Report No. 7515-GH

Ghana: Structural Adjustment for GrowthJanuary23, 1989

Western Africa Region

FOR OFFICIAL USE ONLY

Document of the Word Ba .k

This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may not otherwisebe disclosed without Wbrld Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit 1985 1986 1/ 1987 1988 (est.)

US$l 054.054 0106 0162 2/ 0202Cedi (0) 1 US$0.0185 US$0.0094 US$.0062 US$.0050

FISCAL .2AR

JANUARY 1 - DECEMBER 31

ABBREVIATIONS

AESC - Architectural and Engineering Services CorporationCDH - Consolidated Discount HouseCPI - Consumer Price IndexCocobod - Ghana Cocoa BoardECG - Electricity Corporation of GhanaEFF - Extended Fund FacilityERP - Economic Recovery ProgramESAF - Enhanced Structural Adjustment FacilityGIC - Ghana Investment CenterGLSS - Ghana Living Standards SurveyGNPC - Ghana National Petroleum CorporationGPT - Ghana Posts and TelecommunicationsGWSC - Ghana Ilater and Sewerage CorporationIERD - International Economic Relations DepartmentIFAD - International Fund for Agricultural DevelopmentLSMS - Living Standards Measurement StudyMFEP - Ministry of Finance ind Economic PlanningOHCS - Office of the Head of Civil ServicePAMSCAD - Programme of Actions to Mitigate the Social Costs

of AdjustmentPIP - Public Investment ProgramSAF - Structural Adjustment FacilitySAPSEC - Structural Adjustment Program SecretariatSEC - State Enterprises CommissionSGMC - State Gold Mining CorporationSIL - Special Import LicenceSOE - State-owned EnterpriseVRA - Volta River Authority

1/ A dual exchange rate system was established on September 19, 1986 whena foreign exchange auction was instituted for specified transactions.The 090 rate applied to the first window (cocoa and residual oilexports, petroleum and essential drugs imports, and central governmentdebt service contracted before January 1, 1986); the rate on the secondwindow was established at the weekly auction. The two rates wereunified with effect from February 20, 1987; all transactions are nowvalued at the rate emerging in the weekly auction. In the week endingJanuary 6, 1989 the marginal rate at the auction was 0230=US$l.

2/ Period Average for auction rate.

FOR OMFCIAL USE ONLY

GHANA: STRUCTURAL ADJUSTMENT FOR GROWTH

Table of Contents

Page No.

ECONOMIC INDICATORS

FOREWORD

SUMMARY AND CONCLUSIONS ......... .............................. i

INTRODUCTION ................................................... 1

CHAPTER I - RECENT ECONOMIC PERFORMANCE

Economic Growth. 3Agriculture. 3Industry. 3Services 7

Savings and Investment. 7The Budget. 8Money and Credit .10Prices and Wages .12Ealance of Payments .13Conclusion .15

CHAPTER II - IMPLEMENTATION OF STRUCTURALADJUSTMENT POLICIES - 1987-88

Incentives Policies .16Exchange and Trade ............ ................. 16Cocoa .19

Public Sector .22Public Expenditure Policy .22

Public Investment Program .22State Enterprise Reforms .24

Public Sector Management .25Economic Management .25Civil Service Reform .......... ................. 25

Sector Policies .26Conclusion .................... ......... 27

CHAPTER III - THE SOCIAL DIMENSIONS OF STRUCTURAL ADJUSTMENT

Introduction .28Distribution of Welfare in Ghana .28

Survey ....... ..... 28Household Characteristics by Expenditure Level 29Other Indicators of Living Standards .29Poverty Profile .31Implications for the Structural Adjustment Program 33

Employment .33Background .33

IThis document has a restricted distribution and may be used by recipients only in the performance |of their official duties, Its contents may not otherwise be disclosed without World Bank authorization.

Impact of Redeployment .......................... 35Employment Prospects 1988-90 .................... 37Economic Environment for Employment Generation 38

Program of Actions to Mitigate the Social Costs ofAdjustment (PAMSCAD) ............................ 40

Conclusion ............. 42

CHAPTER IV - THE AGENDA FOR FUTURE REFORM

The Government's Medium-Term Objectives .... ......... 43Incentives Policies ................................. 44Domestic Resource Mobilization ...................... 44

Tax Reform ...................................... 44Financial Sector Reform ............................. 47Private Sector ............. .......... 48Public Sector ....................................... 50

Public Expenditure Policy ........................ 50State Enterprise Reforms ......................... 50

Public Sector Management ............................ 52Economic Management ............ ................. 52Civil Service Reform ............................. 52

Long-Term Challenges ................... 53Food Crops ...................................... 53Environment ..................................... 54Population ....................................... 55

Conclusion .......... ................................ 56

CHAPTER V - MEDIUM-TERM PROSPECTS

Policy Reforms ...................................... 57Investment and Growth in Production .... ............. 57Growth Prospects .................................... 58The Adjustment Path for 1988-91 ..................... 61Balance of Payments ................................. 63Export Growth ....................................... 63Import Projecti.ons .................................. 65Terms of Trade ...................................... 66External Balance and Capital Inflows .... ............ 66Alternate Scenarios ................................. 67Conclusion .......... ................................ 68

CHAPTER VI - EXTERNAL ASSISTANCE NEEDS

Aid Trends in 1987-88 ............................... 69Aid Requirements 1989-91 ............................ 71Technical Assistance ................................ 74Aid Coordination .................................... 74External Debt ....................................... 76Conclusion .......... ................................ 78

ANNEXES

Annex A Recent Policy Changes Since 1987 .... ...... 80Annex B Macroeconomic Projections 1984-95 .... ..... 84Annex C Merchandise Exports and Aid Data .... ...... 92Annex D Operations of the Foreign Exchange

Auction and Bureaus ..... ............. 97Annex E Selected Tables from Ghana Living

Standards Survey ..... .......... 106

.T/C.ISTICAL APPENDIX ............... 113

LIST OF TABLES

1 Economic Indicators .................................. 42 Selected Production Indicators ....................... 63 Summary of Central Government Finance, 1982-88 ....... 94 Movements in Liquidity of Commercial Banks .... ....... 125 Selected Key Economic Variables ...................... 176 Incentives for Cocoa Farmers ......................... 207 Development Budget 1987-88 ........................... 238 Characteristics of Households by Quintiles .... ........ 309 Distribution of the Poor by Degree of Urbanizationi

and Ecological Zones ............................... 311O Distribution of the Poor by Employer and Occupation

of Head ............................................ 3211 Education and the Poor ............................... 3212 Employment Distribution by Sector, 1970-87 .... ....... 3513 Distribution of Employment ........................... 3614 Estimated Employment by Sector, 1988-90 .... .......... 3815 Main Economic Aggregates ............................. 5816 GDP Growth Rate by Subsector ......................... 5917 Selected Economic and Financial Indicators .... ....... 6218 Balance of Payments Overview, 1986-91 .... ............ 6419 Export Growth Rates ........................ 6520 De:erioration of Terms of Trade ...................... 6621 Ghana Aid Commitments 1986-88 ........................ 7122 Projected Aid Disbursements .......................... 7223 Overall Aid Pipeline, 1987-91 ........................ 7424 External Debt Service on Government and

Government-Guaranteed Debt ......................... 78

EX1tMIC IDOICJNlR___________________

GN PEEt CAPITA IN 1987: US$ 390 1/

NMRAL RAM OF GfIGROSS XNWNICtAL PK=JZT IN 1987 (Z Ccnstant Prices)

----- -- -- Cedis Mil. z 1980-87

GDP at MudWt Prices 746,000 100.0 1.1%Gross Dnestic Investment 80,588 10.8 1.5ZGross Natiaral Saving 44,294 5.9 --Current Accoumt Bal nce -36,294 -4.8 --

Export of Goods & N?factor Serv. 147,139 19.7 2.9%Import of Goods I Ncnfactor Serv. 194,697 26.1 1.52

C1JrU)T AN4D LABOR FPO

Output in 1987 Labor Force, 1984

(Cedis Mil.) Milion Z

Agriculture 377,481 3,311 61.1Industry 118,947 680 12.5Services 245,258 1,431 26.4

GVE*0r FINANS------------------- 1986 1987

Cedis MiU. Z of GDP Cedis Mil. Z of GDP

Total Revenue 69759 13.6 105009 14.1Total Expenditure & Net Lending 73328 14.3 106987 14.3Overall Deficit (-) -3569 -0.7 -1978 -0.3

MiXNEY, CREDIT AND PRICES

1980 1981 1982 1983 1984 1985 1986 1987

Mbney and Q asi-money 7938 11637 14834 20495 34621 55625 85937 132263Bank Credit to Governent 6526 10655 11064 21059 24170 27176 29647 22220Bank Credit to Private Sector 943 1345 1562 2841 12153 21178 37455 46945

Mbney and Quasi Money asPercent of GDP 18.5 16.0 17.4 11.1 12.8 16.2 16.8 17.7

General Price Index (1977-100) 401 869 1062 2357 3304 3647 4543 6352

__ote__________las____________Note: 1/ Atlas nethod.

RALANCZ OF PAYMENTS MEWiANDLSE EXRS (AVERAGE 1986-87)__.__________------ 1986 1987 ------------------

---- ---- US$ Mi1 ITrade Balance -56 -198 ------- -----

Exports (FOB) 749 827 Cocoa Beans & Products 499 63.4Imports (CIF) -805 -1025 Gold 124 15.7

Residu l Oil 19 2.3Tinber 67 8.5

Invisibles (Net) -148 -26 Electricity 48 6.0Services -221 -227 Mbyguese 8 1.0Transfers 73 202 Dimond 5 0.6

Bauxite 5 0.6Current Balance -203.6 -223.5 All Other Goods 14 1.8

Capital Account 184.5 374.7 Total 788 100.0Grants 118.2 122.2Official Capital (Net) 128.2 218Private Capital (Net) 2.7 -3Capital n.e.s. -64.6 37.5 EXIRNAL EDT, EMqER 31, 1987Errors & oCmissions -37.8 -12.4 -------------------------------- USS Bil.

Overall Balance -56.9 138.8 Total Outstanding andDisbursed MLT 2,202

Net DMF 16.1 -25.2Arrears Payments -3.6 -71.1Other 44.3 -42.5Gross Internatical

Reserves (eni of period) 163.2 194.4 rT SERVICE PAIIO FOR 1987

Total Outstanding andDisbursed MELT 1/ 53.9

EXCHANG RATE Cedib/US$ IBRD/imT LENDING (December 31, 1987)

IBRD IDA IFCAverage 1988: 202 ---- ---- ---Average 1987: 162 OutstandingAverage 1986: 106 and Disbursed 151.1 699.7 30.0Average 1985: 54 Undisbursed 0.0 409.3 15.0

Outstanding, Inc.Undisbursed 151.1 1109.0 45.0

------------------------------------------------------------------- __--------__-----------------------

Note: 1/ Debt Service includes IXF debt and excludes arrears payrnits.As percent of exports of goods and nnn-factor services.

FOREWORD

(i) The report, Ghana: Structural Adjustment for Growth, evaluatesthe progress achieved under the structural adjustment prog.am,the priorities for the continuation of that process,particularly during 1989-90, and the projected impact on theeconomy. The report also examines the role of donors insustaining the momentum of the reforms.

(ii) The Statistical Appendix presents a time series of key economicdata for Ghana. As the appendix mainly draws on officiallypublished data sources, some of the text tables may differslightly from the Statistical Appendix. The text tables aredrawn from diverse sources, and include Bank or IMF staffestimates wherever the official data are either inconsistent orincomplete.

(iii) The report is based on the findings of missions which visitedGhana in May and July 1988. The mission consisted ofTheresa P. Jones (Chief of Mission), Pirouz Hamidian-Rad(Macroeconomist). Peter Gregory (Labor Economist/Consultant),Thang-Long Ton (Research Assistant), and Ismail Ibrahimi (DebtSpecialist). Paul Glewwe (Economist) analyzed the data from theGhana Living Standards Survey. Annette Minott providedsecretarial support at Headquarters. The mission benefited fromassistance provided by staff of the Bank of Gh.na, the Ministryof Finance and Economic Planning, the Ghana Statistical Service,and other agencies in Ghana.

SUMMARY AND C_ NCi.USIONS

Introduction

1. In April 1983, the GoveLnment of Ghana launched reforms that wereintended to reverse the decline in the economy since 1970. The program hasbeen supported by the International Monetary Fund, the World Bank, andother donors. The achievements of the Economic Recovery Program (1983-86)are impressive. Growth resumed and adjustment of the official exchangerate narrowed the differential between the parallel and official rates.Production of cocoa rose, largely a result of higher prices for the farmer.Fiscal and monetary stability was restored and external ar:ears reduced.Nevertheless, the economy faced structural problems which, if not remedied,would inhibit growth. Production was below potential. The banks were weakand investment was insufficient. Public resources were tiot managed well.

2. In order to lay a firm base for sustained growth, the Governmentdecided to formulate policies to continue the process of structuraladjustment. Substantial progress was made in carrying out this programduring 1987-88. Experience also has demonstrated some problems. Amongthese is the lagging response of private investment and still weak capacityin economic management. At the same time, Ghana must endeavor to reach itsgrowth objectives in the face of deteriorating terms of trade. The need torespond to these problems, as well as to consolidate the gains achieved,has determined priorities for the next two years. The Government is alsoconfronting longer-term issues - how to promote growth in agriculture,protect the environment, and make population policy more effective.Concessional assistance will be crucial to support the country's efforts toachieve the economic expansion necessary to raise per capita incomes.

Recent Economic Performance

3. Economic growth decelerated slightly in 1987, owing to the impactof poor weather on agriculture. Leading sectors were trade,transportation, construction, manufacturing, and mining. Growth in 1988 isestimated at about 6 percent. In 1987, investment rose to nearly 11percent of GDP; preliminary estimates show a further increase in 1988.Higher public investment was the main factor; private investment also grew,but was confined mainly to mining. To an increasing degree, futureexpansion in the economy will depend on adequate private investment in awider range of economic activity. Although several recent actions by theGovernment should encourage a greater response from the private sector,additional measures may be needed to improve the investment climate. In1987-88, both foreign and nationas -,vings rose, the former explained byhigher levels of concessional assistance. Public savings increased sharplyin 1987, while private savings declined in real terms. In 1988, the trendappears to have been reversed. Budget targets were surpassed in 1987.Revenue collections exceeded estimates, increasing to 14.1 percent of GDP.The Government constrained the growth, while improving the structure, ofexpenditures by emphasizing operations and maintenance and the development

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budget. A lower overall deficit, coupled with an increase in foreignfinancing, enabled the Government to retire debt to the banking system.The 1988 budget contained several tax reforms. Slower revenue growth(primarily owing to the trend in receipts from cocoa), together with thepriority placed on critical expenditures, is expected to lower currentsavings and raise the overall deficit. Nevertheless, higher foreignfinancing would enable the Government to repay the banking system again.

4. Monetary developments in 1987 reflected the improvement in thebalance of payments and fiscal performance. Broad money rose by 53percent, mainly because of an increase in net foreign assets. All areas ofthe economy felt the restrained growth in net domestic assets. Due to astrong increase in deposits and restrictions on _ expansion of credit,the banking system holds substantial excess reserves. One manifestation ofthe problem is the persistence of negative real interest rates, althoughthe Government has decontrolled rates. The combination of excess reservesand unmet credit demand highlights the difficulty of managing liquidity inthis complex situation. Policies must address several objectives in thecontext of an oligopolistic and weak banking system and without sufficientinstruments to ccntrol monetary aggregates. Inflation accelerated to 40percent in 1987, owing to a rise in food prices and the depreciatica of theexchange rate. During 1988, good harvests moderated price pressures.Because of the upsurge in inflation in 1987, real wages for the civilservice declined, in contrast to the improvement since 1984. However, thecombination of larger wage increases and lower inflation should cause realwages to improve in 1988.

5. The balance of payments registered an overall surplus )f nearly$140 million in 1987, despite lower cocoa prices. Export earn::ngs rose by10 percent, led by timber and gold. In real terms, imports grew by 18.5percent. In spite of higher imports and interest payments, the currentaccount d ficit widened only slightly. This was more than compensated by adoubling o47 the capital account surplus as inflows of concessionalassistance increased by 14 percent. In 1988, the current account of thebalance of payments is likely to have deteriorated, mainly because of thedecline in cocoa prices and shipments. However, a higher capital accountsurplus is expected to finance most of the increase in the deficit. As aresult, Ghana is expected to achieve the targeted overall surplus of $125million.

Implementation of Structural Adjustment Policies 1987-88

6. The Government focused on policies to improve incentives and themanagement of public resources. The auction has been key to the effort toreach a market-determined exchange rate. It has functioned well since itsbeginning in September 1986. Industry has received the largest share offoreign exchange, accounting for about half oi the total. There is still asubstantial differential between the auction and bureau foreign exchangerates of over 40 percent, notwithstandir a temporary narrowing in May-June1988 to about 20 percent. Although seasonal factors may have infiuencedthe trend, it also points to the need for additional measures to promotethe convergence of the two rates. During 1987 the Government reviewed

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trade taxes and tariffs. Based on the review, the 1988 budget includedseveral actions: the sales tax was unified across most import and domesticcommodities; the sales tax on imports began to be levied on the duty-inclusive value; and the sales tax structure was simplified. In addition,the nominal tariff rate was reduced by a uniform 5 percentage points forthe bulk of goods bearing a customs duty of 15 percent or higher. The netimpact of these changes was to lea,e nominal levels of protection roughlythe same, with the exception of several industries receiving temporaryprotection through special taxes.

7. Better incencives for cocoa farmers has been a major plank of theGovernment's program. Effective for the 1986/87 minor crop, the producerprice was raised by 65 percent to ¢140,000 metric ton. As a result, thefarmers' share of the world price (valued at the official exchange rate)rose from 23 percent in 1986/87 to 33 percent in 1987/88. There is strongevidence that farmers are responding by rehabilitating and replanting theirfarms. A producer price of 0165,000/metric ton was announced in May 1988.This would raise the farmer's share of the f.o.b. price to an estimated 46percent in 1988/89. In the event that actual export prices in localcurrency terms are higher than anticipated, the additional receipts will beplaced in a compensation accoint, with 60 percent going to the farmer and40 percent to the Government, to be paid at the end of 1989. TheGovernment intends to continue to improve incentives for cocoa farmers.Part of the explanation for the excessive taxation of the cocoa farmer isthe inefficient operations of the Ghana Cocoa Board (Cocobod). During 1987and 1988, Cocobod took several actions to lower costs. Staff levels werereduced and sales of unviable plantations are in progress. Operating costsfell from 29 percent of the f.o.b. price in 1985/86 to an estimated 17percent in 1986/1987. The corporate plan for 1987/88-1990/91 sets outfuture measures which will be taken to lower the Board's share of thef.o.b. price to 15 percent by 1988/89 and to make efficiency gainsthereafter. These include: phasing out input subsidies; sheddingresponsibility for input supply; reducing its role in transporcation;lowering the costs of evacuation; divesting additional plantations; andimproving accounting and management information. The corporate plan mustbe implemented fully if the targeted reduction in operating costs is to beachieved.

8. Pricrities in the area of public expenditures were: one, toimprove the allocation of operations and maintenance spending; and two, toimprove the planning and implementation of investment. During 1987, astudy was completed on recurrent expenditure norms for health, education,and agriculture. During 1988, a manual outlining the main principles to beused to implement the guidelines was distributed to budget officers toassist in preparing the 1989 budget. The three-year Public InvestmentProgram (PIP) is supporting the reform effort, but more attention needs tobe given to monitoring and effective implementation. The Governmentextended the PIP to cover the period 1988-90.

9. State enterprise reform progressed more slowly than expected.Nevertheless, there were several achievements. The Government drew upguidelines on budgetary transfers to state enterprises. Corporate plans

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were finalized for 6 priority enterprises. The Government advertised 32enterprises for sale to investors. Of those, interests in six iointventures would be sold by the end of 1988 and liquidation of tenenterprises was in the final stages. The Government also took some actionsto improve economic management. In order to strengthen coordination, anEconomic Liaison Unit was formed. The Ministry of Finance and EconomicPlanning (MFEP) also set up a Debt Management Unit. Nevertheless,analytica' support and some of the basic information needed for economicpolicy making are still lacking. Monitoring has improved in some areas,but is still insufficient for some parts of the budget and corsessionalassistance. Civil service reforms aim at reducing staff levels, raisingremuneration, and increasing salary differentials. By the end of 1987,some 12,000 civil servants had been retrenched. A similar number wasexpected to be laid off in 1988. Based on the preliminary findings of jobinspections and other analyses, the Government intends to retrench 12,0C0employees in 1989. As further instances of overstaffing are revealed, theprogram will be extended into 1990. In some skill areas the Governmentwould continue to recruit staff, but there should not be hiring in thosejob categories accounting for most of the redundancies. Mechanisms need tobe developed to control hiring in both the civil and education services;otherwise, the expected benefits of staff reductions may not materialize.The Government continued to progress on sector reforms, particularly ineducation.

Social Dimensions of Structural Adjustment

10. Economic gains since the beginning of the Economic RecoveryProgram have benefited most of the population. Nevertheless, it will taketime before economic expansion alone is able to generate sufficientemployment and higher incomes for the poor. The effort to address thisconcern is a comprehensive one. It includes: the Ghana Living StandardsSurvey (GLSS), which will improve the information base and monitor theeffects of structural adjustment; the promotion of more opportunities forproductive employment; and an intensification of the poverty focus of thereforms, through a program of actions to mitigate the social costs ofadjustment (PAMSCAD).

11. The first results of the GLSS show that most of the poor live inrural areas, particularly in the northern zones. A large share is found inhouseholds headed by a farmer without cocoa land. Most live in householdsheaded by someone with no education. They are less likely to attend schoolthan other groups. The unemployed are rarely found among the poorest.Farmers in the northern region of Ghana have been correctly identified as agroup requiring special effort to improve their condition. More generally,the survey supports a strategy of poverty alleviation through improving therural terms of trade and agricultural productivity and growth. Relativelylow access to services, even among wealthier groups, reflects the pastdeterioration of infrastructure in Ghana. The data confirms the emphasisof public investment on rehabilitating infrastructure and improving accessto social services for rural residents. Better educational opportunitiesfor the poor would be particularly important to enable them to raise their

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expenditures. The information also suggests that the main cause of povertyin Ghana is not unemploymer,t, but low incomes awong those who do work.

12. According to the data available, there is no severe shortage ofemployment opportunities in Ghana. However, it is true that during thedecade after 1974, the average productivity of workers and their realearnings declined sharply. In general, it would appear that the reformprogram has improved employment conditions, but they have a long way to go.In the course of the decline in the economy, the structure of employmentchanged. Agriculture absorbed most of the growth of the labor force.Manufacturing employment rose by 51 percent in spite of a sharp decline inoutput, the increase attributable almost entirely to parastatals.Overstaffing increasingly characterized the private modern and publicsectors. Between 1984 and 1987, agriculture again absorbed most of thegrowth in the labor force. In part, this may be a voluntary choice in viewof improved incentives. Also, alternatives in the non-agricultural sectormay be scarce as it moves toward a more efficient allocation of labor.This has implied a reduction of employment in manufacturing, the beginningof a cutback in the public sector, and only modest expansion in otherareas.

13. Taking into account the proposed retrenchment of civil servantsand the need to correct overstaffing in state enterprises, the Governmentforesees the release of about 60.000 employees during the next three yearsIf those displaced look for opportunities in urban wage employment, thesituation is grim. However, this view underestimates the adaptability ofthe labor force. In 1983, there was a massive return of workers fromNigeria. The economy was depressed, but they appear to have been absorbedrather quickly, largely in agriculture. The lay-off of public sectorworkers involves a much smaller total number, is spread over a longerperiod of time, and is occurring under more favorable economic conditions.Among those retrenched so far, of those who indicated an occupationalpreference, almost 56 percent named agriculture. They have shown anawareness of the nature of the labor market in another way. Questioned onthe employment status they would prefer, most opted for self-employment.This realism suggests that their absorption into the labor market will bemore easily achieved than would have been possible had a greater preferencebeen expressed for wage employment in the urban private sector. Two otheraspects of redeployment provide grounds for optimism: first, the programhas attracted many voluntary retirements; and second, a relatively smallproportion has registered for assistance.

14. Government and private sector activity will offset some of theunfavorable consequences of retrenchment. One of the most important ishigher levels of public investment which will require substantial laborinputs. Continued dynamic growth would expand and improve employmentopportunities. Estimated growth in labor requirements for the economyexceed the expected increase in the labor force, which would have theeffect of improving wages. There have been a few practices, primarily inthe past, which may have hindered the efficient functioning of the labcrmarket. Expansion in agriculture is key to employment generation. Inaddition, the current effort to promote small and medium-sized enterprises

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and the adoption of a liberalized foreign exchange regime will favor animprovement in employment conditions.

15. The Government is concerned about the poor and the sustainabilityof economic reforms if inadequate attention it paid to them. The followingare target groups for PAMS'AD: (i) rural households, especially in thenorthern regions; (ii) low income un- or under-employed urban households;and (iii) retrenched workers who lack productive employment. Projects werechosen on the basis of several criteria: strong poverty focus; higheconomic and social rates of return; modest institutional requirements;and, in sensitive areas, high visibility. Included are communityinitiative and employment generation projects, counselling and placementservices for the redeployed, and projects designed to meet basic needs.The effectiveness of PAMSCAD is contingent on funding and properimplementation. Up to now relatively few donor commitments have beensigned, but several are expected to be finalized in early 1989. Inaddition, implementation could be improved. Given the c mplexity of theprogram and the need for quick action, responsibility f.: carrying outprojects should be decentralized. Procedures to ensure an adequate flow offinancing should be established without delay. The Government may 'Wish tofocus on a few critical projects in an advanced state of preparation.During 1988 the most progress was made on community initiative projects.

The Agenda for Future Reforms

16. The central task for the next two years (1989-90) is to maintaineconomic growth. Attention will be given to several problems, some long-standing and others which have emerged. The economy is still constrainedby inadequate savings and investment. In particular, growth depends on adynamic response from the private sectcr. Efforts are needed to lowerinflation, while providing sufficient credit to the private sector. Thedesign and implementation of some aspects of the program have experienceddifficulty because of strained economic management capacity. TheGovernment also is addressing longer-term challenges: agricultural growth,protection of the environment, and population policy. Ghana will be tryingto meet its objective in spite of a substantial decline in the terms oftrade. This increases the urgency of the reform agenda.

17. The aim of structural adjustment is to lay the base for sustainedgrowth within the context of a viable balance of payments and pricestability. The Government's goal is to achieve an average annual growth ofreal GDP of at least 5 percent, thereby ensuring modest increases in percapita incomes. In crder to meet that target, it is estimated thatinvestment would increase from 12.5 percent of GDP in 1988 to 16 percent by1990 and that national savings would rise from 6.5 percent of GDP to 8.5percent. Foreign savings, primarily financed by concessional aid, isestimated at 6 percent of GDP in 1988, and is projected to rise to 7.6percent in 1989-90 before starting to decline. To attain these objectives,during 1989-90 the reforms will emphasize: further improvements inincentives; measures to increase domestic resource mobilization; and betterresource management in the public sector.

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18. The Government will promote the convergence of the exchange ratein the auction and bureau markets. One measure will be full literalizationof payments and transfers for current transactions by June 1990. In thecase of trade, the Government abolished import licensing, effective mid-January 1989. For the future, import duties should be restructured instages to create a lower and more uniform pattern of protection in order toencourage non-traditional exports and efficient import substitution. TheGovernment is aware of the problems of some companies, both as a result ofpast distortions and trade liberalization. In response to those concerns,a study will be undertaken during 1989, jointly with the World Bank, onprotection and the extent of unfair trading practices. In the meantime,levels of tariff protection established in 1988 remain in force.

19. The main objectives of tax reform are twofold. The first is toraise revenue to finance necessary public spending, while reducing relianceon cocoa. The second is to enhance the contribution of the tax system togrowth, while promoting equity. Further strengthening of taxadministration is critical to both. Tax reform also should be guided byseveral principles. Reliance on consumption taxes should be increased.The Government is considering an enlargement of the role of the sales taxby introducing a credit system to replace the current ring system. Highertaxes on motor vehicles and petroleum products would improve equity,increase revenues, and recover more of the social costs of road use.Consistent with those objectives, the 1989 budget raised rates of motorvehicle taxation. In the area of direct taxes on personal income, theobjective would be to broaden coverage, thereby spreading the burden morefairly. Currently interest income, dividends, and capital gains are taxedat different rates, distorting the distribution of savings among differentforms of investment. The Government reduced taxaticn of dividends in the1989 budget, a step in the right direction. In the case of companytaxation, in order not to discriminate against different sectors, the ratefor all activities should be unified at the lowest rate of 45 percent.These measures would enable revenue to rise and would lower reliance oninternational transactions, particularly cocoa. An additional priority isto examine investment incentives. During 1'89, the Government willevaluate the impact of the tax system and other regulations, such as theInvestment Code, on investment.

20. The weak financial system is impeding structural adjustment inGhana. The banks are characterized by distortions resulting from previouscontrols, selective credit policies, lack of competition, and weaksupervision. Diagnostic studies have been completed for the major banks todetermine the magnitude of problems and to decide on remedies. Theproposed restructuring will cover capital losses and recapitalization,where necessary. It is a complex and sensitive program, which will taketime both to implement and to benefit the economy. In the meantime, theGovernment has taken several measures to establ4_h better bankingpractices, improve supervision and deposit mobilization, strengthen publicconfidence, and increase the efficiency of credit allocation. It alsointends to develop indirect instruments for monetary management, capable ofabsorbing or injecting liquidity as and when required.

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21. To a large extent, the Government can best promote the privatesector by continuing to implement prudent fiscal and monetary policy,reducing intervention in the economy, and rehabilitating infrastructure.However, the response to these measures and to the changes in incentivesneeds to improve; otherwise, Ghana is unlikely to meet its growthobjectives. Additional initiatives could improve the investment climate.The dialogue between the Government and the business community needs to beimproved and more information provided on economic policies. The capacityfo policy analysis by private sector organizations needs to bestrengthened. Implementation of financial sector reforms is a priority forthe private sector. It is also time to re-examine the provisions of theInvestment Code. The Ghana Investment Center should expand its promotionrole, while streamlining the investment approval process and limitingGovernment interver.tion.

22. The focus in the area of public expenditures will be to improveimplementation through better monitoring and control. The rolling three-year public investment program (PIP) will be updated annually and theGovernment has established a Project Selection Committee. The focus ofactions for those priority enterprises remaining fully or partially stateowned are improvements in policy environment and better monitoring ofperformance. All state enterprises are expected to become financiallyself-sufficient; initially the focus will be on commercially-orientedfirms. Corporate plans and the associated performance agreements for 14priority enterprises would be finalized by the end of 1988. Several issueshave arisen on divestment. Although the value of the assets of the firmsidentified so far for divestiture exceeds their liabilities, many havelarge unfunded liabilities for termination and pension benefits. TheGovernment has decided to bear these costs. In order that this requirementdoes not limit resources available for investment nor progress on stateenterprise reform, Ghana should have access to sufficient programassistance on concessional terms. Another issue is whether the Governmentshould invest in enterprises identified for divestment. Experience inother countries indicates that investors prefer to undertake rehabilitationthemselves. Nevertheless, the Government should take some actions -maintenance, financial and management audits, retrenchment plans, andmanagement contracts. A third issue is what is the best administrativedrrangement. Again, experience in other countries indicates thatdivestment is best carried out by a specially constitutec: group.

23. In order to strengthen economic management capacity, theGovernment will improve the organizatioa and operations of the Ministry ofFinance and Economic Planning and make the budget process more effective.Preparations for the National Development Planning Secretariat arecontinuing and it is expected to become operational before the end of 1990.The Government completed a study on pay and grading within the civilservice; it recommended a differential of 13:1. In order to makemeaningful progress within the budget constraint the Government will haveto limit across-the-board adjustments to modest levels and avoid changes inallowances which would compress the salary structure. Since salaryrelativities will improve only gradually, the need for the skillsmobilization scheme and the special duty allowance remains strong.

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24. In the longer-term, measures to promote agricultural growth,protect the environment, and implement a population policy will beimportant. Agriculture operates well below potential mainly becauseproductivity of the smallholder is low. This is largely attributable tolimited use of new technology, poor delivery of inputs, weak agriculturalservices, insufficient credit, and inadequate infrastructure. Lowagricultural productivity has a pervasive impact on the economy. Duringthe last year the Government has devoted more attention to the challenge ofagricultural growth. A rehabilitation program has been identified focusingon basic services and activities with the greatest potential for improvingsmallholder production. Ghana's growth prospects depend on the success ofthese efforts. Continued poor performance would constrain growth with anobvious impact on living standards, particularly for the poor. Protectionof the environment is a serious concern of the Government. The maintenanceof tree cover is necessary for sustained agricultural production. Hiowever,pressure on this resource is increasing. In order to protect and manageeffectively its forests on a sustained yield basis, the Government hasdecided to increase forestry fees and rationalize concessions. Theseefforts will be supported by a forestry resource management project.Ghana's population has grown rapidly, straining essential services. Womenface greater health risks from many, and often inadequately spaced, births.Ghana was a leader in Africa in recognizing t.Ae consequences of populationgrowth, but implementation has been erratic. Actions are needed toincrease the momentum of population programs.

Medium-Term Prospects

25. The projections assume vigorous pursuit of policy reforms andimplementation of the three-year rolling public expenditure program. GDPis projected to increase at about 5 percent per annum over the 1988-95period. Growth is supported by a significant increase in investment,financed largely by national savings in the long-run, with private savingsresponsible for the major part. In the short-run, the public sector willcontinue to account for the larger share of investment. Over the long-run,the role of the private sector would increase and by 1995 it would accountfor nearly half of total investment.

26. In agriculture, replantings would stimulate cocoa production.Output is expected to reach 278,000 tons by 1991 and 300,000 tons by 1995.Food and industrial crops would respond favorably to improved extension,credit delivery and input supply. Agricultural output is expected to growat 3 percent per annum through 1995. Industry would be the fastest growingsector. Gold output is projected to expand rapidly in response to theimproved exchange rate policies and additional investment, increasing bytwo and a half times between 1987 and 1995. Further growth inmanufacturing would be achieved by new investments in efficient importsubstitution and export industries, fostered by liberal trade and exchangerate policies and better financial intermediation. Services would expandto support higher production.

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27. The balance of payments would maintain a sizeable surplus in orderto meet Ghana's obligations to the IMF, increase reserves, and settleremaining arrears. The current account deficit, as a share of GDP, isprojected to continue to widen in 1989, compensated by capital inflows,mostly concessional. Fueled by gold, export earnings are projected to growat an average annual rate of 10 percent between 1988-1992. However, cocoaexport receipts would continue to decline in 1989 becau3e of fallingprices. Due to the response of farmers to improved incentives, the volumeof cocoa exports would increase sharply in 1989, and more modestlythereafter. The Government also committed itself to promote nontraditionalexports, which are expected to grow rapidly from the present low base.Cocoa's share of total exports falls from 60 percent in 1987 to about 40percent by 1991, reflecting the effect of poor prices and structuraladjustment. Imports would increase roughly in line with growth in theeconomy. Ghana's terms of trade are projected to deteriorate because ofthe decline in cocoa and gold prices.

External Assistance Needs

28. Commitmen,; of concessional assistance increased by nearly 60percent in 1987 over 1986 levels. They are estimated to have risen to $760million in 1988, an increase of about 15 percent. The share of bilateraldonors has declined from 48 percent in 1986 to only 42 percent in 1988.Since 1986 disbursements have increased by about 6 percent per annum toreach an estimated $490 million in 1988. Disbursements from the pipelineimproved during the last two years. However, for new commitments thedisbursement ratio declined. Actions on the part of both the Governmentand donors could improve disbursements from new commitments of program aid.

29. Concessional aid continues to be critical to support structuraladjustment in Ghana. Because of the deterioration in the terms of trade, areduction in the current account deficit will take longer to achieve.Although debt service will decrease, obligations remain high. The aidpipeline at the beginning of 1989 is estimated at $1.4 billion. Newcommitments of $800 million in 1989 and an average of $830 million each in1990-91 are recommended. The share from bilateral donors is expect('d toincrease to slightly over half. These levels represent a modest realgrowth of under 8 percent, compared to 1987-88. This is justified )yGhana's past performance and the need to sustain progress by ensuringadequate imports and sufficient resources to finance key components of theprogram. Quick-disbursing program and sector support of about $330 millioneach year during 1989-91 is recommended. Use of the auction can speed updisbursements and supports an important reform. In addition to financingimports, program assistance is required to generate counterpart resourcesto meet the costs of several reforms. Food and commodity aid commitmentsof $40-45 million a year are recommended. Recommended project commitmentsrise from $415 million in 1989 to $480 million in 1991. Donors should beguided by the public investment program.

30. There is strong aid coordination in Ghana both between theGovernment and the donors and among the donors. During 1987-88 co-financing activity increased; there are several vehicles for additior:al

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cooperation, particularly the Second Structural Adjustment Credit. Donorsshoul. make efforts to streamline their procedures. Technical assistanceis key to the success of many reforms. The Government can improve theutilization of this resource by decentralizing the process of approvingconsultant contracts.

31. Although the stock has grown, the debt service burden is expectedto lessen, reflecting the improvement in the structure of Ghana's debt andthe decline in obligations to the IMF after 1988. After rising to nearly70 percent of exports of goods and non-factor services in 1988, total debtservice is projected to drop to 35 percent by 1990 and to under 20 percentby 1995.

32. At the last Consultative Group meeting for Ghana, donors pledgedsupp.,rt to a program which broadened and deepened economic reforms. Thecountry has made substantial progress in implementing what the Ghanaiansand the donors recognized would be only the first stage of the structuraladjustment process. Encouraged by the response of the economy andchallenged by the problems remaining, the Government is committed toimplementing further reforms. The ability of the country to persist inthis ambitious program and its success in raising the living standards ofits people depends also on donor support. In order to maintain themomentum, donors should reinforce and extend their support to Ghana'sstructural adjustment program.

INTRODUCTION

1. In April 1983, the Government of Ghana launched an ambitious setof reforms that was intended to reverse the deterioration in the economysince 1970. The program has been supported by resources from theInternational Monetary Fund (IMF), the World Bank, and other donors. Theachievements of the Economic Recovery Program (1983-86) are impressive.The economy resumed growth as gross domestic product increased by an annualaverage of about 6 percent. Adjustment of the official exchange ratenarrowed the differential between the parallel and official rates.Production of cocoa, the main foreign exchange earner, rose from a low of158,000 metric tons to 228.000 metric tons, largely because of higherprices for the farmer. The government budget was turned arounu from adeficit (excluding expenditure financed by external project aid) equivalentto 4.7 percent of GDP in 1982 to one of 0.3 perceat. Comprehensive pricecontrols were dismantled. The average annual rate of inflation deceleratedfrom 123 to 25 percent.

2. In spite of these achievements, the Government recognized thatthe economy faced major structural problems. Although the balance ofpayments had improved, exports remained well below historical levels, whilethe volume of imports was inadequate to support the recovery process. Theweakness of the financial system hindered the mobilization of savings andresulted in a low preference for holding financial assets. Production wasbelow potential, particularly agriculture, which accounts for half of GDP.Cocoa farmers were still taxed excessively, thereby discouraging therestoration of Ghana's production. The response of the private sector hadbeen uneven. More tax revenue was required in order to finance the growthof public investment from its low level. Improved planning was needed toincrease returns on capital spending by the Government. Senior staff ofthe civil service were still underpaid, while there were too many employeesat lower levels. Weak implementation capacity was becoming an obstacle tothe success of the reforms.

3. In view of these problems and in order to lay a firm base forsustained growth, the Government decided to extend its economic program andto formulate policies for the medium-term which would continue the processof structural adjustment. The broadening of the reform effort has beensupported by an IDA Structural Adjustment Credit and cofinanced by otherdonors, by an Extended Arrangement and Structural Adjustment Facility ofthe IMF, and other concessional assistance.

4. The Government made substantial progress in implementing thestructural adjustment program during 1987-88. Delays were experienced insome areas such as state enterprise reform, and more progress was achievedin some areas (i.e. exchange rate) than in others (i.e. increasing civilservice salary differentials). The economy continues to respond favorablyto the reforms. The positive impact of growth on poverty reduction is

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being reinforced through public expenditures, the promotion of employmentopportunities, and the program of actions to mitigate the social costs ofadjustment (PAMSCAD). Experience has demonstrated some problems. Amongthese are the lagging response of private investment, the relatedconstraint of a poorly performing banking system, and continuing weaknessesin economic management capacity. At the same time, Ghana must endeavor tosustain growth in the face of a serious deterioration in the terms of traderesulting from lower cocoa and gold prices. In order to address theseproblems, as well as to consolidate the gains achieved so far, theGovernment intends to continue to pursue the reforms needed to promote thestructural adjustment of the economy. Adequate inflows of concessionalassistance will be crucial to support the Government's efforts to achievegrowth sufficient to raise pr- capita incomes.

5. The World Bank's previous report 1/ analyzed the main elementsof the structural adjustment program and their expected impact on theeconomy. After reviewing recent economic performance (Chapter I), thisreport examines implementation of these reforms during 1987-88(Chapter II). The social dimensions of the program are considered inChapter III. The reform agenda, particularly during 1989-90, is discussedin Chapter IV. On the basis of the Government's planned actions, theimpact of the reforms on the economy is projected (Chapter V). The finalchapter outlines external assistance requirements.

1/ Ghana: Policies and Issues of Structural Adjustment, World Bank ReportNo. 6635-GH, March 30, 1987

I. RECENT ECONOMIC PERFORMANCE

6. The highlights of economic performance during 1987-88 werecontinued growth and further improvements in investment and savings, theimpetus for the latter coming mainly from the public sector. The expansionof domestic credit was sharply constrained and contributed to anaccumulation of excess reserves by the banking system. At the same time,demand for credit from the private sector remains high. Lower food priceshelped moderate inflation in 1988. The balance of payments recorded asizeable surplus in both years, helped partly by an increase indisbursements of concessional assistance.

Economic Growth

7. Growth in real GDP decelerated to 4.8 percent in 1987, primarilyreflecting the impact of poor weather on agriculture. The leading sectorswere trade and transport services, construction, manufacturing, and mining.ValLe added in non-cocoa agrirulture marginally declined. In 1988 theeconomy is estimated to have grown by about 6 percent, as food cropsresponded to better weather.

8. Agriculture. Erratic rainfall had an adverse effect on outputin 1987. Production of maize, the most important cereal, droppedmarginally. Cocoa output for 1987/88 was 17 percent below the previousseason. Poor weather also causod output from the 1987/88 cocoa crop todecrease by 17 percent. Weather conditions were better in the northernregions, explaining the incLease in production of millet. In 1988 farmersplanted 10-20 percent more acreage for most food crops, responding torelatively high domestic prices. That, coupled with higher yields becauseof plentiful rainfall, is estimated to have raised output by between 8-12percent for most crops. The decline in prices was not as sharp as inprevious bumper harvests, possibly because some of the surplus was exportedto neighboring countries. Thus, production prospects for 1989, assuminggood weather, are favorable. Cocoa output recovered in 1988/89 and isexpected to reach 230,000 metric tons.

9. Industry. Value added in mining rose by 8 percent in 1987 andpreliminary indications show even higher growth in 1988. Production ofgold, the most important mineral in terms of foreign exchange earnings,increased by 14 percent in 1987, reflecting rehabilitation of mines at bothAshanti Goldfields and State Gold Mining Corporations. The former is alsoopening a new shaft. The devaluation of the cedi has increased .evenuesand profits, more than compensating for higher operating costs in someareas (for example, electricity, imported inputs and machinery), therebyproviding resoutces to boost production. However, for the State GoldMining Corporation (SGMC), old 2quipment, inadequate working capital, lowproduction, and negligible development funds have hampered the company's

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TAME 1. GHANA: EOnXMXC flCICAlS

Peroentage Change1984 1985 1986 1987 1988 ___________________________-_

a/ 1986/85 1987/86 1988/87

Naticral Acco.nts (Millicns of Cedis)

GDP at Markt Prices (in 1975 prices) 5158 5420 5702 5976 5.2Z 4.8Z 6.02Agriculture 2780 2798 2890 2891 3.3Z 0.0%Industry 599 705 758 844 7.5Z 11.32Services 1917 2061 2195 2401 6.'Z 9.4Z

GDP at Current Prices 270561 343048 511373 746000 49.1Z 45.9Z

Investnent/GDP (CUrrent Prices) 6.9 9.6 9.7 10.8 12.5 _ _ _Natiaial Savings/GDP (Current Prices) 4.0 5.4 5.3 5.9 6.5 _ _ _

Mnyey and Barking (Billicns of Ced.i) b/

Mxiey and Quasi Mbney (EQ) 34.6 55.6 85.9 132.3 142.5 54.5Z 53.9Z 7.7ZNet Foreign Assets -1.5 -6.8 2.5 38.1 60.6 _ _Net Dumestic Assets 39.2 66.5 94.6 105.3 93.0 42.3Z 11.4Z -11.7Z

Bank Credit to Goveriment (net) 24.2 27.2 29.6 22.2 17.8 9.1% -25.1Z -19.9ZCocoa Finacring 3.6 13-5 16.9 16.5 - 24.7% -2.5% -

Credit to the private sector 12.1 21.2 37.5 46.9 57.7 76.9Z 25.1Z 23.0O

F2/GDP at Current Prices (Z) 12.8 16.2 16.8 17.7 _ _

Prices (Anrrial Average (2iange) (Z).-- --- -- -- - ---- --- -- --- --- -- --

Ccnsuser Prices 40.2 10.4 24.6 39.8 32.7 c/ 33.3 d/ 34.2 d/ 29.9 eiof .hich: Food 11.0 -11.1 20.3 38.5 35.9 c/ 30.4 d/ 35.7 d/ 31.0 e/

Non-Food 78.4 28.3 27.0 40.5 31.1 c/ 34.9 d/ 33.4 d/ 29.4 e/W-anlesale Prices 81.5 56.4 63.5 41.4 70.3 d/ 28.0 d/GDP Deflator 35.3 20.6 41.7 39.2 _

BaLance of Paymnts (Millimns of UL$)

|Exports of Goods arxi NFS 605 672 797 906 918 18.6% 13.72 1.3%|Thmorts of Goods and NFS 810 858 968 1199 1289 12.9% 23.8% 7.52

|7rade BaLance -114 -96 -56 -198 -282 _ _Resource Balanze -205 -186 -171 -293 -371 _ _Currnt Azcout Deficit -214 -264 -204 -224 -309 _ _Capital Account (Net) 196 135 185 3/5 434 37.,Z 103.3% 15.7%

of Wtich: Net Aid Disbursements f/ 196 179 334 406 452 86.3Z 21.7% 11.3%Overall Balanze 37 -118 -57 139 125 _ _Gross Reserves [end of periodj 132 139 163 194 204 17.2% 18.6% 5.4%a=rrent Accornt Deficit as

Z of GDP at CUrrent Prices -2.8 -4.2 -4.2 -4.9 -6.0 - _

Nioinal Exchange Rate 36 54 106 162 202 96.32 52.8% 24.9%[Cedis/TS$; period average]

Notes:a/ provisional estimatesb/ irnluding prinmry and secundary banks; at end-period; for 1988, data leflect

positicn at end-Septemberc/ Average of previcus twelve rrnths (October 87-October 88)d/ Dfcefiber to Decembere, October to Octoberf/ gross aid inflows nirus long-tern amnrtizaticn; 1988 figuze is estimated.

Source: Gcavermt of Gana and Bank Staff estimates.

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ability to improve its financial position. As a result, gold output fromSGMC fell in 1988. An expanded investment program for SGMC is to besupported by an IDA Mining Rehabilitation Credit, co-financeLi by theEuropean Investment Bank and other donors. The Government is trying tomobilize additional resources by expanding private sector participation inthe corporation. By mid-1988 new private mines began to contribute to goldproduction and exports. Severe financial constraints and closure of partof the plant (due to a shortage of spare parts) caused the output of GhanaConsolidated Diamonds to drop in 1987 and 1988. Production of bauxite andmanganese fell in 1987, but recovered sharply in 1988.

10. Growth of manufacturing slowed in 1987, although it remained oneof the more dynamic sectors in the economy. The index of manufacturingproduction increased by 5 percent in 1987, restoring the sector to slightlyover half the 1977 level. Overall performance is greatly influenced bytrends in the petroleum refinery, which accounts for about a fifth ofmanufacturing output. Crude oil throughput nearly doubled between 1983 and1985, before nearing effective capacity. Excluding it, the index ofmanufacturing output rose by 18 percent in 1986 and 12 percent in 1987. In1987 there was continued rapid expansion for chemical products (notablysoap), aluminium ingots and beverages, modest growth for textiles, iron andsteel products, and recovery for food processing. Preliminary figures forthe first nine months of 1988 show that output has increased for someproducts, comparel to the same period in 1987, for example, milk, flour,cocoa products, tobacco, lumber, cement, and aluminium ingots. However,production declined for several including paint, towels, beer, and softdrinks. The most recent data on capacity utilization is for 1985 showingan increase to 25 percent from an estimated 18 percent in 1984. Giventrends in production since then, capacity utilization is likely to haverisen further. Manufacturing has benefited from the foreign exchangeauction which has ensured a steady supply of raw materials and intermediateinputs. The reform program also may be affecting the structure ofproduction, although it is early to make a judgement. Some activities arestill far below previous levels - shoes, distilling, textiles, garments -while others are near (60-90 percent), and in some cases, exceed previousoutput peaks - soap, beer and soft drinks, sawmills and wood products, andprinting and publishing.

11. A survey of about 30 medium- and large-scale enterprises inDecember 1987 also provides some preliminary information on the impact ofthe reforms on manufacturing. In general, production was up, largelybecause of the improved supply of raw materials. However, this was notuniversal. Several companies were experiencing problems because of avariety of factors - weak consumer demand, import competition, obsoletemachinery, and tight liquidity. The worst affected were textiles, drugs,and other medicines. All companies were constrained by a tight cash flowcaused by the high cost of imports, the need for prior deposit at theforeign exchange auction, debt service on loans borrowed in foreignexchange, and improved tax collection. Nevertheless, nearly all companieswere making new investments. Most, with the notable exception of textilesand drugs, felt that they could compete against imports. There was a

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tWl1E 2. :KA SELD PE 1=CNMMT

1970 1980 1981 1982 1983 1984 1985 1966 1987 1988 est

Agricultue

Cereals (000 t'ns)

mize 482 382 378 346 172 575 411 559 553 600Rice 49 78 79 36 40 64 90 70 88 95Millet a/ 141 82 119 76 40 60 53 243 271 300Sorgum 186 132 131 86 56 - 62

Starchy Staples (000 tms)

Cassava 2388 2322 2065 2470 1728 4083 3076 3692 2943 3300Cocoyan 1136 643 631 628 720 600 730 650 na naYan 909 650 591 588 866 425 880 1098 1001 1200Plamtain 1641 734 829 745 342 760 676 677 na na

Cocoa (000 *ns) b/ 433 258 225 178 158 175 219 228 188 230

Forestry (000 m3)

Logs 1560 480 550 410 560 578 620 890 951Sawn Tinter 360 150 190 150 189 180 223 232 284

Mtining

Index-Mirera1 Production 100 74 68 60 50 58 65 60 65Gold (000 troy ounces) 642 353 341 331 277 287 299 288 329 116 c/Diaxnds (000 caracs) 2550 1149 836 684 339 346 636 559 442 95 c/Manganese Ore 392 250 223 160 173 288 316 259 254 76 c/Baincite 337 225 181 64 70 49 170 204 195 95 c/

Electricity

Electricity (Millim }rih) 2920 5306 5382 4973 2569 1815 2996 4435 4676 3612 d/of iich:

Akosarbo Hydroelectricity 2882 5276 5341 4103 2080 1469 2461 3678 3881 2997 d/

Cride Oil Ref iery Thrtugput 1120 1058 1129 1040 481 747 958 985 990 380 e/

Note:a/ For 1986-88, includes both millet and sornlxmb/ Purchased by Coccbod during season beginning in year stated.c/ January-Aprild/ January-Septembere/ January-June

Source: Statistical Service, Accra, Ghaia, Quarterly Digest of Statistics. December 1987.and FA, Prtoduction Yearbook, 1987.

flurry of export activity among several companies including agriculturalequipment, beverages, matches, furniture, and aluminium products.

12. Construction picked up after a small decline in 1986. Adequatesupplies of clinker were available, as well as imported cement afterelimination of the import ban. Government investment provided a strongimpetus in both 1987 and 1988.

13. Services. Growth continued to exceed overall economic expansionin 1987. Transport is benefiting from imports of trucks, availability ofspare parts, and rehabilitation of the railway and roads. Surprisingly,wholesale and retail trade increased at an even higher rate than in1985-86. Price decontrol, trade liberalization, and better supplies havesqueezed previously high rents, and improved relative incentives forproductive as compared to trading activities. However, so far thoseeffects appear to have been more than compensated for by the impact of amore buoyant economy, higher levels of imports and domestic production, andpent-up consumer demand. In addition, retailers can exact substantialrents from some products whose prices are still regulated (for example,matches and drugs). Growth in trading is expected to slow; after risingsharply in 1986, credit to the sector fell in 1987.

Savings and Investment

14. In 1987, the investment 21 to GDP ratio increased to nearly 11percent, comtpared to 9.7 percent in 1986. Preliminary estimates indicate afurther rise in 1988. Higher public investment was the main factor behindthe increase. Private investment also grew, but concentrated in mining.Public investment is expected to play a leading role given the deterioratedinfrastructure in Ghana and, therefore, the need to rehabilitate beforeprivate investment can revive. In addition, at the beginning of the ERP,capacity utilization was low and numerous economic changes made investmentdecisions difficult for companies. To an increasing degree, however,growth will depend on adequate private investment. Several actions by theGovernment should encourage a greater response from the private sector.The foreign exchange- auction is operating smoothly, en&aling companies tomeet foreign exchange needs on a regular basis. Transfers of profits anddividends, including those previously blocked, are being handled throughthe auction, after approval by Bank of Ghana. Corporate taxes have beenlowered for manufacturing. Nevertheless, additional measures may be neededto improve the investment climate (para 92).

15. In 1987, both national and foreign savings rose slightly, to 6and 5 percent of GDP, respectively, and increases are estimated for 1988also. In the case of foreign savings, the higher current account deficitwas financed largely by aid flows in both years. A sharp increase inpublic savings accounted for the improvement in national savings in 1987,

21 Data on investment is subject to a great deal of uncertainty. Cove~rageis only partial given the dated industrial census, now being revised,and the lack of information on agriculture. Public investment isestimated from budget actuals, the public investment program, andestimated aid inflows. Private investment is derived as a residual.

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public savings accounted for the improvement in national savings in 1987.while private savings declined from 3.7 percent of GDP in 1986 to 2.7percent. There are several possible reasons for the drop in privatesavings. As foreign exchange became more accessible, consumers may havedrawn down savings to satisfy pent-up demand. Other factors have shiftedthe composition of savings towards the public sector. The process ofstructural adjustment has raised costs in many areas, including utilitytariffs, education and health fees, and transportation. Tax collectionprocedures are tighter and real civil service wages declined in 1987. Theacceleration of inflation also may have discouraged savings. Finally,incentives are shifting from some groups, such as traders, to others, suchas cocoa farmers, who may have a lower marginal propensity to save. In1988. however, this trend appears to have shifted. Public savings declinedto an estimated 3 percent of GDP, primarily because of a slowdown inrevenue growth, and private savings recovered. Contributing factors may bethe slowdown in inflation and higher real wages.

The Budget

16. Fiscal performance in 1987 surpassed budget targets, resultingin higher public savings. Revenues exceeded estimates, increasing from theequivalent of 13.6 percent of GDP in 1986 to 14.1 percent. The mainsources were: cocoa taxation, resulting from depreciation of the exchangerate; improved collections from companies; and rationalization of the salestax and excise duty structure. The Government constrained growth inreculrrent expenditures. Nevertheless, spending on operations andmaintenance increased in real terms by abouc 2 percent, necessary givenpast underfunding and the objective of .mproving the provision of basicservIes. LeveiupmeriL outiays (exciudiix:g externai tinancing tor projects)rose from 1.9 percent of GDP to 2.5 percent, permitting progress onrehabilitation projects. Roughly q3 billion covered compensation andrelated costs for staff redeployment. Current budget savings rose sharplyfrom 1.7 percent of GDP in 1986 to 3.3 percent. This, together with anincrease in foreign financing, enabled the Government Co retire debt to thebanking system equivalent to 1 percent of GDP.

