Report No. 6635-GH

Ghana: Policies and Issuesof Structural AdjustmentMarch 30,1617

Western Africa Region

FOR OFFICIAL USE ONLY

Document of the lbirld Bank

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

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CURRENCY EQUIVALENTS

Currency Unit Calendar 1985 From January 1986 From September 1986

US$1 054.054 090.0' 0128-156 1/Cedi (0) 1 US$0.0185 US$0.011 US$0.0073-0.0065

FISCAL YEAR

JANUARY 1 - DECEMBER 31

ABBREVIATIONS

ADF - African Development FundCocobod - Ghana Cocoa BoardECG - Electricity Corporation of GhanaEFF - Extended Fund FacilityERP - Economic Recovery ProgramGHAIP - Ghana Italian Petroleum Company LimitedGNPC - Ghana National Petroleum CorporationGOIL - Ghana Oil Company LimitedGP&T - Ghana Posts and TelecommunicationsGPHA - Ghana Ports and Harbour AuthorityGRC - Ghana Railway CorporationGWSC - Ghana Water and Sewerage CorporationIFAD - International Fund for Agricultural DevelopmentLODP - Letter of Development PolicyMFEP - Ministry of Finance and Economic PlanningNATCAP - National Technical Cooperation AssessmentOHCS - Office of the Head of Civil ServicePIB - Prices and Incomes BoardPNDC - Provisional National Defence CouncilSAF - Structural Adjustment FacilitySAIS - Structural Adjustment Institutional SupportSEC - State Enterprises Commiss-LonSGMC - State Gold Mining CorporftionSIL - Special Import LicenceSOE - State-owned EnterpriseUNFPA - United Nations Fund for Population ActivitiesVRA - Volta River Autnority

1/ A dual enchange 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 thesecond window was established at the weekly auction. The two rateswere unified with effict from February 20, 1987; all transactionsare now valued at the rate emerging in the weekly auction. In theweek ending March 20, 1987, the marginal rate at the auction was0156 = US$1.

FOR OMCIAL US ONLY

GHANA: POLICIES AND ISSUES OF STRUCTUFAL ADJUSTMENT

Table of Contents

Page No.

ECONOMIC INDICATORS

FOREWORD

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

CHAPTER I - RECENT ECONOMIC DEVELOPMENTS

Introduction ... . **. . *9**99*9*9***............ .................. 1

Recent Policy Measures ........................... 1Economic Growth ............ 3

Agriculture ........ . 3Industry .......................... 5Services ........... ......................... 5

Savings and Investment ........, .................. 5The Budget ....................................... 7Money and Credit .....999 ................... ....... 8Prices and Wages .*****........9999999999 ** *** *... 9Balance of Payments .......... .. ... ... .... ... ... . . 9Conclusion ...... . * 12

CHAPTER II - STRUCTUi'AL ADJUSTMENT ISSUES

Achievements of the Eewonomic Recovery Program 13Remaining Adjustment Tasks ....................... 13The Government's Medium-Term Objectives 15Incentive Policies 16

Exchange and Trade 16Cocoa 18

Pricing Policy ........... .18

Marketing ....... 20Domestic Resource Mobilization ................... 22

Financial Sector ..... .... ... 22Private Sector Investment Climate 24Public Sector .......... 26

State Enterprise Reforms 26Public Sector Management .................... 28

Conclusion ... 30

This 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.

CHAPTER III - PUBLIC EXPENDITURE PROGRAM -

Introduction ...... *¢¢¢*v¢**s*v4 32Achievements under the Economic Recovery Program(1984-1986) ..o................ 32Public Expenditure Program 1986-1988 ............. 33

Wage Policy ........ 33Expenditures on Other Goods and Services...... 34

Education 34Health 35Agriculture ........ . . 35

Public Investment Program (1986-1988) ............ 36Financing Plan ............ 38Productive Sectors 40

Agriculture .................... . 40Minu ing .................... 42Manufacturing 42

Economic Infrastructure 42Energy 42Transportation 43Roads and Highways ......... ... .. ... 43Communications 43Water ...... 44

Social Sectors..... . .... . 44Health 44Education 44

Protection of Super-Core Projects ................0 .45Remaining Tasks and Institutional Issues ......... 45

CHAPTER IV - MEDIUM-TERM PROSPECTS

The Alternative Scenarios 46Policy Reforms .ooo.. ..... ..... 0 00... 47Investment and Growth in Production ........... 48Sectoral Growth Prospects ........... oooo.oo..oo.. 49The Adjustment Path for 1987-1989 ............. 51Social Impact .... ***1***000****0# 53Balance of Payments 1987-1989 ............... 0. 54Export Growth ............ oo ... o.... 0.o...... 54Import Projections .**0*0*********.000 .0... ... 55Terms of Trade oo.o..o.oo ... o.... ... ooo.oeo..o.. 56External Balance and Capital Inflows ............. 56Conclusion 000000000000000***O 58

CHAPTER V - EXTERNAL ASSISTANCE NEEDS

Aid Trends in 1985-1986 ......... 004.. 000....... 60Ghana's Aid Requirements in 1987-1989 .......... 62Technical Assistance .00.............0.0....... 0 66Aid Coordination ........o..000...0.......000*.9e 67External Debt Management ..... *.........*.**0...*. 68Conclusion STATISTICAo.o.o.......o............. o o 70

STATISTICAL APPENDIX .... o....oooo*******o 96

ANNEXURES

Annex A Selected Policy Changes Since 1985 .......... 71Annex B Macro-Economic Projections, 1985-1995 *....... 76Annex C Flow-of-Funds Framework, 1984-1989 .......... 83Annex D Balance of Payments and Aid Data . 0........... 90

LIST OF TABLES

1 Economic Indicators 4....................... . * . 42 Selected Production Indicators ................... 63 Summary of Government Finance, 1982-87 .. s.....o. 104 Ghana: Selected Indicators of Structural

Adjustment ........... ..................... . 145 Incentives for Cocoa Farmers .................... 186 Public Investment Program: 1986-1988 by Sector 387 Ghana - 1987 Public Investment Program .......... 398 Ghana - Projected Financing of the 1987 Public

Sector Investment Program 419 Two Scenarios .... ............. .............. .. 4710 GDP Growth Rate by Subsector 5011 Selected Economic and Financial Indicators ...... 5212 Export Growth Rates Under the Two Scenarios ..... 5513 Balance of Payments Overview 1985-1989 ......... 5714 Aid Commitments to Ghana, 1985-86 600006..60..-. 6115 Overall Aid Pipeline, 1985-1989 ........... ,..... 6516 External Debt Service on Government and

Government-Guaranteed Debt .................... 69

GHANA

ECONOMIC INDICATORS

GNP PER CAPITA IN 1985: US$390 1/

GROSS NATIONAL 'PRODUCT IN 1985 ANNUAL RATE OF GROWTH

(S Constant Prices)Cedis Mil. % 1979-84

GDP at Market Prices 372,982 100.0 -2.5Gross Domestic Investment 27,094 7.3 -8.3Gross National Saving 11,539 3.1 -3.3Current Account Balance 15,555 4.2 --Export of Goods, NFS 36,931 9.9 -10.9Import of Goods, NFS 48,153 12.9 -11.8

OUTPUT AND LABOR FORCEOutput in 1985 Labor Force, 1983Cedis Mil. Mil. S

Agriculture 153,373 41.1 2.584 57.2Industry 57,651 15.4 0.691 15.3Services 161,959 43.5 1.242 27.5

4.517 100.0

GOVERNMENT FINANCE1985 1986

Cedis Mil. S of GDP Cedis Mil. S of GDP

Total Revenue and Grants 40,311 10.8 73,625 14.4Total Expenditure and Net Lending 47,891 12.8 73,326 14.3Overall Deficit (-) -7,580 -2.0 299 .1

MONEY, CREDIT AND PRICES1977 1978 1979 1980 1981 1982 1983 1984 1985

Money and Quasi-money 2/ 3,044 5,131 5,942 7,949 12,029 14,837 20,497 28,552 44,987Bank Credit to Government 3,203 5,636 4,903 6,518 10,649 11,057 21,059 22,819 24,825Bank Credit to Private Sector 560 739 796 940 1,342 1 rl58 2,841 6,104 10,517

(Percentages or Index Numbers)Money and Quasi-money as% of GDP 2/ 27.3 24.4 21.1 19.4 15.7 16.7 10.7 10.2 12.8General Price Index(1977-100) 100.0 173.1 267.3 401.2 868.6 1,062.4 2,357.4 3,304.2 3,647.2

1/ Atlas Methodology.2/ Includes primary banks only

BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1983-86))

1985 1986 1/(USs Million) US$ million _%

Trade Balance -95 -7 Cocoa Beans & Products 397 65.8Exports f,o.b. 632 773 Gold 101 16.8Imports c.i.f. 727 780 Residual Oil 24 4.0

Timber 28 4.6Invisibles (Net) -188 -186 Electricity 29 4.8Services -220 -235 Manganese 8 1.3Transfers 32 49 Diamond 4 0.7

All Other Goods 12 2.0Current Balance -283 -193

Total 603 100.0Capital AccountGrants 105 115Official Capital (Net) 32 88 EXTERNAL DEBT, DECEMBER 1985Private Capital (Net) 5 18Capital n.e.s. 2/ 24 -84 US$ Bil.

Overall Balance -117 -56 Total Outstanding andDisbursed M&LT 1.2

Net IMF 122 17Arrears Payments -57 4Other 33Gross InternationalReserves (End of Period) 145 172

DEBT SERVICE RATIO FOR 1986 3/

February 1973 - June 18, 1978 Total Outstanding andUS$1 ¢1.15 Disbursed M&LT 47

Since Aug. 26, 1978 US$1 - 0 2.75Since ApAil 21, 1983 US$1 - 024.69Since Oct. 10, 1983 US$1 - 030.00 IBRD/IDA LENDING (December 31, 1986)Since March 25, 1984 US$l - 035.00Since August 25, 1984 US$1 - 038.50 IBRD IDASince December 3, 1984 US$1 = 050.00Since April 19, 1985 US$1 - 053.00 Outstanding & Disbursed 112.77 422.34Since August 12, 1985 US$1 - 057.00 Undisbursed 0 352.59Since Oct. 7, 1985 US$1 = 060.00 Outstanding, incl.Since Jan. 11, 1986 US$1 m 090.00 Undisbursed 112.77 774.93Since Sept. 19, 1986Second Window Auction US$1 - 0128-156

1/ Estimates.2/ Includes errors and omissions.3/ As % of exports of goods and non-factor services (includes IMF debt).

March 20, 1987

FOREWORD

(i) This report, Ghana: Policies and Issues of StructuralAdjustment, assesses the structural adjustment program beingimplemented by the Goverrment and its projected impact onthe economy over the next decade. The report examines therole of donors in supporting the continuation and broadeningof an already ambitious reform program.

(ii) The Statistical Appendix presents a tim3 series of keyeconomic data for Ghana. As the appendix mainly draws onofficially published data sources, some of the text tablesmay differ slightly from the Statistical Appendix. The texttables are drawn from diverse sources, and include Bank orIMF staff estimates wherever the official data are eitherinconsistent or incomplete.

(iii) The report is based on the findings of a mission whichvisited Ghana in November 1986. The mission consisted ofTheresa P. Jores (Chief of Mission), Caroline Doggart(Economist/Consultant), and Pirouz Hamidian-Rad (Economist).Timothy Condon (Economist) was responsible for the initialwork on macro-economic projections. The mission drew on theanalysis of a parallel public expenditure review mission,led by Mr. Luis Ramirez, and the preparatory work for theStructural Adjustment Credit. Nilda Maypa providedsecretarial support at headquarters.

SUMMARY AND CONCLUSIONS

Introduction

1. In April 1983, the Government of Ghana launched an ambitious setof reforms that was intended to reverse the economy's steady deteriorationsince 1970. The policy measures of the Economic Recovery Program aimed atrealigning relative prices in favor of production and away from trading andrent-seeking activities, improving government finances, and encouragingprivate investment. The International Monetary Fund has provided supportthrough three stand-by arrangements, the most recent approved in October1986. Donors, including IDA, responded by committing higher amounts ofcorcessional assistance, including program aid. The previous report of theWorld Bank analyzed the initial response of the economy to the measures.It also identified some of the remaining policy and institutional reformsnaeded before the full potential of the economy could be realized. r-ringthe November 1985 Consultative Group meeting the GovernmenL and donors cameto a consensus on the main elements of the reform program. Based on thisand additional work carried out in the course of 1986, the Government hasdeveloped and begun to implement a detailed action program that continuesthe structural adjustmernt of the economy.

2. In addition to updating information on recent economicdevelopments (Chapter I), this report analyzes the structural adjustmentprogram and identifies areas which require additional study or reforms(Chapter II). Chapter III analyzes the rolling three-year publicexpenditure program, a key component of the structural adjustment process.On the basis of the Government's program, projections are made which tracethrough the impact of the reforms on the economy (Chapter IV). The finalchapter examines recent aid trends and estimates Ghana's externalassistance requirements over the next three years. The analysis indicatesthat the reform program in Ghana has made substantial progress since thelast Consultative Group meeting which is reflected in economic performance.Implementation of the Government's structural adjustment program wouldsignificantly improve prospects for sustained growth in the economy andbalance of payments viability. An essential ingredient for the success ofthe broadened reform effort is expanded donor support.

Recent Economic Developments

3. Major actions taken during 1986 included another devaluation ofthe cedi. In January 1986 the rate was adjusted from g6O-$1.00 tog9O0$1.00. The Government moved towards a market-determined rate inSeptember by establishing a second window foreign exchange auction. By theend of 1986 the real value of the cedi (on a trade weighted basis) haddeclined by over 90 percent compared to its level at the beginning of 1983.In February 1987 the official and auction exchange rates were unified atthe auction rate. The Government further adjusted administered prices,particularly the cocoa producer price, petroleum, and utility tariffs.Public sector wages again were raised to compensate partially for the past

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severe erosion; the differential between earnings of the highest and lowestlevels in the civil service was widene,'. In spite of an increase innominal interest rates, in real terms they again became slightly negative.However, an adjustment in Marsh 1987 is expected to restore positive levelsof interest rates. Implementation of programs to rehabilitate transport,energy, mining, timber and cocoa gained further momentum and began to showresults.

4. The econor.y continued to respond strongly to the policy reforms.Real GDP is estimated to have risen by about 5 percent in both 1985 and1986. This was despite a deceleration in growth of agriculture in 1985when output of most food crops declined, following tne fall in producerprices aftex the bumper 1984 harvests. Some recovery occurred in 1986 asprices stabilized. Cocoa production improved markedly in the 1985/86season. Industry led economic growth in both years, but output grew lessin 1986. The fiscal position deteriorated sharply in the first half of1986 due to shortfalls in budgetary receipts and larger than anticipatedexpenditures following the January wage adjustment. However, correctivemeasures put in place during the second half of the year reversed much ofthe deterioration. Thus, the provisional outturn for the year indicates astrengthening in the Government's fiscal performance. Current budgetsavings (net of grants) rose sharpl.y to 1.8 percent of GDP, but partly atthe expense of needed recurrent outlays on other goods and services.Development expenditures remained at 2 percent of GDP, below what had beeninitially planned. Domestic bank financing of the budget was constrainedand within the programmed ceilings. The 1987 budget, announced inFebruary, demonstates the Government's intention to continue domesticresource mobilization efforts ard to improve the structure of expenditures.

5. In spite of a sharp growth in money supply during 1985-86, theliquidity position of the commercial banks tightened in the face of higherdemand for credit, particularly to finance imports as a result of thedecline in the value of the cedi. Inflation remained in conu.rol, but asfood prices returned to the usual seasonal pattern, it accelerated from anannual average increase of 10 percent in 1985 to about 25 percent in 1986.A contributing factor appears to be the impact oi the second window foreignexchange auction, which squeezed out much of the rent element in prices andresulted in some cost-push pressures. As for the balance of payments, 11X1985 there was a disappointing stagnation in non-petroleum imports, whichdid not grow in nominal terms over 1984 levels due to a shortfall in aiddisbursements. Although imports grew sharply in 1986 as flows ofconcessional assistance increased, strong export growth resulted in an evenlower current account deficit than in 1985.

Structural Adiustment Issues

6. Over the last four years Ghana's Economic Recovery Program hasbrought about substantial adjustment in the economy by realigning pricesand restoring fiscal and monetary discipline. In addition, some progresshas been made in improving the climate for private sector investment. Inspite of these achievements and the initial favorable response of the

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economy, the Government recognizes that in order to lay a firm base forsustained growth and balance of payments viability, further actions areneeded to strengthen and broaden the policy reforms. The specific goalsfor 1987-89 are: to sustain economic growth at 5.0-5.5 percent per annum;to more than double investment and national savings, expressed as shares ofGDP; and to improve resource management within the public sector. The maininstruments which the Government plans to use in order to achieve theseobjectives are: incentives policies, measures to increase domestic resourcemobilization, actions to encourage a sufficient private sector response tothe economic reforms, and improvements in management and resource use inthe public sector.

7. The centerpiece of Ghana's structural adjustment program is amarket-determined exchange rate applied to all economic transactions and aliberal trading regime in which protection is provided by an even andmoderate tariff structure. Unification of the official rate and theforeign exchange auction in February 1987 extended the application of amore realistic exchange rate to cocoa and petroleum. In the meantime,imports of consumer goods continue to be channeled through special importlicenses (SILs). The integration of the market for consumer goods importswith the foreign exchange auction is the next key task, to be completed ina phased manner by early 1988. The Government favors a gradual approach inorder to avoid sharp upward pressure on the rate. In line with the changesin the exchange and trade system, several interim tax reforms have beenimplemented. A more comprehensive re-examination of the trade taxstructure is to be carried out by a Government Task Force during 1987.Recognizing the importance of a strong export response to tradeliberalization, the Government is strengthening export promotion and hasabolished export licenses. For non-traditional exports, a medium-termstrategy to direct additional promotion efforts is to be developed.

8. Improved incentives for cocoa farmers has been one of the majorpolicy reforms of the Economic Recovery Program. However, because ofhigher than anticipated increases in rural inflation, it was not until the1985/86 crop year that the real cocoa producer price increasedsignificantly. The ability to reach and sustain the production target of300,000 metric tons per annum depends upon adequate incentives for farmersto rehabilitate and replant. Looking ahead to the next crop year, aftermaking adjustments for likely wage and price trends in 1987, a producerprice of about %150,000 per ton would make rehabilitation and replanting ofcocoa financially profitable. Based on current estimates of the long runproduction response to a higher farmgate price, a share for farmers in therange of 55-60 percent of the f.o.b price would further improve incentivesand, at the same time, maximize fiseal revenues from cocoa exports.Setting a target for the longer term would require consideration ofadditicnal factors and improved data that are being pursued in a study ofcocoa incent' es.

9. Part of the explanation for the high level of taxation of thecocoa farmer in Ghana is the excessive marketing costs of the Ghana CocoaBoard (Cocobod). Although there has been some success during the Economic

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Recovery Program in lowering marketing costs, in 1986 the Cocobod's shareof the f.o.b. price was 27 percent (excluding retrenchment costs). This ishigh compared to other producer countries. The Government believes that itis inadvisable to make radical changes in the present marketing system nowfor several reasons including poor infrastructure and the risk ofdisrupting the recovery of cocoa exports. These considerations do notimply that a gradual switch to a marketing system with more participationby the private sector woulca not work well or be more cost effective thanthe present arrangement. It does, however, argue for an indepth study ofthe options open to the government for improving the efficiency of cocoamarketing. In the meantime, the Government recognizes the need to reducethe costs of the Ghana Cocoa Board. These efforts will be guided by theprinciple that the Cocobod should confine itself to activities which cannotbe done more efficiently by other institutions or the private sector. TheCocobod has initiated the restructuring by laying-off some of the remainingredundant staff and is reviewing its operations with a view to reducingcosts to about 15 percent of the f.o.b price by 1988/89, in favor of higherproducer prices. These measures will be integrated into a rollingthree-year corporate plan beginning with the crop year 1987/88.

10. Successful implementation of the structural adjustment programdepends on a well-functioning and broadly based financial system. Thepublic's willingness to hold fir,ancial assets in Ghana has increased as aresult of higher interest rates and lower inflation. However, confidencein the banking system is still weak. Bank operations are relativelyinefficient and their portfolios include a substantial proportion of loanswhiclh could prove difficult to collect. For the medium-term, the need togenerate balance of payments surpluses in order to deal with the overhangof external arrears, scheduled IMF repurchases, and short-term liabilitieswill have a major impact on credit behavior. In developing a financialprogram, a careful balance will need to be struck between legitimate creditneeds anl ensuring macro-economic stability. Careful monitoring of the keymacro-economic aggregates, a better assessment of the credit needs of theproductive sectors and a flexible approach to credit targ6ts will berequired in this period of major changes in the economy. The Governmentplans to review the financial sector during 1987 with assistance from theWorld Bank. The review would look closely at credit allocation, ways toimprove the efficiency of bank operations, and measures to develop capitalmarkets. Audits and detailed portfolio reviews will be carried out inseveral banks. In order to ensure that the behavior of net foreign assetsdoes not squeeze domestic credit to an extent which threatens the economy'sgrowth objectives, the Government should consolidate outstanding externalarrears into medium-term loans. An important factor in this regard is thenecessity of continued access to the resources of the InternationalMonetary Fund, preferably through the Structural Adjustment and theExtended Fund Facilities, in order to reduce the net transfers tc the IMFover the next several years.

11. Achievement of the growth objectives of the structural adjustmentprogram relies on the response of the private sector to the improvedincentives. However, so far private sesn'r investment has lagged. To some

v

extent this is explained by the large changes occurring in relative pricesand the substantial unutilized capacity at the beginning of the EconomicRecovery Program. However, factors contributing to still weak privatesector confidence include the initial changes in regulations for theforeign exchange auction and the manner in which the revenue authoritiestook actions to improve collections of corporate income taxes. Severalmeasures would improve the policy environment for the private sector. Theyinclude more frequent consultations between the Government and the privatesector on current policies; reducing the excessively high corporate incometax rate and the even higher taxes on dividends and capital gains; making apublic statement that the confidentiality of bank customer relations wouldbe respected; and easing the restrictions on the economic activities opento foreign investors.

12. A key objective of the Government's program is to improve theperformance and efficiency of the state-owned enterprise (SOEs) sector andto reduce its size in order to decrease the burden on the economy. Aftercarrying out an initial diagnostic study, a Government Task Force hasdeveloped a policy framework. It includes a more lational legal framework,progressive reduction of budget transfers to state-owned enterprises,greater resource transfers to the Governmetit and exposure of SOEs to morecompetition and market discipline. Institutional arrangements are designedto achieve day-to-day management autonomy for the enterprises, whileenabling the Government to monitor performance in order to ensureaccountability. Corporate plans will be the basis of performanceagreements between the Government and selected priority enterprises. Inaddition, some 30 enterprises are to be put up for sale, liquidated orconverted into joint ventures. The size and envisaged pace of theGovernment's program reflects its recognition that divestment ofstate-owned enterprises will not be easy. For the program to succeed, theGovernment will need to give priority to enterprises which are large drainson _he budget and include firms potentially attractive to the privatesector.

13. Implementation of the structural adjustment program is severelystraining the capacity of the public sector to manage the economy.Policy-makers in Ghana do not have sufficient analytical support, a gapwhich will become increasingly binding as the economic reforms proceed. Inspite of the improvement in the Govetnment's fiscal position, the budgetsystem has fallen into disuse since 1983, partially beceise of thefinancial crisis and the priority given to cash flow management. Inaddition, during the past years of economic decline the conditions ofemployment and the efficiency of the civil service deteriorated. TheGovernment has decided to fo'rus its efforts on strengthening a few keypolicy functions and the reform of the civil service. Between 1975-82civil service employment grew at the high aver&ge rate of 14 percent. As aresult, there is excessive staffing, particularly at the lower echelon-which lowers productivity, compounds management problems, and restricts theGovernment's ability to pay reasonable salaries. The Governmentcourageously has committed itself to a reduction in the size of the publicservice of roughly 5 percent a year during 1986-1988. Timely

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implementation is essential if wage differentials in the civil service areto improve. In the interim, since successful implementation of thestructural adjustment program depends on the high morale and productivityof at least key civil servants, the Government intends, first, to mobilizelocal expertise to supplement the existing civil service and secondly, toprovide additional remuneration to selected individuals working on criticaltasks.

Public Expenditure Policy

14. Public expenditure policy will play a vital role in achieving thegoals of the structural adjustment progran.. The production response tochanges in policy depends on adequate and well maintained economicinfrastructure and on improving the quality and level of investment inhuman capital. The combination of expanding civil service employment anddeclining revenue has severely distorted the structure of recurrentexpenditures, in particular the balance between the number of employees andthe provisions for goods and services. The impact of across-the-boardexpenditure controls on these items in recent years and the Government'sbelief that while there are scarcities in certain areas, there is alsowaste, point to the need to allocate outlays more systematically. Initialwork has focused on education, health, and agriculture. The aim is todevelop guidelines for allocations in these sectors, based on what isrequired to. perform adequately essential services.

15. One of the Government's objectives in drawing up a rolling three-year public investment program is to improve planning and implementation,thereby increasing the returns on these e;penditures. It represents aneffort to break out of the past pattern of largely ad hoc allocations andstop and go funding which left many projects starved of funds and onlypartially completed. The following criteria were used to select projects:

(i) A minimum economic rate of return for all large projects(over $5 million), for which the technique was applicable. If anERR had not already been calculated, out the project seemed tohave the potential for generating an adequate rate of return, itwas included on a tentative basis. Implementation, however,would await a detailed feasibility study.

(ii) In cases where the ERR criterion was not applicable or where theanalysis was incomplete or dated, a judgement was based on thefollowing considerations: the proportion of the prnject funded byforeign aid with the aim at least 60 percent finan<;ng; ongoingprojects or those ready for implementation; the ability togenerate additional revenue for the Government or, at the least,low recurrent cost implications; whether the project wouldgenerate or save foreign exchange; and its impact on employmentcreation and the alleviation of poverty.

At this stage, attention focused on projects financed through the budget.Tentative projections indicate that public investment (including budget

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expenditures and foreign aid financing) would increase from 6 percent ofGDP in 1986 to 9-10 percent in 1987-88. Reflecting the emphasis onmaintaining and improving economic infrastructure in Ghana, theseexpenditures account for 60 percent of the program. Outlays on productivesectors represent 30 percent of the PIP with a focus on supporting servicesin agriculture and the rehabilitation of the wholly or partiallygovernment-owned mining companies. It is assumed that the private sectorwould be the primary source of investment ii manufacturing. Social sectors(education, and health) make up the remaining 11 percent of investments.Budget allocations will be protected for a select group of super-coreprojects critical to the success of the structural adjustmer.t program.

