One of the fastest growing economies in the world a few years ago, Ghana’s rate of growth slowed in 2015 to 3.9 percent, down from 7.1 percent in 2013. Ghana’s economy is highly dependent on the export of primary commodities such as gold, cocoa, and oil. Thus, the country remains vulnerable to potential slowdowns in the global economy and commodity price shocks. Overall increased inflation and devaluation of the Ghanaian cedi since late 2013 has dampened the macroeconomic success story. While the cedi has largely stabilized over the past year, inflation hit 19.2 percent in March 2016 – the highest since early 2010 – and still remains stubbornly high. Ghana’s total public debt rose to 71.4% of GDP in 2015, exceeding pre-HIPC levels.
In 2015, the GOG signed a $918 million extended credit facility (ECF) agreement with the International Monetary Fund (IMF) in an effort to stabilize Ghana’s struggling economy. Although the government has made progress this past year on fiscal consolidation, structural reforms are progressing slowly. Ghana has successfully completed three IMF reviews since the program started but Government of Ghana authorities face challenges in addressing its massive state-owned enterprise debt, mostly in the power sector, estimated to be between $1.5-2 billion. Ghana completed a five-year $547 million Millennium Challenge Corporation (MCC) compact in 2012 and a second, five-year $498 million MCC compact focused on the power sector entered into force on September 6, 2016.
Ghana exports goods to the United States under the African Growth and Opportunity Act (AGOA) and is a Feed the Future, Power Africa, Trade Africa, and Partnership for Growth country. The United States is among Ghana’s principal trading partners, with bilateral trade between the two countries reaching $1.2 billion in 2015. A number of major U.S. companies operate in the country, including IBM, Coca-Cola and Newmont Mining. Political stability, overall sound economic management, a low crime rate, competitive wages, and an educated, English-speaking workforce enhance Ghana’s potential as a West African hub for American businesses. Ghana has significant reserves of oil and gas, currently being developed by a variety of global petroleum companies, including U.S.-based Kosmos Energy.