17. The 1988 budget, announced in January, contained several taxreform initiatives. Additional relief was provided on personal incometaxes, import duties were reduced, the sales tax was restructured so thatthe same rate applied to foreign and domestically ?roduced goods, theexcis^ duty on petroleum products was raised, and the purchase tax on somemotor vehicles was reinstited. The standard sales tax rate also wasincreased from 20 to 25 percent. Only a marginal rise in receipts fromcocoa taxation was budgeted, given the depressed international market, lessrapid depreciation of the cedi, and continued improvement in producerprices. Owing to the trend in receipts from cocoa, revenue growth wouldslow. Outlays on wages and salaries would remain at roughly the same shareof GDP, given the increases mandated by Government. The budget maintainedoperations and maintenance outlays at barely 1987 levels in real terms.Development expenditures financed by Government resources and counterpartfunds were budgeted at 023.2 billion, about the same share of GDP as in

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TABLE 3. GHANA: SUMMARY OF CENTRAL GOVERNIENT FENANCE, 1982-1988 [Millicns of Cedis]

Actual Pray. Budget

ITEM 1982 1983 1984 1985 1986 1987 1988

Revenues 5200 10184 21727 38692 69759 105009 131204

of wiich:Taxes an Inccme aid Property 1506 1780 4060 7451 14121 24087 28417Taxes cn Intermational Transactions 788 4990 8242 15324 28467 44644 49345Taxes on Goods and Services 2146 1689 5628 92'+4 19621 26167 41621Ncn-Tax Revenues and Other n.e.s. 760 1725 3797 613 7550 10111 11821

Total Expenditure and Net Landing 9220 15178 27485 47892 73328 106987 138824

of whfich:Recurrent Expenditures 8029 13566 23326 38462 60835 80583 103969Developmt Expenditures a/ 817 1192 3368 7303 9826 18552 23237Net Lending a/ 374 420 791 2127 2667 4852 8500Special Efficiency b/ - - - - - n00 3118

Overall Deficit/Surplus a/ -4020 -4994 -5758 -9200 -3569 -1978 -7620

Financing: 4020 4994 5758 9200 3569 1978 7621

Foreign (net) 267 744 2730 5142 -1746 4857 13601

Foreign Grants 52 57 914 1620 3868 6037 11476Borrowing 215 1973 5073 9562 13412 23654 37066Kepayments - -i2dt -3Z5/ -bU40 -iYU2b -246-4 -34Y941

Damestic (net) 3753 4250 3028 4058 5315 -2879 -5980

Banking System 434 2572 3106 3011 2471 -7400 -5980Social Security 371 230 437 510 3182 2531 -Oth r 2948 1448 -515 537 -338 1990 -

bmorandum Itam:l

Interest Paymnnts 2168 2204 3425 5086 11341 10587 11515

As Percent of GDP (2)Revenwes 6.02 5.5Z 8.OZ 11.3Z 13.6Z 14.12Recurrent Expenditures 9.3Z 7.4Z 8.6Z 11.2Z 11.9Z 10.8ZCurrent Budget Savings -3.3% -1.8Z -0.6Z 0.1Z 1.7Z 3.3ZDevelopmgnt Expenditures a/ 0.9% 0.6Z 1.2Z 2.12 l.9Z 2.52Overall Deficit/Surplus a/ -4.7Z -2.7Z -2.12 -2.7Z -0.7Z -0.3ZNet Dcoestic Financing 4.3Z 2.3Z 1.1Z 1.2% 1.OZ -0.42Net Foreigi Financing a/ 0.3Z 0.4Z 1.02 1.5% -0.3Z 0.7ZDevelopment Expenditures [broad coverage]c/ 1.9% 3.3Z 5.0% 5.2%Net Foreigi Financing [broad coverage) c/ 1.72 2.6Z 2.7Z 3.4ZOverall Deficit/Surplus [broad _overage] c/ -0.lZ -l.lZ -3.7Z -3.0%

Note:a/ Excludes foreign assistance tied to projects.b/ Provision for retrenchment program, including trainingc/ Includes foreign financed projects of Central Govergmnt cnly.

Source: Ministry of Finance and Econimic Planningand Bain Staff estimates.

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1987. Primarily because of revenue trends, current savings were expectedto decline as a share of GDP. Nevertheless, an anticipated increase inforeign financing would enable the Government again to repay the bankingsystem, thereby shifting resources to the private sector. Based onpreliminary information, it appeared Lhat overall targets would beachieved. Higher than budgeted flows of concessional assistance permittedslightly greater expenditures on operations and maintenance and capitalprojects.

Money and Credit

18. Monetary developments in 1987 reflected the strong improvementin balance of payments and fiscal performance. Broad money rose by 53percent, about the same rate of growth as in 1986, mainly because of astrong increase in the net foreign assets of the banking system. Given theneed for a tight stance on monetary policy to moderate inflation, growth innet domestic assets (NDA) was restrained. In relation to the outstandingstock of broad money, they grew b; only 12 percent, compared to 50 percentin 1986. Credit to the private sector increased by 25 percent, part of thegrowth possible because credit to the Government contracted, but overall,still lower than inflation. The broad money to GDP ratio continued torecover, from 16.8 percent in 1986 to 17.7 percent in 1987, indicating thegreater willingness of the public to hold financial assets.

19. All parts of the economy felt the squeeze on growth of NDA.During 1986, the real level of loans and advances from banks increased by arange of 68 percent for non-export commerce to 43 percent for manufacturingand to 15 percent for noriruilture. In 1987. growth sharnlyv eprrpnpd ton percent for agriculture and manufacturing. Outstanding loans and advancesfor import and other non-export trade declined by 30 percent, indicating ashift in incentives away from trading activities and the fact that by 1987some pent-up consumer demand may have been met. It is notable that creditfor export trade (excluding cocoa) more than doubled in 1986 and rose by 30percent in 1987, albeit from a low base. By the end of 1987, thedistribution of loans and advances by sector had changed compared to 1985.Agriculture accounted for 20 percent of the total, down from 24 percent;manufacturing increased slightly from 28 to 29 percent; construction'sshare rose from 9 to 12 percent; and non-export commerce had dropped from18 to 15 percent after an increase to 21 percent in 1986. During the firstnine months of 1988 credit remained tight. The outstanding amount of loansand advances from banks declined slightly in real tPrms. Only loans tomanufacturing and transport and communications were higher.

20. In contrast to the tightening of liquidity in 1986, during 1987excess liquidity began to affect the financial system. The primary reasonwas continued strong growth in deposits, coupled with restrictions ongrowth in credit. As Table 4 shows, deposits with the commercial banksrose by nearly 60 percent in 1986-87. About 23 percent of the increase wasprovisioned as required reserves. Although demand for loans by the privatesector was high, the credit ceilings set by Bank of Ghana constrained banksfrom lending. Thus, they could expand loans by less than half of the netincrease in available funds, leaving them with substantial liquidity.Since their access to treasury bills was limited, it did not provide an

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outlet for funds. In response, the Bank of Ghana put in place severalmeasures to mop up excess reserves. The required reserve ratio was raised.Banks also were allowed to increase holdings of commercial paper and tofinance cocoa bills, the latter as of 1988. Nevertheless, at the end of1987, commercial banks had ¢4.5 billion in excess reserves. For thebanking system as a whole (including commercial and secondary banks) actualreserves were 40 percent of deposits, while the required ratio was only 28percent. Reportedly, the situation caused some banks to turn away largedepositors and manifested itself in several other forms. In spite of thedecontrol of interest rates, they remained negative in real terms. Theoperations of the Consolidated Discount House (CDH), a facility set up toassist financial institutions in managing their balances t'Lrough a moneymarket, was interrupted one day after it became operational. This occurredbecause of the relatively large quantities of overnight money offered bythe banks and uncertainties on CDH operating procedures. The discount rateat the treasury bills auction also was driven down soon after it began atthe end of October 1987, falling from 22 to 19.5 percent by the end of theyear -- substantially below the going lending rate. Preliminary data forSeptember 1988 indicate that the banking system still held excess reserves,41 percent of deposits compared to the required 30 percent. However,within the banking system, secondary banks have reduced excess reservessubstantially during 1988.

21. The persistence of the problem illustrates the difficulty ofimplementing monetary policy and managing liquidity in this complexsituation. Government policies must address several objectives -moderation of inflation, re-monetization of the economy, improvement in netforpion aqcats And nrevlsion of en,uate credit for efficient uses in theprivate sector. The difficulty is compounded by the lack of Central Bankinstruments to manage monetary aggregates indirectly, which would be moreflexible than direct controls on credit.

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Table 4: Movements in Liquidity of Commercial Banks a/(Cedi Million)

1985 1986 1987

Additional Deposits 7,560 10,228 15,928

Uses of Additional Deposits:

- Required Reserves Based onPrevious Year's Ratios 3,402 4,091 3,619

- Additional Net Loans and Advancesto Private Sector 5,910 10,007 5,619

- Change in Holdings of Treasury Bills 185 - -270- Change in Holdings of Stocks and Bonds 577 994 -2- Change in Holdings of Commercial Paper 1,744 -1,567 82- Additional Required Reserves to

Manage Liquidity b/ -1,061 -2,773 -2,321

Total Uses of Additional Deposits 10,757 10,752 11,382

Net Change in Liquidity c/ -3,197 -524 4,546

Memorand-mn Items (Annual Average)

Real Savings Deposit Rate (Z) 5.53 -4.90 -13.1Treasury Bill Rate (2) 17.75 19.75 22.75

a/ Covers three largest primary banks.b/ Changes caused by adjustments in the required reserve ratios.c/ Negative numbers represent a reduction in reserves compared to the end

of the previous year,

Prices and Wages

22. In 1987, the consumer price index (CPI) rose by 40 percent,compared to 25 percent the previous year. The acceleration was due toseveral factors. One, erratic rainfall caused a marginal decline in maizeproduction, an important food staple. Although the impact was not as greatas had been feared initially, average retail prices for maize (in Accra)rose 80 percent. Output of other food commodities also declined. As aresult, the food component of the CPI, which carries a weight of nearlyhalf, rose by 39 percent, compared to 20 percent in 1986. Two, rapiddepreciation of the cedi in late 1986 as the auction started and the

13 -

unification of the exchange markets in February added to inflationarypressures. Initially, a squeeze on scarcity rents dampened the impact ofdepreciation. However, in 1987, prices increased significantly for severalimported products, especially clothing and footwear, which have asignificant weight in the CPI. Three, hikes in fuel prices and utilitytariffs added to price pressures. As a result of the last two factors, thenon-food component of the CPI rose by about 40 percent, in contrast toslightly under 30 percent in 1985-86. The point-to-point rate peaked atnearly 46 percent in September before declining to 34.2 percent byDecember. Inflation moderated marginally in early 1988, but by July goodfood crop harvests began to have an impact. By October, the point-to-pointrate of the CPI had dropped to 29.9 percent.

23. The price of labor is an important variable in the economy, givenits possible impact on inflation and use as an indication of welfare.Because of the upsurge in inflation, real wages (including allowances) forthe civil service declined in 1987, slightly for the lowest grades, butsignificantly for higher grades, in contrast to the improvement since 1984.At several times during 1988, salaries for public servants were raised.The budget provided a 30 percent across-the-board increase and in mid-year,the Government granted a non-taxable, temporary allowance, equivalent to12.5 percent of the basic wage. This was followed by a second temporary,non-taxable allowance amounting to 10 percent of the basic wage, effectivein November. The mid-year adjustment was skewed in favor of lower paidemployees, slightly compressing differentials between the highest andlowest ranks. The combination of larger wage increases and lower inflationshould cause real wages to improve in 1988. The Government took theopportunity of the 1988 budget speech to comment on incomes policy. Themain points were that increases in wages for private and parastatalcompanies should be based on improvements in productivity in order not tocause inflation. The Government preferred to use tax policy (i.e. personaltax relief) to shift income to productive labor. Finally, wage claims hadto be balanced against the concern for financial viability of enterprises.It is difficult to determine the impact of the salary increases for thecivil service on overall wage trends in 1988. In many cases laborpressured private firms to match the increases although technically notjustified under existing collective bargaining agreements. In a fewcases, the Prices and Incomes Board disallowed wage adjustments exceeding25 percent. The Government has not mandated an adjustmont in the minimumwage since 1986. According to employers, at least in relatively large,modern enterprises, the lowest wage they offer exceeds the minimum wage.

Balance of Payments

24. The balance of payments in 1987 registered an overall surplus ofnearly $140 million, a sharp turnaround from the 1986 deficit of $57million. This improvement, occurring despite a decline in cocoa prices,was due to a substantial increase in disbursements of concessionalassistance and a drop in amortization payments.

25. Export earnings rose by 10 percent to reach $827 million, led bytimber and gold. The volume of timber exports increased by about 70

14 -

percent; value doubled to reach $90 million. The availability of equipmentand spare parts has facilitated timber's strong response to the economicreforms. In particular, bush equipment and log transport vehiclespermitted a rapid increase in log exports. Other reasons for higher growthin exports of logs were: the shorter lead time to obtain and use equipment,easier marketing requirements, and the availability of technical skills inGhana. Although the increase in timber exports has been favorable for thebalance of payments, it has put pressure on the resource base (see para103). The rise in the value of gold exports to $142 million reflectedincreases in volume (11 percent) and price (21 percent). On the otherhand, although shipments increased, earnings from cocoa declined slightlyto $495 million, as internation&l prices fell.

26. The value of imports rose to slightly above $1 billion, a realincrease of 18.5 percent, a bit higher than growth in 1986. 31 The widertrade deficit was financed partially by a rise in private transfers,corresponding to imports funded by foreign exchange held outside Ghana. Inspite of higher interest payments, the current account deficit of $224million, equivalent to 5 percent of GDP, was only slightly higher than the1986 level in nominal terms.

27. A doubling of the capital account surplus more than compensatedfor the higher current account deficit. Inflows of concessional assistance(grants anid long-term loans) increased by 14 percent (in US$ terms). Inaddition, official amortization dropped because of lower obligations onprevious medium-term oil financing. Some debts have been cleared andrecourse to the ongoing facility was reduced. The overall surplus was usedto meet repurchases from the IMF and to increase reserves. In addition,the stock of arrears was lowered by $71 million, $29 million through cashpayments and the remainder converted to a medium-term loan. Purchases fromthe IMF amounted to $149 million, including $55 million from the StructuralAdjustment Facility. However, repurchRses increased sharply to $174million, resulting in a net outflow of resources to the IMF. Ghana'sinternational reserves improved by $30 million to nearly $194 million,equivalent to about 10 weeks of import0 of goods. The debt service ratio(including IMF and arrears payments) rose to 62 percent, compared to 49percent in 1986.

28. In 1988, the current account is likely to have deterioratedmainly because of the decline in cocoa prices and export shipments, thelatter due to the impact of bad weather on the 1987/88 crop. In spite ofhigher earnings from gold, timber, and electricity, preliminary estimatesindicate that export receipts stagnated. This, together with higherinterest payments on medium and long-term debt, will cause the current

3/ As of 1987 more complete data is available on imports through SpecialImport Licenses (SILs). Although data for previous years has beer.revised on the basis of the new information, import figures for theseyears may not be entirely comparable with 1987.

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account deficit to widen by about $85 million, reaching the equivalent of 6percent of GDP. However, a higher capital account surplus is expected tofinance most of the increase in the deficit. Concessional inflows (grantsand long-term loans) are estimated to have risen by 10 percent(in US$ terms) to about $487 million. In addition, disbursements onmedium-term loans increased due primarily to official financing associatedwith public investment projects. Direct foreign investment also rose asactivities in gold mining expanded. As a result, Ghana is expected toachieve the targeted overall surplus of $125 million. These resourceswould be used to cover repurchases due the IMF and to pay off arrears andmedium-term liabilities of the Bank of Ghana. It would also be possible toadd a small amount to inte;national reserves. Obligations to the IMFpeaked in 1988 at about $300 million (including charges), leading to a risein the debt service ratio to 65 percent. Purchases from the IMF totaled$210 million under the Extended Financing Facility and, later in the year,under the Enhanced Structural Adjustment Facility.

Conclusion

29. During 1987-88, the Ghanaian economy continued to respondpositively to the reforms undertaken since 1983. Growth was maintained,supported by higher investment. Fiscal performance in 1987 surpassedbudget targets, pushing up public savings. In spite of an expecteddecrease in the real level of public savings in 1988, the Government wouldagain repay debt to the banking system given the increase in foreignfinancing. A tight stance on monetary policy restrained the growth in netdomestic assets in order to lower inflation. As a result, the real levelof loans and advances to the private sector decreased sharply. Inflationeased in 1988. The balance of payments strengthened in 1987 as exportsresponded to rehabilitation efforts and concessional assistance rose. Inspite of lower cocoa prices, Ghana is expected to maintain a sizeablebalance of payments surplus in 1988. The generally favorable performanceof the economy confirms the thrust of the ERP. The ob,ective of thepolicies now being implemented is to ensure that growth is sustained byputting the economy on a stronger footing through better incentives forproduction and the promotion of needed structural changes.

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II. IMPLEMENTATION OF STRUCTURAL ADJUSTM4ENT POLICIES - 1987-88

30. During 1987-88 the Government focused on policies to improveincentives, primarily through unification of the various exchange ratemarkets and maintenance of a flexible exchange rate, further tradeliberalization, and higher cocoa producer prices; and on reforms to improvemanagement and resource use in the public sector. The first chapterdiscussed the response of the economy to the reforms implemented since1983. In this section, rectInt progress in the areas of incentives,particularly relating to the exchange rate and cocoa, and public sectormanagement is discussed.

31. In order to put these recent measures in the proper context, itis helpful to review the important adjustments in the economy since 1983,some of which are summarized in Table 5. The core of the reforms has beenthe real effective depreciation of the cedi by about 90 percent since thestart of the Economic Recovery Program. Conservative demand management, aswell as the introduction of the foreign exchange auction, has narrowed thegap between the parallel and official exchange rates. The Government hasrationalized the tariff structure and liberalized trade substantially byeliminating most quantitative restrictions on imports and by progressivelyallowing most imported goods to be financed through the auction. The cocoaproducer price is 2.5 times higher in real terms. Administered prices,including petioleum and utility tariffs, have been adjusted to pass-throughthe devaluation of the exchange rate. Although interest rates have beendecontrolied, they "re still negative in real terms, in part reflecting tnerigidities and weakness of the financial system. Improvements in taxadministration, the impact of the depreciation of the exchange rate, andhigher petroleum taxes, have contributed to stronger revenue performance.Within the context of tight monetary policy, credit is being shifted fromthe public to the private sector. Exports have responded to theliberalized exchange and trade regime and rehabilitation efforts. Thegradual eliminati.a of arrears is helping to restore normal arrangements,particularly for trade financing, with creditors.

Incentives Policies

Exchange and Trade

32. The Government made progress in reaching a market-determinedexchange rate applied to all economic transactions. First, in severalstages during 1987 and early 1988, consumer goods were made eligible forthe foreign exchange auction. The last phase was completed February 1988.Second, restrictions on payments and transfers for other currentinternational transactions are being lifted gradually. With effect fromFebruary 29, 1988, all bona fide requests for foreign exchange required forbusiness travel (up to a maximum of $3,000 per trip) became eligible forfunding through the auction. Third, the Government has taken steps toincrease the flow of resources to the auction. Effective March 1987, the

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TABLE 5. GEM: SELECE KEY EONMIC VARIAELES

ITEM 1903 1984 1985 1986 1987 1988EstiTste

Real Effective Exchange RateIrxiex 1984 - 100 259.1 100.0 72.7 41.9 32.3 32.3Arrial Cwhge -32.8Z -61.42 -27.3Z -42.42 -22.91

Ratio of Parallel Market toOfficial Exchange Rate 22.2 3.2 2.8 1.8 1.4 1.4

Real Cocoa Producer Price(1970/71 = 100) a/ 34 38 62 75 8S 84

Items under PLice Control b/ 23 17 8 8 8 8

Real Average Water Tariff (C/1009 gallcn)(1983=100) 22 16 14 52 46 52

Real Interest RateShort-term Deposit Rate (6 mnmths)(Z) -51.12 -17.62 6.9Z -4.5Z -13.1Z -9.4ZMaximun Lending Rate (Z) -49.5Z -12.31 11.4Z -1.3Z -11.7Z -1.12

Broad Mbney as a Ratio of GDP c/ 11.1Z 12.81 16.2Z 16.8Z 17.7Z -

Tax Revenue as a Percent of GDP 4.62 6.62 9.4Z 12.12 12.7Z

Net Credit to Goverrument (end of period]as a Percent of GDP ll &? 8.9Z 7.9Z 5.: 3.2 1.;2

Net Credit to the Private Sector [end of 1.5Z 4.5Z 6.22 7.3Z 6.3Zperiod] as a Percent of GDP

Index of Real Wages (1977 = 100)Civil ServiceSenior Management 10 7 13 36 31 32Accountant 16 12 24 55 46 48Clerical 26 22 43 64 51 57Unskilled Labor 32 27 55 56 44 50

Volume Index of Major Exports:(1977 = 100)Cocoa 63 60 68 77 85 73Tinter 19 23 38 44 75 78Gold 70 72 72 74 80 100

External Paymnats Arrears(Millios of USS] 440 232 175 171 99 69

Note:a/ Real effective price for the crop year beginning in the year stated.b/ Up until 1983, price cantrols were coiprehensive.c/ Narrcw definiticn of mmey before 1984.

Source: Governmet of Ghana ad Bank Staff Estimstes.

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Cocoa Board's foreign exchange retention ratio was reduced from 5 to 2percent. As of September 14, 1987, the ratio for log exporters was loweredfrom 20 to 5 percent and then abolished in December 1988. The AshantiGoldfields Corporation has started paying dividends to the Government inforeign exchange out of its retention account, thereby effectivelyincreasing its surrender of foreign exchange to the Bank of Ghana.Comparable arrangements have been reached with the Volta River Authority.

33. The auction has functioned well (see Annex D). The amount offoreign exchange handled has increased from $37 million in 1986, to $204millior in 1987, and to $256 million in 1988. In general, the movement ofthe cedi has been smooth, with the average depreciation per auction no morethan 1 percent. The progressive inclusion of consumer goods does notappear to have affected the rate of depreciation substantially, althoughthe number of applications has increased significantly. Industry hasreceived the highest share of resources from the auction, accounting forabout half (through September 1988). Within industry, the largest amountswent to companies manufacturing textiles, followed by metal products andbreweries. Transport accounted for 10 percent of the foreign exchangeallocated through the auction, commerce for 12 percent, and agricul.ture for7 percent. With expanded access, the share received by commerce increasedfrom only 1 percent in 1986, to 8 percent in 1987, and to 17 percent forthe first three quarters of 1988. The share of agriculture has increasedfrom 5 percent in 1986 to 7 percent by the first 9 months of 1988. Thecurrency demanded is dominated by the US dollar, accounting for 60 percentof the total; the UK pound is second with a share of 20 percent.

34. In order to encourage the flow of additional resources throughlegal channels and to improve the operation of the exchange system,particularly the process of obtaining small amounts of currency on a dailybasis, as of February 1, 1988, the Government permitted the establishmentof foreign exchange bureaus. These are licensed by the Bank of Ghana andsubject to certain rules and regulations. Foreign exchange arising fromretention accounts (except cocoa and mining), interest earnings,commissions and remittances, and that held by the public may be sold to thebureaus. The first one opened in April 1988. Transactions areconfidential, but bureaus report the monthly volume of sales and purchasesof foreign exchange to Bank of Ghana. The monthly value of transactionsrose from the equivalent of $533,500 in purchases and $606,400 in sales inApril to purchases of $7.8 million and sales of $8.5 million in August.Volume decreased to $6.9 million and $6.6 million, respectively, foi-purchases and sales in October. The major currencies are the US doJlar andthe CFA franc. Initially, there was a significant differential (over 40percent) between the auction and bureau rates, reflecting the segmentationof the two markets, capital controls, and the small number of bureaus.Although the differential narrowed to about 20 percent during May-June1988, by mid-November it had widened to over 40 percent. Although it againnarrowed somewhat during December, at the end of that month, it stood atslightly above 40 percent. It is likely that seasonal factors, includinggreater travel both to and from Ghana, accounted for some of the changes inthe differential late in 1988. Nevertheless, it also points to the need

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for additional measures by the Government to promote the convergence of thetwo exchange markets.

35. Ghana's tariff structure provides for a relatively uniform andmoderate level of protection, with duty rates ranging between 0 and 25percent. Special import taxes (see below) raise nominal protection to 25-90 percent. In order to determine the distortions caused by the incidenceof other taxes on domestic production and imports, during 1987 theGovernment reviewed trade taxes and tariffs. On the basis of this review,the Government took the following actions in the 1988 budget: unified thesales tax across most import and domestic commodities; began applying thesales tax on imports to the duty-inclusive value; simplified the structureto four rates -- exempt, 10 percent (concessionary), 25 percent (standard),and 35 percent (luxury). In addition, the nominal tariff rate was reducedby a uniform 5 percentage points for the bulk of goods bearing a customsduty of 15 percent o, higher. In order to provide temnporary protection toselected industries, a 10 percent special tax was levied on some importcategories including: selected drugs, garments, cosmetics, mineral waters,juice, rubber sandals, soaps, and some food products. The excise tax wasextended to imports and the specific rate of special tax on imports ofexcisable products was replaced with a lower rate of 40 percent ad valorem.A similar rate of special tax was imposed on textile imports. The netimpac.. ot these changes was generally to leave nominal rates of protectionunchanged for most products. However, for some goods, levels of protectionthrough the tariff structure increased slightly.

Cocoa

36. The improvement in incentives for cocoa farmers has been a majorplank of t'ie Government's reforms. Effective for the 1986/87 minor crop,the cocoa Droducer price was raised by 65 percent to ¢140,000/metric ton(exclusive of bonus). In late 1988 farmers were also paid bonuses onprevious production, 0500/metric ton for 1986/87 and ¢10,000/metric ton for1987/88. The impact of these price changes was to raise the farmers' shareof the world price (valued at the official exchange rate) from 23 percentin 1986/1987 to 33 percent in 1987/88. Because of the aged stock of cocoatrees in Ghana (over 25 percent of the cocoa acreage has trees over 30years old yielding little) and the effects of disease and bush fires, theproduction target of 300,000 metric tons per annum by 1995 can only bereached if farmers rehabilitate and replant cocoa. There is strongevidence that farmers are beginning to respond to better incenti'ies. Asurvey carried out in early 1988 showed that a significant amount ofreplanting, much of it using hybrids, had taken place in recent years. Thehighest response was shown in the Ashanti and Western regions. These treeswill begin producing over the next several years enabling production torise.

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TABLE 6. GHAN: INC£TIV FOR CO)GA FARIMS

lIl Est.

ITDi 11982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 l

lCocoa Purchases by GCB ('000 mt)l 178 158 175 219 228 188 230 l

I i IAnnounced Producer Price a/ | 12000 20000 30000 56000 85000 140000 165000 l

I [Cedis/tetric tm])

IReal Producer Price | 49 34 38 62 75 89 84

I (1970/71=100) b/ l

INominal Producer Price as Z l

of FOB Price at Official II Exchange Rate b/ c/ I 38.OZ 24.02 25.02 24.02 23.22 33.2Z 45.5Z I

|Naninal Producer Price as Z II of World Price at Parallel I

Market Rate I 9.02 6.02 9.02 13.0Z 16.42 23.9Z 32.52 I

[Notes:la/ Price for main crop; excludes bonus or ccmpensation payment.

b/ Takes into account bonus payents of 500 cedis/tcn, applied to purchases in 1986/87

and 10,000 cedis/ton, applied to 1987/88 purchases, the first paid in 87/88 and

and the latter in 88/89. It should be noted that for 88/89, in the event that

actual export prices in local currency tenms are higher than anticipated,

the additional receipts will be placed in a ccpensation account and sharedbetween fatmrs and the Governmt in a ratio of 60/40. Paymnt wculd be

rade by December 1989, shortly after the start of the 1989/90 crop year.

Ic/ Estirated average for crop year; as of 1986/87 based an auctian exchange rate.

lSource: Ghmia Cocoa Board and Bark staff estirmtes.

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37. In view of the sharp deterioration in cocoa prices oninternational markets, a more modest rise in producer price of 18 percent,or to ¢165,000/metric ton, was announced, effective fJr the 1987/88 minorcrop. This would raise the fiarmer's share of the f.o.b. price to anestimated 46 percent. In the event that actual export prices in localcurrency terms are higher than anticipated, the additional receipts will beplaced in a compensation acco.int, with 60 percent going to the farmer and40 percent to the Government. It is expected that any payments due to thefarmer would be made at the end of 1989. At a price of 0165,000/metricton 1/, the financial returns to replanting are slightly lower than whatprevailed in 1987/88 because the higher price did not compensate fully forthe increase in rural wages. For rehabilitation, profitability hasimproved marginally. Wage costs account for a smaller share of total costsin rehabilitation in the early years, which accounts for the differencebetween the trend in incentives for replanting and rehabilitation. In linewith the results of a study or1 cocoa incentives, conducted with World Bankassistance, the Government intends to improve further incentives for cocoaproducers. Initiatives in tax reform which would compensate for thedecline in revenue from cocoa, as well as a more efficient Ghana CocoaBoard, would facilitate such a policy.

38. Part of the explanation for the excessive taxation of cocoafarmers is the costly and inefficient operations of the Ghana Cocoa Board(Cocobod). The pace of improvement in incentives for farmers is partiallydependent on how quickly costs are lowered in the Board. Progress hasbecome even more important with the recent decline in world prices forcocoa. During 1987 and 1988 Cocobod took several actions to improve itsoperations. The Board reducEi staff by neariy iz,uuu in 1987. Daaei ofunviable plantations are in nrogress. Majority ownership of itsinsecticide plant was divested. As a result of these and other actions,Cocobod operating costs (excluding feeder roads and retrenchment payments)were reduced from 29 percent of the f.o.b. price in 1985/86 to an estimated17 percent in 1986/87. The Cocobod's corporate plan for the period1987/88-1990/91 has beer, approved, and a performance agreement based on itwas concluded with the Government in February 1988. This plan sets out thefuture measures which will Le taken to lower the Board's share of thef.o.b. ptice to 15 percent by 1988/89 (excluding extraordinary costs suchas retrenchment) and to make efficiency gains thereafter. These include:(i) phasing out input subsidies by 1990; (ii) progressively sheddingresponsibility for input supply, to be replaced by the private sector;(iii) reducing its role in transport as road conditions improve; (iv)lowering the costs of evacuation by reducing the number of buying centers;(v) divesting additional plantations; and (vi) improving accounting and

1/ Although farmers will effectively receive a somewhat higher pricethan ¢165,000/metric ton in 1988/89 (because of payment of the bonusfrom 1987/88), replanting and rehabilitation primarily take placesoon after the price is announced in May. Thus, the announced priceis used in this analysis.

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management information in order to improve decision-making and performancemonitoring. In addition, the Board identified additional staff reductions.The corporate plan will need to be implemented fully and additionalmeasures identified if the targeted reduction in operating costs is to beachieved.

Public Sector

Public Expenditure Policy

39. During 1987-88 the Government had two major priorities forpublic expenditures. The first was to improve the allocation of operationsand maintenance expenditures, particularly in agriculture, health, andeducation. The second was to improve the planning and implementation ofpublic investment, thereby increasing the returns on those expenditures.Some progress was achieved in both areas. A task force in the Ministry ofFinance and Economic Planning (MFEP) completed a study on recurrentexpenditure norms for health, education, and agriculture in late 1987. Theguidelines were used to prepare the budget for 1989. A manual outliningthe main principles of the guidelines was prepared and distributed tobudget officers in line ministries and in MFEP. Application of the normswill be a gradual process and refined on the basis of experience. In manycases more informaticn is needed (i.e. inventories of major equipment,facilities, etc.). Nevertheless, the guidelines will help ensure thatcritical services, such as agricultural extension and primary education,rec'ive more adequate funding. In addition, recurrent budget provisionswould more fully reflect Government strategies, for example, in health, anemphasis on primary health care.

40. Public Investment Program. In order to strengthen managementof public investment, MFEP is monitoring actual expenditures on the centralgovernment development budget on a quarterly basis. Table 7 summarizes thedata. As discussed in Chapter 1 (para 16), in 1987 development outlays(excluding external project assistance) reached the budget provision.However, the PIP component, which accounted for 86 percent of thedevelopment budget, fell short of its allocation. In addition, someexpenditures differed substantially from PIP provisions. Spending inhealth was more than double the initial allocation; transport andcommunications received only half of its provision, while agriculture wasprovided 70 percent more. Data for the first half of 1988 show thatspending on the PIP component of the development budget is more in linewith trends in overall spending, aithough differences between outlays andallocations appear to be continuing. Some adjustment to budget allocationsduring the year is to be expected given changing circumstances and thereare several other factors which may have been important in 1987-88. One,there was a substantial overhang of expenditures from 1986, which affectedspending during the subsequent year. Two, preparation and monitoring ofthe PIP only recently has been reinstituted and it will take some time toimplement it fully. Three, control and supervision of contractors,

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Table 7: Development Budget 1987-88(million cedis)

- ------ 1987 ----------- 1988-----

--Provision-- --Actual--l/ -Provision- Actual 1/ 2/Amount 1 Amount 2 Amount 2 Amount

Public Investment Program

Sector

Industry 136 .7 57 .3 302 1.3 8.4 .8Health 870 4.8 2,194 11.3 1,624 7.0 1,522 14.5PAMSCAD 148 .6 n.a. n.a.Transport and Communications 1,576 8.7 727 3.9 1,311 5.6 232 2.2Land and Natural Resources 51 .3 123 .7 407 1.8 183 1.7Local Government 1,776 7.6 448 4.3Roads and Highways 3/ 9,172 50.4 7,381 39.8 7,693 33.2 4,365 41.5Fuel and Power 574 3.2 53 .3 242 1.0 n.a. n.a.Education 1,725 9.5 1,244 7.2 1,834 7.9 2,498 23.7Agriculture 823 4.5 1.423 7."' 1,587 6.8 381 3.6Water 657 3.6 428 2.3 867 3.7 320 3.0Works and Housing 3/ 2,770 12.0 184 1.7

PIP Projects 15,584 85.7 13,728 74.0 20,561 88.5 10,217 100.0Non-PIP 2,630 14.3 4,824 26.0 2,676 11.5 313 3.0Development Budget 18,214 100.0 18,552 100.0 23,237 100.0 10,530 100.0

Memorandum Items ($ million)

Concessional Financing of PIP 404 328 421 391Project 267 208 (est.) 244 237 (est.)Program 137 120 (est.) 177 154 (est.)

1/ Based on budgetary releases2/ January-June3/ Included in the PIP component in 1987

Source: PIP 1986-88 and PIP 1988-90, Ministry of Finance anu Economic Platnin.Lg,and Staff Estimates

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particularly for health and education projects, the responsibility of theArchitectural and Engineering Services Corporation (AESC), is weak.Monitoring is made much more difficult because of the very large number ofongoing projects in these sectors. Allocations are spread too thinly,resulting in overruns and low returns on spending. Four, commitments forcapital spending are not adequately controlled or monitored. TheGovernment recognizes that although some charges are to be expected duringthe course of the year, the PIP can only be a mechanism for improvingreturns on spending if it guides both allocation and implementation ofdevelopment outlays. Thus, actions have been taken to improve PIPimplementation. Coordination between the PIP Task Force and the BudgetDivision has increased and the Ministry of Works and Housing is examiningways to improve the work of the AESC.

41. In July 1987, the Government set up a special account to protectfunding for a select group of about 20 projects in the PIP, critical to thestructural adjustment program. Although it is too early to make adefinitive judgement, it does appear that the super-core mechanism hasassured that funding is available for critical projects on a timely basis.

State Enterprise Reforms

42. One of the priorities of the Government's efforts to managepublic sector resources better is to improve the performance of stateenterprises. This is a two-pronged effort, focused on increasing theefficiency of those priority firms which will remain fully or partiallyowned by the Government, and on reducing the size of the rest of thesector. Progress during 1987-88 was somewhat less than expected, in spiteof continued Government commitment. There were several reasons for this.One, the work of updating and auditing financial accounts and valuingassets took longer than expected, reflecting the scarcity of these skillsin Ghana. Two, utilization of technical assistance to support the program,in particular to strengthen the State Enterprises Commission (SEC), underthe IDA-financed Public Enterprise Project was delayed. Three, legalprocedures, even to liquidate small, inactive companies, proved lengthy.Nevertheless, there were several concrete achievements. The Governmentdrew up guidelines governing budgetary transfers to state enterprises.Corporate plans were finalized for 6 of the 14 major enterprises that willremain in the Government's portfolio, including the Ghana Cocoa Board. TheGovernment advertised 32 enterprises for sale to investors. Of those,interests in six joint ventures would be sold by the era of 1988 andliquidations of another ten state enterprises were in the final stages atthe end of 1988. Total budgetary transfers to state enterprises havedropped from nearly 1 percent of GDP in 1985 to 0.7 percent in 1987.

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Public Sector Management

Economic Management

43. Successful implementation of structural adjustment requires moreeffective economic management. The Government took some actions in this areaduring 1987-1988. One, in order to coordinate decisions and follow-up oneconomic policies, an Economic Liaison Unit was formed, attached to the officeof the Chairman of the Committee of Secretaries. Two, critical agencies ofthe Government were supplied with logis ics and equipment through theStructutal Adjustment Institutional Support Project, financed by IDA, as wellas thrcugh other donor projects. Three, a debt management "lnit was set upin MFEt' and steps taken to improve coordination between MFEP, the Controller-Accountant General and the Bank of Ghana. Four, the budget is now announcedon a more timely basis. In other areas, however, progress was disappointing.Analytical support and some basic information necessary for economic policymaking are still lacking. There have been substantial delays in recruitingpersonnel to improve the capacity of MFEP. Monitoring has improved for taxrevenue and development outlays, but is still insufficient in other areas ofthe budget and for aid comraitments and disbursements. Supervision of thepublic investment program should be expanded to include the monitoring cfphysical progress, beginning with the largest and most critical projects.Although the Structural Adjustment Program Secretariat (SAPSEC) monitorspolicy measures and other activities of the structural adjustment program, itis not 6acked up by sufficient technical expertise.

44. Improving the efficiency of the civil service is an importantobjective of the adjustment program. The ongoing reforms aim at reducingstaffing levels, raising remuneration, and increasing salary differentials.The redeployment program experienced considerable start-up problems. Althoughthere was widespread recognition that the lower ranks of the civil servicewere overstaffed, identification of those to be redeployed was difficult inthe absence of adequate information. In addition, it took some time to sortout the amount and arrangements for termination payments. Nevertheless, bythe end of 1987 some 12,000 civil servants had been removed from the payroll,compared with a target of 15,000. About 3,000 of these were over retirementage and about 4,000 were non-teaching staff of the Ghana Education Service.The remainder were civil servants. Estimated savings on the 1988 salary bill,based on a sample analysis, is slightly over 1 billion cedis, compared to anestimated cost for compensation payments and training in 1987 of 03 billion.

45. Job inspections and other analyses carried out by the ManagementServices Division of the Office of the Head of the Civil Service, andsupported by technical assistance provided by the Overseas DevelopmentAdministration of the United Kingdom, will strengthen future redeploymentefforts. This work has identified areas with the greatest potential for staffreductions without impairing efficiency. Although job inspections have onlycovered a small share of civil servants, the initial results have been

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validated sufficiently to provide guidelines to assist in identifyingredundant staff. Over half of the civil servants are manual or unskilledworkers at the junior levels of the grade structure. Overstaffing at theselevels averages over 20 percent but in some cases reaches up to 40 percent.Also, there is still significant over-staffing of non-teaching posts in theGhana Education Service. Based on these preliminary results, the Governmentintends to redeploy at least 12,000 employees each year during 1988-1989 andto extend the program to 1990 based on the results of further work. As of thebeginning of November 1988, 8,440 staff had been redeployed. It is recognizedthat in some skill areas the Government should continue to recruit staff, butthere should not be hiring in those job categories accounting for most of theredundancies. Monitoring should be strengthened and mechanisms developed tobetter control personnel hiring in both the civil and education services. Inorder to ensure adequate control over the wage bill and to support manpowerplanning, a reliable civil service personnel data base needs to be integratedwith the payroll. Otherwise, the expected gains from redeployment - improvedefficiency and a more appropriate staffing structure -may not be realized.

Sector Policies

46. The Government implemented several important sectoral reforms during1987-88. It began to put in place new junior secondary schools. As part ofthe restructuring of the education system, pre-university education will bereduced from 17 to 12 years. This involves new curriculum and training forlarge numbers of staff. The budget for 1988 improved the provision forprimary education. In addition, nearly 6,000 redundant non-teaching staffwere laid off. Textbook use and boarding fees have been increasedconsiderably at all but very low levels, and boarding and feeding subsidies atsecondary schools and universities have been reduced by up to 50 percent inreal terms. In order to lay the base for reform, a university rationalizationstudy was completed in early 1988. With a view to improving the quality and)verage of health services, work has started to reform the sector. The focus

is on four key areas: management, procurement, financing, and manpower. Someactions already have begun. The Ministry will be reorganized anddecentralized. Regions are to have more operational responsibilities,including control over budgets and personnel. From now on the Ministry ofHealth will procure only items on essential drug lists, introduced in June1988. In agriculture, the Government raised fertilizer prices for the 1988crop season, thereby lowering the subsidy covering transport costs from 42 to30 percent. It also has begun to privatize fertilizer marketing. Privatedealers are being registered in two regions; the remainder will be covered in1989. Their participation should increase the number of outlets. Thetimeliness of fertilizer delivery also improved for the 1989 growing season.Pilot extension projects have started in several regions. The Ministry ofAgriculture, in cooperation with other Government agencies and donors, isdeveloping a Medium Term Agriculture Development Program to identify theactivities needed to promote growth in agriculture, particularly food crops.Ghana Posts and Telecommunications Corporation is implementing a majorrehabilitation project, totaling roughly $170 million with financing providedby several donors. The project includes assistance to the Corporation tostrengthen management, planning, and financial operations. The objective isto improve its performance so as to eliminate subsidies.

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Conclusion

47. The Government made good progress in implementing the structuraladjustment program during 1987-88. The smoAth functioning of the auction andits extension to consuner goods, as well as introduction of foreign exchangebureaus, have moved Ghana closer to a market-determined exchange rate. Thetariff structure and the impact of domestic taxes on protection levels havebeen rationalized. Cocoa farmers are responding to better incentives, therebylaying the base for future growth in output. The Ghana Cocoa Board hasreduced its operating costs, but additional actions are needed, as describedin the corporate plan, to improve efficiency further. The three-year PIP issupporting the reform effort, but more attention should be paid to effectiveimplementation. In spite of start-up problems, state enterprise reforms madeprogress. Although there we.-e efforts to improve economic management,particularly policy coordination and debt management, weaknesses remain. TheGovernment implemented several important sector reforms, particularly ineducation.

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III. THE SOCIAL DIMENSIONS OF STRUCTURAL ADJUSTMENT

Introduction

48. The economic gains since the beginning of the Economic RecoveryProgram have benefited large segments of the population. The resumption ofgrowth permitted real increases in per capita income for the first time inover a decade, particularly in rural areas, where most of Ghana's poorlive. Nevertheless, it will take time before economic expansion alone isable to generate sufficient employment and higher incomes for the poorestgroups in the country. Also, even in today's improving conditions theplight of the poor remains desperate with limited access to health,education and other services. In addition, some components of structuraladjustment will exacerbate the problems of certain vulnerable groups in theshort run, and this could impede the sustainability of the recoveryprogram. The Government's effort to address these conc-rns is acc.,iprehensive one. One, the Ghana Living Standards Survey (GLSS) providesinformation on the effects of structural adjustment and the characteristicsof the poor. The first section of this chapter highlights the preliminaryresults of the survey. Two, the effort to improve conditions for the poormust be concerned primarily with increasing productivity and, thereby, realwages. The second section examines the potential of the structuraladjustment program to improve employment opportunities. Three, in order toincrease the poverty focus of the reforms in the short-run, the Governmentdeveloped a program of actions to mitigate the social costs of adjustment(PAMSCAD). The final section discusses PAMSCAD and the progress achievedsince the donors' meeting in February 1988.

Distribution of Welfare in Ghana

49. Survey. The GLSS is based on the World Bank's Living StandardsMeasurement Study (LSMS) methodology and carried out by the GhanaStatistical Service. During the first year of the survey, from September1987 to August 1988, 3200 households were interviewed. Perhaps its mostdistinctive feature is the computer-based technology which allows for rapidanalysis, so that policy decisions can be made on the basis of detailedinformation less than a year old. The survey measures welfare byevaluating expenditures which is preferable to information on income fortwo reasons. One, welfare levels of households are determined by goods andservices consumed, not by the income available for such consumption. Two,income data are more prone to errors than expenditure data, especially incountries such as Ghana where most of the population is self-employed inagriculture. Expenditures consist of: food purchases and the value of foodgrown and consumed by the household; the value of non-food items consumedby the household; the value of goods and services provided free of chargeby employers; the imputed use value of durable goods; and the value ofhousing as measured by imputed rents. The information presented below isbased on results from the first six months. Additional information ispresented in Annex E.

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50. Household Characteristics by Expenditure Level. In Table 8expenditure data is divided into five quintiles, where quintile 1 containsthe poorest 20 percent of the population and 5 the wealthiest 20 percent.Within each quintile the population is broken down according to variouscategories. As is the case in almost all developing countries, wealthiergroups have a disproportionately large fraction of urban residents. Ghanacan be divided into three ecological zones: a coastal strip at the southernedge of the country, a forest zone north of the coast which covers about athird of the country and where most cocoa is grown, and the dry northernsavannah that covers one half of the country. The coastal zone is thewealthiest, followed by the forest. Yet each quintile contains substantialhouseholds from all three zones and the average per capita expenditurelevel of the coastal zone is only about 65 percent higher than that of thesavannah. Much of the reason that the coastal zone is the wealthiest isthat the capital city of Accra is there. Households in which the headworks for the government or a public corporation have higher expendituresthan those headed by the self-employed (and those with no employment).However, households in which the head works for a private employer areclearly better off than all others. Among farming households, those whi:hhave at least one acre or cocoa land are better off than those withoutcocoa. The expenditures of households whose heads are in sales and serviceoccupations are only slightly less than those headed by white collarworkers. Of the unemployed in the sample, only about 6 percent were headsof households, and those households have expenditure levels slightly higherthan the national average. Presumably expenditures are being maintainedthrough the employment of other family members, income transfers, and thedraw down of savings. The data show that the difference between thepoorest group, agriculture households without cocoa, and the best offgroup, white collar households, is relatively small - the latter group'sexpenditure level is only 60 percent larger than that of the former. Asone would expect, households headed by someone with a university or otherpost-secondary education are better off than those in which the head haslittle or no education. However, the biggest disparity is only slightlymore than two to one.

51. Other Indicators of Living Standards. Comparing households by percapita expenditure is only one way to assess living standards. Data fromthe GLSS can also be used to exam.ine access to safe drinking water,electricity and social services. Indoor water supply is relatively rare inGhana, serving only about 8.5 percent of the population. Even for thewealthiest quintile, only about 20 percent has this type of water supply.If access to outside public standpipes, which should also be a relativelyhealthy source of water, is added, no more than a fifth of the populationhas access to piped water. In contrast, water from lakes and streams, morelikely to be unhealthy, supplies more than half of the population. About23 percent have no toilet facilities; there is little variation accordingto level of expenditure. Only about 22 percent of the population live inhouseholds with electric lighting. For the lowest quintiles this figuredrops to 6 percent, rising to over a third for the wealthiest quintile.For children aged 6 to 15, school enrollment is about 70 percent. Slightly

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Table 8: Characteristics of Households by Quintiles 1/

---- -------- Quintiles-------------Mean PerCapita

All ExpenditureCharacteristic Ghana 1 2 3 4 5 (Cedis/Year)

UrbanizationUrban (pop. > 5000) 30.2 19.4 21.4 33.8 34.2 42.2 71,997Semi-Urban(pop. >1500<5000) 19.6 15.3 23.3 25.3 21.8 12.5 53,533Rural (pop. < 1500) 50.2 65.3 55.4 40.9 44.0 45.4 52,756

Ecological ZoneCoastal 30.3 20.1 19.4 31.1 28.1 52.8 74,836Forest 43.1 34.6 49.7 47.2 51.0 32.9 55,613Savannah 26.6 45.3 30.8 21.7 20.8 14.3 45,373

Sex of HeadFemale 24.9 23.9 23.6 28.7 27.5 20.6 59,042Male 75.1 76.1 77.4 71.3 72.5 79.4 58,603

Employer of HeadPrivate 6.9 4.4 4.7 4.1 7.2 14.0 85,897Govern/ment 12.1 5.9 11.1 14.5 16.4 15.4 69,091Parastatal 2.5 1.1 3.8 2.7 2.9 2.1 64,928None 3.9 4.0 3.5 4.3 3.6 4.0 57.963Self-Empluyment 74.7 84.7 77.4 77.4 69.9 64.5 54,670

Occupation of HeadWhite Collar 9.1 3.7 3.0 9.9 13.2 15.6 79,428Sales/Services 10.9 3.1 9.6 14.1 13.5 14.4 76,322Prod./Crafts 13.3 9.9 13.2 15.3 12.0 15.9 64,853Unemployed 2.2 1.6 2.4 3.3 0.9 2.9 61,470Cocoa Farmer 18.4 14.3 21.9 17.4 21.9 16.7 55,677Retired 1.6 2.3 1.1 1.0 2.7 1.1 53,193Other Farmer 44.5 65.1 49.1 39.0 35.9 33.4 49,843

Education of HeadUniversity 1.2 0.0 0.0 0.6 1.6 3.7- 120,015Post Sec. Non-Univ. 0.4 0.5 0.0 0.0 0.7 1.1 113,294Sec. Sch. A-Level 0.3 0.0 0.0 0.3 0.5 0.7 102,059Sec. Sch. 0-Level 3.0 0.0 2.0 2.3 5.7 5.1 88,482Middle School 31.3 18.4 28.4 36.6 29.1 43.9 66,966Primary 18.1 6.6 7.9 5.7 9.1 10.9 59,996Teacher Training 1.8 0.4 1.5 2.9 3.2 1.0 56,581None 53.9 74.2 60.1 51.5 50.1 33,7 50,154

Mean Per CapitaExpenditures 58,713 16,538 31,890 45,592 63,988 134,198 -

(Cedis/Year)

U/ Figures in Table 8-11 refer to population, not householdsSiource: Ghana Living Standard Survey

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over half of the population seek treatment when they are ill and about 28percent see a doctor.

52. Poverty Profile. The following examines the characteristics of thepoorest 30 percent and 10 percent of the population. To isolate these groupsarbitrary poverty lines were set at 31,552 and at 18,562 cedis per capita peryear, respectively. One can refer to the larger group as the poor and to thesmaller group as the extreme poor. For both, nearly two thirds are found inrural areas, compared to 50 percent for the population as a whole. About 60percent of the extreme poor are found in northern Ghana, with the other 40percent split evenly between the coast and the forest areas. Focusing on thepoor, they are found in roughly equal proportions in the forest and savannahzones.

Table 9: Distribution of the Poor by Degree of Urbanization andEcological Zones

Poorest 1O1 Poorest 302 All Ghana

Degree of Urbanization

Urban (pop. > 1500) 19.2 19.8 30.2Semi-Urban(pop. >1500<5000) 15.0 17.2 19.6Rural (pop. < 1500) 65.8 63.0 50.2

Ecological Zones

Coastal 20.2 17.2 30.3Forest 19.5 40.9 43.1Savannah 60.3 42.0 26.6

Source: Ghana Living Standards Survey

Most heads of poor households are self-employed; they comprise about 85percent in both groups. This does not vary substantially from the nationalaverage. About 80 percent of the extreme poor and about 60 percent of thepoor are found in households headed by a farme: without cocoa land. Althoughhouseholds headed by cocoa farmers make up about 18 percent of the population,only about 6 percent of the extreme poor are from cocoa farming households.If one broadens the definition of poverty to include the poorest 30 percent,households headed by cocoa farmers make up nearly 18 percent of the poor,about the same as their proportion in the general population.

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Table 1O: Distribution of the Poor by Employer and Occupation of Head

Employer Poorest 10Z Poorest 30Z All GhanaGovernment 4.0 5.9 12.1Parastatal 1.1 2.4 2.5Private 4.4 3.7 6.9Self-Employment 87.5 84.6 74.7None 3.1 3.4 3.9

OccupationCocoa Farmer 5.7 17.5 18.4Other Farmer 79.6 61.7 44.5Sales/Services 3.0 4.2 10.9Prod./Crafts 8.7 10.3 13.3White Collar 0.0 3.0 9.1Retired 2.2 1.6 1.6Unemployed 0.8 1.7 2.2

Souirce: Ghana Living Standards Survey

53. Education is often viewed as a means of escaping poverty, and the GLSSdata support this position. Over 80 percent of the poor, and over 70 percentof the extreme poor, lived in hnuseholds where the head had no education. Incontrast, those households in which the head had a secondary level educationor higher are not found among the extreme poor and make up less than 1 percentof the Door. AmonR the extreme poor, school enrollment is about 45 percentfor children aged 6 to 15, while it is closer to 60 percent among the poor,both lower than for the population as a whole. There are no major differencesin the use of health facilities between the poor and non-poor.

Table 11: Education and the Poor

Education of f:ead Poorest 1O0 Poorest 30Z All GhanaNone 80.8 71.7 53.9Primary 3.5 6.9 8.1Middle 15.7 20.6 31.3Secondary O-Level 0.0 0.0 3.0

A-Level 0.0 0.0 0.3Teacher Training 0.0 0.5 1.8Other Post-Secondary 0.0 0.3 0.4University 0.0 0.0 1.2

School AttendanceAges 6-10 43.2 57.2 66.8Ages 11-15 46.0 60.5 70.8

Source: Ghana Living Standards Survey

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Malnourished children are found in roughly the same proportions in both poorand non-poor households. Stunted growth (evidence of past malnutrition) ismost prevalent in children 2 years or older. This may reflect the pooreconomic conditions of the early 1980s as children born between 1979 and 1985are more likely to be stunted than those born in more recent years. Poorerhouseholds tend to have more children than the typical household, but thedifferences are not very large.

54. Implications for the Structural Adjustment Program. According to thepreliminary results of the GLSS, farmers in the northern region of Ghana havebeen correctly identified as a group which requires special efforts to improvetheir condition. More generally, the survey supports a strategy of povertyalleviation through improving the rural terms of trade and agriculturalproductivity. Although cocoa farmers are relatively better off than otherfarmers, they make up nearly a fifth of those classified as poor under thebroad definition, indicating that improving producer incentives will improveincome for some poorer groups in the country. The relatively highexpenditures for sales and service jobs probably reflects the past incentivesand high rents for trading activities. As incentives shift, it is likely thattheir position will not improve as fast or may even decline relative to othergroups. The differential in expenditures between government and privateemployees is not as great as comparisons of salaries and other benefits wouldimply. This may reflect the fact that government workers supplement theirsalaries by other income-earning activities, both individually and among otherfamily members. It is also somewhat surprising that parastatal workers havelower expenditure levels than government employees. The relatively low accessto services such as safe drinking water and other utilities, even amongwealthier groups, retiects the past deterioration ot infrastructure in Ghana.Likewise, access to social services, particularly among the poor, is limited.The data supports the emphasis of public investment on rehabilitatinginfrastructure and improving access to social services for the poor. Thelocation of projects would also be an important consideration in trying toreach the extreme poor who live mainly in the northern region. The surveyindicates that better educational opportunities would be particularlyimportant in enabling the poor to raise their expenditures. Unemployment isnot an important cause of poverty; less than 2 percent of even the poorest 30percent of households are headed by an unemployed person. This implies thatthe m_in cause of poverty in Ghana is low incomes among those who do work.

Employment

55. Background. Both the scarcity of data and the problems in definingunemployment and underemployment, make it difficult to quantify the currentsituation in Ghana. Applying a standard definition, i.e., requiring an activesearch for employment within the reference period, the 1984 census reportedurban and rural open unemployment rates of 6.1 and 1.6 percent, respectively,or an average of about 3 percent for the total labor force. Preliminary datafrom the GLSS yields an unemployment rate of 2 percent, a decline from theestimate of the 1984 census. These figures indicate that there is no severeshortage of employment opportunities in Ghana. This is supported by GLSS data

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which shuws that unemployment is not strongly correlated with poverty and thatmost unemployed are relatively young and not heads of households.