16. Although the preparation of the 1986-1988 public investmentprogram has improved planning in Ghana, it is only a first step. Much workremains to be done, beginning with the rollover of the program in mid-1987.The major priorities are: (a) to ensure that the program is integratedcompletely into the budget; (b) to carry out feasibility studies andeconomic analysis for som- 40 large projects; and (c) to assignresponsibilities for preparing and monitoring the public investment programon a continuous basis.

Medium-Term Prospects

17. Once most of the structural adjustment measures outlined aboveare in place prospects for the economy achieving sustainable growth of 4-5percent per annum, supported by a large increase in investment, are strong.Eiie relatively large resource transfers expected from abroad would cushionthe needed adjustment in consumption. While the public sector will beresponsible for rehabilitating infrastructure, the private sector isexpected to invest in order to improve the economy's productive base.

18. In agriculture, it is projected that the real increase in cocoaproducer prices will permit exports to expand to 260,000 metric tons by1989, then increase slowly to reach 300,000 tons by 1995. The near-termincreases will come from improved husbandry and greater availability ofinputs, while after 1990 the yield from hybrids planted during the 1970sand early 1980s will begin to be felt. The adequacy of incentives andextension services will be an important determinant of production. of foodand industrial crops. Output of this sector is projected to grow at 2percent a year in 1986-90, then increase to 3 percent in 1990-95. Timberperformance in 1985 and 1986 was very good; exports are projected to riseto a level of 730 thousand cubic meters by 1995. Industry is expected toshow the highest growth rate. Manufacturing will continue to benefit fromthe increased availability of imported spares and raw materials and thehigher level of domestic demand. On the whole it should benefit fromimport liberalization, which, while eliminating inefficient domestic firms,should also expand the opportunities for efficient import substitution.Growth in mining depends critically on the success of on-goingrehabilitation and modernization. Gold production capacity in Ghana isestimated to be 600,000 fine ozs. a year, compared to a 1986 output of288,000 thousand fine ozs. Ghana is expected to produce close to thatamount by 1995.

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19. National and foreign savings must both increase in order tofinance the required investment levels. Investment is projected to morethan double from its current level of 10 percent of GDP to 23 percentby 1989. National savings would more than double from an estimated 6.6percent of GDP in 1986 to close to 15 percent by 1989. In the area ofpublic savings, domestic resource mobilization resulting from new revenuemeasures, tax reform and improvements in tax administration would increasetotal revenue from 13.6 percent of GDP in 1986 to 16.5 percent by 1989.There are complementary recurrent expenditure policies. They includeholding personal emoluments to less than 6 percent of GDP, reflecting inpart the planned reduction in the size of tne civil service. Privatesector savings is expected to be stimulated by the restoration ofconfidence, the growth in personal incomes after 1988, and financial sectorreforms. Private savings, measured as a share of GDP, rise from 5 percentin 1986 to 11 percent by 1989, taking into account a strong increase inremittances from abroad.

20. If the policy reforms contemplated under the structuraladjustment program do not materialize the outlook would not changesignificantly at first because of the momentum already built up. But ifthe gains in exchange rate policy erode, if agriculture incentives areallowed to decline and if trade liberalization stalls, the export momentumwould falter, food shortages would take place, and public investment woulddecline due to a fall in revenues. The adverse impact of these on thebalance of payments would be exacerbated by a decline in external capitalflows as donors retreat. The shortfall in private investment would reducethe economy's future growth potential. Furthermore, the fall in foreignexchange availability would make the debt service burden unmanageable,triggering yet another downward spiral.

21. Implementation of the structural adjustment program is expectedto result in growth in export volume averaging 8 percent a year. Althoughthe bulk of the increase will come from cocoa earnings, its share of totalexports should fall from 67 percent in 1986 to 52 percent by 1995. Amongnonr-cocoa exports, gold should rapidly increase its importance as outputrecovers. After a more than 20 percent rise in the nominal value ofnon-oil imports in 1986, growth in imports is projected to moderatesomewhat to average 10 percent during 1987-89. Because of the declineexpected in cocoa prices and the required inicrease in imports, the balanceof payments outlook for Ghana over the next three years is for a wideningof the current account deficit. A large volume of concessional assistancewill be needed not only to finance this deficit, but also to achieve astrong overall surplus in the balance of payments to deal with the overhangof external arrears, short-term debt, and IMF repurchases.

External Assistance Requirements

22. While donors have provided strong s-apport to Ghana, new aidcommitments in 1986, excluding technical assistance, at $370 million, werenearly 20 percent below the level achieved in 1985, and significantly shortof the World Bank-s recommendation to the November 1985 meeting of the

ix -

Consultative Group. However, the level of aid disbursements improvedsharply in 1986 over 1985 performance. In order to meet the targetedlevels of disbursements for 1987-1989, donors will need to increase thelevels of their aid. This recommendation is justified by the extent of thestructural adjustment program being implemented in Ghana and thecorresponding need for concessional financing to ensure that the envisagedbenefits are realized. In order to cover slightly over a third of importsof goods and nonfactor services in the 1987-1989 period, commitments of$575 million are needed in 1987, and an average of $635 million in 1988 and1989.

23. This may appear to be a large increase over the low 1986 actuals,but represents partly the decline in the value of the dollar and theslippage of several commitments from 1986 to 1987, including the IDAStructural Adjustment Credit. During 1987-1989 the most pressing need isfor quick disbursing funds to finance urgent import requirements now beingprovided efficiently and quickly through the weekly foreign exchangeauction. Donors are urged to design assistance in such a way that it canbe channeled through the auction. Such program and sector commitmentsshould average $230-240 million in 1987-1989. Food and commodity aid isparticularly important to assist the government in reducing the socialcosts of adjustment, and new commitments should average at least $50million. Moreover, wiUn an investment program now prepared, the projectaid pipeline needs to be built up, focusing on activities included in thatprogram. The bulk of these emphasize rehabilitation and improved use ofexisting _city. Project aid commitments (excluding technical assistancegrants which are estimated to average about $20 million per annum) arerecommended to increase from $275 million in 1987 to $330 million in 1989.Donors should finance a high proportion of total cost, and where possible,recurrent and maintenance costs, particularly in the social sectors.Donors are also encouraged to take advantage of cofinancing opportunities,including those provided by ongoing or prospective IDA operations. Therehas been good progress in 1986 in the area of aid coordination. Frequentlocal level meetings and both an industry and a social sector meeting forinterested donors have been accompanied by an improved flow of aidinformation, thanks partly to a strengthened International RelationsDivision in the Ministry of Finance and Economic Planning, with UNDPassistance.

24. In spite of the relatively low stock of outstanding debt and itsgenerally concessional terms Ghana's debt service burden has increased inrecent years and will remain severe over the medium-term. This is largelybecause of the service on 12-month oil credits, obligations to the IMF, andthe reductions planned in arrears. The debt service ratio, inclusive ofIMF purchases and settlement of payment arrears, was 47 percent in 1986.In the period 1987-89 debt service will increase further, peaking at 67percent in 1988. It is important that the debt service burden notconstrain the implementation and success of the structural adjustrentprogram. Externel concessional assistance will be critical to ensure an

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adequate amount of import financing in the context of the large paymentobligations which face Ghana over the next three years.

25. Since the last meeting of the Consultative Group for Ghana, theGovernment has made considerable progress in almost all areas identifiedthen as critical to the successful evolution of the program. As describedabove, a comprehensive structural adjustment program has been prepared, tobe supported by a $115 million IDA and African Facility Credit. Thegovernment has certainly lived up to its part of the "compact". In what isnow the fifth year of the reform program, Ghana remains at the forefront ofeconomic adjustment in Sub-Saharan Africa. Its persistence and expandedeffort deserve support. Donors should respond generously and quickly.Without that support, the success of the structural adjustment program willbe endangered. Donors should take the opportunity of the implementation ofthe structural adjustment phase of the reform effort to demonstrate theircommitment and support to Ghana for the medium-term.

I. RECENT ECONOMIC DEVELOPMENTS

Introduction

1. In April 1983, the Government of Ghana launched an ambitious setof reforms that was intended to reverse the steady deterioration in theeconomy since 1970. The policies of the Economic Recovery Program (ERP)focused on realigning relative pUices in favor of production and exportsand away from trading and rent-seeking activities, improving governmentfinances, and encouraging private investment. The International MonetaryFund supported the program with two stand-by arrangements. A third one-yearstand-by arrangement was approved in October 1986. At the end of 1986total IMF credit (including drawings under the Compensatory FinancingFacility) outstanding to Ghana was SDR 611 million or 299 percent of quota.Total assistance from members and observers of the Consultative Group forThana has risen sharply, with commitments in 1984-86 averaging $430 million,compared with $198 million between 1980-83.

2. The World Bank's previous report / analyzed the initial responseof the economy to the measures. It also identified some of the remainingpolicy and institutional reforms needed to realize the country's economicpotential. In addition, at the November 1985 Consultative Group meetingthe Government of Ghana outlined a policy framework for the medium-term.During that meeting the Government and donors reached a consensus on themajor reforms needed. Based on this preliminary work and discussion, anddrawing on additional analysis carried out in early 1986, the Governmenthas developed a detailed set of actions that constitute a structuraladjustment program, Besides reviewing recent economic developments(Chapter I), this report will analyze the main elements of the proposedprogram and identify areas requiring further study or reform (Chapter II).A key component of the structural adjustment process is the rollingthree-year public expenditure program, discussed in Chapter III. On thebasis of the Government's planned actions, projections are made which tracethrough the impact of the reforms on the economy (Chapter IV). The finalchapter examines recent aid trends and outlines the external assistancerequirements of the Government's program over the next three years.

Recent Policy Measures

3. In the context of the recovery program several important policymeasures have been taken since 1985 (see also Annex A).

(i) The Government made substantial progress toward a market-determined equilibrium exchange rate. The cedi depreciatedfrom %2.75-$1.00 in April 1983 to %60-$1.00 by October 1985.In January 1986 the rate was further adjusted to 990$1.00.On September 19, 1986, the Government established a secondwindow foreign exchange auction, covering most transactionsexcluding cocoa, petroleum, debt service for official debt

1/ Ghana: Towards Structural Adjustment, World Bank Report No. 5854-GH,October 7, 1985.

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contracted before the beginning of 1986, and some essentialdrugs. Consumer goods continued to be imported underspecial import licenses (SILs). By the end of 1986 the cedihad depreciated in real terms by over 90 percent from itslevel at the oeginning of 1983. On February 20, 1987, theGovernment unified the official and the auction foreignexchange markets at the auction rate.

(ii) Administered prices have been adjusted to reduce domesticdistortions arising wholly or partly from an overvaluedexchange rate. The cocoa producer price was raised by 50percent to P85,000/metric ton effective for the 1985/86mid-crop season which began in late April 1986. An additional¢500/metric ton is to be paid if the production target forthe 1986/87 season of 230,000 metric tons is reached. Theproducer price for coffee also was raised. After adjustingpetroleum prices after the cedi devaluation in January 1986,the Government marginally reduced fuel prices in March inthe wake of the sharp fall in oil prices on internationalmarkets. However, on June 30, prices reverted to theirformer levels, implying an implicit tax on petroleum equiva-lent approximately to 20 percent of the gasoline price.Petroleum prices were adjusted again in February 1987 toreflect the unification of the official and auction exchangerates. In addition, during 1986 utility tariffs and postalcharges were increased significantly. In mid-1986 fertilizerprices were raised on average by about 80 percent to fullyreflect the c.i.f. import price (at %90=$1.00), although asubsidy remained to cover handling and distribution costs.

(iii) Effective January 1986, public sector wages and salarieswere raised by the same percentage as occurred in theminimum wage (070 to %90/day). The Government also restruc-tured salary scales, increasing the pre-tax ratio betweenthe highest and lowest grades. In addition, allowances wereraised. These measures were taken because real wages forsenior civil servants had fallen to about 10 percent of 1977levels. The revised salary structure widened the pre-taxratio between the highest and lowest grades from the previous2:1 to almost 6:1. Average public service salaries went upby about 80 percent over 1985. In February 1987 the Govern-ment announced a 25 percent increase in the minimum wage.The same adjustment will be applied across-the-board topublic service salaries.

(iv) Interest rates have been raised in stages to the pointthat they became positive in real terms in 1985. As part ofthe Government's policy of trying to maintain positive realinterest rates, in August 1986, deposit and lending rateswere increased. However, with the acceleration ininflation, in 1986 (para 13) interest rates became slightly

negative in real terms. In March 1987, the Governmentraised lending and deposit rates (with the exception ofloans for agriculture) across-the-board by 3 percentagepoints. This is expected to restore positive real levels.The rates on 12-month time deposits have more than doubledsince October 1983 to the present level of 23 percent.The maximum lending rate is now 26 percent.

(v) Programs to rehabilitate transport, energy, mining, timberand cocoa made further progress, supported by foreignassistance. Rehabilitation of the western railway line isnearly complete and has paid dividends in terms of highershipments of export freight. The Government announced amajor reform of the education system. These projects havebeen integrated into a rolling three-year (1986-1988) publicexpenditure program (Chapter III).

Economic Growth

4. Real GDP is estimated to have risen by 5.1 percent in 1985,compared to 8.6 percent in 1984 when most of the recovery from the droughttook place (Table 1). The main factors causing the slowdown in the rate ofgrowth were (a) the decline in non-cocoa crop production in response to thefall in prices after bumper harvests in 1984; and (b) the stagnation innon-oil imports in 1985 resulting from lower than expected aid disbursements(Chapter V) and only partial utilization of available external creditfacilities because several sectors, including agriculture and mining, werestrapped for local currency. The only activities showing a strong improve-ment in performance compared to 1984 were cocoa, manufacturing, and elec-tricity and water. Real output in the economy at the end of 1985 was 4percent lower than the most recent peak in production (1978). Preliminaryestimates for 1986 indicate growth of about 5 percent.

5. Agriculture. Production of most food crops declined in 1985.Estimated output of maize, the main cereal, fell by 30 percent (Table 2).Acreage cultivated dropped to pre-drought levels as the wholesale pricefell to 40 percent of the 1983 high. The trend was similar for starchystaples, such as cassava. Food crop output in 1986 benefitted from generallyadequate and well distributed rainfall. Cocoa production improved markedlyin the 1985/86 season. Purchases rose from 174,000 metric tons in theprevious crop year to 219,000 metric tons, exceeding original estimates.According to field reports, farmers responded to the sharp producer priceincreases in May 1985 with improved husbandry and harvesting practices,which increased estimated yield from 194 kilos/ha. to 243 kilos/ha.Estimates for cocoa purchases in 1986/87 are 230,000 metric tons; about180,000 metric tons had been purchased by the end of 1986. The lowergrowth in production expected for the 1986/87 crop year compared to theprevious season reflects to some extent a less favorable rainfall pattern,but also highlights the need for further improvement in incentives forfarmers (para 32-35) as Ghana is still below its production potential.

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Table 1: ELXXIMIC IDDICAICRSPercent CSrge

Unit 1984 1985 1986 a/ 1985/1984 1986/1985National Accots

CDP at Market Prices Cedi million 5,158 5.420 5,705 5.1 5.3Agriculture at conistant 2,780 2,802 2,951 0.8 5.3Industry 1975 prices 599 707 752 18.0 6.4Services 1,779 1911 2,002 7.4 4.8GDP at narket prices Cedi billion 271 373 511

Investment 2 of GDP 7.6 7.3 10.3National Savlnga 4.7 3.1 6.6

!Minq and E4dcn b/

Mkney and Quasi-M4txy (M2) Cedi billion 35.3 56.2 86.4 59.2 53.7Net DOonstic Assets end of period 39.9 67.1 95.1 68.2 41.7Bank Credit to GCovenmnt (net) 24.2 27.2 29.6 12.4 8.8".oa Pinancing 3.6 13.6 16.9 277.8 24.3

Credit to the rest of the ecommy 13.7 26.0 42.7 89.8 64.2Others (net) -1.6 0.4 7.4 - -

M2 as a % of GDP at n rket prices 13.0 15.1 16.9

Prices

Cosumer Prices Amrual 40.2 10.4 24.6 19.5 c/ 33.3 c/of %hich: Food Percentage 11.0 -11.1 20.3 11.6 c/ 30.4c/

Non-Food Chane 78.4 28.3 27.0 14.7 c/ 34.9 c/Wholesale Prices 81.5 56.3 30.2 -GDP Deflator 35.9 31.2 30.2 -

Balance of Payments US$ millUon

xyports of Goods and NFS 604 671 818 11.1 21.9inports of Goods and NFS 810 876 955 8.1 9.0Resxurce Gap -206 -204 -137 - -Current Acaoimt Deficit -215 -283 -193 - -Capital Account Net 94 167 137 78.5 -17.5of which Net Aid Disbursl wts d/ 253 199 344 -21.3 72.9

Gross Reseives (end of period) 132 145 172 9.8 18.6Current Account Deficit as% of GDP at Current Maket Prices -2.8 -4.1 -3.7

Nxnal FEchrge Rate Cedis perUS dollar

(period average) 35.3 54.1 98.9 53.3 82.8

a/ provisional estimtesb/ including priny and seondary banksc/ Decerber 1986 over Deiber 1985d/ gross aid irfl]s minus log-tme amortization

Source: Governuent of Ghana and Baik staff estimatesEI/GHCM1

6. Industry. Mining output expanded by 15 percent in 1985. Bauxiteoutput more than tripled as rehabilitation of the western railway line madepossible higher shipments. Production of diamonds nearly doubled as miningbegan from a new deposit. Gold production rose by 7 percent and manguneseoutput was up by a third, the latter also reflecting higher capacityavailable on the railway. Further recovery stalled in 1986 because oflabor problems in the gold mines and delays in implementing the rehabilita-tion program of the State Gold Mining Corporation. Diamond productiondropped in 1986 because repair of the washing plant required closure of thefacilities. Bauxite output rose by 20 percent, while manganese declined,reflecting the depletion of oxide ores. Growth in manufacturing acceleratedfrom 13 percent in 1984 to 22 percent in 1985. Although aid disbursementswere generally low in 1985, manufacturers in the private sector were theprimary beneficiaries, and thus were able to import critical raw materialsand spare parts. Data on capacity utilization for manufacturing are notyet available but the strong growth in 1984-85 almost certainly has raisedcapacity utilization from the low level of 30 percent in 1983. The mostdynamic components were food processing, tobacco, petroleum refining, ironand steel and other metal products. A slowdown in growth is expected in1986 although the sector would still outpace the overall economy. Thisreflects the end of the initial quick recovery from a low base due toimproved supplies of raw materials and spare parts. Future productionincreases will occur more gradually after additional investment is made,primarily for rehabilitation. Although capacity utilization is still low,effective capacity utilization is probably much higher because equipment isold and has been poorly maintained. Construction activity grew at a fasterrate in 1985 because of the improved availability of cement and the increasein public investment. However, growth moderated in 1986 because of renewedproblems with the supply of clinker which forced the shutdown of the sementfactory and lower growth in Government financed maintenance and investment.

7. Services. Growth in services exceeded overall economic expansionin 1985. Transport was up by 10 percent in line with continued progress inrehabilitation of infrastructure, higher railway freight carried, andimproved supplies of spare parts and vehicles for road transport. Thegrowth of wholesale and retail trade slowed slightly in 1985 and is expectedto decline further in 1986. This reflects the shift in incentives awayfrom trading activities to production and, in 1985, the impact of highertaxes on special import licenses for consumer goods. Fiscal restraint hasconfined growth in government services to an average of only 2 percent ayear since 1983.

Savings and Investment

8. Preliminary Bank staff estimates indicate that the level ofinvestment in 1985 dropped slightly compared to 1984, to 7.3 percent ofGDP. Public investment expenditures as a share of GDP (including foreignaid for projects in both the central government and state-owned enterprises)rose only marginally because of low aid disbursements. Private investmentstagnated, reflecting the still uncertain investment climate, in partbecause of the sharp changes occurring in relative prices as the reform

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Table 2: SELBCIE) PXUMN INDICPS

('000 metric tons, unless otherAisq noted)

est.1970 1980 1981 1982 1983 1984 1985 1986

Cereals 858 674 725 543 308 965 780 905Maize 726 32 T76 346 172 574 395 495Rice 49 78 97 36 40 76 80 80Millet 141 82 119 76 40 139 120 140Sorghun 186 132 131 86 56 176 185 190

Starchy StaplesCassava 2,388 2,322 2,065 2,470 1,729 4,065 3,075 3,040Cbcoyam 1,136 643 631 628 720 600 580 n,a.Yam 909 650 591 588 866 725 560 660Plantain 1,641 734 829 749 342 760 676 n.a.

Cocoa al 413 258 224 179 159 174 219 230

Logs ('00O O3) 1,560 480 550 410 560 578 620 890Sawn Tinber ('000 m3) 360 150 190 150 189 180 223 232

Index of Mineal Production (1977=100) 100 73.8 68.2 59.9 50.2 57.9 66.3 62.6 b/Gold ('000 fine troy ounces) 642 353 341 331 277 287 299 288Diamonds ('000 carats) 2,550 2,149 836 684 339 346 636 556iegan ore 392 250 223 160 175 267 357 333Bawdte 337 225 181 64 70 49 170 204

Electricity Generation 2,920 5,316 5,373 4,982 2,575 1,819 3,020 3,599 b/

of which.Akoscbo Hydroelectricity 2,882 5,276 5,341 4,103 2,080 1,469 2,461 3,000 b/

Crude Oil Reflnery[hRghput 1,120 1,058 1,129 1,040 481 747 958 985

a/ Purchases by Cocobod during season beginning in year stated.b/ January-October 1986

Source: Gbana Statistical Service

SPI/GRCM

program was implemented, and excess capacity. Foreign savings in 1985 isestimated at 4.1 percent. of GDP compared to 2.8 percent in 1984. Nationalsavings are estimated reridually at 3.1 percent for 1985, mostly from theprivate sector. In 1986, investment is estimated to have risen to about 10percent of GDP. Public investment increased, primarily because of higheraid disbursements; private investment was also more dynamic. Nationalsavings rose sharply, as foreign savings declined with the strengthening ofthe balance of payments. Higher national savings reflected increases bothin current savings of the central government and in private savings.

The Budget

9. The Government's fiscal position deteriorated sharply in thefirst half of 1986 due to shortfalls in budgetary receipts and larger thananticipated expenditures following the January wage and allowance adjustment.However, corrective measures were taken during the second half of the year,reversing much of th. deterioration. These included establishment of theforeign exchange auction in September. In addition, after negotiationswith union representatives, the Government put in place from June 1 arevised salary scale which reduced the initial wage and allowance awards.Thus, the provisional outturn for 1986 indicates that the Government wasable to strengthen its fiscal performance. Revenues rose to 13.6 percentof GDP because of the implicit tax on petroleum (since the decline ininternational prices was not passed to consumers), improved administrationof the company tax, an increase in receipts from cocoa arising from the.-valuation and larger crop, anid the impact of the salary increase onpersonal income tax proceeds. Less progress was made on restructuringexpenditures, mainly because of uncertainties over resource levels.Recurrent expenditures rose to nearly 12 percent of GDP because of the wageawards and higher interest payments. Recurrent outlays on other goods andservices declined marginally in nominal terms (implying a 25 percent realdecrease) compared to 198, leading to a scarcity of resources for essent.'aloperations and maintenance. For example, only a negligible amount ofroutine road maintenancA was carried out for lack of materials, althoughstaff and equipment were available. Development outlays (excluding externalproject assistance) remained at about 2 percent of GDP, only half theoriginal budget provision. The shortfall affected several critical sectors.Oeriodic road maintenance covered only a quarter of needs and several waterprojects were delayed. Current budgetary savings (net of grants) rosesharply to 1.7 percent of GDP. The overall budget deficit was only .7percent of GDP, reflecting the constraint posed by negative outflows onnon-concessional foreign financing. This occurred because the decline inoil prices in 1986 resulted in lower inflows from borrowings (used tofinance half of total petroleum purchases) relative to repayments onprevious loans. Domestic bank financing of the budget declined to 0.5percent of GDP.

10. The 1987 budget, announced in February, reflects the Government'6intentions to continue domestic resource mobilization efforts and toimprove the structure of expenditures. Revenues are programmed to rise toabout 16 percent of GDP as a result of the impact of the depreciation of

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the cedi and higher excise taxes. The growth of recurrent expenditures isto be held to 1 percent of GDP because of a moderate i7age adjustment (25percent average increase). As a result, higher current savings are projected.Development expenditures (excluding external project assistance) areestimated at nearly 3 percent of GDP in line with the provisions made inthe public investment program 1986-88 (see Chapter IV). This represents areal increase of 60 percent over 1985 levels. It is critical that thislevel is reached in order to fund such important projects as road maintenanceand the rehabilitation of the western railway line and agricultural feederroads. An allocation is also made for the special efficiency program,which would cover the costs of the planned retrenchment of staff, includingre-training. Anticipated foreign financing for the budget reflects higherconcessional aid, reflecting anticipated program assistance. Theseinflows, as well as the efforts to increase tax revenue and constrainrecurrent expenditures, would enable the Government to make substantialrepayments to the domestic banking system. This is an ambitious target,representing a sharp turnaround from even the previous period of decliningdomestic bank credit to the Government. The programmed repayments wouldpermit more credit to go to the rest of the economy.

Money and Credit

11. Annual growth of broad money accelerated during 1985-86 to over50 percent, compared to a 1984 increase of about 40 percent. In 1985 themajor explanation was the sharp rise in cocoa financing (although this isself-liquidating by the end of the seasor in September) and in creditexpansion to the private sector. In 1986 the factors were the improvementin the net foreign assets position resulting from the stronger balance ofpayments performance, and the foreign exchange losses of the Bank of Ghanaassociated with exchange rate changes and the settlement of arrears.Credit to the central government remained constrained during both years andwithin the ceilings agreed in the IMF programs. The transitional difficul-ties in implementing wage adjustments in 1986 resulted in a larger thanplanned increase in credit to the government at mid-year, but the measuresput in place during the last half of the year remedied the problem. Thebroad money to GDP ratio recovered to 15 percent in 1985 and to 16.9percent in 1986, reflecting both the sharp drop in inflation and thepolicy of trying to maintain positive interest rates.

