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- GDP (PPP):
- $82.4 billion
- 7.0% growth
- 8.3% 5-year compound annual growth
- $3,305 per capita
- Inflation (CPI):
- FDI Inflow:
Ghana’s economic freedom score is 64.2, making its economy the 66th freest in the 2014 Index. Its overall score is 2.9 points better than last year, reflecting notable improvements in the control of government spending, freedom from corruption, and business freedom. Ghana is ranked 5th out of 46 countries in the Sub-Saharan Africa region, and its overall score has risen above the world average.
Over the 20-year history of the Index, Ghana’s economic freedom has advanced by nearly 9 points. With improvements in seven of the 10 areas measured, Ghana’s overall economic freedom has been undermined only by declines in freedom from corruption and monetary freedom. In the area of market openness that measures trade freedom, investment freedom, and financial freedom, Ghana has made particularly notable progress. Categorized as a “mostly unfree” economy for much of its history in the Index, Ghana has achieved “moderately free” status in four of the past five years.
Lingering institutional impediments to advancing economic freedom include the inefficient protection of property rights and the weak rule of law. Corruption remains a serious deterrent to translating economic growth into sustained and broad-based economic development throughout the country.
Ghana has been a stable democracy since 1992. Long-time opposition candidate John Atta Mills was elected president in December 2008 but died in 2012. Former Vice President John Dramani Mahama won a special election in December 2012. Ghana is considered a regional model for political and economic reform. It is rich in natural resources, including gold, diamonds, manganese ore, and bauxite, and oil production began in 2010. Challenges include managing new oil revenue while maintaining fiscal discipline and resisting debt accumulation. Estimated oil reserves have jumped to almost 700 million barrels. The industrial sector (about 30 percent of GDP in 2007) is more developed than in other African countries, but agriculture accounts for 50 percent of employment and 39 percent of exports.
Government corruption remains a significant problem, and anti-corruption laws are rarely implemented effectively. Scarce budgetary resources compromise and delay the judicial process, and poorly paid judges are tempted by bribes. The process for gaining clear title to land is often difficult, complicated, and lengthy. Some progress has been made in recent years in improving the protection of intellectual property.
Ghana’s top individual income and corporate tax rates are 25 percent. Other taxes include a value-added tax (VAT), a national insurance levy, and a capital gains tax. The overall tax burden equals 14.6 percent of total domestic income. Government expenditures are 24 percent of gross domestic output, and public debt remains over 55 percent of the size of the economy.
The business start-up process takes two weeks, but obtaining necessary permits takes over 200 days and still costs over twice the level of average annual income. Despite ongoing efforts to modernize the labor code, a large share of the labor force remains in the informal economy. In May 2013, Ghana scrapped costly fuel subsidies to help restore fiscal stability after overshooting its budget deficit target by nearly 100 percent in 2012.
Ghana has a 10.1 percent average tariff rate, and non-tariff barriers further impede trade. Foreign investment is officially welcomed, but investors may face restrictions in certain sectors of the economy. The financial sector has undergone restructuring through privatizations, but the banking sector is undercapitalized, and access to financing remains limited.