56. Instead of trying to determine a precise, but dubious, measure,employment can be approached in another way. What can be said with certaintyis that real earnings from employment have deteriorated substantially inGhana. During the decade after 1974, growth in aggregate output wassubstantially below the increase in the labor force, leading to a decline inthe average productivity of workers and a drop in real earnings. For example,real earnings in firms with 30 or more workers peaked in 1974 before decliningprecipitously; by 1983 they stood at roughly one-tenth the 1974 level.Although real wages in these firms have risen in both 1984 and 1985 (thelatest data available), they are still only 20 percent of 1974 amounts.Evidence indicates that real wages continued to improve in 1986, but may haveslipped somewhat in 1987. It would appear that a process of improvement inemployment conditions has begun but still has a long way to go.

57. In the course of the decline in the economy, the structure ofemployment changed substantially (see Table 12). Agr:culture principallyabsorbed the growth of the labor force, increasing its share of the total from57 to 61 percent. Manufacturing employment rose by 51 percent in spite of asharp decline in output of 45 percent. This increase appears to beattributable almost entirely to parastatals which virtually doubledemployment. Output per worker declined substantially in all sectors, andoverstaffing increasingly characterized segments of the private modeLn andpublic sectors. The maintenance of employment was achieved at the expense ofreal earnings, as noted above. D.'ring this period, investment also declinedsharply. Coupled with the growth in the labor force, this reduced capital-labor output ratios, with negative consequences for productivity and realincome. The preliminary results of the GLSS provide a rough indication oftrends between 1984 and 1987. Again, it appears that agriculture absorbedmost of the growth in the labor force. I.. part, this may reflect a voluntarychoice in view of the improved incentives facing farmers. The availability ofland in many parts of the country would permit the expansion of areas undercultivation, and therefore, the productive absorption of labor. Also,alternatives may be scarce in the non-agricultural sector in view of itsmovement toward a more efficient allocat2on of labor. This has implied areduction of employment in manufacturing, the beginning of a retrenchment inthe public sector, and only modest expansion in other sectors.

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Table 12: Employment Distribution by Sector, 1970-87(in '000)

---- 1970------ -----1984----- -----1987-----Number Percent Number Percent Number Percent

Agriculture, Forestry,and Fishing 1,790 57.2 3,311 61.1 4,203 66.1

Mining 31 1.0 27 0.5 69 1.1Manufacturing & Utilities 389 12.4 588 10.9 436 6.9Construction 74 2.3 65 1.2 80 1.3Commerce 436 13.9 792 14.6 857 13.5Transportation andCommunication 84 2.7 123 2.3 128 2.0

Finance and BusinessServices - - 27 0.5 24 0.4

Government and otherServices 329 10.5 474 8.7 557 8.8

Total Employment 3,133 100.0 5,422 100.0 6,354 100.0Open Unemployment 158 123Labor Force 5,580 6,477Unemployment as Z of

Labor Force 2.8 1.9

Source: Population Census (1970, 1984) and Ghana Living Standards Survey(1987)

58. Impact of Redeployment. AppLuxiInateiy ii,uuu puDlic service empioyeeswere taken off the payroll in both 1987 and 1988. The Government is committedto redeploying 12,000 more in 1989 and to extend the program into 1990 asfurther instances of overstaffing are revealed. Furthermore, the stateenterprises are overstaffed, according to one estimate, by about 20,000 posts,in total. In order to improve the efficiency of parastatal companies, someworkers will have to be laid off. In short, over a three-year period, theGovernment foresees the release of about 60,000 employees, most of whom arelocated in urban areas. This means that the economy would have to generateadditional jobs over and above the normal growth of the labor force, estimatedat about 180,000 a year. If those displaced look for opportunities in urbanemployment, the situation is grim. In 1984, only 30 percent of the laborforce was urban. More important, no more than 16 percent were employed insalaried positions, and of these, almost two-thirds were in the public sector(see Table 13). Since direct public employment is scheduled to decline,opportunities for wage employment are not likely to be robust over the nearterm.

59. However, this view may ainderestimate the adaptability of the laborforce. In 1983, there was a massive return of workers from Nigeria, estimatedto have numbered about a million. In spite of the fact that the economy wasdepressed, the returnees appear to have been absorbed rather quickly, largelyin agriculture. The redeployment of public sector workers involves a muchsmaller total number, is spread over a longer interval of time, and isoccurring under more favorable economic conditions. Much of the discussion ofthe im.act of redeployment is undertaken in isolation without considering the

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total effects of government policies and other economic developments onemployment. The following analys4s puts in perspective the probable impact ofthe structural adjustment program on employment cunditions in Ghana.

Table 13: Distribution of Employment by Status, 1984

Status Number Percent

Central Government 310,658 5.7Public Boards and Enterprises 241,640 4.5Private Enterprises 319,590 5.9Cooperative Enterprises 2,374 -Self-Employment 3,777,675 69.7Unpaid family workers 679,422 12.5Other 91,121 1.7

Total 5,422,480 100.0

Source: 1984 Population Census

60. Among those redeployed so far (throug mid-1988), of those whichind.icated an occupational preference, almost 5 percent named agriculture.This proportion is only moderately smaller than the share of the total laborforce employed in agriculture. Even among those from the greater Accraregion, a majority of the redeployed men who expressed an occupationalprererence cnose agriculture. ''nis result indicates tnat ties to ruralcommunities may be stronger than expected. It is also a rational choicebecause many reported no formal education and few of the remainder had morethan some primary education. Particularly among men with no education,agriculture was the overwhelming choice. Manual trades dominated the non-agricultural choices. Those redeployed so far have shown an acute awarenessof the nature of the labor market in another way. In response to the questionregarding the employment status they would prefer, few (6.6 percent) opted forwage employment in the private sector. Again, this matches closely theproportion of the total labor force employed in a wage earning capacity in theprivate sector. Nearly 70 percent expressed a preference for self-employment,a share identical to that found in the labor force as a whole. In short, thepreferences of the redeployed appear to closely parallel the existingstructure of the labor force. This sense of realism suggests that theirabsorption into the labor market will be more easily achieved than would havebeen possible had a greater preference been expressed for wage employment inthe urban private sector.

61. That so many of the redeployed have opted for agriculture isencouraging, for it is the sector with the greatest absorptive capacity. Italso would seem to represent a rational response to labor marketrelationships. Rural real incomes are unlikely to have declined as sharply asurban wages since the former have a large in-kind component. Furthermore, asprices to farmers and access to seeds and fertilizer inputs improve, the

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prospects of further relative gains in agricultural incomes are gocd. Therural labor market for hired workers also provides a premium over urban wagelevels for unskilled labor. The prevalence of relatively high wage rates isconsistent with reports that, during peak periods of agricultural activity,there are labor shortages. Two other aspects of the redeployment programprovide grounds for optimism. One, the program has attracted what has beencharacterized by those administering it as a "substantial" number of voluntaryretirements. This suggests that public employees find the terminationpayments attractive or that they consider alternative job prospects to befavorable or both. In addition, less than 4,000, or only about a fourth ofthose redeployed since 1987 (up to mid-1988), have registered for assistance(for example, training). One possible inference is that the majority haveeither decided to withdraw from the labor force or already have found analternate productive activity.

62. Employ.ient Prospects 1988-90. Important aspects of government andprivate sector activity will offset some of the unfavorable consequences ofredeployment. One of the most important is higher levels of publicinvestment. A substantial portion of these expenditures is devoted toimprovements and additions to infrastructure and will require substantiallabor inputs. In addition, the Governmenc will implement PAMSCAD which willundertake public works proiects employing labor-intensive methods. Based onan analysis of those 1988 projects with significant labor requirements, it isestimated that i total of 35,659 manyears of employment would be generated bythe public investment program. This does not represent a net addition whichcannot be calculated in the absen,.e of similar information for 1987. However,since in 1988 total public investment increased in real terms compared to1987, it may be presumed that the net change in employment is positive. In

the aC tStI-;t.9L tol SL. .. L c.L J C au.) '± act. -1- - ,&I VVO Lzv Ca CL.ld L .Lv wow)a ±.)

increase by almost 30,000 over 1988. In addition to these direct effects, tothe extent that projects use domestically produced materials, employment isgenerated in other sectors. The expenditures of the workers employed willalso generate additional employment. A conservative estimate of the 'secondround' employment generated by each direct job would be on the order of 0.5.Thus, the net effect of government activities on employment will be positive,notwithstanding redeployment.

63. More generally, a continuation of dynamic growth would expand andimprove employment opportunities for the Ghanaian labor force. The estimatesbelow are based on projections of GDP growth (see Chapter V) and assumptionsabout productivity increases. 11 The estimated levels of employment and therates of growth shown in Table 14 represent the increase in the laborrequirements of the economy if sectoral rates of growth conform toexpectations and the rates of increase in productivity approximate those

In the shoLt-run, no productivity increases are assumed for agriculture,construction, or commerce. An annual rate of increase of two percent isestimated for manufacturing, mining, and transportation and communications.A 0.5 percent annual increase is forecast for private service sectors.Government employment is estimated from recent levels making allowances forreductions stemming from redeployment.

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assumed here. If the rate of increase in aggregate labor requirements exceedsgrowth in the labor force, about 3.3 percent, this would be expected toimprove real earnings. That is, the actual increase in employment will notnecessarily match the estimates, unless increases in labor participation rateswere to occur; this is unlikely since these are already high. Rather, workerswill move from jobs with low productivity and low earnings to those that aremore productive and remunerative. Average labor productivity in the economywould thus be a function of increases within soLae sectors and of shifts oflabor from sectors with lower to those with higher productivity. As can beseen, projected employment growth exceeds the expected rate of increase in thelabor force by a comfortable margin in 1988-89. Thus, the prospects foremployment are favorable over the 1988-90 period.

Table 14: Estimated Employment by Sector, 1988-90(Employment in '000)

Sector 1988 1989 1990

Agriculture, Fishing 4,363 4,538 4,642Mining 75 81 88Manufacturing, Utilities 470 499 540Construction 92 103 113Transport and Communications 138 146 153Commerce 943 1,009 1,070Financial Services 25 27 28Non-Governmental Services 260 285 306Central Goverrunent 285 270 270

7vL,01 E11LPy1UYL:1L b,z t,)r I,10

Annual Increase (percent) 4.7 4.6 3.6

Source: Staff Estimates.

64. Economic Environment for Employment Generation. By and large, theenvironment in Ghana favors continuing improvement in employment conditions.In contrast to other countries, the labor code does not place many legalrestrictions on conditions of employment. However, there have been a fewpractices, primarily in the past, which may have hindered the efficientfunctioning of the labor market. Cf greatest importance is the retention ofthe decree restricting the freedom of employers to reduce their work forcewithout government permission. If flexibility is denied enterprises inadapting to changing market conditions by adjustments in employment levels,employers will seek to contain labor costs by reducing real wages whereverpossible. Alternatively, employers may seek to limit the risk of having tocarry an excessive work force in a recession by investing in labor-savingequipment. Given the scarcity of capital and Ghana's generous endowment oflabor, such a response would not be efficient from the social point of view.Perhaps an even greater obstacle to adjusting emp,loyment levels in manyenterprises is of their own making in the form of very generous separation

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allowances that have been agreed with unions. The amendment of thesearraxgements would seem to be of high priority to enterprises that wish to beefficient and competitive. This is likely to require concessions on otheremployment terms, e.g. for real wage increases, as these become feasible.

65. A second practice opposed by some employers is the responsibility ofthe Prices and Incomes Board to approve wage agreements reached throughcollective hargaining. There is support for the Government's desire to dampeninflationary pressures. However, the experience of other countries with suchcontrols is that they lead to substantial distortions and stand in the way ofan efficient allocation of labor. In particular, expanding firms may beunable to recruit the quality of labor required if limitations are placed ontheir ability to respond to market conditions. Furthermore, the restorationof productivity from the depths to which it declined during years ofovermanning may require at least the partial restoration of real wages inorder to elicit more efficiency from workers. Unfortunately, theadministration of incomes policies cannot be endowed with the flexibilityiequired to adaFt wages to the needs of different employers. The Governmentmay wish to reconsider the role of the Prices and Incomes Board in this area.

66. The third practice is one that may not involve active governmentintervention but does concern the relationship between wage decision-making inthe public and private sectors. Employers observe that any initiative by theGovernment to adjust the wages of its employees is followed by demands thatthe private sector follow suit even if the latter already has implemented wageadjustments agreed upon through collective bargaining. This is occurring eventhough Government officials have made statements intended to sever the linkbetween public and private sector wage adjustments. If the public sector isto retain an etticient and productive labor torce, the ditterential betweenpublic and private wages, primarily in the higher ranges of the civil service,must be narrowed. Little will be served if the private sector is forced tomatch public sector adjustments with little regard to profitability or theirown labor requirements. The Government not only needs to reiterate itsposition, but also should not encourage or support trade union demands forsuch linkages.

67. Growth in agriculture is key to employment generation. Increases inagricultural incomes can stimulate productive activity in other sectors.Higher rural incomes quickly give rise to increased demands for consumer goodsand agriculture-related services, many of which will be met by informalproducers in rural areas. As incomes continue to rise, demand willincreasingly shift towards higher quality goods made in the modern sector. Afurther bonus of rising rural incomes is that these Laise the opportunity costof labor to the urban sector and will place upward pressure on urban wageswithout direct intervention. Finally, because the returns to investment inagriculture in the form of research and extension services and feeder roadsare likely to be very favorable, such activities should hold a high priorityin the government's allocation of resources. Also favoring employmentgeneration is the current effort to promote small and medium-sizedenterprises. The most important f_rst step is to remove those conditions thatplace them at a competitive disadvantage with large enterprises. In addition,the formation of cooperative organizations of small entrepreneurs may improve

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their access to lower-cost sources of inputs. The provision of creditguarantees for members might open up access to lower-cost sources of credit.The organizations would also be able to afford technical resources forimproving production methods or developing markets. Finally, the government'sadoption of a liberalized foreign exchange regime has favorable implicationsfor improvemen.t in employment conditions. To the extent that more realisticexchange rates make more goods competitive in world markets, production andemployment are encouraged. Such goods can be expected to be more labor- anddomestic resource-intensive than average, thus efficiently promotingemployment. The response ot producers to measures taken thus far in reformingthe exchange rate and trade regimes is already visible and positive. Animproved climate for private investment would also promote employment growth.

Program of Actions to Mitigate the Social Costs of Adjustment (PAMSCAD)

68. The Government is concerned about the plight of the poor and about thesustainability of the economic reforms if inadequate attention is paid totheir plight. The success of the Economic Recovery Program provides a firmbase for an effort to meet those concerns. The Governzment also was encouragedto develop the program because of indications of donor support and theint-erest expressed in addressing the social costs of adjustment. Thefollowing were identified as being the most vulnerable, and hence the targetgroups for PAMSCAD: (i) rural households, especially in the northern region,who have low productivity, poor access to social services and incomeincreasing opportunities, and who suffer particularly from unemployment andhunger during the lean season; (ii) low income un- or under-employed urbanhouseholds, who lack productive economic opportunities and have suffered their.nrease in prices of some essential commodities; and (iii) retrenched workerswho lack productive employment. As already discussed, the preliminary resultsof the GLSS confirm the identification of the first group. The source ofvulnerability of these groups points to areas where targeted interventionswould be most beneficial. For rural households, income and nutritionsupplements are required in the lean season; in the long run, theirproductivity needs to be increased. For each of these groups, and moregenerally ,or the poor, access to health and education services needs to beimproved. Thp phasing out of school feeding subsidies could lead to reducedaccess and, therefore, steps should be taken to avoid this through cost-effective provision of food to students.

69. The projects in PAMSCAD were chosen on the basis of several criteria.In particular, projects were included if they had a strong poverty focus; higheconomic and social rates of return; modest institutional requirements toensure ease and speed in implementation; and in sensitive areas, highvisibility to enhance the confidence in and sustainability of the reformprogram. The projects chosen include a set of community initiative projectsthat will enable communities to identify and implement projects torehabilitate and construct social and economic infrastructure, generateemployment, and address the needs of vulnerable groups. Employment generationprojects constitute a significant proportion of the portfolio. These includepublic works and food-for-work projects. They will provide employment andincrease incomes for a large cross-section of the rural and urban unemployedand underemployed, while at the same time create or rehabilitate economic and

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social infrastructure. A few projects have been developed to alleviate thehardship of the redeoloyed, focusing on provision of counselling and placementservices. In addition to these interventions, there are projects designed tomeet the basic needs (water and sanitation, health, nutrition, and shelter) ofvulnerable groups. Included are hand-dug wells and low-cost sanitation. Anessential drugs scheme has been proposed, as well as supplementary feeding andnutrition education. A project encourages primary school enrollment byensuring that all children have access to basic text and exercise books. Inaddition, initial food stocks to finance a revolving fund for bulk purchase offood for second cycle boarding schools has been proposed. This will minimizefeeding costs, thereby easing the three-fold increase in parents' contributiondue to the removal of suhsidies, part of the ongoing reform in education.

70. The extent to which PAMSCAD will be successful in fulfilling itsobjectives is contingent on the amount of funding available and properimplementation of the projects. Regarding the former, in February 1988, adonors conference was organized to discuss PAMSCAD. At that meeting, donorspledged sufficient funds to meet the financing requirements, estimated at $84million. The process of converting these indications to commitments anddisbursements i.s in progress. Up to now relatively few donor commitments havebeen signed, but several are expected to be finalized early in 1989. Somedonors have agreed to release counterpart funds from previously committedprogram assistance for community initiative projects. Also, projectimplementation was slow to start, even for activities for which financing wasavailable. In part this is explained by the fact that PAMSCAD is complex,involving many agencies and different types of projects in its effort to reaThthe poorest groups. Additional work is also needed to prepare some project:s.However, other factors have slowed down propress in putting PAMSCAD intoaction. One, the organizational arrangements for managing the program to>lksome time to finalize and initially overlapping jurisdiction caused proh)iHns.Two, there are not enough qualified staff to undert.ke the needed preparatk.rywork. In some cases, this is preventing donors from finalizing their plefIes.Three, there is a need to establish a mechanism for inter-ministerialcoordination. Four procedures have not been developed to draw down tunds asand when needed.

71. Given the complexity of the program and the need for quick action, ifwould be preferable to decentralize responsibility for carrying out PAMSCADprojects to each implementing agency and set in place a coordinatingmechanism. Additional staff need to be hired to prepare some projects. Iflocal consultants are not available for a particular task, foreign technicalassistance should be tapped on a temporary basis. Funding is in place tosupport this. Procedures to ensure an adequate flow of financing should heestablished without delay. In the case of counterpart funds, the Ministrv ofFinance and Economic Planning needs to set up procedures similar to those forthe super-core investment projects whereby quarterly advances of funds aremade to project accounts. External financing should be channeled directly tothe implementing agency. In the short run, the Government may wish to focusor. a few critical projects which are in an advanced stage of preparation.Examples would be hand dug wells, low cost sanitation, priority public worksand the decentralized community initiative projects. The Government has setup a special team to manage the latter and the criteria for selecting those

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projects have been established. So far 176 projects, with a total cost ofabout 0230 million have been selected. The list includes the completion ofschool buildings and classrooms, latrines and hand dug wells. The goal was toimplement two projects per region (10) before the end of 1988. Finally, theInternational Economic Relations Division (IERD) of the MFEP needs to follow-up with donors more actively to finalize commitments and match funding withprojects showing financing gaps.

Conclusion

72. An important objective of the reform program is to address the needsof the poor. The first results of the Ghana Living Standards Survey providevaluable information which can be used to design projects to reach the poor.The data show that most of the poor live in rural areas, particularly in thenorthern part of the country. A large share is found in households headed bya farmer without cocoa land. Most live in households headed by someone withno education and they are less likely to attend school than other groups. Thesurvey supports a strategy of poverty alleviation through improving the ruralterms of trade and agricultural productivity. The data also supports theemphasis of public investment on rehabilitating infrastructure and improvingaccess to social services for the poor. There are encouraging signs that thetransition of retrenched workers to more productive employment will not be asdifficult as feared. A continuation of the economic growth realized in recentyears is expected to expand employment faster than the projected increase inthe labor force. Growth in agriculture, as well as a liberalized foreignexchange regime, is key to employment generation. PAMSCAD aims to address theneeds of the poor in the short-run. But its ability to meet its objectivesiprlemenn taimponv . A i1 bili tv rf Hn?Nr rpcnllrePC c wol IC 4morr

implementation.

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IV. THE AGENDA FOR FUTURE REFORM

73. The main task for the next two years (1989-90) is to maintaineconomic growth, while consolidating the gains achieved so far. Atten;ionwill need to be given to several areas which have emerged as problems.First, although economic recovery has begun to take hold, growth is stillconstrained by inadequate domestic savings and investment. Domesticsavings need to be strengthened by mobilization of more tax revenue,restructuring of the financial system, and acceleration of state enterprisereforms. At the same time, further actions are needed to improve theinvestment climate. Second, while inflation moderated in 1988, determinedefforts are needed to reduce it further, while ensuring that the privatesector has enough credit to retool and invest. Third, the design andimplementation of some aspects of the program have experienced difficultybecause of strained management capacity. State enterprise reforms are anexample. Efforts to reform the civil service, in particular, to iniproveincentives for staff with accounting and other scarce skills, need to befollowed through, supplemented by technical assistance as required. Thepessimistic outlook for cocoa and gold prices means that Ghana will betrying to sustain growth in spite of a substantial decline in its terms oftrade. This increases the urgency of the reforms outlined below,particularly those which would promote a supply response. It also meansthat special efforts will be needed to ensure adequate levels ofconcessional assistance. The Government is committed to a timetable forsome of these reforms; the Dhasing of others is still being consiiprpcd.Ghana is also giving attention to longer-term challenges: promotingagricultural growth; protecting the environment, particularly forests; andpopulation policy.

The Government's Medium-Term Objec:ives

74. The general aim of structural adjustment is to lay the base forsustained growth within the context of a viable balance of payments andprice stability. The Governmert's goal in the near term is to achieve anaverage annual growth of real GDP of at least 5 percent, thereby ensuring amodest increase in per capita incomes. In order to meet that target, it isestimated that the level of investment would need to increase from 12.5percent in 1988 to 16 percent by 1990 and that national savings would haveto rise from currently 6.5 percent of GDP to 8.5 percent by 1990. Foreignsavings, primarily financed by concessional aid flows, are estimated at 6percent of GDP in 1988, and are projected to rise to 7.6 percent of GDP in1989-90 before starting to decline.

75. To attain these objectives, during 1989-90 the Government will emphasize: further improvements in incentives for efficientproduction, export, and import substitution; measures to increase domesticresource mobilization by improving the contribution of the tax system toeconomic growth, reforming the financial system, and promoting the

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response from the private sector; and better resource management in thepublic sector.

Incentives Policies

76. The Government will promote the rapid convergence of the exchangerates in the auction and bureau markets primarily by further wideningaccess to the auction. Specifically, the Government has decided toliberalize fully parments and transfers for current internationaltransactions by June 1990, including permitting access to the foreignexchange auction. An initial step will be to make eligible for fundingthrough the auction all bona fide requests for transfers of profits anddividends by the end of January 1989. In the case of trade, the Governmenttook the important step of abolishing import licensing effective mid-January 1989. For the future, import duties will need to be restructuredin stages to create a lower and more uniform pattern of protection in orderto encourage further non-traditional exports and efficient import-substitution. In this context, the Governmert should: gradually lowerimport duties above 15 percent; phase out special import taxes; and furtherreduce the extensive number of duty exemptions and concessions, as well asapply the principle that when granted they should be determined on acommodity, not an institutional basis. In addition, the duty drawbacksystem would benefit from modifications which would exempt thoseenterprises which export all or most of their production from import dutieson inputs, and for other firms, would reduce the processing time forrebates. The Government is aware of the problems being experienced by somecompanies, both as a result of past distortions and trade liberalization.Tn resnonse to those concerns. a studv will be undertaken, iointly with theWorld Bank, on protection and the extent of unfair trading practices. Inthe meantime, levels of tariff protection established in 1988 for somelocal industries will remain in force.

Domestic Resource Mobilization

Tax Reform

77. When the Economic Recovery Program began in 1983, the tax systemhad collapsed; as a result, revenues had fallen to only 5.5 percent of GDP.The principal factor behind this deterioration was massive erosion in thetraditional tax base, owing to overvaluation of the exchange rate andpervasive price controls. The tax structure was also costly from anefficiency point of view due to excessive reliance on internationaltransactions, particularly cocoa, and high rates of company and personalincome tax levied on a low base. Implementation of the ERP, mostimportantly the move to a more realistic exchange rate, has improvedrevenue performance. Tax revenue rose steadily to 12.7 percent of GDP by1987. In addition, the Government began to reform the tax structure,focusing on personal taxation relief, rationalizing indirect taxes andexpanding the role of taxes on consumption, and reducing the implicit taxon cocoa. Nevertheless, taxes on international transactions still accountfor over 40 percent of revenue, of which receipts from cocoa represent 26percent of the total.

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78. The main objectives of tax reform over the medium term aretwofold. The first is to raise enough revenue to finance necessary publicspending, while reducing reliance on cocoa. The second is to enhance thecontribution of the tax system to growth by minimizing distortions whichwould lead to a misallocation of resources or discourage savings andinvestment, while at the same time promoting equity. For example, theeconomic costs of taxation could be reduced if the base were broadened asthat would permit lower overall rates. Further strengthening of taxadministration will be critical to both objectives. The timing of specificmeasures would be decided based on revenue needs in the context of themacro-economic framework. If the actions discussed below are implementedover the next two years, tax revenue would rise to about 14 percent of GDPby 1990; the share accounted for by international transactions would fallto about 35 percent, with taxation on cocoa dropping to 15 percent.

79. Tax reform should be guided by several principles. Reliance onconsumption taxes needs to be increased. To achieve this, the Governmentis considering an enlargemernt of the role of the sales tax by introducing acredit system to replace the current ring system. Under the ring system,registered enterprises are granted permits to waive payment of sales tax oninputs, either imported or purchased from other registered firms. Thecredit system would require a sales tax on all input purchases, but wouldallow enterprises to offset that against what is due on the sale of theiroutput. Such a system would reduce leakage from the tax net; because thereis an incentive to comply, enforcement is easier. It would also facilitateextension of the sales tax to services. Exports would be free of taxationthrough application of a zero rate. Purchases of capital goods would alsobe effectively freed from tax, since those charges would be eligible forcrediting. In addition, the basis for charging excise and sales tax ongoods currently subject to excise duties (spirits, beer, wine, cigarettes)needs to be rationalized. Current anomalies result in negative protectionfor the cigarette industry. Revenue could be mobilized and administrationsimplified if goods at the 10 percent concessionary rate were moved to thestandard rate (22.5 percent), exempting those consumed primarily by thepoor. The rev-..ue gains and broadening of the tax base which would berealized witn the credit system would permit a gradual reduction of thestandard sales tax rate, which is high by international standards. Highertaxes on motor vehicles and petroleum products would improve equity,increase revenues, and recover more of the social ccsts of road use.Consistent with those objectives, the 1989 budget revised motor vehicletaxation by: levying a sales tax (10-35 percent) on all passenger vehiclesand imposing an import duty on small passenger cars, previously free oftaxes. Excise taxes would continue to be used to raise revenues from goodswith inelastic demand or negative externalities.

80. Tn the area of direct taxes on personal income, the objectivesshould be to broaden coverage and spread the burden more fairly across thepopulation. Personal exemptions would be raised, and the number ofmarginal tax brackets reduced, coupled with an expansion in their size.The brackets also should be adjusted to take into account inflation. TheGovernment has taken some actions in this regard and intends to continue

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the reforms. The 1989 budget increased the personal exemption and thelevel of income at which the top marginal rate applies. In the medium- tolong-run the incorporation of allowances and the value of in-kind benefitsin the tax base would broaden coverage. It also would eliminatedistortions caused by different treatment of various sources of income andreduce the scope for avoidance of taxes. These measures would ensure thatthe structure of tax rates yields revenues commensurate with administrativecosts. Currently interest income, dividends, and capital gains are taxedat different rates, distorting the distribution of savings among diffe2.entforms of investment. In conjunction with inflation, these tax lawsstrongly encourage debt financing as opposed to equity participation. As afirst measure, taxation of dividends should be reduced and taxes on capitalgains limited to real gains, achieved by including them as part of taxableincome. The Government's announcement that the 30 percent dividendwithholding tax would be converted into a final tax of 30 percent is a stepin that direction. It is also suggested that a withholding tax on interestincome be introduced. However, timing would have to take into accountfinancial sector reforms and the need to avoid frequent changes in the taxcode.

81. In the case of company taxation, in order not to discriminateagainst different sectors, the rate for all activities should be unified atthe lowest rate of 45 percent, which currently applies to manufacturing.mining, agriculture, and real estate. Capital gains earned by companiesalso should be treated in the same way as gains earned by individuals.

82. The Government plans to continue implementing measures to imp-ovetax administration. Included are the adontion of a unique taxpaveridentification number, more computerization, improved information systems,training, and better documentation for imports. In addition, a taxtribunal has been established.

83. Another priority for tax reform is to examine incentives forefficient investment. The need to promote a sufficient response from theprivate sector makes such an evaluation critical. During 1989, theGovernment, assisted by the International Monetary Fund and the World Bank,intends to evaluate the impact of the tax system and other regulations,such as the Investment Code, on investment. The study will analyze thestructure of marginal effective tax rates on investments in differentactivities resulting from the combination of the personal and company taxcodes and the incentives provided under the Investment Code. It will alsoexamine different options for reforming business taxes in order to promoteefficient investment. This could include modifications such as switchingto cash flow taxation of businesses or adjusting capital allowances andother deductions, such as interest payments, to more closely approximateeconomic depreciation, and taxation of real rather than nominal businessincome. It will also look at possible changes in personal income taxes ondividends, interest and capital gains in order to reduce distortions inasset choices.

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Financial Sector Reform

84. The weak financial system is impeding structural adjustment inGhana. In particular, it has hindered the response of manufacturers andother investors to improved incentives and the mobilization of savings. Inaddition, the pace of improvement in the willingness of the public to holdfinancial assets has slowed. The velocity of circulation decreased from7.8 in 1984 to 6.2 in 1985. It remained at that level during 1986 and fellonly marginally in 1987 to 5.6. Possible causes for the slow-down in themonetization process are inflation, negative interest rates and the failureof banks to introduce new products and services in the face of excessliquidity. Thus, during the next two years the Government will implementmeasures to strengthen and reform the banks.

85. The formal financial system in Ghana is dominated by three banks.In addition, there are seven smaller ones, including three developmentbanks, a small cooperative bank, and over 100 rural banks. Total assetsamount to about 25 percent of GDP, more than half in the three lprgestcommercial banks. The system has been distorted by previous interest ratecontrols and selective credit policies, lack of competition, and weaksupervision by the Bank of Ghana. As a result, it faces severe financialproblems. There is a large volume of non-performing loans and provisionsfor portfolio losses are inadequate. Operating costs are high duepartially to inefficient operations. Several banks are highly exposed toforeign exchange risk. In general, their capital base is insufficient.Accounting systems and management information are weak.

86. Diagnostic studies have been completed for the three developmentand six commercial banks, including the three largest ones, to determinethe magnitude of their problems, both financial and managerial, and todecide on remedies. The proposed restructuring of the financially troubledbanks will cover both capital losses and recapitalization where necessary.Among the most important measures to be implemented are the following:(i) the reduction of non-perforaiing loans through improved collection andwrite-offs, coupled with capital injections to cover immediate needs;(ii) restructuring for commercial and development banks covering, in thefirst stage, at least 50 percent of their respective total assets; and(iii) similar plans for the remaining assets. Experts are currently inGhana assisting the Government to develop the specific actions required toimplement the above. The estimated financial requirement is about $280million over the period 1988-90. The program is supported by a FinancialSector Adjustment Credit with resources provided by several donors,including IDA, Japan and Switzerland.

87. The restructuring of the banks is a complex and sensitiveprogram. It will take time to implement and to benefit the economy. Inthe meantime, the Government has introduced amendments to the Banking Actand other relevant regulations establishing rules relating, in particular,to the capital adequacy of banks, reserve requirements, exposure limits,penalties and reporting requirements to the Bank of Ghana. It also hasinitiated work on a proposal setting out uniform auditing and accounting

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standards for ban's, and placed limits on secured as well as unsecuredloans to any single borrower. The banks, in cooperation with the Bank ofGhana, should educate the public on the new laws and their implications forindividual and corporate depositors in order to lessen lingering fears onconfidentiality. In order to improve customer service, banks should bepermitted to vary days and hours of operation. The Bank of Ghana intendsto review the system for collecting and clearing checks, with the aim ofdetermining the reforms necessary to reduce the extensive delays and highcost of present arrangements. In addition, the Bank of Ghana shouldannounce a timetable for decontrolling bank charges and spreads.

88. The Government has liberalized the financial system by abolishingcontrols on interest rates and on credit allocation by sector, except foragriculture, for which a minimum requirement (20 percent) is applicable.However, so far neither the structure nor level of lending rates hasresponded and interest rates remain negative in real terms. There areseveral possible explanations, including the excess reserves of tne banks(para 20), inflation, and institutional rigidities. The recent moderationin inflation, if sustained, should return interest rates to positive reallevels. The combination of weak and poor-performing banks and thenecessity for a tight monetary program to moderate inflation, is making itvery difficult for the Bank of Ghana to manage liquidity. This points tothe importance of developing indirect instruments for monetary management,capable of absorbing or injecting liquidity as and when required. Also, asecondary market in government backed securities and commercial paper isneeded. Finally, the Bank of Ghana is preparing a plan to improve themonitoring of banks' cash reserves and the timely iss"ance of short-termpaper.

Private Sector

89. To a large extent, the Government can best promote the privatesector by consistently implementing prudent fiscal and monetary policiesand reducing intervention in the economy. During the last two years theGovernment also has taken measures in the areas of tax reform andderegulation which have improved incentives for the private sector. A taxappeais procedure recently has been established. The liberalized exchangeand trade regime has decreased public intervention in the activities ofprivate companies. However, more can and should be done to improve theinvestment climate, especially if private investment is to become theengine of growth for Ghana in the future.

90. The Ghana Investment Center (GIC) can play a key role inencouraging private investment. However, the approval procedures forinvestment proposals are lengthy and delays common because of the shortageof qualified staff. A decision on whether or not to approve a project isat times arbitrary and not based on clear criteria. The GIC is not a 'onestop shop' for approvals and overlapping jurisdiction with other Governmentagencies causes difficulties. The staff are occupied with approvinginvestments, leaving little time for promotion and advisory functions. TheInvestment Code has been in operation for about three years, but thefailure to realign existing laws and regulations with its provisions has

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hampered implementation. Complex regulations administered by severalagencies are a constraint particularly for small and medium-scaleenterprises. The relevance of some incentives, in light of recent tax andta-iff reforms, also needs to be reviewed. Finally, the Code may haveoverly restricted foreign investment.

91. The major bodies representing the private sector are: the GhanaChamber of Commerce, the Ghana Employers' Association, and the Associationof Ghana Manufacturing Industries. While they do have some opportunitiesto meet with high level Government officials, the dialogue between theprivate sector and the government could be better. Senior governmentofficials could use such meetings to assess the business environment andissues concerning the private sector. One also would expect private sectorassociations to undertake studies to inform, advise and educate theirmembers on new developments and policies. There is little evidence thatthe associations in Ghana provide such services. This is a major gapespecially in view of the absence of cther autonomous private sector policyresearch and advisory institutions in the country.

92. The following measures would improve the investment climate inGhana and thereby help to promote the expansion in private investmentnecessary to support economic growth:

(i) The dialogue between the Government and the businesscommunity should be expanded. A related problem isinsufficient information on new policy measures, forexample, changes in foreign exchange and trade regulations.Lack of publicity about some changes in policy reduces thefavorable impzict on private sector confidence. An exampleis the recent decision to repatriate blocked funds.

(ii) Private sector organizations could play a larger, and moreconstructive, role in the design of economic policies iftheir capacity for policy analysis were strengthened.

(iii) Implementatior. of financial sector reforms needs to begiven priority. Lack of adequate credit is identified asthe key constraint by most businessmen. Within the contextof the need tc ensure price stability, it becomes even moreimportant for banks to intermediate effectively and tochannel resources to high return projects. Actions toguarantee confidentiality in bank accounts will also beimportant.

(iv) It is time to re-examine the provisions of the InvestmentCode. The promotion role of the GIC should bestrengthened and the investment approval processstreamlined.

(v) Continued tax reform would be a clear signal toinvestors. This includes further reduction in corporateand personal income tax burdens and other measures to

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improve incentives for efficient investment. There alsomay be scope for streamlining procedures relating to taxclearance certificates.

Public Sector

Public Expenditure Policy

93. The Government's main priority over the next two years will be toimprove the implementation of public expenditures through better monitoringand control. The public expenditure program will continue to be preparedwithin a consistent macroeconomic framework to be updated twice a year.The adequacy ar4J allocation of non-wage recurrent expenditures foragriculture, health, and education, will be improved by implementing andrefining the guidelines which have been prepared. Guidelines may bedeveloped for other sectors, for example, higher education. Monitoring ofspending on these items also will be strengthened. The rolling three-yearpublic investment program (PIP) will be updated annually; non-PIPexpenditures will not exceed 10 percent of the development budget. AProject Selection Committee has been established to review new projects forconsistency with the objectives of the structural adjustment program andsector strategies, as well as for adequate economic returns. Monitoringwill be strengthened and expanded to include physical progress.

State Enterprise Refcrms

94. The Government will continue to take steps to improve thepertormance ot those enterprises remaining fully or partially owned by thestate. One important means will be a policy environment that encouragestheir operation on commercial terms with minimum intervention by theGovernment. During 1989, the SEC is to undertake a study of the impact ofexisting policies on the pricing, staffing, and procurement autonomT ofstate enterprises with a view to recommending changes in regulations.Guidelines governing budgetary support to state enterprises were formulatedduring 1987. All state enterprises are expected to become financiallyself-sufficient, but initially the focus will be on commercially-orientedfirms. The guidelines call for the phased removal of operating subsidies.Direct Government support would be provided only within the context ofapproved corporate plans and the PIP, and only to supplement internal fundsand commercial loans. Loan guarantees would also be subject to inclusionin approved corporate plans and the PIP. Given the work required todevelop corporate plans, initially the guidelines are being appliedflexibly. The Government should ensure that these guidelines are fullyintegrated into the budget process.

95. Corporate plans and performance agreements are the principal meansby which the management and financial performance of those enterprisesremaining in the Government's portfolio will be monitored and improved. In

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the first phase, attention will focus on 14 priority state enterprises, 1/selected on the basis of their financial and budgetary importance.Corporate plans and the associated performance agreements for all 14enterprises would be finalized by the end of 1988. On the basis of thesedocuments, to be updated annually, the SEC will assess performance. Inorder to implement this strategy, SEC must design and test a monitoring andeva'uation system using the targets incorporated in the corporate plans andperformance agreements as benchmarks. It is expected that as the corporateplans are updated, the quality of supporting documentation and financialinformation will improve.

96. The Government has taken the first steps to reduce the size ofthe state enterprise sector. Over the next two years follow-through onthese initiatives is required to achieve results. Particularly importantwill be the provision of adequate information to potential investors onoperating results, balance sheets, audited statements, estimates of futureviability, outstanding debt, etc. The Government should intensify effortsto collect :his data, drawing on both local and, as needed, foreignresources. Continued weakness in this area will cause delays. Otherissues related to divestment have arisen. Preliminary analysis indicatesthat the value of the assets of the firms identified so far for divestment(12) exceeds their liabilities. Of course, this is only an estimate ofwhat will be realized in the market. However, many have large unfundedliabilities fcr pension and termination benefits. Through previouscollective bargaining agreements, these redundancy payments are much moregenerous than s;imilar provisions for the civil service and even privatecompanies, and bear no relation to the enterprise's ability to pay. TheGovernment has decided to bear these costs and, based on rough estimates,tnere would be an allocation of 4-5 billion cedis in the 1989 buugtL Lucover the obligations expected to be incurred in that year. In order thatthis requirement not excessively limit the resources available for criticalinvestment outlays nor limit progress on state enterprise reform, Ghanashould have access to sufficient program assistance on concessional terms.The Government may also need to modify these termination benefits - atleast those financed by the budget - to more reasonable levels. Anotherissue is whether the Government should invest in enterprises which may bedivested in order to attract investor interest or to obtain a better price.Experience in other countries indicates that investors prefer to undertakerehabilitation themselves. It is unlikely that these outlays would becompensated by a higher price. Also, it is not clear that the publicsector is the most qu3lified to make such decisions. Nevertheless, theGovernment should take some action prior to divesting companies. Exampleswould be maintenance, financial and management audits, staff inventory andredeployment plans, pricing studies, financial forecasts, contracts with

Ghana Water and Sewerage Corporation, Electricity Corporation of Ghana,Volta River Authority, Ghana Cocoa Board, State Gold Mining Corporation,Ghana Posts and Telecommunications, Ghana Railways Corporation, Ghana Portsand Harbours Authority, Ghana Airways, Black Star Line, Ghana Oil Company,Ghanaian Italian Petroleum Company, Ghana National Petroleum Company, andGhana SLpply Commission

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private sector firms to manage the SOE during the transition period ortwinning arrangements. Support for such activities is provided by arestructuring fund, a component of the IDA-financed Public EnterprisesProject. A third issue concerns the administrative arrangement forcarrying out divestiture. Again, experience in other countries indicatesthat the task is best done by a specially conqtituted group. This isbecause some of the skills needed - for example, investment banking,business analysts, etc. - are not found in public agencies and becausethose in the public sector unavoidably have conflicting interests. TheGovernment is reviewing the current administrative arrangements (the SEC issecretariat for the Divestment Implementation Committee and bothinstitutions share the same chairman) with a view to making recommendationsto improve them.

Public Sector Management

Economic Management

97. In late 1988, a Policy Analysis Division (PAD) was established inthe Ministry of Finance and Economic Planning (MFEP). It will be necessaryto ensure that the staffing of the unit is well matched to the division'smain function of policy analysis. Once the staffing and the terms ofreference for the division are finalized, additional requirements forpersonnel may become evident. If it proves difficult to recruit Ghanaians,foreign technical assistance could temporarily fill any gaps. TheGovernment also will focus on improving the organization and operations ofMFEP in order to make the preparation and implementation of the budget moreeffective. In particular, the various task forces will be integrated intothe Ministry. The responsibilities of other agencies in the budget processwill be re-examined. Coordination, particularly between the sector andcentral ministries, needs to be improved. Payment procedures need to bestreamlined and controls on commitments and monitoring strengthened. TheGovernment has begun by undertaking a study on budgetary reform due to becompleted in early 1989. Finally, it is continuing preparations forestablishing a National Development Planning Secretariat (NDPS), which isnow expected to become operational before the end of 1990. The NDPS willbe responsible for preparing the medium- and long-term developmentrramework and sectoral strategies to guide the preparation of the PIP.Based on this framework, the Ministry of Finance will prepare the rolling,three-year PIP.

Civil Service Reform

98. During 1987 and early 1988, a study on civil service pay andgrading was carried out. The Government is reviewing its recommendation toachieve a differential of 13:1, compared to 5.5:1 (pre-tax) in 1987. Giventhe demands on the budget and tight resources, progress towards thisstructure will be gradual. The Government's current intention is to limitthe wage bill to within 5.5 percent of GDP in 1989, compared to slightlyless than 5 percent in 1988, and to w thin 6 percent in 1990-91. In orderto make meaningful progress in increasing relativities within thatconstraint, Government will have to limit across-the-board adjustments to

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modest levels and avoid changes in allowances which would compress thesalary structure.

99. To boost its capacity to implement the structural adjustmentprogram in the short run, the Government had intended to utilize twotemporary mechanisms. A scheme has been put in place to compensate thosecivil servants working on the structural adjustment program with a specialduty allowance, but no payments have been made. Also, guidelines on theuse of local consultants and Ghanaians returning from overseas for short orlong-term assignments in the civil service have not been finalized. Sincethese mechanisms have not been implemented, they have not been able to helpalleviate the constraint of weak implementation capacity. In view of thelikelihood that salary relativities will improve only gradually, therationale for these programs remains as strong as ever.

Long-Term Challenges

100. The purpose of the measures described above is to lay the base forsustained growth in Ghana. However, that is not the whole picture. Thereare long-term challenges which need to be addressed in order to achievegrowth in per capita incomes and to maintain the resource base. Therefore,the Goverrunent is developing stra.egies and action programs in severalother areas. Among the most important are: improving food cropproduction, focusing on smallholders; protection of the environment,particularly forest resources; and lopulation policy.

101. Food Crops. Given its resource base, Ghana has the potential tomeet most domestic food requirements and to export surpluses.Nevertheless, per capita cereai production has declined from 176 pounds(1974-76 average) to 141 pounds (1986). Although growth in agriculture hasimproved since the beginning of the Economic Recovery Program due to betterpolicies and generally good weather, the country is far from reaching itspotential. The main reason is that the productivity of the smallholder,who accounts for nearly 80 percent of output, is very low even comparedwith levels achieved in other African countries. This is largelyattributable to the limited use of available technological packages, poordelivery of inputs (particularly fertilizer), weak agricultural services,limited availability of credit, and inadequate infrastructure. Lowagricultural productivity has a pervasive impact on the economy. It limitsgrowth, as agriculture accounts for over half of GDP; it results in povertyconditions in rural areas, particularly among non-cocoa farmers; it keepsfood prices high for the consumer; and it makes products uncompetitive ininternational markets.

102. During the last year, the Government has devoted increasingattention to the challenge of agricultural growth. A rehabilitationprogram has been identified focusing on basic services and other activitieswith the greatest potential ior improving smallholder production. Thisincludes establishing the means to deliver proven technical packages,improving logistical support for the extension service, ensuring minimuminput requirements, particularly fertilizer and seed, and increasinginvestment in feeder roads. Initially scarce resources will be

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concentrated in districts which have the greatest potential. As alreadydiscussed, the Government is phasing out the subsidy on fertilizer andplans to establish a private fertilizer marketing system by 1990. Seedsupply has been grossly inadequate. largely on account of the weakmanagement and poor finances of the G'hana Seed Company. In the short-run,the Government will seek immediate financing of urgent rehabilitation, andin the long-run, promote greater private sector participation. The ongoingactivities of several donors will support these efforts: the smallholderrehabilitation project (IFAD), grain and legume development (CIDA), andsupport to agricultural services (IDA, the African Development Bank, andWest Germany). In addition, the Government is benefiting from the lessonslearned in the Global 2000 project wh.'ch has been successful in raisingyields. Ghana's growth prospects depend critically on the success of theseefforts. Poor performance of agriculture would seriously limit thepotential for economic expansion with a corresponding impact on livingstandards, particularly for the poor.

103. Environment. Protection of the environment is a serious concernof the Government. A priority issue is land management. Declining soilquality due to overuse in some areas, use of inappropriate farmingpractices, drought, and erosion would reduce the future growth ofagriculture. In 1987, the Environmental Protection Council prepared aNational Plan of Action to Combat Desertification. Parts of the programare being implemented - for example, rural development projects in theNorth - but more attention should be paid to evaluating the effectivenessof these policies and investments. More work is also needed to understandthe causes of desertification and to develop and promote integrated farmingsystems suited to climatic conditions in different regions. Closely.e.ate. Lu LaLIU L1LLgtsLLtL1L is pLrotection or Gnana s rorests. le

maintenance of tree cover is :.mportant to maintain farm yields, avoiderosion and siltation of dams, and is necessary to sustain agriculturalproduction. However, pressure on this resource is increasing. Existingfarming practices and demands for woodfuel have reduced forests and treeson farms. In addition, the recent impressive export performance of thesector (para 25) is straining the resource base.

104. In order to protect and manage effectively its forests on asustained yield basis, the Government has decided to implement severalreforms. One, forestry fees will gradually be raised to levels thatreflect the full market value of production. This will enable the sectorto recover management costs and to generate revenue that coulc be utilizedto maintain and expand the resource base. Two, the concession system willbe rationalized and allocations based on a more market oriented approach.Concessions should be large enough for effective forest management andfelling control and granted for long enough periods of time to reLain theconcessionaire's interest in protecting and working the forest according toenvironmentally sound practices. These reforms are critical to achievinghigh standards of technical and economic efficiency of forestry and loggingoperations and to eliminate waste. In addition, the working conditions andbenefits for staff working in forestry sector institutions will beimproved. In order to arrest the depletion of the forest and to promotedomestic value added in wood processing, the Government has banned the

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export in log form of 18 species of trees. A study will be carried outduring 1989 to review the effectiveness of the ban and to examine itsposs!ble substitution by a tariff. In addition, tree planting andcultivation will be promoted on a large scale, by testing and introducingsuitable agro-forestry and community forestry packages. The Government'sefforts in this area will be supported by a Forestry Resource ManagementProject, with financing provided by IDA, the United Kingdom, and Denmark.Activities under the project include completion of a forest inventory,assistance for seedling production, and strengthening extension andresearch.

105. Population. Ghana's population is growing rapidly, placingconsiderable strain on food supplies and natural resources, such asforests. Population growth is also eating a major portion of the potentialincome gains from economic recovery. Continuation of the present rate ofgrowth would make it more difficult for the Government to improve healthand education services, particularly for the poor. The estimated crudebirth rate for 1985-90 is 45 per thousand, and the crude death rate is 13per thousand. Ghana was among the leaders in Africa in recognizing thesevere consequences of population growth, but implementation of itspopulation policy has been erratic. In response to previous organizationaldifficulties, the delivery of family planning services by the public sectorhas been shifted to the Ministry of Health (MOH) and integrated with othermaternal and child health services. Family planning is now provided in amajority of MOH health facilities. However, there are still major problemsin ensuring adequate supply and in mounting an information and educationcampaign. Contraceptive prevalence is only in the range of 11-13 percent,despite the opportunity provided by an apparently large unmet need for bothcniid spacing and iimitation of Dirtns.

106. A renewed high-level commitment to population control andredoubled efforts is required. The Government should set broad targets forthe family planning program and prepare a comprehensive strategy and actionplan to reach them. Actions needed to increase the momentum of currentpopulation programs include development of a more effective educationcampaign and improving MOH logistics (supplies and equipment). Ademographic and health survey has provided information useful for targetingboth service delivery and information. Management reform in MOH(para 46) would improve organization and delivery of family planningservices. Major reliance should continue to be placed on NGOs and acontraceptive social marketing program to expand the coverage of familyplanning services. Adequate donor support and financing for theGovernment's family planning efforts will be critical for success.Resources should be provided to cover recurrent and local costs asinadequate funding in these areas is often a major constraint.

Conclusion

107. The general aim of structural adjustment is to lay the base forsustained growth within the ̂ ontext of a viable balance of payments andprice stability. To attain these objectives, over the next two years theGuvernment will emphasize: further improvements in incentives, domestic

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resource mobilization, and better resource management in the public sector.The Government will promote the rapid convergence of the exchange rates inthe auction and bureau markets. Import duties should be restructured tocreate a lower and more uniform pattern of protection. Tax reform wouldenable revenue to rise while at the same time lowering reliance oninternational transactions, particularly cocoa. The weak financial systemposes an obstacle to successful structural adjustment. Restructuring ofthe banks, as well as other actions by the Bank of Ghana to improvefinancial intermediation, will be critical. Otherwise, private companieswill not have sufficient access to funds. The Government needs to make allpossible efforts to promote private investment. Considerable work is alsorequired to follow through on the initial steps taken to improve theefficiency of state enterprises. Further impro-cments in economicmanagement are needed, as well as civil service reform. In the longer-term, effective policies to promote agricultural growth, protect theenvironment, and implement a population strategy will be important.

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V. MEDIUM-TERM PROSPECTS

108. Ghana's medium-term objective will be to sustain the growthmomentum in the face of a substantial deterioration of its terms of trade.The specific targets are: (i) an average annual growth in GDP of at least5 percent, or about 2 percent per capita; (ii) price stability; and (iii)generation of substantial balance of payments surpluses. These projectionsare based on a vigorous pursuit of additional reforms and implementation ofthe three-year rolling Public Investment Program (PIP). The outcome ofpolicy interactions have been simulated, making assumptions regardingglobal economic conditions and resource availabilVties. The sensitivity ofthe results is tested with respect to world cocoa prices and lower privateinvestment.

Policy Reforms

109. As discussed in Chapter IV, over the niext two years, theGovernment will be implementing reforms in several areas. The exchangerate will effectively be market-determined once services become eligiblefor access to the foreign exchange auction in mid-1990. Additionalincentives will be provided to exports and efficient import-substitution asprotection levels are reduced. Public expenditure policies will improvethe allocation of recurrent outlays, raise the level of public investment,and increase its efficiency. The recourse of state enterprises to theGovernment budget will decline. Their improved financial performance willcontribute to additional savings and investment in the economy. A bettersdlary structure for the civil service will enable the Government torecruit needed technical and managerial staff.

110. Growth of the main economic aggregates under the base casescenario is presented in Table 15. GDP is projected to increase at around5.0 percent per annum over the 1988-95 period. Growth is supported by arise in investment, financed largely by national savings in the long-run,with private savings responsible for a major part of that.

Investment and Growth in Production

111. In the short-run, the efficiency of new investment is expectedto remain high because of still low capacity utilization in many sectors,and the initial impetus to growth provided by the recovery of agriculture.As the maximum effective capacity in many industries is reached in theearly 1990s, new investment will be required to increase production. Inthe short-run, the public sector will continue to account for the largershare of investment. Based on provisional information, the PublicInvestment Program 1989-1991 would continue the previous emphasis onimproving economic infrastructure. Important projects include cocoa feederroads, railroad and road rehabilitation, and telecommunications expansion.Investment also would focus on rehabilitating the mines and strengthening

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Table 15: Main Economic Aggregates

(Annual Average Growth Rates; Percent Per Annum)(constant 1984 Cedis)

1986-88 1988-92 1992-95

GDP 5.4 5.0 5.0GDP per Capita 2.4 2.0 2.0Investment 16.9 8.7 11.9Public 8.3 8.5 4.5Private 39.7 9.2 23.2

National Savings 10.8 14.4 16.0Public 34.3 16.4 10.3Private 1.4 11.8 21.3

Exports 4.7 10.2 5.4Imports 10.5 4.6 5.0

Source: Ghana Statistical Service and Bank staff estimates

agricultural services. The Government is devoting resources to improvingsocial infrastructure, particularly in education. Expenditures for theprogram of actions to mitigate the social costs of adjustment (PAMSCAD) arealso an important component of spending for the social sectors. CentralGovernment savings will play an important role in financing the publicinvestment vroaram. as measures to improve resource mobilization areimplemented.

112. Over the long-run, however, the role of private investment wouldincrease and by 1995 account for about half of the total, compared to abouta third now. Foreign direct investment is expected to become a moreimportant source of private investment, initially because of activity ingold mining. Domestic private investment is lagging somewhat, but thereare some encouraging signs. The Ghana Investment Centre recorded a 20percent real increase in the value of approvals of investment applicationsin 1987. These projects could add to productive capacity over the next twoto three years. There are substantial investment opportunities in Ghana,particularly in agro-industry. The Government's effort to attract privateparticipation in some state-owned enterprises is also expected to provideopportunities. Only if private sector investment grows as projected,responding to stepped-up efforts to improve the investment climate, willthe targeted growth in GDP be achieved.

Growth Prospects

113. Table 16 shows projections by sector. The performance ofagriculture will depend on the sub-sectors of cocoa, forestry, and food andindustrial crops. Cocoa output has responded positively to higher producerprices. The Government is committed to ensuring that farmers graduallyincrease their share of the world price. Given declining nominal world

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cocoa prices through 1989 and only a slow recovery through 1995, reachingthat objective would imply reductions in Cocobod expenditures andGovernment taxation of cocoa farmers. Replantings of hybrids are expectedto begin bearing fruit over the next several years. Production is expectedto reach 278,000 tons by 1991 and 300,000 tons by 1995. Continuedreplanting at a rate of 30,000 hectares per year and progress in combatingcocoa swollen shoot disease are expected to contribute to higher output.

Table 16: GDP Growth Rate by Subsector(constant 1984 Cedis; Percent)

1986-88 1988-92 1992-95

Agriculture 1.9 3.1 3.0Cocoa -1.9 8.2 2.5Forestry 1.6 1.5 1.5Others 2.7 2.3 3.3

Industry 11.1 10.i 10.5Mining 13.8 14.1 5.2Manufacturing 9.0 9.5 12.0Utilities 17.6 9.9 10.1Construction 14.8 10.0 8.0

Services 8.2 5.0 4.2Transport 10.5 6.3 5.0.Wholesale and Retail Trade 13.7 6.2 5.0Financial Services 5.3 5.3 5.0Public Administration 3.0 2.2 2.0Other Services 16.7 7.2 5.0

GDP 5.4 5.0 5.0

Source: Ghana Statistical Service and Bank staff estimates

114. Timber exports have expanded rapidly during the last threeyears However, estimates of timber cut for export, as well as other uses,such as fuel, exceed what is consistent with sustained yield management.It is likely, therefore, that future growth in the timber sector will beslower because of higher forestry fees and better management ofconcessions. However, the sector should benefit from continued improvementin transportation, which is still a constraint, higher value added asadditional rehabilitation is undertaker, in timber processing, and thereduction of waste.