12. In spite of the increase in broad money, the liquidity positionof commercial banks (primary) tightened during 1985-1986. The ratio ofreserves to deposits dropped from 64 percent at the end of 1984, to 58percent at the end of 1985, and to 46 percent by mid-1986. The ratio ofloans and advances to deposits rose from 60 percent in 1984, to 69 percentin 1985, and to 77 percent by mid-1986. Because the Bank of Ghana reducedreserve requirements in May 1985, at the end of 1985 the amount of excessreserves held by the commercial banks (18 percent of deposits) was onlymarginally lower than the 1984 level. However, by mid-1986, the ratio ofexcess reserves had fallen to only 6 percent. In response to the continueddecline in liquidity, the Bank of Ghana again reduced reserve requirementsin October 1986.

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Table 3: SUMMAR OF GQ13VERNMf FINANCE _ 1982-87(Cedi MLlllAl)

1982 1983 1984 1985 1986 1986 1987Actual Actl Actual Revised R!dEt Prov. ulget

Revemues 5,200 10,184 21,727 38,692 83,432 69,757 102,103of which:

Taxes cn 1ncme and property 1,506 1,780 4,125 7,993 20,904 14,121 17,230Taxes on International transactions 788 4,990 8,242 15,764 34,454 28,466 49,251Taxes on goods and services 2,146 1,689 5,562 8,373 18,774 19,620 26,502Non-tax revenue and other n.e.s. 760 1,725 3,798 6,562 9,300 7,550 9,120

Foreign Grants 52 57 914 1,620 4,332 3,868 7,883

Total 2TpenLiture and Net lErdIg 9,220 15J175 27,485 47,892 90,039 73,326 108,905of wich:

Recurrent xperxditure 8,029 13,401 22,700 38,462 63,858 60,833 81,691Development xpezpditure 1/ 817 1,354 3,994 7,303 20,181 9,826 18,214Net lerding 1/ 374 420 791 2,127 6,000 2,667 4,800Special Efficiency 2/ - - - - - - 4,200

Cmerall Deficit/§0r1lus -3,968 -4,934 -4,844 -7,580 -2,275 +299 +1,081

Financing: 3,968 4,937 4,844 7,580 2,275 -299 -1,081Foreign (net) 215 970 1,816 3,522 -725 -5,614 2,419

Borrmwing 5,073 9,562 144*i90 13,412 26,128Repanents 3,257 6,040 15,431 19,026 23,709

Daeastic (net) 3,718 3,964 3,028 4,058 3,000 5,315 -3,500Banldng Systen 434 2,145 2,437 3,006 2,000 2,471 -5,500Social Security 371 230 591 1,052 1,000 3,182 2,000Other 2,913 1,4% - - - -867 -

Unidentified 35 93 - - - 529 -

MsIrandum Items:Interest Payments 2,168 2,204 3,425 5,086 8,257 11,341 17,265

As percent of GDP (%)Revenues 6.0 5.5 8.0 10.4 16.6 13.6 16.1Recurrent Ependitu¢es 9.3 7.3 8.4 10.3 12.7 11.9 12.93urrent Bxdget Savings (net of grants) -3.3 -1.7 -0.4 0.1 3.9 1.7 3.2Development penditure and Net Lending 1.4 1.0 1.8 2.5 5.2 2.4 3.6Overall Deficit (net of grants) -4.7 -2.7 -2.1 -2.5 -1.3 -0.7 -1.1Net Dbmestic Financing 4.3 2.2 1.1 1.1 0.6 1.0 -. 6Net Foreign Fnanci%g 0.2 0.5 0.7 0.9 -0.1 -1.1 .4

1/ Thcx es foreign assistance tied to projects.2/ Provision for retrewment progran, inclwding training.

Scurce: Ministry of Finance and Economic Plannirg.

SGP/IIq

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Prices and Wages

13. In 1985, the consumer price index (CPI) rose by 10 percent,compared to 40 percent in 1984, in large measure because food pricesdropped after the recovery from the drought. However, inflation acceleratedduring the year. The point-to-point rate rose from 7 percent in June 1985to 19 percent in December 1985. As expected, after the temporary phenomenonof declining food prices came to an end, inflation increased to an averageof about 25 percent in 1986. Food prices rose on average by 20 percent, incontrast to the decline of 11 percent in 1985. The second window foreignexchange auction, which squeezed out much of the rent element in prices,resulted in some cost-push pressures for non-food commodities in the lastmonths of the year. In addition, higher fuel prices and utility ratesraised prices during the first half of the year. Nevertheless, ir. 1986 theincrease for non-food commodities (27 percent) was slightly lower than the1985 average of 28 percent. However, the price trend for this component ofthe CPI jumped from a point-to-point rate of about 24 percent in August-September to 29 percent in October and to 35 percent in December. It isstill relatively low considering the large devaluation of the exchange rateat the beginning of the year, coupled with the subsequent sharp depreciationin the auction. There is some evidence of consumer resistance to higherprices which has adversely affected retail turnover.

14. As already noted (para 3), in January 1986 the Government raisedsalaries in the public service, resulting in a 80 percent increase in thewage bill for 1986 as compared with the previous year. Even after theadjustment, however, the average wage in real terms was only about 40percent of 1977 levels for senior public servants and 65 percent for lowerlevel workers. In addition to reversing the sharp decline in real wages andincreasing structural relativities, the salary adjustments appear to haveimproved slightly the position of the public sector relative to the privatesector. Although complete data is not available, several public enterprisesand many private sector companies did not fully match the Government's wageadjustments in 1986. Preliminary indications suggest that during 1986wages increased on average by about 60 percent for public corporations andthe private sector. Recent increases in the minimum wage mandated by theGovernment have narrowed only slightly the rural-urban wage differential.In May 1984, the rural wage rate was three times the official minimum wage.In 1986 farm labor was paid g250/day (based on rates paid by cocoa farmers;wages in the North and for other crops are probably slightly lower),compared to the minimum wage of 090/day. In 1987 the Government raised theminimum wage by 25 percent to 0112/day and adjusted public service salariesacross-the-board by the same percentage, as real levels of compensation arestill substantially below 1977 levels. Several allowances were alsoraised, particularly for transport.

Balance of Payments

15. The current account deficit in 1985 amounted to $283 million,4.1 percent of GDP. This was substantially less than had been projectedbecause of a shortfall in non-petroleum imports, which did not grow in

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nominal terms over 1984 levels. A major reason for this development wasthe decline in aid disbursements in 1985 because of a change in thestructure of commitments away from quick-disbursing assistance and the slowtranslation of aid indications into commitments. Imports of consumer goodsunder special licensef. (SILs) amounted to half of what had been projected,as traders were confronted with higher taxes.

16. Export earnings in 1985 grew by 12 percent reaching $630 million,the bulk of the increase coming from cocoa. The rise in cocoa earnings wasdue entirely to the bigger volume of shipments as realized prices for beanssagged. Ashanti Gold Corporation achieved its planned level of gold sales,but because of the delays in rehabilitation and higher than usual localsales, the State Gold Mining Corporation only reached half of its projectedexports. As a result, the volume of gold exports was unchanged from 1984.As the Volta River Authority returned to normal operations afterdrought-induced cutbacks, and prices increased, electricity export earningsrose by 75 percent to $35 million. The value of timber exports wasadversely affected by a decline in the average price as logs recoveredfaster than processed products. However, volume shipped nearly doubledfrom 1984 levels.

17. The current account deficit was mainly financed by grants andofficial long-term loans totaling $224 million, lower than the 1984 level.These flows finane.ed somewhat less than half of non-petroleum imports.Taking into account other official and private capital, the overall deficitwas $117 million, covered by IMF purchases of $124 million borrowings bythe Bank of Ghana. Arrears were reduced by nearly $60 million. Includingpayment arrears and IMF charges, total debt service was equivalent to 62percent of exports, compared to 46 percent in 1984. Gross internationalreserves rose to $145 million by the end of 1985, equivalent to about 10weeks of imports, compared to $132 million at the end of 1984. The figuresfor Ghana's gross international reserves have been revised downwards sincethe last economic report to correct a misclassification of the assets ofthe Bank of Ghana.

18. Provisional figures for the 1986 balance of payments indicatethat the current account deficit declined to $193 million, equivalent to3.7 percent of GDP. Export growth was strong in 1986 as total receiptsrose by 20 percent. The volume of cocoa exports rose 15 percent and pricesstrengthened. There were also major improvements in timber exports and inreceipts from sales of electricity. The latter rose by 40 percent becauseof higher demand from the aluminum smelter. Given the decline in goldproduction in 1986, the value of these exports did not increase above thelevel of 1985, in spite of an increase in price. Manganese shipments wereconstrained because of increasing difficulties in selling lower grade ore.In contrast to 1985, the value of non-oil imports rose by over 20 percent,primarily because of tne sharp improvement in disbursements of concessionalassistance. In addition, the lifting of import restrictions for mostproducer goods facilitated imports at the end of the year. The value ofoil imports declined, reflecting lower international prices. Net privatetransfers, mostly remittances through special import licenses, rose

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slightly compared to 1985, owing to a reduction in tax rates and theelimination of the requirement for up front payment of taxes.

19. The main source of financing for the current account deficit wasconcessional assistance, totaling $358 million, 60 percent higher than the1985 level. Official grants and long-term loans again financed nearly halfof non-oil imports. Inflows of export credits were somewhat higher in1986, reflecting the restoration of normal trade financing as Ghana'seconomic performance strengthened. Private external capital inflows remainsmall apart from financing through the International Finance Corporationand a consortium of banks for the rehabilitation of the Ashanti GoldCorporation. Short-term capital outflows reflected, among other items, thebalances in IDA's Special Accounts for program credits. The overallbalance of payments deficit declined to $56 million. Financing of thedeficit was quite different from 1985. Net inflows from the IMF were only$17 million, reflecting delays in negotiating the third stand-byarrangement, which became effective only in October. After three years ofprogress in reducing arrears, little was achieved in 1986, although theGovernment avoided the buildup which had been expected given the trend forthe first half of the year. At end-1986 external payments arrears totaled$171 million. The remainder of the deficit was financed by an increase inmedium-term borrowings by the Bank of Ghana. Gross international reservesrose to $172 million, equivalent to 11 weeks of imports. The smallreduction in arrears, coupled with improved export performance, lowered thedebt service ratio to 47 percent (including the IMF).

Conclusion

20. As indicated above, the Economic Recovery Program made substantialprogress during 1985-86. Economic growth was sustained. The Governmentreversed the decline in public service wages and the compression in thesalary structure without sacrificing overall fiscal performance. Monetarypolicy became less restrictive, but this reflected higher demand for creditfrom the private sector, not the government. The extent of financialintermediation in the economy also increased. In spite of the large dropin the value of the cedi, inflationary pressures have been contained.Exports are responding to the ch3nges in incentives. The level of importsis gradually becoming more adequate for the needs of the productive sectors,in large part because of higher aid disbursements. The level of externalpayments arrears has been reduced and balance of payments performance hasstrengthened. The Economic Recovery Program has been largely successful inachieving most of its initial stabilization objectives. However, theGovernment recognizes that in order for the country to realize its potentialand for living standards to improve, the reform effort must continue so asto bring about the necessary structural adjustments in the economy.

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II. STRUCTURAL ADJUSTMENT ISSUES

Achievements of the Economic Recovery Program

21. Over the last four years Ghana's Economic Recovery Program hasachieved substantial adjustment in the economy by realigning prices andrestoring fiscal and monetary discipline. In addition, progress has beenmade in improving the climate for private sector investment. The mainachievements are summarized below and in Table 4.

22. The core of the reforms has been the depreciation of the realeffective exchange rate by about 90 percent since 1983. Conservativedemand management has helped reduce sharply the gap between the paralleland official exchange rates. Thus incentives for exports and for channel-ling transactions through official markets have improved sharply. Themajor adjustment in the exchange rate has guided the realignment of relativeprices throughout the economy. The government has simplified and loweredimport tariffs and substantially liberalized imports both by lifting almostall restrictions on goods financed from importers' own foreign exchangeand, more recently, by removing restrictions on most producer goods throughaccess to the auction. Thus protection levels have been significantlylowered to encourage efficient import substitution and shift relativeincentives in favor of exports. The cocoa producer price has more thandoubled in real terms, although implicit taxation is still excessive.Administered prices have been promptly adjusted to pass-through fully thedevaluation of the exchange rate. With the decline in world oil prices in1986, Ghana's petroleum prices by mid-1986 exceeded international levelseven at the parallel market exchange rate, although they were still wellbelow those prevailing in neighboring countries. With the virtualdismantling of price controls, prices of other goods were allowed toreflect these changes in the exchange rate and administered prices. Thedecline in inflation, the impro-vement in private sector climate, and theattainment of positive real interest rates in 1985 have contributed to theincrease in the level of financial intermediation. Domestic resourcemobilization responded strongly to the changes in the exchange rate,improved administration, and additional re:enue measures. This enabled theGovernment to lessen reliance on inflationary financing from the bankingsystem.

Remaining Adjustment Tasks

23. In spite of these achievements and the initial favorable responseof the economy, the Government recognizes that in order to lay a firm basisfor sustained growth and balance of payments viability, further actions areneeded to strengthen and broaden the policy framework underlying the reformprogram. Although the balance of payments has improved, exports remainwell below their established potential, while the level of imports isinadequate to support the recovery process. Moreover, the debt serviceburden is nigh and there are still external payments arrears. Confidenceproblems and the continued weakness of the financial system result in

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Table 4: Ghana: Selected Indicators of Structural Adjustment

1983 1984 1985 1986

Real Effective Exchange RateIndex 1983 - 100 100.0 69.2 57.1 30.2Annual change (%) -76.6 -30.8 -17.5 -47.1

Ratio of Parallel Market toOfficial Exchange Rate 22.2 3.2 2.8 1.8

Real Cocoa Producer Price (1970/71 = 100) 1" 34 38 62 80(est)

Cocoa Producer Price as share of World Priceat Parallel Exchange Rate 1/ 6 9 13 20(est)

Items Under Price Control 23 21 17 8 8

Gasoline Price as Share of InternationalPrice at Parallel Exchange Rate 27 37 57 108

Real Interest RateShort-term Deposit Rate (6 months) (X) -51.1 -20.4 6.0 -6.1Maximum Lending Rate (%) -49.5 -16.8 8.7 -3.3

Broad Money as a ratio of GDP 3/ 11.1 13.0 15.1 16.9

Tax Revenue as a percent of GDP 5.5 8.0 10.4 13.9

Net Credit to Government (end of period)(as share of GDP) 11.4 8.9 7.3 5.9

Index of Real Wages (1977 - 100)Civil ServiceSenior Management 10 7 13 36Accountant 16 12 24 55Clerical 26 22 43 64Unskilled Labor 32 27 55 56

Volume Index of Major Exports: (1977 a 100)Cocoa 63 60 68 78Timber 19 23 46 66Gold 70 72 72 73

External Payments Arrears (US$ million) 440 232 175 171

1/ Crop year beqinning in year stated.2/ Up until 1983 price controls were comprehensive.3/ Narrow definition of money before 1984.

SISA/GHCEM1

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inadequate support for the productive sectors, the failure to mobilize thesavings needed to fund investment, and the low preference for holdingfinancial assets. Agriculture, the dominant sector in the economy, isoperating below potential. The cocoa farmer is still taxed excessively,thereby discouraging the restoration of Ghana's production. Effectiveprotection for manufacturing varies too widely; tax anomalies and erodedprotection could distort or impede the supply response of enterprises tothe removal of foreign exchange rationing. The response of the privatesector to the reforms has been uneven and hindered by uncertainty abouteconomic policies and the Government's intentions. Tax administrationremains weak and incentives for production and energy conservation areinadequate. Further domestic resource mobilization is required in order toraise public investment from its still low level. Improved investmentplanning is needed to raise the returns on public sector projects.State-owned enterprises strain the Government's management capacity, andare a drain on the budget, instead of contributing to resource mobilization.Senior civil servants, accountants, and technicians are still grosslyunderpaid, while there are too many employees at the lower rungs of thecivil service. Finally, weak management and implementation capacity haveemerged as serious obstacles to the success of the structural adjustmentprogram.

The Government's Medium-Term Objectives

24. Within the general aim of laying a base for sustained growth andbalance of payments viability, the Government's specific goals for 1987-1989are the following:

(i) sustain uconomic growth at around 5.0-5.5 percent per annum;

(ii) increase the level of investment from about 10 percent of GDP in1986 to 23 percent of 1989 GDP;

(iii) raise national savings from the present 7 percent of GDP to 15percent by 1989;

(iv) improve the management of resources within the public sector.

25. The main instruments which the Government plans to use in orderto achieve the objectives of the structural adjustment program are:incentives policies, primarily unification of the various exchange ratemarkets and maintenance of a flexible exchange rate policy, including thefull pass-through of any adjustment to the domestic economy, i.e. cocoaproducer prices, petroleum, and other administered prices, and furthertrade liberalization; measures to increase domestic resource mobilizationthrough tax reform, higher public savings, and strengthening of the financialsystem; actions to encourage a sufficient response by the private sector tothe economic reforms- and reforms to improve management and resource use inthe public sector. The Government's program is ambitious and covers a widespectrum of policy issues. This chapter will focus on the major issuesraised in the key areas of incentives policies, the mobilization of domestic

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resources, the private sector investment climate, and public sectorreforms. There is also a brief discussion of the social impact of thestructural adjustment program. The following chapter examines theGovernment's efforts to rehabilitate the country's economic and socialinfrastructure and increase the returns to public investment.

Incentive Policies

Exchange and Trade

26. The centerpiece of Ghana's structural adjustment program is theaim of achieving a market-determined exchange rate applied to all economictransactions, and a liberal trading regime which provides a relativelyuniform and reasonable level of effective protection. After successivedevaluations, the exchange rate is now more realistic. The establishmentof the second window foreign exchange auction in September 1986 and thereplacement in October of highly restrictive import licensing by theautomatic issue of licenses for most production inputs were major steps inthe liberalization of the economy. Unification of the official rate andthe foreign exchange auction in February 1987 extended the application of a.more realistic exchange rate to cocoa and petroleum.

27. Virtually the only non-capital transactions which remain to beintegrated into the foreign exchange auction are imports of consumer goodsand factor and non-factor services. Consumer goods continue to be importedthrough special import licenses (SILs) financed by foreign exchange providedby the importer. The integration of this market with the foreign exchangeauction is the next key task in future liberalization efforts. The Governmentis reluctant to fully join the markets immediately because of the risk ofsharp depreciation of the exchange rate, particularly when confidence inthe auction is still being built up. Such a depreciation could impedeaccess by producers and increase opposition to the system. It is importantto remember that the SIL market functions well, is based on a close toequilibrium exchange rate and is competitive. Also, the Government haseliminated the special taxes which had been levied on these imports,thereby reducing the protection given to domestic producers. An additionalconsideration is that the SIL market increases the supply of foreignexchange to Ghana, at a time when supply through other channels is impededby lack of confidence in the financial system. Although confidence isimproving, the process will be a gradual one.

28. However, integration of the markets as quickly as is prudentgiven the above considerations is important because without it the officialexchange rate in Ghana will not be fully market determined. In addition,the continuation of the parallel market for SIL imports may encourageholdings of foreign exchange outside the domestic banking system.Recognizing this, the Government intends to allow access to the auction byApril 1987 for several categories of goods, which in 1986 accounted forover 50 percent of the value of SIL imports. This is a first step towardsfull integration of the markets by early 1988.

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29. A related issue is future policy on export retention accounts.These were established at a time of acute scarcity of foreign exchange andquantitative controls on imports financed from official foreign exchange.The objective was to ensure that the key export sectors could meet theiressential foreign exchange requirements. The establishment of the foreignexchange auction and the elimination of most import controls have eliminatedthe rationale for most of the retention accounts and their gradual eliminationwould augment the supply of foreign exchange to the auction, therebybroadening that market. The Government intends to review the policies onretention accounts during 1987 with a view to reducing them for largetraditional exporters (cocoa, mining) beginning with the Ghana Cocoa Board,subject to contractual cbligations to third parties.

30. In line with the reforms in the exchange and trade system, in theFebruary 1987 budget the Government announced several interim tax reforms,including the removal of the special tax on most consumption goods imports;abolition of many previous exemptions to sales taxer and import duties; andthe consolidation of excise duties into a new structure of sales taxes ondomestic production, except for tobacco products and beverages. In additionto these interim reforms, the recent changes in the exchange and tradesystem call for a re-examination of the trade tax structure. Although thetariff structure in Gnana is fairly moderate and even (with a standard rateof 20-25 percent), net protection in some cases is quite uneven because ofthe incidence of other taxes and excise duties and various exemptions. Inaddition, there may be a need to provide protection through higher tariffson a temporary basis to some industries during the adjustment process.Most export production in Ghana is estimated to receive negative protectionbecause it is not compensated fully for domestic taxes and protection.During 1987 a Government Task Force will review the trade tax system. Thework program includes: (i) redesigning the structure on the basis ofcertain agreed principles, such as a shift from taxation of production totaxation of consumption, a distinction between the protection and revenueroles of tariffs, and rationalization of the incentives for import competingactivities, and estimating revenue yield; (ii) measuring effective protectionunder the present system and exchange rate and designing a tariff structurewhich would provide relatively uniform protection and allow for temporaryprotection in the case of infant industry, temporary adjustment, or dumping;(iii) defining appeals procedures and the criteria to be used in an ongoingtariff review to justify infant industry, temporary, and arLtidumpingprotection; and (iv) designing improved duty relief arrangements forexporters.

31. If trade liberalization is to succeed, and not strain the balanceof payments, exports must increase rapidly. The change in the exchangerate has already provided a strong incentive for higher exports from Ghana.In January 1987 the Government took the additional step of abolishingexport licensing., In addition, export taxes on timber and minerals havebeen eliminated. The Export Promotion Council is being reconstituted andstrengthened. However, additional measures need to be taken. Some improve-ments are needed in the existing scheme to provide fisnal relief throughdrawbacks for export production inputs. For example )nsideration should

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be given to a duty suspension arrangement for exporters. In the area ofnon-traditional exports, the Government should develop a medium-term exportdevelopment strategy. As an input to this strategy, during 1987 the WorldBank, in cooperation with the International Trade Center, will carry out astudy to assess the potential for non-traditional exports from Ghana.Through this work policy or other barriers to activities which offerpromising prospects will be targeted for special attention.

Cocoa

32. Pricing Policy. Cocoa is the mainstay of the economy of Ghana.Although.a long term objective of the structural adjustment process is todiversify the economy, the success of reform efforts over the next 3-5years depends on ensuring full utilization of cocoa production capacity andproviding sufficient incentives to encourage the replanting and rehabilita-tion necessary to sustain output of about 300,000 metric tons per annum.Significant increases in the cocoa producer price have been one of themajor policy reforms of the Economic Recovery Program. However, as shownin Table 5, it was not until 1985/86 that the real cocoa producer priceincreased significantly.

Table 5: Incentives for Cocoa Farmers

Est.1982/83 1983/84 1984/85 1985/86 1986/87

Total cocoa purchases byGCB '000 mt 179 159 174 219 230

Nominal producer price(0 per metric ton) 2/ 12,000 20,000 30,000 56,600 85,500

Real producer price(1970/71 - 100) 49 34 38 62 80

Nominal producer price aspercent of f.o.b. price atofficial exchange rate b/ 38 24 25 24 28

Nominal producer price as% of world price atparallel market rate b/ 9 6 9 13 20

a/ as of beginning of crop year/ estimated average for crop year

Source: Ghana Cocoa Board and staff estimates.

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33. A symptom of the failure to provide adequate incentives for cocoafarmers has been the presence of strong incentives to smuggle cocoa fromGhana tS neighboring countries in order to obtain a better selling price.As incentives become more adequate smuggling should decrease, subject alsoto improvement of roads for cocoa evacuation in the western region. At thebeginning of the Economic Recovery Program the Ivory Coast producer pricewas about 5 times the price in Ghana at the estimated parallel marketexchange rate. By 1985/86 that differential, while still substantial, hadnarrowed to about 3 times. The current producer price in Ghana of $567 perton at the auction exchange rate (about 0155u$l in March) compares with$1,310 per ton in the Ivory Coast. Although there has been a decrease overthe past several years, further adjustments are needed in the producerprice in order to eliminate the price incentive to smuggling.

34. Because of the relatively aged stock of cocoa trees in Ghana, theeffects of disease and bush fires, and previous low levels of rehabilitationand replanting by farmers, the ability to reach the production target of300,000 metric tons per annum by 1995 depends upon adequate incentives forfarmers to rehabilitate and replant using improved hybrid varieties. Atthe current producer price, it appears that cocoa rehabilitation ismarginally unprofitable, while there is a strong inducement for replanting.The major reasons for the higher incentive for replanting is the return inearly years from food crops (such as plantain), grown to provide shade forseedlings, and higher benefits in later years because of the better yieldsachieved with hybrid varieties. In actual practice, the distinctionbetween rehabilitation and replanting is blurred as most farmers combinethe two. The analysis does, however, suggest that a further strengtheningof price inducements for the farmer is required. Looking ahead to the nextcrop year, after making adjustments for likely wage and price trends in1987, a producer price of about gl50,000 per ton would be required for bothrehabilitation and replanting of cocoa to be financially profitable. Thiswould raise the farmers' share of the f.o.b. price to an estimated 40percent, at the official exchange rate.

35. Based on current estimates of the long run production response toa higher farmgate price, a share for farmers in the range of 55-60 percentof the f.o.b. price would maximize fiscal revenues to the Ghana Cocoa Boardand to the Government from cocoa exports. This is a reasonable intermediatetarget. In setting a share for producers for the long-run other factorswould need to be considered: the impact of the higher price on ruralincomes, alternative sources of Government revenue, and competitivenesswith other countries. It is also important to verify the productionresponse of farmers under current conditions in Ghana in order to betterguide future pricing decisions. These would be examined in a study ofcocoa incentives during 1987. Nevertheless, current data justifies agradual increase in the farmers' share of the f.o.b. price. Although thepossible output response in the skort run is much lower since cocoa has along gestation period, if the impact of a diversion of smuggling is takeninto account, a gradual increase in the share of farmers is expected toincrease revenues from cocoa even in the near term for both the Ghana CocoaBoard and the Government. The difficulty of forecasting the average

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exchange rate which will prevail during a period of active exchange ratepolicy has meant that the farmer's share has deteriorated from its level atthe beginning of the crop year. For example, the 1985/86 producer pricefor the main crop represented only 24 percent of the f.o.b. price (at theofficial exchange rate) after the January 1986 exchange rate devaluation,compared to 40 percent at the beginning of the season. Similarly, for the1986/87 crop year the share of the farmer has declined to less than 30percent (at the auction rate) from a share of 45 percent at an exchangerate of P90-$1.00. In order to ensure that the cocoa producer price ismaintained at an adequate share of the f.o.b. price, beginning in 1987/88farmers will be compensated at the end of the crop year for developments inthe exchange rate, world cocoa prices, and output that result in a highercedi value of export proceeds than orginally anticipated.

