992. Based on the living standards surveys conducted by the Ghana Statistical Service in collaboration with the World Bank during 1987/88,1988/98, and 1991/92.

 

	1995	1996	1997    Estimate	1998	1999
				Projections
Current account (excluding official transfers)	-402	-525	-435	-505	-484
Exports, f.o.b.	1,431	1,571	1,511	1,658	1,895
Imports, f.o.b.	-1,687	-1,932	-1,805	-1,982	-2,165
Services (net)	-409	-441	-437	-492	-529
Private transfers	263	276	296	311	314
Capital account	-79	-204	-288	-302	-179
Scheduled amortization	-330	-203	-258	-328	-374
IMF repayments	-108	-125	-166	-138	-75
Other capital (net)	359	124	136	164	271
Change in official reserves (increase –)	-187	99	140	-12	-95
Change in arrears (decrease –)	-35	-100	0	0	0
External financing requirements	-703	-731	-583	-819	-758
Expected disbursements	703	631	583	819	650
Grants	263	206	216	215	198
Project	179	153	184	188	185
Program	84	52	31	27	13
Concessional loans	397	386	367	493	415
Project	322	314	326	388	357
Program	75	72	41	105	59
IMF	43	40	0	111	37
Debt deferral/rescheduling	0	100	0	0	0
Residual financing gap	0	0	0	0	108
Sources: Ghanaian authorities; and Fund staff estimates and projections.

	1994	1995	1996	1997 Est.	1998	1999	2000	2001	2002
					Projections
Total public and publicly       guranteed debt	5,703	5,875	6,174	6,324	6,605	6,796	6,908	6,967	6,925
Of which
Multilateral (including IMF)	4,226	4,298	4,662	4,752	4,971	5,083	5,134	5,126	5,014
Bilateral	1,302	1,400	1,484	1,532	1,633	1,713	1,773	1,842	1,910
Other1	175	178	28	40	0	0	0	0	0
External public debt service
Principal	270	438	328	424	466	450	406	389	358
Medium term	130	256	127	172	198	252	240	230	210
Long term	57	75	77	86	130	122	128	125	133
IMF repurchases	83	108	125	166	138	75	38	34	15
Interest	106	128	144	127	141	150	125	126	134
Medium term	36	45	61	65	66	73	55	57	60
Long term	59	72	73	54	70	72	66	65	70
IMF charges	11	11	11	8	6	5	4	4	4
Total
Including IMF	376	566	473	551	607	600	532	515	492
Excluding IMF	282	447	337	377	463	520	489	477	473
Memorandum items:
External public debt-service ratio2
Including IMF	27.4	35.8	27.4	32.9	33.2	28.9	23.4	20.8	18.6
Excluding IMF	20.5	28.3	19.5	22.5	25.3	25.0	21.5	19.3	17.8
Ratio of external public debt          service to GDP3
Including IMF	7.3	9.2	7.5	8.2	8.7	8.1	6.7	6.1	5.4
Excluding IMF	5.4	7.2	5.3	5.6	6.7	7.0	6.2	5.6	5.2
Ratio of external public debt          service to GDP3	110.2	95.0	97.3	93.6	95.2	92.0	87.7	82.2	75.8
Sources: Ghanaian authorities; and Fund staff estimates and projections.
1Consists of short-term oil credits, Cocoa Board debt, and Bank of Ghana debt.
2In percent of exports of goods and nonfactor services.
3In percent.