115. Food and industrial crops would respond favorably to betterprovision of agriculture services, particularly extension, and more timelyand adequate fertilizer supplies. The priorities in the medium-term are(i) to expand output of cotton, rubber, tobacco, palm oil, pineapple,

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coffee, and grains, thereby diversifying output, (ii) to increase c opprocessing and make it more efficient, and (iii) to improve domestic andexport marketing and lower transport costs. The strategy is to reducestate intervention in production and input delivery in favor of moreprivate sector involvement. The provision of financial services to farmersis expected to improve through the restructuring and strengthening of ruralbanks. Agricultural output is expected to grow at 3 percent per annumthrough 1995.

116. Industry is expected to be the fastest growing sector. Ghanahas considerable potential for increasing gold production from both new andexisting mines. The main requirements are gold prices of at least $400 perounce and an acceptable invertment climate. Both these conditions are nowbeing met. Output is expected to grow rapidly in response to the improvedexchange rate policies and additional investment. More extensiverehabilitation is expected to bcost production by SGMC. Rehabilitation andexoansion at the Ashanti Goldfields Corporation's mines is expected toincrea._e output to 450,000 oz. by 1992. Numerous private Ghanaian andforeign investors have been granted gold exploration and extractionconcessions. Based on current projects, their production would reach about150,000-200,000 oz. of gold annually by the .nid-1990s. In addition,introduction of the foreign exchange bureaus and regularization of thesmall miners' operations could channel another 30,000-60,000 oz. of goldthrough the official market. Total output is, therefore, expected toincrease by two and a half rimes between 1987 and 1995 and reach nearly800,000 oz. annually by the end of that period, approaching the earlierpeak achieved in the late 1960s. Somewhat faster growth would be possibleif the private sector response turns out to be more favorable and ifprivate participation in some SGMC operations takes place in the nearfuture.

117. The outlook for other minerals is not as bright as gold.Diamond production fell in 1988 and no expansion is projected in themedium-term. A recovery to the potential annual output of one millioncarats is dependent on completing a feasibility study on rehabilitating theoperations and arranging adequate financing. Private sector participationmay also be considered to provide the necessary financial resources. Thepicture for manganese is uncertain due to the exhaustion of high-gradeores. Further improvements in the railroad system could bring about a neardoubling of bauxite output by 1990.

118. The growth in the output of manufactures, witnessed since 1983,is expected to slow a bit over the next two years as the sector increaseseffective capacity utilization. The strategy for manufacturing centers onimport substitution and nontraditional exports. For example, prospects forexports of wood and aluminium products are bright, given appropriateincentives for the private sector. Growth would be achieved in the 1990smainly through investment in import substitution industries, fostered byfurther trade and exchange rate liberalization and improved financialintermediation. Utilities are expected to fare well throughout the period.The Government has taken steps to improve the operation of both theelectricity and water companies. The power sector needs additional

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investment, particularly in subtransmission and distribution facilities.Lake Volta has been partially refilled and, given reasonable rainfalls, theVolta River Authority (VRA) should be able to meet potential demand throughthe mid-1990s without major investment in a new generating plant. Thecompany is currently executing a major transmission/distribution expansionin northern Ghana (US$100 million). Substantial investment is needed bythe Electricity Corporation of Ghana (ECG) to complete the rehabilitationof its system and to provide for growth in demand over the next four years.This is being addressed under a proposed project to be financed by IDA andother donors. A Five-Year Rehabilitation and Development Plan prepared bythe Ghana Water and Sewerage Corporation (GWSC) identifies its immediateobjectives for the water sector as: the provision of adequate and reliablesupply in urban centers through rehabilitation of existing systems;expansion of facilities to meet urgent demands in areas of extreme need;completion of all partially implemented projects; improved operation andmaintenance; and continued efforts to improve water and sanitation servicesin rural areas. These objectives will be supported by several donorprojects, either ongoing or under preparation. Construction is projectedto enjoy a bullish growth in response to higher investment levels anddemand for housing.

119. Growth in services, which now accounts for about 40 percent ofGDP, is expected to be strong and provide adequate support to expandedproduction. Transportation will benefit from higher economic activity.There will be substantial improvements in capacity and efficiency throughrehabilitation of roads, railways and ports, the strengthening of sectorinstitutions and staff training. Growth in wholesale and retail trade isexpected to taper off because of the shift in inrpnttives away from tradingactivities. Financial services are expected to maintain healthy growth dueto the ongoing restructuring of the banking svstem and to the increaseddemand for financial services associated with economic expansion.

The Adjustment Path for 1988-91

120. The planned policy and public expenditure initiatives have beenlinked using an internally consistent macroeconomic framework which tracksthe flow of funds in the economy for the period 1988-91. The behavior ofthe main economic and financial indicators is summarized in Table 17. Moredetailed information appears in Annex B. The economy is projected to growat 5 percent per annum with investment as share of nominal GDP growing from12.5 percent in 1988 to 16 percent in 1990 and 22 percent by 1995.

121. Public savings will improve as a result of mobilization of tax.evenue and only modest growth in recurrent expenditures. Revenues are

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TABLE 17. Ghana: Selected Economic and Financial Indicators

AnmualAverage Actual Estimtes Projections

1980-83 1984 1985 1986 1987 1988 1989 1993 1991

Growth Rates (Z)

GDP -5.0 8.6 5.1 5.2 4.8 6.0 5.4 4.6 4.8GDP Deflator 71.1 35.3 20.6 41.7 39.2 31.4 15.2 9.1 6.6

Percent of Gross Dcmestic Productat Market Prices

National Accounts:Consumption 96.5 95.8 93.3 93.9 95.6 94.7 95.1 93.7 92.1Investment 4.5 6.9 9.6 9.7 10.8 12.5 14.3 16.0 16.5Private 3.1 4.4 5.5 2.4 3.0 4.2 4.6 5.1 5.5Public a/ 1.4 2.5 4.2 7.3 7.8 8.3 9.6 10.9 11.0National Savings 3.9 4.0 5.4 5.5 5.9 6.5 6.7 8.5 9.4Public b/ -4.4 -0.6 0.1 1.7 3.3 3.0 3.0 4.0 4.8Private c/ 8.3 4.6 5.4 3.7 2.7 3.4 3.7 4.5 4.7Foreign Saving 0.6 2.8 4.2 4.2 4.9 6.0 7.6 7.6 7.1

Central Govermment Budget:Total Revenues 6.4 8.0 11.3 13.6 14.1 13.3 14.0 15.2 16.1Total Expenditure 12.2 10.9 15.4 19.2 19.0 18.8 20.9 22.6 22.7Recurrent 10.7 8.6 11.2 11.9 10.8 10.2 11.0 11.3 11.3Capital 1.5 2.5 4.2 7.3 7.8 8.3 9.6 10.9 11.0Special Efficiency 0.0 0.0 0.0 0.0 0.4 0.3 0.2 0.3 0.3

Overall Deficit 5.8 2.9 4.1 5.5 4.9 5.5 6.9 7.3 6.6Financed by:

Foreign net: 0.3 2.0 2.9 4.5 5.3 6.2 7.6 8.1 7.3Donestic net: 5.5 1.1 1.2 1.0 -0.4 -0.7 -0.6 -0.8 -0.7

Broad Money (M2) d/ 12.8 16.2 16.8 17.7 16.2 16.1 16.5 16.8Monetary Flows:Net Foreign Assets -3.2 -1.6 -5.0 -16.0 -1.5 1.7 1.7 1.5 1.5Net Dcomstic Assets 4 7 4.5 7.9 5.5 1.4 1.3 1.1 0.9 0.6GoverncrrlL 3.9 0.7 0.9 0.5 -1.0 -0.7 -0.6 -0.6 -0.5Cocoa 0.7 0.6 2.9 0.7 -0.1 0.4 0.2 0.1 0.1Private non-co.'oa 0.1 3.3 3.6 3.3 1.8 1.4 1.2 1.0 0.7

Balance of PaymentsExports of GNFS 4.5 8.0 10.6 16.6 19.7 17.9 19.5 21.6 22.6Imports of GNFS -5.4 -10.8 -13.6 -20.1 -26.1 -25.1 -28.9 -31.3 -31.2Resource Balance -0.9 -2.7 -2.9 -3.6 -6.4 -7.2 -9.3 -9.7 -8.7Current Acct. Balanc -1.6 -2.8 -4.2 -4.2 -4.9 -6.0 -7.6 -7.6 -7.1Overall Balance -1.0 0.5 -1.9 -1.2 3.0 2.4 2.3 2.3 2.4

Note:a/ From 1984, includes State Enterprises capital expenditures financed

by external concessional assistance.b/ Represents Central Government's savings only.c Includes state enterprises.d/ Includes both primary and secondary banks.Source: Bank staff estimates.

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projected to increase from 14.1 percent of GDP in 1987 to 16 percent by1991. This will come about through tax reforms, higher taxes on petroleum,and improvements in administration. As a share of GDP, revenues from cocoaare projected to be 40 percent lower by 1991, replaced by other indirecttaxes. Current expenditures as a share of GDP are expected to decreaseslightly in 1988 and hover around 11 percent thereafter. This is achievedby keeping personal emoluments within 5.5-6 percent of GDP. Althoughrelativities between the salaries of higher and lower ranked civil servantswill be improved, there will be some savings as a result of shedding excesslabor. Purchases of other goods and services would increase in real termsby about 4 percent per annum, in order to improve operations andmaintenance expenditures in agriculture and the social sectors. Theseincreases would be partially offset by a relative decrease in resources fortransfers to state enterprises and subvented organizations, resulting fromthe Government's reform efforts. Thus public savings is projected toincrease from 3.3 percent of GDP in 1987 to 4.8 percent by 1991. Now thata more realistic exchange rate prevails and inflation appears to bemoderating, it is expected that private savings will increase and reach 4.7percent of GDP by 1991. Private remittances which amounted to 4.4 percentof GDP in 1987 are projected to remain at about that level.

Balance of Payments

122. The balance of payments' outlook for the medium-term ischaracterized by an overall surplus in order to ensure sufficient financialresources to meet Ghana's obligations to the IMF, reach a prudent level ofinternational reserves, and settle remaining external payment arrears by1990. The current accojnt di!fict is projected to widen in !089 asimports, mostly financed by external aid flows, increase more rapidly thanexports. This would be compensated for by capital inflows, mostly onconcessional terms. As a percent of GDP, tile current account deficit isprojected to increase to 7.6 percent in 1989 before falling to 7.1 percentby 1991 (see Table 18).

Export Growth

123. Fueled to a large extent by growth in gold, nominal exportearnings are projected to grow at an average annual rate of 10 percentbetween 1988 and 1992. However, cocoa export earnings would continue todecline in 1989 due to falling prices. In nominal dollar terms, recentprices are the lowest in the past 13 years, the result mainly of largeproduction increases in the Ivory Coast and Malaysia. In the near term,cocoa prices could decline still further. Negotiation of the next ICCO(International Cocoa Organization) agreement is likely to be difficult.Prices are expected to recover, but only gradually after 1989. However,due to the response of farmers to improved incentives, output is projectedto increase sharply in 1989 and then more modestly, but steadily, in 1990and beyond.

124. New investment and the rehabilitation of existing operations ingold mining will result in an average annual increase in exports of 15percent during 1988-92; growth will taper off thereafter. Earnings would,

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TABLE 18. GHANA: BALANCE OF PAYMENTS OVERVIEW, 1986-1991

(US$ Million)1936 1987 1988 1989 1990 1991

Exports of Goods (fob) 749.3 826.9 828.0 838.1 919.0 1047.5Cocoa beans and products 503.3 495.3 430.0 370.4 408.9 438.4Other exports 246.0 331.6 398.1 467.7 510.1 609.1Imports of Goods (cif) -805.1 -1024.9 -1110.3 -1201.4 -1290.5 -1395.9Oil -125.0 -144.6 -148.3 -159.2 -178.4 -197.7Non-oil -680.1 -880.3 -962.0 -1042.2 -1112.1 -1198.1

Trade Balance -55.8 -198.0 -282.3 -393.4 -371.5 -348.4

Non-factor Services -115.0 -94.9 -88 8 -90.3 -95.5 -103.3Receipts 48.0 79.3 89.7 109.7 116.9 127.2Payments -163.0 -174.2 -178.5 -200.0 -212.4 -230.5

Resource Balance -170.8 -292.9 -371.0 -453.7 -467.0 -451.7

Net Factor Paymrents -105.7 -132.2 -138.6 -129.7 -116.0 -113.0Interest Payrmnts -101.5 -121.6 -130.3 -118.9 -105.7 -101.7Pablic and BOG -45.2 -66.6 -76.4 -75.9 -71.4 -73.4Private -0.9 -2.6 -4.7 -0.5 -0.6 -0.7BFE Charges -55.4 -52.4 -49.2 -42.5 -33.7 -27.6

Factor Payments & other -4.2 -10.6 -8.4 -10.8 -10.2 -11.3Net PrivAte Transfers & S'TT. 72.9 201.6 200.8 ?1'.o 220.0 195.9

Current Accotznt Balance= Foreign Savings -203.5 -223.5 -308.9 -368.4 -362.9 -368.8

As Z of GDP -4.22 -4.92 -6.02 -7.6Z -7.62 -7.1%

Externdl Capital Inflow 184.5 374.7 433.8 478.4 473.0 493.8Grants 118.2 122.2 177.4 211.5 219.7 213.1Public Foreign Borrowings 128.2 218.0 195.4 247.5 285.4 303.1MLT net 139.4 230.4 208.6 259.1 289.0 303.5Gross Inflows 390.0 412.7 413.7 405.2 410.7 431.3Concessional (LT) 256.7 303.7 300.1 335.0 354.3 362.1of whic.: SALs 0.0 57.5 72.5 60.0 60.0 50.0

Non-concessional (MT) 133.3 109.0 113.6 70.2 56.4 69.2of which: oil 59.0 63.9 35.5 0.0 0.0 0.0

Amortizatimn -250.6 -182.3 -205.1 -146.1 -121.7 -127.8Trust Fund -11.2 -12.4 -1-.1 -11.6 -3.6 -0.4Private Foreign Borrowing (Net! 2.7 -3.0 -1.0 2.0 1.0 0.5Direct Foreign Investment 4.3 4.7 25.0 25.0 28.0 29.0Short term borrowing -68.9 32.8 37.0 -7.6 -61.2 -51.8

(Incl. IDA Special Account)Errors & Onissions -37.8 -12.4 0.0 0.0 0.0 0.0

Overall Balance -56.8 138.8 125.0 110.0 110.0 125.0

Note: Details may not add to total due to rounding.Source: Pani of Ghana and Bark staff estimates.

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however, not rise at the same pace due to falling prices in response todiminishing prospects of higher inflation in the industrialized nations,declining petroleum prices, relatively good economic indicators, andcontinued growth in production. As a result of recent Government policiesto protect the environment and preserve Ghana's forests, the growth ratefor exports of logs and timber is expected to diminish. Export ofelectricity by VRA is expected to have increased by 2 percent in 1988,reaching its maximum capacity of around 3000 mkh. The Government hascommitted itself to promote exports of nontraditionals (for example, non-cocoa agricultural, fish, and wood products) over the next few years byintroducing some incentive measures such as exemption from foreign exchangesurrender requirements. Exports are expected to respond positively andgrow rapidly from their still low base.

Table 19: Export Growth Rates(constant 1984 Cedis; Percent)

1986-88 1988-92 1992-95

Cocoa -1.7 8.1 2.5Timber 36.2 4.3 2.9Gold 13.7 15.0 5.7Diamonds -25.8 -2.4 0.0Electricity 8.1 0.0 0.0Oil Residuals -8.5 0.0 0.0Bauxite 9.5 3.9 0.0Manganese 6.1 5.1 0.0Nontraditionals -6.1 72.6 23.1Non-Factor Services 25.5 /.5 4.9

Total Exports GNFS 4.7 10.2 5.4

Source: Ghana Statistical Service and Bank staff estimates

125. Cocoa's share of total exports of goods falls from 60 percentin 1987 to 40 percent by 1991. This reflects both the impact of poorprospects for cocoa prices and the structural adjustment of the economywhich would lower Ghana's dependence on this commodity in spite of therecovery of output.

Import Projections

126. Because of pent-up demand and the sharp increase indisbursements of concessional assistance, imports recovered rapidly during1985-1987 frormi the very low levels which existed at the beginning of therecovery program. In real terms imports have now recovered to 1976 levels.However, in the future, as industries with hieher domestic value addedstrengthen their competitiveness vis-a- .is imported goods, import growthwill decline to roughly match overall growth in the economy. Foreignexchange savings also will be attained through efficiency gains,

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particularly in the use of energy as prices rise and transportinfrastructure is improved. Growth in food imports wili tend to dampen asdomestic production rises and the income elasticity declines at nigherlevels of per capita income. As interest obligations to the Fund ease, netfactor payments are projected to fall.

Terms of Trade

127. Ghana's terms of trade are projected to deteriorate in themedium-term primarily because of lower cocoa and gold prices. Nominalcocoa prices are projected to decline by 30 percent between 1987 and 1989before recovering somewhat. Gold prices are expected to fall in 1989-90,rising at 2 percent per annum thereafter. The prices of Ghana's otherexport commodities are expected to improve in the medium-term but notsufficiently to offset the decline in cocoa and gold prices. The terms oftrade index is expected to be nearly 20 percent below its 1984 position by1991 and to remain at about that level through 1995. Compared to theprojections made in early 1987, the terms of trade have deterioratedsubstantially with the exception of 1988, mainly due to higher log and goldprices. This has resulted in an average increase of $35 million per annumin the current account deficit, and therefore, in financing requirementsfor 1988-91.

Table 20: Deterioration of Terms of Trade(Index 1984=100)

1988 1989 1990 1991 1992 1993 1994 1995

Export Prices:

1987 CEM 90 92 93 97 102 107 112 117December 1988 Projections 98 87 89 91 96 101 105 110

Import Prices:

1987 CEM 101 102 106 110 115 119 124 129December 1988 Projections 98 103 106 110 114 119 123 128

Terms of Trade:

1987 CEM 90 88 88 88 89 89 90 91December 1988 Projections 100 84 84 83 84 85 85 86

Percent Change 11.1 -4.5 -4.5 -5.7 -5.6 -4.5 -5.6 -5.5

Source: Bank staff estimates

External Balance and Capital Inflows

128. The current account deficits are projected to be financed byhigher levels of concessional capital flows. As a result, the debt service

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ratio (including IMF obligations and arrears), after a temporary rise toclose to 70 percent in 1988, is projected to fall steadily to 22 percent by1992 and under 20 percent of exports of goods and non-factor services by1995. Concessional capital flows (long-term loans and grants) areprojected to finance a bit more than half of non-oil imports of goods overthe 1988-91 period. Direct foreign investment is expected to increase overthe medium-term from $25 million in 1988 to $30 million in 1991. Despitethe widening of Ghana's access to Fund resources via the EnhancedStructural Adjustment Facility, net inflows from the Fund are projected toremain negative over the 1988-91 period. Additions to foreign exchangereserves will be consistent with a policy c,f maintaining a prudent reservelevel as a ratio of weeks of imports of goods (around 16 weeks by 1991);all payment arrears would be cleared by l95n.

Alternate Scenarios

129. If world cocoa prices fall short of the projections by$300/metric ton (from $l,600-1700/metric ton to $l,300-1400/metric ton)over 1989-1991, the Government would not be able to increase real producerprices for the farmer to the same extent. This would result in about 5percent less in cocoa production by 1991, and it would remain lower through1995. As a result of this direct effect, GDP growth would be marginallylower. Tax receipts from cocoa would be reduced by about 45 percent overthe 1989-91 period. Without compensating policies, tax revenues would beequivalent to only 14.0 percent of GDP by 1991. This would lower publicsavings and thereby reduce the size of the de-elopment budget. Cocoaexport receipts would also fall substantially, resulting in a financinggap. If the gaps were financed at nonconcessional terms, it would resultin larger debt service. It is estimated that a fall in world cocoa pricesof the magnitude mentioned above could increase financing gaps by anaverage of $80 million a year during 1989-91. If the necessary financingwere not mobilized, import growth would be less, further dampening GDPgrowth. The current account would also deteriorate to about 9 percent ofGDP and would still be at 8 percent of GDP in 1991. If such a situationoccurred, the Gove:nment would have to take remadial actions in order notto jeopardize the structural adjustment program. Perhaps the mostimportant would be increasing other taxes in order to make up for lowerrevenues, for example, taxes on petroleum or motor vehicles. Some actionsto reduce Government expenditures might be necessary. Budgetary transfersto state enterprises could be reduced faster, for example. In order toimprove incentives as much as possible t- the farmer, efforts would have tobe stepped up to lower the operating eosts of the Ghana Cocoa Board. Therewould also be strong justification for more donor resources.

130. The ability of the Ghanaian economy to generate growth in thelong-run depends on the recovery of private sector savings and investment.In 1988 private investment is estimated to be equivalent to 4.2 percent ofGDP, up from 1987, but still below the level of 1984-85. So far it alsohas been concentrated in mining. Private savings are estimated at 3.4percent, again an increase over 1987, but below historical levels. Privateinvestment is expected to rise to 5.5 percent of GDP by 1991 and to 10percent by 1995; correspondingly, private savings would rise to 4.7 percent

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of GDP by 1991 and to 8.6 percent by 1995. This trend implies significantgrowth for both (see Table 15). What would be the impact on the economy ifthis does not materialize - if the Government's efforts and policies arenot as effective as envisaged under the base scenario? To illustrate, itis assumed that private investment does not increase in real terms over1988 levels and that private savings do not continue to recover.

131. A shortfall in private investment would adversely affect mining,manufacturing, construction, financial services and wholesale and retailtrade, where the private sector plays a leading role. The most importanteffect is that economic growth would not exceed 4 percent, at best,assuming that the lack of private investment affects mostly the industrialsector. Of course, if agriculture were also affected, the impact on growthwould be greater. In the short-run, per capita real income is notaffected, but by 1995 it would be 4 percent less under this scenario.Because of the impact on exports of minerals and nontraditionals, realexport levels would be 12 percent lower. This would have a significantimpact on Ghana's foreign exchange receipts, resulting in either a cut inimports or higher borrowings. As a result debt service ratios could beslightly higher. Also, the shift from dependence on foreign savings tonational savings would be more difficult. The lack of private investmentand savings would worsen balance of payments performance with the currentaccount deficit rising to o-.e-r 8 percent of GDP. By 1995 it would stillexceed 7 percent. Perhaps most important, however, is that the structuraltransformation of the economy would be stymied. By 1995 cocoa exportswould still account for nearly half of export earnings, instead of 40percent under the base scenario. By 1995 industry would account for only18 percent of GDP, compared to 20 percent under the base scenario.

Conclusion

132. Structural adjustment has sustained the economy on a growth pathso far. Vigorous pursuit of economic reforms during 1989-90 will be achallenging task for the Government, under less favorable internationaleconomic conditions. Lower cocoa prices would create financing gaps, whichwould increase aid requirements. The Goverrment would need to takeremedial actions as well. An improved response of the private sector isrequired to maintain growth. The Government should try to promote such aresponse through the policies at its disposal. The donor community needsto continue supporting the Government in the difficult endeavor that liesahead by providing financial Lesources on concessional terms.

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VI. EXTERNAL ASSISTANCE NEEDS

133. During 1987 and 1988 the Government implemented policies topromote structural adjustment. The continuation of this program over thenext two years, as described in the previous chapter, is proposed to besupported by a Second Structural Adjustment Credit of $120 million from the!nternational Development Association, as well as by resources from otherdonors. Although Ghana can build on the considerable success of the past,future progress will be more difficult because of the sharp deteriorationin the terms of trade. These unfavorable international factors give evengreater urgency to effective implementation of reforms; otherwise, economicgrowth may falter. The continued support of donors, which has expanded inline with Ghana's efforts, also will be critical. The financialrea"irements of the program - imports to support expansion of productionand the rehabilitation of infrastructure, and the costs of redeployment,state enterprise reform, restructuring of the banks, and povertyalleviation - are substantial, reflecting the ambitious agenda. However,Ghana's own foreign exchange resources will be constrained because ofprojected noor prices for its two main exports, cocoa and gold. Donors canand should ensure that reforms which would lay the base for sustainedgrowth are not delayed because of inadequate financing. This chapterdiscusses aid requirements for the medium-term and provides the WorldBank's recommendations on the volume and composition of new commitments.In addition, the projected debt service burden is reviewed.

Aid Trends in 1987-88

134. Estimated commitments of concessional assistance to Ghana in1987 totaled $612 million. This compares with $353 million in 1986 and$575 million recommended at the May 1987 Consultative Group meeting. Invalue terms, nearly three-fourths of the indications made at that meetingwere commi.ted. Those indicated initially for 1986 (such as IDA'sStructural Adjustment Credit I) represented 40 percent of the total. Evenif commitments are valued in SDRs, the growth over 1986 is still animpressive 56 percent. Commitments are estimated to have risen to about$760 million in 1988, an increase of about 15 percent (again expressed inSDRs) and slightly exceeding the recommendations made at the last CGmeeting. The composition of commitments in both years was consistent withWorld Bank recommendations. However, contrary to expectations, the shareof bilateral donors in total commitments declined from 48 percent in 1986to only 42 percent in 1988.

135. In line with growth in commitments, disbursements continued toincrease, from $359 million in 1986 to $443 million in 1987, and to anestimated $487 million in 1988. These levels are equivalent to an

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Table 21: Ghana Aid Commitments 1986-88(Millions of US Dollars)

Type of Aid -----Bilateral---- --Multilateral-- ----Total------

1986 1987 1988 1986 1987 1988 1986 1987 1988

Project 1/ 89 182 171 111 176 236 200 358 407Program/Sector 61 54 127 70 154 177 131 208 304Food/Commodity 18 40 26 4 7 27 22 47 53

Total 168 276 324 185 337 440 353 612 763

of which:Grants 100 138 199 12 64 65 113 202 264

Grants asZ of Total 60.0 49.9 61.4 6.5 19.0 14.8 32.0 33.0 34.6

Note: Figures are rounded

1/ Includes Technical Assistance.

Source: World Bank staff estimates based on information supplied byMinistry of Finance and Economic Planning and Donors

improvement of about 6 percent per annum if valued in SDRs. Disbursementsin 1987 were close to the recommendations of the last CG meeting, while in1988 they may exceed the target. Performance improved on the pipeline asthe ratio of disbursements in 1987-88 averaged 34 percent, compared to 29percent in 1986. However, for new commitments the ratio dropped from arelatively high 32 percent in 1986 to 22 percent in 1987 and to only 15percent in 1988. Part of the explanation is the fact that much of the co-financing of the Structural Adjustment Credit was not finalized until late1987. There were also some delays as donors worked out procedures todisburse aid through the auction. The Bank of Ghana experienced somedifficulty, particularly in collecting the import documents necessary toapply for reimbursement from donors. Given the relatively high share ofprogram assistance, it should be possible to achieve higher disbursementsfrom new commitments in the future. This could be attained by greaterstandardization of donor procedures. Also, the goods eligible forfinancing through program assistance should be broadly defined, withexclusions covered in a short negative list. Prior allocation of programassistance to beneficiaries should be avoided; experience shows that itdelays disbursements. Finally, the Bank of Ghana needs to improve itsmanagement of assistance channeled through the foreign exchange auction.

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Aid Requirements 1989-91

136. The availability of external assistance on concessional termscontinues to be critical for Ghana's successful structural adjustment. Thedeterioration in the terms of trade means that a reduction in the currentaccount deficit of the balance of payments will take longer to achieve andwill start from a higher level than had been expected. Moreover, theachievement of a viable balance of payments position will depend on theability to import intermediate and capital goods to restructure industryand build new capacity. Although export performance has improved andvolume gains are anticipated for cocoa, gold, and nontraditional products,low prices will limit the increase in revenues. Export receipts areexpected to stagnate in 1988-89 before rising by about 10 percent in 1990.Although debt service will begin to decrease, obligations remain highduring 1989-90, averaging $430 million a year. Finally, there are costsassociated with implementation of reforms, which will make demands on thebudget. At a minimum, aid disbursements should be sufficient to financeabout 40 percent of imports.

Table 22: Projected Aid Disbursements(Millions of US Dollars)

-----Actual ------- -----Projected-----1985 1986 1987 1988 1989 1990

Tmports (GNFS) 858 968 14199 1,289 1,401 1,503Current Account Deficit 264 204 224 309 368 363ODA Disbursements 211 359 443 487 568 600

ODA as Z of Imports 25 37 37 38 40 40ODA as Z of Current

Account Deficit 125 176 198 158 154 165

137. The aid pipeline at the beginning of 1989 is estimated at $1408million. Out of the total, $444 million (32 percent) is expected to bedisbursed in 1989, 343 in 1990, and 312 in 1991. New commitments of $800million in 1989 and an average of $830 million each in 1990 and 1991 arerecommended in order to meet minimum requirements, making conservativeassumptions on disbursement rates. Some slowdown is projected compared to1987-88 because of the shift towards non-project lending, and withinprogram commitments, the gradual increase in sector operations and privatesector credit lines, both of which are slower to disburse than more generalbalance of payments support. The share from bilateral donors is expectedto rise from 42 percent in 1988 to sli6htly over half. The amountsrepresent a modest increase of under 3 percent in real terms, compared tothe average for 1987-88. This is fully justified by Ghana's pastperformance and the need to sustain progress by ensuring a equate importlevels and sufUicient resources to finance key componenits of the program.Assuming vigorous implementation of reforms during 1989-90, Ghana's

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concessional assistance requirements would level off as the impact ofprevious policy measures improves the balance of payments.

138. Quick-disbursing program and sector support of about $330million a year is recommended. As capacity utilization in industry reachesits effective limits, inigher imports of capital goods, as well asintermediate goods and raw materials, will be necessary to supportexpansion. Since it is difficult, if not impossible, to predict whichenterprises will successfully adjust to the changed economic circumstances,allocations of program support should be avoided. More donors arechanneling program assistance through the foreign exchange auction and thistrend should continue. Use of the auction can speed up disbursements andalso supports the cornerstone of the reform program. Bank of Ghanarecently has improved coordination with the commercial banks and theirinternal processing and strengthened staffing. The Government plans tohire a local consultant in early 1989 to review the procedures relating toprogram assistance disbursed through the auction with a view to improvingthe system. It is also important for donors to minimize restrictions andprocurement requirements. Assistance is most easily used in the auction ifit is untied as, for example, several donors have done through SpecialJoint Financing (SJF) for the first Structural Adjustment Credit. However,even if assistance is tied, auction procedures permit the 'earmarking' ofsuccessful bids against donor resources. In those cases,a broad definitionof eligible goods and minimum procurement regulations are especiallyimportant. In sum, the Government's move to a more market-oriented economyis best supported by external assistance which, likewise, is free of majorrestrictions, thereby promoting the most efficient use of resources.

139. In addition to supporting the foreign exchange auction andfinancing imports, program assistance is required to generate counterpartresources which can be used to cover the costs of several reforms.Particularly important are the needs related t.o restructuring of the banks.IDA has approved a Financial Sector Adjustmen: Credit which has attractedcofinancing from several donors, including Switzerland and Japan. Moreefficient financial intermediation is key to promoting an adequate supplyresponse by the private sector. Also, at least in the short-run, theGovernment will be saddled with costs associated with state enterprisereforms as over-staffing is widespread and most companies do not have theresources to cover termination payments. These demands, together withcivil service redeployment, will put pressure on budgetary resources. TheGovernment can ill afford to cut other critical areas, such as operationsand maintenance outlays or development expenditures. In order to providethe maximum flexibility, donors should try to eliminate the restrictions onuse of counterpart resources. Program assistance is also supportingeducation reforms. Potential may exist for similar operations in healthand agriculture.

140. Ghana's domestic food supplies improved considerably in 1988.Nevertheless, food will continue to be imported, mainly items which are notlocally grown or produced in sufficient quantities (wheat, rice, sugar,powdered milk). Food and other commodity assistance can make a usefulcontribution as it would substitute for commercial imports and thus be

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TABLE 23: GHANA OVERALL AID PIPELINE, 1987-1991 1/(Millions of $US Dollars)

Project Program/ Food/YEAR ITEM 2/ Sector 3/ Commodity Total

1987 Undisbursed Balance, 12/31/86 609 188 50 846---- New 1987 Commitments 358 208 47 612

____________________

Disbursements from Pipeline 182 94 30 306Disbursements from 1987 Ccummitments 51 61 25 137Total Disbursements 233 155 55 443___________________

Exchange Rate Adjustments (Est.) 175

1988 Undisbursed Balance, 12/31/87 857 288 45 1190---- New 1988 Commiitments 406 304 53 763

Disbursements from Pipeline 198 147 27 372Disbursements from 1988 Commitments 27 64 24 115Total Disbursements 225 211 51 487

Exchange Rate Adjustments (Est.) -58

1989 Undisbursed Balance, 12/31/88 992 368 48 1408---- New 1989 Commitments 415 340 45 800

Disbursements from Pipeline 240 177 27 444Disbursements from 1989 Commitments 35 74 15 124Total Disbursements 275 251 42 568

1990 Undisbursed Balance, 12/31/89 1132 457 51 1640---- New 1990 Conmnitments 440 330 45 815

Disbursements from Pipeline 262 200 28 490Disbursements from 1990 Commitments 36 62 12 110Total Disbursements 298 262 40 600

1991 Undisbursed Balance, 12/31/90 1269 527 59 1855---- New 1991 Commitments 480 320 40 840

Disbursements from Pipeline 292 185 28 505Disbursements from 1991 Commitments 40 50 10 100Total Disbursements 332 235 38 605________ __________

1992 Undisbursed Balance, 12/31/91 1417 612 61 2090

Note: Details may not add to total due to rounding.1/ Includes comnitments and disbursements from African Development Bank

which is classified as medium-term in the balance of payments.2/ Includes Technical Assistance and Net Lending.3/ Includes credit lines to the private sector.

Source: Bank Staff Estimates.

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unlikely to discourage domestic agriculture. In the past (1982-1985)the share of cereal imports covered by food aid in Ghana was low (30percent), compared to other countries in Sub-Saharan Africa where theaverage is about 50 percent. Fertilizer is also needed to impiove yieldsin agriculture. New food and commodity aid commitments of at least $40-45million a year are recommended. Food-for-work schemes are part of theprogram of actions to mitigate the social costs of adjustment (PAMSCAD).This is one way to st:engthen the poverty focus of structural adjustmentand to provide a "safety net" for redeployees.

141. The recommended project aid commitments (including technicalassistance which is expected to average $20 million per annum) rises from$415 million in 1989 to $480 million in 1991. The increase reflects theimportant role of public investment in achieving the adequate and well-maintained infrastructure which would encourage private investment. Donorsshould be guided by the public investment program, currently being updatedto cover the period 1989-1991. There are financing gaps in severalprojects, including road maintenance, one of the highest prio<ityactivities. Donors should finance a high proportion of tocal costs and,where possible, recurrent and maintenance requirements, particularly in thesocial sectors.

Technical Assistance

142. Technical assistance continues to be needed to support thestructural adjustment program. It is particularly important in some areaswhere skills are scarce in Ghana, for example, state enterprise reform andfinancial sector restructuring. Delays in utilizing technical assistancecould slow progress on key reforms. However, lengthy and centralizedapproval procedures for consultants have made it more difficult to tapthese resources. In order to make technical assistance more effective andto increase accountability to the relevant agency, Government shouldconsider decentralizing most of the responsibility for hiring consultants.Local consultants, the Government's preference, are working in the areas ofcivil service reform, budget procedures and debt management, among others.However, more extens,ive use could be made of local consultants if theGovernment finali d guidelines on salaries and other employment terms.Excessively high salary levels may hurt the morale of civil servants andthe guidelines should be formulated with that in mind.

Aid Coordination

143. There is strong aid coordination in Ghana both between theGovern.ment and donors and among donors. There are regular meetings ofdonor representatives and government officials at the local level whereimplementation issues of common concern are discussed and informationexchanged. An annual status report updates progress of the Government inimplementing the structural adjustment program and commitments anddisbursements of external assistance. Meetings also have been held todiscuss PAMSCAD, requirements for the water sector (through a UNDProundtable), and the mining sector.

144. The International Economic Relations Department (IERD) needs tostrengthen monitoring of aid commitments and disbursements, particularly asthe pipeline grows. There are still gaps in the information and it doesnot appear that sufficient priority is given to this responsibility.Discussions were held with donors following the May 1987 Consultative Groupin order to identify the steps needed to translate aid indications tocommitments. However, this initiative was not followed up sufficiently.Given the importance of program aid to the auction and budget, thesedisbursements should be reported quarterly to concerned officials andprojections made for at least one year. Reporting on other assistancecould begin with the projects most critical to the structural adjustmentprogram, e.g. port rehabilitation, and extended gradually. Coordinationbetween IERD staff and those preparing the public investment program alsoneeds to be improved to ensure not only that the information presented onexternal financing is up-to-date, but also so that the PIP document can beused to mobilize additional resources. Problems persist in ensuring thatavailable data on disbursements is provided to those requiring it, both inthe Ministry of Finance and Economic Planning and the Bank of Ghana.

145. The information presented in the three-year PIP can be aneffective means to coordinate aid. The Government has a responsibility toensure that the projects included meet the established criteria andreinforce sectoral strategies and to use those allocations to guideexpenditures. At the same time, donors have a responsibility to be guidedby the priorities presented in the PIP. As the process of preparing andimplementing the PIP is strengthened, donors are encouraged to reducerestrictions on counterpart funds in favor of general support to theexpenditure program.

146. Du-ing 1987-88 cofinancing activity in the Ghana programincreased. Several donors took advantage of the vehicle of the firstStructural Adjustment Credit to commit quick-disbursing assistance. TheIndustrial and the Financial Sector Adjustment Credits also attractedsubstantial amounts of financing from both bilateral and multilateraldonors. Donor cooperation was evident in both the preparation andfinancing of projects in two key areas - cocoa rehabilitation and forestry.Several donors are contributing to the rehabilitation of thetelecommunications sector. IDA has several possible vehicles foradditional cooperation, particularly the second Structural AdjustmentCredit, but also transport and water sector rehabilitation, among others.In addition to easing the burden on the Government through cofinancing,donors need to make efforts to streamline their procedures. In the contextof the Special Program of Assistance for Sub-Saharan Africa, dorzrs areexamining disbursement and procurement regulations with the objective ofstandardizing to the extent possible. The potential benefits would besubstantial for Ghana as it would shorten the lags between commitment anddisbursement and lessen the demands on administrative capacity, alreadystrained by implementation of the structural adjustment program.

- 76 -

External Debt

147. Ghana's medium and long-term external public debt outstandingand disbursed (excluding IMF borrowings with the exception of the TrustFund and the Structural Adjustment Facility) at end 1987 amounted to $2.2billion, slightly over 50 percent of GDP. This represents an increase ofabout 80 percent since the end of 1985. Bilateral creditors account forslightly over 30 percent; multilaterals for 55 percent (IBRD and IDA loansamount to 39 percent of total debt); and financial institutions andsuppliers credits for the remainder. Although the stock of debt has grownconsiderably, the outlook is for a moderation in the debt service burden.This is occurring for several reasons. One, debt service on medium-termloans, primarily previous borrowings to finance petroleum, will decline asobligations are paid off. Two, debt service due the IMF, after peaking at$563 million in 1988, will decline significantly. Three, the increase inthe stock of debt has been mostly on concessional terms. Thus, afterrising to close to 70 percent of exports of goods and non-factor servicesin 1988, debt service (including the IMF and arrears) is projected to dropto 52 percent in 1989 and further to 25 percent by 1991. By the end of1990 the Government intends to eliminate all external payments arrears.This should assist in restoring normal relations with Ghana's creditors,particularly in the area of trade financing.

148. Although the debt service burden is projected to ease after1988, during the period 1989-90 these payments will claim about 40 percentof Ghana's export earnings. External assistance is critical to ensure anadequate amount of import financing in the context of these highobligations. In addition, there is potential for debt relief on the partof some bilateral donors. Both the United Kingdom and Canada have takenactions in this area, thereby providing additional resources to Ghana. TheWorld Bank intends to provide supplemental resources to those countries,now borrowing only on IDA terms, but who owe debt on past borrowings onharder IBRD terms and are undertaking adjustment programs. Ghana isexpected to benefit. The replacement of the previous extended arrangementwith the IMF by the enhanced structural adjustment facility (ESAF) had asignificant impact on future debt service as the terms of the ESAF are moreconcessional.

149. As already mentioned (para 43) the Government is installing adebt management system, assisted by the Cormnonwealth Secretariat.Organizational arrangements for the Debt Management Unit (DMU), now in theMinistry of Firance and Economic Planning, have been finalized. The termsof reference have been agreed, including coordination with other parts ofthe Government, such as Bank of Ghana and the Controller-AccountantGeneral. Although it will take some time to collect all the data necessaryto operate the system and to train staff, a start has been made. It willbe necessary to review the procedures and terms of reference for the unitto ensure that coordination is adequate and that the necessary informationon payments due and projected debt service is being compiled and isavailable to those agencies requiring it. Also, although it is importantfor the DMU to be kept fully informed of disbursements, it is important

- 77 -

TABLE 24. GHANA: EXTERNAL DEBT SERVICE ON GOVERNMENT AND GOVERNMENT-GUARANTEED DEBT(Millions of $US Dollars)

I l ACTUAL EST. PROJECTED

------ ----- ----- ----- - ---- ---------------------I ITEM 1985 1986 1987 1988 1989 1990. 19911= I_,=__- ====-1Medium and Long-Term Debt

Amortization I 255 262 195 218 158 126 128| Long-Term 32 35 37 34 40 43 52 || Medium-Term | 216 216 146 171 107 78 76

of which: Oil I 49 116 59 64 36 0 0Trust Fund f 7 11 12 13 12 4 0

Interest j 59 45 67 76 76 71 73 I

I Total Debt Service 314 307 262 294 234 197 201

I IMF Obligations

| Repurchases 0 22 174 255 175 108 66 |Charges I 44 55 52 49 43 34 28 ITotal IMF Debt Service 44 77 227 304 217 142 93

I GRAND TOTAL | 358 384 489 598 451 339 294 I

I Payment Arrears I 57 4 72 30 45 25 0

I Debt Service Ratios I

(in percent) II excluding IMF | 46.7 38.5 28.9 32.0 24.7 19.0 17.1

including IMIF 53.3 48.2 53.9 65.2 47.6 32.7 25.1including DMF and arrears I 61.8 48.7 61.8 68.5 52.4 35.1 25.1

I Memorandum Item

Export of Goods and I 672 797 906 918 948 1036 1175 |Non-Factor Services I

Source: Bank of Ghana (1985-87) and staff estimates (1987-91).

- 78 -

that any changes in procedures (i.e. signatures needed on withdrawalapplications, etc.) not slow aid flows.

Conclusion

150. At the last Consultative Group meeting for Ghana donors pledgedsupport to a program which broadened and deepened the reform effort. Sincethen, assisted by that support, the country has made progress inimplementing what both Ghanaians and the donors recognized would be onlyone stage in the structural adjustment process. Encouraged by the responseof the economy and challenged by the difficulties remaining, the Governmentis committed to further adjustment measures. The ability of the country topersist in this ambitious program and its success in raising the livingstandards of its citizens will depend, as it has in the past, on thecontinued support of donors. Since poor price prospects for cocoa and goldwill limit export earnings, concessional assistance is critical. in o Aer tomaintain the momentum. The Government has persevered in its policy reformssince the Economic Recovery Program began in 1983. Similarly, donorsshould reinforce and extend support for Ghana's structural adjustmentprogram by making additional commitments of concessional assistance.

- 79 -

ANNEXES

I

i

- 80 - ANNEX APage 1

Selected Policy Changes Since 1987

AGRICULTURE

Cocoa:

1. Effective for the 1987/88 minor crop which began in May 1988,the cocoa producer price was raised to ¢165,000/metric ton. In the eventthat actual export prices in local currency terms are higher thananticipated, the additional receipts will be placed in a compensationaccount and shared between farmers and the Government in a ratio of 60/40.The previous price was ¢140,000/metric ton exclusive of a ¢10,000/metricton bonus.

Other Crops:

2. The producer price for coffee was increased to 0186,000 cedisper tonne and for sheanut to ¢31,000 per tonne, effective May 1988.

3. The Government announced new minimum prices for maize and paddyrice, in August 1988:

Maize (100-kg bag]: 04,800Paddy Rice [82-kg bag] -- Grade A: ¢5,100

== Grade B: 04,100

4. Effective October 1988 new prices were announced for tobaccoand cotton. For tobacco, the price was increased from 0110/kg for air-cured to ¢145/kg and from 0140/kg to 0185/kg.

Fertilizer:

5. The Government announced new fertilizer prices for the 1988crop season as follows which reduced the subsidy to 30 percent.

Fertilizer Prices(Cedis per 50 kg. bag)

Type of Fertilizer New Price

- Compound Fertilizer 2,300

- Sulfate of Ammonia 1,600- Muriate of Potash 2,100

6. Effective January 1989, the Government raised fertilizer pricesby about 50 percent, thereby reducing the subsidy to 15 percent.

ANNEX A- 81 - Page 2

THE 1988 BUDGET

7. The Government announced a series of revenue measures in January1988 in the following areas:

- New st.ructu-e of personal income taxation with a view toreducing the level of taxation and to increase relief frominflation-induced increase in the effective tax rate (seetable below";

New Personal Income Tax Rates

1988 1987Taxable Income Rates Taxable Income Rates

0 - 24,000 0% 0 - 10,000 0%24,000 - 54,000 52 10,000 - 30,000 5Z54,000 - 84,000 102 30,000 - 60,000 10o84,000 - 225,000 20Z 60,000 - 120,000 20%

- Special tax incentives to the real estate and housingsectors.

Taxes on Domestic Goods and Services:

- Excise Duty, restricted to production of alcoholic and non-alcoholic beverages, beer and tobacco, is as follows:

Item 1987 1988Beer 52.0% 49.02Tobacco 67.8Z 67.22Spirits 30.0 30.0Soft Drinks 44.0Z 42.0OSuper Malt 25.0 24.5Z

- Sale Tax: Goods of a similar nature, whether imported ordomestically produced, will be taxed at same sale tax rate.

- Import Duties: The process of reducing import dutiescontinued, as shown below-

Item 1987 1988Concessionary 10% 10%Basic Raw Materials 152 10%Other Raw Material/Cap:tal Goods 20% 15%

Consutner Goods 25% 202Luxury Goods 30Z 25Z

- Corporate Tax: Tax for manufacturing, farming and exportsectors was reduced from 55 to 45 percent.

ANNEX A- 82 - Page 3

Vehicle Taxation: The temporary waiver of duties and taxeson saloon cars and commercial vehicles with cubic capacitiesof 1800 and below was restricted to saloon cars andconmnercial vehicles of 1600 cc and below.

THE 1989 BUDGET

8. The Government announced several revenue measures in January1989:

- Personal taxation: (The standard personal exemptio-. wasraised and the top marginal rate of 55 percent was shiftedfrom an income level of ¢984,000 to ¢1,200,000 per annum.

- Corporati Taxes: In the area of corporate taxes,manufacturing, farming and exporc sectors will continue tobe subject to a rate of 45 percent. A rate of 50 percenthas been introduced for all other corporate bodies exceptthose in banking, insurance, commerce, and printing, whichwill continue to pay corporate tax at 55 percent.

- Sales tax: Standard sales tax reduced from 25 to 22.5percent.

- Excise Duty: Beer, cigarettes, alcoholic and non-alcoholicbeverages will attract the standard sales tax of 22.5percent instead of 7.5 percent and lower excise duty rates.

- Vehicle Taxation: A minimum import duty and sales tax of,respectively, 5 and 10 percent of the CIF value of passengercars will be levied for cars of 1600 cc and below. Ratesare higher for larger capacity cars. Tax rates also werein-reased for cross-country vehicles.

- SIL Tax: The tax of 20 percent on SIL imports wasabolished.

MONEY AND BANKING

9. To further the government's policy to promote competition andefficient mobilization and allocation of financial resources, maximumborrowing and lending rates of the commercial banks were decontrolledbeginning in September 1987, except for the minimum savings rate which was

ANNEX A- 83 - Page 4

maintained at 21.5 percent. The minimum rate was abolished in February1988. Also 'n Februar; 1988 the Bank of Ghana raised its own lending ratefrom 23.5 percent to 26 percer.t. The Government has abolished controls onthe sectoral distribution of credit, except for agriculture where a minimumlending requirement (20 percent) is still applicable.

10. To equalize the cost of financial resources to banks, cashreserve requirements against demand deposits were tevised and now rangebetween 13.8 and 28.6 percent; cash reserves against savings and timedeposits range between 6.9 and 14.3 percent.

PRICES

11. The Government adjusted the retail prices of petroleum productsin January 1988 and 1989 as follows:

Petroleum Prcduct Prices [per imper4al gallon]

--1987-- ---1988--- ----1989----February January JanuaryCedi US$ Cedi US$ Cedi UP$-

Premium 190 1.24 235 1.33 275 1.20Regular 180 1.18 230 1.31 270 1.17Kerosene 110 0.72 170 0.97 190 0.83Gas Oil 165 1.08 225 1.28 250 1.09

Annex BPage 1

- 84 -

GHANA: SECTORAL GROWTH RATES OF GDP-------------------------------------------------------------------

[Constant 1975 Prices; in percent]

SBCTORAL CCtIPONENTS 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

Industrial Sector 17.6 7.6 11.3 10.8 9.9 10.4 10.2 9.8 10.8 10.4 10.3Mining 6.5 -3.0 7.9 20.0 19.4 13.9 14.0 9.4 6.6 4.8 4.8Manuf. 24.3 11.0 10.0 8.0 8.0 10.0 10.0 10.0 12.0 12.0 12.0Utilities 20.7 18.0 18.7 16.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0Construction 2.8 -2.7 15.0 15.0 12.0 10.0 9.0 9.0 8.0 8.0 7.0

Agricultural Sector 0.6 3.3 0.0 3.8 4.0 2.3 2.9 3.3 2.6 3.0 3.4Cocoa 13.2 18.2 3.3 -6.8 14.2 3.9 7.2 7.1 0.2 2.6 4.7Forestry 0.1 1.2 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5Agric., Li.restock

and Fishing -2.3 0.9 -0.9 6.5 2.3 2.0 2.1 2.7 3.3 3.3 3.3

Services Sector 7.5 6.5 9.4 7.0 5.5 5.2 4.7 4.5 4.2 4.2 4.2Transport 8.5 5.6 10.9 10.0 8.0 7.0 5.5 5.0 5.0 5.0 5.0Wholesale & Retail 13.7 9.C 17.4 10.0 7.0 6.0 6.0 6.0 5.0 5.0 5.0Financial Services 2.6 7.7 5.5 5.0 5.0 6.0 5.0 5.0 5.0 5.0 5.0Government Services 4.6 2.3 3.0 3.0 2.3 2.3 2.3 2.0 2.0 2.C 2.0Other Services 18.3 18.8 19.2 15.0 10.0 8.0 6.0 5.0 5.0 5.0 5.0

G H A N A: S E C T O R A L D I S T R I B U T I O N O F G D P

[Constant 1975 Prices; in percent]

SECTORAL CCtPONENTS 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

Industry 12.7 13.0 13.8 14.4 15.0 15.8 16.6 17.4 18.4 19.4 20.4Mining 1.1 1.0 1.1 1.2 1.4 1.5 1.6 1.7 1.7 1.7 1.7Manuf. 8.3 8.7 9.2 9.3 9.6 10.0 10.5 11.1 11.8 12.7 13.5Utilities 0.8 0.9 1.1 1.2 1.2 1.3 1.3 1.4 1.5 1.6 1.6Construction 2.4 2.3 2.5 2.7 2.8 3.0 3.1 3.2 3.4 3.5 3.5

Agriculture 50.3 49.5 47.1 46.1 45.5 44.5 43.7 43.0 42.2 41.4 40.8Cocoa 6.9 7.8 7.6 6.7 7.3 7.2 7.4 7.6 7.2 7.1 7.1Forestry 5.6 5.4 5.2 5.0 4.8 4.7 4.5 4.4 4.3 4.1 4.0Agric., Livestockand Fishing 37.8 36.3 34.2 34.4 33.4 32.5 31.7 31.0 30.7 30.2 29 7

Services 37.0 37.6 39.1 39.5 39.5 39.7 39.7 39.6 39.4 39.2 38.9Transport 4.2 4.2 4.5 4.6 4.8 4.9 4.9 4.9 4.9 4.9 4.9W4holesaie & Retail 10.4 10.8 12.1 12.6 12.7 12.9 13.1 13.2 13.3 13.3 13.3Financial Services 8.4 8.6 8.6 8.5 8.5 8.6 8.6 8.6 8.7 8.7 8.7Governmsent Scrvices 12.5 12.2 11.9 11.6 11.2 11.0 10.7 10.4 10.2 9.9 9.6Other Services 1.6 1.8 2.0 2.2 2.3 2.4 2.4 2.4 2.4 2.4 2.4

GDP 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

----------------------------------------------------------------- __----------__-------------

Source: Bank staff estimates.Note: Details may not add to total due to rounding.

G H A N A: V O L U M E O F E X P O R T S

Product 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

Cocoa (MT) 164839 187714 210870 218882 204009 233054 242156 259611 278043 278599 285791 299223Log and Timber (GM) 148252 246812 291382 497040 537875 580905 598332 616282 634770 653814 673428 693631Gold (FOT) 285759 285138 292211 323496 379593 455512 523838 602414 662656 709041 744493 781718Diamond (Carat) 425038 639598 564954 396723 328897 328897 328897 328897 328897 328897 328897 328897Manganese (MT) 247780 263441 245794 235123 283500 326025 326025 326025 326025 326025 326025 326025Oil Residual (MT) 124445 198837 202216 169071 169071 169071 169071 169071 169071 169071 169071 169071Electricity (Mn KWH) 624 1700 2500 2847 2898 2898 2898 2898 2898 2898 2898 2898Bauxite (MT) 45000 124453 226461 226415 275111 316378 363834 363834 363834 363834 363834 363834

G H A N A: E X P O R T P R I C E S--------------------------------------

(US$ per Unit)

Product 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

Cocoa ($/MT) 2315.6 2195 2387 2263 210d 1589 1689 1689 1788 1862 1937 2054Log and Tiimber ($/CH) 143.0 113 151 182 199 212 217 228 240 252 264 277Gold ($/FOT) 361.5 318 364 440 441 431 381 389 397 405 413 421Diamond ($/Carat) 6.6 9 8 10 12 12 13 13 14 14 15 16Manganese ($/MT) 33.5 34 33 33 28 30 31 32 33 35 36 38Oil Residual ($ MT) 181.6 168 87 113 89 99 106 112 119 126 133 141Electricity ($/Mn KWH) 33.3 20 18 17 26 27 27 28 29 31 32 33Bauxite ($/MT) 20.5 22 22 23 23 23 25 26 28 29 31 33----------..----------------------------------------------------------- __----__----------------------------------------

G H A N A: E X P O R T S I N C U R R E N T P R I C E S----------------------------------------------------------------

(Millions of US$)

Product 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

Cocoa 382 412 503 495 430 370 409 438 497 519 554 615Log and Timber 21 28 44 90 106 122 129 139 151 163 176 191Gold 103 91 106 142 167 197 200 234 263 287 307 329Diamond 3 5 5 4 4 4 4 4 4 5 5 5Manganese 8 9 8 8 8 10 10 10 11 11 12 12Oil Residual 23 33 18 19 15 17 18 19 20 21 22 24Electricity 21 34 46 49 75 77 80 82 85 89 92 96Bauxite 1 3 5 5 6 7 9 9 10 10 11 12Others 5 18 14 14 16 34 61 110 160 216 268 333 -____ ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- )OQ

Exports of Goods 567 633 748 827 828 838 919 1047 1201 1321 1448 1617

Non-Factor Services 38 39 47 79 90 110 117 127 138 150 164 178 tTotal Exports 605 672 796 906 918 948 1036 1175 1339 1472 1612 1795

Note: Details may not add to total due to rounding.Source: Bank staff estimates.