36. Marketing. Part of the explanation for the excessive taxation ofthe cocoa farmer in Ghana is the excessive marketing costs of the GhanaCocoa Board (Cocobod). This institution currently provides services to.farmers, such as inputs, extension, and research; owns cocoa and coffeeplantations and processes cocoa; and handles internal and external marketingfor cocoa, coffee, and sheanuts. During the first phase of the EconomicRecovery Program, studies were carried out and some measures were taken toreorganize and improve the efficiency of the Cocobod. Some 16,000 staffwere retrenched and 25,000 "ghostworkers" eliminated from the payroll bythe end of 1985. In addition, effective January 1987, responsibility forcocoa feeder roads was transferred to the Department of Feeder Roads.Although marketing costs have been reduced, in 1986 the Ghana Cocoa Board'sshare of the f.o.b. price was about 27 percent (excluding retrenchmentcosts). This share is high compared to costs in other major producingcountries, even after taking into account the broader responsibilities ofthe Cocobod for extension and research. The recently approved 1986/87budget, including the cost reduction measures described below, would stillresult in a Cocobod share (excluding retrenchment and financing costs) ofabout a quarter. Excluding extension and research, the share would drop toabout a fifth.

37. In Malaysia and Brazil, major cocoa producers, there is lessgovernment participation in the industry. Input provision and internalmarketing and exporting are in the hands of the private sector. Competi-tion among traders and exporters results in marketing costs estimated at nomore than 10-15 percent of the world price, leaving for the farmer about85-90 percent, out of which he must cover input costs and some transport.These incentives have led to intensive cultivation practices, resulting inyields per hectare of 800-1200 kg compared to 200-250 kg in Ghana. Analternate procedure which operates in West Africa (Ivory Coast and Cameroon)is a mechanism whereby the government sets prices at different stages ofproduction, but private producers and traders carry out most activities.Yields per hectare in these countries (300 kg for Cameroon and 480 kg forthe Ivory Coast) also exceed those in Ghana.

38. These marketing systems, which rely more on the private sectorthan does Ghana, demonstrate higher efficiency in marketing, better

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provision of supporting services, and give greater incentives for thefarmer, thereby encouraging higher production and yields. However, theGovernment believes that a major change in marketing is not advisable atthis time in Ghana for several reasons. One, private traders and haulersmay be unwilling to evacuate cocoa if infrastructure in producing areas isinadequate. In Ghana, infrastructure, particularly roads, is poor in somecocoa growing areas, particularly the western region, where production hasnow shifted. Two, a radical change in marketing arrangements, as, for*xample, occurred recently in Nigeria, can be disruptive. Given theimportance of cocoa in the economy, Ghana cannot afford to jeopardize therecovery now occurring in production. Three, cocoa financing puts signifi-cant demands on the banking system. Reforms and further strengthening ofthe weak financial system in Ghana may be needed to ensure that adequateresources are available for crop purchases if the system is managed by manyprivate traders and exporters. Now the Cocobod is assured access tosufficient credit.

39. These considerations do not imply that a gradual switch to amarketing system managed by the private sector would not work well or bemore cost effective than the present arrangement. It does, however, arguefor an in-depth study of the options open to the Government for improvingthe efficiency of cocoa marketing and extending the liberalization in othersectors of the economy to cocoa. It is important that such a marketingstudy be carried out early in the Government's structural adjustmentprogram in order to prevent a lagging cocoa sector from holding back thefull recovery of the economy. Acknowledging this need, the Government hasrequested the World Bank to prepare a report on the relevance of theexperience of other countries to Ghana.

40. In the meantime, the Government recognizes the need for measuresto reduce the costs of the Cocobod. The short-term strategy which is beingdeveloped will be guided by the following principles:

(i) Cocobod will attempt to confine itself to activities which cannotbe done more efficiently by other institutions or the privatesector, and in keeping with this;

(ii) the Cocobod will progressively shed all extraneous activitieswhich are not directly related to its purchasing and marketingfunctions and to extension and research;

(iii) the Cocobod will lay-off all remaining excess staff in a phasedmanner; and

(iv) that in effecting reductions, care will be taken to protectessential functions;

(v) a systematic review of the operational costs of the Cocoa Boardwhile carrying out (i) and (ii) above with a view to reducingsuch costs in order to favor higher producer prices.

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41. As first steps, in 1987 the Cocobod divested unviable plantationsand laid-off the staff (approximately 10,000) made redundant as a result.In addition, substantial staff reductions are to be made in the CocoaServices Division. A joint venture is planned for the insecticide plant, aCocobod subsidiary. The Cocobod also intends to achieve economies incapital expenditures. It is critical that the Cocobod not raise staffinglevels (net of the above mentioned retrenchment) in the junior and lowergrades and casual day labor. Increases in staff wages and allowancesshould be strictly limited to Government-mandated adjustments. The Cocobodbudget for 1986/87 shows subsidies for the marketing of sheanuts and coffeewhich are being borne by the cocoa farmer. The Government needs tore-examine its policy for sheanuts where the producer price is higher thanthe current international price. Cocobod's role in coffea and sheanutmarketing also should be reviewed.

42. In the longer run, however, in order to continue the streamliningof the Cocobod, it is necessary to assess the effectiveness of the entireoperation. Th9 current accounting and financial control systems areinadequate to do this. Neither do they provide to the management theinformation needed to run the Cocobod. During 1987 a commercial accountingsystem will be introduced in the Board which will make it possible toassess tho cost effectiveness of different operations (e.g., haulage andprocessing). On the basis of that information, further reform measureswill be developed in the framework of a corporate plan which will initiallycover a three year period beginning with the crop year 1987/88. The goalof this plan will be to take the additional s eps necessary to lower theBoard's share of the f.o.b. price to 15 percent by 1988/89.

Domestic Resource Mobilization

Financial Sector

43. Successful implementation of the structural adjustment programdepends on a well-functioning and broadly based financial system to mobilizeresources and channel them efficiently to productive activities, particularlyin the private sector. The Economic Recovery Program has made considerableprogress in this area. The velocity of circulation has decreased from 7.7percent in 1984 to an estimated 6 percent by the end of 1986 as the willing-ness of the public to hold financial assets has risen in response to higherinterest rates and lower inflation. Nevertheless, it is stillsubstantially above the rate which existed in Ghana during the 1970's.There is still a lack of confidence in the banking system. In addition,banks in Ghana are relatively inefficient with spreads between lending anddeposit rates which are high by international standards.

44. Since 1984, the issue of whether there is adequate "liquidity" inthe Ghanaian economy has been widely discussed. It is a complex question,subject to considerable uncertainty and contradiction. On the one hand, itis difficult for the private sector to raise sufficient working capital foroperations and imports given the large depreciation of the cedi, generallyweak balance sheets (reflecting past losses), and conservative bankers.

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At the same time, commercial banks have held excess reserves. During thecourse of 1985-86, however, liquidity became tighter as evidenced by thedrop in excess reserves in the banking system even after the Bank of Ghanalowered the reserves ratio. For the medium-term, the need to generatebalance of payments surpluses in order to reduce payments arrears, meetshort-term obligations, and finance scheduled IMF repurchases will have amajor impact on credit availability. In developing a financial program, acareful balance will need to be struck between meeting the credit require-ments of the productive sectors and ensuring macro-economic stability.Careful monitoring of the key macro-economic aggregates, a betterassessment of the credit needs of the productive sectors, and a flexibleapproach to credit targets will be required in this period of major changesin the economy.

45. Beyond the short term, the provision of adequate credit in theeconomy depends on further increasing the public's willingness to holdfinancial assets. The Government plans to achieve this by maintainingpositive interest rates, primarily through controlling inflation. This isa necessary, but not sufficient condition. Until the public has moreconfidence in the banking system the response to higher real interest rateswill be muted. A positive step is the Government's intention to redeemfrom the public ahead of schedule the bonds which individuals received ascompensation when the 050 note was demonetized. The Government needs toconsider additional actions to reassure the public, such as making a publiccommitment to freeze accounts only in exceptional circumstances and torespect the confidentiality of bank-customer relations. Financial institu-tions should be encouraged to develop innovative ways of mobilizingresources, particularly among groups whose incomes are incrt-asing as aresult of economic reforms, for example, cocoa farmers and exporters. Lessrecourse by the government to financing through the banking system alsofrees resources for the private sector. Already the share of credit to thegovernment has dropped from about 9 percent of GDP in 1984 to 6 percent in1986. A further decline in the share of credit to the government is neededover the next several years, but phased so as not to jeopardize the necessaryincreases in high-return development expenditures.

46. In addition to the liquidity issue, there is wider concern overthe ability of the financial system in Ghana to facilitate the structuraladjustment of the economy. First, poor past economic performance and weakcredit analysis and collection procedures have left some banks with asizeable portfolio of poor loans, relative to their capital base. This isa major reason for the banks' unwillingness to provide more loans to whatthey consider marginally creditworthy firms, in favor of holding Governmentsecurities. Second, in general, the banks in Ghana operate inefficiently.There are several reasons for this: small currency denominations, too manybranches, and the relatively small size of the financial system given thecurrency still held by the public outside of the banks. Regarding thefirst problem, the Government is now considering the issue of largerdenomination currency notes. Third, commercial banks in Ghana levy numerousadditional charges which tend to lower the interest actually received bythe depositor and to increase the lending rates charged. These wide

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spreads are probably necessary in order to cover non-performing loans andthe high costs of operations, but they discourage the mobiization ofadditional resources and borrowing foi productive activities. Fourth,capital markets in Ghana are undeveloped. There is no stock market andonly limited merchant banking.

47. The Government plans to review the financial sector during 1987with assistance from the World Bank. The review would look closely atcredit allocation, ways to improve the efficiency of bank operations, thestrengthening of Bank of Ghana's supervision of the commercial banks, andmeasures to develop capital markets. This wIll be supplemented bymanagement and financial audits and detailed portfolio reviews of key banksin order to determine the extent of the problem and remedial measures.

48. Finally, in order to ensure that the behavior of net foreignassets does not squeeze domestic credit to an extent which threatens theeconomy's growth objectives, the Government should seek 'he consolidationof outstanding external arrears into medium-term loans, thereby reducingthe amount of cash outlays needed to lower the amount outstanding. Inaddition, the Government could consider new borrowing by the Bank of Ghana,within the constraints posed by the external debt position, to lengthen thematurity structure of its current portfolio. Of course, an importantfactor in this regard is the necessity of continued access to IMFfacilities, preferably through the Structural Adjustment and the ExtendedFund Facilities, which would lower the net transfers to the IMF over thenext several years.

Private Sector Investment Climate

49. Achievement of the growth objectives of the structural adjustmentprogram relies on the response of the private sector to improved incentives.Although Government will have a key role in providing adequate andwell-maintained infrastructure, investment in production is expected tocome from the private sector. While steps have been taken to improve theprivate sector climate, so far the investment response to the EconomicRecovery Program has lagged. This is not surprising, given the largechanges in relative prices and the uncertainties prevailing in the economicenvironment. Moreover, the large unutilized capacity at the beginning ofthe ERP has focused the private sector towards modest rehabilitationinvestments rather than the creation of new capacity.

50. However, the business community continues to receive mixedsignals. Business owners generally welcomed the foreign exchange auctionand the related easing of import restrictions. But changes in regulations,unclear and inconsistent application, particularly on the cedi depositrequired for successful bidders, and restrictions on access caused by therequirement for tax clearance certificates (which the Government abolishedat the end of the year) caused some confusion. The manner in which therevenue authorities implemented the otherwise necessary and overduecollection of current and outstanding tax payments also contributed to themixed signals. This resulted in sudden increases in tax assessments for

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many companies and a requirement for advance payment of quarterly obliga-tions. These actions weakened the financial position of many firms andalso affected the banking system during 1986 as customers d_ew down demanddeposits and clamored for higher overdrafts and other credit lines in orderto meet tax demands. The worst of the crisis is now over. The Governmenthas announced that companies can pay taxes due at the end, instead of atthe beginning of the quarter. Provided that a reasonable appeals procedurecan be set up to deal with disagreements, which may be quite legitimate,corporations should return to a more regular cash flow position in thecourse of 1987. However, the suspicions created will take time to dissipate.

51. Several measures could improve the policy environment for theprivate sector. They include:

(i) fostering closer consultation between the Government and theprivate sector, for example, by increasing the frequency ofmeetings of the existing tripartite committee or other forum,dealing with current policy actions;

(ii) reducing the restrictions on private investment posed by thestill excessively high tax rates on corporate income and oncapital gains (which discourages portfolio investment) and themultiple taxation of dividends. In the 1987 budget the Governmentannounced a reduction in the corporate income tax rate formanufacturing enterprises from 50 percent to 45 percent. Thereis also a need to make prompt tax rebates in cases in whichcompanies are required to make presumptive advance tax paymentswhen in fact they are making losses. More encouragment would beprovided to invest in new or more risky ventures if there were aprovision in the tax code which permitted losses to be carriedforward;

(iii) continuing to moderate the excessively progressive personalincome tax rate. Even after the changes in the structure of thepersonal income tax announced in the 1986 and 1987 bludgets amarginal rate of 55 percent applies to incomes exceeding only0300,000 per annum (approximately $2,000);

(iv) improving communication channels to avoid misapprehension andmisunderstanding and to ensure that the expected response toeconomic reforms is forthcoming. This is particularly importantfor the foreign exchange and imnort regimes where little efforthas been expended to explain t e detailed functions, rationale,and operational requirements to the public;

(v) easing the restrictions on the activities open to foreigninvestors. Otherwise, this may deter joint ventures and thecorresponding transfer of know-how and technology. Also, theGovernment needs to sign treaties with more countries in order toavoid the double taxation of foreign investors; and

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(vi) developing a phased program to clear up the backlog of blockedfunds for capital repatriation and dividends and to phase inaccess to the foreign exchange auction for approved transactionsin those categories. The Government intends to permit access tothe foreign exchange auction for those service and transferpayments approved by the exchange control authorities since thebeginning of the auction. The Government should also activelyencourage a mechanism whereby some of the backlog of blockedfunds could be converted into equity investments;

Public Sector

State Enterprise Reforms

52. A key objective of i-he Government's structural adjustment programis to improve the performance and efficiency of state-owned enterprises(SOEs) in order to increase their contribution to Ghana's economic recovery.SOEs are important in nearly all economic sectors. Virtually all ofGhana's major exports are produced and/or marketed by SOEs and they operatekey economic infrastructure. Although the sector is large (the Governmenthas a majority interest in 181 enterprises), the financial resourcesmobilized by it are small. In 1983 the consolidated final accounts of 63enterprises (for which information was available) showed a loss equivalentto 0.2 percent of GDP. Actual losses are probably considerably largersince most financial statements substantially undervalue assets and enter-prises not reporting operating results tend to be loss makers. Reflectingthe generally poor financial performance, many SOEs have liquidity problems.The current ratio for the sector in 1984 was only 0.84. As a result, manyenterprises have arrears to other SOEs, the Government, and private suppliersand contractors, complicating efforts to improve fiscal performance. Inaddition, some SOEs are supported through the Government budget. In 1985total transfers to state-owned enterprises from the budget in the form ofsubventions, equity, and loans were equivalent to nearly 1 percent of GDP,twice as high as in the previous year. The Government's institutionalarrangements for dealing with SOEs were characterized by overlapping anduncoordinated responsibilities among technical ministries, the Ministry ofFinance and Economic Planning, the State Enterprise Commission, and theindividual enterprises. While enterprises were often subject to interfe-rence in day to day management, the Government does not have adequateknowledge of their performance. On paper the State Enterprise Commissionhad broad powers, but it was ineffective because of inadequate resourcesand staffing.

53. After carrying out an initial diagnostic study of the sector, aGovernment Task Force has developed a policy framework to address theseproblems. It includes greater management autonomy, a more rational legalframework, progressive reduction of budget transfers to state-ownedenterprises, use of investment criteria, clearance of arrears, greaterresource transfers to the Government in the form of dividends and timelytax payments, and exposure of SOEs to more competition and marketdiscipline. A major objective is co reduce the dependence of state-owned

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enterprises on the budget through setting ceilings on transfers, whichwould be reduced in stages, and establishing clear guidelines forevaluating requents for support. This would be supported by changes inpricing and tarifti and by efforts to reduce operating costs in individualenterprises. Under the Government's structural adjustment program,institutional arrangements are designed to achieve day to day managementautonomy for the enterprises while enabling the Government to monitor theperformance of SOEs in order to ensure accountability. The mechanism bywhich this will be done is through the preparation of three-year corporateplans by key state-owned enterprises, which will be the basis ofperformance agreements embodying targets and including mechanisms ofrewards or penalties. These will be negotiated each year with theGovernment. The State Enterprise Commission would advise and beresponsible for monitoring performance. Corporate plans will set out theobjectives of the enterprise, strategies, establish performance targets andinclude actual and projected financial statements.

54. In addition, the Government intends to reduce the size of the SOEsector. In the first phase the Tank Force has identified about 30 enter-prises which will be put up for sale, liquidated or converted into jointventures. The initial list includes enterprises which are not consideredto be of strategic importance, loss makers, and net losers of foreignexchange, as well as profitable ventures which could benefit from wideraccess to capital, management, and technical expertise. It is expectedthat Shout five enterprises would be offered for sale, including the StateFishing Corporation, a major drain on the budget, and liquidation would beinitiated for an additional five inactive companies by the beginning of1988. The size and envisaged pace of the program reflects a recognitionthat divestment of state-owned enterprises in Ghana will not be an easytask and the need for Government action in complementary areas. It requirespreparatory work in the areas of asset valuation, completion of adequatefinancial accounts, and packaging of investment proposals. There is nostock market on which shares of state-owned enterprises could be sold.However, stocks are bought and sold through several existing brokers andfacilities could be set up in commercial banks. In addition, manystate-owned enterprises are characterized by operating problems, losses,and overstaffing, making them unattractive to private investors. Theinvestment climate in Ghana poses barriers for some investors in the formof restrictions on dividend remittances and multiple taxation of dividends(para 51). In many ways the success of the Government's state-ownedenterprise retionalization program will depend on parallel actions taken toimprove the investment climate and private confidence in the financialsystem. Because of the constraints mentioned above it is important thatthe program be carried out in a phased, flexible, and pragmatic manner. Atthe same time, the Government needs to target enterprises which are largedrains on the budget and include firms which are potentially attractive tothe private sector.

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Public Sector Management

55. The first part of the Economic Recovery Program necessarilyfocused on major changes in incentives and critical rehabilitation.However, implementation of the Government's structural adjustment programis severely straining the capacity of the public sector to manage theeconomy. Policy-makers in Ghana do not have sufficient analytical support,a gap which will become increasingly binding as the reform programproceeds. In addition, economic policy coordination is weak. In spite ofthe improvement in the Government's fiscal position, the budget system hasfallen into disuse since 1983, partially because of the financial crisisand the priority given to cash flow management. The policy guidanceprovided to line ministries in recent years has been minimal. Investmentplanning was equally weak, in part reflecting the low level of resourcesfor public sector investment. In addition to shortages of staff andequipment, the Ministry of Finance and Economic Planning is not properlyorganized to carry out its functions within the structural adjustmentprogram. For example, recent efforts to improve recurrent budgeting andinvestment planning had to be undertaken by Task Forces.

56. During the past years of economic decline the conditions ofemploy:ment and the efficiency of the civil service deteriorated dramatically.A rapid expansion of employment, five times greater than the annual growthof the labor force, was coupled with falling wages, particularly at thehigher levels. This resulted in many vacancies in higher level posts, lowmorale, and poor productivity. In addition, the Government, in particularthe Office of the Head of the Civil Service, does not have adequate informa-tion about the size, structure, etc. of the civil service. This gap inknowledge contributed to the difficulties in implementing the wage andsalary increase during 1986. The structural adjustment program cannot beimplemented without measures to increase the efficiency of the civilservice.

57. The Government has decided to focus on strengthening a few keypolicy functions and reforming the civil service. In order to provideeconomic policy analysis to the Government a special unit is to be createdwithin the Ministry of Finance and Economic Planning. To better coordinateeconomic policies a small unit is to be set up within the office of theChairman of the Committee of Secretaries. A recent technical assistancemission of the IMF assessed the budgetary process in Ghana and has maderecommendations which are currently being discussed by the Government. Themain priorities for improvement of the budget include: (a) institutingfinancial planning; (b) development of a foreign exchange budget for theGovernment; (c) inclusion of all foreign aid; (d) preparation and distribu-tion of more complete and detailed information; (e) more timely preparationand announcement; and (f) strengthening the monitoring of implementation.The intent of these recommendations is to enable allocation decisions to bemade by the budget, and not as currently happens, as a residual of variousdecisions made for cash flow management reasons. In addition, coordinationbetween the Ministry of Finance and Economic Planning and the line ministriesduring preparation and implementation of the budget needs to be strengthened.

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58. Tho policy measures which are being implemented to improveinvestment planning are covered in the next chapter on public expenditures.However, in addition, the Government has decided to re-organize the planningfunction. Initially it was thought that divisions within the Ministry ofFinance and Economic Planning would be reorganized and re-staffed in orderto carry out investment planning. However, in late 1986 the Governmentannounced its intention to set up a comprehensive national planning system.A committee has been set up to determine the modalities for implementingthe new structure, but it has just begun its work. Inputs to the decisionsinclude the previous work done by the Public Administration Restructuringand Decentralization Committee (PARDIC) and a 1986 study financed by theUNDP. Although details are still to be worked out, the outlines of theproposal are: (1) a split in the Ministry of Finance and Planning; (2) theestablishment of a National Planning Commission; and (3) decentralizationof investment from the central government to the local level. The proposalsreflect the Government's desire to move away from the past ad hoc system ofplanning to a more structured and permanent one. There are severalpositive features to the proposals, which would contribute to moreeffective implementation of the structural adjustment program. A NationalPlanning Commission may improve inter-ministerial coordination on economicand p_anning issues. In addition, the Government's management of theinvestment program would be eased considerably by shifting small andcommunity level projects to the local level, which also would improve thelink between priorities and the needs of the community. However, such amajor change also has costs and risks. A new planning establishment couldstrain limited management resources and spread them too thin. Moreover, itis important that the investment program and the budget be closelyconnected. These considerations should be taken into account in designingthe new structure.

59. Between 1975-82 civil service employment grew at the high averageannual rate of 14 percent. As a result, there is excessive staffing,particularly at the lower echelons, which decreases productivity, compoundsmanagement problems, and restricts the Government's ability to pay reasonablesalaries. The Government courageously committed itself to a retrenchmentof the public service of up to 5 percent a year (roughly equivalent to15,000) during 1986-1988. However, since making the initial commitment inlate 1985, progress in carrying out the retrenchment has been somewhatslower than the initial timetable. The first phase of lay-offs in 1986totaled up to 11,000 through a combination of eliminating "ghost workers"and some dismissals, particularly in the Ghana Education Service. For 1987the Government has identified 6,740 surplus employees comprising 1,000civil servants over retirement age and 5,740 excess non-teaching staff;they will be discharged by the end of May. The remaining 8,260 of the15,000 target are to be off the Government's payroll by the end of October1987. In addition, the Government needs to finalize the compensationscheme which should meet legal obligations, while being consistent withfiscal prudence. Slow progress in this area would result in the continuedinefficiency of the public service, thereby slowing down implementation ofthe structural adjustment program, and would constrain the progress whichcan be made in increasing salary relativities. After the initial round of

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lay-offs is carried out, further reductions are to be based on a review ofstaffing and functions within the civil service, to be carried out in thelatter half of 1987. The Government also plans to improve the expertiseand strengthen staffing for the Office of the Head of the Civil. Service.

60. Regarding future salary adjustments, the Government shouldcontinue to improve wage differentials in the civil service. This is boundto be a gradual process given resource constraints. Illustrativecalculations (based on the 1986 salary and allowance structure and takinginto account the 1987 across-the-board cost of living increase) indicatethat it would take roughly 1 billion cedis extra in salary adjustments,skewed towards the higher two-thirds of the scale, to improve differentialsby about 10 percent (i.e. from a 4:1 pre-tax ratio to 4.4:1) This includessome "catch up" since the 1987 salary award included some lump sumincreases in allowances which, other things being equal, narroweddifferentials. Estimated savings in the 1987 wage bill (net of retrenchmentcosts) if 15,000 employees at the lower grades were redeployed at thebeginning of the year are roughly the same. Given the tight resourceconstraints, to a large extent the Government's ability to achieve the muchneeded improvement in salary levels at the upper echelons is dependent onprogress on retrenchment.

61. However, the successful implementation of the structural adjustmentprogram depends on the high morale and productivity of at least a key groupof civil servants who are critical to the process. For that reason, theGovernment intends in the short-run, first, to establish a mechanism formobilizing local expertise on both a short and long term basis to supplementthe civil service and secondly, to set up a transitional arrangement toprovide additional remuneration to selected civil servants working on keystructural adjustment tasks. Local experrise would be mobilized by estab-lishing an organized pool of Ghanaian consultants and personnel availablefor secondment for Government service for short or long-term assignmentsfrom elsewhere in the public or private sectors, or international employment.This would be a transitional mechanism to attract highly qualified staffback into the civil service. Recruitment would be managed by an outsideagency experienced in the provision of consultancy services in order toensure consistent treatment regarding contracts and fees. In order toavoid accusations of favoritism, additional compensation to selected civilservants could be provided as a form of overtime payment to cover the timeand expenses associated with participation an task forces, committees, etc.outside of regular working hours and the support work for those tasks.

Conclusion

62. This chapter has analyzed the main instruments which the Governmentplans to use in order to achieve the objectives of the structural adjustmentprogram in the areas of incentives policies, domestic resourcemobilization, private sector investment climate, and public sector reforms.In some areas, such as the cocoa producer price, the reforms and phasinghave been planned in detail. In others, such as trade taxation and thefinancial sector, the objectives are clear, but the specific measures

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and their timing are still being studied. The program is well integratedand ambitious. The potential for successful implementation is good giventhe past achievements of the Economic Recovery Program and the build up indonor support, among other factors. At the same time, there are risks.The Government's implementation capacity is weak and structural adjustmentimposes more, not less, burden on that capacity. Technical assistance,including IDA's Structural Adjustment Institutional Support Project, isdesigned to minimize the potential difficulties. Some of the reforms willadversely affect some groups and in some instances the benefits of adjust-ment will not occur immediately. It is important for the Government tocontinue to explain the rationale of its reform efforts so as not to riskdelays because of adverse reactions to transitional costs. The supplyresponse to the reforms could be delayed because of the liquidityconstraints already discussed or infrastructural bottlenecks. The reviewof the financial system will recommend measures to facilitate the provisionof credit to the productive sectors within the context of continuedmonetary restraint. In the area of infrastructure, the Government isstrengthening public investment planning in order to better allocateresources and to increase the returns on projects.

