President John Kufuor has used his time in office to introduce economic reforms and investment incentives

If one of the most reliable indicators of a nation’s success is international confidence in its economy, then Ghana can point to what happened on the London Stock Exchange at the end of September as demonstration that it is on the right track.

Usually dependent on donor loans and grants, the black star state went to the international money market to raise funds for national development projects, issuing a $750 million, 10-year dollar bond at 8.5 per cent – becoming only the second sub-Saharan African nation, after South Africa, to do so. The bond was substantially oversubscribed, attracting more than $3 billion from American and European investors.

One man who will have taken particular pleasure in that outcome is John Kufuor, the charismatic Oxford-educated lawyer who has been Ghana’s president since 2001. Due to step down from the job at the end of his current and final term in 2008, Mr Kufuor can look back on his period in office with a sense of satisfaction. In his own words: “It is gratifying that the results of the years of hard work on the macro-economy and the commitment to good governance are yielding fruits. The economy is stable, inflation and interest rates are declining while the cedi maintains its value against major trading currencies.”

Stability is a particularly valuable asset in the part of Africa in which Ghana is located, where conflict is an all too familiar obstacle to development in other states. Ghana itself has gone through its share of political turmoil in the half century since gaining its independence, but multiparty politics were restored in 1992 and Mr Kufuor’s predecessor Jerry Rawlings, who seized power in a coup, retained it by winning two presidential elections, in 1992 and 1996.

The transition from Mr Rawlings to Mr Kufuor in 200I was the first peaceful handover of power in Ghana from one elected administration to another. And it is a clear sign of Ghana’s political maturity that Mr Kufuor will also be standing aside on reaching the constitutional two-term limit of his time in office, and that whoever takes over from him can be confidently expected to do so as the result of a victory in next year’s elections.

Aliu Mahama Vice-President of Ghana	Francis Poku Minister of National Security

The hallmarks of Mr Kufuor’s New Patriotic Party administration have been economic reform, improved fiscal control, prudent monetary management and investment incentives. As a result, the economy has remained resilient even in the wake of increases in the world market price of crude oil. Government policies have focused on development of the private sector, cutting corporate tax, freeing up capital controls and making it easier to register a business.

Kwadwo Baah-Wiredu, Minister of Finance, says: “Over the past six years, there has been a considerable improvement in our GDP growth rate, moving from 3.7 per cent in 2000 to 6.2 per cent in 2006. Our credit ratings have opened the door for external investors to play a role in the economy.”

Mr Baah-Wiredu expects the economy to grow at 6.5 per cent this year, despite the serious flooding and drought the country has suffered.

Ghana’s economic strength is based on the natural resources with which it is so well endowed. Gold, timber and cocoa production remain its major sources of foreign exchange. In 2006, the balance of payment recorded a surplus of $178.8 million compared to a $84.34 million surplus in 2005 thanks to a strong performance by the export sector, and growth in remittances from Ghanaian diaspora, donor resources and debt relief.

Subsistence agriculture remains the main economic activity, but the industrial and services sectors are growing and non-traditional exports are rising. A major offshore discovery of oil earlier this year (see page 8) could have huge implications for the economy, and the potentially lucrative tourism sector and other business areas will get a huge boost at the start of next year when Ghana hosts Africa’s biggest soccer event, the 2008 African Cup of Nations.

Vice-President Aliu Mahama says Ghana has always been a frontrunner and aims to show that it is still Africa’s shining star. “We are very proud of having built a very solid base for Ghana’s future, in terms of the economy, infrastructure, social issues and so on. We are focusing on five very important pillars: agriculture, infrastructure, good governance, private sector development and human resources.”

President Kufuor visiting an area affected by the floods that hit West Africa. Despite being one of the worst affected countries, Ghana still expects higher economic growth this year

The importance that the government attaches to good governance is emphasised by Francis Poku, Minister of National Security, whose department has a responsibility that extends beyond tackling issues such as terrorism to broader issues concerning the smooth working of the country. “We are interested in ensuring good governance, respect for the rule of law, human rights and the stability of all the country’s democratic institutions,” he says.

“We have made a good start. We have stability and we want Ghanaians to take advantage of it. By maintaining that stability, we can make Ghana an attractive destination for investors and tourists.”