Amiex B

- 86 - Page 3

GHANA: BASIC EXPENDITU1KE INDICATORS-----------------------------------

[Constant 1984 Prices, in percent]

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

IMPORTS/GDP 10.8 11.2 12.4 14.0 13.6 13.3 13.4 13.3 13.4 13.5 13.5 13.5

EXPORTS/GDP 8.0 9.3 10.0 10.4 9.8 10.7 10.9 11.5 12.0 12.0 12.0 12.2

CONSUMTTION/GDP 95.8 93.7 94.9 94.8 94.5 93.3 92.7 91.7 90.8 90.0 89.3 88.3

INVESTHMENT/GDP 6.9 8.2 7.5 8.7 9.3 9.4 9.7 10.0 10.7 11.4 12.1 13.0

Source: Bank staff estimates.

- 87 -Annx B

GHANA: BALANC OF PA2'!T

US$ MlA.iM)1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

Exports of Goods (fob) 567 633 749 827 828 838 9:9 1047 1201 1321 1448 1617Cocoa beans and prrducts 382 412 503 495 430 370 409 438 497 519 554 C15Other exports 185 221 246 332 398 468 510 609 7U4 802 894 1002

Inports of Goods (cif) -681 -729 -805 -1025 -1110 -1201 -1291 -1396 -1537 -1679 -1834 -2009Oil -161 -200 -125 -145 -148 -159 -178 -198 -219 -243 -269 -299Non-oil -520 -529 -680 -880 -962 -1042 -1112 -1198 -1318 -1436 -1564 -1710

Trade Balance -114 -96 -56 -198 -282 -363 -372 -348 -336 -358 -386 -392

Non-factor Services -91 -90 -115 -95 -89 -90 -96 -103 -112 -119 -126 -134Receipts 38 39 48 79 90 110 117 127 138 150 164 178Payments -129 -129 -163 -174 -179 -200 -212 -231 -250 -269 -290 -312

Resource Balance -205 -186 -171 -293 -371 -454 -467 -452 -448 -477 -512 -526

Net Factor Payments -81 -111 -106 -132 -139 -130 -116 -113 -114 -109 -114 -121Interest Payments -79 -108 -102 -122 -130 -119 -106 -102 -100 -93 -94 -98

Public and BOG -53 -59 -45 -67 -76 -76 -71 -73 -76 -79 -83 -90Private -5 -5 -1 -3 -5 0 -1 -1 -1 -1 -1 -1ahF Cl2arges -21 -44 -55 -52 -49 -43 -34 -28 -23 -13 -9 -7

Factor Paymnts & other -2 -3 -4 -11 -8 -11 -10 -11 -14 -17 -20 -23Net Private Transfers & SLL 73 33 73 202 201 215 220 196 193 181 )SC 188

Current Account Balance= Foreign Savings -214 -264 -204 -224 -309 -368 -363 -369 -369 -405 -436 -459

Exrer.rzl Capital Inflow 196 135 185 375 434 478 473 494 494 530 561 584Vrants 103 83 118 122 177 212 220 213 219 207 192 178?,iblic Foreign Borrowings 172 26 128 218 195 247 285 303 329 307 348 375

t{T net 173 33 139 230 209 259 289 303 329 307 348 375G,rcss Inflcws 288 281 390 413 414 405 411 431 467 456 498 538

Ccrcessicnal (LT) 118 128 257 304 300 335 354 362 401 383 417 456cf which: SALs 0 0 0 58 73 60 60 50 50 0 0 0

Nkt-concessional (!T) 170 153 133 109 114 70 56 69 66 73 81 82of which: oil 49 116 59 64 36 0 0 0 0 0 0 0

Anrmt izatio -115 -248 -251 -182 -205 -146 -122 -128 -138 -149 -150 -164Trust Ftzd -1 -7 -11 -12 -13 -12 -4 0 0 0 0 0

Priv. Foreign Borrowing (Net) 4 5 3 -3 -1 2 1 1 1 2 2 2Direct ForeigInvestnent 2 6 4 5 25 25 28 29 30 31 32 33S-T borrcwing (Inc.IMA sp.ac) -85 15 -69 33 37 -8 -61 -52 -86 -17 -13 -3

Errors & Ozissions 55 11 -38 -12 0 0 0 0 0 0 0 0

Cverall Balance 37 -118 -57 139 125 110 110 125 125 125 125 125

Note: Details ¢ay not add to total due to rcunding.Source: Bank staff estimates.

Arex BPage 5

- 88 -

GHAtMA: MACROECONOMIC FRAMEWORK---------------------------------------------------------

(Ratio to GDP at current rarket prices; in percent)

PUBLIC SECTOR BUDGET 1984 1985 1986 1987 1988 1989 1990 1991

TOTAL REVNDUE 8.0 11.3 13.6 14.1 13.3 14.0 15.2 16.1Current Receipts 8.0 11.3 12.4 13.4 12.2 12.8 13.4 13.8

Direct Taxes 1.5 2.3 2.8 3.2 3.8 3.' 3.8 4.0Indirect Taxes 5.1 7.0 8.1 8.8 7.0 7.7 8.2 8.3Cocoa 1.4 0.6 2.7 3.6 2.2 1.9 2.2 2.1Other 3.7 6.4 5.4 5.2 4.8 5.8 6.0 6.2Other Revenues (income & fees 1.4 1.9 1.5 1.4 1.4 1.4 1.4 1.4

mem: current rec. net of cocoa 6.6 10.7 10.9 10.5 11.1 12.0 13.0 14.0Additional Res. Mob.(Petroleum T 0.0 0.0 1.3 0.7 1.1 1.2 1.8 2.4

TOTAL EXPENDITURES 10.9 15.4 19.2 19.0 18.8 20.9 22.6 22.7Current Expenditures 8.6 11.2 11.9 10.8 10.x 11.0 11.3 11.3

Wages and Salaries 2.0 4.2 5.1 4.8 4.7 5.1 5.4 5.6Other Purchases of GDS 4.0 3.8 2.4 2.5 2.2 2.3 2.5 2.5Interest Payments 1.3 1.5 2.2 1.4 1.2 1.3 1.2 1.1

To Non Banking Sector 0.6 0.6 1.1 0.9 0.6 0.5 0.3 0.2To Rest of World 0.7 0.9 1.2 0.6 0.6 0.7 0.8 0.9

Subrentions 1.0 1.2 1.4 1.3 1.3 1.; 1.1 1.0Transfers 0.4 0.6 0.7 0.8 0.9 1.1 1.1 1.1Government to Private

Capital Expenditures 2.5 4.2 7.3 7.8 8.3 9.6 10.9 11.1Development Expenditure 1.9 3.3 5.0 5.2 5.9 6.7 7.5 7.6- Financed fran Gove rmment andAid Counterpart Funds (1) 1.2 2.2 1.9 2.5 3.0 3.1 3.8 4.2

- Project Aid Financed 0.7 1.1 3.1 2.7 2.9 3.7 3.7 3.3Project Loans 0.3 0.5 1.8 1.3 1.8 1.7 1.6 1.5Project Grants 0.4 0.6 1.3 1.4 1.1 2.0 2.1 1.8

Net Lending 0.6 0.9 2.3 2.6 2.4 2.9 3.5 3.4Project Aid Financed 0.3 0.3 1.8 1.9 1.8 2.1 2.7 2.8Other 0.3 0.6 0.5 0.7 0.6 0.8 0.8 0.6

Special Efficiencv 0.0 0.0 0.0 0.4 0.3 0.2 0.3 0.3less Funds not included in Budge 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Current Account Savings (-) -0.6 0.1 1.7 3.3 3.0 3.0 4.0 4.8Overall Deficit (enlarged defini -3.1 -4.1 -5.5 -4.9 -5.5 -6.9 -7.3 -6.6Overall Deficit (IMF Narrow def. -1.8 -2.3 0.1 0.5 0.3 0.5 0.7 1.3Overall Deficit (DVF Broad def.) -2.3 -3.0 -3.3 -2.4 -3.0 -2.8 -3.1 -2.6

Deficit Financing 3.1 4.1 5.5 4.9 5.5 6.9 7.3 6.6of which :Domestic Financing 1.1 1.2 1.0 -0.4 -0.7 -0.6 -0.8 -0.7Private to Government (net) 0.5 0.3 0.6 0.6 0.0 0.0 -0.3 -0.2Monetary to Gvt (net) 0.7 0.9 0.5 -1.0 -0.7 -0.6 -0.6 -0.5

Foreign Financing 2.0 2.9 4.5 5.3 6.2 7.6 8.1 7.3Loans 2.4 3.6 6.0 6.1 6.7 7.7 8.5 7.9Project loans 0.5 0.8 3.4 3.0 3.3 3.3 3.8 3.9Non-Project loans 1.9 2.8 2.6 3.2 3.4 4.3 4.7 3.9Concessional 1.2 1.0 1.6 1.8 1.9 2.5 2.6 1.7of which: SALs 0.0 0.0 0.0 1.3 1.4 1.2 1.2 1.0

Non-Concessional : oil C.7 1.7 1.0 1.3 1.5 1.6 1.9 1.9ADB program 0.0 0.0 0.0 0.0 0.0 0.1 0.2 0.4

Grants 0.7 1.1 2.2 2.5 2.5 4.1 4.2 4.0Project grants 0.4 0.6 1.5 1.7 !.4 2.4 2.5 2.3Nou-Project grants 0.3 0.5 0.8 0.8 1.1 1.7 1.7 1.7

Repayments to Rest of World -1.2 -1.8 -3.7 -3.3 -3.0 -4.2 -4.6 -4.5

Source: Bank staff estimates.

- 89 -Annex BPage 6

GHANA: MACROECONOMIC FRAMEWORK----------------------------------------------------- __----

(Ratio to GDP at currert muuket prices; in percent)

PRIVATE SEOR ACOUW 1984 1985 1986 1987 1988 1989 1990 1091

(includes State Oaned Enterprises)Disposable Income 93.2 89.5 88.6 89.6 90.0 90.1 89.2 87.7

GDP at factor costs 94.9 93.0 90.6 90.5 91.9 91.1 90.0 89.3Transfers, Govermment tr Private 0.7 1.1 1.7 1.7 1.4 1.6 1.4 1.3Transfers, FoLeigi to Private 1.0 0.5 1.5 4.4 3.9 4.4 4.6 3.8- Direct Taxes 2.9 4.2 4.2 4.6 5.2 5.1 5.2 5.4- Net Factor Paynits 0.4 0.8 1.0 2.3 2.1 1.9 1.6 1.2

Uses of Disposable Incmea 93.2 89.5 88.6 89.6 90.0 90.1 89.2 87.7Private Ccxsuiption 88.6 84.2 84.9 87.1 86.6 86.4 84.7 83.0Private Savings 4.6 5.4 3.7 2.7 3.4 3.7 4.5 4.7

Capital Sources 9.4 11.8 7.5 7.4 6.3 8.0 7.9 8.3Private Savings 4.6 5.4 3.7 2.7 3.4 3.7 4.1 4.5Special Efficiency 0.0 0.0 0.0 0.4 0.3 0.2 0.3 0.3Loans, Mbnetary to Private 3.8 6.5 3.9 1.7 1.8 1.4 1.2 0.8of which: Cocoa 0.6 2.9 0.7 -0.1 0.4 0.2 0.1 0.1

Loans, Foreigi to Private (net) 0.7 -0.9 -2.1 1.5 -0.5 1.5 0.8 1.5Direct Foreigi Investnext 0.0 0.1 0.1 0.1 0.5 0.5 0.6 0.6Other Monetary Assets 0.0 0.6 1.1 0.7 0.2 0.3 0.3 0.2Capital Grants, Foreigi to Private 0.2 0.2 0.2 C.3 0.3 0.2 0.2 0.2Other 0.0 0.0 0.6 0.0 0.3 0.0 0.0 0.0

Capital Uses 9.4 11.8 7.5 7.4 6.3 7.e 7.9 8.3Private Investnmt 4.4 5.5 2.4 3.0 4.2 4.6 5.1 5.5M + QM 3.6 6.1 5.9 6.2 3.5 2.8 2.3 2.1Loarns, Private to Govenrrnmt 0.5 0.3 0.6 0.6 0.0 0.0 -0.3 -0.2Other 0.9 -0.1 -1.3 -2.4 -1.5 0.6 0.7 1.0

Note: Details may not add to total due to rounding.Source: Bank staff estimstes.

Arnne B- 90 - Page 7

GHANA: MACROECONOMIC FRAMEWORK------------.---------------------------------------- __---

(Ratio to GDP at Current Market Prices; in percent)

MCNE$ARY SECTIO - CAPITAL AW= CNLYFLOW IN: 1964 1985 1986 1987 1988 1989 1990 1991

TOIAL ASSETS 4.1 6.4 7.3 6.2 3.5 2.8 2.3 2.1Net Foreiga Assets -1.6 -5.0 -16.0 -1.5 1.7 1.7 1.5 1.5Net Drastic Assets 4.5 7.9 5.5 1.4 1.3 1.1 0.9 0.6

Loans, Mbnwtary to Govenzment 0.7 0.9 0.5 -1.0 -0.7 -0.6 -0.6 -0.5Loens, Mbnetary to Private 3.8 6.5 3.9 1.7 1.8 1.4 1.2 0.8

Cocoa 0.6 2.9 0.7 -0.1 0.4 0.2 0.1 0.1Non-cocoa 3.3 3.6 3.3 1.8 1.4 1.2 1.0 0.7

of Which: Laog-tenn foreignLiabilities of Dev. Ban 0.0 0.0 -0.3 -0.2 0.0 0.0 0.0 0 0

Other items, net 0.0 0.6 1.1 0.7 0.2 0.3 0.3 0.2Revaluatim Account 1.2 3.5 17.8 6.3 0.5 0.0 0.0 0.0

TOTAL LIALITIES 4.1 6.4 7.3 6.2 3.5 2.8 2.3 2.1M + qM 3.6 6.1 5.9 6.2 3.5 2.8 2.3 2.;Sn allocations 0.6 0.3 1.4 0.0 0.0 0.0 0.0 0.0

STOCK at close of=________________

TOTAL ASSETS 13.9 17.4 19.0 19.2 17.3 17.0 17.2 17.5Net Foreign Assets -1.1.6 -14.2 -25.6 -19.0 -11.9 -8.2 -5.7 -3.6Net Domestic Assets 14.5 19.4 18.5 14.1 li.4 10.5 10.1 9.6

Loans, Monetary to Goverrmient 8.9 7.9 5.8 3 0 1.5 0.6 0.0 -0.5Loans, Mbnetary to Private 6.2 11.3 11.6 9.7 8.7 8.6 8.7 8.6

Cocoa 1.3 3.9 3.3 2.2 2.0 1.9 1.8 1.7Non-cocoa 4.8 7.4 8.3 7.4 6.7 6.7 6.9 6.9

of Wich: Lag-ter- foreignLiabilities of Dev. Bank 0.0 0.0 -0.3 -0.4 -0.3 -0.2 -0.2 -0.2

Other itemE, net -0.6 0.1 1.1 1.5 1.3 1.3 1.5 1.6Revaluatiam Lnsses 11.1 12.2 26.0 24.1 17.8 14.6 12.8 11.5

TOTAL LIABILITIES 13.9 17.4 19.0 19.2 17.3 17.0 17.2 17.5M + 4I 12.8 16.2 16.8 17.7 16.2 16.1 16.5 16.85CR allocations 1.1 1.2 2.2 1.5 1.1 0.9 0.8 0.7

Note: Details Imy not add to total due to rcuding.Scurce: Bank staff estinetes.

- 91 - Annex BPage 8

GHANA: MHACROEC0OYOMIC FKAMEWORK

(Ratio to GDP at current zruket prices; in peroent)

NATICONL AXMrS 1964 1985 1986 1S87 1988 1989 1990 1991

Gross Dbmst±c Product 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0GDP, factor costs 94.9 93.0 90.6 90.5 91.9 91.1 90.0 89.3Indirect Taxes 5.1 7.0 9.4 9.5 8.1 8.9 10.0 10.7

Rescirce Gap 2.7 2.9 3.6 6.4 7.2 9.3 9.7 8.7

Total Expenditures 102.7 102.9 103.6 106.4 107.2 109.3 109.7 108.7caruizption 95.8 93.3 93.9 95.6 94.7 95.1 93.7 92.1

Public Ccuiqiticzn 7.3 9.2 9.0 8.6 8.2 8.7 9.0 9.1Private Carisnqrtin 88.6 84.2 84.9 87.0 86.6 86.4 84.7 83.0

Investment 6.9 9.6 9.7 10.8 12.5 14.3 16.0 16.5Public Investment 2.5 4.2 7.3 7.8 8.3 9.6 10.9 11.0Private Investient 4.4 5.5 2.4 3.0 4.2 4.6 5.1 5.5

Naticona1 Savings 4.0 5.4 5.4 5.9 6.5 6.7 8.5 9.4Public Savings -0.6 0.1 1.7 3.3 3.0 3.0 4.0 4.8Private Savings 4.6 5.4 3.7 2.7 3.4 3.7 4.5 4.7

Foreign Savings 2.8 4.2 4.2 4.9 6.0 7.6 7.6 7.1

Total Savings 6.9 9.6 9.7 10.8 12.5 14.3 16.0 16.5

Note: Details may not add to total due to rounding.Source. Bank staff estimetes.

-92 - ANNEX C-~ ~Page 1

!MRCHANDIS' EXPORTS, 1983-1991

(US$ Million)

--------------------------------------------------------------- __------------__----------------------

-------------- Actual ---------------- Est. -------Projected--------ITEM 1983 1984 1985 1986 1987 1988 1989 1990 1991

------------------------------------------------------------------- __--------__----------------------

COMOA (beansIVolumbe fMS159,280 149,574 171,747 195,012 205,229 183,802 206,279 215,474 233,299Unit Value ($111) 1,583 2,351 2,189 2,434 2,100 2,227 1,600 1,700 1,700Total Value (C million) 252 352 376 470 436 385 337 373 403

COCOA [Products)Volume oMt) 15,000 15,265 15,966 15,858 13,653 20,207 26,775 26,682 26,312Unit Value ($/1MT) 1,573 2,461 2,261 2,144 2,124 2,227 1,270 1,349 1,349Total Value (S million) 24 29 36 34 29 45 34 36 36

COCOA (Total]Volume (M) 174,280 164,839 187,714 210,870 218,882 204,009 233,054 242,156 259,611Unit Value ($/MT) 1,582 2,315 2,195 2,387 2,263 2,108 1,589 1,689 1,3:89Total Value (S million) 276 382 412 503 495 430 370 409 438

GOLDVolume ('000 fine oz.) 278 286 285 292 324 380 456 524 6n2

ACG 250 255 252 279 297 340 390 450SGMC 36 30 40 45 63 94 110 125Other 19 21 24 27

Unit Value ($/fine oz.) 367 361 318 364 440 441 431 381 389Total Value (S million) 102 103 91 106 142 167 196 200 234

DIAM0NDSVolume ('000 carats) 439 425 640 565 397 329 329 329 329Unit Value (US cents/carat 640 660 860 800 1000 1200 1200 1300 1300Total Value ($ million) 3 3 5 5 4 4 4 4 4

MANGANESEVolume ('000 MT) 127 248 263 246 235 284 326 326 326Unit Value ($/MT) 39 34 34 33 32 28 30 31 32Total Value (S million) 5 8 9 8 8 8 10 10 10

BAUXITEVolume ('000 MT) 45 124 226 226 275 316 364 364Unit Value ($/lM ) 21 22 22 23 22 22 25 25Total Value ($ million) 1 3 5 5 6 7 9 9

TIM1BERVoluae ('000 cu. meters) 103 148 247 291 497 538 581 598 616Unit Value ($/cu. meter) 142 143 113 151 182 199 212 217 228Total Value (S million) 15 21 28 44 90 105 123 129 139

RESIDU.AL OILVolume (M1) 112 124 199 202 169 169 169 169 169Unit Value ($/MT) 180 182 168 87 113 89 99 106 112Total Value (S million) 20 23 33 18 19 15 17 18 19

ELECTRICITYVolume (mn kwh) 624 1,700 2,500 2,847 2,898 2,898 2,898 2,898Unit Value ($/Wn kwh) 33,300 20,200 18,360 17,000 26,000 27,000 27,000 28,000Total Value ($ million) 12.0 20.8 34.3 46.0 49.0 75.0 77.0 80.0 82.0

OTHER GOODSTotal Value (S million) 8 5 18 14 14 16 34 61 110

G-RAND TOTAL 441 567 633 748 827 828 838 919 1,047------------------------------------------------------------------- __---..---__-----------------------

Note: Details may not add to total due to rounding.Source: Bank of hana for 1983-87; World Bank Staff estimates for 1988-1991.

Annex C- 93 - Page 2

AID COMMITMENTS TO GHANA IN 1987 BY TYPE OF ASSISTANCE AND DONOR

(US$ million.s)

Commodity Program/ Technical Of whichDonor Project and Food Sector Assistance Total Grants

CG Members

Canada 18.3 6.5 3.8 28.6 28.6France 5.8 0.3 4.2 10.3 2.5Germany 2.8 9. 4.3 16.9 7.1Italy 15.0 7.0 22.0 7.0Japan 86.2 6.9 93.1 20.5SwitzerlandUK 1.6 32.9 5.4 39.9 39.9USA 1.8 19.0 20.8 6.8ADB/ADF 23.8 23.8BADEAEEC/EIB 51.7 3.6 0.9 56.2 48.1IFAD 12.2 12.2UNDP/UNICEF 3.0 10.0 13.0 13.0WFP 3.2 3.2 3.2World Bank 72.8 130.0 21.3 224.1

Others

AustraliaBrazilChinaDenmark 14.9 14.9 14.9IndiaKoreaKuwait FundNetherlands 9.3 7.4 16.7 7.4OPEC FUND 4.4 4.4SpainSaudi Fund 4.7 4.0 8.7Norway 3.7 3 .7 3. 7

Total 308.2 46.5 207.9 49.9 612.5 226.5Bilateral 160.4 39.7 54.1 17.7 271.9 134.7Mutilateral 147.8 6.8 153.8 32.2 340.6 91.8

Annex CPage 3

- 94 -

AID COMMITMENTS TO GHANA IN 1988 BY TYPE OF ASSISTANCE AND DONOR

(US$ millions)

Commodity Program/ Technical Of whichDonor Project and Food Sector Assistance Total Grants

CG Members

Canada 11.9 6.7 3.6 3.1 25.3 25.3France 2.5 0.3 2.5 5.3 0.3Germany 11.4 24.1 4.9 40.4 6.7ItalyJapan 108.4 1.2 16.0 125.6 39.4Switzerland 9.5 9.5 9.5UK 19.5 40.9 6.3 66.7 66.7USA 17.4 20.3 37.4 30.9ADB/ADF 36.3 63.9 100.2BADEAEEC/EIB 14.1 10.1 12.9 37.1 37.1IFADUNDP/UNICEF 3.0 8.0 11.0 11.0WFP 17.3 17.3 17.3World Bank 169.6 100.0 269.6 0.0

Others

Australia 0.0Brazil 0.0China 0.0Denmark 0.0India 0.0Korea 0.0Kuwait Fund 0.0Netherlands 10.0 10.0 10.0Norway 0.0OPEC FUND 4.8 4.8 0.0

Spain 0.0Saudi Fund 0.0Sweden 3.3 3.3 3.3

Total 381.5 53.0 304.2 24.8 763.5 254.2Bilateral 153.7 25.6 124.1 16.8 320.2 188.8Mutilateral 227.8 27.4 176.8 8.0 440.0 65.4

ANNEX C- 95_ Page 4

AID DISBURSEMENTS TO GHANA IN 1987 BY TYPE OF ASSISTANCE AND DONOR

(USS millions)

Commodity Program/ Technical Of whichDonor Project and Food Sector Assistance Total Grants

CG Members

Canada 11.2 5.0 0.5 1.1 17.8 17.8France 9.3 0.4 1.3 2.5 13.5 2.5Germany 25.4 2.5 1.8 29.7 3.3Italy 1.3 1.3 1.3Japan 10.7 6.0 16.7 13.0Switzerlarnd 7.7 7.7 7.7UK 2.7 16.8 5.5 25.1 25.1USA 6.7 19.0 25.7 10.7ADB/ADF 15.1 22.1 1.1 38.3BADEAEEC/EIB 12.9 3.5 5.1 1.4 22.9 6.9IFAD 5.0 5.0UNDP/UNICEF 3.0 7.5 10.5 10.5WFP 21.5 21.5 21.5World Bank 97.1 88.8 5.3 191.2

Others

Australia 0.0Brazil 0.0China 0.0Denmark 0.0India 0.0Korea 0.0Kuwait Fund 0.0Netherlands 10.5 1.0 11.5 10.5OPEC FUND 0.0Spain 0.0Saudi Fund 3.2 3.2Norway 1.4 1.' 1.4

Total 205.0 55.4 155.3 27.3 443.0 132.2Bilateral 70.5 30.4 39.3 12.0 152.2 91.9Mutilateral 134.5 25.0 116.0 15.3 290.8 40.3

ANNEX C-96 - Page 5

AID DISBURSEMENTS TO GHANA IN 1988 BY TYPE OF ASSISTANCE AND DONOR

(US$ millions)

Commodity Program/ Technical Of whichDonor Project and Food Sector Assistance Total Grants

CG Members

Canada 14.9 5.7 2.6 2.3 25.5 25.5France 11.2 0.3 12.6 0.8 24.9 0.3Germany 12.5 4.0 3.4 19.9 4.5ItalyJapan 18.8 6.6 5.9 31.3 20.0Switzerland 4.1 4.1 4.1UK 3.9 43.7 6.2 53.8 53.8USA 1.4 17.4 2.0 20.8 13.4ADB/ADF 15.3 10.1 0.9 26.3BADEAEEC/EIB 11.7 3.0 4.3 1.3 20.3 15.0IFAD 8.0 8.0UNDP/UNICEF 3.0 8.9 11.9 11.9WFP 17.8 17.8 17.8World Bank 85.9 109.4 7.5 202.8

Others

Australia 0.0Brazil 0.0China 0.0Denmark 0.1 0.1 0.1India 0.0Korea 0.0Kuwait Fund 0.0Netherlands 2.5 10.1 0.4 13.0 10.6OPEC FUND 2.0 2.0Norway 1.0 1.0 1.0Saudi Fund 3.8 3.8Sweden 0.0

Total 196.0 50.8 208.8 31.7 487.3 178.0Bilateral 70.1 30.0 85.0 13.1 198.2 133.3Mutilateral 125.9 20.8 123.8 18.6 289.1 44.7

- 97 - ANNEX DPage 1

GHANA: Operations of the Foreign Exchange Auction and Bureaus

1. In September 1986 the Government introduced a seconA-tierforeign excharnge market in Ghana where the rate of exchange between thecedi and the dollar was determined at a foreign exchange auction heldweekly. The access to the auction was widened at several stages to allowmore consuaer goods imports access to the auction. In April 1988, thefirst foreign exchange bureau began operation in Accra to buy and sellforeign exchange. This technical note describes the operations of both theauction and the foreign exchange bureaus.

Foreign Exchange Auction

2. Effective September 19, 1986 the Bank of Ghana began operating anew system for determining the exchange rate of the cedi and for allocatingforeign exchange. The system consisted of an officially determinedexchar.ge rate (Window I) and an auction-determined exchange rate (WindowII). The objectives of the system were: (i) to allow the exchange rate torespond readily to changes in demand and supply; (ii) to ensure promptallocation of foreign exchange; (iii) to promote trade liberalizationthrough elimination of controls on trade and payments; (iv) to minimize theuse of administrative mechanisms; and (v) to attract foreign exchangetransacted outside the banks into the banking system. Under this system,the first-window exchange rate, fixed at ¢90 per US dollar, applied toearnings from exports of cocoa and residual oil, import payments forpetroleum products and essential drugs, and service payments on governmentdebt contracted before January 1, 1986. All other external transactionschanneled through the official banking system were settled at the auctionrate. Including transactions not channeled throughi the auction market butsettled at the auction rate, the second-window exchange rate effectivelyapplied to some two-thirds of Ghana's external transactions.

3. Since its inception, several modifications have been made to theoperation of the auccion. Following the first auction the system used todetermine the exchange rate was changed from one in which the successfulbidder pays the marginal price (the lowest bid which fully exhausts theamount of foreign exchange available) to a dutch auction in which thesuccessful bidder pays the bid price. With effect from December 19, 1986,bidders are no longer required to support their bids with social securityand tax clearance certificates. Full payment of the cedi value ofsuccessful bids, immediately after each auction, is required by the Bank ofGha.aa, which transfers the foreign exchange to a blocked account in thename of the bidder's bank. The two markets were unified effective February19, 1987, at ¢150 per US dollar, and since then all transactions throughthe official banking system are settled at the exchange rate determined inthe weekly auction.

ANNEX D

-98 - Page 2

4. Following the exchange rate unification, the scope of theauction was broadened substantially. With effect from March 13. 1987, bidsfor foreign exchange to cover service and transfer payments approved by theexchange control authorities became eligible for the auction. In addition,as of March 20, 1987, goods amounting to about 40 percent of the value ofall goods previously excluded from the "A (automatic) licensing scheme andimported under Special Import Licenses (SILs) were moved onto the "A" listof goods, eligible for funding through the auction. This included asignificant number of nonluxury consumer goods. Subsequently, effectiveSeptember 14, 1987. additional categories of imports, in value representingabout 50 percent of the remaining goods imported under SILs, becameeligible for funding through the auction.

5. The last phase of the elimination of restrictions on imports wascompleted on February 5, 1988, when remaining goods under SILs were movedonto the "A" list of goods eligible for funding through the auction, exceptthe five items on the negative list of imports and those imports prohibitedfor nontrade reasons and through other regulations (for example, someagricultural goods).

Developments in the Auction

6. Table 1 shows movements in the exchange rate at the weeklyauction since its inception. After establishing the auction on September19, 1986, the rate climbed to ¢128 per dollar. Total demand for foreignexchange exceeded the supply by a substantial margin for three consecutiveweeks due to the delay in the start-up of the auction and the suspension ofopening of letters of credit for about 8 weeks prior to its start. Inspite of the substantial increases in funding of the auction between thefirst and the third, the exchange rate quickly depreciated from 128 to 145due to a high level of unmet demand. Since then, the movement in theexchange rate has become smoother with less than 1 percent depreciation perweek, with only a few exceptions when the exchange rate either appreciatedor depreciated more charply -- for example, when the two windows merged.The rate rose very quickly between June 1988 and August 1988, from ¢184/US$to ¢226/US$ (an average depreciation of 2 percent per week), due toseasonal factors; thereafter, the rate stabilized through the end of 1988.

7. The difference between the highest and the lowest bids, ameasure of the auction participants' ability to minimize the Bank ofGhana's surplus generated by the rules of the dutch auction, narrowed in1987 and averaged 6.3 cedis (down from 25 cedis in 1986). In 1988 thedifference averaged 8 cedis. The spread between the auction rate and thehighest bid averaged 12 cedis in 1986, 5 cedis in 1987, and 6 cedis in1988. When compared with the difference between the higiiest and the lowestbids, this indicate that the auction rate generally settled close to thelowest bid. The supply of foreign exchange to the auction amounted to$36.5 million in 1986, an average of $2.6 million per auction, $204.3million in 1987 (an average of $4.3 million per auction), and $255.8million in 1988 (an average of $5.1 million per auction).

GUANA: WEEXLY FlNEMENTS OF CEDI

as of: 26-Jan 1988 MONTHLY D A T A

ALCT MMTE AIDC.RATE DEM1WD SUPPLY INELIG.UNSUCC [UOC TOTAL HIGHEST LOWEST HIGH-LOW HIGH-ADC. MMTh Average Total Total No, ofND. (Y'MW)CEDI/US$(Us$ H) (US$ M) BIDS BIDS BIDS BIDS BID RATE BID RATE DIFF. DIFF. Mk/YY EK. Rate DtmKd &uWly 9ucc.Bids

CEDI/USS CD(I/US$ CEDI/USS CEDI/US$ - E$-W=U -"A.-----=1 860919 128 7.831 2.500 1 38 29 68 152 90 62 242 860926 136 11.952 4.020 5 74 62 141 160 92 68 24 9/86 132.93 19.783 6.520 913 861003 145 12.970 6.000 11 37 88 136 155 100 55 104 861010 145 2.463 2.360 13 1 47 61 160 141 19 155 861017 151 4.850 2.600 0 20 23 43 163 142 21 126 861024 147 3.100 2.500 0 7 45 52 165 130 3i 187 861031 149 2.032 1.300 0 10 22 32 151 131 20 2 10/86 146.75 25.415 14.760 2258 861107 148 2.886 2.640 0 4 41 45 158 146 12 109 861114 149 1.299 1.015 5 5 27 37 155 146 9 6

10 8oil2 150 2.080 1.720 1 5 31 37 160 146 14 1011 861128 151 3.130 1.640 1 29 31 61 158 148 10 7 11/86 149.34 9.395 7.015 13012 861205 152 5.830 3.660 1 28 52 81 157 145 12 513 861212 154 4.207 1.948 5 30 39 74 160 150 10 614 861219 152 2.630 2.628 1 0 46 47 160 152 8 8 12/86 152.47 12.667 8.236 13715 870109 150 1.370 1.370 3 u 33 36 158 150 8 816 870116 152 3.318 2.539 6 14 35 55 158 150 8 617 870123 153 3.055 2.245 3 9 42 54 155 152 3 218 870130 154 3.150 2.800 1 8 51 60 157 152 5 3 1/87 152.57 10.893 8.954 16119 870206 148 2.457 2.457 4 0 55 59 157 148 9 920 870213 152 6.250 2.630 5 30 43 78 158 148 10 621 870220 150 6.837 6.431 1 8 82 91 157 149 8 722 870227 153 4.540 2.840 0 40 72 112 156 151 5 3 2187 150.62 20.084 14.358 25223 870313 155 7.260 4.460 0 55 77 132 158 150 8 324 870320 156 5.857 4.627 5 21 66 92 158 152 6 225 870327 156 6.200 4.300 9 7 67 83 160 152 8 4 3/87 155.67 19.317 13.387 21026 870403 156 2.766 2.715 4 3 43 50 160 155 5 427 870410 157 6.036 3.641 5 25 52 82 160 152 8 328 870424 158 4.890 2.830 15 17 50 82 160 156 4 2 4/87 157.01 1'.692 9.186 14529 870508 159 7.890 7.090 17 39 85 141 162 156 6 3

GHANA: WE(LY ?MVEMENTS OF CEDI

as of: 26-Jan 1988 MONTHLY D A T A

ADCT DMTh ADC.RATE DEMAND SUPPLY INELIG.UNSUO SUOC TUAL HIGHEST LOWEST HIGH-LOW HIGH-ADC. DATE Average Total Total No. ofND. (Yfth )CEDI/tUS$(U$ HM) (US M) BIDS BIDS BIDS BIM BID RATE BID RATE DIFF. DIFF. MH4YY Ex. Rate Demmnd Supply Succ.Bids

CDJI/US$ CEDI/US$ CEDI/'US CEDI$IUS$ U=C|-U30 870515 159 5.650 5.650 9 0 85 94 165 159 6 631 870522 160 3.940 3.810 2 6 68 76 163 159 4 332 870529 157 2.530 2.530 6 0 59 65 165 157 8 8 5/87 158.93 20.010 19.080 29733 870605 157 2.860 2.860 9 0 51 60 162 157 5 534 870612 159 5.800 3.800 1 21 57 79 162 157 5 335 870619 159 5.070 4.140 1 1 86 88 164 158 6 536 870626 161 6.650 2.780 2 38 43 83 164 159 5 3 6/87 158.99 20.380 13.580 23737 870703 162 6.020 2.960 5 21 62 88 164 159 5 238 870710 163 7.430 5.180 6 31 76 113 165 162 3 239 870717 162 7.198 7.198 10 0 108 118 170 1'52 8 840 870724 162 7.560 7.310 4 3 75 82 166 159 7 441 870731 162 4.209 4.209 9 0 75 84 165 162 3 3 7/87 162.19 32.417 26.857 39642 870807 162 3.660 3.660 7 0 76 83 165 162 3 343 870814 163 5.070 5.070 7 0 68 75 165 163 2 244 870821 164 4.630 3.610 8 17 61 86 165 163 2 145 870828 165 7.470 4.710 15 25 74 114 167 163 4 2 8/87 163.55 20.830 17.050 27946 870904 166 9.607 6.806 10 21 79 110 168 163 5 247 870911 168 6.880 3.000 16 54 54 124 169 164 5 148 870918 171 14.639 2.700 10 131 25 166 172 168 4 149 870925 176 17.770 8.750 12 153 78 243 179 170 9 3 9/87 171.03 48.896 21.256 23650 871002 175 7.436 7.436 25 0 180 205 191 175 16 1651 8il109 174 5.102 4.957 6 2 96 104 183 172 11 952 871016 174 4.339 4.339 19 0 100 119 182 174 8 853 871023 174 3.895 3.895 21 0 85 106 180 174 6 654 871030 174 3.696 3.696 21 0 87 108 182 174 8 8 10/87 174.31 24.468 24.323 54855 87110o 173 4.675 4.675 11 0 81 92 180 173 7 756 87113 173 4.255 3.843 7 8 83 98 179 170 9 657 871120 174 4.740 4.130 9 11 100 120 181 172 9 758 871127 174 5.808 5.499 18 1 99 118 178 170 8 4 11/87 173.53 19.478 18.147 363