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III. PUBLIC EXPENDITURE PROGRAM

Introduction

63. Public expenditure policy will play a vital role in achieving thegoals of the Government's structural adjustment program. The productionresponse to changes in policy depends on adequate and well-maintainedsupporting economic infrastructure- transport, communications, power, water- which is mainly the responsibility of the public sector. The Governmentalso has primary responsibility for investment in human capital through theprovision of health and education services and specific interventions toalleviate poverty. The infrastructure base in Ghana has erodedsubstantially because of the previous failure to invest and to maintainadequately existing facilities. In addition, the sharp decline in bothreal civil service salaries and in the provisions for operations andmaintenance has lowered the quality and quantity of recurrent services.

64. Recognizing these problems, in the first phase of the EconomicRecovery Program, the Government began to expand investment, notably intransport. However, projects still suffer from stop and go funding fromthe budget and shortages of cedis. There are still bottlenecks, such asport facilities, and others will appear as the economy grows. Substantia.llylarger expenditure is required to accommodate the needs for operations andmaintenance and for rehabilitation of the country's economic and socialinfrastructure. At the same time, measures are needed to ensure the mostefficient use of the limited resources available and to eliminate waste andunproductive expenditures. Though revival of the economy will yieldincreased revenues, a significant cotntribution can be made by better use ofexisting resources. Investment projects need to be appraised on the basisof common criteria to ensure that they maximize benefits to the economy.

Achievements under the Economic Recovery Program (1984-1986)

65. During the Economic Recovery Program the Government made someprogress in improving public expenditure policies. In the area of wages,real salary levels for civil servants have risen since 1984, but initiallythe improvements benefited the lower levels more than the upper ranks. In1986 the Government widened differentials in the salary structure byskewing the wage increase towards the higher grades in the civil service.However, differentials are still low compared with other countries andinadequate to sufficiently motivate the civil service to implement thestructural adjustment program. There has been less progress in achievingmore adequate funding for other goods and services in the recurrent budget.Real spending per employee has continued to drop during 1984-86 and theseexpenditures have been subject to across-the-board reductions during thefiscal year because of resource constraints. T:e needed increase incapital expenditures has begun, albeit at a slow pace. As a share of GDP,capital expenditures (including development expenditures from theGovernment's own resources and counterpart funds, and foreign projectfinancing) have risen from only 3.6 percent in 1984 to 5.9 percent in 1986.

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However, during the last three years capital expenditures, like spendingfor other goods and services in the recurrent budget, have been subject tocuts during the year in response to shortfalls in anticipated domestic andexternal resources. Over time this has resulted in a stock of hundreds ofpartially completed projects. In road maintenance, shortfalls in fundingin 1986 caused a thousand workers to be left idle because of lack ofbitumen and other essential supplies. The main achievement during theEconomic Recovery Program has been the near completion of the rehabilita-tion of the western railway line, which has facilitated the shipment ofexports such as cocoa, bulk minerals, and timber to the port.

Public Expenditure Program 1986-1988

Wage Policy

66. As already discussed, in 1986 the Government significantlyimproved remunerations for public service employees in Ghana. Such a stepwas critically needed. Although wage adjustments in late 1984 and 1985 hadincreased real salaries marginally over the lows of early 1984, the realsalary of a Permanent Secretary (or equivalent) was about 10 percent of1977 levels, while the real salary of a messenger stood at half of the 1977level. The differential between the salaries of the highest and lowestpaid employees in the public service had narrowed to only 2.3:1 beforetaxes. The salary measures finalized in mid-1986 increased thedifferential between the highest and lowest paid workers to 5.7:1. Takinginto account tax relief implemented in 1986, the post-tax differential isestimated to be 4.1:1, compared to the previous 1.5:1. There is evidenceof improved morale and efficiency of the public service during 1986 as aresult of the salary adjustments.

67. However, these changes are not sufficient and a key goal of theGovernment's wage policy should be to improve relativities still furthersubject to resource constraints. The Government's progress on reducing thesize of the public service will be critical in order to free resources forthis effort. Tentative projections show that given the anticipated tightfiscal position over the next few years, total emoluments should beconstrained at slightly above their present level of 5.5 percent of GDP.This implies that wage increases would be tied to adjustments for the costof living, real economic growth, and saNIngs from redeployment. Evenwithin this constraint it would be possible over the next three years forthe Government to improve relativities (based on wages and allowances) to7.5-8.0:1 pre-tax and 5.0-5.5:1 post-tax (on the basis of 1986 tax rates).This would bring Ghana more in line with other countries. Since themarginal income tax rate in Ghana is high (peaking at 55 percent), much ofthe progress in this area should come from adjustments in the taxstructure, particularly in the early stages.

68. It will be important for the Government to avoidacross-the-board cr flat wage increases, which would reverse the progressmade in 1986. Although it may only be possible to reverse salarydecompression gradually because of resource constraints, the mechanisms

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discussed in Chapter II (para 62) can provide some immediate support tomobilize the skills needed to implement the structural adjustment program.In addition, continued progress in this area is important, a wage andsalary review is to be undertaken during 1987 along with the staffing andfunctional review of the civil service (para 61). The results of the studywould be incorporated in the 1988 budget.

Expenditures on Other Goods and Services

69. The combination of expanding civil service employment anddeclining revenue has distorted the structure of recurrent expenditures, inparticular the balance between the number of employees and the provisionsfor other goods and services (items 2-5). Between 1975 and 1982 averagereal expenditure on goods and services per civil service employee declinedby about 85 percent. Although the Government has made efforts to improvethis situation, as a result of shortfalls in revenues in 1986, expenditureson other goods and services measured as a share of GDP declined from thelevel of nearly 4 percent in 1984-85 to 2.4 percent. In 1986 average realexpenditure on goods and services per civil service employee was less than10 percent of the 1975 level. The impact of this decline is evident bothin the lack of materials (paper, office machines) for civil servants toperform their jobs and inadequate supplies (essential drugs, dressings,books) for health and education services, and agricultural extension (forlack of vehicles).

70. The impact of across-the-board expenditure controls on theseitems in recent years points to the need to allocate outlays moresystematically. In addition, budget officials believe that while there arescarcities in certain areas, there is also substantial waste in this budgetcategory. Initial work has focused on education, health, and agriculture,both because they account for a large share of spending and because theseservices have been most affected by restraints on expenditures. The aim isto develop guidelines to be used to make allocations for these items, basedon what is required to perform adequately essential services. Given thepast deterioration, it is likely that this objective can be reached onlygradually and will depend also on the impact of staff retrenchment carriedout over 1987-89. Progress on the work is hindered by lack of detailedinformation on actual spending in these categories. One of the objectivesof the improvements in budgeting (para 57) should be the provision of suchdata in a timely fashion.

71. Education. The proportion of the education budget allocated tonon-salary recurrent items has fallen from 19 percent in 1975 to 15 percentin 1984 and to only an estimated 6 percent in 1986, within a decliningtotal. In the primary school system wages now account for 97 percent ofthe recurrent budget and lx secondary schools the share is 78 percent,above the average in other African countries of about 91 percent and 72percent, respectively. As part of the reform of the education system,supported by IDA with cofinancing provided by the OPEC Fund and Norway, theGovernment is restructuring the budget of the Ministry of Education.Resources are to be shifted from the wages category through a freeze on

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teaching positions, a decline in the number of non-teaching staff, and theelimination of "ghost workers" in an on-going audit. In addition, theboarding and meal subsidies for secondary schools are to be phased out.Spending for other items of recurrent goods and services are to beincreased. The goal is to lower the share of salaries in re_urrentexpenditures by 1987 to 92 percent for primary schools and to 74 percentfor secondary schools. This process will be assisted by expanded costrecovery for building fees, exercise books, and text books which are to beearmarked for the purchase of supplies. Thus far the objectives set forattaining a better balance between salaries and other goods and serviceshave been based on an analysis of the situation during the mid-1970's whenthe budget was better structured. However, in the long-run a framework isneeded to develop expenditure guidelines related to students, teachers, orbuildings, depending on the spending item. Work should continue to developthe information on school costs which would enable these guidelines to bedeveloped.

72. Health. The share of the Ministry of Health's recurrent budgetallocated to wages has increased from 44 percent in 1978/79 to 60 percentin 1985 and to 75 percent estimated in 1986. The effect of cutbacks inother goods and services in health has severely constrained support toprimary health care at the community level by restricting deliveries ofessential supplies, mobile health units, and field supervision.Preliminary work on the health budget, based as in the case of education onallocations in past years when shares were better balanced, results in therecommendation to triple in real terms the funding for other goods andservices for the Ministry of Health. This takes into account therecommendations of the World Health Organization for an 'essential drugs"program in Ghana. The program is designed to reduce costs by restrictingthe range of publicly supplied drugs to a limited and carefully selectednumber that could serve a large majority of cases seen, particularly inprimary health facilities. Also included are improvements in inventory,storage and distribution of drugs.

73. This analysis is only the first stage in developing usefulguidelines for recurrent expenditures. Additional work is needed torrepare standard unit costs for the principal types of healtb facilities.These guidelines could then be used by each region to make budgetallocations and to estimate the recurrent cost implications of investmentprojects. The Ministry of Health should work toward developing andapplying such guidelines for the 1988 budget. In the area of costrecovery, the increaae of hospital fees in 1985 has mobilized resourceswhich are currently shared by the general budget (50 percent), the Ministryof Health (25 percent), and the hospital (25 percent). Further increasesare needed because fees are still below marginal costs, with a view toshifting the cost of curative health care to the user.

74. Agriculture. The share of other goods and services in theMinistry of Agriculture's budget has dropped from roughly 40 percent in1977/78 to only 15 percent estimated for 1986. In the case of agriculture,the task of developing guidelines for recurrent expenditure is complicated

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by the planned restructuring of the Ministry, including gradual divestmentof certain functions such as input supply and provision of mechanizationservices. Little work has been accomplished in the area of developingguidelines for non-salary recurrent expenditures for agriculture, but thereis potential for improving allocation using this tool. The Ministry ofAgriculture should develop guidelines for the running and maintenance ofvehicles based on well functioning on-going projects. In addition, basedon the work program for extension staff, guidelines on vehicle needs andtransport and travel allowances can be calculated. In the area of costrecovery, the Ministry is planning to increase fees for veterinary drugsand medicines and to increase the farmers' fees for irrigacion operationsand maintenance costs, A major objective of IDA's proposed AgriculturalServices Rehabilitation Project is to improve research and the delivery ofextension services and credit to farmers by providing additional financialresources and by assisting the Ministry of Agriculture to implement neededreforms and institutional changes.

Public Investment Program (1986-1988)

75. One of the Government's objectives in drawing up a rolling threeyear public investment program (PIP) is to improve the planning and imple-mentation of public investment in Ghana, thereby increasing the returns onthose expenditures. It represents an effort to break out of the pastpattern of largely ad hoc allocations and stop and go funding which leftmany projects starved of funds and only partially completed. The largeincreases envisaged in public investment which are needed to support thestructural adjustment of the economy make it critical that suehimprovements are implemented without delay. The preparation of the1986-1988 public investment program represents a major step forward in thisprocess. The achievements to date will need to be consolidated andexpanded upon in subsequent years as the program is updated and rolledover.

76. The criteria used to select projects for the investment programwere:

(i) A minimum economic rate of return of 15 percent for alllarge projects (with total costs exceeding $5 million), forwhich the technique was applicable. If an ERR had notalready been calculated, but the project seemed to have thepotential for generating an adequate rate of return, it wasincluded on a tentative basis. Implementation, however,would not be funded through the budget until an ERR wasestimated, based on a feasibility study.

(ii) In cases where the ERR criterion was not applicable or wasbased on insufficient or dated information, a judgement wasmade based on the following considerations - the proportionof the project funded by foreign aid with the aim of atleast 60 percent financing; ongoing projects or those readyfor implementation; the ability of the project to generate

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additional revenue for the Government or, at the least, withlow recurrent cost implications; the generation or savingsof foreign exchange; and its contribution to employmentcreation and the alleviation of poverty.

At this first stage there were many projects for which time did not permitthe calculation of an economic rate of return because a recent feasibilitystudy was not available. As stated above, for those projects, judgementwas used to decide if the project had the potential for showing a returnhigher than 15 percent. On this basis, some projects with over $5 millionof investment were included tentatively, subject to meeting the economicrate of return criterion when a full feasibility study is carried out andbefore implementation begins. Until that time these projects would not beconsidered for any allocations from the central government's developmentbudget. Projects lacking feasibility studies whose economic rates ofreturn were doubtful were not included in the public investment program.

77. The detailed public investment program covers about 80 percentof the development -xpenditures of the central government, in addition toinvestments of the major parastatals. However, at this stage, attentionfocused on projects financed through the budget. Tentative projectionsindicate that public investu ent (including budget expenditures and foreignaid financing) would increase from 4 percent of GDP in 1984-85 and anestimated 6 percent in 1986 to 9-10 percent in 1987-1988.

78. The public investment program for 1986-1988 is summarized below(Table 6). It shows only the part of the program for which financing wassecured by the end of 1986 and thus is not all inclusive, but it isrepresentative of the Government program as a whole. Reflecting theemphasis on maintaining and improving economic infrastructure in Ghana,these expenditures account for 62 percent of the program. Outlays onproductive sectors represent 33 percent of the PIP with a focus onsupporting services in agriculture and rehabilitation of the wholly orpartially government-owned mining companies. It is assumed that theprivate sector would be the primary source of investment in manufacturing.Social sectors (education and health) make up the remaining 5 percent ofinvestments. The overall strategy of the Government is to concentrate itsresources in the critical areas of economic and social infrastructure andto participate directly in other areas only when there is a gap in theavailability of private investment or exceptional circumstances. Table 7shows the proposed 1987 budgetary component of the public investmentprogram.

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Table 6: Public Investment Program: 1986-1988 By Sector 1/

(in millions of Cedis)

Number Totalof Investment

Prolects 1986-88Sector

Productive 56 59,231 33Agriculture 34 19,560 11Industry 13 5,827 3Mining and Timber 9 33,844 19

Economic Infrastructure 86 109,789 62Transportation 15 27,372 15Roads and Highways 24 43,262 25Communications 17 2,588 2Energy 21 26,937 15Water 9 9,630 5

Social 20 9,724 5Education 5 3,475 2Health 15 6,249 3

PIP Totals 162 178,744 100

1J Based on en:ternal financing secured as of December 31, 1986.

Exchange Rate: P150 - US$1

Financing Plan

79. The financing plan for thie 1987 investment program is shown inTable 8. As is the case in Tables 6-7, only financing secured as of theend of 1986 is included. Excluding investments of the state-ownedenterprises financed through retained earnings and commercial borrowings,the proposed public investment program totals g53.8 billion, or 8-9 percentof projected GDP. Projects of the central government represent 60 percentof the program, with those managed by the state-owned enterprisesaccounting for the rest. Investment by the state enterprises is somewhatunderstated as these estimates do not include financing provided throughtheir retained earnings or commercial borrowing. The current savings ofthe central government; (minus the allocation for the special efficiencyprogram) are projected to total slightly above 3 percent of GDP.Information on the current savings of the state-owned enterprises includedin the public investment program has not been consolidated. Net externalfinancing is projected to total 7 percent of GDP. Program assistance isthe most important (4.4 percent of GDP) with external project funds on-lentto the state-owned enterprises second. Amortization payments are expected

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Table 7: an - 1987 Public InvestmePt 1/

(Cedis M111ian)

Secured Foreign Financing Domestic t FYnancingTotal &etcost Colpmet it m1d1987 FC t LC IC

(A) Productive Sectors 13,331 10,603 427 30 906 1,365

Agriculture 7,102 5,160 427 - 800 715Industry 3,229 2,943 - 30 106 150Mining and Tiiber 3,000 2,500 - - - 500

(B) EkonomicInfrastructure Sectors 34,995 21,910 398 2,290 9,785 612

Transport .),517 7,395 - 525 1,051 546Roads and Hig%"ays 14,191 4,545 378 1,765 7,503 -Ccmamications 988 922 - - - 66Energy 6,474 5,880 20 - 574 -Water 3,825 3,168 - - 657 _

(C) Social Sectors 5,445 1,602 1,248 442 2,153 -

EAucation 3,232 452 1,055 375 1,350 -Health 2,213 1,150 193 67 803 -

PIP Subtotals 53,771 34,115 2,073 2,762 12,844 1,977

1/ Includes only foreign financing secured as of Deceber 31, 1986.Excludes financing (and associated expenditures) fran camcercial sources,dcmestic and foreign, and from the retained earnings of public enterprises.

EKchange Rate: ¢150 - US$1

PIP/QHCD11

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to reach 4.6 percent of GDP. Net domestic financing is slightly negativebecause of the central government's planned repayments to the commercialbanks. The 1988 allocations in the public investment program are tentativeat this stage, to be firmed up when the PIP is updated to cover the period1988-1990. However, preliminary figures show a substantial financing gapin the programs for agriculture, roads and highways, communications,petroleum, water and health.

Productive Sectors

80. Agriculture. Despite the progress made during the first phase ofthe Economic Recovery Program there. are several constraints to furthergrowth in agriculture. There is a need to improve incentives, mainlythrough pricing policies. In addition, essential support services,especially extension and research (and their linkages) remain weak. Thesupply and distribution of inputs, particularly fertilizer, seeds, andcocoa inputs, are inadequate both because of the scarcity of foreignexchange and inefficient Government intervention. There has beenwidespread deterioration of the Ministry of Agriculture's transport fleetand physical infrastructure in the sector. The Ministry of Agriculture'scapability to formulate, plan and monitor policy is weak. The thrust ofthe Government's future agriculture strategy is to continue to increase anddiversify output in line with comparative advantage through the removal orreduction of the constraints mentioned above. The Government's role willbe rationalized in order to develop more competitive markets and toallocate resources more efficiently. The reforms will be phased so thatproducers can adjust gradually to more competitive and efficient modes ofproduction. Major priorities are to increase export earnings from cocoa,timber and non-traditional exports, to improve food security and to providestronger support services.

81. The main components of the public investment program foragriculture include rehabilitation and expansion of productive capacity inthe food sector (35 percent of the total). This covers improvements in thequality and distribution of inputs (seed, fertilizer, and seedlings);enhanced research and extension support to food crops and livestock andfishing activities; reducing crop and livestock losses; mechanization; andgrain storage and handling. The project for mechanization is subject toreview. The construction of additional grain storage will be re-examinedafter completion of a review of food security strategy during 1987.Projects to rehabilitate and expand productive capacity in cash cropsaccount for 30 percent of proposed agriculture investment. These includeon-going oil palm projects, cocoa rehabilitation, and development of rubberand cotton. Rural development, emphasizing raising incomes throughexpanded agricultural output, will continue in the Volta Region and beginin the relatively disadvantaged Northern Region. This makes up slightlyabove a fifth of the agriculture program. The consolidation of irrigationdevelopment through strengthening the Irrigation Development Authority,improving agronomy on existing schemes, and selected rehabilitationaccounts for 10 percent of investment. Institutional support for the

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Table 8: GHANA - PROJECTED FINANCING OF THE 1987 PUBLIC SECTOR INVESTMENT PROGRAM

(in millions of cedis)

TOTAL BUDGETARY CAPITAL EXPENDITURES 57,982

Public Sector Investment Program 53,771Central Government 32,789Selected Public Enterprises 1/ 20,982

of which: Central Government transfers 2,551Other Capital Expenditures and Net Lending 4,211

FINANCING 57,98^

Public Sector Savings

Central Government 2/ 16,212

External Financing (net) 45,270

Central Government 50,377

Concessional 39,190Non-project 3/ 22,507Project 16,683

Non-Concessional 4/ 11,187

State-Owned Enterprises 18,602

Concessional 18,602

Total Amortization -23,709

Domestic Financing (net) -3,500

Banking System -5,500Central Government -5,500

Other 2,000

1/ Excludes Ghana Water and Sewerage Corporation and Ghana RailwayCorporation which are funded through central government budget.

2/ Current savings minus allocation for Special Efficiency Program3/ Realized4/ Oil financing

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Ministry of Agriculture most importantly through reorganizing andstrengthening the planning division, makes up the rest of the program.

82. Mining is the second largest foreign exchange earner in Ghana.The recovery in exports envisaged under the structural adjustment programincludes the successful rehabilitation of mining. The largest component ofthe investment program is rehabilitation of the gold mines, accounting forthree-quarters of the total. Ashanti Gold Fields (55 percent owned byGovernment), which accounts for the major share of gold production inGhana, is implementing the largest project. It began in late 1985 andconsists of sinking two new shafts, re-equipment, and the introduction ofcarbon-in-pulp treatment for the large quantity of tailings accumulated atthe mine. Rehabilitation of the State Gold Mining Corporation accounts forabout 20 percent of the program and includes financing of a foreign manage-ment contract and rehabilitation of the Tarkwa and Prestea mines. Sale ofthe dredging operations at Dunkwa to the private sector is being consideredand thus is not included in the investment program. Investments by theGhana National Manganese Company include the ongoing re:iabilitation ofequipment and the oxide washing facility, in addition to the commissioningcosts of the existing but never used nodulization plant, pending a reviewof its viability. Finally, the Ghana Bauxite Company is rehabilitating itsequipment and vehicle fleet.

83. Manufacturing. The program for manufacturing is a relativelysmall proportion (3 percent) of the PIP because of the dominant roleenvisaged for the private sector. In addition, publicly-owned firms areexpected to stand on their own feet financially and to operate ascommercial entities with no transfers from the central government budget.The major project is rehabilitation of the Bonsa Tyre Company which isawaiting a final decision on a suitable technical partner, needed to ensureaccess to technology and to additional equity. Also included areinvestments to improve scrap handling for GIHOC Steelworks and torehabilitate the Tema Food Complex. The successful implementation of thelatter project also requires an appropriate technical partner.

Economic Infrastructur.

84. Energy. The Government's energy strategy is based on thefollowing guidelines: (a) to improve the availability and long-termsecurity of supply at reasonable cost; (b) to reduce the country'svulnerability to short-term disruptions in supply; (c) to rationalize thedevelopment of indigenous resources; (d) to promote greater operationalefficiency and the financial viability of energy producing and distributingorganizations; (e) to promote greater efficiency of energy use by applyingappropriate policy instruments and measures to manage demand. In additionto pricing policies (para 3), the energy investment program is designed toimplement this strategy.

85. It is divided about equally between projects related to petroleumand those dealing with electricity. In petroleum, about two-thirds of theprogram is allocated to exploration. Drilling, on-shore in the Tano Basin

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and off-shore in the Keta Basin, has already begun, but implementation ofother exploration projects, particularly Saltpond, will depend on theparticipation of private operators. The rest of the petroleum investmentprogram consists of the completion of the on-going rehabilitation of therefinery and a follow-up phase, rehabilitation of the distribution system,and construction of a lube plant. For electricity, the main projects arethe extension of the electricity grid to the northern region of the countryand the on-going power rehabilitation project.

86. Transportation accounts for 40 percent e.f the public investmentprogram with roads and highways projects making t'p about 60 percent of thetotal. This relatively high share reflects the need for urgent andextensive rehabilitation. By 1983, after a decade of minimal investmentand neglect of maintenance, transport infrastructure had deteriorated tosuch an extent that it became a binding conttraint on the Economic RecoveryProgram. Since Ghana's economy is highly dependent on the production ofexport commodities, adequate land transport services and efficient portsare vital. While significant improvements have been made over the lastseveral years, particularly on railway rehabilitation, serious bottlenecksremain. The primary requirement for investment is rehabilitation andmaintenance of infrastructure and services that are already in place. TheGovernment is also taking steps to improve the management of thestate-owned enterprises which play a large role in the sector.

87. Slightly over a third of the roads and highways investments arefor maintenance or rehabilitation with the periodic maintenance of trunkroads the largest activity. That program is partially funded from a roadlevy on petroleum products. Cocoa feeder roads, recently transferred fromthe Ghana Cocoa Board to the Department of Feeder Roads, account for 10percent of the roads and highways investment program. Rehabilitation andcompletion of priority bridges account for about 6 percent of the program.The remainder of the investment in roads and highways is primarily directedtowards the completion of on-going projects, for example, the Axim-EluboRoad (a coastal road in the western region connecting the Ivory Coast andthe Trans-West Highway) and the Kaneshie-Mallam Road connecting Accra withthe Winneba Road which continues to one of the two major ports in Ghana.Regarding the latter, the Government is considering possible changes indesign to lower costs. A major reconstruction project is the Yamoransa-Anwiankwanta Road, an important connection between Kumasi and Takoradithrough a rich agricultural and timber area. The major projects in othertransport are the completion of the western line project of tne railway andthe rehabilitation of the Takoradi and Tema ports. In addition, it isproposed to begin some investments on the eastern and central railwaylines. Other projects include the rehabilitation and replacement of busesfor the public companies operating in the sector, and the completion of thetransport system on Lake Volta, and related improvements in petroleumhandling facilities.

88. Communications accounts for only 2 percent of the investmentprogram. This reflects the preliminary nature of planning, rather than thestatus of infrastructure, because needs are great. In addition to

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completion of rehabilitation of the earth station and of the cable network,a more extensive program for upgrading and expansion of the telecommunica-tions network is tentatively included in the last year of the program toallow time for additional planning and design work. Improvements in themanagement of the Posts and Telecommunications Corporation would need toprecede any major investments.

89. Water projects have a dual importance within the investmentprogram as a key component of e-onomic infrastructure and as the means ofsupplying safe water to a larger share of the population. The programfocuses on the completion of on-going supply schemes in several regionalcapitals and in investment in urgent rehabilitation of the Accra-Tema waterand sewerage facilities. Water supply in rural areas is to be expanded byproviding shallow drilled wells fitted with hand pumps. An importantcomponent of the program is institutional support to assist in improvingthe management and efficiency of the Ghana Water and Sewerage Corporation.

Social Sectors

90. Investments in health account for 3 percent of the total program.Although the Government has followed a policy of primary health care since1978, resource and management constraints so far have prevented muchprogress towards reaching the target of providing it to 80 percent of thepopulation by 1990. One of the Government's objectives is the achievementand maintenance of an efficient balance between the use of hospital-basedmedicine and primary health care facilities. In addition, the aim is toallocate health resources equitably between urban and rural areas and amongregions. Primary health care investments account for about a fifth of theprogram. This includes staff training, establishment of necessary organ-izations and support to family planning and nutrition programs. There isalso a project to rehabilitate health stations. Some new facilities willbe required, but they will be limited to health stations in rural areas orpolyclinics in growing urban areas. Hospitals will not be expanded. Thenumber of health stations needed will not be known until a detailedplanning exercise is completed. The investment program tentativelyprovides for the construction of 100,000. Although the Government's focusis on primary health care, it is also necessary to protect investments insecondary care. About a third of the health investment program isallocated to hospital rehabilitation.

