Friendly welcome in an oasis of calm
GHANA'S PROGRESSIVE, STABLE, AND DEMOCRATIC POLITICAL SYSTEM IS A BEACON OF HOPE IN A TROUBLED REGION. NOW THE GOVERNMENT SEES THE PRIVATE SECTOR AS THE ENGINE OF FUTURE GROWTH AND HAS EMBARKED ON A STRATEGY TO ENCOURAGE FOREIGN INVESTMENT

SMOOTH POLITICAL transition has given President John Kufuor (center) a firm mandate to effect positive economic change

Ghana is one of Africa’s success stories. A paradigm of democracy, it is among the continent’s more developed and progressive states, with a stable economy and a reasonably sophisticated infrastructure. Accra, the national capital, is a major hub for air and sea transport and an important center for business. Most recently, it has been an oasis of calm in the face of unrest in neighboring Ivory Coast.

The smooth political transition that saw President John Kufuor assume office in early 2001 is testimony to how far Ghana has come. It was the first state in sub-Saharan Africa to gain independence from Britain in 1957. Located on the Gulf of Guinea, the country has a rich history, typified by the powerful Ashanti empire of the 17th century. Today, it is regarded as one of the friendliest places to visit in the whole of Africa.

Formerly known as the Gold Coast during colonial times, the economy is dependent on two commodities—gold and cocoa. Buoyant prices on the international markets for both of these items have resulted in an improving financial position. Gross domestic product was valued at around $6 billion in 2002. Despite these successes, however, the fight against poverty remains the most pressing issue for the government, as it does elsewhere in the region.

In addition to social progress, President Kufuor has made economic development a priority in his first two years in office. This has meant tackling inflation and interest rates, diversifying the productive base, helping the fledgling private sector to flourish, and improving the transport and communications infrastructure. He sees the private sector as the engine of growth and is eager to attract foreign direct investment (FDI) to help nurture its development.

JAKE OBETSEBI-LAMPTEY Minister of Information

Minister of Information Jake Obetsebi-Lamptey says that Ghana’s political and economic maturity places it in an important position in the west African region, where the foundations of democracy are also taking hold. Ghana is looking to use its influence to steer regional bodies such as the Economic Community of West African States (Ecowas) which has grand designs on a single market and a single currency. “I look to Ghana to play an increasingly significant role in regional affairs,” he says.

Although the recent coup attempt in the Ivory Coast sent out “terrible signals” to the rest of the world, American and other investors need to be able to distinguish between those states that have effected change and those that still lag behind says Mr. Obetsebi-Lamptey. He believes that Ghana is a place where foreign investors can not only make money, but achieve returns far in excess of those at home in the U.S. or in Europe. “It’s also nice to make money and enjoy it in an environment in which you feel comfortable,” he adds.

Accra has carefully created the conditions to attract greater inflows of FDI, including responsible economic management and attention to social issues such as HIV/AIDS. There is a reliable physical infrastructure, with improvements under way, and there are direct flights to the U.S. There is an educated and versatile English-speaking population of around 20 million that has produced, among other leaders, United Nations Secretary General Kofi Annan.

NANA AKUFO-ADDO Attorney General & Minister of Justice

According to Nana Akufo-Addo, the country’s Attorney General and Minister of Justice, Ghana’s legal system is something that should also make American businessmen feel comfortable. One of the most developed legal systems in Africa, it has many similarities with U.S. law. “It is very easy for American lawyers to advise their clients and to understand the legal processes and systems here,” he says. “It is essentially the same system as in the U.S.”

There have been efforts to modernize the judicial system, not only through reform of the legislature, but on a practical level, with the computerization of the courts. The result is a faster, more transparent and functional legal system. Mr. Akufo-Addo is eager to make any further changes that will assist business and cut red tape. There is also a zero tolerance policy towards corruption throughout the system. “My general philosophy is to make it easier for businessmen to do business, to simplify rules and to create a more efficient bureaucracy to manage the rules,” he adds.

There are hopes that, with a more level playing field for business, Ghana can start to diversify its economy away from commodity exports to value-added areas such as manufacturing and processing activities. It is especially interested in developing production in the agricultural sector, including cocoa, as well as in timber and salt production. The aim is also to develop other industries such as textiles, with the help of the U.S. Africa Growth and Opportunity Act, and also tourism. Mining will, however, continue to play a dominant role in the economy for some time.

The view from outsiders like the International Monetary Fund (IMF) is realistic but encouraging. There are problems, but there is also huge potential. Don Enrique De La Piedra, the IMF representative in Ghana, says the importance of political and economic stability cannot be stressed enough in the African context. “Once you have a stable economy, once you get rid of your external debt problem and once you really get the private sector going, you only need to move on,” he says.