=10

GIANA: WEEKLY MDNEMENTS OF CEDI

as of: 26-Jan 1988 MONTHLY DATA

AILT OMTh ADC.RATE ID*JMI SUPPLY ELIG.UNSU0C SUC TOTAL HIGHEST L0WEST HIGH-LOW HIGH-AIJC. DATE Aerage Total Total No. of

ND. (YMD)CEDI/US$(US$ H) (US$ H) BIDS BIDS BIDS BIDS BID RATE BID RATE DIFF. DIFF. 1F/YY E. Rate DImid Supply Suec.3ids

- ~~~~~-- CEDIr1US$ CEDI/'US$ CEI)I/US$ CEDIUsS$ -_ _----ts -- - - US$ -*- -51-~59 871204 175 6.640 6.440 9 2 115 126 180 174 6 5

60 871211 176 6.021 5.057 6 15 74 95 178 175 3 2

61 871218 176 6.600 6.600 6 0 129 135 180 176 4 4 12187 175.64 19.261 18.097 318

62 880108 176 6.157 6.157 24 0 108 132 180 176 4 4

63 880115 176 4.900 4.900 15 0 115 130 180 176 4 4

64 880122 176 5.369 5.369 18 0 122 140 180 176 4 4

65 880129 178 9.132 4.121 22 48 74 144 180 176 4 2 1188 176.40 25.558 20.547 419

66 880205 179 6.820 4.650 15 30 118 163 181 177 4 2

67 8,0212 179 7.230 7.230 16 0 118 134 181 179 2 2

68 880219 181 10.330 6.895 20 66 55 141 182 179 3 1

69 880226 183 10.670 5.030 18 111 69 198 185 180 5 2 2/88 180.42 35.050 23.805 360

70 880304 185 11.100 6.600 35 31 157 223 186 183 3 1

71 880311 185 6.330 6.330 27 0 94 121 190 185 5 5

72 880318 185 7.428 7.428 46 0 159 205 188 185 3 3

73 880325 185 6.720 6.720 14 0 132 146 189 185 4 4 3/88 185.00 31.578 27.078 542

74 880408 185 7.200 5.200 36 0 86 122 189 185 4 4

75 880415 185 3.394 3.394 18 0 110 128 188 185 3 3

76 880422 186 4.144 4.037 38 1 92 131 190 185 5 4

77 880429 186 4.597 4.597 41 0 88 129 189 186 3 3 4/88 185.50 19.335 17.228 376

78 880506 186 5.5.56 .556 27 0 119 146 189 186 3 3

79 880515 185 4.415 4.415 8 0 135 143 190 185 5 5

80 880520 185 4.800 4.800 23 0 123 146 190 185 5 5

81 880527 184 4.163 4.163 12 0 98 110 188 184 4 4 5/88 185.07 18.934 18.934 475

82 880603 184 4.386 4.146 12 7 117 136 188 184 4 4

83 883610 186 5.078 4.414 9 7 96 112 189 185 4 3

84 880617 188 4.400 4.400 11 11152 174 190 185 5 2

85 880624 190 10.800 5.600 15 91 124 230 191 187 4 1 6/88 187.23 24.664 18.560 489

86 880708 193 '.390 5.350 30 180 107 317 195 189 6 2

87 880715 196 12.100 6.700 27 83 171 281 198 193 5 2

GHANA: WEZXLY MDVEMNTS OF CEDI

as of: 26-Jan 1988 MONTHLY D A T A

ALCT MAM ALC.RATE LMMD SUPPLY INELIG.UNSUE SUDC TOTAL HIGHES1 LCWST HIGH-LOW HIGH-AME. DATE Average Total Total Nb. ofND. (ytHD)CEDIWUS$(US$ N) (US$ M) BIDS BIL BIDS BID BID RATE BID RATE DIFF. DIFF. FFHYY Ex. Rate Demaid 9upply Suc.Bids

====-C==(ItUS$ CEDIIUS$ CEDI/US$ CEDI|US$ - C88 880722 201 10.540 4.560 24 208 49 281 202 196 6 189 880729 211 15.170 4.510 17 296 75 388 219 201 18 8 7/88 199.52 51.200 21.120 40290 880805 215 11.300 6.210 0 180 Y119 299 240 211 29 2591 880812 219 6.650 6.650 35 0 216 251 241 219 22 2292 880819 226 11.200 6.300 9 116 105 230 240 219 21 1493 880826 226 5.506 5.506 8 0 209 217 252 226 26 26 8/88 221.34 34.656 24.666 64994 880902 228 9.100 6.200 6 7 124 137 240 220 20 1295 880909 228 4.990 4.990 4 0 17 121 240 228 12 1296 880916 227 4.560 4.560 8 0 133 141 240 227 13 1397 880923 227 4.209 4.200 5 0 134 139 242 227 15 1598 990930 227 4.516 4.516 8 0 1il 119 240 227 13 13 9/88 227.46 27.366 24.466 61999 881007 228 5.314 5.308 9 0 112 121 240 227 13 12 o

100 881014 229 4.765 4.765 10 0 102 112 235 229 6 6101 P81021 229 4.160 4.160 5 0 86 91 235 229 6 6102 881028 229 3.865 3.865 7 0 96 103 235 229 6 6 10188 228.71 18.104 18.098 396103 881104 230 5.195 5.195 14 0 107 121 238 230 8 8104 881111 230 3.899 3.899 10 0 94 104 235 230 5 5105 881118 231 7.198 7.100 6 0 153 159 240 230 10 9106 881125 231 4.995 4.995 16 0 128 144 235 231 4 4 11188 230.57 21.287 21.189 482107 881202 231 5.050 5.050 14 0 122 136 236 231 5 5108 881209 231 4.609 4.501 1 1 120 122 237 229 8 6109 881216 232 6.530 5.200 14 5 158 177 235 231 4 3110 881223 230 5.315 5.315 12 0 141 153 236 230 6 6 12/88 230.99 21.5u4 20.066 541

OQ-

-103 - ANNEX DPage 7

8. The number of total bids increased substantially with theinclusion of more consumer goods in the auction. In 1986, there were 915bids to purchase foreign exchange. In 1987, the bids rose to 4,664 and in1988, to 8,048.

9. The stepwise inclusion of more consumer goods in the auction didnot have a serious impact on the exchange rate. It increased, however, thenumber of bids at the auction very substantially. The average number ofsuccessful bidders per auction increased from 42 before the convergence ofthe two windows to 74 up until March 20, 1987, when goods amounting toabout 40 percent of the value of all goods previously ex_luded from the 'A'licensing scheme became eligible for funding through the auction, afterwhich the average number of successful bids increased to 81 and further to90 prior to inclusion of most remaining goods previously imported underSILs. The average numbe. of successful bids per auction has been around120 since then.

10. In most auctions the exchange rate for the previous week set thefloor for the lowest bid. In few auctions, however, the rule did not holdand the lowpst raLe fell below the exchange rate for the previous week.This resulted in the exchange rate appreciating somewhat, particularly iftU BOG could meet total demand. An econometric analysis of the foreignex.hange auction data reveals that: (i) the exchange rate at the auctionis heavily influenced by the rate determined at the previous auction;(ii) the introduction of new measures and expansion of the auction coveragehad an insIgnificant effect on the exchange rate; (iii) the introduction ofnew measures and expansion of the auction coverage had an insignificanteffect on the exchange rate; and (iv) unmet demand at the previous auctionhas a sizeable effect in determining the exchange rate at the next auction.

11. The distribution tf auction funds by sector is shown in Table 2.Industry is the largest recipient of foreign exchange, receiving about halfof the foreign exchange supplied at the auction. Textiles account for thelargest share within industry (based on information through the firstquarter of 1988), receiving an average of 7.8 percent of total fundssupplied. Metal, brewery, and plastic and rubber industries received 5.5percent, 4.5 percent, and 4 percent respectively, of total foreign exchangesupplied through the end of the first quarter of 1988. Agriculture hasincreased its share from 4.5 percent in 1986 to 7 percent for the firstthree quarters of 1988. As more consumer goods have become eligible forthe auction, the share of supply going to commerce also has increased, from1 percent in 1986, to 8 percent in 1987, and to 17 percent through thefirst 9 months of 1988. About 60 percent of auction funds have beendemanded in US dollars, followed by pounds sterling, accounting for 19.4percent or $86.7 million equivalent. The deutsche mark ranked third,followed by the French franc.

Foreign Exchange Bureaus

12. In order to attract additional foreign exchange resources toofficial channels and to further facilitate the process of obtaining smallamounts of foreign exchange on a daily basis, effective February 1, 1988,the Government permitted the establishment of Foreign Exchange Bureaus tobe operated by any person or institution iicensed by the Bank of Ghana.

Table 2: Ghana: Sectoral Distribution of Auction Funds, 1986-1987, 1988-Q1-Q3------------------------------------------------------- __--------------..----__-----

US$M and I of Total

1986(9/19 - 12/31/86) 1987 1988 - Q1 Total 1988 - Q2 - Q3

Anmont Share of Amount Share of Amount Share of Anamut Share of Anmout Share of

(US$M) Total Z (US$M) Total Z (US$M) Total Z (US$M) Total Z (US$M) Total 1

Agriculture 1.7 4.5Z 14.1 6.9Z 8.0 10.4Z 23.7 7.51 6.5 4.9Z

Transport 3.8 10.0Z 24.6 12.12 4.6 6.02 33.0 10.4Z 14.0 10.6Z

Health 2.9 7.8Z 11.0 5.4Z 3.0 4.02 17.0 5.42 7.9 6.OZ

Utility 0.5 1.3Z 0.4 0.2Z 0.0 O.OZ 0.9 0.3Z 0.2 0.2Z

Tourism 0.2 0.6Z 1.2 0.6Z 0.0 0.02 1.4 0.4! 0.0 0.02Ccumerce 0.5 1.3Z 15.8 7.82 12.3 16.12 28.6 9.OZ 23.2 17.6Z

lIxdustry 25.5 68.0Z 103.2 50.8Z 36.4 47.6Z 165.1 52.12 57.5 43.7Z

Textiles 4.4 11.7Z 16.3 8.0Z 4.1 5.3Z 24.7 7.8Z - -

Brewery 2.5 6.61 8.9 4.4Z 2.9 3.8Z 14.3 4.5Z - -

Tobacco 1.9 5.0Z 7.0 3.4Z 2.3 3.0% 11.2 3.52 - - O

Soap 0.5 1.2Z 6.0 3.0Z 3.1 4.1Z 9.6 3.02 - -

Plastic & Rubber 2.3 6.12 8.0 3.9Z 2.4 3.1Z 12.7 4.02 - -

Metal 2.9 7.8Z 12.0 5.92 2.6 3.4Z 17.5 5.52 - -

Paper 1.6 4.31 6.2 3.0Z 1.4 1.8Z 9.2 2.9Z - -

Others 9.5 25.21 38.9 19.2Z 17.7 23.1Z 66.1 20.8Z - -

Energy 1.5 4.1I 13.1 6.51 5.8 7.51 20.4 6.4Z 11.2 8.52

Tin&ber 0.1 0.3Z 2.5 1.22 1.1 1.42 3.7 1.2Z 2.0 1.52

Cbnstruction 0.8 2.0Z 3.3 1.6Z 1.3 1.82 5.4 1.7Z 2.8 2.1%

Non-Traditional Exports 0.0 0.0% 0.9 0.52 0.0 C.0 0.9 0.3% 0.0 O.OZ

Informtion 0.0 0.0Z 1.9 0.9Z 0.3 0.4% 2.2 0.72 0.0 0.0Z

Mining 0.0 0.0% 0.4 0.2Z 0.0 O.OZ 0.4 0.1% 0.1 0.1%

Financial Institutions 0.0 0.0Z 7.8 3.8Z 3.5 4.5Z 11.3 3.5Z 2.1 1.6Z

Education 0.0 0.0% 0.0 0.0Z 0.0 0.0% 0.0 0.02 0.0 0.0%

Food lmports 0.0 0.0z 2.3 1.1Z 0.0 0.0% 2.3 0.72 0.0 0.0%

MiscelLaneous 0.0 0.0% 0.6 0.3Z 0.2 0.2Z 0.8 0.22 4.1 3.1Z

Grand Total 37.6 100.OZ 203.1 100.0% 76.5 100.0% 317.2 100.0Z 131.6 100.OZ

Source: Bank of Ghana.

Xh,-:Z 25 i

><

ANNEX D

- 105 - Page 9

The aim is convergence of this market with the auction market. The demandfor foreign exchange at these bureaus is market determined it a pricefreely quoted by each bureau. Foreign exchange arising from the retentionaccounts of exporters (with the exception of cocoa and mining companies),interest earnings, commissions and remittances, and that held by the publicmay be sold to a foreign exchange bureau.

13. The first foreign exchange bureau became operational in April1988; the introductory buying rate was 0280 - US$1, close to that offeredin the unofficial parallel market. As of the end of October 1988, therewere more than seventy foreign exchange bureaus operating in Ghana,including some run by the commercial banks. The bureaus are authorized todeal in eight major currencies: US dollar, pound sterling, deutsche mark,Swiss franc, French franc, Canadian dollar, CFA franc, and Japanese yen.Transactions take place on strictly confidential basis and no records arekept on clients. However, the bureaus are required to report to the Bankof Ghana their monthly volume of sales and purchases by type of currency.The monthly transactions handled by the foreign exchange bureaus rose fromthe equivalent of $533.5 thousand in purchases and $606.4 thousand in salesin April to purchases of $7.8 million and sales of $8.5 million in August.The level of transactions decreased to $6.9 and $6.6 million, respectively,for purchases and sales in October, the latest data available. The majorcurrencies for the bureaus are the US dollar and the CFA franc. BetweenApril and October, 37 percent of sales and 44 percent of purchases weretransacted in dollars and 35 percent and 42 percent, respectively, for theCFA franc.

14. After the initial attractive rate (C280/US$) offered in April,the buying rate appreciated somewhat and averaged ¢260 = U5$1 in May 1988,more than 40 percent above the auction rate. The rates were relativelystable between May and September 1988, but increased sharply in October andNovemiber 1988 and reached ¢335/US$ by miu-November 1988. The differentialbetween the auction and bureau rates, after narrowing to about 30 percentduring the May-September period, increased to 46 percent in November 1988before narrowing to 30 percent before Christmas. At the end of Decemberthe differential was about 43 percent. The movements in the spread betweenthe bureRu and auction rates are probably explained by seasonal factorsincluding the increase in travel during that time of year.

- 106 - ANNEX E

Page 1

Selected Tables from Ghana Living Standards Survey: 1987-88

Table 1: Distribution of Per Capita Consumption Expenditures by Deciles

Mean PerPercent Share of Capita Expenditure

Decile Aggregate Expenditures (Cedis/Year)

1 2.44 14,3372 3.79 22,3073 4.89 28,7224 5.96 35,0575 7.12 41,8706 8.39 49,3147 9.78 57,4918 11.99 70,4859 15.45 90,80610 30.19 177,504

All Ghana 100.0 58,713

Note: Each decile contains lOZ of the population, not 1OZ of households.

Source: First six months of data from GLSS

- 107 - ANNEX E

Page 2

Table 2: Per Capita Expenditure by Administrative Region

Mean P.C.Expenditures

Region (Cedis/Year)

1. Greater Accra: 92,828

Accra City 106,273Tema City* 72,871Other Greater Accra 80,977

2. Eastern 63,3643. Central 49,7704. Western 81,9405. Ashanti 46,028

Kumasi City* 60,325Other Ashanti 44,105

6. Brong-Ahafo 54,0947. Volta ,1,1198. Northern 42,6439. Upper East 37,594

.;V . uppCe *CO & * JU t V J

* Small Sample (32 or 31 households)

Source: First six months of data from GLSS.

- 108 - ANNEX EPage 3

Table 3: Characteristics of Households by Location 1/

Breakdown by:Degree of Urbanization Ecological Zone

All SemiCharacteristic Ghana Urban Urban Rural Coastal Forest Savannah

Sex of Head

Male 75.1 73.1 65.9 80.0 72.1 70.1 86.8Female 24.9 26.9 30.1 20.0 27.9 29.9 13.3

Employer of Hcad

Government 2.1 19.7 17.6 5.3 11.8 13.5 10.7Parastatal 2.5 4.1 3.8 1.0 3.0 3.4 0.4Private 6.9 14.5 2.0 4.2 15.6 4.2 1.2Self-Employment 74.7 74.7 75.0 86.7 64.2 76.9 83.1None 3.9 7.2 1.6 2.8 5.4 2.0 5.3

Occupation of Head

Cocoa Farmer 18.4 3.7 21.5 26.0 6.0 37.2 2.0Other Farmer 44.5 25.7 44.3 55.9 40.0 31.0 71.6Sales/Services 10.9 24.6 10.0 3.1 16.0 10.9 5.2Prod./Crafts 13.3 24.8 10.2 7.5 21.2 9.9 9.7White Collar 9.1 14.1 12.5 4.7 11.5 9.0 6.4Retired 1.6 3.6 0.5 0.9 2.6 0.3 2.8Unemployed 2.2 3.5 1.1 1.9 2.9 1.7 2.3

Education of Head

None 53.9 45.2 47.8 61.6 41.9 48.5 76.4Primary 8.1 5.7 7.4 9.7 9.8 9.5 3.8Middle School 31.3 38.0 37.0 25.0 37.9 36.4 15.5Sec. Sch. O-Level 3.0 4.8 4.4 1.5 4.4 2.5 2.4

A-Level 0.3 0.9 0.0 0.0 0.7 0.0 0.2Teacher Training 1.8 1.9 2.6 1.4 1.3 2.7 0.9Post Sec. Non-University 0.4 0.3 0.0 0.7 1.2 0.1 0.2

University 1.2 3.2 0.9 0.1 2.6 0.4 0.8

1/ Figures in Tables 3, 4, and 6 in Annex E refer to population, nothouseholds. For example, 75.1 percent of the people in the GLSS samplelive in male headed households, not 75.1 percent households are headed bymales.

Source: First six months of data from GLSS

- 109 - ANNEX EPage 4

Table 4: Housing Characteristics in Ghana

-------------------Quintiles--------------Ghana 1 2 3 4 5

Source of DrinkingWater

Inside Plumbing 1.7 0.0 0.0 1.0 2..1 5.6Tnside Standpipe 6.8 2.0 3.0 7.0 7.4 14.6Outside StandpipePrivate 3.9 0.5 2.7 4.2 5.3 7.1Public 7.2 7.1 5.1 7.7 9.8 6.3

Neighbor 1.8 1.8 0.5 3.3 1.2 2.1Water Vendor 2.6 0.7 0.7 3.7 2.8 5.2Water Truck 0.1 0.0 0.0 0.0 0.3 0.4Well w/Pump 8.0 14.9 6.9 6.6 5.9 5.5Well w/out Pump 11.2 12.0 11.6 10.3 12.5 9.2Rainwater 0.6 0.5 0.3 1.2 0.7 0.3River, Lake, etc. 56.2 60.7 69.3 54.9 52.1 43.8

Type of Toilet

Flush 4.1 0.0 0.0 3.9 4.5 12.3Pit Latrine 57.3 60.9 61.5 62.5 54.7 46.8Pan/Bucket 11.2 4.2 7.0 14.1 14.1 16.5None 23.2 30.6 29.9 15.9 21.4 18.4Other 4.2 4.3 1.6 3.6 5.3 6.1

SotLce of Lighting

Electricity 22.1 6.3 11.7 28.2 28.1 36.4Kerosene/Oil Lamp 77.2 91.7 87.3 71.5 71.9 63.6Candles/Torch 0.0 0.2 0.0 0.0 0.0 0.0None 0.6 1.8 1.0 0.3 0.0 0.0

Source: First six months of data from GLSS.

- 110 - ANNEX EPage 5

Table 5: Household Size and Per Capita Consumption of the Poor

Poorest 10? Poorest 30Z All Ghana

Per Capita Expend. (Cedis/Yr.) 14,337 21,791 58,713Per Capita Food Expend. (Cedis/Yr.) 10,003 15,630 42,269Household Size: 7.9 7.0 4.9

Note: Weighted by household (e.g. an average household in Ghanacontains 4.9 members).

Source: First six months of data from GLSS

Table 6: Composition of Household Members Among the Poor

Poorest 1OZ Poorest 30? All Ghana

Children 0-6 years 27.1 27.6 24.9Children 7-12 years 21.9 20.0 17.8Children 13-17 years 13.4 12.6 11.1Adults 37.6 39.8 46.2Members Who Worked in Last 7 Days 62.1 61.3 58.7

Source: First six months of data from GLSS.

ANNEX EPage 6

Table 7: Housing Among the Poor

Poorest 102 Poorest 301 All Ghana

Source of Drinking WaterIndoor Plumbing 0.0 0.0 1.7Inside Standpipe 1.2 2.2 6.8Outside Standpipe:

Private 0.9 0.5 3.9Public 7.1 6.5 7.2

Neighbor 1.2 1.2 1.8Water Vendor 0.0 0.4 2.6Water Truck 0.0 0.0 0.1Well w/Pump 13.9 12.1 7.9Well w/o Pump 14.3 12.1 11.1Rainwater 0.0 0.3 0.6River, Lake, etc. 59.7 64.8 56.2

Type of ToiletFlush Toilet 0.0 0.0 4.1Pit Latrine 56.2 62.5 57.3Pan/Bucket 1.6 4.2 11.2Other 6.0 3.2 4.2None 36.3 30.0 23.2

Source of LightingElectricity 6.7 6.1 22.1Kerosene/Oil Lamp 89.9 92.3 77.2Candles/Torch 0.4 0.1 0.0None 3.0 1.4 0.6

Source: First six months of data from GLSS.

- 112 - ANNEX E

Page 7

Table 8: Indicators of Health Status Among the Poor

Reported Incidence of Illness Poorest 10: Poorest 302 All Ghana

Z People Ill (last 4 weeks) 23.5 26.6 34.3Proportion of Days Ill among

Population (2) 6.8 7.4 10.8Proportion of Days Inactive among

Population (2) 3.9 4.2 5.9

Health Care Providers Consulted When Ill

None 61.02 57.9Z 47.6ZDoctor 18.1 20.7 27.5Nurse 5.1 5.1 6.7Medical Assistant 10.2 10.3 10.9Pharmacist 0.6 2.0 2.5Healer/Spiritualist 2.3 2.7 3.5Other 2.9 1.3 1.4

Anthropometric Indicators of Poor Health

Incidence of Stunting (low height for age)All Children Aged 0-9 19.32 20.7Z 19 %:

Males 19.2 23.8 21.8Females 19.3 17.5 17.6

Incidence of Wasting (low weight for height)All Children Aged 0-9 4.3Z 3.32 4.3Z

Males 3.9 3.5 4.3Females 4.8 3.1 4.3

Incidence of Stunting by Age Males Females0-11 months 2.22 2.9Z12-23 months 13.0 13.324-35 months 21.9 30.736-47 months 24.6 24.748-71 months 29.2 18.372-108 months 25.0 18.0

Source: First six months of data from GLSS

- 113 -

STATISTICAL APPENDIX

I

-114 -

GHANA: STRUCTURAL ADJUSTMENT FOR GROWTH

STATISTICAL APPENDIX

1. Population and Employment

1.01 Population Estimates, 1970-871.02 Estimated Population by Age and Sex, 19861.03 Population and Jensity by Regions, 1960, 1970, 19841.04 Labor Force Estimates, 1980

2. National Accounts

2.01 Nationa'. Income Estimates, 1975-872.02 GDP, by Kind of Economic Activity, Current Prices, 1975-872.03 GDP, by Kind of Economic Activity, Constant 1975 Prices,

1975-872.04 Expenditures on GNP in Purchasers' Value, Current Prices,

1975-872.05 Expenditures on GNP in Purchasers' Value, Constant 1975 Prices,

1975-872.06 Capital Transactions, Current Prices, 1975-872.07 Gross Capital Formation by Type of Goods, Current Prices, 1975-87

3. Balance of Payments

3.01 Summary of Balance of Payments, 1979-873.02 Values of Exports by Country of Consignment, 1975-853.03 Imports by Category, 1970-853.04 Values of Imports by Country of Origin, 1975-853.05 Petroleum Imports, Exports, and Prices, 1979-873.06 Index Numbers of Exports and Imports, 1980-87

4. External Debts

4.01 External Public Debt as of December 31, 19874.02 External Public Debt: Projections of Service Payments and

Disbursements based on Debt Outstanding as of December 31,1987

5. Public Finance

5.01 Summary of Central Government Finances, 1975/76-19875.02 Sources of Government Revenue and Grants, 1975/76-19875.03 Recurrent Expenditures, Functional Classification, 1975/76-19865.04 Economic Classification of Government Current Expenditures,

1975/76-19875.05 Development Expenditures, Functional Classification,

1975j76-19875.06 Central Government Debt: Domestic and Foreign, 1975-June 19885.07 Central Government Debt: Domestic, 1975-June 1988

- 115 -

GHANA: STRUCTURAL ADJUSTMENT FOR GROWTH

STATISTICAL APPENDIX

6. Money and Credit

6.01 Summary Accounts of the Banking System, 1975.886.02 Consolidated Balance Sheet of the Banking System, 1975-886.03 Assets and Liabilities of the Bank of Ghana, 1975-886.04 Assets and Liabilities of Primary Banks, 1975-886.05 Assets and Liabilities of Secondary Banks, 1975-886.06 Classification of Loans and Advances by Purpose, 1975-886.07 Money Supply and Liquidity of the Public, 1975-886.08 Reserve Requirements: Primary Banks, 1975-886.09 Reserve Requirements: Secondary Banks, 1975-886.10 Velocity Ratios, 1975-876.11 Interest Rates, 1975-September 1988

7. Agricultural Sector

7.01 Cocoa Bean Production, Consumption, Prices, Payments to Farmersand Export Receipts, 1974/75-1987/88

7.02 Purchases of Cocoa Beans by Regions, 1974/75-3987/887.03 World Production of Cocoa Beans, 1974/75-1987/887.04 Production of Important Crops, 1970-877.05 Area Under Important Crops, 1970-19877.06 Yield of Important Crops, 1970-877.07 Production of Timber, Veneer and Plywood, 1970-877.08 Operations of the Ghana Cocoa Board, 1974/75-1986/87

8. Industrial Sector

8.01 Mineral Production, 1975-878.02 Diamond Production, 1975-878.03 Gold Production, 1975-878.04 Production of Some Selected Manufactured Commodities, 1975-878.05 Railway Traffic, 1975-June 1988

9. Prices

9.01 Consumer Price Index Numbers, 1978-879.02 Monthly Consumer Price Indices, 1982-889.03 Wholesale Price Index Numbers, 1978-879.04 Index Numbers of Prime Building Costs, 1978-879.05 Average Retail Prices of Selected Commodities in Accra,

1977-879.06 Average Monthly Earnings per Employee in Establishments

Irrespective of size, 1980-869.07 Minimum Wage: Daily Wage and Indices of Nominal and Real Wages,

1975-87

TABIE 1.01: POPUATICI ESTD1AS a)

(in thlxwds)

ITEM 1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

bt b/Populatkm 8559 9760 10020 10280 10550 108:'0 11100 11390 11690 11090 12298 12620 12978 13320

hrwal Growth Rate 2.7Z 2.7Z 2.6Z 2.6Z 2 6Z 2.6Z 2.6Z 2.6Z 2.6Z 2.6Z 2.6Z 2.8? 2.6Z

Note: a/ Kid-year estinmtes.

b/ 1970 Census, March 1970, and 1984 Census, March 1984.

Source: 1986-87: Statistical Service, Accra, Ghana.

1964-85: Quarterly Digest of Statistics, March 1986, and Decmrber L987.

1975-83: Quarterly Digest of Statistics, June 1984.

1970: Ecnanic Survey, 1975-76.

- 117 -

TABLE 1.02 ESTDMATED POPUMATION BY AGE-GROUP AND SEX(HMl-YEAR 1986)(in thousands)

AGE-GROUP MALE FEMALE TOTAL

0- 4 1,180 1,190 2,3705- 9 1,104 1,095 2.199

10-14 780 740 1,52015-19 605 575 1,18020-24 463 569 1,03325-29 440 518 95730-34 400 450 85035-39 336 329 66540-44 264 266 53145-49 218 194 41350-54 181 169 35155-59 116 100 21660-64 114 108 22265-69 72 70 143?0 74 '4 61 12575-79 33 31 6480-84 30 31 6185-89 15 16 3190-94 11 11 2295 14 13 26

TOTAL 6,441 6,537 12,978

Source: Statistical Service, Accra.

- 118 -

TABLE 1.03: POPULATION AND DENSITY BY REGIONS(Populatiom in Thousands)

1960 1970 1984

SQpARE KR POP. DENSITY POP. DENSITY POP. DENSITY

All Regions 238,533 6727 28 8559 36 12298 52

Western 23,921 626 26 770 32 1158 48

Central 9,826 751 76 890 91 1142 116

Greater Accra 3.245 542 167 903 278 1431 441

Eastern 19,323 1044 54 1210 63 1681 87

Volta 20,570 777 38 947 46 1212 59

Ashanti 24,389 1109 45 1482 61 2090 86

Brong Ahafo 39,557 588 15 767 19 1207 31

Northern 70,384 532 8 728 10 1165 17

Upper West 18,476 289 16 320 17 438 24

Upper East 8,842 469 53 543 61 773 87

Source: 1960, 1970, 1984 Censuses of Ghana.Quarterly Digest of Statistics, June 1988, p. 90.

Note: Earlier figures for 1970 have been adjusted for the transfer of the Ada LocalCouncil from Eastern Region to Greater Accra Region.

TABLE 2.01: NATIONAL INCCIE ESTDIMTES

ITR4 1975 1980 1981 1982 1983 1984 l9d5 1986 1987

National Incoma (illicns of CedisJ- in Current Prices 4918 41159 70186 83598 178202 255713 320941 469530 677861- in 1975 Prices 4°18 5171 4986 4607 4388 4842 5046 5307 5516

Per Capita National Incame (Cedis)- in Current Prices 493 3708 6162 7151 14863 20807 25431 36118 50587- in 1975 Prices 493 466 438 394 366 394 400 408 412

GDP Market Prices (pillions of Cedis]- in Current Prices 5283 42853 72626 86451 184038 270561 343048 5S373 746000- in 1975 Prices 5283 5538 5344 4974 4747 5158 5420 5702 5976

LInex of Natinal Ixxcne [1975 - 100]- in Current Prices 100 837 1427 1700 3623 5199 6525 9547 13gZX- in 197S Prices 100 105 101 94 89 98 103 108 112

Inde of Per Cap. Nat. Inc. [1975 - 1001- in Current Prices 100 752 1249 1450 3013 4218 5155 7'22 10255- in 1975 Prices 100 94 89 80 74 80 81 83 83

Index of GDP M)rket Prices [1975 - 100]- in Current Prices 100 837 1427 1700 3623 5199 6525 9547 13782- in 1975 Prices 100 105 101 94 89 98 103 108 112

Source: 1984-87: Quarterly Digest of Statistics. June 1988.1980-83: Quarterly Digest of Statistics, December 1987.1975: Quarterly Digest of Statistics, June 1984.

Note: Data for 1987 are provisional.

TABLE 2.02: GROSS DCIES[rIC PRODIWCT, BY KIND OF ECONCMIC ACTIVITYIN PRODUCERS' VAL'JES

(Millions of Cedis in Current Prices)

ITEM 1975 1980 1981 1982 1983 1984 1985 1986 1987

A. AGRICULTURE 2518 24820 38553 49572 109927 133232 154003 244317 377481Agriculture and Livestock 1567 19776 33558 44003 92047 110422 118656 175621 266077Cocoa Produce Marketing 577 2269 1197 639 10228 11138 18755 41017 66030Ftrestry and Logging 293 1805 2135 3235 5609 9300 11351 18870 34607Fishing 81 971 1663 1595 2044 2372 5241 8809 10768

B. INDUSTRY 1109 5086 6653 5401 12199 28631 57209 87723 118947Mining and Quar=ying 105 462 369 285 1944 3214 3822 8783 13630Manufacturing 736 3346 4338 3117 7101 17306 39562 57021 73720Elec'ricity and Water 33 223 456 513 358 2166 4045 8957 13279Construction 236 1055 1491 1486 2796 5S45 9780 12962 18319

C. SERVICES 1637 13202 27993 32740 62764 109068 132374 176675 245258Transport, Storage, Comumications 206 1130 2329 2568 7663 17451 18329 21995 27524Wholesale and Retail Trade 642 7327 19074 22951 43120 76544 85032 97786 137963Finance, Insurance, Business 276 1314 1927 2621 3311 4676 7746 15153 19250Government and Other 513 3430 4663 4601 8670 10398 21267 41740 60521

SUB-TOTAL 5264 43108 73199 87712 184890 270931 343586 508715 741685Less Imputed Bank Charge 77 651 1207 1802 2259 2865 5323 6903 11206Import Duties 96 397 634 541 1407 2494 4786 9561 15520

GDP at Market Prices 5283 42853 72626 86451 184038 270561 343048 511373 746000

Percentage distribution 0

A. AGRICULTURE 48Z 58Z 53Z 57Z 60Z 49Z 45? 48Z 512Agriculture and Livestock 30Z 46Z 462 51Z 50? 41Z 35Z 34Z 36ZCocoa Production, Marketing 11Z 5Z 2Z 12 6Z 4? 5? 8? 9?Forestry and Logging 6Z 4Z 3? 4Z 3Z 3Z 3Z 4Z 5ZFishing 2Z 2? 22 2Z 1Z 1Z 2Z 2? 12

B. INIXJSTRY 21Z 122 9Z 6Z 72 11Z 17? 17Z 16?ining and Quarrying 2Z 12 12 0Z 1Z 1Z 1Z 2? 2ZManufacturing 14Z 8? 6? 4Z 4Z 6Z 12Z 11Z 10ZElectricity and Water 1Z 1? 1? 1Z 0Z 1Z 1Z 2Z 2?Construction 4? 2? 2Z 2Z 2Z 22 3Z 3? 2Z

C. SERVICES 31? 31Z 39Z 38? 34Z 40Z 39Z 35Z 33ZTrarsport, Storage, Communications 4Z 3? 3? 32 4Z 6Z 5? 4Z 4Zilolesale and Retail Trade 12Z 17? 26? 27? 23Z 28Z 25Z 19? 18?Finance, Insurance Business 5? 3? 3Z 3? 2? 2Z 2? 3? 3?Government and Other 10? 8? 6? 5? 5? 4? 6? 8? 8?

Imputed Bank Charge 1? 2Z 2? 2? 1Z 1? 2? 1? 2?Import Duties 2? 1Z 1? 1Z 1Z 1? 1Z 2Z 2?

Source: 1984-87: Quarterly Digest of Statistics, June 1988.1982-83: Quarterly Digest of Statistics, December 1987.1980-82: Statistical Service, Accra.1975: Economic Survey, 1977-80.

TABLE 2.03: GROSS DOMESTIC PRDUIJCT, BY KIND OF ECONOMIC ACTIVITYIN PRODLY'ERS' VALUES

(Millions ot Cedis in 1975 Prices)

ITEH 1975 1980 1981 1982 1983 1984 1985 1986 1987

A. AGRICULTURE 2518 2957 2881 2724 2534 2780 2798 2890 2891Agriculture and Livestock 1567 2017 2001 1916 1763 2035 1997 2001 1994Cocoa Production, Marketing 577 545 521 432 370 339 384 454 469Forestry and Logging 293 304 266 287 309 313 313 317 322Fishing 81 92 93 R9 92 93 104 118 106

B. INDUJSTRY 1109 895 752 624 550 599 705 758 844Mining and Quarrying 105 71 66 61 52 59 63 61. 66Manufacturing 736 575 464 369 328 370 460 511 562Electricity and Water 33 43 48 44 41 39 47 55 65Construction 236 206 174 151 129 132 135 132 152

C. SERVICES 1637 1765 1824 1758 1798 1917 2061 2195 2401Transport, Storage, Comunications 206 166 177 179 192 217 235 248 275'Wholesale and Retail Trade 642 556 545 489 463 510 580 632 743Finance, Insurance Business 276 372 389 401 415 453 465 500 528Governmunt and Other 513 671 713 689 728 737 782 815 856

SUB-TOTAL 5264 5617 5457 5106 4881 5296 5564 5843 6137Less Imputed Bank Charge 77 160 166 166 177 191 206 218 239import Duties 96 81 53 34 44 53 63 77 78

GDP Harket Prices 5283 5538 5344 4974 4,47 5158 5420 5702 5976

Real GDP Growth -12.4Z 0.5% -3.5Z -6.92 -4.6Z 8.6Z 5.1Z 5.2Z 4.8Z

Percentage distribution

A. AIRICULTURE 482 53Z 542 55Z 53Z 54Z 52Z 512 48ZAgriculture and Livestock 30% 362 372 39Z 37Z 39Z 37Z 35Z 33ZCocoa Production, Marketing 112 102 1OZ 9Z 82 'Z 72 82 82Forestry and Logging 62 5Z 5Z 6Z 6Z 62 6% 62 5SFishing 22 22 2Z 2% 22 2% 22 22 2%

B. INDUJSTRY 212 162 14% 132 12Z 122 132 13% 142Mining and Quarrying 22 12 1 11% 1% 1! 12 ]2 12Manufacturing 14% 10% 92 72 72 72 8% 92 92Electricity and Water 1% 1% 1% 1Z 12 12 12 12 12Construction 42 42 32 3% 32 3% 2% 22 3!

C. SERVICES 31% 32Z 34Z 35Z 38Z 37Z 38Z 38% 402Transport, Storage, Communications 42 31 3Z 4% 42 4Z 42 42 52Wiolesale and Retail Trade 12% 10% 10% 1O0 10% 10% 112 11% 12%Finance, Insurance Business 5Z 72 72 82 92 92 92 92 92Government and Other 10% 12% 132 14% 15% 14% 14! 14% 14%

Less Impted Bank Charge 1% 32 32 32 42 42 42 ;4 42Import Duties 2Z 1% 1Z 12 1% 1% 1% 1% 1%

Note Figures are rounded.Source: 1984-87: Quarterly Digest of Statistics, June 1988.

1982-83: Quarterly Digest of Statistics, Decenber 1987.i980-82: Statistical Service, Accra.1975: Econcnic Survey, 1977-80.

TABLE 2.04: EXPENDITURES ON GROSS NATIONAL PRODUCT IN PURCHASERS' VALUES(Millions of Cedis in Current Prices)

ITEM 1975 1980 1981 1982 1983 1984 1985 1986 1987

1. Private Final Consumption 3873 35953 63333 77619 167147 233023 284621 421849 6088012. Goverment Final Consumption 689 4784 6384 5603 10787 19641 32241 56596 793323. Gross Fixed Capital Formation 614 2613 3430 3053 6922 18542 32689 49088 799704. Change in Stocks 59 -203 -109 -133 -21 65 139 340 5545. Exports of Goods and Services 1023 3628 3454 2886 10225 20161 33185 98148 1538376. less Imports of Goods and Services 974 3923 3866 2578 11022 2087; 39826 114648 1764947. GDP Purchasers' Values: 5283 42853 72626 86451 184038 270561 343048 511373 7460008. less Factor Inccme Paid Abroad 42 182 222 225 1640 3642 5769 12576 204599. Gross National Product: 5241 42671 72404 86226 182398 266918 337280 498797 72554110. less Depreciation 323 1512 2218 2628 4197 11206 16339 29267 4768011. National LTccme: 4918 41159 70186 83598 178202 255713 320941 469530 67786112. Net Current Transfers 51 219 228 227 2200 7313 7421 20016 2972313. National Disposable Inccue 4970 41378 70414 83824 180402 263026 328362 489546 70758514. Per Capita National Incoue [Cedis] 493 3708 6162 7151 14863 20807 25431 36118 50587

Percentage Distribution

1. Private Final Consumption 74Z 84Z 87Z 90Z 922 872 84Z 85Z 84Z2. Goverment Final Consumption 13Z llZ 9Z 6Z 6Z 7Z 1OZ llZ 1123. Gross Fixed Capital Formation 12Z 6Z 5Z 4Z 4Z 7Z 10Z lOZ 1124. Change in Stocks 1Z OZ OZ OZ OZ OZ OZ OZ OZ5. Exports of Goods and Services 201 9I 52 3I 62 8I 102 202 2126. less Imports of Goods and Services 19Z 9Z 5Z 3Z 62 82 12Z 23Z 24%7. GDP Purchasers' Values: 101% 1OOZ 0OOZ 100l 1012 1012 1022 1032 10328. less Factor Income Paid Abroad 1Z OZ 02 0 12 12 2% 32 329. Gross National Product: 1OOZ 100% 1OOZ 100% 1OOZ 1OO% 100% 100% 100%10. less Depreciation 6Z 42 32 3% 2% 42 52 62 7211. National Income: 94Z 96Z 97Z 97Z 98Z 96Z 952 94Z 93!12. Net Current Transfers 1I 1Z 02 0% 1Z 3Z 2% 42 4%13. National Disposable Inccue 952 97Z 97Z 972 99Z 992 97Z 982 98%

Source: Statistical Service, Accra; Quarterly Digest of Statist-cs, December 1987, and June 1988.

TABLE 2.05: EXPENDITURE'. ON GROSS NATIONAL PRODUCT IN PURCHASERS' VALUES(ME llicis of Cedis in 1975 Prices)

ITEM 1975 1980 1981 1982 1983 1984 1985 1986 1987

1. Private Final Consumption 3873 4253 3892 3382 3443 3917 4181 4321 44172. Goverment Final Consumption 689 982 1136 1010 990 862 835 850 11003. Gross Fixed Capital Formation 614 516 456 352 344 392 489 473 5744. Change in Stocks 59 -26 -9 -8 -1 1 1 2 25. Exports of Goods and Services 1023 655 597 688 373 409 435 616 7976. less Imports of Goods and Services 974 842 727 449 402 423 522 560 9157. GDP Purchasers' Values: 5283 5538 5344 4974 4747 5158 5420 5702 59768. less Factor Income Paid Abroad 42 54 42 40 30 54 76 101 1069. Gross National Product: 5241 5483 5302 4935 4717 5104 5345 5601 587010. less Depreciation 323 312 316 328 329 262 299 294 35411. National Income: 4918 5171 4986 4607 4388 4842 5046 5307 551612. Net Current Transfers 51 55 45 40 54 109 97 160 15413. National Disposable Income 4970 5225 5030 4647 4442 4951 5143 5467 567014. Per Capita National Income [Cedis] 493 466 438 394 366 394 400 408 412

Percentage Distribution1. Private Final Consumption 74Z 78Z 73Z 692 732 77Z 782 77Z 7522. Goverment Final Consumption 13Z 182 21Z 202 21Z 172 16Z 152 1923. Gross Fixed Capital Formation 12Z 9Z 92 72 72 82 92 8Z 1OZ4. Change in Stocks 1Z 02 OZ 02 02 02 02 02 OZ5. Exports of Goods and Services 20' 122 112 142 82 82 82 112 1426. less Imports of Goods and Services 19Z 15Z 142 9Z 92 82 1OZ 102 16Z7. GDP Purchasers' Values: 1O0Z 1012 1012 1O0Z 1017 1O0Z 1012 1022 10228. less Factor Inccoe Paid Abroad 12 1Z 12 12 12 12 12 22 229. Gross National Product: 1002 1002 1002 1000 1002 1002 1002 1002 100210. less Depreciation 62 6Z 6Z 72 72 5Z 62 52 6211. National Incane: 942 94Z 942 93Z 93;. 952 942 95Z 94212. Net Current Transfers 12 12 12 1Z 12 22 22 3Z 3Z13. National Disposable Inccue 952 952 952 942 942 972 96Z 982 97Z

Source: Statistical Service, Accra; Quarterly Digest of Statistics, December 1987 and June 1988.

TABLE 2.0f: CAPITAL TRANSACTIONS(Millions of Cedis in Current Prices)

ITEM 1975 1980 1981 1982 1983 1984 1985 1986 1987

1. Gross Savings 731 2153 2915 3231 6664 21568 27839 40368 671312. Depreciation 323 1512 2218 2628 4197 11206 16339 29267 476803. Net Saving 408 641 697 602 2467 10363 11500 11101 194514. less: Surplus of the Nation on

Current T'ransactions 59 -258 -406 310 -237 2961 -4988 -9060 -133935. Statistical Discrepancy 0 0 0 0 0 0 0 0 06. Finance of Gross Capital Formtion 672 2410 3321 2920 6901 18607 32827 49428 80524

Gross Capital Formetion:7. Increase in Stocks 59 -203 -109 -133 -21 65 139 340 5548. Gross Fixed Capital Formation 614 2613 3430 3053 6922 18542 32688 49088 799709. Gross Capital Formation 672 2410 3321 2920 6901 18607 32827 49428 80524

Source: 1982-87: QwLrterly Digest of Statistics, June 1988.

1980-81: Quarterly Digest of Statistics, June 1986.1975: Econanic Survey, 1976-76.

Note: Data for 1986 are revised and those for 1987 are provisional.

TABLE 2.0,: GROSS CAPITAL FORMATION BY TYPE OF GOODS

(Mlions of Cedis in Currert Prices)

ITEM 1975 1980 1981 1982 1983 1984 1985 1986 1987

1. Buildings 296 1627 2277 2121 4750 10494 17205 20730 29878

2. Other Constnuxtiom Works 92 216 325 322 349 1027 2993 4576 6595

3. Land Improvement 8 18 27 30 32 69 298 350 505

4. Transport Equipment 93 349 365 283 871 3465 4260 9038 17311

5. Mhchinery Equipment 125 403 437 297 920 3487 7933 14394 25682

6. Gross Fixed Capital Formtion 614 2613 3430 3053 6922 18542 32689 49088 79970

7. Changes in Stocks 59 -203 -109 -133 -21 65 139 340 554

8. Gross Capital Formatim 672 2410 3321 2920 6901 18607 32827 49428 80524

9. Less Depreciation 323 1512 2218 2628 4197 11206 16339 29267 47680

10. Net Capital Fonmation 349 898 1103 292 2704 7402 16489 20161 32844

Source: 1982-87: Quarterly Digest of Statistics, June 1988.

1980-81: Quarterly Digest of Statistics, June 1986.

1975: Economic Survey, 1976-76.

Note: Data for 1986 are revised and those for 1987 are prov.sional. Figures are rounded.

- 12o -

TABLE 3.01: GHANA: BALANCE OF PAYMENTS(Millions of US Dollars)

ITEM 1979 1960 1981 1982 1983 1984 1985 1986 1987

A. Merdhandise 184 132 -310 10 -100 -114 -96 -56 -198EXports (f.o.b.) 1066 1104 711 641 439 567 632 749 827Isports (c.i.f.) -82 -972 -1021 -631 -539 -681 -729 -805 -1025

B. Non-Factor Services -95 -104 -113 -85 -65 -91 -90 -115 -94.9Receipts 82 107 120 105 38 38 38 48 79.3Paymeits -177 -211 -233 -190 -103 -129 -128 -163 -174.2Govennent (n.i.e.) -79 -84 -85 -66 -43 -39 -31 -76 -74.4Travel -27 -33 -34 -26 -10 -12 -10 -11 -11.5Other -70 -94 -114 -98 -50 -79 4-6 -77 -88.3

C. Rescurce Balanee (AiB] 89 28 -423 -75 -165 -206 -186 -171 -293

D. Net Factor Inrcae -46 -80 -81 -82 -82 -81 -110 -106 -132Receipts 2 2 1 2 0 2 2 1 2Payments -48 -82 -82 -84 -82 -83 -112 -107 -134

Interest paynents -48 -82 -82 -84 -82 -79 -108 -102 -122

E. Private Transfer (net) -3 -3 -4 -1 17 73 33 73 202

F. Current Account Balane [C+D+E] 40 -55 -508 -158 -230 -214 -264 -204 -224

Financed by:Grants (Official Transfers) 82 83 87 84 72 103 82 118 122Official Lcng Teum Loans(net) 108 96 49 16 15 84 110 211 254

nishimrsTpnts 123 120 78 5S 84 118 135 257 304Ainrtizaticn -15 -24 -29 -39 -69 -34 -25 -46 -50

Official MediLun-Tenm Loans(net -14 -13 42 97 13 89 -70 -72 -23Disbursements 0 0 49 103 68 170 153 133 109

uTDrtizaticn -14 -13 -7 -6 -55 -81 -223 -205 -132Trust FUnd 34 0 0 0 0 -1 -7 -11 -12Direct Foreigi Investnmet -3 16 16 16 2 2 6 4 5Private CapiLal (net) -5 0 -13 -5 12 4 0 3 -3

Disbursqmts 0 0 4 4 42 11 5 5 1ArDrtizaticn -5 0 -17 -9 -30 -7 -5 -3 -4

SR A11ocaticn 14 14 14 0 0 0 0 0 0Capital n.e.s. -26 12 0 13 61 -85 15 -69 33Errors and Qnissians -105 -141 63 -36 -187 55 11 -38 -12

G. Net Capital A-cCUnt 85 67 258 165 -13 251 146 147 362

H. Overall Ba1mnCe [F-G) 125 12 -250 27 -243 37 -118 -57 139

I. MToetary Movements -125 -12 250 -27 243 -37 118 57 -139FinarcingDMF (net) 28 31 -12 -5 259 214 122 16 -25

Purthases 259 218 122 38 149eP±pird±ses -12 -5 0 -4 0 -22 -174

Changes in SDR Ho1dings -5 15 -6 -10 17 2 0 16 -12Foreigi Ewhange -68 27 110 -44 0 -35 11 15 -31Paynents Arrears -75 -79 141 35 -34 -208 -57 -4 -71Bilateral Balarces -5 -6 17 -3 1 -10 9 -9 -7S/T Liabilities of B3G 0 33 23 0M/T Liabilities of BCG 7

NOte: Detals inBy nOt add to total due to rarding.Source: Bak of Ghana and Bank staff estimntes.

- 12 7 -

IY3E 3.02: VAUlES CF XIRS BY OJIM CF OMlMM(EermW Shame)

I755 1977 1978 1979 19 l9B1 1982 9833 1984 1985

AfrimNpdla 0.8 0.6 0.2 0.1 0.1 0.0 0.0 0.0 0.0 0.0Gdbia 0.0 0.4 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0tmaD 0.9 0.1 0.2 0.5 0.0 1.1 1.6 17.6 3.0 5.7

SstM1 0.0 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Libiri 0.1 0.3 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0

Elo-chlE lW3 D 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0Ivcxy aLut 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Eblgpt 0.8 0.4 0.5 0.2 0.4 0.4 0.3 0.3 0.4 0.3

0MW 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Zaire 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Af5rks lTMIsl 3.1 2 5 1.5 1.0 0.8 1.5 1.9 18.0 4.5 6.1

hyekCi5S&h 0.7 0.5 0.2 0.1 0.1 0.0 0.0 0.0 0.0 0.1ArxgtJm 0.9 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0tbka3d Statb 13.9 16.5 18.4 7.8 8.8 22.3 20.3 6.7 5.9 11.1

Anrii tAd: 15.5 17.0 18.8 7.9 8.9 22.3 20.4 6.7 5.9 11.2

AiaChimll 1.9 1.7 2.0 1.9 3.1 1.2 2.8 0.0 2.6 4.7HIr rag 0.1 0.0 0.4 0.3 0.0 0.0 0.0 0.0 0.0 0.0?rLzy 0.0 0.1 0.2 0.4 0.7 1.2 0.9 2.6 0.7 1.6Jqxi 8.7 6.8 6.4 9.3 8.4 12.8 7.8 7.4 12.8 13.1

Ais btDals 10.8 8.7 9.0 12.0 12.2 15.3 11.6 10.3 16.2 19.5

EtweUrtbid KkaF 17.7 19.9 17.4 16.4 19.1 10.7 14.5 10.7 21.6 27.5Be1ghsAuLasao q 0.9 0.9 1.3 0.6 0.3 0.6 0.4 0.8 1.0 0.6Pkbrsae 0.7 1.0 0.5 0.9 0.9 0.5 0.5 0.7 1.1 0.8Italy 2.6 2.1 1.5 1.7 1.1 0.7 0.3 3.5 0.4 0.5

FeulwaL 6.1 2.8 2.5 1.7 0.2 1.6 0.6 0.0 0.6 1.3FzwiSa 0.5 0.5 0.5 1.3 0.1 0.0 0.4 1.1 1.4 1.8Newrlmnd 12.5 15.7 20.2 16.5 16.4 12.7 16.4 9.9 1.6 13.7Fed Pmp 10.1 9.3 9.5 10.4 6.8 9.0 9.9 7.1 8.6 8.29Ld4±or3aglt 10.4 7.8 6.2 7.9 17.4 1B.1 16.8 22.5 24.4 0.0U.S.S.L 8.3 11.0 11.1 21.4 15.8 7.0 6.3 8.6 12.8 8.79Lodm ri0.7 0.8 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0

fLzp Tl:s 70.6 71.8 70.7 79.1 78.1 61.0 66.2 65.0 73.4 63.2

GK d IS1a 1C0.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Samme: Qmt ly istp of Statistics, June 1988, pp. 62-63.Qintmwly i4p'W of Sttistkics, Juxt 1986, pp. 63-64.(p""wrlyr t of Statistics, June 1972, pp. 19-20.

I NaR@IIiIIIi

E ii jji 1111Eg | aNgSSlEMRii.E~i MlEE Ige

Table 3.04: VALUES OF IMPORTS BY COUNTRY OF ORIGIN(Percenta;e Share)

CONJTINENTICOUNTRY 1975 1977 1978 1979 1980 1981 19a2 1983 1984 1985

Africa 16.5 17.4 14.3 18.5 26.7 32.9 40.6 18.2 39.9 27.6

Asia 13.3 11.7 10.8 8.8 7.7 7.2 5.0 9.4 8.3 9.3

hericaCanada 2.4 1.7 2.3 2.7 1.0 1.8 0.9 0.8 0.6 0.9Jamica 1.4 0.4 3.3 2.4 3.2 4.6 2.4 1.0 0.0 3.3Argentina 0.0 0.2 0.0 0.3 0.2 0.4 0.5 0.0 0.2 0.0United States 18.4 16.4 12.4 11.5 12.9 11.8 16.2 10.5 6.1 6.3Total 22.2 18.7 18.0 16.9 17.3 18.7 19.9 12.3 6.9 10.5

Ukited Kingdom 17.1 0.0 22.5 21.0 23.2 17.3 15.0 27.1 18.0 27.5Belgium/Luxembourg 2.0 0.1 1.3 1 e 1.2 0.9 2.1 1.2 1.8 1.7Frdnce 4.4 1.5 3.7 3.6 3.3 2.7 2.6 2.3 1.9 2.4Italy 3.0 2.9 4.8 4.2 2.5 2.5 2.9 5.9 4.2 3.6Yugoslavia 0.9 1.1 1.2 1.5 1.0 0.2 0.0 0.3 1.1 0.0Romania 0.2 0.8 1.1 0.3 0.5 0.0 0.3 1.3 0.1 0.3Fed Rep Gernsny 13.0 15.4 14.8 14.3 10.0 11.4 7.0 15.3 12.3 12.59,itzerlarkd 1.4 3.0 5.7 3.3 1.2 1.6 1.1 1.6 1.0 0.8U.S.S.R. 1.2 2.6 0.5 0.4 0.1 0.0 0.1 0.1 0.0 0.0Sweden 1.2 1.0 1.1 0.5 0.6 0.4 0.3 0.5 0.2 0.4Netherlands 3.1 2.2 2.9 2.7 3.0 3.4 1.7 3.6 3.4 2.8Dernark 0.6 0.6 1.1 0.5 0.4 0.3 0.2 0.3 0.3 0.1Norway 3.8 2.4 1.9 1.0 1.2 0.4 1.3 0.6 0.4 0.5Total 51.8 54.5 62.5 55.8 48.3 41.2 34.4 60.1 44.9 52.6

Grand Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Source: Quarterly Digest of Statistics, June 1988, pp. 60-61.Econcanic Survey 1972-74, p. 42.

TABLE 3.05: PETRDLEJM DMPORTS, EXPORTS, AND PRICES

1979 1980 1981 1982 1983 1984 1985 1986 1987

Inports (FOB):Volume (000 Tons) 1220 1016 870 1189 511 884 949 919 1058Value (US$ Millions) 131 227 344 217 204 161 200 125 145

Exports (FOB):Volume (000 Tons) 238 237 224 239 112 124 199 202 169Value (US$ Millions) 21 30 34 34 20 23 33 18 19

Net ILports (FOB):Volume (000 Tons) 982 779 b46 950 399 760 750 717 889Value (US$ Millions) 110 197 310 183 184 138 167 107 126

Retail Prices(cedi/imp. gallon): b/Super Gasoline 7.50 10.50 11.30 12.30 25.00 60.00 105 00 147.500 185.000Regular Gasoline 7.00 10.00 10.30 11.30 21.50 56.00 100.00 145.000 180.000Kerosene 3.50 5.00 5.50 5.00 13.20 35.00 55.00 80.000 110.000

Source:1. Ghana National Petrolemzn Campany2. Ministry of Fuel and Power

Note:a. Import volumes include small quantities of petroleum Troducts.b. As of end-year.

TABLE 3.06: IDNCE NUMFES OF EXPORTrS AND NORMTS(1980 = 100)

ITEM 1980 198i 1982 1983 1984 1985 1986 1987

CPrntity Indices:Exports 100.0 103.0 116.5 82.5 87.0 NA NA NAImports 100.0 112.8 64.7 46.1 23.4 25.9 30.1 NA

Uait Value Indices:Exports 100.0 64.0 49.0 310.0 829.0 1,115.0 2,490.0 3,692.0Imports 100.0 87.5 106.6 420.0 730.0 3,270.0 4,325.6 NkTeDms of Trade 100.0 73.1 46.0 73.8 113.6 34.1 57.6 NA

Source: 190-M86: Quarterly Digest of Statistics, June 1988, p. 54.

TABLE 4.01 GHANA

EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC 31. 1987

INCLUDES ONLY DEBT COMMITTED 000000 - DEC 31, 1987DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS

(IN THOUSANDS OF U.S. DOLLARS)

D E B T O U T S T A N D I N G I N A R R E A R S

DISBURSED : UNDISBURSED : TOTAL : PRINCIPAL : INTEREST

CREDITOR TYPE SUPPLIERS CREDITSCREDITOR COUNTRY

AUSTRALIA 13 - 13 13 4BRAZIL 8.274 - 8.274 1,417 497EGYPT. ARAB REPUBLIC OF 94 - 94 94 24FRANCE 289 - 289 - 4GERMAN DEM. REP. 2,210 8,983 11,193 1,179 106INDIA 4,311 1.100 5,411 - -ITALY 1,4?8 - 1,28 - -JAPAN 9.716 - 9.716 - 120KOREA, REPUBLIC OF 16.510 - 16,510 - --NETHERLANDS 1.833 - 1.833 - 23NORWAV 1,471 - 1,471 - -POLAND 1,308 1,308 -UNITED KINGDOM 31,061 31,061 1,295 444YUGOSLAVIA 6,237 - 6,237 - -