91. The government has begun to implement a major reform of thesystem of education. The purposes are to improve pedagogic and costeffectiveness. A key element is the reduction of pre-university educationfrom 17 to 12 years. The Government also intends to allocate moreresources to the primary and secondary levels, as compared to tertiaryinstitutions. The priority is not new construction, but the rehabilitationof existing facilities, which accounts for 40 percent of the investments.The provision of books and equipment, necessary to support the revisedcurriculum for secondary schools represents about a fifth of the program.There are also small allocations for university equipment and the

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rehabilitation of teacher training colleges. In all, the projects ineducation make up 2 percent of the public investment program.

Protection of Super-Core Projects

92. Within the public investment program, about 20 projects, fundedfrom the central government budget, which are critical to the structuraladjustment program have been identified. The list emphasizes agriculturalsupporting services; transport rehabilitation, particularly the westernrailway line and feeder roads; road maintenance, and the completion andrehabilitation of health stations. In total, the projects represent40 percent of the Government's 1987 development budget (excluding foreignproject financing). Their budget allocations will be protected fromresource shortfalls during the year. The cash flow required for theseprojects will be estimated and a quarterly advance made to an imprestaccount from which each project could draw. Withdrawals from the accountsby project authorities would be supported by evidence of spending in theprevious quarter. It is anticipated that this mechanism would beoperational by May and the imprest accounts funded by counterpart fundsgenerated by program assistance.

Remaining Tasks and Institutional Issues

93. Although the preparation of the 1986-1988 public investmentprogram represents a major improvement in planning in Ghana, the effort isa first step. Much work remains to be done, beginning with the rollover ofthe program to cover 1988-1990. The major priorities in the work programare (a) to enst.re that the investment program is integrated completely intothe budget; (b) to carry out feasibility studies and economic analysis forsome 40 large projects for which this has not been done; and (c) to assignresponsibilities for preparing and monitoring the public investment programon a continuous basis. In cooperation with the Budget Division of theMinistry of Finance and Economic Planning and the Accountant General, thePIP Task Force will be responsible for monitoring the progress of theprogram on both a financial and physical basis. They would prepare amid-year review of the 1987 program by the end of September. Up to nowwork on the investment program has been spearheaded by a special Task Forcesince the Ministry of Uinance and Planning was not adequately staffed toundertake the work. The decision to assign responsibility for this task ona more permanent basis has been complicated by the recent decision to putin place a national planning system. The modalities to implement thisdecision have yet to be worked out. In the meantime, it is important thatthe efforts to improve public expenditure policy proceed. Theresponsibility for the task should be absorbed as soon as possible into thenormal work of the Government. Otherwise its effectiveness in improvingbudgetary procedures and project implementation will not be fully realized.

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IV. MEDIUM-TERM PROSPECTS

94. Ghana's economy has responded favorably to the stabilization andadjustment measures of-the Economic Recovery Program. As discussed inChapters II and III, the Government recognizes that to maintain themomentum of the adjustment process and sustain growth, further reforms andadequate and well allocated public expenditures are required. This chapterupdates the macro1 conomic scenarios developed for the last countryeconomic report, - and analyzes prospects for Ghana's economy underalternate policy assumptions.

The Alternative Scenarios

95. The continued reform scenario takes into account the plannedpolicy and public expenditure initiatives under the adjustment program andassumes the continued vigorous pursuit of structural changes. Theadjustment fatigue scenario assumes that the pace of reform slackens andthen tapers off. The momentum of economic recovery in 1984-86 and theprogress to date on infrastructure rehabilitation are sufficient to permitrelatively strong growth under both scenarios through 1990. However, theprojections for the longer term (1990-95) are quite different. Continuedreform leads to sustainable long term GDP growth of 4-5 percent, whileadjustment fatigue leads to stagnation as the economy feels the impact ofonly partial improvement in incentives.

96. In the adjustment fatigue scenario the reforms proposed underthe structural adjustment program do not materialize. In particular, thegains in exchange rate policy are allowed to be eroded, agricultureincentives decline, and trade liberalization stalls. Consequently, theexport momentum falters and food shortages develop. The adverse impact onthe balance of payments is exacerbated by a decline in external capitalflows as donors retreat. Public investment drops to inadequate levelsbecause of insufficient domestic and external resources. As confidence inthe economy weakens, a shortfall in private investment reduces growthpotential. The fall in the supply of foreign exchange forces cutbacks inessential imports and makes the debt service burden unmanageable,triggering yet another downward spiral.

97. The major differences in the projected outcomes are shown inTable 9. Gross domestic investment grows at an annual average rate of only3.6 percent over the 1986-95 period in the absence of further adjustment.Economic growth is, therefore, substantially lower, resulting in a declinein per capita GDP. Recovery of both exports and imports falters under the

Ghana: Towards Structural Adjustment, Report No. 5854-GH, October 7,1985.

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adjustment fatigue scenario. The rest of the chapter focuses for the mostpart on the "continued reform" scenario.

Table 9: TWO SCENARIOS

(Annual Average Growth Rates; Percent Per Annum)

(constant 1984 Cedis)

Continued Reform Adjustment Fatigue1985-90 1990-95 1985-90 1990-95

Population 3.0 3.0 3.0 3.0GDP per Capita 2.1 1i1 0.5 -0.9GDP 5.1 4.0 3.5 2.0Consumption 3.0 3.6 3.4 1.9Investment 24.1 6.1 4.0 3.8Exports 8.2 3.0 5.5 0.6Imports 8.4 3.1 4.4 1.3

Policy Reforms

98. The continued reform scenario incorporates the policies to beimplemented under the structural adjustment program. As discussed inChapters II and III, the Government of Ghana is implementing major reformsin many areas including: (i) exchange and trade; (ii) cocoa sector;(iii) public expenditure; (iv) state-owned enterprises; and (v) publicsector management. The exchange rate will reach an equilibrium levelduring 1987-88. As part of trade policy reforms, consumer goods importswill gradually be absorbed into the exchange auction and administrativecontrols will be replaced by price rationing of foreign exchange. Inaddition, the Government will simplify and rationalize trade taxes,removing the bias against exports and making protection more even andmoderate. In the cocoa sector the Government will increase producerincentives to ensure achievement of production goals, streamline the GhanaCocoa Board's operations and confine its activities to only those whichcannot be done more efficiently by other institutions or the privatesector, thereby reducing its operating costs to 15 percent of the averagef.o.b. price. Public expenditure policies will improve the allocation ofrecurrent outlays, raise the level of investment, and increase itsefficiency through better planning and the application of investmentcriteria. State-owned enterprises will depend less on budgetary transfersand increase their contribution to domestic resource mobilization.Management of the public sector will be strengthened through betterorganizational structures, mobilizing additional skills, training and civilservice reform. These measures are necessary ingredients for the continuedreform scenario, which is described in more detail below.

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Investment and Growth in Production

99. The average incremental capital output ratio (ICOR) is relativelylow (about 3) during the initial years of the structural adjustment programbecause of low capacity utilization in many sectors and the recovery whichwill be brought about through rehabilitation and improved incentives. Longoverdue rehabilitation of infrastructure such as ports is likely to have alarge impact on private sector production. Thereafter, the average ICORwould return to a more normal level of 4.6 by 1995. In contrast, it hasbeen assumed, under the adjustment fatigue scenario, that investmentproductivity declines towards the end of the period to 5. Given theseICORs, the key to sustaining output growth in the longer term under thecontinued reform scenario is the jump in investment identified in the nearterm. GDP growth averages between 5-6 percent during the initial periodand then subsides to around 4 percent during 1990-95. Consumption mustaccommodate the rise in investment, but its fall is cushioned by resourcetransfers from abroad; by 1989 consumption accounts for 85 percent of GDPcompared with 92 percent in 1986.

100. During 1986-88 the public sector is the main source of invest-ment; the private sector's role will be modest reflecting the uncertaintycaused by the changes in relative prices and a wait-and-see attitude.Government's implementation of a three-year rolling investment program,composed primarily of economic and social infrastructure rehabilitation,should increase the efficiency of investment, in part because betterplanning will reduce the costly fits and starts resulting from swings ingovernment revenue. While donors will provide financing for a large shareof the program, the gov.rnment's own current savings also will beimportant. The policy reforms designed to improve resource management inthe public sector are key here.

101. While the public sector is responsible for rehabilitating infra-structure, over the medium-term the private sector is expected to invest inorder to expand the economy's productive base. Although growth in publicinvestment is strong, private investment will gradually increase its shareof the total. By 1987 three years of recovery combined with the visiblesupport for Ghana from the international community should begin to bolsterconfidence. The Government will help by creating a stable economic andpolitical climate for private investors. These efforts have already begunwith the recently issued Statement of Industrial Policy, the promulgationof a new Investment Code, and the reconstitution of the Ghana InvestmentCentre. A stable economic and political environment is only a pre-conditionfor the increase in private investment, however. Further stimulus shouldcome from the accelerator effects of output growth and lower excesscapacity. Investment opportunities in efficient import-substitution andexport activities should also expand as a result of exchange rateadjustment and trade liberalization. The Government's intention todecrease its role in some state-owned enterprises will also expand theopportunities for private sector initiative.

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102. Once most of the structural adjustment measures are in place, theprospects for the economy achieving a growth path of 4-5 percent a yearwill be strong. The exchange rate will be at an equilibrium level, privatesector confidence will be restored and the investments made in the mid andlate 1980's will begin to bear fruit. As financial deepening continues,credit to the private sector will become more adequate. Tradeliberalization will be facilitated as the exchange rate auction isbroadened to include consumer goods and services.

Sectoral Growth Prospects

103. The performance of agriculture depends on the sub-sectors ofcocoa, timber, and food and industrial crops, of which the latter twoaccount for about 80 percent of value-added. Agricultural output willcontinue to respond favorably to improved price incentives. The adequacyof incentives will be an important determinant of production of food andindustrial crops, though more effective provision of extension serviceswill also play a role. The planned restructuring of the Ministry ofAgriculture is also intended to improve other services to farmers such asthe supply of inputs and research, and would strengthen the link betweenresearch and extension. Output of food and industrial crops is projectedto grow at 2 pencent per year in 1986-90, then increase to 3 percent in1990-95. The volume of food imports would rise up through 1989 and thenbegin to decline.

104. Cocoa output has responded well to higher producer prices. TheGovernment is committed to ensuring that farmers gradually increase theirshare of the world price. It is projected that the real increase inproducer prices will permit exports to expand to 260,000 metric tons by1990 from 219,000 in 1985/1986. This is conservative, but based onestimates of Ghana's potential production capacity. The near-termincreases will come from improved husbandry and greater availability ofinputs, while after 1990 the yield from hybrids planted during the 1970sand early 1980s will begin to be felt. Replanting is expected to continueat a rate of 30,000 hectares per year. Efforts to control cocoa swollenshoot virus disease will also improve yields. These factors would permit agrowth in cocoa production to about 300,000 tons by 1995. Timber continuesto be a dynamic element of Ghana's exports. The arrival of forestry equip-ment, scheduled for 1985, was delayed until 1986, and as a result exportsshould show another strong gain in 1987-88. The timber levy was reduced in1986, and the 6 percent export levy was replaced by an increase in stumpagefees. This should improve incentives, although additional measures areneeded to improve forest management, rehabilitate forest plantations, andrationalize concessions. Assuming progress in these areas, exports areprojected to increase to a level of 730,000 cubic meters by 1995, comparedto 354,000 in 1986.

105. As can be seen from Table 10, industry is projected to be tenfastest growing sector. In the near-term manufacturing would contir e tobenefit from the increased availability of imported spares and rawmaterial. The rapid growth of this sector in the past two years was

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facilitated by the existence of substantial excess capacity. This sourceof output growth will still be possible in some activities, notably foodprocessing. In beverages, wood products, paper products, and cement,capacity utilization is approaching historically normal levels, and netinvestment will be necessary to respond to increased demand. On the whole,manufacturing should benefit from the more liberal exchange and traderegime, which, while eliminating inefficient firms, should also expand theopportunities for efficient import substitution. Previous studies of themanufacturing sector in Ghana have shown that a significant number ofenterprises (50-60 percent) currently in operation would be efficient atworld prices. As mentioned in Chapter II (para 30), a review of tradetaxation would also examine the need foL temporary protection in the caseof infant industries.

Table 10: GDP GROWTH RATE BY SUBSECTOR

(in 1984 Cedis; Percent)

Continued Reform Adjustment Fatigue1985-90 1990-95 1985-90 1990-95

Agriculture 3.0 3.1 2,3 1.4Cocoa 6.2 2.7 3.4 -0.1Forestry 6.7 5.1 4.6 2.5Others 2.2 3.0 2.0 1.5

Industry 11.3 5.1 6.8 2.0Mining 10.0 4.1 6.6 1.9Manufacturing 12.0 5.4 6.9 2.1Utilities 10.7 4.9 6.6 2.0Construction 9.7 4.9 6.7 2.0

Services 5.5 4.6 3.9 2.6Transport 5.2 4.6 3.8 2.5Wholesale & Retail 6.0 4.8 4.2 2.8Financial Services 5.2 4.4 3.7 2.8Public Admin. 1.9 2.4 0.7 0.0Other Services 4.0 4.0 2.7 2.0

GDP . 5.1 4.1 3.5 2.0

106. Growth in mining depends on the success of on-goingrehabilitation and modernization. The annual production capacity in Ghanais estimated at 600 thousand fine ozs., about double 1986 output. Ghana isexpected to attain nearly that level by 1995. An encouraging sign is thatapplications for gold prospecting licenses have risen, in part because theimprovement in the exchange rate has increased the attractiveness ofexporting at the official rate. Ghana Consolidated Diamonds Ltd. hasincreased production capacity thanks to its new operations at the Birimdeposit. After repair of the washing plant in 1986, production is

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projected to hit one million carats per year by 1988, and be sustained atthat level until 1995. The Ghana Bauxite Corporation has begun torehabilitate the washing plant which could expand capacity to 500,000metric tons per year, more than double current production. The medium-termoutlook for manganese shows growth slowing down due to exhaustion of oredeposits. The picture could change if the Ghana National ManganeseCorporation's nodulization plant proves viable. This would permit theexploitation of low-grade carbonate ore deposits and expand capacity to400,000 metric tons per annum.

107. Growth in services, which now accounts for about 40 percent ofGDP, is projected to be a relatively strong 5.4 percent in 1986-90, mainlyon the strength of gains in whAesale and retail trade, financial services,and transportation. Transportation has grown rapidly due to the rehabili-tation of the economy's infrastructure and will benefit from the projectedoutput increases, particularly in exports. Growth in wholesale and retailtrade will diminish over time because of the shift in incentives away fromtrading activities, but will benefit from higher domestic production andafter 1988, from the growth in consumer demand. Growth in financialservices will be strong during the next several years as confidence in thebanking system is gradually restored. In the 1990-95 period, growth in theservices sector tapers off to 4.6 percent, slightly higher than the averagefor the economy as a whole.

The Adjustment Path for 1987-1989

108. The policy measures to be implemented in the structuraladjustment program have been incorporated into the continued reformscenario using a simple internally consistent macro-economic accountingframework that tracks the sources and uses of funds in the economy for theperiod 1987-1989. The behavior of the main indicators is summarized inTable 11. More detailed information appears in Annex C. The economy isprojected to grow at about 5 percent per annum. National and foreignsavings must both increase in order to finance the required investmentlevels. Investment is projected to more than double from its current levelof 10 percent of GDP to 23 percent by 1989. National savings is projectedto more than double from an estimated 6.6 percent of GDP in 1986 to closeto 15 percent by 1989.

109. In the area of public savings, domestic resource mobilizationresulting from new revenue measures, tax reform and improvements inadministration are projected to increase total revenue from 13.6 percent ofGDP in 1986 to 16.5 percent by 1989. Also, unification of the official andauction exchange rates is expected to raise proceeds from the cocoa exporttax. The projected increases in revenues, coupled with the reduction inthe Ghana Cocoa Board's costs, more than offset the improvements in theproducer price so that Government revenue from cocoa increases to 4.3percent of GDP in 1987 from 2.7 percent in 1986. There are complementaryrecurrent expenditure policies. The latter include holding personalemoluments to less than 6 percent of GDP, reflecting in part the plannedreduction in the size of the civil service. The state-owned enterprise

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Table 11: Selected Economic and Financial Indicators

AnnualAverage Actual Estimates Projections

…________ ------- ---------------- --------------------------1980-83 1984 1985 1986 1987 1988 1989

Gr'owth Rates (X)

GDP -5.1 8.6 5.1 5.3 5.0 5.3 5.3GPf Deflator 106.6 3.5 31.2 30.2 18.0 12.5 7.5

Percent of Market Price GDP___________________________

National Accounts:Corsumption 96.5 95.1 95.7 92.3 89.8 86.7 85.0Investment 4.3 7.6 7.3 10.3 17.1 21.0 22.8Pr_vate 3.1 4.0 3.4 4.4 7.9 11.1 11.9Bucsetary Cap. Expenditures a/ 1.4 3.6 3.8 5.9 9.2 9.9 10.8National Savings 3.9 4.7 3.1 6.6 8.5 12.2 14.8Pub 'Lc bl -4.4 -0.4 0.1 1.7 3.2 3.5 3.6Private 8.3 5.1 3.0 4.8 5.3 8.7 11.2

of which: Foreign Transfers i.0 1.0 0.5 0.9 1.3 2.0 2.8Foreign Saving 0.6 2.8 4.2 3.7 8.6 8.8 7.9

Central Government Budget:Total Revenues 6.4 8.0 10.4 13.6 16.1 16.2 16.5Total Expenditure 12.2 11.8 14.1 17.8 22.8 23.6 24.4

Recurrent 10.7 8.4 10.3 11.9 12.9 12.7 12.9Capital 1.5 3.4 3.8 5.9 9.2 9.9 10.8Special Efficiency 0.0 0.0 0.0 0.0 0.7 0.9 0.6

Overall Deficit 5.8 3.8 3.8 4.1 6.6 7.4 7.9

Broad Money (M2) c/ 13.0 15.1 16.9 18.1 20.0 22.0

Balance of PaymentsExports of GNFS 4.5 8.0 9.9 15.8 21.7 22.2 22.7Imports of GNFS -5.4 -10.7 -12.9 -18.5 -28.6 -30.0 -30.5Resource Balance -0.9 -2.7 -3.0 -2.6 -7.0 -7.7 -7.8Current Account Balance -1.6 -2.8 -4.2 -3.7 -8.6 -8.8 -7.9Overall Balance -1.0 -1.6 -1.7 -1.1 2.8 3.0 2.5

------------------------------------------

a/ From 1984, includes State Enterprises capital expenditures financedby external concessional assistance.

b/ Represents Central Government's savings only.c/ Includes both primary and secondary banks.

Source: Bank staff estimates.

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reforms bring about a decline in the share of subsidies and transfers inthe government budget. Despite the growth in expenditures on other goodsand services, which is necessary to reverse past neglect, the currentsavings of the central government is projected to increase from 1.7 percentof GDP in 1986 to nearly 4 percent by 1989.

110. Private sector savings is expected to be stimulated gradually bythe restoration of confidence and the growth in personal incomes after1988. Financial sector reforms, which include restoring positive realinterest rates, the introduction of instruments to mobilize small savlngsand longer term resources, and tax policy changes to stimulate savings,support both the increase in the savings effort and the return of theprivate sector to the once suspect banking system. The ratio of broad moneyto GDP is projected to continue to recover toward a historically morenormal value; by 1989 the ratio (covering primary and secondary banks) isprojected to be 22 percent. Although this is a large jump from the ratioof 16.9 percent in 1986, it is consistent with the re-monetization experi-ences of other countries in the aftermath of hyperinflation. It is alsosubstantially less than the ratio of broad money to GDP (26 percentcovering primary banks only) which prevailed in Ghana on average during1965-79. Continued financial deepening is necessary to offset the impacton credit to the private sector of the strengthening of net foreign assetsduring 1987-1989 and continued monetary restraint. In addition to theefforts of local Ghanaians, the exchange rate reforms and build-up ofconfidence are expected to encourage private remittances, which areprojected to reach $120 million by 1989, equivalent to 3 percent of GDP.Other private savings, measured as a share of GDP, increases from 4 percentin 1986 to 8 percent by 1989.

Social Impact

111. The prolonged decline in the economy through 1983 caused asubstantial reduction in per capita real incomes and food production. Thesocial impact of the adjustment program needs to be evaluated in thecontext of the costs of a failure to adjust. The adjustment fatiguescenario indicates that without further reforms, the recovery to date wouldfalter, and the economy would resume its downward decline with adverseconsequences for all Ghanaians. Under the continued reform scenario, theeconomy is able to reach a level of growth which raises per capita incomes.The improvement in producer incentives, higher levels of investment, andthe shift in resources from urban to rural areas and from traders toproducers will enhance opportunities throughout the economy, butparticularly for small farmers, and will expand employment. The shift inresource allocations within higher expenditures towards primary health careand primary and secondary education will benefit lower income groups. Insum, the majority of the population is likely to be better off with thepolicy reforms than without.

112. The adjustment policies could have a potentially adverse impacton the poor through (a) price changes resulting from exchange ratemovements and petroleum taxation; (b) the retrenchment of civil service and

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state enterprise employees; and (c) employment losses arising from theeffect of trade liberalization on inefficient firms. The price impact islikely to be moderate because the prices of most end-products alreadyreflect their scarcity values, as indicated by the limited impact ofexchange rate adjustment on inflation so far. Inflation is expected todecelerate during the program period, helping the poor. The economy shouldbe able to absorb the displaced workers from the public sector. The majorincrease in public investment will occur in labor-intensive activities suchas road maintenance. Employment creation will also occur in agriculture,where wage rates are already higher than in the urban areas (para 14). TheGovernment's proposed compensation to workers will ease the transition.Previous sector work suggests that a high proportion of firms currentlyoperating in Ghana are efficient at world prices (para 105) meaning that,on balance, trade liberalization should expand employment. Finally, theGovernment intends to develop special programs for those groups which willnot be among the first to benefit from the adjustment program. Theseinclude food-for-work schemes, credit to the self-employed, and trainingprograms. The 1987 budget provides for both compensation payments(g2,800 million) and the cost of other programs (gl,400 million) forretrenched workers. Additional donor support is expected for the latter.

Balance of Payments 1987-1989

Export Growth

113. Export growth (in constant prices) under both the continuedreform and adjustment fatigue scenarios is shown in Table 12. Exports arenot as dynamic in the absence of further reforms because of the impact ofthe incomplete exchange rate adjustment on the profitability of exportactivities and the constraints posed by less rehabilitation of importanteconomic infrastructure, particularly in transport. With continued reform,export growth is expected to average 8 percent a year through 1990. Thebulk of the '_crease will come from cocoa earnings (para 104). Amongnon-cocoa exports, gold, bauxite, timber, and diamonds are projected toexpand in the near term because of the rehabilitation in progress for thesesectors. Gold should rapidly increase its importance as output recovers inthe mines of both the Ashanti Gold and the State Gold Mining Corporations.As Ghana Consolidated Diamonds brings new capacity into operation, diamondearnings should rise, and could be boos. I further if private miners areattracted to official marketing channel.. The outlook for the two bulkminerals is uncertain: manganese exports will be hampered by theexhaustion of high quality ores, while bauxite depends on the continuationof existing marketing arrangements. Their joint share of export earningsis unlikely to exceed 2 percent. Although timber exports should continue togrow, there is unlikely to be much improvement in terms of value added insales, except for perhaps an increase in the relative importance of lumbercompared with logs. There also may be a small rise in the wake of theTimber Export Development Board's efforts to reestablish G.-tana among thesuppliers of wood products to traditional European markets. Assuming thatwater levels at the Volta dam remain at normal operating levels, the VoltaRiver Authority's (VRA) exports of electricity to neighboring countries and

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to the aluminum smelter (VALCO) could amount to slightly over $50 million ayear. The structural transformation of the economy will also open up newpossibilities for non-traditional exports.

Table 12: EXPORT GROWTH RATES UNDER THE TWO SCENARIOS

(in 1984 Prices; Percent Per Annum)

Continued Reform Adjustment Fatigue1985-90 1990-95 1985-90 1990-95

Cocoa 6.3 2.7 3.5 -0.1Timber 14.1 5.1 12.0 2.5Gold 10.5 4.3 7.0 2.0Diamonds 8.4 0.0 8.6 0.0Electricity 15.7 0.0 13.1 0.0Nontraditionals 22.1 8.3 2.7 2.0Non-Factor Services 1.2 3.0 8.0 2.8

Total Exports GNFS 8.2 3.0 5.5 0.6

114. In the continued reform scenario, cocoa's share of total exportsof goods falls to 52 percent by 1995 from 67 percent in 1986. Thus,despite the success of the reform program in restoring cocoa production,Ghana's dependence on it diminishes. Conservatively, cocoa priceprojections do not take into account the price premium Ghana enjoys forsuperior quality. A decline in cocoa prices would have a serious impact onthe structural adjustment program. If cocoa prices dropped 10 percentbelow what is currently being projected, it would add about $50 million tothe financing gap each year (para 118). If financed on non-concessionalterms the debt service ratios would rise by about 5 percentage points.Economic growth would also be somewhat lower.

Import Projections

115. The projected rapid growth of the economy during 1986-89, inparticular the strong increase in investment and industrial production,will require imports even though incentives will encourage enterprises withmore domestic value-added. The volume of petroleum, capital and otherintermediate goods, which account for 85 percent of Ghana's imports and forwhich the scope for import substitution is small, increase by over 20percent between 1985 and 1989. Reflecting the still low base, importvolume is expected to increase at close to double the rate of economicgrowth during 1986-1989. After 1990 the growth in imports is projected todrop to less than the increase in the overall economy for several reasons.Changes in incentives will shift production away from activities whichintensively use imports to ones that are based on domestic resources.Improvements in efficiency, particularly energy, will dampen demand. Ghanawill also be able to reduce its food imports after 1989 due to smallerincreases in demand and higher growth in food crop production.

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Terms of Trade

116. Ghana's terms of trade are projected to deteriorate through theearly 1990's primarily because of the declining real price of cocoa.Nominal cocoa prices are expected to drop by 14 percent between 1986 and1990 before beginning a gradual recovery in the period 1990-1995 of about 4percent per annum. The projected long-term strengthening in cocoa pricesmoves the terms of trade slightly in Ghana's favor mainly because of realincreases in the world prices of cocoa and timber. Nevertheless, by 1995the terms of trade index is still 12 percent below the level of 1986.