TOTAL SUPPLIERS CREDITS 84.755 10,083 94.838 3.998 1.222

CREDITOR TYPE : FINANCIAL INSTITUTIONSCREDITOR COUNTRY

FRANCE 7,567 8,015 15,582 - -INDIA 3.363 3,363 206 173ITALY 3,816 - 3,B1C - -UNITED KINGDOM 172,709 49.139 221,848 5,745 1,366

TOTAL FINANCIAL INSTITUTIONS 187,455 57,154 244,609 5,951 1.539

CREDITOR TYPE : MULTILATERAL LOANSCREDITOR COUNTRV

AFRICAN DEV. BANK 59,137 73,091 132,228 841 305AFRICAN DEV. FUND 71.909 83,990 155,699 348 38BADEA/ABEDA 9,544 19,000 28,544 105 78ECOWAS 965 - 965 - -EEC 15,000 11,500 26,500 - -EUROPEAN DEV.FUND 28.119 - 28,119 426 21EUROPEAN INVEST BANK 51,908 40,014 91.922 - 12IBRD 151,079 - 151,079 - -IDA 699.716 409,304 1,109.020 - -IFC 30.000 15,000 45.000 - -IMF 58,025 126.264 184,289 - -IMF TRUST FUND 30,187 - 30,187 - -INTL FUND ARG(IFAD) B,200 16,500 24,700 - -OPEC SPECIAL FUND 17,930 10,200 28,130 - -

NOTES: (1) Only debts with an original or extended maturity ot over one yeat are included in this table.(2) Debt outstanding includes principal in arrears but excludes interest in arrears.

TABLE 4.01 GHANA (Continued)

EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNUISBURSED AS OF DEC 31. 1987

INCLUDES ONLV DEBT COMMITTED 000000 - DEC 31. 1987DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS

(IN THOUSANDS OF U.S. DOLLARS)

D E B T O U T S T A N D I N G I N A R R E A R S

DISBURSED : UNDISBURSED TOTAL : PRINCIPAL : INTEREST

CREDITOR TYPE

TOTAL MULTILATERAL LOANS 1.231.719 804.863 2.036.582 1.720 454

CREDITOR TYPE : BILATERAL LOANSCREDITOR COUNTRY

BRAZIL 2.873 - 2,873 - -BULGARIA _ 7.000 7.000 - -CANADA 61.596 289 61.885 2.145 609CHINA - 1.343 1.343 - -CZECHOSLOVAKIA 5.975 - 5.975 _ _DENMARK 3.037 25 3.062 - -FRANCE 39.185 40.701 79.886 156 181GERMANY. FED.REP. OF 282.216 50.453 332.669 2.311 2.436INDIA 2,330 - 2.330 194 207ISRAEL 358 - 358 358 124ITALV - 58.700 58.700 - -JAPAN 17,158 132.454 149.612 - 1.101KUWAIT 33.587 - 33.587 - -NETHERLANDS 35.222 10.584 45.806 1.139 370POLAND 4.547 - 4.547 - -SAUDI ARABIA 18.376 37.382 55.758 - -UNITED KINGDOM 9.512 3.119 12.631 109 39UNITED STATES 172.451 8.192 180.643 348 346USSR 14.755 4.534 19,289 - -

TOTAL BILATERAL LOANS 703,178 354.776 1,057.954 6.760 5.413

TOTAL EXTERNAL DEBT 2.207.107 1.226.876 3,433.983 18.429 8.628

NOTES: (1) Only debts with an original or extended maturity of over one year are included in this table.(2) Debt outstanding includes principal in arrears but excludes interest in afrears.

TABLE 4.01 GHANA (Continued)

EXTERNAL PUBLIC DEBT OUTSTANDING INC:LUDING UNDISBURSED AS OF DEC 31, 1987

INCLUDES ONLV DEBT COMMITTED 000000 - DEC 31. 1987DEBT REPAVABLE IN FOREIGN CURRENCY AND GOODS

(IN THOUSANDS OF U.S. DOLLARS)

D E B T O U T S T A N D I N G I N A R R E A R S

DISBURSED : JNDISBURSED : TOTAL PRINCIPAL : INTEREST

CREDITOR TYPESUPPLIERS CREDITS 84,755 10,083 94.838 3.998 1,222FINANCIAL INSTITUTIONS 187.45E 57.154 244.609 5.951 1.539MULTILATERAL LOANS 1,231.719 804,863 2,036.582 1.720 454BILATERAL LOANS 703.178 354,776 1,057.954 6.760 5.413

TOTAL EXTERNAL DEBT 2,207,107 1,226,876 3,433,983 18.429 8.628

NOTES: ([) Only debts with an original or extended maturity of ojer one year are included in this table.(2) Debt outstanding includes principal in arrears but ex-ludes interest in a'rears.

TABLE 4.02 - GHANA

SERVICE PAYMENTS, COMMITMENTS. DISBURSEMENTS AND OUTSTANDING AMOUNTS OF EXTERNAL PUBLIC DEBTPROJECTIONS BASED ON DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC 31. 1987

INCLUDES ONLY DEBT COMMITTED 000000 - DEC 31, 1987

DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS

(IN T11OUSANDS OF U.S DOLLARS)* * * TABLE TOTAL * * o

DATE DEBT OUTSTANDING AT r R A N S A C T I 0 N S D U R I N G P E R I 0 D OTHER CHANGES

END OF PERIOD

DISBURSED INCLUDING COMMIT- DISBURSE- : S E R V I C E P A Y M E N T S CANCEL- ADJUST-ONLY UNDISBURSED MENTS MENTS ------------ ----------- : LATIONS * MENT *-

: : PRINCIPAL INTEREST TOTAL: (1) (2) (3) (4) (5) (6) (7) (8) (9)

197412 702.040 789.926 44.806 31,060 14.070 12.982 27.052 2.298 -

197512 668.205 291.451 170,067 31.077 35.002 t9.354 54,356 258 -61.191197612 659.161 940.684 103.239 44.835 33.532 18.675 52.207 100 -20.980197712 780.831 1.187.219 218.536 100.418 19.719 15.549 35.268 333 48.051197812 855.680 1,276.126 113.189 113.041 41.405 23.882 65.287 667 17.790197912 989.571 1.434.358 167.603 153,982 40.515 29.981 70.496 - 31.144198012 1,128,163 1.559.550 198.568 197.914 70.766 30.196 100,962 1.157 -1.453198112 1.135.189 1.559,066 139.860 114.0C2 33.457 26.374 59.831 82 -106.805198212 1.152.193 1.603.631 148.978 97.817 39.486 28.993 68.479 3.349 -61.578198312 1,208,250 1.590.780 126.735 172.878 66.650 44.812 111.462 128 -72.808198412 1.161,933 1.615.487 229.694 117.7EO 71.595 29,663 101.258 926 -132.466198512 1.293,603 2.078.084 465,635 182.8C9 74.143 31.212 105.355 110.336 181.441198612 1,683.000 2.515.574 337,993 363.7E7 94.057 42.369 136.426 5.610 199.164198712 2,202,005 3.435.001 630.294 359,0,6 116,709 56.195 172,904 20.326 426.168

* * * THE FOLLOWINC FIGURES ARE PROJECTED * * *

198812 2.436.496 3.227.921 - 428.3,6 173.582 73.646 247,228 11.895 -21.603198912 2,557.510 3.052,981 - 295.9f0 173,394 72.216 245.610 - -1.546199012 2,626.360 2.905,374 - 216.4'2 146,041 69.199 215.240 - -1.566199112 2,642,731 2,788.537 - 133.2(2 115,256 66.139 181.395 - -1.5811Y9212 2,585,779 2.662.379 - 69.2(4 124,646 62.192 186.838 - -1.512199312 2,481,645 2.521,129 - 37.116 141.239 57,284 198,523 - -11199412 2.372.182 2.387,600 - 24.0iO 133.525 52.150 185,675 - -4199512 2.240,426 2,244.852 - 10.9't 142.737 47,715 190.452 - -11199612 2.091.801 2.092.555 - 3.6-4 152.304 42.796 195.100 - 7199712 1.942.246 1,942.362 - 6'8 150,181 37.889 188.070 - -12199812 1.831.171 1.831.287 - - 111.070 33.576 144,646 - -5199912 i.725.444 1.725.560 - - 105.715 29.681 ¶35.396 - -12200012 1,625.815 1.625,930 - - 99.632 26.192 125.824 - 2200112 1.547.951 1.548.066 - 77.858 23.387 101.245 - -6200212 1.472.989 1.473.104 - - 74.972 21,282 96.254 - 10200312 1.400.102 1.400.209 - - 72.888 19,306 92.194 - -7200412 1.327.831 1.327,938 - - 72.270 17.372 89.642 - -1200512 1.258.310 1.258,417 - - 69.513 15.449 84.962 - -8200612 1.196.79, 1,196.904 - - 61.511 13.723 75.234 - -2200712 1.141.335 1,14i.441 - - 55.457 12,511 67.968 -

Projected amounts in this coluimni aw-e amounr)ts excluded from projections because of unknown terms.

** ihis column shows the amount of arithmetic imbalance in the amount outstanding Including undisbursed from one period to

the next The most common causes of Imbalances are charges in exchange rates and transfers of debts from one categoryto another in the table,

TAERE 5.01: S¶1+WY OF CENRIAL GCVERra-.N FIANDES(Millions of Cedis)

ThEM 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982 1983 1984 1985 1986 1987

1Tb1 Feex-a ard Grants: 815 1075 1539 2188 3026 3279 4545 5252 10241 22641 40311 73625 111046- Tax PIverae: 655 917 1543 1605 2823 2969 4188 4439 8434 17830 31841 61587 95400

*l aes m lnvxn ard Property 203 233 304 383 611 854 1339 1502 1730 4014 7704 14633 23396*lTxes aErijmetcGoods and Service 238 346 403 416 832 1410 1913 2148 1757 5590 8373 19858 26990* Taxes on Intermtiaul Trasatimns 214 338 836 806 1380 706 937 789 4948 8227 15764 27096 45015

- Nibtax Rev81e 105 97 140 191 203 265 309 761 1750 3897 6850 8170 9609- Gaffits 0 0 1 0 0 45 48 52 57 914 1620 3868 6037

E&iq iitmre: 1439 1945 3018 4094 4672 7719 8844 9220 15175 27485 47891 70659 99135- Purnreit: 997 1308 2322 3335 4077 6329 7917 8029 13564 23326 38461 60833 80583

* Weges and Salaries - - - - - - - 2082 3743 5282 14524 26194 35920

441 637 695 760 595 1390 927 817 1192 3368 7303 9826 18552

31±t laxibqg 273 250 276 247 115 267 361 374 420 791 2127 2667 4852Swecial Efficiency 300

Current kxAount Deficit -183 -233 -783 -1147 -1051 -3050 -3372 -2777 -3323 -685 1850 12792 30463

OC,era1 bxiut Deficit -897 -1120 -1754 -2154 -1760 -4707 -4659 -3968 -4934 -4844 -7580 299 4059

Fimiwxing: 897 1120 1754 2154 1760 4707 4659 3967 4934 4844 7580 -299 -4059- Intelai Lnas 1060 942 1904 1045 1470 4225 5614 3752 4247 3028 4058 5315 -2879

of tidch Bank of Gana 605 646 1437 419 380 3226 1809 434 455 0 2083 -180 -5875- Etermnl Lnis (net) -1 5 -6 -8 290 482 0 215 687 1816 3522 -5614 -1180- thier Receipts -163 174 -144 1117 0 0 -955 0 0 0 0 0 0

Scnme: 1978/79-87: Qiarterly DiC st of Statistics, June 1987, p. 38 and hne 1988, p. 38; and IF. Recint Fcxxinic Deelqprwit, April 22. 1987.1975/76-1977/78: DW Report, SMV83/161, July 1983; 'obrld Bank Report Nb. 3072GH, February 1981.

Nbte: 1979/80-1987 fignes are prelimdnary actmls and subject to revisin.

TABLE 5.02: 993M CF GNEMM REVFNE AND CANS(a111il s of Cedis)

TIEM 1975/76 1976/77 1977/78 1978/79 1579180 1980/81 1981182 1982 1983 19B4 1985 1986 1987

Total Reve 815 1075 1538 2188 3026 3234 4497 5200 10184 21727 38691 69757 105009

Tax Pevem.: 710 979 1398 1997 2821 2969 4188 4440 8435 17830 31841 61587 95400- Txes oa In e, Prufits: 198 225 298 381 604 446 906 971 105 2907 5753 11150 17960

* 1a1ies 5 122 127 169 296 384 619 664 755 2122 4573 9658 14381* Individals 84 104 171 212 308 62 287 307 350 785 180 1492 3579

-Payril T8xes 3 2 2 2 2 322 387 441 527 911 1858 3198 4550-Txes an Prqperty: 2 6 3 - - 86 46 90 98 196 93 285 886

* Pfw ty Taws 0 4 2 - - 4 10 9 12 8 25 58 62* Othrs 1/ 2 2 2 - 5 82 36 81 86 188 69 228 824

- mes Dx Ikestic Goods, Services: 238 346 403 416 826 1410 1913 2148 1757 5590 8373 1985 269901 Saq, Purchase Tax53 65 72 86 106 179 196 280 193 441 L176 2548 8363* Select Fidse an Goods 183 276 324 330 720 1037 1521 1503 1520 5054 7197 10465 12804* Selwt E] ise on Services 2 4 7 - - 194 196 365 45 95 0 6845 5823

- Taxes an intematicmsl Trade: 269 400 691 1196 1390 706 937 789 4948 8227 15764 27096 45015*• iprtDuties: 82 123 395 355 447 463 769 570 1852 3189 6376 12521 17556

** stan Dut ies 46 74 386 355 361 443 668 494 1407 2494 4786 9561 12724* Otber leprt kties Goods 35 49 9 - 86 20 102 77 445 695 1591 2960 4832

* E4port D.ties: 188 277 286 843 926 2 6 2 2935 4874 9172 14170 27019** Coa 180 269 278 835 920 - - - 2800 4509 8861 13901 26996**0Other E5qxxt i. es Gods 8 8 8 8 6 2 6 2 135 365 312 270 23

* Othr Taces Ietratil Trde - - 10 0 16 241 161 217 161 164 215 405 440

Nm-Thx Reiete: 105 97 140 191 205 265 309 760 1750 3897 6850 8170 9609-Sa of Goods, Fees, etc. 12 24 26 26 44 38 113 204 262 736 - - -

- Pruerty Inane: 86 67 109 158 145 195 182 391 915 2509 - - -

* Prom Public Ehterprises 79 43 55 156 145 190 179 385 906 2500 - - -* HS, Royalties, Itrest 8 24 54 2 0 5 3 6 8 9 - - -

- TrEfers frm tr lel Govt. 0 0 1 2 1 - - - - - - - -

-Odw Non-Mw Pa R e 8 5 4 5 14 32 14 165 573 652 - - -

Forei4 Grants - - 1 - - 45 48 52 57 914 1620 3868 6037

Tltal Revenue ani Grats: 815 1075 1539 2188 3026 3279 4545 5252 10241 22641 40311 73625 11046

Saure: 1978/79-87: Q-arterly DiWst of Statistics, June 1987, p. 38 ard June 1988, p. 38.1975/76-1977/78: IM IPport, 91/83/161, July 1983; 'vbrld Bar* Report N.a. 3072Cl, February 1981.

Note: 1979/80-1987 figures are preliminary actuals, distrilutim betwcm re9ee categories neay rot reflect nDst recent revisims in budget actnals.

TABLE 5.03: RI1JFRENr EXPNENDITURES, FICMOWL CLASSMFICATICN(Millions of Cedis)

Illm 1975176 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982 1983 1984 1985 19B6

A. Gerral Services:General Adninistratinm 150 178 315 412 490 1248 965 1285 2829 4017 7382 7931Defense 86 80 129 175 125 332 490 439 648 1459 2664 3795Justice s Police 54 68 126 151 186 245 320 327 531 1149 2570 3832ltwtl: 290 326 570 738 800 1824 1775 2050 4009 6624 12616 15559

B. (mmnziity Servioes:Hmds and Vbterwrys 37 20 42 53 81 90 132 123 178 423 376 616Fire Protection, Ihter 9applyand Sanitation 12 13 23 122 242 377 316 738 618 1111 2204 3751

Otier Ccminity Serices 15 16 36 64 45 124 83 74 246 516 631 1009Tbtal: 63 49 101 239 368 590 530 935 1042 2050 3211 5376

C. Sa:ial Services:FAication 254 314 553 846 965 1242 1696 1704 2883 5251 9803 16247IHa1th 87 117 204 304 278 418 501 486 587 2112 3765 5407Social Senurity, W.1fare 94 78 63 82 242 -7 316 738 618 1111 2204 3751 -Ofihr Social Services 28 31 60 69 84 135 155 153 190 331 416 618Tbtal: 463 540 880 1300 1569 1788 2669 3081 4278 8805 16188 26023

D. Ekxxzanic Services:Agriculture and Mn-Mirwral Regairces 70 126 344 390 487 680 803 828 1389 936 1276 2121FUel and Power 1 1 6 2 2 2 3 3 19 33 33 44Ot1her Minmral Resources,

Ml'afacturing, Cmstnrtimn 27 28 51 55 82 98 101 104 213 488 531 932TiraEport, Storage, CAnn 6 18 47 69 78 103 100 99 211 301 621 1302Otbher Eanic Services 4 2 3 5 3 3 4 4 191 360 524 693

Tbtal: lOB 174 450 520 652 886 1012 1037 2023 2118 2985 5092

E. IbauLocabl- Exqaxnditure:Gei Transfer to Incal Govt. 31 44 80 106 154 2)3 274 309 464 789 580 1256OtIer 100 177 242 514 726 1021 1973 2168 2204 3425 5086 11341

Total: 132 220 321 620 880 1234 2247 2477 2668 4214 5666 12597

Statistical Discrepany -59 0 0 -82 -192 8 -316 -1552 -455 -485 -2204 -3813

Grl 1d Total 997 1308 2322 3335 4077 6329 7917 8029 13564 23326 38461 60833

Sonce: Quarterly Digest of Statistics, Decmber 1987, pp. 41-42

ik*1e: 1979/80-1987 figures are preliminary actuals and subject to revisim.

TAELE 5.04: ED0XNI[C CLASSIFIICATICN OF CEKXRAL GOVEhRNT CURREN EXPENDMiUMS

(Milliins of Cedis)

1975(76 1976177 1977178 1978/79 1979/80 1980/81 1981/82 1982 1983 1984 1985 1986 1987

Ot krIt In: 767 858 1497 1994 2153 3605 4079 4343 7057 14955 27057 39620 54091- Ct pqsatim of BrToyees 425 453 823 1222 1246 2268 2297 2299 3736 5262 14891 27786 38287- Otder GCds and Services 315 365 598 746 882 1301 1743 2004 3241 9609 11948 11543 15321- C it ies - - - - - - - - - - - - _

- MUlitury Epxditure 18 25 12 0 0 0 0 0 0 0 0 0 0- FiEnt 10 15 64 26 26 37 39 40 79 84 217 291 483

Tragfwers: 289 503 867 1322 1926 2690 3799 4457 6272 7659 11315 21158 26481- tkdtic Sectors 184 317 620 797 1175 1648 1802 2266 3775 3892 5750 9033 15518- Interest en Gewnral Debt 100 177 242 514 725 1022 1973 2168 2204 3425 5086 11341 10587- Abimd 5 9 5 U 26 20 23 22 293 342 479 784 376

Statistical Discr'erx-y -59 -53 -42 19 -3 34 39 -771 235 712 90 55 11

itala Qwrent Bq)u&iiture 997 1308 2322 3335 4077 6329 7917 8029 13564 23326 38461 60833 80583

Source: Quarterly Digest of Statistics, Jun 1988, pp. 39-40.

EFxxrmic SuRvey, 1977-80, p. 280.

Nbte: 1979/80-1987 figures are previsiomal and subject to revisinn.

Figues are mzxx?d.

TABLE 5.05: IEVEIL2 FMfN EXPENDI1ES, R CTICNAL CLASSIFICAfCTIN

(Ailliais of Cedis)

ITEM 1975/76 1976177 1977/78 1978/79 1979/80 1980/81 1981/82 1982 1983 1984 3.8 1986 1987

A. General Services-Gargal Aninistratkm 124 90 98 127 117 i1n 104 38 60 653 1069 127 3158DrffAue 6 32 28 35 50 156 97 25 25 147 322 810 0Anite ad oice 11 14 17 20 5 24 g 11 15 27 73 205 0

Total: 141 135 143 182 172 291 210 74 100 827 1464 2312 3158

B. Oumzdty Services:kBias and Wvternays 75 130 151 123 104 290 209 261 740 1467 2175 2053 6869Fire Prntectimk, Ihter 9up1y

and Saitatim 28 39 42 36 34 102 50 27 54 260 420 748 428Otber Cuiidty Services 8 13 13 18 18 0 15 14

Tct±al: 11i~ 182 206 177 157 392 274 302 794 1727 2594 2801 7297

C. Social Servces:F,lrtjjxi 67 103 1,%7 Lb-1 61 77 82 90 130 136 402 658 1686Hml1th 31 42 53 63 47 75 48 53 60 158 233 447 21.53 Social Security, liefare 6 10 9 1 2 7 5 6 10 20 28 26 109OtberSocua1Servdces 32 50 44 37 14 45 22 8 14 83 169 183 0 C)

Total: 137 205 214 215 124 205 158 157 215 397 832 1313 3948

D. Exxanun Services:Agriculture "i Nkm-Mineral Reso.urces 37 66 83 97 84 262 166 135 147 384 664 1079 1227Fuel nd Pcr 2 2 4 10 3 12 12 1 6 61 111 31 574Other Mineral Resources

Mau~facturing,Gcinstnx±ticn 6 23 11 34 21 66 51 21 38 176 78 162 748Transport, Storage Calm. 5 16 16 22 14 142 51 22 36 216 1195 1463 1550Other Fxnianic Services 3 6 16 8 8 10 1 1 18 203 365 664 50

Total: 53 115 131 170 129 491 281 180 246 1041 2413 3400 4149

E. Thflnocable Expaditure:Gm iTaufer toLIcal Govt. - 0 1 16 L.2 12 4 5 - - - - -Otber - - - - - - -. 219 - -- - -

Total: 0 1 16 12 12 4 223

Stafistical Discr'epancy -1.19 -162 -62

Grard otal 441 637 695 760 595 1390 927 817 1192 3368 7303 9826 18552

Source: Quarterly Digest of Statistics, June 1968, p. 42.Quarterly Digest of Statistics, Jiz 1986, p. 43.

t&fte: 1979/80-1967 figuires are preliminary actuals and subject to revision.

TAIE 5.06: (CENhAL M1VE NrET: I X) D IMC AN) RFEIG

(Domestic IDbt in Millims of Gedis; 1976-82: Ehd Jun; 1983-87: Ehi December)

(Forei. Debt in Mi] Liuu of lS$; Eai Deeubr)

1975 1976 1977 1Q78 1979 1980 1981 1982 1983 1984 1985 1986 1987 Bxd Jue

Pimv. Rev. 1988

Izestic Dbt: 1441 2306 3768 6184 6696 9341 11.846 17488 29315 3290B 37766 50686 47908 52116

I*etary Authrities 698 1235 2255 4222 4184 5607 7334 9156 16747 19861 21634 27267 23954 18260

Ciamcial Bls 104 208 434 533 891 1321 1604 3016 4894 4535 5210 5238 6200 6130

Saxzxbryfm B s 77 107 127 151 219 367 570 1077 1764 1481 3483 8013 6074 4958

Social Security FI 324 477 585 724 873 1061 1270 1480 1951 2388 2899 6100 7326 12835

Priwte Sector 109 172 270 420 398 788 889 2552 3036 3094 3144 2880 3380 9420

PEkic Ehterprises 130 107 97 135 131 177 179 207 923 1529 1397 1189 974 512

(filliau of {ES$, i EdDmber)

Ftxeig Det: 668 659 781 856 990 1128 1135 1152 1208 1162 1294 1683 2202 -

hSamatia-ml [Selqnwt Ixntit. 83 100 142 194 268 341 376 404 423 449 581 825 1232 -

Bilaterl Debt 479 486 522 520 570 650 646 637 643 586 553 621 698 -

lie1imsI CrnKits 96 66 110 112 121 130 106 89 8' 70 97 88 85 -

Fikmuiallastiutias 10 8 8 30 30 7 7 22 54 56 62 149 1,7 -

S&urr: Dnestic Debt: BB* of lau; Foreig Debt: IBD.

TAME 5.07: CEN1RAL GVM1T 1T: DM=C

('1illims of Gedis; Eri of Period)

DEM 1975 1976 1977 1978 1979 198C 1981 1982 1983 1984 1985 1986 1987 1988

By HDbidirgs:

Bat of (Gha 590 1235 2255 4222 4184 5607 7334 9156 16747 19881 21634 27267 23954 18260

Cam( rcial Baks 103 208 434 533 891 1321 1604 3016 4894 4535 5210 5A38 6200 6130

Saomdary Bais 65 115 167 171 354 479 984 1764 1481 3483 8J13 6074 4958

S.S.N.I.T. 477 585 724 873 1081 1270 1480 1951 2388 2899 6100 7326 12B35

Private Setor and Ptlic lterprises 757 321 379 538 578 978 1159 2852 3959 4623 4541 4069 4354 9933

fttal DXuestic Det 1268 2306 3768 6184 6696 9341 11846 17488 29315 32908 37766 50686 47908 52116

By Type:

A. Srt Teu

Wiys ad Meis Akhxnes - 50 0 200 273 660 660 614 1816 1800 1800 1800 1800 1B00

Treasury Bills - 323 323 434 823 1111 1137 1787 3475 3475 3811 4675 6378 13487

Gwveumit. Oirzet AEcont - - - 345 33 294 - - - 859 3188 9102 6627 3221

Sib-Total: - 373 323 980 1126 2064 1797 2401 5291 6135 8799 15578 14805 18508

B. lmg Tern:Campsatory Stoxks - 9 8 8 8 7 7 7 6 5 5 5 5 5

Stocks ad Bmls - 1889 3401 5161 5527 7234 10007 13786 22790 25652 27873 34078 32074 32578

CI.B. Loms - 21 21 21 21 21 21 21 21 21 21 21 21 21

RaihsyLoan - 9 9 9 9 9 9 9 9 9 9 9 9 9

Caipnisory Savirgs - 7 7 7 6 6 6 6 6 6 6 6 6 6

Others - - - - - - - - 1194 1081 1055 991 990 990

SLt-Total: - 1933 3445 5204 5570 7276 10050 15087 24024 26M 28967 35108 33104 33608

Total Shaft, ImLg Tern: - 2306 3768 6184 6696 9341 11846 17488 29315 32908 37766 50686 47908 52116

Sourre: Bak of (uila, Research Department, May 24. 1988.

EFxmnic Sunvey, 1977-80, p. 216.

N!te: Suitotal in 1982 inclxdes also 1258.8 millin (edis frm other oars.

Figures are runxzed.

TABLE 6.01: SUMMARY ACCOUNTS OF THE BANKIN SYSTEM(Millions of Cedis; Ehd Period)

Sept1975 1980 1981 1982 1983 1984 1985 1986 1987 1988

Net Foreign Assets: 136 -358 -1160 -1024 -16676 -31440 -48702 -130656 -141707 -146244Banking System 188 477 24 238 4031 9146 4610 5327 11140 9489Net INF Position -52 -119 -78 -59 -8405 -23388 -39359 -113344 -137005 -139251Post-1972 Payment Arrears - -537 -955 -1051 -10399 -15402 -12263 -18571 -10516 -11148Pre-1972 Payment Arrears - -75 -54 -54 -335 -392 -209 - - -Participation Arrears - -104 -97 -98 -1568 -1404 -1481 -4068 -5326 -5334

Net Donestic Assets: 1280 8404 12943 16004 22601 39237 66464 94590 105334 93023Claims on Government 903 6526 10655 11064 21059 24170 27176 29647 22220 17780Claims on Public Entities 101 400 441 527 813 676 4795 5274 8610 9128Cocoa Financing 188 1559 2950 5553 521 3580 13545 16889 16471 -Claims on Non-Bank Fin. 72 74 107 129 200 897 13 - - -Claims on Private Sector 865 943 1345 1562 2841 12153 21178 37455 46945 57706Net Other Assets -849 -1098 -2555 -2831 -2833 -2239 -243 5325 11088 8409

Revaluation Account 16158 29930 41884 133135 179768 206880

Mbmey and Quasi Mamey: 1374 7938 11637 14834 20495 34621 55625 85937 132263 142526MM"ey 991 6087 9415 11205 16411 27370 43950 65816 95042 101059Quasi4-aney 384 1851 2222 3629 4084 7251 11675 20121 37221 41468

SDR Allocation 42 108 146 146 1588 3106 4021 11132 11132 11132

Source: Bank of Ghana; IMF Reports, 1973-83.

Note:1. For 1971-75. Net Foreign Assets valued at 1 Cedi = SDR 0.71842.2. The series after 1978 is not strictly comiparable with

that of the preceding period because prior data on arrears' paymentsdid not include arrears on service payment.

3. Excludes secondary banks up to 1983.

TABLE 6.02: C)NSOLIDlATED BALANCE SHEET OF THE BANKING SYSTEM(Ilillion of Cedis at End Period)

Sept1975 1980 1981 1982 1983 1984 1985 1986 1987 1988

ASSETS: 1745.4 9962.1 -5393.0 18929.9 31535.7 39395.8 60589.7 89133.7 106713.5 98732.21. Net Credit to Government 938.7 6940.4 !0949.6 11341.1 21794.1 16319.2 27566.2 29677.7 22357.1 19530.3

A. By Banking System 964.5 6522.2 -0499.1 10942.8 22057.9 24100.9 27566.2 29677.7 22357.1 19530.3* By Bank of Ghana 863.6 5452.9 8811.5 8183.9 16195.8 18551.8 20644.7 20464.4 14589.4 9828.0* By Cmnercial Banks 100.9 1069.3 1687.6 2758.9 5862.1 5549.1 6921.5 9213.3 7767.7 9702.3

B. Net Use of IMF Resources -25.8 418.2 450.5 398.3 -263.8 -7781.7 0.0 0.0 0.0 0.02. Credit to Rest of Public Sector 190.2 582.4 590.7 707.6 1406.7 2221.7 6120.5 8823.0 11977.4 14892.0

A. By Bank of Ghana 78.1 196.9 175.2 205.8 287.6 1080.1 2797.1 3718.5 5740.2 6674.0B. By Commercial Banks 112.1 385.5 415.5 501.8 1119.1 1141.6 3323.4 5104.5 6237.2 8218.0

3. Credit for Cocoa Financing 185.0 1559.0 2949.7 5552.9 523.4 3579.5 14520.1 16888.3 16480.7 -A. By Bank of Ghana 85.0 1328.6 2162.6 4937.1 115.0 3430.0 12515.6 15807.0 14164.0B. By Ccaiercial Banks 100.0 230.4 787.1 615.8 408.4 149.5 2004.5 1081.3 2316.7 -

4. Credit to the Private Sector 298.0 939.6 1341.6 1557.4 5248.9 11086.4 19798.6 36459.9 47706.8 56687.8A. By Commercial Banks 298.0 939.6 1341.6 1557.4 5248.9 11086.4 19798.6 36459.9 47706.8 56687.8

5. Overseas Assets (Net) 133.5 -59.3 -438.6 -229.1 2562.6 6189.0 -7415.7 -2715.2 8191.5 7622.1A. With Banking System 187.2 475.6 16.9 172.4 3122.3 6647.1 7127.9 12234.1 17216.6 7057.6

* With Bank of Ghana 191.5 531.8 152.5 327.5 3365.5 7e53.3 10398.3 16798.3 25640.0 16266.3* With Ccmercial Banks -4.3 -56.2 -135.6 -155.1 -243.2 -1206.2 -3270.4 -4564.2 -8423.4 -9208.7

B. Net Use of IMF Credit -53.7 -534.9 -455.5 -401.5 -559.7 -458.1 -14543.6 -14949.3 -9025.1 564.5

LIABILITIES: 1745.4 9962.1 .5393.0 18929.9 31535.7 39395.8 60589.7 89133.7 106713.5 98732.21. Money Supply 990.9 6087.0 9415.0 11205.0 16411.0 27370.0 43950.0 65815.7 95042.0 101058.5

A. Currency with Public 506.9 2659.4 3324.6 4477.7 6377.1 14947.7 26708.8 34575.5 46117.0 43603.4B. Denand Deposit 484.0 3427.6 6090.4 6727.3 10033.9 12422.3 17241.2 31240.2 48925.0 57455.1

2. Quasi-Mmney 383.5 1851.2 2221.6 3629.3 4084.3 7250.7 11674.6 20121.4 37221.1 41467.9A. Savings Deposits 269.6 1763.5 2124.5 3566.7 3988.6 6054.1 8832.2 14140.8 22238.9 26353.0B. Time Deposits 113.9 87.7 97.1 62.6 95.7 1196.6 2842.4 5980.6 14982.2 15114.9

3. Other Liabilities 371.0 2023.9 3756.4 4095.6 11040.4 4775.1 4965.1 3196.6 -25549.6 -43794.2

Source: Bank of Ghana.

Note: - Figures for net IMF accounts have been revised frcxn February 1972to reflect adjustment in the exchange rate of the Oedi in February 1972.

- Excludes secondary banks up to 1983.

TABLE 6.03: AS:;ETS AND LIABILITIES OF THE BANK OF GHANA(rl41ions of Cedis at End Period)

Sept1975 1980 1981 1982 1983 1984 1985 1986 1987 1988

ASSETS

Foreign Assets: 197.6 547.8 554.9 570.4 6452.1 19549.8 31703.4 91837.2 57663.0 67730.9Gold 7.8 47.3 132.5 134.2 2175.0 4584.2 2764.5 11643.8 14342.4 19840.8SDR Holdings 11.4 7.9 25.0 51.6 70.0 2.4 1087.9 293.9 3025.9 1244.9Foreign Currency Balance w/Bank 113.4 391.3 336.1 348.0 3911.6 14028.6 26922.4 76386.1 29595.6 35255.9Foreign Securities 43.5 55.5 54.8 27.0 260.0 358.5 482.1 1223.5 1808.9 2125.3Other 21.5 45.8 6.5 9.6 35.5 576.1 446.5 2289.9 8890.2 9264.0

Claims on Government: 902.2 5607.2 '369.0 10067.3 16734.3 19880.7 21633.8 27267.2 23463.0 17838.7Ghana Stocks 591.1 4637.5 7711.6 9167.2 13564.7 16665.8 16631.5 16282.7 14567.3 13476.6Treasury Bills 29.6 16.0 19.1 286.3 1353.6 555.5 14.6 82.1 469.0 110.3Loans and Advances 117.7 953.8 [638.3 613.8 1816.0 2659.4 4987.7 10902.4 8426.7 4251.8

Claims on Public Institutions: 90.8 1346.5 '244.1 5019.9 222.6 3556.4 12666.1 15975.7 15107.1 885.9Bills Discounted 85.0 770.0 [151.0 863.0 115.0 3430.0 12170.0 15807.0 14164.0 -Other 5.8 576.5 L093.1 4156.9 107.6 126.4 496.1 168.7 943.1 885.9

Claims on Financial Institutions: 75.2 84.0 93.6 123.0 234.2 953.7 2646.6 3549.8 4707.4 5717.6Commercial Banks 3.0 6.0 22.8 22.7 22.1 23.1 22.1 22.1 25.8 -Development Banks 72.2 78.0 70.8 100.3 212.1 930.6 2624.5 3527.7 4681.6 -

Other Assets 241.9 599.9 312.0 1642.7 17476.0 21563.4 23434.8 46863.0 59572.2 212706.2

TOTAL ASSETS 1507.7 8185.4 1'573.6 17423.3 41119.2 65504.0 92084.7 185492.9 160512.7 304879.3

LIABILITIES

Currency in Circulation: 524.4 3897.0 i552.0 7488.0 11435.0 16234.4 25326.5 34734.7 52981.7 51250.8Notes 510.3 3857.4 i497.2 7400.0 11356.0 16159.6 24989.8 34605.3 52822.2 51250.8Coins 14.1 39.6 54.8 88.0 79.0 74.8 336.7 129.4 159.5 -

Deposits: 622.3 2576.1 3631.6 6424.0 16341.4 18857.9 20191.9 43254.4 46463.2 42734.9Ccmmercial Banks 325.9 1371.1 1989.9 2288.8 1307.4 2047.3 1732.7 7442.2 3963.7 5284.3Development Banks 17.7 391.4 360.7 331.9 510.3 304.5 1725.8 3037.7 6310.8 4476.3Other Financial Institutions 0.1 0.2 -0.4 - - - - - -Public Institutions 10.7 55.5 25.0 102.0 539.0 135.9 784.5 2034.5 3693.5 6836.9Government 118.2 271.0 557.4 1884.0 538.0 1328.9 989.1 6802.8 8873.6 8167.4Special Deposits 149.7 486.9 699.0 1817.3 13446.1 15041.3 14959.8 23937.2 23621.6 17929.2Private 40.8

Foreign Liabilities 6.2 17.2 400.5 243.0 3910.0 19936.3 35849.0 89988.2 41048.1 190017.1Capital and Reserves 168.9 572.1 117.3 144.8 3943.5 5077.4 6656.9 14152.6 15880.4 17260.4Other Liabilities 11 185.9 1123.0 1872.2 3123.5 5490.3 5398.0 4060.4 3363.0 4139.3 3616.1

TOTAL LIABILITIES: 1507.7 8185.4 12573.6 17423.3 41120.2 65504.0 '084.7 185492.9 160512.7 304879.3

Source: Bank of Ghana

1/ Includes revaluation.

TABLE 6.04: ASSETS AND LIABILITIES OF PRIMARY BANKS 1/(Million of Cedis at End Period)

Se t1975 1980 1981 1982 1983 1984 1985 1986 1987 1988

ASSETS

Cash Reserves: 371.5 1850.6 1950.9 3365.9 4341.0 8788.2 10848.1 11350.5 10264.4 15939.0Ghana Currency 36.8 375.7 357.2 531.1 1046.0 1709.2 2769.1 2387.1 4002.7 5679.0

Balance at Bank of Ghana 332.7 1474.9 1593.7 2834.8 3295.0 7079.0 8079.0 8963.4 6261.7 10260.0

Foreign Assets 0.2 2.3 10.7 10.0 917.4 461.9 449.0 383.4 4785.6 435'.1

Claims on Government: 158.3 1300.6 1643.4 3030.3 4863.0 4443.9 5206.2 6199.9 5927.6 8491.9

Stocks and Bonds 116.0 711.2 1060.9 2041.1 3874.0 3317.0 3893.9 4888.0 4886.0 4886.0

Treasury Bills 42.8 589.4 582.5 989.2 989.0 1126.9 1312.3 1311.9 1041.6 3605.9

Claims on Public Institutions: 107.1 35.0 22.0 419.9 403.0 0.2 1744.3 177.6 260.0 4544.6Bills Discounted: 107.1 35.0 22.0 419.9 403.0 0.2 1744.3 177.6 260.0 0.0

Cocoa Bills 99.5 29.7 9.7 419.9 403.0 0.0 159'.0 0.0 0.0 -Other Bills 7.6 5.3 12.3 - - 0.2 150.3 177.6 260.0 -

Loans and Advances 4336.7

Others 207.9

Claims on Private Sector: 403.0 1517.2 1888.1 2281.0 3636.1 6756.0 12666.0 22673.4 28291.7 30188.4

Loans and Advances 403.0 1517.2 1888.1 2281.0 3636.1 6756.0 12666.0 22673.4 28291.7 30127.0Other (Investment) 61.4

Other Assets 194.9 909.1 1553.5 4060.6 4992.5 7520.2 9254.0 26262.1 51007.1 65946.8

TOTAL ASSETS 1235.5 5614.8 7368.6 13167.7 19153.0 27970.4 40167.6 67046.9 100536.4 129464.8

LIABILITIES

Private Sector Deposits: 711.3 3635.8 3895.6 6285.9 8416.3 11667.8 18117.5 27287.9 41071.0 45565.8Demand Deposits 351.1 1795.9 1688.8 2671.5 4365.1 6563.0 9738.7 13397.3 18150.9 20842.5

Savings Deposits 266.0 1758.4 2118.5 3561.3 3984.9 4777.5 6888.4 10938.8 17512.9 19364.2

Time Deposits 94.2 81.5 88.3 53.1 66.3 327.3 1490.4 2951.8 5407.2 5359.1

Public Sector Deposits: 160.8 305.4 453.7 1392.4 1145.0 2239.0 3527.7 4399.7 7309.1 10705.6Demand Deposits 137.5 294.1 438.9 1377.5 1111.9 2215.1 3501.4 4338.8 7028.2 8661.3

Savins Deposits 3.6 5.1 6.0 5.4 3.7 5.1 5.9 15.6 59.9 79.6

Tima Deposits 19.7 6.2 8.8 9.5 29.4 18.8 20.4 45.3 221.0 1964.7

Goverrment Deposits 57.9 241.7 304.7 272.9 552.5 601.3 989.4 1309.9 1847.4 2338.5Foreign Liabilities 4.4 58.5 30.4 165.2 255.4 613.3 2298.4 2566.5 8657.0 16157.4Credit from Bank of Ghana - - - - - - - 0.4 - -Paid-up Capital, Reserves 56.7 216.2 195.3 525.0 2085.0 3576.6 5145.9 9122.4 14934.9 10673.7Other Liabilities 244.4 1157.2 2188.9 4526.3 6698.8 9272.4 10088.7 22360.1 28206.1 44023.8

TOTAL LIABILITIES 1235.5 5614.8 7068.6 13167.7 19153.0 27970.4 40167.6 67046.9 102025.5 129464.8

Source: Bank of Gaana.

Note: 1/ Excludes secondary banks.

TABLE 6.05: ASSETS AND LIABILITIES OF SECONDARY BANKS(Millions of Cedis at End Period)

Sept1975 1980 1981 1982 1983 1984 1985 1986 1987 1988ASSETS

Cash on Hand 3.6 93.7 104.4 229.6 355.1 2102.9 5316.2 1244.3 1922.8 2298.6Balance with Bank of Ghana 19.6 435.1 244.9 264.9 267.8 39.7 2524.4 2807.3 6011.3 5576.8Palances Due By Other Banks 5.5 55.0 64.3 322.8 861.5 426.8 1108.0 808.8 8514.3 15484.9Treasury Bills 6.0 157.3 301.2 274.7 376.4 550.1 674.2 1419.1 2313.6 3028.8Commercial Bills 11.1 0.0 19.1 0.3 4.5 - 40.0 360.0 600.5 214.8Loans and Advances 201.1 81S5.6 1355.3 1595.5 2787.3 5464.2 9832.8 18302.5 29095.3 31284.0Investments:Securities 41.2 200.3 323.5 884.0 1235.1 1267.0 2589.2 3480.1 2653.9 2534.6Enterprises 10.3 30.8 32.7 44.7 53.3 129.7 198.3 432.0 1236.4 501.3Other Assets 56.3 541.5 836.4 1288.2 2661.9 3799.4 2260.4 16398.0 24464.3 24888.7TOTAL ASSETS 354.7 2379.3 3281.8 4904.7 8602.9 13779.8 24543.5 45252.1 76812.4 85812.5

LIABILITIES

Paid-up Capital and Reserves 56.4 243.8 289.3 357.9 526.5 818.5 1216.0 2381.4 3012.0 5003.3 iBalances Due to Other Banks 3.1 100.7 23.0 35.2 164.0 138.9 519.0 906.5 760.9 1681.0Borrowings From Other Banks 83.9 114.2 237.9 306.9 1353.5 2301.3 5467.7 8093.0 15815.4 12304.9Deposits of Other Banks - - - - - - - - - -Demand Deposits 52.4 687.3 911.1 1427.1 2783.4 3857.5 7641.7 13874.4 17354.3 21819.4Savings Deposits 30.4 370.5 586.8 803.1 1003.5 1271.5 1937.9 3186.4 4666.1 5296.5Time Deposits 54.7 247.3 291.6 398.1 474.6 850.5 1331.6 2983.5 9354.0 8364.4Otiler Liabilities 73.8 615.5 942.1 1576.4 2297.4 4541.6 6429.6 13826.9 25849.7 31343.0TTAL LIABILITIES: 354.7 2379.3 3281.8 4904.7 8602.9 13779.8 24543.5 45252.1 76812.4 85812.5

Source: Bank of Ghana.Quarterly Digest of Statistics, March 1984, p.30.

TABLE 6.06: CLJSSIFICATION OF LOANS AND AIDVANCES 1/ BY PURPOSE(Millions of Cedis at End Period)

Sept

1975 1980 1981 1982 1983 1984 1985 1986 1987 1988

PRIMARY BANKS:

Agriculture, Forestry, Fishing 32.5 145.3 323.1 486.7 1105.4 2155.0 2897.4 4062.2 5920.1 5620.8

Mining and Quarrying 6.0 49.6 124.8 205.8 238.9 234.0 470.9 629.4 727.5 973.0

Manufacturing 109.0 311.6 325.0 357.9 587.1 1366.8 2350.1 4545.4 6559.7 8871.2

Construction 44.5 168.4 241.0 309.0 411.5 716.2 959.6 1553.8 1742.2 3264.2

Electricity, Gas and Water 1.5 115.2 23.5 40.3 47.8 17.8 31.0 44.9 128.7 58.6

Commerce and Finance:Import Trade 33.9 25.5 40.2 37.0 78.2 275.4 778.8 2632.8 2899.9 3284.1

Export Trade 19.1 260.8 336.7 250.1 90.4 187.0 430.9 1263.9 2276.0 2206.3

Other 75.4 210.0 262.2 258.3 636.3 954.9 2363.2 3559.3 2860.9 4771.2

Transport and Cumiunications 42.9 147.6 188.5 176.1 215.2 345.7 663.9 1129.1 1168.9 1863.4

Services 19.7 53.9 93.1 81.8 166.1 306.0 578.4 1026.3 1391.8 3015.4

Miscellaneous 9.2 29.1 40.8 27.4 41.5 92.9 212.4 269.1 1355.2 535.5

Total: 393.1 1517.0 L993.9 2230.4 3618.4 6651.7 11736.6 20716.2 27030.9 34463.7

SEONDARY BANKS:

Agriculture, Forestry, Fishing 72.0 267.1 346.6 615.2 907.5 1624.1 2310.5 3414.1 4792.9 4729.8

Mining and Quarrying 7.2 11.7 26.9 37.2 183.7 263.5 489.3 807.9 1903.7 281.1

Manufacturing 27.2 171.0 303.7 277.3 781.5 1921.6 3696.3 6255.0 8912.5 12092.7

Construction 33.1 113.3 159.0 202.2 383.2 557.7 1058.2 2345.6 4525.2 3965.3

Electricity, Gas and Water 0.8 0.8 2.5 1.9 1.8 3.6 6.8 1.2 40.8 *.3

Ccommrce and Finance:Import Trade 0.6 4.6 6.0 5.4 29.2 32.3 211.9 298.6 603.9 1041.2

Export Trade 0.0 8.6 92.9 13.0 8.1 0.4 59.1 187.3 382.6 405.7

Other 22.4 42.1 54.2 35.1 47.5 220.1 457.1 1482.7 1456.3 3152.2

Transport and Ccmmunications 19.1 64.2 130.4 122.9 184.2 308.0 490.4 892.4 1358.1 2915.2

Services 6.6 43.6 88.7 93.2 81.6 227.7 646.2 1585.2 1745.8 2203.2

Miscellaneous 1.4 49.0 101.4 68.6 85.7 185.0 238.5 669.9 733.5 493.4

Total: 190.4 776.0 L312.3 1472.0 2694.0 5344.0 9664.3 17939.9 26455.3 31284.1

Souce: Bank of Ghana.Quarterly Digest of Statistics, March 1984. pp. 31-32.

Note: 1/ Excludes staff loans, unpaid interest, cocoa marketing advances, and consortium loans.

TABLE 6.07: MDNEY SUPPLY AND LIQUIDITY OF THE PUBLIC(Millions of Cedis at End Period)

Sept1975 1980 1981 1982 1983 1984 1985 1986 1987 1988

Mbney Supply:1. Currency with Public 484.0 3427.6 5090.4 6727.3 10033.9 12422.3 17241.2 31240.2 46117.0 43603.42. Denand Deposits 506.9 2659.4 3324.6 4477.7 6377.1 14947.7 26708.8 34575.5 48925.0 57455.13. Hiney Supply [1+2] 990.9 6087.0 3415.0 11205.0 16411.0 27370.0 43950.0 65815.7 95042.0 101058.5

Savings:- Primary Commercial Banks

4. Time Incl. Certificate Deposits 113.9 87.7 97.1 62.6 95.7 346.1 1510.8 2997.1 5628.2 7323.85. Savings Deposits 269.6 1763.5 2124.5 3566.7 3988.6 4782.6 6894.3 10954.4 17572.8 21058.1

- Secondary Banks

6. Time Deposits 54.7 247.3 291.6 398.1 474.6 850.5 1331.6 2983.5 9354.0 7791.17. Savings Deposits 30.4 370.5 586.8 803.1 1003.5 1271.5 1937.9 3186.4 4666.1 5294.9

8. Total Savings [4+5+6+7] 468.6 2469.0 :1100.0 4830.5 5562.4 7250.7 1167;.6 20121.4 37221.1 41467.9

Money + Quasi-Money (Narrow cov.) [3+4+5] 1374.4 7938.2 1:.636.6 14834.3 20495.3 32498.7 52355.1 79767.2 118243.0 129440.4

Mbmey + Quasi-Money (Broad cov.) [3+8] 1459.5 8556.0 1,'515.0 16035.5 21973.4 34620.7 55624.6 85937.1 132263.1 142526.4

Source: Bank of Ghana.

Note: 1. Mbney and quasi-riney including secondary banks.2. Quasi-axrney includes only tine and savings depositu of primary commrcial banks.

TABLE 6.08: RESERVE REyWIRFENTS: PRIMARY BANKS

(Millions of Cadis at End Period)

Sept

1975 1980 1981 1982 1983 1984 1985 1986 1987 1988

Actual Reser- s:Cash Reserves 373.0 2022.7 2563.0 2896.2 3129.6 4306.5 5339.0 7954.7 11836.0 17862.2

Other Liquid Reserves 151.3 1254.7 1966.4 3007.4 4850.5 4426.2 4582.2 6377.2 6323.4 8021.4

Total Reserves 524.3 3277.4 4529.4 5903.6 7980.1 8732.7 9921.2 14331.9 18159.4 25883.6

Deposits: 919.5 4060.0 5660.3 7638.2 10089.5 13658.8 21219.1 31447.2 47375.4 59140.9

Percentage to Deposits:Cash Reserves:

Kininumn Ratio Required 20.0 42.0 35.0 35.0 30.0 10.0 15.0 7.8 21.0 19.1 1

Actual Ratio Returned 40.6 49.8 45.3 37.9 31.0 31.5 27.8 25.3 25.0 30.2

Other Liquid Reserves: 0

Minimum Ratio Required 20.0 25.0 25.0 25.0 25.0 35.0 25.0 15.0 6.7 10.0 I

Actual Returned 16.4 30.9 34.7 39.4 48.1 32.4 30.3 20.3 13.3 13.6

Total Reserves:Ratio Required 40.0 67.0 E0.0 60.0 55.0 45.0 40.0 22.8 27.7 29.1

Actual Ratio Returned 57.0 80.7 EO.0 77.3 79.1 63.9 58.1 45.6 38.3 43.8

Source: Bank of Ghana.

TABLE 6.09: RESERVE REQUIREMENTS: SECONDARY BANKS(Millions of Cedis at End Period)

Sept1975 1980 1981 1982 1983 1984 1985 1986 1987 1988

Actual Reserves:Cash Reserves - 526.9 503.0 635.6 1020.0 1045.1 2330.7 5274.8 8527.3 7819.4Other Liquid Reserves - 324.9 592.2 1170.1 1488.3 1984.6 3817.4 5356.1 5782.6 5005.8

Total Reserves - 851.8 1L95.2 1805.7 2508.3 3029.7 6148.1 10630.9 14309.9 12825.2

Deposits: - 1260.1 2L79.4 2812.6 4243.5 6670.7 9986.4 20965.2 33219.8 35541.6

Percentage to Deposits:Cash Reserves:

Kiniimmi Ratio Required - 25.0 20.0 20.0 10.0 10.0 10.0 8.6 22.6 20.2Actual Ratio Returned - 41.8 27.7 22.6 24.0 15.7 23.3 25.2 25.7 22.0

Other Liquid Reserves:Miniumn Ratio Required . 25.0 25.0 25.0 35.0 35.0 30.0 15.0 6.7 10.0Actual Retumned - 25.8 27.2 41.6 35.1 29.7 38.2 25.5 17.4 14.1

Total Reserves:Ratio Required - 50.0 45.0 45.0 45.0 45.0 40.0 23.6 29.3 30.2Actual Ratio Returned - 67.6 54.9 64.2 59.1 45.4 61.5 50.7 43.1 36.1

Source: Bank of Ghana.

TABLE 6.10: VELOCITY tATIOS

(Broad Coverage)

1975 1980 L981 1982 1983 1984 1985 1986 1987

Gross Damestic Product (M.P.) 5283.0 42853.0 726Z6.0 86451.0 lP4038.0 270560.6 343048.4 511372.7 745999.8

(Million Cedis)

Hbney (MI) (Million Cedis) 990.9 6087.0 94L5.0 11205.0 16411.0 27370.0 43950.0 65815.7 95042.0

Quasi4Money (Million Cedis) 468.6 2469.0 31)0.0 4830.5 5562.4 7250.7 11674.6 20121.4 37221.1

Momey and Quasi-Mmney (M2) (Million Cedis) 1459.5 8556.0 125L5.0 16035.5 21973.4 34620.7 55624.6 85937.1 132263.1

GDP / ML Ratio 5.3 7.0 7.7 7.7 11.2 9.9 7.8 7.8 7.8

GDP I M2 Ratio 3.6 5.0 5.8 5.4 8.4 7.8 6.2 6.0 5.6

Source: Bank of Ghana.

Note: Money and Quasi-mnKey are based on mothly averages; GDP L985-87 Provisional.

TABLE 6.11: INTEREST RATES(End Period)

Sept1975 1980 1981 1982 1983 1984 1985 1986 1987 1988

Bank of Ghana.Rate of Govt. Stocks Fran 5.0 5.0 19.5 5.0 5.0 5.0 5.0 5.0 5.0 -

To 8.0 13.5 19.5 10.5 19.5 19.5 19.5 19.5 19.5 -Treasury Bill Rate 7.8 12.0 18.5 9.5 13.0 16.8 17.8 19.8 22.8 19.6Other Advances 9.0 14.5 19.5 10.5 14.5 18.0 18.5 20.5 23.5 -Bank Rate 8.0 13.5 19.5 10.5 14.5 18.0 18.5 20.5 23.5 26.0

Commercial Bank Rates:Borrowing Rates:

Fixed Deposits:3 M)mths 7.6 12.1 18.3 8.5 11.5 14.8 16.8 - 18-22.0 18-22.0

6 Mbmths 7.9 12.4 18.5 8.5 11.5 15.0 17.0 19.0 19-22.0 18-22.012 Mbnths 8.0 13.0 19.0 9.0 12.5 16.0 18.0 20.0 22-22.5 19-22.524 Mbnths - - - - - - 19.0 22.0 21-23.0 21-23.0

Savings Deposits 7.5 12.0 18.0 8.0 11.0 14.5 16.5 - 19-22.0 18-21.5

Bill Discount Rate From: 7.8 14.0 25.5 12.0 - - - 18.5 - -

To: 8.5 14.5 25.5 12.0 - - 23.0 18.5 - -

Lending Rates:Loans and Advances Secured by:Goverrmient Securities 10.5 16.5 25.5 12.0 16.5 16.5 20.5 - - -

Stocks in Trade 12.5 18.5 18.5 18.5 19.0 22.5 23.0 - - -

Tmovable Property From 11.5 17.5 17.5 17.5 14.5 16.5 23.0 - - -To 12.5 18.5 18.5 18.5 14.5 16.5 23.0 - - -

Bank of Ghana Guarantees Fran 11.5 15.0 15.0 15.0 16.5 20.0 20.5 - - -To 12.5 15.0 15.0 15.0 16.5 20.0 20.5 - - -

Other From 12.5 17.5 ]7.5 17.5 19.0 22.5 23.0 - - -

To 12.5 18.5 18.5 18.5 19.0 22.5 23.(G - - -

Unsecured Lcans Frnm 12.5 17.5 17.5 17.5 19.0 22.5 23.0 - - -

To 12.5 18.5 ].8.5 18.5 19.0 22.5 23.0 - - -

First Ghana Building Society:Savings Rates From 5.0 8.0 8.0 6.0 6.0 8.0 - - NA NA

To 5.5 8.5 8.5 6.0 6.0 8.0 - - NA NA

Lending Rate From 10.0 14.0 ]4.0 10.0 10.0 15.0 23.0 22.5 NA 23.0To - - - - - - - 23.0 NA 30.0

Source: Bank of Ghana

Note: Effective Septenber 1987, a liberalized systen of deterrining borrowing and lending rateswas introduced by the Central bank for all commercia and secondary banks.

TABLE 7.01: CO(CCA BEAN PFJUJlnCN, CNSUMPTIION, PRICES,

PAM1ENTS T0 FARERS AND EXPORT RKEElPTS

(Quantity in thousand tons; values in millions of cedis)

ITEM 1974/75 1975/76 1976/77 1977/78 1978179 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88

Productim:

FHbin Crop 365 382 305 263 250 282 255 216 177 154 165 205 218 173

Mid Crop 8 12 14 8 15 14 3 9 1 i 9 14 9 15

Total 373 394 319 271 265 296 258 225 178 158 175 219 228 188

Cmmmption:

Dbmestic 1/ - - - - - 35 26 31 25 15 20 25 30LAl

Export 334 342 270 233 221 253 240 201 160 148 165 188 211 219 I

Export Receipts - - - 2423 2649 2541 1123 950 4828 12391 13737 22400 44634 75448

Net Payuments to Faniers 209 237 242 362 727 1186 1132 2699 2192 3230 4064 7042 12518 19804

Prices in Cedis Per Ton:

Fran Exports 1688 1526 2596 10399 11986 10043 4679 4726 30175 83723 96077 183676 229865 344826

To Farmr 2/ 3/ 4/ 561 602 758 1333 2489 3603 3644 10628 12000 20000 30000 56600 85000 140000

Remairider 1127 924 1838 9066 9497 6440 1035 -5901 18175 63723 66077 127076 144865 204826

Source: Chana Cocoa Board.

1985/86 Data are provisional and those of 1986/87-1987/88 are istinntes.

Data for 1977/78-1982/83 are fron Table 3 of Paper n Cocoa Se-tor.

Note: 1/ Includes changes in stocks.

2/ 1982/83-1986/87 include unl; nnin crop.

3/ fcr 1986/87, price excludes banus of 500 cedis/tcn, paid ii Septeiber 1988.

4/ for 1987/88, price excludes bonus of 10,000 cedis/ton.

TABLE 7.02: PURC:iASES OF COOOA BEANS BY REMIONS(Qui3ntities in Thousand Tons)

ITEM 1974/75 1975/76 1976/77 1977/78 1978/79 D79/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88

1. ASHANnMain Crup: 106 120 99 87 82 98 91 69 55 46 43 52 55 48Kid Crp: 2 2 4 3 5 2 1 2 1 1 2 2 2 1Sub-Total: 108 122 103 90 87 100 92 71 56 47 45 54 57 49

2. BKC/AHAF)Mbin Crop: 79 85 75 68 48 73 47 49 35 29 28 35 32 27Mid Crop: 1 2 2 1 2 2 1 1 0 1 1 1 1Sub-Total: 80 87 77 70 50 75 48 50 35 30 29 36 33 27

3. EASTERNMin Crp: 69 65 48 39 47 41 46 34 31 25 27 32 32 27Mid Crop: 2 3 4 2 3 4 1 3 0 1 2 3 2Sub-Total: 71 68 53 41 50 45 47 37 31 26 29 35 33 27

4. CENnlALMain Crop: 58 57 37 21 24 16 25 21 17 13 18 26 26 16Mid Crop: 2 3 1 1 1 3 1 1 0 0 1 2 1Sub-Total: 60 59 38 22 26 19 26 22 17 13 19 28 27 16 v

5. E1EThRNMain Crop: 39 42 37 41 44 49 45 42 35 38 49 60 73 53Mid Crp: 2 2 3 1 2 4 0 2 1 1 4 5 3Sub-Total: 40 44 40 42 46 52 45 44 36 39 53 65 76 53

6. KLTAMain Crop: 13 13 9 7 5 5 1 1 4 3 1 1 2 2Mid Crop: 0 1 1 0 1 0 0 0 0 0Sub-Total: 14 13 9 7 6 5 1 2 4 3 1 1 2 2

TALMin Crop: 365 382 305 263 250 282 255 216 177 154 165 205 218 173Mid Crop: 8 12 14 8 15 14 3 9 1 4 9 14 9 15

Total: 373 394 319 271 265 296 258 225 178 158 175 219 228 188

Saurce: (Ghana Cocoa Board.

TABLE 7.03: WO1LD PROUTIcU OF 0O00A BEANS

(Thousarid H1tric Tbns)

CUNTRY 1974/75 1975/76 1976/77 1977j78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88

Cameroon 118 96 82 107 106 124 120 122 106 108 120 118 123 130Ghan 382 401 329 268 250 285 258 225 178 159 175 219 228 183Ivory Coast 242 231 230 304 312 379 403 465 360 411 565 585 590 635NiBeria 214 216 165 207 137 172 156 183 156 115 151 110 80 135Other African Cbontries 55 59 49 55 59 62 58 53 56 66 69 77 64 54

All African Countries 1.011 1,003 855 941 864 1.022 995 1,048 856 859 1,080 1,109 1085 1137

Brazil 273 243 234 283 314 294 349 314 336 302 412 376 369 399Ecukador 78 63 72 79 86 95 81 88 46 48 121 97 77 75Otfher Atmrican Countries 88 86 86 102 107 99 98 120 112 112 120 121 128 138West Indies 41 42 42 42 48 35 45 48 53 52 52 53 49 47Asia 60 63 60 65 73 81 92 116 130 140 161 209 253 295

World Production: 1,551 1,500 1,349 1,512 1,492 1,626 1,660 1,734 1,523 1,513 1,946 1,965 1,961 2,091chana's Production in Z 24.6Z 26.77 24.4% 17.7Z 16.87 17.5Z 15.5Z 13.02 11.7% 10.5Z 9.02 11.12 11,6Z 8.8Z

Scurce: Intematiaial Cocoa Organization 'ICCO)), for data 1983/84 and 1984/85, February 5, 1986.Gill and Duffus, Cocoa Market Report, June 1988.

Nbte: Chana production in this table is slightly different from previous tables due to different source.

TABLE 7.04: PRCEUlTION OF IMPORTANT CROPS(Thcusand Tons)

CRDP 1970 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

CerealsMaize 482 486 343 286 274 218 380 382 378 346 172 575 411 559 553Rice 49 73 71 70 109 108 93 78 79 36 40 66 90 95 81Millet 141 154 122 144 125 93 149 82 119 76 40 106 80 130 271Guinea Com 186 177 135 189 131 121 158 132 131 86 56 156 160 210 -

Starchy StaplesCassava 2,388 3,606 2,398 1,819 1,811 1,895 1,759 2,322 2,065 2,470 1,728 4,083 3,076 2,876 2,943Cocoyan (tcns) 1,136 1,510 1,099 773 722 726 749 643 631 628 720 730 650 650 1,000Yam 909 850 709 575 535 544 602 650 591 588 866 880 900 1.098 1,001Plantain 1,644 2,024 1,246 1,256 927 940 817 734 829 745 342 650 677 677 1,005

Pulses and tlutsGrwundkts 102 157 111 113 81 83 107 142 126 111 91 90 128 129 -Coccwt 302 307 311 229 152 159 159 174 433 337 339 120 108 108 108Oil Palm 696 917 901 901 739 935 1,012 914 889 889 889 - - - 51Beans and Peas 13 17 16 17 14 EL 9 16 17 14 12 - - - -

VegtablesTcatoes 93 105 90 100 103 104 125 84 64 52 57 300 375 403 -Pepper 95 148 118 113 76 78 92 86 72 63 63 - - -Crko 102 252 160 108 92 93 110 99 40 46 62 - - - -Garden Eggs 10 29 29 26 12 12 12 32 24 24 20 20 24 24 -

OtbersSugar Cane 112 171 205 190 258 272 272 171 85 59 86 90 110 110 -Orange 129 150 150 52 19 21 11 154 134 108 129 35 35 37 -Pineapple 29 35 16 25 5 5 3 7 6 7 6 5 6 6 -Banana 16 8 7 9 4 4 7 3 4 5 3 15 22 23 -

ource: 1981-1987: Quarterly Digest of Statistics. June 1988, p. 5.1976-1981: Quarterly Digest of Statistics, June 1984, pp 4-5.1984-1986: FA) Pruduction Yearbook, 1986.1970-1975: Ministry of Agriculture.

Note: Data for 1981-1987 are estimates.

TABLE 7.05: IREA UNDER IMPORTANT CRDPS(TIusand Hectares)

CROP 1970 1974 1975 1976 1977 19,7e 1979 1980 1981 1982 1983 1984 1985 1986 1987

Cereals 999 960 805 843 768 615 924 854 843 822 835 841 964 890 926

Maize 452 425 320 273 256 205 358 355 372 373 400 400 405 472 489

Rice 55 67 79 77 129 123 105 99 116 61 40 69 87 76 82

Millet 249 222 199 243 208 1'7 250 139 157 172 175 176 222 342 355

Guinea Corm 243 246 208 249 175 160 211 261 198 216 220 196 250 - -

Starchy Staples 1,070 1,148 897 728 636 646 621 688 686 735 738Cassava 351 389 285 250 232 2;5 219 315 308 339 339 436 356 387 422

Cocoyam 259 284 205 167 147 1515 158 137 134 145 113 - - - -

Yam 172 133 177 100 89 95 105 113 116 110 143 223 1i1 179 171

Plantain 288 343 230 211 168 1l1 139 123 128 141 143 - - - -

Pulses and Nuts 398 443 430 426 373 3',9 391 371 491 464 410Groundruts 98 1L 102 91 85 T1 92 84 119 115 95 - - - -

Coconut 36 38 38 28 23 21 21 21 52 45 46 - - - -

Oil Palm iL1 146 144 144 108 19 1L57 146 143 143 143 - - - -

Beans and Peas 153 149 147 163 157 18 121 121 176 161 126 - - - -

Vegetables 79 136 98 93 74 -'2 86 78 55 53 47 - - - -

Tomatoes 19 23 19 22 16 ;'2 27 19 14 10 1 - - - -

Pepper 28 53 40 39 28 26 31 28 25 23 23 - - - -

Ckro 28 53 32 23 24 20 24 21 9 11 15 - - - -

Garden Eggs 4 10 7 9 6 4 4 11 9 9 7 - - - -

Others 41 44 42 21 14 L4 14 34 32 30 24 - - - -

Sugar Cane 4 6 6 6 7 8 8 5 4 3 4 - - - -

Orange 20 23 27 8 3 3 2 25 24 21 16 - - - -

Pineapple 9 11 5 3 2 2 1 2 2 3 2 - - - -

Banana 8 5 4 5 3 2 4 1 2 3 2 - - - -

Source: 1981-1987: Quarterly Digest of Statistics, June 1988, p. 4.1978-80: Quarterly Digest of Statistics, June 1986, p. 5.

Note: Data for 1981-87 are estimates.

TABLE 7.06: "IEILD OF IMPORTANT CROPS(Kg. per ha.)

CROP 1970 1974 1975 1976 1977 19;8 1979 1980 1981 1982 1983 1984 1985 1986 1987

CerealsMaize 1,070 1,150 1,070 1,050 1,070 1,003 1,060 1,076 1,020 930 430 1,440 1,020 1,180 1,130Rice 890 1,100 900 910 845 8i8 890 788 680 590 1,000 960 1,030 1,250 990Millet 570 700 610 592 601 55C 600 590 760 440 230 600 360 380 760Guinea Corm 770 700 650 760 750 7E0 750 500 660 400 250 8ir 640 - -

Starchy StaplesCassava 6,800 9,280 8,430 7,280 7,810 8,07) P,030 7,370 6,700 7,290 5,100 9,370 8,640 7,430 6,980Co-ovam 4,380 5,320 5,360 4,630 4,90 4,6'j 4,740 4,640 4,710 46330 6,370 - - -

5,280 b,400 :.,000 , OC0 6n,i( n,731 7-70 5,750 5,100 5,350 6,056 3,960 8,110 6,130 5,850Plantain 5,700 5 ,900 ' ,420 5,950 5,2 5,814 ) 1>;0 6,480 5,280 2,390 - - - -

PRll;cs amud Nuts(,nnlm(bluts 1,000 1,410 ,090 ;,24G 9 /,III .160 - _ _C(x clult 8,300 8,160 8,2/0 8P3. 00 6,vO'. 5/', -5-'-,------

0i1 Pabl 6,280 6,270 6,270 6,2bO 6,84 ), '8) 6,4', - - - _

Beans and Peas 90 110 110 100 90 9 7' - - - - - _ -

VegetablesTtinnt *'s 4,870 4,610 4,760 4,530 6,440 4,731 4,630 - - - - -Pep5. 3,380 2,800 2,970 2,940 2.710 3, 00t( 2,970 - - - - - - - -Okr) 3,630 4,940 4,900 4,640 3,840 4,650 4,583 - - - - - - - -Garden Eggs 2,530 2,940 3,900 2,990 2,000 3,00(i 3,000 - - - - - - - -

OthersSugar Cane 27,950 31,100 35,330 33,930 36,860 36,270 36,270 - - - - - - - -

Orange 6,515 6,510 5,550 6,580 6,330 7,000 5,790 - - - - _ _ _ _Pineapple 3,065 3,290 3,330 10,000 3,330 3,330 3,000 - - - - - _ _ _Banana 2,026 1,650 1,700 1,800 1,600 2,000 1,750 - - - - - _ _ _

Source: 1981-87: Derived frrn Quarterly Digest of Statistics, Dece-ber 1987.1976-79: Quarterly Digest of Statistics, June 1984, pp. 4-5.

Note: Data for 1981-86 are forecast estitnates.Figures are rounded.

TABLE 7.07: PRODUCTION OF TDMIBER, VENEER AND PLYWOOD

(Thousands of Cubic Meters)

CATEGORY 1970 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 198 7p

Quantities:

Logs:Recorded Exports 601.1 430.0 430.0 -'.0.0 400.0 380.0 190.0 120.0 50.0 50.0 60.0 74.0 143.0 221.0 257.0

Sawmill Intake 876.5 850.0 770.0 850.0 540.0 530.0 280.0 340.0 350.0 260.0 280.0 257.0 320.0 396.0 436.0

Veneer/Plywood Intake 75.9 130.0 110.0 190.0 100.0 60.0 20.0 20.0 120.0 90.0 130.0 126.0 80.0 116.0 136.0

UnIrecorded Use/Stocks 100.0 121.0 77.0 157.0 122.0

Total Output: 1553.5 1410.0 1310.0 1380.0 1040.0 970.0 490.0 480.0 520.0 400.0 570.0 578.0 620.0 890.0 951.0

Sawn Tinter:

Recorded Exports 240.8 170.0 160.0 140.0 100.0 170.0 80.0 70.0 50.0 40.0 50.0 57.0 89.0 107.0 142.0

Local Sales 94.1 200.0 230.0 220.0 400.0 160.0 100.0 50.0 100.0 90.0 90.0 69.0 115.0 87.0 61.0

Own Use (Mills&ines) 25.2 30.0 30.0 80.0 50.0 70.0 30.0 20.0 10.0 90.0 20.0 27.0 22.0 25.0 19.0

Changes in Stock -6.5 50.0 -30.0 10.0 30.0 -80.0 30.0 10.0 30.0 -70.0 20.0 27.0 -3.0 13.0 62.0

Total Output: 353.5 450.0 390.0 450.0 580.0 320.0 240.0 150.0 190.0 150.0 180.0 180.0 223.0 232.0 284.0

Veneer: c

Exports 0.4 8.7 7.4 2.0 0.5 27.1 5.5 7.3 6.0 5.0 9.0 12.0 13.0 14.0 13.0

Local Sales 0.0 0.1 0.0 0.0 0.7 0.3 0.5 0.2 0.1 0.1 0.6 0.0 1.0 1.0 1.0

Own Use 0.0 0.1 0.1 9.0 0.3 16.0 12.2 16.0 17.0 17.0 12.0 6.0 8.0 8.0 9.0

Changes in Stock 0.0 9.4 7.6 3.1 11.0 -6.8 -1.5 -1.2 -3.0 -1.0 2.5 2.0 1.0 0.0 9.0

Total Output: 0.4 18.3 15.1 14.1 12.5 36.6 16.7 22.3 20.1 21.1 24.1 20.0 23.0 23.0 32.0

Plywood:

Exports 21.7 18.5 17.5 17.3 36.3 18.0 2.0 2.0 0.2 0.3 0.2 0.0 1.0 3.0 1.0

Local Sales 8.0 12.5 12.4 46.1 53.4 20.2 33.5 47.5 60.0 39.3 31.9 15.0 16.0 18.0 22.0

Own Use 0.1 2.1 0.3 0.6 2.6 2.7 3.1 0.5 1.0 0.4 1.6 1.0 1.0 1.0

Changes in Stock 1.5 25.3 9.7 -7.0 -34.3 -0.9 -0.3 1.2 2.0 -1.2 3.0 1.0 0.0 0.0

Total Output: 31.3 58.4 39.9 57.0 58.0 40.0 38.3 51.2 63.2 38.8 36.7 17.0 18.0 22.0 23.0

Scurre: 1981-87: Ministry of Lands and Natural Resources, May 1988.

1976-80: Esonomic Survey 1977-80, pp 62, 68.

1972-75: E:cnomic Survey 1975-76, pp 86, 89-92.

1970-71: E2cnumic Survey 1972-74, pp. 91-94.

Note: p = provisicnal

TA8LE 7.08: OPERATICNS OF THE GHANL (OOOA BDYRD 1/(Millions of Gedis)

1974175 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87

Revenues: 600 552 755 1181 2298 2211 1444 1237 5090 15137 20765 48622 85383Exports 555 516 700 1028 2022 1934 1219 1116 4828 12829 20465 44714 71338Local Deliveries 41 33 51 149 271 267 207 87 242 599 280 1126 404Miscellaneous 3 3 4 4 5 11 19 33 20 3709 20 2782 13641

Costs: 329 394 353 548 1059 1557 1413 3539 3L69 6933 13243 24565 38935Producer Proceeds 211 236 246 351 619 958 801 2448 2158 3110 4418 13295 19493Licensed Buying Agent 22 30 23 45 106 194 265 301 457 110 200 357 695Use of Stocks 0 3 - - - - - - - - 528 395Freigit, etc... 8 9 15 10 17 39 47 93 59 109 7 20 20Finaxe Costs 21 5 8 6 10 80 188 133 474 500 328 728 1484 1417Adninistratim, etc... 31 15 20 37 14 68 102 114 145 184 414 1230 1971 4539Cocoa Div. Grants, etc... 4/ 69 88 26 69 171 77 52 79 111 2862 6661 6910 12376

Profits or Losses before Taxes 271 158 402 634 1238 655 32 -2302 1622 8204 7522 24057 46448

Duties Paid 319 266 433 '86 1334 847 53 0 1300 5636 8075 17592 30896

Profits or Losses after Taxes -48 -108 -32 47 -96 -192 -21 -2302 322 2568 -533 6465 15552

arand:Purchases (000 tais) 376 396 319 269 245 296 258 224 179 158 175 219 228Shipmmts: 376 376 301 271 239 285 226 209 175 164 185 213 241

Exports 329 338 270 233 208 247 200 204 158 149 165 188 211Local Deliveries 47 38 31 39 32 37 26 5 17 15 20 25 30

Scurce: Guana Cocoa Board.1969/70 - 1973/74: IMF Report, July 23, 1975, p. 85.1974/75 - 1978179: World Bank Report, February 19, 1981, p. 99.

Note: 1/ Crop year ending Septenber.2/ Miinly discounted charges at bill dram to finance the pirchase

of cocoa, export duty, and operatimxs of the board.3/ includes provisicr for doubttul debts and depreciatimn.4/ includes grants to the Cocoa Divisioa for produce inspecticn,

research, ccnstructim of feeder roads, and subsidies for insecticides and spraying.

TABLE 8.01: MINERAL PRODUCTION

1975 1980 1981 1982 1983 1984 1985 1986 1987

Production:Gold (Kg' 16494.0 10981.0 10595.3 10230.3 8601.1 8923.2 9311.2 8950.0 10228.0

Diamond (00) carats) 2336.2 1149.2 836.2 684.2 339.3 345 8 636.0 559.2 442.0

Bauxite (000 tons) 325.2 225.1 181.3 63.5 70.4 48.5 169.5 204.0 195.0

Manganese (000 tons) 415.3 249.9 223.1 159.9 173.1 286.7 315.6 259.3 253.6

Index of Production (1977=100):Gold 110.3 73.4 70.8 68.7 57.5 59.7 62.3 59.8 68.4

Diamond 120.0 59.0 43.0 35.2 17.4 17.8 32.7 28.7 22.7

Bauxite 116.5 80.9 65.2 22.8 25.2 17.4 60.9 73.3 70.1

Manganese 142.0 85.7 76.5 54.8 59.3 98.3 108.2 88.9 87.0

Overall Index 122.2 73.8 68.2 59.9 50.2 57.9 65.3 60.3 64.6

Export Volume:Gold (000 troy ounce) - 346.2 344.5 300.4 278.0 286.0 285.0 292.0 323.5

Diamond (000 carats) - 897.0 944.0 688.0 605.0 425.0 640.0 565.0 397.0

Bauxite (000 tons) - 223.0 151.0 36.0 82.0 45.0 124.0 226.0 226.4

Manga;nese (000 tons) - 162.8 142.0 97.0 127.0 248.0 263.4 246.0 235.1

Export Unit Values:Gold (US$/troy ounce) - 54'.0 459.0 373.0 367.0 361.0 318.0 364.0 440.5

Diamond (US$/carat) - 11.0 9.0 7.0 6.4 6.6 8.6 8.0 10.0

Bauxite (USS/MT) - 14.0 17.0 19.0 20.5 21.0 21.5 21.8 22.6

.anganese (US$IMT) - 53.0 56.0 39.0 24.4 34.0 34.0 33.0 33.0

Source: 1980-87: Quarterly Digest of Statistics, June 1988, pp. 6-9.

Economic Survey 1975-76, p. 81.

Export Volumes, 84-87: Bank of Ghana.

Note: 1984-87 figures are provisional.Export Unit Values are converted using average annual exchange rate.

TABLE 8.02: Diamond Production

197_ 1980 1981 1982 1983 1984 1985 1986 1987

Total in 000 Carats 2336.2 1149.2 836.2 684.2 339.3 345.8 636.0 559.2 442.0

Companies:

000 Carats 2251.4 1148.7 836.1 682.7 336.7 342.1 633.3 556.3 437.0000 Cubic Meters Treated 1607.6 755.3 755.2 496.0 339.7 356.1 542.5 422.1 2185.5Carats Per Cubic Meter 1.49 1.52 1.11 1.38 1.01 0.96 1.16 0.60 0.20

African Diggers (000 C) 84.8 0.5 0.4 1.5 2.6 3.7 2.6 2.9 5.0

_--- -- ----- _ = = __=== _ _==== c _=___ c c _ _- cSources: Quarterly Digest of Statistics, June 1988, p. 7.

Quarterly Digest of Statistics, June 1972, p. 8 for data 1970-71.

TABLE 8.03: Gold Production

_ _ = _ __-= == =--=___-- = = ------ ----

1975 1980 1981 1982 1983 1984 1985 1986 1987

Total in Kg 16,295.1 10,981.0 10,595.3 10,280.3 8,601.1 8,923.2 9,311.2 8,950.0 10,228.0

Quartz Reefs:Tonc Crushed 1, 441' C0 9.1.0 95i.9 8q6.6 765.3 886.9 ,,086.7 1,024.0 1,150.9Ki'lograms Won 14.124. ;Q 5 e .3 .? , 8,000 .6 8,382.0 8,804.0 8,294.4 9,362.0

TiWT per Metric Ton 6 .3 .-. 6.6 6.7 6.1 5.2 5.2 5.2

Bankoe Reefs:Met :i- Tons Crushed 29'9. 2 2.. 1.' lSi.3 89.0 103.0 98.6 81.2 120.3

Ki.ograms Won _7 c 1,2-3 17.'7 29.9 502.. 449.1 417.2 481.9 568.0D-WT per Metric Tori 3.8 .7 3., 4.1 3.6 2.8 2.7 3.8 3.0

Alluvial:Cubic Meters Treated 2,566.0 1,519.0 1.762.8 1,486.1 770.1 918.3 893.2 1,565.9 2,143.6Kilograms Won 373.2 206.5 204.9 116.2 98.2 92.1 90.0 173.7 298.0

DIVT per Cubic Meter 0.072 0.087 C.075 0.050 0.089 0.064 0.065 0.071 0.089

Source: Quarterly Digest of Statistics, June 1984, June 1988, p. 6.

1J'.RLE 8.04: PRODUCTION OF SOME SELECTED MANUFACTURED COMMODITIES

Up to Sept1975 1980 1981 1982 1983 1984 1985 1986 1987 1988

Milk Reconstituted (Million Liters) 37.8 13.4 15.9 7.6 10.0 11.0 14.6 7.7 23.4 19.441Ice Cream (000 Liters) 927.0 2053.0 210f.0 628.0 444.0 746.0 1152.0 686.0 792.0 MAMilo (Metric Tons) 1425.0 1211.0 969.0 741.0 - - - - 285.0 MAWheat Flour (Metric Tons) 63204.0 89608.0 73245.0 25401.0 17981.0 39590.0 45306.0 62818.0 71444.0 27945Sugar (Metric Tons) 11347.0 4014.0 1542.0 56.0 - - - - - -

Cocoa Butter (Metric Tons) 17610.0 10985.0 992E.0 8764.0 8818.0 3866.0 7674.0 6399.0 8114.0 2301Cocoa Liquor (Million Liters) 3368.0 2257.0 2776.0 2765.0 1558.0 1163.0 3000 0 3676.e 4931.0 4888Cocoa Cake (Metric Tons) 22325.0 12613.0 10775.0 J(178.0 11321.0 4633.0 9178.0 7490.0 1031-.0 NACocoa Powder (Metric Tons) 0.0 0.0 0.0 0.0 656.0 435.0 475.0 578.0 665.C MABeer (Million Liters) 63.3 44.5 52.7 33.9 31.0 45.2 42.9 54.6 58.5 29.198Soft Drinks (000 Crates) 2167.0 1362.0 1762.0 802.0 382.0 553.0 718.0 658.0 1355.0 654Cigarettes (Millions Sticks) 2339.0 2028.0 1611.0 1208.0 1074.0 2008.0 1942.0 1826.0 1734.0 1157Cloth (Million Meters) 121.3 36.5 30.5 7.1 7.1 10.3 12.6 15.2 13.8 NAJute Bags (000) 3700.0 3228.0 3097.0 1723.0 1697.0 2059.0 2431.0 1863.0 1551.0 NA -

Margarine (Metric Tons) 2613.0 935.0 1273.0 732.0 275.0 527.0 941.0 999.0 2396.0 t' Guardian Soap (Metric Tons) 0.0 6666.0 835F.0 4199.0 2699.0 4383.0 10005.0 17757.0 26478.0 NAToilet Soap (Metric Tons) 2746.0 1059.0 1019.0 504.0 448.0 1082.0 1893.0 604.0 1252.0 NALaundry Soap (Metric Tons) - - - - - 477.0 510.0 852.0 1785.0 NATooth Paste (Metric Tons) 236.0 98.0 227.0 70.0 27.0 12.0 122.0 105.0 142.0 NAPetrol (000 Metric Tons) 252.8 245.7 252.6 244.0 53.0 172.0 216.0 200.0 154.7 MAKerosene (000 Metric Tons) 99.6 119.5 130.7 133.0 77.0 86.0 120.0 112.0 92.2 NADiesel, Gas Oil (000 Metric Tons) 345.6 283.2 296.2 287.0 164.0 218.0 278.0 275.0 220.0 NACement (000 Metric Tons) 666.3 294.3 396.0 252.0 278.0 235.0 356.0 219.0 294.4 NAIron Rods (Metric Tons) 2865.0 5378.0 5084.0 2247.0 1535.0 1914.0 3360.0 2828.0 3121.0 295

Source: 1988: Statistical Service.

1975, 1980-1987: Quarterly Digest of Statistics, June 1984, June 1986. and June 1988, p. 13.

TABLE 8.05: RAILWAY TRAFFIC

1st HalfITEM 1975 1980 1981 1982 1>a3 1984 1985 1986 1987 1988

FREIGHT:(in thousand metric tons)Cocoa 117.3 94.8 71.8 66.1 46.8 17.8 33.6 95.9 67.3 38.7Timber 2Z3.4 55.8 63.9 83.1 61.0 23.6 35.8 40.1 43.8 22.9Bauxite 324.9 191.4 183.3 73.7 59.2 47.2 134.4 208.2 257.4 138.8Manganese 323.0 231.8 260.6 174.7 137.8 252.5 263.0 247.4 237.7 157.3Others 178.7 63.4 126.3 68.2 44.8 28.9 36.7 16.1 25.4 21.1

Total: 1167.3 637.2 705.9 465.8 349.6 370.0 509.5 607.7 631.6 378.8

FREIGHT TRAFFIC: (in million tonne-km)Total 205.4 106.4 91.9 74.0 61.0 43.5 77.2 100.0 106.2 62.35

PASSENGER:a,

Passsenger Journeys (000) 6816.0 5543.0 3693.0 3114.0 33,4.0 1379.0 2115.0 2608.0 3485.5 1598.2Passenger Kilometers (million) 488.8 459.6 313.5 290.0 380.0 157.4 190.3 255.1 566.8 178.6

Source: 1988: Statistical Service.1980-87: Quarterly Disgest of Statistics, June 1988, pp. 18-19.1975: Quarterly Digest of Statistics, june 1982. p 40.

TAK'E 9 3, .,; 1P!:E,'r,'yS '710

Weight CATEuuRY 1979 9; :i 1982 1983 1984 1985 1986 1987

100.0 Cambined Index 267.3 2', A 7357.4 330)4.2 3647.2 4543.1 6352.0

49.2 Food 257.7 39. 63 .i. 2. 70 .. 3^58.5 2717.7 3268.8 4527.1

6.2 Beverage and Tobacco 317.8 S14.3 1'78.8 -129.2 2302.8 3907.2 4801.5 6369.4 8826.919.2 Clothing and Footwear 283.8 398.6 92 . A)9.0 2,_5.5 3604.3 4643.7 5732.6 8373.76.8 Rent, Fuel, and Power 185.3 ZY;.8 6 .V , 7L 9 31s2.7 3372.8 4807.3 6740.65.1 Furniture and Fumrrishings 287.2 "71. s ? 1 .4 2'.. 4765.2 5404.0 6829.0 9703.91.8 Medical Care and Health 280.8 -.S S 7', g c' 1991.6 3143.8 4100.2 4754.5 5908.94.3 Transport and Carimnications 247.0 39F.8 7 7Q 7 16.23.4 3081.4 4741.5 6364.6 8551.85.5 Recreation and Entertainment 315.1 4'_..._ 74 . 2660.6 4435.3 53'7.0 7253.91.9 Misc. Goods and Services 320.7 I.1 - '.i2201.1 39;1.7 4987.1 ")17.2 7543.9

U R B A N:

100.0 Ccnbined Index 256.5 c 1: 290, 9.7 3329.2 4267.1 6118.7

48.0 Food 248.7 - ,2. 2496.1 3000.1 4279.55.5 Beverage and Tobacco 320. 2 5 .1 - .... 32.6 7105.3 9931.216.4 Clothirg and Footwear 2?1c - :- 4129.3 5221.1 7979.99.6 Rent, Fuel, and Pcwer _77.4 1.'. ' ... 2313.3 3823.4 5624.54.8 Furniture and Furnishings 278.2 - 9 - .. k z479.9 6700.4 9796.21.2 Medical Care and Health 26i.7 -l '- . . ' . 3 528.7 4162.3 5383.15.4 Transport and Camunzications 23 .c 2., .-. ;2 !5 .09 7021.3 9634.96.0 Recreation and Entertairnment 27... ". .: , - , 6 4341.9 5098.6 F .31.1

1.7 Misc. Goods and Services 3. - : - -, ,', . A' 97L 2 Al 4

R U R A L:

1C(.v Cnibined Indpx 2. - -. :t' .- 3973.6 4824.3 6590.6

49.8 Fcl> 26'7.- ..-.. .. .. 73.., 2939.4 3537.4 4774.8

6.9 Beverage and Tobacco 3 S. ; . 6 4531.7 5770.0 7927.022.2 Clothing and Footwe:r 292.q 7 9034.9 6121.7 8673.2*.0 Rent, Fuel, and Power 262.8 . s `-7 5992.1 7239.7 9499.95.3 Furniture and Funmishin*s 29'.6 .7 .809.6 6950.7 9616.6

2.4 Meclical Care and Health 290.4 4vt _ 'c.e 4389.4 5054.2 6175.0

3.2 Transport and Ccnmuications 275 8 -. 2 .2 4051.4 5214.3 6667.54.2 'Recreation and Entertainnvrnt 2. .- 7.7 4592.5 5682.6 7877.82.0 Misc. Goods and Services 26.3 0-90.8 6070.0 7911.9

A C C R A:100.0 Ccnbined Index ,76.- 37 - ... -7 - 77 7 _272 83282.7 4262.8 6156.0

48.3 Food 283.7 -3 . - . i 629.4 2407.3 2871.5 4068.0

5.6 Beverage and Tobacco 333.1 r., _2'.. . .495.2 5147.1 7158.1 10396.913.7 Clothing and Footwear 266.7 - .9 : - - 2615.9 3859.2 5205.8 8069.9

11.2 Rent, rFuel, and Power 167.9 ,: .< -:;. - 13t4.7 1947.5 338C.8 5059.84.8 Furniture and Furnishings 388.6 .e 4877.7 6558.0 10040.60.3 Medical Care and Health 323.1 : 21.5 4465.2 5127.9 5954.2

6.7 Transport and CamuLnications 6'. ' '.- :: .- . . 6577.1 8574.0 11978.27.2 Recreation and Entertairnen'- 36-..' - . . 2'^:.' 4211.5 5046.3 6939.1

1.7 Misc. Goods and Services 338.9 .92 _ 7.? 1.. .9L. 2618.F. 3781.5 5079.4 6i74.5

Source: Statistical News Letter, S a:.: .¢-- A. :a

- 168 -

TABLE 9.02: MCNTHLY SM PRICE INICES: N A T I O N A L(1977 = 100)

02IBNE FOX 8VER. a-CTH. RENr.FRE FRNSH MDIC. TRANSP. RSEA MISLYEAR and MOT DM TOEAO FtODWEAR POWER IWG HEALTH CCFM. TTICN LANEXU

1982 -- December 1264.1 1407.8 1204.7 1241.3 744.4 1360.2 1249.9 777.6 1033.0 1377.4

1983 -- December 3064.4 3206.6 3139.8 2972.8 2813.2 3695.8 2918.3 2674.7 2075.1 3201.9

1984 -- Deceaber 3247.9 2507.3 4210.3 3985.9 3266.1 4984.1 3490.1 3850.2 3685.7 4291.5

1985 -- Ja ry 3488.3 2645.7 4200.0 4193.3 3312.7 5070.3 3648.8 4224.2 4060.5 4602.3February 3495.4 2745.6 4388.9 4255.2 3230.1 5210.6 3769.9 4351.3 4126.6 4698.9Marchl 3575.9 2819.2 4538.8 4390.1 3190.0 5227.6 3842.1 4421.8 4226.1 4745.2April 3613.5 2803.3 4829.3 4423.6 3309.3 5292.4 3944.4 4525.6 4272.. 4786.1Mby 3647.9 2831.1 4859.7 4474.4 3390.9 5313.2 3959.6 46i2.7 4223.9 4839.9June 3728.0 2871.0 4857.7 4698.5 3334.8 5421.7 4047.3 4831.9 4278.3 4960.7July 3693.4 2726.7 4941.2 4764.6 3327.2 5523.9 4180.2 4884.4 4402.9 5078.6Augist 3665.1 2630.7 4922.9 4816.0 3367.0 5503.4 4223.3 4986.1 4433.9 5106.1September 3648.2 2548.8 4925.8 4872.3 3414.0 5421.4 4304.6 4997.4 4629.3 5141.8ortcter 3672.1 2560.4 5003.4 4843.4 3461.7 5494.8 4347.7 5010.1 4811.6 5174.9Ncvemrber 3737.0 2633.3 5026.0 4904.4 3515.8 5605.8 4447.5 5018.4 4848.2 5299.2DecaTer 3881.2 2797.1 5124.0 5088.8 3619.9 5762.4 4496.1 5034.6 4909.7 5412.0

1986 -- Jmauary 4047.2 2928.6 5571.7 5172.2 3797.0 5919.1 4555.6 5776.4 4947.7 5537.0February 4179.4 3050.9 5832.0 5246.0 4035.5 6133.2 4630.4 5886.7 5062.1 5656.9March 4301.5 3162.2 5973.2 5335.6 4302.1 6290.5 4699.0 6096.4 5119.3 5750.3April 4394.1 3228.2 6073.8 5398.5 4627.8 6477.7 4722.8 6233.6 5170.5 5801.5Mly 4499.2 3337.1 6178.8 5505.9 4783.0 6615.4 4728.9 6262.9 5253.1 5852.4June 4590.9 3399.1. 6288.7 5631.6 4969.4 6763.2 4744.9 6380.3 5327.8 5880.5Julv 4575.2 3309.3 6395.1 5654.5 5024.3 6848.7 4748.9 6526.5 5274.0 5904.6ug.zst 4542.3 3237.8 6433.5 5635.0 5030.5 6858.4 4743.6 6545.0 5391.8 5949.5Septenter 4517.8 3168.9 6450.7 5654.3 5053.9 6893.8 4767.6 6545.2 5407.8 5956.5October 4734.9 3287.4 6819.4 6153.3 5203.9 7276.1 4844.3 6612.5 5468.9 6102.2Novaier 4959.8 3468.3 7114.0 6518.3 5354.2 7749.1 4894.0 6701.1 5579.3 6232.8Deenater 5175.0 3647.2 7302.2 6885.2 5505.9 8123.3 4974.2 6809.0 5701.6 6381.9

1987 -- Jamary 5400.4 3841.2 7551.3 7210.1 5722.0 8487.5 5147.3 6945.9 5819.2 6560.8February 5616.3 3983.2 7880.9 7497.9 5960.9 8794.6 5293.8 7311.0 6126.0 6728.6March 5914.2 4167.7 8303.7 7790.3 6260.6 9149.0 5481.8 7943.5 7048.2 6992.1April 6195.6 4399.6 8718.5 8114.4 6552.4 9496.0 5737.0 8501.1 7198.6 7257.2May 6404.3 4617.8 8906.8 8322.7 6721.3 9731.8 5922.1 8715.2 7375.8 7463.0June 6605.0 4838.2 9030.8 8557.0 6899.6 9875.9 6020.6 8908.7 7481.1 7683.8July 6635.4 4800.2 9071.5 8673.1 7011.8 9976.7 6099.4 8954.4 7586.3 7807.9August 6610.9 4720.9 9106.5 8707.8 7026.4 10014.6 6123.2 8963.0 7607.8 7847.3Septber 6591.8 4649.5 9134.1 8735.7 7086.5 10048.9 6157.2 8988.5 7620.3 7883.7October 6596.0 4626.8 9172.4 8769.1 7113.3 10086.8 6174.5 9003.6 7644.8 7915.8NIveber 6710.5 4729.9 9343.4 8916.3 7184.1 10229.2 6290.1 9089.5 7716.9 8077.0Debcarer 6943.8 4950.4 9702.4 9190.0 7348.2 10555.5 6460.0 9297.8 7821.8 8309.6

1988 -- Jamary 7232.0 5196.2 10118.1 9449.5 7773.5 11010.3 6717.6 9815.7 7928.9 8664.2Febmuary 7533.6 5444.8 10573.7 9778.7 8143.4 11460.9 6958.4 10407.1 7996.4 8990.6Mardi 7875.3 5762.2 10950.5 10213.7 8576.3 11829.9 7188.0 10C634.7 8160.1 9386.3April 8208.3 6087.5 11333.3 10622.5 8938.3 12156.7 7387.7 10802.1 8353.6 9809.4Mky 8553.5 6424.9 11519.2 10898.0 9175.7 12354.4 7545.7, 11440.9 9249.3 10281.6June 8808.0 6692.3 11683.3 11186.4 9484.2 12594.2 7728.6 11533.3 9448.0 10597.3July 8722.2 6453.0 11721.8 '1l99.6 9518.7 12657.7 7743.5 11535.7 9462.0 10654.7Augst 8625.6 6233.5 11749.3 11329.9 9535.5 12684.2 7752.2 11535.9 9475.4 10678.8September 8572.5 6105.0 11777.9 11355.2 9546.9 12700.3 7767.0 11539.5 9482.1 10686.1Octcber 8569.8 6060.2 11944.5 11384.5 9576.7 12726.3 7774.9 11539.5 9491.0 10705.5

Scxrce: Statistical Nws Letter, Statistial Service, Anxia, Ghana.

- 169 -

TABLE 9.02: tDNILY CONSUM PRICE INDICES: A C C R A(1977 - 100)

aM4BIED FWOD BEVER. aYH.REr. FM FJRNISX MEIC. TRANSP. RECREA MISCELYEAR and DMIT TOBACCO FOUlUEAR PER IU HEALTi C021. TION LAZOUIS

1982-- Decerber 1196.8 1421.5 987.9 1057.0 524.4 1441.2 1647.4 1049.8 1154.5 911.2

1983 -- Decerber 2207.5 2319.9 2601.3 1947.7 1076.6 2933.7 1180.3 3642.2 1768.4 1897.9

1984 -- tecerber 2/83.1 2159.5 4415.4 3109.7 1610.7 4419.7 3372.5 5334.3 3269.3 3039.0

1985 -- January 3015.2 2375.0 4489.5 3298.8 1610./ 4501.9 3757.3 6060.5 3843.8 3257.6February 3040.9 2380.7 4489.5 3307.0 1625.4 4730.7 3757.3 6060.5 3919.8 3474.0March 3198.2 2456.9 4489.5 3676.1 1625.4 4730.7 3757.3 6060.5 3919.8 3474.0April 3298.1 2549.4 5482.2 3760.1 2021.9 4745.0 4015.1 6203.9 3925.8 3528.6May 3343.0 2585.7 5486.2 3839.0 2049.7 4749.9 4310.5 6347.3 3925.8 3583.3June 3343.3 2551.0 5278.3 3860.8 1906.6 4840.9 4668.9 6768.3 3984.1 3712.7July 3290.3 2336.5 5287.3 3988.6 1965.7 4866.4 48.5.5 6765.4 4264.2 3900.3August 3287.3 2292.9 5271.6 4018.2 1977.0 4857.6 479. 1 6951.8 4292.7 3900.7Septerber 3285.6 2207.0 5297.2 4081.7 2060.8 4861.3 491?.9 6951.8 4558.3 3900.7October 3336.5 2299.6 5321.1 4022.9 2122.0 4990.8 491 .9 6929.0 4550.6 4018.4Novenber 3403.8 2380.4 5367.2 4078.1 2158.3 5154.5 491 .9 6912.9 4605.8 4207.8December 3549.9 2472.3 5505.7 4378.4 2246.9 5503.0 4913.9 6912.9 4747.4 4419.7

1986 -- January 3768.8 2585.6 6558.2 4514.5 2457.8 5642.7 4939.5 7913.6 4724.0 4599.6February 3903.8 2726.9 6699.2 4555.7 2619.2 5811.2 5042.0 8129.7 4854.6 4739.8March 4061.5 2907.7 6733.3 4627.2 2984.9 5954.3 5042.0 8229.8 4865.1 4960.0April 4156.4 2912.5 6750.5 4717.9 3220.7 6087.0 5042.0 8309.7 4876.1 5004.8May 4192.3 2967.6 6788.2 4880.5 3344.4 6127.4 5042.0 8386.3 4919.5 5004.8June 4297.3 3039.5 6903.4 5049.0 3483.3 6273.6 5158.8 8595.7 4960.3 5021.3July 4292.8 2858.7 7089.4 5192.2 3578.5 6622.8 5158.8 8799.2 5112.3 5066.7August 4Z59.0 2769.7 7141.5 5191.0 3588.0 6651.3 5158.8 8821.8 5137.9 5102.0Septenber 4258.1 2714.9 7141.5 5285.5 3628.8 6714.4 5158.8 8832.3 5188.9 5140.4October 4444.3 2821.0 7614.2 5799.9 3736.3 7107.3 5241.4 8882.8 5188.9 5325.2Noverber 4640.7 2981.7 8022.2 6103.9 3870.0 7600.3 5266.1 8935.3 5317.2 5478.3Decenber 4878.6 3172.2 8455.4 6551.7 4057.2 8103.1 5284.3 9052.0 5410.8 5509.4

19S7 -- Jarnary 5132.4 3390.7 8813.4 7011.2 4258.1 8643.1 5307.3 9212.4 5455.3 5665.5February 5382.7 3529.0 9320.0 7313.2 4486.8 9154.8 5372.9 9648.4 5889.8 5821.5March 5705.9 3731.7 9851.2 7506.8 4714.7 9340.8 5438.5 10703.1 6858.0 5958.9April 6008.5 6936.3 10334.0 7891.3 4924.7 9737.7 5616.8 11637.7 6939.4 6128.5May 6226.4 4161.7 10599.2 7997.8 5011.6 10095.0 5934.9 12188.8 7115.4 6165.9June 6406.5 4349.2 10683.1 8191.2 5150.5 '016!".6 6134.1 12683.1 7174.7 6189.3July 6462.9 4314.7 10716.7 8383.3 5283.8 10423.2 6216.4 12781.9 7299.6 6262.3August 6455.3 4287.2 10721.4 8395.8 5293.4 10445.4 6231.2 12801.7 7299.6 6267.3Septanber 6421.4 4188.6 10742.6 8396.7 5361.5 10447.0 6231.2 12854.7 7304.7 6315.3October 6429.6 4183.5 10767.0 8429.8 5364.3 10483.0 6244.6 12887.' 7304.7 6341.8November 6498.0 4267.0 10880.5 8498.9 5371.1 10581.4 6301.0 12954.4 7307.8 6433.8December 6742.5 4494.7 11333.6 8819.4 5497.2 10971.1 6421.3 13383.9 7320.1 6543.9

1988 -- January 7093.9 4713.3 12123.1 9067.4 6073.4 11590.8 6630.5 14352.0 7320.1 6939.5February 7397.4 4959.0 12605.3 9259.6 6469.7 12102.3 6795.7 15229.9 7340.8 6993.0March 7676.1 5236.8 12978.2 9492.7 6828.9 12583.7 6898.8 15229.9 7670.0 7223.4Apr!.1 7959.5 5533.2 13551.7 9709.5 7104.1 12845.2 7143.8 15229.9 8041.0 7596.3May 8297.7 5813.0 13879.5 9843.4 7300.0 13119.0 7528.2 15759.8 9147.3 8366.6June 8525.8 6057.5 13899.8 10209.0 .330.8 13267.5 7528.2 15759.8 9351.5 8359.6July 8442.9 5840.5 13927.5 10295.2 7662.2 13369.8 7528.2 15759.8 9351.5 8366.6August 8329.4 5591.2 13935.9 10340.8 7662.2 13374.0 7528.2 15759.8 9351.5 8366.6September 8254.9 5426.8 13974.4 10358.4 7664.5 13375.1 7528.2 15759.8 9351.5 8366.6October 8222.3 5340.2 14032.5 10359.3 7708.3 13389.0 7528.2 15759.8 9354.2 8368.3Novber 8264.3 5393.5 14035.9 10390.2 7769.1 13488.0 7528.2 15759.8 9357.9 8368.3

Soarce: Statistical News Letter, Statistical Service, Accra, GhanA.

- 170 -

TABLE 9.02: fJMDLY CNrMf PRICE INDICES: R U R A L(1977 = 100)

CCMtINED FOOD BEVE. aLOT. RENT.FUE FURNISH HMIDC. TRANS. RECRA MISMEYEAR and H iNX TtZC3 FRXTWAR PCM DlU HEALTH 3WM. TICN LANEtI

1982 -- Demeter 1400.0 1515.8 1371.1 1363.9 1101.5 1477.8 1350.0 644.8 948.9 1621.3

1983 -- Deceaber 3501.3 3482.7 3284.8 3353.6 6344.5 4016.8 3542.7 2677.2 2065.5 3584.7

1984 -- December 3585.7 2706.5 4139.0 4324.1 6521.3 5431.0 3781.7 3230.9 3802.7 4490.0

1985 -- Jnuary 3803.0 2895.4 4096.7 4663.6 6656.3 5537.1 3953.4 3566.1 4244.0 4885.3February 3902.9 3048.4 4238.5 4680.3 6345.2 5658.8 4038.9 3085.5 4321.0 4875.6March 3931.1 3048.0 4371.2 4772.0 6035.1 5655.3 4177.2 3936.8 4448.9 4881.5April 3930.3 3046.7 4454.0 4724.0 5908.8 5753.5 4260.4 4017.0 4448.6 4983.6MbLy 3953.9 3071.5 4478.9 4729.1 6038.1 5794.6 4253.8 4035.7 4448.6 4934.9June 4094.1 3153.8 4556.2 5106.4 5926.3 5905.3 4316.0 4150.6 4461.8 5084.9July 4021.6 2951.3 4630.8 5184.4 5739.2 6019.2 4450.2 4254.3 4464.7 5121.4ALgpst 3978.1 2844.9 4621.4 5220.4 5760.2 5960.1 4501.0 4279.4 4498.5 5167.9Septenter 3947.8 2748.9 4625.7 5270.3 5766.0 5809.2 4570.6 4297.2 4749.1 5222.0October 3951.5 2715.0 4749.6 5260.4 5819.7 5809.7 4628.9 4312.8 4976.9 5251.3Ncvember 4006.4 2769.6 4760.5 5324.9 5885.6 5878.0 4747.2 4324.6 4998.9 5364.8Decaber 4162.4 2978.8 4796.8 5483.3 6024.4 5934.9 4775.0 4356.9 5037.5 5476.4

1986 -- Jariary 4307.4 3147.4 4983.7 5561.3 6174.9 6081.6 4847.4 4669.0 5101.3 5611.0Februay 4435.7 3272.3 5236.8 5641.0 6429.4 6232.7 4919.8 4715.3 5255.8 5760.7*iMarh 4561.5 3387.9 5399.4 5740.7 6620.7 6421.4 5007.2 5007.4 5358.5 5836.3April 4655.6 3460.9 5491.9 5807.5 6996.8 6627.5 5035.7 5127.2 5467.3 5911.4May 4792.0 3616.9 5579.2 5916.5 7228.5 6783.5 5041.4 5207.0 5617.5 6005.7Jure 4873.8 3673.9 5682.1 6037.3 7480.2 6939.1 5039.1 5290.9 5770.9 6032.4July 4867.4 3616.3 5821.0 6029.8 7500.3 6952.1 5044.7 5362.2 5800.7 6070.0Augist 4837.2 3541.7 5863.2 6028.8 7494.8 6974.4 5039.0 ''76.2 5837.1 6145.2S'eptaiber 471o..4 5.3 . 6o. 1 /7 /7)2L. / 6YY2.; 5u/7.9 5368.u 383.6 6146.5October 5036.4 3583.2 6232.3 6538.4 7688.6 7365.4 5151.3 5424.9 5927.9 6312.8Ncvember 5262.1 3765.4 64,75.7 6888.4 7825.1 7848.8 5192.5 5476.5 6038.7 6420.4DecaTber 5463.8 3929.9 6582.0 7239.1 7908.2 8189.8 5252.9 5546.7 6184.4 6587.5

1987 -- Jauary 5682.6 4108.7 6824.7 7543.0 8127.5 8504.4 5443.6 5635.5 6386.0 6798.3February 5884.2 4245.5 7094.4 7821.6 8405.7 8748.0 5575.5 5948.9 6681.7 6966.0March 6166.6 4426.5 7479.8 8124.9 8766.3 9136.1 5756.4 6344.7 7628.3 7294.1April 6429.8 4659.0 7823.4 8397.5 9139.1 9459.0 6027.9 6744.7 7774.7 7583.5Fey 6633.9 4870.0 7970.9 8620.1 9447.2 9620.9 6187.8 6794.4 7967.5 7832.8June 6847.0 5104.6 8080.2 8864.3 9726.8 9792.3 6264.1 6844.3 8102.8 8086.0July 6865.2 5056.4 8124.0 8950.4 9890.2 9846.1 6347.6 6881.1 8212.0 8234.0Axgpst 6829.6 4950.8 8164.6 8989.6 9912.0 9882.9 6370.7 6884.7 R241.2 8273.7September 6815.1 4885.6 8192.3 9022.3 9998.4 9926.0 6416.0 6902.6 8259.0 8304.0October 6819.1 4859.6 8243.6 9053.6 10051.9 9959.3 6428.5 6914.3 8291.5 8326.6NoveTber 6944.1 4961.3 8410.5 9210.6 10172.6 10119.7 6555.9 7009.2 8409.8 8508.9Deceber 7170.2 5169.5 8715.1 9480.5 10360.9 10404.5 6725.7 7106.1 8579.4 8735.2

1988-- Jauary 7428.8 5417.2 9018.4 9731.5 10612.1 10787.0 7036.1 7330.4 8746.2 9068.9February 7717.0 5640.5 9425.1 10085.5 11091.3 11210.1 7298.3 7679.0 8838.1 9439.4March 8084.9 5968.2 9831.7 10550.2 11741.9 11515.1 7591.8 8010.6 8973.9 9838.0April 8428.9 6283.9 10127.5 10966.5 12271.8 11920.9 7841.0 8292.8 9131.3 10323.6May 8772.9 6628.9 10286.1 11276.2 12592.2 1214'..9 8011.1 8893.6 9977.9 10763.7Jiun 9067.7 6936.3 10454.9 11576.2 13070.1 12497.4 8284.7 9061.8 10434.6 11.126.1July 8982.1 6677.7 10500.8 11721.4 13092.5 12563.8 8305.4 9068.4 10157.3 11212.5Aug.st 8881.6 6452.3 10528.4 11748.1 13111 1 12591.6 8316.1 9069.1 10168.1 11245.3Septerber 8823.3 6310.5 10560.2 11781.2 13131.0 12609.8 8338.0 9078.8 10173.4 11256.6October 8830.3 6273.4 10729.6 11824.8 13161.4 12640.2 8346.3 9078.8 10184.2 11290.3

Source: Statistical News Letter, Statistical Service, Accra, Ghana.

- I;.1 -

TAME 9.02: MDTHLY CCtS.ER PRIM 2CiCES: U R B A N(1977 = lOC)

O-M3INE FOCD 3VER7. CLD. RENT. FE FUISHi MEDIC. TRAP. RBECRA MISCELYEAR and MlN INX T0EDC FOOTWYEAR POWER DU HEALTE aUM. TICN LANECUE

1982 -- Dece7ber 1131.9 1299.8 1000.0 1080.0 599.9 1235.8 1052.2 854.0 1086.6 1039.3

1983 -- DecaTer 2639.5 2930.0 5.0 2691.9 24,.2.1 1384.8 3356.3 1684.4 2673.2 2080.9

1984 -- Decenter 2919.5 2308.0 4297.8 3541.3 1949.4 4511.4 2913.0 4206.1 3615.8 4060.3

1985 -- January 3024.5 2396.0 4326.7 3574.9 1960.2 4576.6 3046.0 4602.4 3988.9 4365.9February 3099.1 2442.8 4573.4 3696.2 1970.1 4736.6 3211.6 4630.9 4010.3 4493.1Mbrc-h 3230.5 2590.4 47'4.5 3886.8 2C39.2 4775.3 3179.9 4708.c 4093.0 4579.4April 3305.4 2559.0 5289.9 4028.6 2257.8 4884.7 3319.9 4818.0 4166.6 4649.2May 3350.3 2590.7 5327.0 4139.6 2320.1 4884.1 3378.2 4944.3 4089.6 4729.3June 3372.0 2588.2 5227.6 4'162.3 2286.6 4910.3 3518.4 52Z3.5 4168.6 4816.1July 3374.3 2502.0 5322.1 4212.6 2351.6 5060.0 3643.7 5246.6 4366.0 5005.5ALgast 3359.1 2416.4 5292.8 4284.4 2398.9 5020.4 3674.4 5392.3 4395.3 5034.2Septembr 3355.5 2348.7 5294.0 4349.1 2462.6 5011.3 3779.0 5399.9 4557.7 5048.8October 3399.1 2405.7 5315.3 4295.1 2507.9 5161.7 3791.9 5410.9 4712.8 5086.0Nakwrir 3473.4 2496.9 5351.6 4351.6 2557.2 5317.9 3855.3 5417.2 4758.2 5222.8DeceTber 3606.1 2615.4 55?5.5 457C .2 2647.3 5579.9 3944.8 5424.1 4833.3 5537.1

1986 -- Jaiiary 3792.4 2709.8 6293.2 4660.7 2835.1 5747.2 3979.0 6413.0 4855.9 5450.9

Februarv 3928.4 2829.5 6562.4 C726.7 3)67.2 Py'28.? 4c5s.5 6559.8 4946.4 5536.1

Mach 4046.9 2536.5 6677.3 4,K07.2 3364.3 61.52.r0 4089.8 6722.3 4976.4 5650.2

April 4135.1 2915.4 6786.' -.86i. 3669.5 6319.2 2'.104,3 6815.0 4993.1 5673.6

Yay 4213.0 303t57.3 6914.5 4966.1 3793.8 6437.7 4'11.2 609. 5 5035.4 5673.8

Jur 4306.1 3124.2 7,0 3 3.0 509e.2 3953.8 6577.2 ,41623.5 76 .5 5063.0 57C3.7

July 4289.4 3C.02.3 7.99.A 5t'. 6, 222.8 6 ,73.3 .164.2 7195.8 5119.1 5711.9AkgJIst 4253.9 2934.0 7133.3 5119.6 4_33.7 6735.8 419. 721.9 5 25.8 57215

sptAt I 6L 424J.) -Z>Llo8z,@ I>: ' . rxE -, 7; 515 .. 3 573.2 *D: D

October 4/40.1 2991.6 7539.8 5647. ,198. 9 71 ?'. 42.7.7 7295.1. 5194.7 5857.0

NrveTivr 4664.2 3171.3 7897.2 6R .5.6 4353.7 76435 3.6 434. 2 7, 4..-9 5304.8 60 14.4

DeTber 4892.5 3364.5 8186.1 641.8 4533.2 8053.1 4/23.4 7534.6 5413.2 6142.4

1987 JanJa-ry 5124.3 3573.8 8443.0 6772.3 .748.9 8469.6 4562.0 7699.1 5480.5 6284.1

February 5354.2 3721.0 88.6.5 7072.4 4972. &4. 4737.1 809-.C 5794.1 6452 0

Mtrth 5667.5 3908.9 94.8 735.,4 52.7.1 962.6 4'939.1 8862.5 6701.6 6640.4

April 5966.6 4140.3 9&7'.C 7742.C 55,.- 535.1 5.62.2 9-1ic6 6854.6 6877.3

MaY 6179.7 4365.5 IX55 4 7931. 6 5618.7 9849.1 5397.1 9819.3 7022.3 7032.3

JIMe 6368.5 4571.9 10197.4 8152.9 .,75 5.9 9964.4 5;539.3 i?09 5.3 71 09.7 7215.6

July 6410.6 4543.9 10234.2 8308.5 5847.5 10114.9 5638.9 10146.0r 7212.4 7311.6

hl&Zt 6396.9 449C.9 10262.5 8337.3 5859.1 -f1053.5 5634.; 10f,57.7 7229.5 7350.9

SeptadTer 6373.4 44i3.5 10289.8 8358.8 5908.7 10178.8 5645.6 10187.5 7238.6 7394.4

October 6377.9 4394.C 10312.2 8394.9 5924.7 10271.4 5672.4 10204.5 7258.4 7437.5

NKeTber 6482.0 4498.4 10488.1 8529.4 5975.3 1'345. 0 5764.8 10285.2 7302.9 7574.1

Der 6722.2 4731 4 1914.1 8807.9 6129.5 i'7i5.- 5935.0 10557.6 7369.1 7814.0

1988 -- Jaiary 7038.9 4975.2 11467.7 9078.7 66625.2 11246.3 60868.3 1I244.3 7440.7 8192.9

February 7353.5 5249.2 11983.3 9375.i4 6951.C 11726.2 6286.6 11975.1 7493.5 8468.1

Marrh 7669.7 5556.1 12323.5 9771.4 7295.8 12162.8 6390.2 12143.0 7674.0 8860.3

April 7992.0 5891.2 123i3.1 10170.3 7589.9 2406.0 6491.9 = 2".4 7889.0 9210.7

Vey 8338.7 6220.8 13032.5 1-0/C.7 7793.8 12576.C 6626.1 12905.0 8814.0 9720.2Junle 8553.9 6448.3 31I9X. 8 1374.C 8033.7 12696.6 6629.6 12953.9 9037.9 9981.5July 8468.0 6228.4 i3 220.2 10745. ` 37 3 2 7 7.C 6633.0 12953.9 9046.6 1 0)0 5. 3AL :st 8375.1 6014.6 332.75 110780v.11 8086.4 12782.1 6638.0 12953.9 9061.6 10019.1Septarter 8325.3 5899.4 13272.3 10795.2 8C097.1 12796.1 66 38. 6 12953.9 9069.1 10021.7Octcber 8315.0 58 47.0 13435.. O0K5. 7 8126.8 1281 7. 5 6645 .7 2953.9 9076.9 10024.4

Saute: Statistical News Letter, Statistical Service. Accra, faan.

TABLE 9.03: WHOLE3ALE PRICE INDEX NUK4BERS (1977=100)

Weight ITEM 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

100 Combined Index 147.7 244.6 349.5 523.7 712.2 1630.3 2958.6 4624.9 7564.0 10692.0

55 I. Agriculture, Forestry and Fishing 146.2 236.8 355.4 474.3 773.3 1758.6 2675.6 3514.4 6425.6 9824.741.7 A. Agric. and Livestock Production 147.9 230.5 356.9 527.4 894.8 2009.0 2580.6 3117.5 5014.6 7077.410 B. Forestry and Logging Production 124.8 244.0 335.5 302.5 230.5 831.1 2881.8 4208.2 11445.1 20959.63.3 C. Fish 185.9 291.0 391.5 659.7 882.6 1404.4 3040.8 6383.7 8832.1 10898.116 II. Mining and Quarrying Production 186.7 338.0 449.7 754.2 897.3 1195.8 2078.0 5854.5 8210.Q 12510.0

41.4 III. Manufacturers 148.5 255.8 347.1 546.4 632.8 1538.6 3371.7 6161.8 9157.1 11935.814.7 A. Food, Drink. Tobacco 156.0 260.3 376.5 620.1 736.2 1549.1 3028.2 5344.5 8539.6 11792.07.3 B. Textiles, Wearing Appa. 151.9 220.5 303.0 581.6 669.1 1462.7 3588.4 7124.9 9589.4 12600.04 C. Wood and Furniture 159.4 206.3 206.4 699.4 715.7 774.8 787.9 3072.9 3838.3 3457.29 D. Chemicals 127.7 224.5 378.4 575.5 609.2 1526.7 3332.3 6497.7 9967.3 12247.6

1.8 E. Non-Metallic Products 174.1 331.6 428.4 569.2 662.7 3668.3 5619.3 7830.0 12185.8 19392.03.8 F. Basic Metal Products 183.4 363.5 353.7 438.8 445.9 1778.8 4555.3 9772.8 12675.9 14748.64.4 G. Fabricated Machinery 119.2 243.4 231.1 249.7 250.3 661.6 2361.6 2643.8 5046.8 6184.32 IV. Electricity, Gas, Water 132.5 159.2 174.2 427.4 519.2 590.8 3159.6 4389.6 7781.3 8528.7

31.3 V. Exports 150.6 297.1 376.4 439.3 798 r 1144.4 2734.0 4558.7 8922.0 14132.2

Source: Statistical News Letter, Statistical Service, Accra, Ghana.Quarterly Digest of Statistics, June 1988, p. 53.Newsletter of CBS, No. 4183.

TABLE 9.04: INDEX IMHBERS OF PRIME BUILDING COSTS

Weight ITEM 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

100.0 Combined Index 155.7 242.0 371.6 636.9 744.0 1784.8 3835.2 5998.1 8170.1 11546.7

13.8 Unskilled Labor 141.0 166.3 244.4 407.4 410.3 558.2 1039.1 229.7 3077.3 3600.520.2 Skilled Labor 133.1 164.4 245.6 353.5 357.0 483.6 874.6 1849.2 2837.9 3407.94.8 Sand 201.8 315.1 431.8 814.0 1188.5 1999.4 3993.6 7776.0 8153.4 10504.63.5 Stone 166.6 304.4 379.8 607.7 786.0 1797.6 4891.4 6407.5 7703.7 11617.98.9 Timber 178.5 396.3 637.9 1740.4 1987.9 4329.2 7011.1 8900.0 11972.2 22151.212.3 Cbe,nt 182.8 293.3 433.2 602.7 679.3 2206.6 5064.6 7624.1 12307.5 21775.13.4 Steel Material 133.3 231.2 153.4 510.2 789.5 2794.8 5694.7 7894.7 10307.1 13170.84.6 Roofing Material 162.0 312.2 323.9 673.5 827.8 1918.1 7002.3 4879.9 13166.2 20354.928.5 Hiscellaneous 152.6 232.9 423.4 602.2 720.3 2145.1 4876.5 7630.0 10550.3 12209.8

Source: Statistical News Letter, Statistical Service, Accra, Ghana.Quarterly Digest of Statistics, June 1988, p. 51.Newsletter of CBS, No. 7/83.

TABLE 9.05: AVERAGE RETAIL PRICES OF SELECTED CClH)DITIES IN ACCRA(Cedis per Unit)

0CMMDDITY 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

Unit:

Corm - Shelled rg. 1.1 1.9 3.0 4.1 8.3 8.5 19.5 18.8 19.1 30.4 55.1Rice Xg. 1.3 3.8 10.3 19.0 21.5 - 96.3 94.5 90.4 99.1 156.0Kenkey Kg. 0.4 0.6 1.8 3.1 5.3 6.8 16.3 16.6 21.9 35.5 54.9Bread Kg. 1.6 2.4 4.2 6.0 14.6 22.9 - - 108.6 124.4 113.2Cassava (Fresh) Kg. 0.4 0.7 1.2 1.7 5.9 5.5 24.9 13.8 9.9 21.7 40.1Plantain Kg. 0.6 1.3 2.4 3.4 5.9 11.9 50.4 32.1 25.2 29.7 67.7Yam K8. 0.7 1.5 2.6 3.6 7.6 11.6 52.4 39.4 30.6 35.7 72.1Cassava - Gari Kg. 1.1 2.5 3.4 4.5 11.9 14.4 54.9 33.9 22.2 57.1 95.5Small Beans K8. 1.2 2.9 10.6 18.1 33.4 58.1 101.5 90.1 81.5 103.4 122.5Groundnut Shelled Kg. 1.2 3.3 13.5 23.8 24.9 48.9 99.5 84.4 73.1 97.2 155.3Palm Nut Kg. 0.5 0.9 2.4 3.9 6.4 13.3 64.0 24.8 23.4 55.1 52.6Palm Oil Beer Btle 3.6 7.4 10.9 14.5 21.4 41.3 111.3 125.6 103.3 112.4 129.8Banana Kg. 0.5 1.1 1.9 2.8 4.7 8.1 19.0 31.4 17.2 30.2 31.2Cocoyam Leaves Kg. 1.1 1.4 2.5 3.2 6.4 10.1 16.9 25.0 17.0 38.7 68.6Tomatoes - Medium Kg. 1.3 1.8 6.7 11.3 12.6 21.2 49.9 54.2 29.5 63.1 180.2Beef - Dearer Cut Kg. 3.3 8.5 20.9 38.4 49.2 86.4 135.8 239.0 276.6 320.3 487.7Egg One 0.4 0.6 1.1 1.5 2.7 3.1 8.6 10.4 11.0 13.6 21.4Mik Evaporated Tin 0.4 1.2 1.5 4.4 8.7 2.8 - 18.2 33.0 52.4 109.7Herrings SmDked Kg. 2.4 8.3 22.3 37.1 42.7 63.2 112.7 183.7 147.0 175.2 294.4Sugar Granulated Kg. 1.7 4.1 7.2 12.8 15.2 - - - 90.3 119.4 136.4Coca Cola Bottle 0.4 0.8 0.9 1.1 5.5 1.8 7.6 18.2 39.2 49.9 59.7Beer (Club or Star) Bottle 1.4 3.4 4.8 7.0 16.7 11.9 20.4 62.2 78.0 93.2 130.7Cigarette - Embassy Packet 0.9 3.1 7.5 10.7 21.9 16.0 25.0 45.0 64.4 105.0 151.6Cotton Prints Yard 4.9 7.3 9.1 40.2 64.6 133.7 - - 300.0 415.6 533.0School Girl Uniform One 10.5 12.1 15.4 48.2 93.3 72.7 80.6 160.7 199.7 308.6 603.2Rubber Sandals Pair 3.2 5.9 8.3 10.1 15.9 16.5 100.0 100.0 119.4 123.8 193.1Kerosene Beer Btls 0.2 0.3 0.8 0.8 1.6 1.5 4.7 12.2 16.2 19.1 22.2Charcoal 45.4 kgs. 10.4 20.6 41.4 56.9 111.9 126.7 271.7 455.6 485.9 560.3 924.7Guardian Soap One 0.4 0.9 1.0 4.5 6.2 1.3 - - 30.5 37.2 25.3Matches Box 0.1 0.3 1.0 2.0 5.4 2.3 4.5 7.0 5.6 10.1 10.1Anti-Malaria Tablet 10 1.C 1.0 1.9 2.0 3.6 - 5.0 5.0 11.5 15.6 38.8Petrol - Super Gallon 1.4 2.1 5.1 7.3 12.2 13.0 26.1 53.5 96.3 147.5 185.0Omnibus Services Min.Dist.Cost 0.1 0.1 0.2 0.2 0.6 1.0 1.8 3.0 5.0 5.0 10.0Mammy Truck - Trotro Min.Dist.Cost 0.1 0.3 0.4 0.6 1.5 1.0 1.3 5.1 5.5 9.3 10.060-Page School Book One 3.4 5.4 6.0 7.5 9.7 9.2 10.8 22.6 46.5 47.5 46.9

Source: Statistical Service, Accra, Ghana.Quarterly Digest of Statistics, March 1983, p. 53. June 1986. p. 57, and June 1988, p. 56.

TABLE 9.06: AVERAGE MDNTHLY EARNINGS PER EMPLOYEE IN ESTABLISHMENTS IhRESPECTIVE OF SIZE[December data; Cedis]

ITEM 1980 1981 1982 1983 1984 1985 1986

Public Sector: 441 579 607 1071 2122 3461 7332Agriculture, Forestry and Fishing 322 490 543 833 2199 2675 5752Mining and Quari-ying 612 862 863 2214 3354 10534 12287Manufacturing 527 631 709 1256 2399 4108 8385Electricity, Water and Gas 526 703 744 860 1980 3291 6540Construction 328 516 518 891 1564 2474 5075Ilolesale, Retail Trades, Restaurants 417 481 577 859 1405 2681 5540Transport, Storage and Cc,munL Ations 530 577 714 1014 2302 3503 10436Finance, Insurance, Real Estate 520 714 720 1211 2290 4254 8562Community, Social, Pers. Services 448 720 562 940 2027 2835 6682

Private Sector: 5S1 672 868 1301 3280 4702 7549Agriculture, Forestry and Fishing 416 683 734 1173 2973 3264 5402Mining and C!uarrying 676 785 1616 2109 4074 5998 6480Manufacturing 567 713 841 1345 3940 5535 7844Electricity, Water and Gas - - - - - - -Construction 522 467 533 840 1615 3032 4612Wiholesale, Retail Trades, Restaurants 803 609 1197 1529 2958 4781 6843Transport, Storage and Ccomunications 503 955 999 1701 2671 6509 11846Finance, Insurance, Real Estate 715 972 1469 1266 3940 7331 18642Ccnmmity, Social, Pers. Services 449 538 775 957 1984 3027 6127

214 276 300 516 1064 1557 3426Public and Private Sectors: 461 593 E45 1110 2287 3347 7364Agriculture, For-stry and Fishing 329 503 559 886 2298 2825 5702Mining and Q.iarrying 613 859 870 2205 3370 6011 12167Manufacturing 552 689 787 1312 3441 5234 7996Electricity, Water and Gas 526 703 744 860 1980 3249 6540Construction 356 507 521 883 1573 2529 4968Wholesale, Retail Trades, Restaurants 553 518 767 1101 1843 2834 5828Transport, Storage and Ccmmmnications 534 624 721 1119 2321 3465 10526Finance, Insurance, Real Estate 545 701 852 1217 2567 4645 9549Community, Social, Pers. Services 448 553 582 941 2025 2782 6659

Source: Statistical Service, Accra, Ghana.Quarterly Digest cf Statistics, June 1988, p. 47.

TAME 9.07: HIN4M WhGE: DIALY W(E AlND INDICES OF NCfl}iAL AND EiAL *@Y3ES

IThM 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

Cedis Per DRy 2.0 2.0 3.0 4.0 4.0 5.3 12.0 12.0 25.0 1/ 35.0 2/ 70.0 90.0 90.0ITr,e l%Ninal W3W (1977=100) 66.7 66.7 100.0 133.3 133.3 177.7 400.0 400.0 833.3 1166.7 2333.3 3000.0 3000.0Inxde Real Wbge (1977=100) 225.4 144.2 100.0 77.0 49.9 44.3 46.1 37.7 35.2 35.3 64.0 66.0 47.2

Siurte: Statistical Service, Acra, Ghwa.

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SPOND'A, _TAS<Eo^^ORADI

MARCH 1987