External Balance and Capital Inflows

117. Under the continued reform scenario, the current account deficitof the balance of payments is projected to widen in 1987-1988, primarilybecause of the projected trends in exports and imports. Private transfersare expected to increase as the incentives to make remittances throughofficial channels improve in line with achievement of a more realisticexchange rate and heightened confidence in the banking system. The currentaccount deficit is projected to increase to 8.7 percent of GDP in1987-1988. The sharp growth in the cedi value of the deficit is explainedby the large devaluations of the cedi, particularly in 1987 when Ghana isprojected to move rapidly towards an equilibrium exchange rate. After1988, however, the current account deficit is projected to fall, both innominal terms and as a ratio to GDP.

118. However, the increase in the current account deficit does notprevent the balance of payments from swinging into an overall surplus ofslightly over $100 million in 1987 and remaining at about that level in1988-1989. This is because of the projected increase in concessionalassistance, needed to reverse the import compression that contributed to-he economy's decline and to support the structural adjustment process.Disbursements of concessional assistance (grants and long-term loans) areprojected to rise by about a third by 1989, compared to 1986 levels,assuming commitment levels which are set out in Chapter V. The programrequires such a level of overall surplus in order to finance theelimination of external arrears by 1989, short-term liabilities, andrepurchases from the IMF; the latter average $186 million between 1987 and1989, peaking in 1988. In addition, the Government intends to reduceremaining external payments arrears. Provision is made also for a neededmodest buildup in gross international reserves. This would 'eave anaverage financing gap of $24 million over the 1987-1989 period (Table 13).Ways to fill that gap are discussed in Chapter V.

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Table 13: Balance of Payments Overview 1985-1989

(US$ million)

1985 1986 1987 1988 1989

Exports 632 773 777 845 920of whichCocoa (412) (519) (475) (490) (524)

Imports -727 -780 -891 -985 -1,073of whichOil (-200) (-125) (-148) (-153) -158

Trade Balance -94 -7 -114 -140 -153

Non-Factor Services (net) -110 -131 -154 -172 -182

Resource Balance -204 -138 -268 -312 -335

Net Factor Income -111 -105 -113 -125 -125

Net Private Transfer 32 49 50 80 120

Current Account Balance -283 -193 -331 -357 -340Financed by:Grants 93 115 162 157 194Official medium andlong term loans (net) 32 99 252 235 211Disbursements (287) (358) (418) (424) (396)Amortization (-255) (-259) (-166) (-189) (-185)

Other capital 41 -77 25 86 42Overall Balance -117 -56 108 121 106

Monetary Movements 117 56 -108 -177 -123

Financing Gap - - 56 1'

Memorandum Item

Gross Aid Disbursements 224 358 428 469 487of which: based on

commitments madeprior to 1987 224 358 291 225 150

Source: Annex D, Page 1

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Conclusion

119. It is sobering that the continued reform scenario succeeds onlyin restoring many economic indicators to levels that Ghana had attained inth6 past. It is not surprising, however, given the sharp decline during theprevious decade. The reforms designed to achieve sustainable growth in thelong-term constitute an integrated package that employs a wide variety ofmeasures to effect changes across all sectors of the economy. Theimpressive efforts of Ghana's policy-makers to date, and the evidentprogress of those efforts, give cause for optimism, although the taskahead remains difficult. Implementation of the structural adjustmentprogram, however, will not be sufficient to ensure the outcomes which havebeen described in this chapter. External concessional assistance, whichhas contributed to the success of the Economic Recovery Program, also hasan important role to play in the implementation of the structuraladjustment program.

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Ghana's Economy: Performance and Prospects

(1975 - 1995)

Ghana: Performance of 30P. Agriculture, Ghana: Extomra Trade and Currntand Manufactul ng Account Balance

.Actual Pro¢ledn ,o 4 ACTUAL PROJECTION, XOOODS OF

- SOOO- V' 2 I I

iiis' 'ioa' liai' ,Or-?, 'vDio' '1943' IPT1979 196? oslOS 985 197, t989 190? logs logs

Ghana: Rati of Broad Money (M2) to GOP Ghana_ Exports of Cocoa and COoaN Prducts

400.

20- 0 ~~~~~~~~~~~300-20 / ~~~~~~~~~~~~~~~~~Actual

'. 0*40Preolectlon2 15 0 200-

PROGRAM o

10- 100-1977 1979 1iG1 lo8s 19i5 1987 1989 1973 1976 1979 1982' '19 19'8 i9g91 1i94

Ghana: Annuol Inflotion Rafo Ghona: Exports of Gold

150- 1S000_

ACTUAL

100-~~~~~~~~~~~~~~~00

0 0 // ~~~~~~~~~~~~~~~~~~~~~~~~Projectiona6 Actual

50 \ °PROGRAM 10000

0 1 I 000 I I IT

1978 1980 1982 1984 1986 1988 1990 1976 1978 1980 1992 1984 1986 t988 1990 1992 1994

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V. EXTERNAL ASSISTANCE NEEDS

120. Since the last meeting of the Consultative Group for Ghana, theGovernment has made substantial progress in almost all the areas identifiedthen as critical to the successful evolution of the reform program. Asdiscussed in earlier chapters, a comprehensive structural adjustmentprogram has been prepared and is to be supported by a $115 millionStructural Adjustment Credit from the International DevelopmentAs3ociation. The Government also has prepared a rolling three-year publicinvestment program (1986-1988). Ghana has lived up to its part of the"compact" with the Consultative Group. This chapter recommends how donorsshould support the new momentum in the reform effort. The response ofdonors to the recovery program to date has been impressive relative to thevery low levels of aid the country was receiving in 1983. Nevertheless,assistance needs to be stepped up if the structural adjustment program isto succeed in laying the foundations for sustained growth, at a time whenobligations arising from short-term debt, external arrears, and scheduledIMF repurchases are high. The chapter discusses aid requirements over theadjustment program (1987-1989) and provides the World Bank'srecommendations on the volume and composition of new commitments. Thechapter also reviews Ghana's projected debt service burden.

Aid Trends in 1985-1986

121. Actual aid disbursements in 1985 were less than had beeninitially expected. They are estimated to have reached only $224 million,nearly 20 percent below concessional flows in 1984. The lowerdisbursements are explained by several factors. First, the structure of1985 commitments shifted away from fast disbursing program and food andcommodity assistance to project aid. Second, a large part of 1985indications was not translated into commitments until late in the year.Third, implementation problems of both donors and the Government causeddelays. These included delays in obtaining legal opinions on loanagreements and in appointing consultants, and the obstacles posed by importlicensing. Disbursement performance worsened compared to 1984 on bothpipeline and new commitments. For the former, the aid disbursement ratio(the ratio of disbursements from the pipeline during the year to theundisbursed pipeline at the beginning of each year) dropped from 34 percentin 1984 to 27 percent in 1985. Only 18 percent of new commitments wasdisbursed in 1985, compared to 34 percent in 1984, when the share ofemergency food relief was high. The consequences for the economy weretwofold: one, non-oil imports showed no growth in 1985 over 1984 levels;and two, there was a substantial buildup in the aid pipeline by thebeginning of 1986, which should contribute to higher disbursements in thefuture.

122. Aid commitments to Ghana in 1986, excluding technicalassistance, are estimated at $370 million, 20 percent below the levelachieved in 1985, and significantly short of the World Bank'srecommendation ($500 million) to the November 1985 meeting of the

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Consultative Group. To some extent, the shortfall is explained by theslippage of some commitments to the first half of 1987, such as IDA'sStructural Adjustment Credit ($115 million), the Yamoransa road projectwith financing to be provided by Japan, and two agriculture sectoroperations (ADB and IFAD). Thus, achievement of the required level of aiddisbursements over the next several years is not necessarily at risk, butit is important to translate aid indications given for 1986 intocommitments as quickly as possible. The share of bilateral aid in thetotal inched up from about a third in 1985 to 40 percent in 1986.Bilateral commitments reached $145 million, compared to the $210 millionindicated at the last Consultative Group meeting. Multilateral commitmentsreached $227 million, compared to the $291 million expected. Taking intoaccount the delayed commitments which either have been made by donorsduring the first quarter of 1987 or are anticipated before the middle ofthe year, multilaterals would exceed their indications at the 1985Consultative Group meetings by about $100 million. On the same basis,bilateral commitments would be only slightly above the 1986 indications,showing the need for further effort: on the part of bilalteral donors. Theproportion of quick-disbursing aid was slightly less than half, the same asthe 1985 share. The composition of bilateral aid commitments has shiftedslightly towards quick-disbursing aid, although there was no increase inthe level of such assistance. Multilateral commitments continued to shifttowards more project aid.

Table 14: AID CONMITMENTS TO GHANA, 1985-86(US$ million)

Bilateral Multilateral Total1985 1986 1985 1986 1985 1986

Project 79 65 166 129 245 194Program/Sector 62 61 134 85 196 146Food/Commodity 18 19 11 13 29 32Total a/ 159 145 311 227 470 372of which:Grants !/ 73 84 30 26 103 110Grants as % of Total 46 58 10 11 22 30

/J Excluding technical assistance grantsSource: World Bank staff estimates based on information supplied

by Ministry of Finance and Economic Planning and Donors

123. In spite of the lower than expected aid commitments in 1986,preliminary estimates indicate that disbursement performance has improvedsharply in 1986 resulting in total inflows of about $360 million. Theratio of disbursements from the pipeline at the beginning of the year roseto 33 percent and from new commitments increased to an impressive 26percent (the 1984 level). Several factors contributed to this welcomedevelopment. One, new program commitments, such as the EuropeanCommunitygs STABEX loan and IDA's Industrial Sector Adjustment Credit,disbursed quickly. In particular, there was a strong response bymanufacturers to program facilities for imports. In addition, some

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bilateral donors made program assistance more attractive by allowingimporters to space their repayments, instead of requiring the total cediequivalent up front. Two, the import licensing system was less of aconstraint because there was a large backlog of licenses in the system.The licensing regime was abolished for most producer and intermediate goodsin October, which helped to speed up disbursements in the last quarter ofthe year, but the full effect on importers will not be evident until 1987.Three, the Central Project Monitoring Unit, set up by the Government inlate 1985, has been successful as a troubleshooter and has helped speed up,on the Government side, both the process of turning indications intocommitments and aid disbursements. However, additional efforts are stillrequired. Donors could take advantage of more cofinancing opportunities,thereby avoiding the delays of separate appraisals. The Government'sremoval of most import restrictions is a major step, but should becomplimented by measures to speed up the process of obtaining legalopinions and of the appointing consultants.

Ghana's Aid Requirements in 1987-1989

124. The availability of foreign exchange will continue to be a keyconstraint to Ghana's economic recovery as the country implements thestructural adjustment program. As discussed in the previous chapter, thecurrent account deficit is expected to average about $340 million duringthe period. Import projections are based on meeting the minimumrequirements for raw materials, spares, intermediate and capital goods,necessary if growth objectives are to be met. Few resources are left forimports of consumption items. Although efforts to rehabilitate importantexport sectors have begun to show results, particularly for cocoa andtimber, over the next three years the growth in export proceeds will beconstrained by the projected stagnation in international cocoa prices.Export receipts will not be adequate to cover necessary imports as well asother payment obligations, particularly debt service. Although commercialtrade credits have a role to play in import financing as internationallenders regain confidence in Ghana's financial position, excessive relianceon these sources would exacerbate an already heavy debt burden. At aminimum, the level of aid disbursements should be sufficient to meetslightly over a third of projected imports of goods and non-factor services(GNFS). However, this would still leave a financing gap averaging $24million in 1987-1989 (Table 13).

Actual Projected1984 1985 1986 1987 1988 1989

(US$ million)Imports (GNFS) 810 876 955 1,100 1,210 1,310Current Account Deficit 215 283 194 331 357 340ODA Disbursements 270 224 357 428 469 487

ODA as % of Imports 33 26 37 39 39 37ODA as % of CurrentAccount Deficit 126 79 184 129 131 143

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125. The aid pipeline at the beginning of 1987 is estimated at $859million. Out of this total $291 million (34 percent) is expected to bedisbursed in 1987, $225 million in 1988, and $150 million in 1989. Newcommitments of $575 million in 1987 (the increase reflecting in part theneed to "catch up" after the shortfall in 1986 and the impact of thedepreciation of the dollar), and an average of $635 million each in 1988and in 1989 are recommended in order to meet minimum requirements, assumingdisbursement rates similar to those of 1986. The share from bilateraldonors is expected to increase from an average of a third in 1984-86 to anaverage of 44 percent in 1987-1989. The recommended commitments representa modest increase of slightly over 10 percent in real terms, compared tothe average for 1984-1986. It is justified by Ghana's strong nastcommitment to the Economic Recovery Program, the need to pro. a strongstimulus to the structural adjustment process, to enable the country toreduce dependence on commercial borrowing, and to ensure an adequate levelof imports at a time when external debt obligations will be high. After1989, Ghana's needs for concessional assistance would decline somewhat, asthe economy benefits more from the structural adjustment program.

126. Quick-disbursing program and sector support of about $230-240million each year during 1987-1989 is recommended. This level of supportis essential to finance imports for rehabilitation and to increase capacityutilization through provision of spare parts and raw materials. Theexperience with IDA's Second Reconstruction Imports Credit (cofinancingfrom the Netherlands and the United Kingdom) has shown that broad andflexible sectoral allocations result in speedier disbursements. Thechanges now occurring in the Ghanaian economy make it more difficult foranyone, including donors, to identify which sectors, let alone whichenterprises, will adjust most quickly to the new incentives. Program loanswhich can be used by a variety of enterprises are most appropriate in thissituation. Other donors have committed similar program assistance formanufacturing, timber, and transport. These facilities have been largelyoriented towards the private sector. IDA's Industrial Sector AdjustmentCredit has succeeded in further streamlining disbursement procedures bylimiting documentation to what is prepared by the commercial banks fortrade financing, instead of requiring additional forms.

127. The operation of the foreign exchange auction since September1986 has important implications for the structure of donor assistance toGhana. The auction and through it, the achievement of a more realistic andmarket-determined exchange rate, is the cornerstone of the structuraladjustment program. The Government's objective is to channel as manytransactions as possible through this mechanism - indeed, this is necessaryif the auction is to perform the function intended. Donors shouldendeavor, to the extent possible, to support this major economic reform bydesigning program assistance so that funds can be channeled through theauction. In addition to specifying only broad and flexible sectorallocations, donors should try to provide untied assistance to the extentpossible. Cofinancing existing program operations such as the SecondReconstruction Imports and the Industrial Sector Adjustment Credits and the

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proposed Structural Adjustment Credit, already the intention of somedonors, would be one way of supporting the foreign exchange auction. Inthe case of donors who are traditional exporters to Ghana, even tiedprogram aid can be channeled through the auction with successful biddersallocated funds from external assistance if the traniraction qualifies. TheBank of Ghana already has begun this process. It is important that astrong effort be made to allocate such aid and that Afficient, quickprocedures for doing this are finalized without delay. In addition, theforeign exchange auction and the emergence of a more realistic exchangerate lessens the degree of supervisior of procurement which is needed,particularly for the private sector.

128. Program assistance is also an effective way to channel resourcesto education and health, which need essential supplies and equipment. TheGhanaians have begun a far-reaching reform of the education system in orderto make it more consistent with the country's needs and financialresources. The reform requires financial resources to support theobjectives of improving facilities and supplies for primary education andreforming the curriculum at both the primary and secondary levels. IDA'srecently approved Education Sector Adjustment Credit is proving aneffective vehicle for cofinancing, particularly for new donors interestedin the social sectors. Similar support is required to meet Ghana'sobjective of strengthening and expanding access to primary health care andmore efficiently providing essential drugs.

129. Although the domestic food supply has continued to improve, Ghanacan still use food and commodity aid to supply products which otherwisewould be imported, such as wheat, rice, sugar, and powdered milk.Commodity assistance, primarily cotton, has provided the raw materialneeded to increase capacity utilization in textiles. New food and commodityaid commitments of at least $50-55 million are recommended. Food aid canbe used effectively to complement project financing, as the World FoodProgram is doing in the area of the transport sector, among others. Thereis scope for a wider application of these food-for-work schemes in Ghanawhich could be targeted to areas of the country which may not benefit fromthe first round of structural adjustment reforms, such as farmers in theNorth, and those workers laid off from the civil service. The schemescould focus on improvements in rural and urban infrastructure, for whichthe needs are great. The World Food Program and bilateral donors shouldwork with the Government to aid its efforts to minimize the social costs ofadjustment. Management would be easier if some food aid is coupled withproject financing, as is the case in the port and road rehabilitationprojects.

130. The level of project aid commitments (excluding technicalassistance which is expected to average $20 million per annum) recommendedrises from $275 million in 1987 to $330 million by 1989. This reflects theneed to support the planned increase in public investment to rehabilitateeconomic and social infrastructure. Donors should be guided by the publicinvestment program (1986-1988) which has been prepared by the Governmentand was described in Chapter III. There are financing gaps in several

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Table 15: OVERALL AID PIPELINE, 1985-1989(US$ Mlllions)

Program/ Food/Project 1/ Sector Commodity Total

1985Undisbursed balance 12/31/84 291 140 83 514New 1985 Commitments 262 196 29 487Disbursements from pipeline 66 47 23 136Disbursements from 1985 commitments 37 33 18 88Total Disbursements 103 80 41 224Exchange Rate Adjustment -8

1986Undisbursed balance 12/31/85 446 253 70 769New 1986 Commitments 217 143 31 391Disbursements from pipeline 100 130 26 256Disbursements from 1986 commitments 24 59 18 101Total Disbursements 124 189 44 357Exchange Rate Adjustments (est.) +56

1987Undisbursed balance 12/31/86 577 220 62 859New 1987 Commitments 295 230 50 575Disbursements from pipeline 156 112 23 291Disbursements from 1987 commitments 30 87 20 137Total Disbursements 186 199 43 428

1988Undisbursed balance 12/31/87 686 251 69 1,006New 1988 Commitments 340 235 55 630Disbursements from pipeline 184 142 28 354Disbursements from 1988 commitments 35 60 20 115Total Disbursements 219 202 48 469

1989Undisbursed balance 12/31/88 807 284 76 1,167New 1989 Commitments 350 235 55 640Disbursements from pipeline 216 138 25 379Disbursements from 1989 commltments 38 50 20 108Total Disbursements 254 188 45 487

1990Undisbursed balance 12/31/89 903 331 86 1,320

I/ Includes technical assistance

Source: Bank staff estimates

OAP/GHCEM1

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areas of the program (para 79). In particular, additional support isneeded for road maintenance and rehabilitation, improvements in supportingservices for agriculture, mining rehabilitation, primary health care, andthe reforms of the education system. The bulk of these projects focus onrehabilitation and improved use of existing capacity. The document meets aneed which has been felt by the donor community and should be a use.'ulvehicle for aid coordination and to help ensure that external assistancemeets the country's priorities. Donors should finance a high proportion oftotal cost, and where possible, recurrent and maintenance costs,particularly in the social sectors. Assistance is also needed to carry outfeasibility studies for the large number of projects which have beenproposed for the investment program, but have not been included because ofa lack of sufficient ir.formation on the potential rate of economic return(para 93).

131. As already stated, the recommended commitment levels andprojected disbursement ratios would leave a financing gap averaging $24million in 1987-89. On its part, the Government shoula try to fill thisgap by consolidating and refinancing external arrears. Donors could helpby providing debt relief and additional support for the structuraladjustment program, for example, by cofinancing IDA'a; Structural AdjustmentCredit.

Technical Assistance

132. The recent salary adjustments for the professional staff of thecivil service have improved morale, but the number of qualified employeesis still insufficient to implement the ambitious structural adjustmentprogram. Even though many skills are available among senior staff inGhana, because of the demands on their time they ar(- not able to beinvolved in all issues or to supervise effectively and train lessexperienced staff. Technical assistance ha3 an appropriate role to play insupplementing the available pool of skilled personnel and in trainingitnior staff. The Government strongly prefers that technical assistanceomes from qualified Ghanaians. This reflects an unwillingness to spend,especially from borrowed funds, scarce foreign exchange for technicalassistance and the problems posed by the extremely high salaries of foreignconsultants, relative to the earnings of Ghanaians. In cases where it iswilling to engage foreign consultants, the Government has expressed thedesire for "workers" as opposed to "advisors", reflecting the strongdemands within the structural adjustment program for tasks such as, taxreforms a'nd improvements in the budgeting process. Pending restoration ofa reasonable measure of competitiveness to civil service salaries, so thatciv'l servants can once again provide nearly all the skills required toimplement Government programs, the skill gaps will be met by a combinationof two measures. One, the Government will shortly establish a skillsmobilization scheme for Ghanaians (para 61). The scheme would offerfinancial incentives for civil servants involved in structuraladjustment-related tasks, provide for long and short-term consultancies forron-civil servants also working on these tasks, and encourage Ghanaiansliving abroad to return to Ghana to take up Government posts. Two, if

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qualified Ghanaians are not available, international consultants will behired.

133. For technical assistance to be effective, whether from local orinternational sources, senior Government staff must actively supervise thework of consultants. In addition, counterpart staff need to be identifiedin order to ensure the transfer of skills. To get the most out of theirtime, consultants should be provided with adequate logistical support andequipment. Given the increase expected in technical assistance to Ghanafrom the UNDP, the IDA Structural Adjustment Institutional Support project,and bilateral programs, it is important for the Government to streamlinethe procedures for approving contracts for consultants. It might behelpful if general guidelines were developed so that only exceptional caseswould require approval outside the relevant ministry. Some assistance mayalso be required to identify qualified personnel, particularly outsideGhana, and to advise on other administrative aspects of hiring externalconsultants.

Aid Coordination

134. Aid coordination both between the Government and the donors andamong donors improved during 1986. At the local level, monthly meetingswith participation by representatives from the government and donoragencies have encouraged the e.ichange of information and discussion ofcommon issues such as the use of counterpart funds, vse of localconsultants, and recent policy measures such as the foreign exchangeauction. Periodic status reports provided updates on progress since theNovember 1985 Consultative Group on: (i) implementation by the Governmentof further reforms under the Economic Recovery Program and (ii) the actionstaken by donors to meet the external financing requirements of the ERP.Information on. the timing and purpose of upcoming visits planned by thestaff of donor agencies is distributed monthly. The Government organized ameeting with the donors in Accra in July for an interim review of thereform program and external assistance. Special meetings were held onindustry and the socia'. sectors for interested donors.

135. The support providt.d by th:e UNDP to strengthen the InternationalRelations Department (IERD) of the Ministry of Finance and EconomicPlanning is beginning to show results. Computerization has improved theprocess of monitoring disbursements and projecting futt:re assistance flows.Donors are also providing IERD with data on actual disbursements as itbecomes available. Further wort. is needed to improve the flow ofinformation between implementing agencies and the staff of IERD on theprogress of foreign-aided projects and likely disbursement levels.Quarterly reporti.Lg of such information using a simple format for majorprojects might help in this regard. IERD also needs to ensure thatinformation on aid commitments and disbursements is made available toothers in the Ministry and Bank of Ghana staff. There are still problemswith lack of data for some bilateral donors without active aid offices inGha.

- 68 -

136. The recently issued public investment program (1986-1988) can bean effective instrument for aid coordination. It also provides adiscipline for both donors and the Government. At least on a preliminarybasis, the Government has identified its priority investment projects andfinancing gaps, reflecting careful consideration. Both donors and theGovernment need to adhere to that program. In order to provide generalsupport to the investment program, donors should cornsider allocating ashare of those counterpart funds generated by food and commodity assistanceor program aid over which they maintain some control to priority projects(para 92).

137. Co-financing activity in Ghana is fairly high, particularly inseveral large infrastructure projects such as port rehabilitation and theNorthern Grid extension. Progress in this area should continue. IDA hasseveral possible vehicles for cofinancing including the on-going EducationSector Adjustment, Second Reconstruction Import and Industrial SectorAdjustment Credits, all of which already have attracted additional fundng.In addition, there are several projects scheduled to begin in 1987-1988suitable for cofinancing, including the Structural Adjustment andInstitutional Support Credits and several project operations (Cocoa III,Transport Rehabilitation, Mining Rehabilitation, and Telecomunications).The Government should actively encourage cofinancing because it lessens theadministrative burden on its officials and line staff.

External Debt Management

138. Ghana's medium and long-term external public debt outstanding anddisbursed (excluding the IMF) at end 1985 amounted to $1.2 billion, roughlya quarter of GDP. Bilateral creditors account for two-fifths; multilateralsources for over one half (Bank and IDA loans and credits comprised 25percent of total debt); and suppliers credits for the remaining 10 percent.In spite of the relatively low stock of outstanding debt and its generallyconcessional terms Ghana's debt service burden has increased in recentyears and will remain severe over the medium-term. This is because of12-month oil credits, obligations to the IMF, and payments to reducearrears, which are not included in the above figure. The debt serviceratio has risen sharply from 14 percent in 1982 to 37 percent in 1986, duemainly to short term oil borrowings. The debt service ratio, inclusive ofthe IMF and reduction of arrears, was 47 percent in 1986. Ghana's debtservice ratio declines over the next several years as dependence on shortterm oil borrowings lessens. However, once IMF obligations and thepayments to reduce external arrears are taken into account, total debtservice averages 58 percent during 1987-88, but eases by 1989.

139. It is important that the debt service burden not constrain theimplementation and success of the structural adjustment program. External3oncessional assistance is critical to ensure an adequate amount of importfinancing in the context of the large payment obligations which face Ghana.Also, to the extent possible, the Government should seek a possibleconsolidation of arrears and a stretching out of terms in order to avoidthe need for cash outlays to reduce the stock of arrears outstanding.

- 69 -

Table 16: EXTERNAL DEBT SERVICE ON GOVERNMENT ANDGOVERNMENT-GUARANTEED DEBT

(US$ Millions)

1984 1985 1986 1987 1988 1989Medium and Long Term Debt

Amortization 141 255 259 166 189 185Long Term 26 25 30 40 45 45Medium Term 114 223 218 117 133 126

of which : Oil (61) (146) (171) (75) (68) (50)Trust Fund 1 7 11 10 10 10

Interest 53 59 44 53 58 59

Total Debt Service 194 314 303 219 247 244

IMF Obligations

Repurchases 4 0 22 161 235 161Charges 21 44 55 52 50 45Total IMP Debt Service 25 44 77 213 285 206

Grand Total 219 358 380 432 532 450

Payment Arrears 61 57 4 26 7? 73

Debt Service Ratios (Z)

excluding IMF 32.1 46.8 37.0 26.3 27.5 25.0including IMF 36.3 53.4 46.5 51.9 59.2 46.2including IMF and arrears 46.4 61.8 46.9 55.0 67.3 53.6

Memorandum item

Export of goodsand non-factor services 604 671 818 832 898 975

Source: Bank of Ghana (1984-86) and staff estimates (1987-89)

EDS/GHCEM1

- 70 -

In addition, there may be advantages for the Bank of Ghana to borrow newmoney if that lengthens the maturity of its liabilities and is on betterterms.

140. The Government has decided to consolidate the debt managementfunction at the Ministry of Finance and Economic Planning in theInternational Economic Relations Division, resolving the previous confusionover the Ministry's and the Bank of Ghana's respective roles. Under IDA'sStructural Adjustment Institutional Support Credit, the Government willinstall the Debt Management and Financial Analysis System (DMFAS) developedby UNCTAD during 1987. The system provides a package of pre-installationtraining in debt reporting, installation of a program specifically tailoredto Ghana's requirements, plus associated hardware, and supervisedimplementation and training. It is important that the Government work outclear reporting relationships and the allocation of responsibilities amongthe various Government agencies which have a role in debt reporting andmanagement, especially the Bank of Ghana and the Accountant General.

Conclusion

141. Since the last meeting of the Consultative Group for Ghana, theGovernment has made considerable progress in almost all the areasidentified thien as critical to the successful evolution of the program.There is little indication that the Government is suffering from"adjustment fatigue". In fact, Ghana deserves high marks not only forstaying the course, but for moving into high gear in the fifth year of thereform program. It has more than lived up to its part of the "compact" andremains at the forefront of economic adjustment in Sub-Saharan Africa.Ghana's persistence and expanded effort deserve support. Without thatsupport, the success of the structural adjustment program will beendangered. Donors, as does the Government, must recognize that structuraladjustment takes time and that external assistance is needed throughout inorder to sustain that process. Donors should take the opportunity of theimplementation of the structural adjustment phase of the reform effort todemonrtrate their commitment and support to Ghana for the medium-term.

- 71 - ANNEX A

Page 1

SELECTED POLICY CHANGES SINCE 1985

AGRICULTURE

Cocoa

1. Effective for the 1985-86 mid-crop which began in late April, thecocoa producer price was raised by 50 percent to 085,000/metric ton. Anadditional 0500/metric ton is to be paid if the production target for the1986/87 season of 230,000 metric tons is reached.

2. As of December 1985, some 16,000 workers were retrenched from theGhana Cocoa Board. An additional 10,000 workers were removed from thepayroll as of February 1987.

Other Crops

3. The Government also announced new fertilizer prices effectiveJune 30, 1986. Prices were increased on average by about 80 percent, but asubsidy remained to cover distribution and handling costs.

Fertilizer Prices(cedis per 50 kg. bag)

Type of Fertilizer New Price

Nitrogen Phosphate Potash

20 0 0 78070 20 15 1,370

-Sulphate of Ammonia 490-Single Superphosphate 503-Muriate of Potash 756

4. Effective April 1986, the producer price for coffee was increasedby 50 percent (from 062,620/ton to 094,095/ton) and for sheanuts by 3percent (from 027,280/ton to 028,000/ton).

THE 1986 BUDGET

5. The following measures were announced in the 1986 budget:

- major increases in the tariff rates of some consumer goods;

- sharp increases in a variety of registration and licensing fees;and

- adjustment of personal income tax rates in order to provide somerelief from inflation induced increases in the effective taxburden (see table below).

- 72 - ANNEX APage 2

Effective Income Tax Rate

Annual Income Level 1 9 8 5 (%) 1 9 8 6 (%)(cedi) Single Married Single Married

25,000 - 40,000 7.0 - 13.1 6.0 - 12.0 2.8 - 3.5 1.8 - 2.940,000 - 60,000 13.1 - 21.4 12.0 - 20.2 3.5 - 5.8 2.9 - 4.560,000 - 80,000 21.4 - 28.6 20.2 - 27.6 5.8 - 7.9 4.5 - 6.980,G00 - 100,000 28.6 - 34.1 27.6 - 33.2 7.9 - 11.1 6.9 - 9.8100,000 - 120,000 34.1 - 37.9 33.2 - 37.2 11.1 - 13.8 9.8 - 12.4'20,000 - 150,000 37.9 - 41.7 37.2 - 41.1 13.8 - 18.6 12.4 - 17.1150,000 - 180,000 41.7 - 44.3 41.1 - 43.8 18.6 - 22.6 17.1 - 21.3180,000 - 210,000 44.3 - 46.1 43.8 - 45.7 22.6 - 25.9 21.3 - 24.6210,000 - 240,000 46.1 - 47.5 45.7 - 47.1 25.9 - 29.2 24.6 - 28.1

THE 1987 BUDGET

6. The following measures were announced in the February 1987Budget:

- Changes in the practice of advance tax payments by corporatebodies and self-employed persons from the beginning of thequarter to the end of each quarter. The corporate tax rate formanufacturing concerns was reduced from 50 percent to 45 percent.

- Substantial reductions in import duties especially on importeditems which satisfy priority needs of the economy, e.g., allcommercial vehicles, motorcycles, bicycles, railway coaches,locomotives, raw materials and capital goods such as pig iron,raw jute, clinker, and cotton and non-luxury consumer goods. The10 percent special sales tax on goods imported under SpecialImport Licenses (SIL) was abolished.

- Major increases in the special tax on the following goods:cigarettes by 100 percent to 0100 per pack of 20 sticks; beer,stout, cider, perry and ale by 78 percent to 0125 per litre;alcoholic beverages by 83 percent to 0550 per litre; andnon-alcoholic beverages from 035 to 060 per litre; and

- The merging of excise duties on all locally produced goods, withthe exception of petroleum products, tobacco, alcoholic, andnon-alcoholic beverages, into sales taxes, and reductions of thesales tax rates on several locally produced inputs for thehousing industry, such as cement, roofing sheets and paint.

MONEY AND BANKING

7. As part of the Government's policy of trying to maintain positivereal interest rates, in August 1986, deposit rates were increased acrossthe board by 2 percentage points, with the exception of 24-month depositrates which were increased 'y 3 percentage points. The rates on 12-month

- 73 - ANNEX A

Page 3

time deposits have more than doubled since October 1983 to the presentlevel of 20 percent. Lending rates were increased on average by2-3 percent by unifying them at the maximum rate of 23 percent.

Interest Rate Structure of Banks(% per annum)

4/19/85 9/10/85 10/10/86 3/27/87to to to to

9/9/85 10/9/86 3/26/87 Present

Bank of Ghana

Discount Rate 18.00 18.50 20.00 23.00Advances to Government 18.00 18.50 20.50 23.50Tr- sury Bill Discount Rate 16.75 17.75 19.75 22.75

Commercial Banks

Savings Deposits 15.50 16.50 18.50 21.50Time or Fixed DepositsThree months 15.75 16.75 18.75 21.75Six months 16.00 17.00 19.00 22.00Twelve months 17.00 18.00 20.00 23.00Twenty-four months 18.00 19.00 22.00 25.00

Lending Rates

With Bank of Ghana guarantee 20.00 20.50 - -Without Bank of Ghana guarantee 22.50 23.00 - -Agriculture, Forestry andFishing (maximum) - - 22.50 23.00

All Other Sectors (maximum) - - 23.00 26.00

PRICES AND INCOMES

8. The Government further adjusted the retail prices of petroleumproducts in January 1986 when it devalued the cedi. However, in March, inthe wake of the sharp fall in oil prices on international markets, theGovernment marginally reduced fuel prices. The lower import prices werenot passed through fully in anticipation of future rise in crude oil pricesand to use the savings to cover debt service on petroleum relatedborrowings. The Government, however, announced on June 30, 1986 itsdecision to revert petrol and diesel fuel prices to their former levels(January 1986). In February 1987, petroleum product prices were adjustedupward to reflect the unified exchange rate.

- 74 - ANNEXAPage 4

Petrolem Product Prics(per bperial Qa tllc

Agst 1985 Januay 1986 March 1986 June 1986 Februry 1987Cedi $Eq Cev Cdi Cedi $Euiv Cedi $Equiv Cedil $Equiv

Pradum Gasoline 105.0 1.04 150.0 1.67 140.0 1.56 150.0 1.67 190 1.24

Regula Gasoline 100.0 1.75 145.0 1.61 135.0 1.50 145.0 1.61 180 1.18

Kerosene 55.0 0.96 90.0 1.00 80.0 0.89 80.0 0.89 110 .72

Gas Oil 85.0 1.49 130.0 1.44 115.0 1.28 130.0 1.44 165 1.08

1^a: US$ equivalent amomnts are calculated at official xxchnge rates.

Fees

9. Utility tariffs and postal charges were increased significantlyin the first four months of 1986 (see table below). The action wasmotivated by the Government's objective of improving the financialperformance of these companies.

Utility and Postal Rate Increases(January - April 1986)

Service % Change in RateWater:Domestic(0 - 3,000 gal/mo.) 500(4 - 10,000 gal/mo.) 750(over 10,000 gal/mo.) 1,150

Commercial(O - 10,000 gal/mo.) 700(over 10,000 gal/mo.) 1,000

Unmetered 350Standpipes 150

Volta River AuthorityElectricity Corporation of Ghana 170Mines 170

Electricity Corporation of GhanaDomestic 47Commercial 80Industrial 80

TelecommunicationsDomestic 300International 70

Postal 600

-75- ANNEX APage 5

Effective January 12, 1987, tariffs for international telephone, telex, andtelegraph services were further increased, as a result of the applicationof the foreign exchange auction rate.

Wages

10. In January 1986, the Government announced an increase in theminimum daily wage from 070 to 090, a wage and salary adjustment aimed atwidening the differential between top and bottom pay scales from less than2 to 1 almost 6 to 1, and higher allowances.

11. The 1987 Budget announced a 25 percent across-the-board increasein wages and salaries for the civil service effective January 1, 1987. Theminimum wage also increased by the same percentage. The canteen allowancewas raised by 50 percent to 030 per day and the transport allowance by100 percent with effect from January. Allowances other than a fewexceptions and those that are exempted by existing law will be added to thebasic salary and taxed.

EXTERNAL

Exchange Rates

12. On January 10, 1986, the Government adjusted the exchange ratefrom 060 - US$1 to 090 = US$1. On September 16, 1986, the Governmentestablished a second window foreign exchange auction, covering alltransactions excluding cocoa, petroleum, debt service for official debtcontracted prior to January 1, 1986, and some essential drugs. The lastauction rate, before the exchange rate was unified on February 21, 1987,was 0157 - US$1. At the foreign exchange auction of March 23, the exchangerate was 0156 = US$1. In the 1987 budget the Government announced that theBank of Ghana will authorize licensed dealers to trade foreign exchange.

External Payment Arrears

13. During 1986 external arrears on payments and transfers forcurrent international transactions and on debt amortization were furtherreduced by $4 million to $171 million at end 1986.

Trade Policy

14. The retention accounts for non-traditional exports increased from20 to 35 percent effective February 21, 1987. Major changes were alsointroduced to import duty tariffs, sales tax and excise duty effective thesame date (no. 5).

SPC/GEcMl

-76 - ANNEX BPage 1

6 H A N As S E C T 9 R A L 6 R O W T H R A t E S O F 6 D P

(Continued Refort Case; in 1984 Prices)

1985 1986 1997 1989 1989 199o 1991 1992 1993 1994 1095....... .. ... ... ..* .... ".4.. - %*4 -...*%lb% .. ft %-f% "Ilk *%" %.. ... .....

Industrial Sector 16.11 6.4? 13.92 12.81 13.5l 6.21 4.82 5.21 5.2? 5.2? 5.2?mining 12.7? -1.1? 19.02 9.9? 9.1? 9.2? 5.9? 3.9? 3.89 3.8? 3.89Manuf. 19.0? 7.0? 14.0? 14.0? 15.0? 6.0? 5.0? 5.52 5.5? 5.5? 5.5?Utilities 20.7? 9.9? 12.01 12.0? 13.01 4.01 4.0? 5.0? 5.0? 5.0? 5.0%Construction 9.0? 7.0? 11.0? 11.0? 11.0? 6.0? 4.0? 5.0? 5.0? 5.0? 5.0?

Agricultural Sector 0.2? 4.8? 1.8? 2.8? 2.7? 3.5? 3.5? 3.1? 3.1? 3.0? 3.0?Cocoa 13.21 11.2? 0.01 9.0? 8.0? 5.8? 5.5? 2.8? 2.5? 1.9? 1.72Forestry 0.2? 0.7? 6.0? 10.01 8.0? 6.1? 5.5? 5.0? 5.0? 5.0? 5.0?Other -1.1? 4.5? 1.7? 1.6? 1.61 3.0? 3.01 3.01 3.0? 3.01 3.0?

Other Sertors 8.2? 5.4? 6.0? 5.6? 5.3? 4.9? 4.4? 4.6? 4.6? 4.6? 4.6XTransport 6.4? 4.5? 6.0? 5.0? 5.0? 5.0? 5.0? 4.52 4.5? 4.51 4.5?hholesale I Retail 9.1? 6.2? 6.5? 6.2? 5.7? 5.0? 4.5? 4.9? 4.8? 4.8? 4.89Financial Servicne 9.3? 3.8? 5.5? 5.5? 5.5? 5.0? 4.0? 4.5? 4.5? 4.5? 4.5?Public Adain. 4.i2 1.5? 2.0? 2.0? 2.0? 2.11 2.2? 2-3? 2.41 2.5? 2.6?Other Services 3.89 3.8? 4.0? 4.0? 4.0? 4.0? 4.0? 4.0? 4.0? 4.0? 4.0?

Opp Growth Rate 5.1? 5.3? 5.0? 5.3? 5.3? 4.5? 4.1? 4.1? 4.1? 4.0? 4.0?

6 H A N A: S R C TOR A L D I S T R I B U T I o N O F 6 D P

(Continued Refore Case; in 1984 Prices)

1984 1985 1996 1987 1988 1989 1990 1991 1992 1993 1994 1995

Industrial Sector 10.61 11.7? 11.9? 12.82 13.7? 14.8? 15.01 15.1? 15.3? 15.5? 15.6? 15.89Mining 1.2? 1.3? 1.2? 1.4? 1.41 1.5? 1.5? 1.6? 1.6? 1.6? 1.5? 1.52manuf. 6.4? 7.2? 7.4? 9.0? 6.6? 9.4? 9.6? 9.7? 9.8? 9.9? 10.1? 10.2?Utilities 0.9? 0.9? 1.0? 1.0? 1.1? 1.2? 1.2? 1.2? 1.2? 1.22 1.2? 1.2?Construction 2.2? 2.3? 2.3? 2.4? 2.6? 2.7? 2.7? 2.7 2,9? 2.9? 2.91 2.8?

Agricultural Sector 49.2? 46.9? 46.7? 45.3? 44.2S 43.2? 42.9? 42.5? 42.2? 41.8? 41.4? 41.0?Cocoa 4.1? 4.4? 4.7? 4.5? 4.6? 4.7? 4.7% 4.8? 4.89 4.7? 4.6? 4.5?Forestry 3.4? 3.3? 3.1? 3.2? 3.3? 3.4? 3.41 3.5? 3.5? 3.6? 3.61 3.6?Other 41.6? 39.2? 39.9? 37.7? 36.4? 35.1? 34.6? 34.2? 33.91 33.5? 33.21 32.9?

Other Sectors 40.3? 41.4? 41.5? 41.9? 42.11 42.1? 42.2? 42.3? 42.5? 42.89 43.0? 43.21Transport 6.4? 6.5? 6.5? 6.5? 6.5? 6.52 6.5? 6.6? 6.61 6.7? 6.7? 6.7?Wholesale I Retail 28.3? 29.3? 29.6? 30.0? 30.3? 30.4? 30.61 30.7? 30.9? 31.1? 31.4? 31.6?Financial Services 1.7? 1.9? 1.8? 1.8? 1.8? 1.8? 1.8? 1.89 1.8% 1.9? 1.81 1.8?Public Adin. 3.4? 3.3? 3.2? 3.1? 3.0? 2.9? 2.9? 2.8? 2.8? 2.7? 2.7? 2.7?Other Services 0.5? 0.5? 0.5? 0.4? 0.4? 0.4? 0.4? 0.4? 0.4? 0.4? 0.41 0.4?

6DP 100.01 100.0? 100.01 100.0? 100.0? 100.0? 100.0? 100.0? 100.01 100.0? 100.0? 100.01

…-.- - - --------- - - ---------- --------- - -- --

Source: Dank staff estioatn.

- 77 - ANNEX BPage 2

6 0A II0 SECTORAL 6ROIITN RATES OF 6DP

lAdiustsent Fatigue Case; 1994 Prices)

195 1996 1997 1988 1989 1490 1991 1992 1993 29,94 299

Industrial Sector 16.12 6.42 13.82 5.22 5.1l 3.61 2.32 2.01 2.02 2.02 2.01lining 12.72 -1.12 19.01 5.02 5.8S 3.92 1.92 l.92 1.91 1.92 1.9SlAnuf. 19.02 7.02 14.02 5.02 5.02 3.91 2.52 2.02 2.02 2.01 2.02Utilati n 20.71 9.92 12.0t 5.02 5.02 2.02 2.02 2.02 2.02 2.02 2.02Construction 8.01 7.02 11.01 6.02 5.02 3.82 2.02 2.02 2.02 2.02 2.02

Agricultural Sector 0.22 4.82 1.81 2.02 1.7n 1.52 1.42 1.4t 1.42 2.42 1.42Cocoa 13.22 11.22 0.02 2.32 2.22 0.02 -0.1 -0.22 -0.12 -0.12 -0.22Forrestry 0.2S o.7 6.02 7.92 3.02 3.12 2.89 2.52 2.52 2.52 2.52Other -1.12 4.52 1.72 1.52 1.52 1,52 2.52 2.52 2.52 1.5S 1.52

Other Sectors 9821 5.42 6.02 2.92 2.92 2.92 2.72 2.72 2.52 2.52 2.52Transport 6.42 4.52 6.0 3.02 3.02 3.02 2.52 2.52 2.52 2.52 2.52Mhateula 4 Retail 9.12 6.22 6.52 3.02 3.02 3.02 3.02 3.02 2.82 2.92 2.92Financial Servicn 9.32 3.82 5.52 3.0S 3.02 3.02 3.02 2.82 2.8l 2.8S 2.92Publ3c Advin. 4.12 1.52 2.02 0.02 0.02 0.02 0.01 0.02 o.ot 0.01 0.02Other Services 3.62 3.98 4.02 2.02 2.02 2.02 2.02 2.02 2.02 2.01 2.02

&DP 6routb Rate 5.12 5.32 5.02 2.72 2.62 2.32 2.12 2.02 2.02 2.02 2.02

6 A 11 At S E C TIO R a L D I S T R I 8 U T I Oi 1 0 F S D P

(djustut Fatigue Case; in 1994 Prices)

1984 1995 1986 1997 1998 1989 1990 1991 1992 1993 199 295444444 444444 444444 "44 .4 4..4 .444 44444 . 4,4..4. .4 4 4" 4.4 ,44.%,

Industrial Sector 10.61 11.72 2l.92 12.89 13.12 13.42 13.62 I3.6Z 13.62 13.62 13.61 13.6tmining 1.22 1.32 1.22 1.42 1.42 1.42 2.5? 1.42 1.45 1.42 2.42 1.42anu4. 6.42 7.22 7.42 9.02 8.22 8.42 8.52 9.52 8.52 8.5t 8.52 9.52

Utilities 0.92 0.92 1.02 1.02 1.02 1.1 I'll . 1.1 1.12 1.22 1.12 1.12Construction 2.2t 2.32 2.32 2.42 2.51 2.62 2.62 2.62 2.6U 2.62 2.62 2.6t

Agricultural Sector 49.21 46.92 46.72 45.32 45.02 44.62 44.22 43.92 43.7n 43.42 43.22 43.02Cocoa 4.11 4.42 4.7n 4.52 4.41 4.42 4.32 4.22 4.11 4.12 4.02 3.92Forrestrv 3.42 3.32 3.12 3.22 3.3S 3.32 3.42 3.42 3.42 3.41 3.42 3.42Other 41.62 39.21 38.92 37.7S 37.22 36.82 36.52 36.32 36.12 36.02 35.62 35.62

Other SiKtors 40.32 41.42 41.5t 41.92 41.9t 42.0S 42.22 42.52 42.72 43.02 43.22 43.42Transport 6.41 6.52 6.52 6.52 6.62 6.62 6.62 6.n 6.72 6.72 6.82 6.82Wholesale I Retail 28.31 29.32 29.62 30.02 30.12 30.22 30.42 30.72 31.02 31.22 31.52 31.72Financial Services 1. 7l 1.82 1.t 1 2.n 1.82 1.8t 1.52 1.81 1. 1.82 1.92 1.91Pubhc Adein. 3.41 3.3t 3.22 3.12 3.02 3.02 2.92 2.82 2.82 2.72 2.72 2.62Other Services 0.57 0.52 0.52 0.41 0.4t 0.42 0.42 0.42 0.42 0.4l 0.42 0.42

GDP 100.01 200.02 100.02 200.02 100.02 100.02 100.02 200.0 100.02 200.01 100.02 200.02

….… .. …… … - - -- - - . - . - _ - _ - . - _ - .- _-_-_-.-.

Source: lank staff estinates.

- 78 - ANNEX BPage 3

6 H A N As v L U M E O F E X P O R T S

(Continued Refore Case)

Product 1984 1985 1986 1987 1998 1999 1990 1991 1992 1993 1994 1995

Cocoa (MT) 164939 191708 214114 214114 231244 249743 264191 278639 296441 293602 298936 303916Log (CH) 149000 247012 397689 421551 463706 500902 531351 560575 588604 618034 649936 691383Sold (FOT) 295759 289902 286013 343216 377539 415291 456820 485600 505024 525225 546234 568084Diasond (Carat) 323000 488699 494075 592890 696566 686566 686566 686566 686566 696566 686566 686566Manganese (NT) 241000 256665 243832 256267 266518 273447 280557 287571 294760 302129 309692 317424Oil Residuals (NT) 124445 192990 123449 166657 166657 166657 166657 166657 166657 166657 166657 166657Electricity (an kwh) 624 1529 2828 3111 3578 3579 3578 3578 3579 3578 3578 3578Bauxite (NT) 44000 146520 190476 247619 346666 399666 458466 459466 459466 459466 458466 458466

8 H A N A: E X P O R T P R I C E I N D I C E S

(Continued Refwor Case)

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

Cocoa 100 93 105 96 91 90 90 94 98 102 107 111Log 100 79 84 89 95 99 104 110 1lS 120 125 131Gold 100 89 103 106 110 114 119 123 128 134 141 147Diasand 100 100 115 119 122 126 131 136 143 149 156 163Mamganese 100 102 102 105 10 114 117 120 176 131 137 144Oil Residuals 100 92 72 75 77 79 93 93 103 115 129 143Electricity 100 68 55 15 55 55 55 55 57 59 61 64Bauxite 100 110 110 115 120 120 125 130 136 143 149 156

G 1 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

(Continued Reforo Case; in Million of USS)

Product 1984 1985 1996 1987 1998 1989 1990 1991 1992 1993 1994 1995-_- - - -- - - - - .I. t"% 1. -* . **"* s "%*. 4 *4s %41*

Cocoa 392 412 519 475 490 524 554 609 652 697 739 784Log 21 29 47 53 62 71 79 B9 96 105 115 126Gold 103 92 106 131 150 171 195 215 234 254 277 301Diamond 3 5 5 6 a 8 a 9 9 10 10 10Manganese a 9 8 9 10 10 11 11 12 13 14 15Oil Residuals 23 33 16 23 24 24 26 29 32 35 40 44Electricity 20 33 49 54 63 63 63 63 65 68 70 73Bauxite 1 4 5 6 9 11 13 14 14 15 16 16Other 5 17 16 18 30 38 45 60 65 70 76 83

Exports of Su is 566 632 773 777 845 920 992 1096 1179 1267 1357 1453

Non-Factor Services 38 39 45 b5 53 55 55 59 62 66 70 75

Total Exports 604 671 919 932 898 975 1047 1154 1241 1333 1428 1528

Source; Bank staff estioates.

- 79 - ANEX BPage 4

6 H A N A: V O L U M E O F E X P OR T S

(Adjustomnt Fatigue Case)

Product 1904 1985 1986 1987 1998 1999 1990 1991 1992 1993 1994 1995- - - - -I v' s%%'.4 %A~'% wb%," lb I. 44*"-

Coroa (MT) 164839 191708 214114 214114 218997 223879 223979 223655 223431 223209 222984 222761Log (CH) 148000 247012 397689 421551 454642 468282 482564 495835 508231 520936 533960 547309Gold (FOT) 285759 288902 286013 343216 360720 383806 399926 408124 416287 424613 433105 441767Diamond (Carat) 323000 488699 494075 592890 639729 639729 639728 639729 639728 639728 639728 639728Manganese (MT) 241000 256665 243832 256267 259342 262454 265866 269190 272555 275962 279411 282904Oil Residual (NT) 12.1445 192890 123449 166657 166657 166657 166657 166657 166657 166657 166657 166657Electricity (an kwh) 62r 1529 2828 3111 3265 3265 3265 3265 3265 3265 3265 3265Bauxite (NT) 44000 146520 190476 247619 288947 297946 324165 324165 324165 324165 324165 324165

6 H A N A: E X P O R T P R I C E I N 0 I C E S

(Adjustment Fatigue Case)

Product 1984 1985 1986 1987 1988 1989 !990 1991 1992 ;993 14 1995

Cocoa 100 93 105 96 99 101 101 105 109 114 119 124Log 100 79 84 89 93 97 102 108 112 117 123 128Gold 100 98 103 106 110 114 118 123 129 134 141 147Diamond 1O0 1O0 115 118 122 126 131 136 143 149 156 163Nanuanese 100 102 102 105 109 114 117 120 126 131 137 144Oil Residual 100 92 72 75 77 79 93 93 103 115 128 143Electricity 100 b8 55 55 55 55 55 55 57 59 61 64Bauxite 1O0 110 110 115 120 120 125 130 136 142 149 156

6 H A N A: E X P 0 R T S I N C U R k E N T P R I C E S

(Adjustsent Fatigue Case)

Product 1984 1985 1986 1987 1998 1989 1990 1991 1992 1993 1994 1995__________._ %"4 %" SA44 4 44 444 4444 % 44.1.-. %%'.lb** %"%lo4

Cocoa 392 412 519 475 505 523 523 544 566 590 614 639Log 21 28 47 53 60 65 70 76 81 87 93 100Sold 103 92 106 13; 140 154 167 177 188 2h 215 229Diaoond 3 5 5 6 8 a p 9 9 10 10 11Manganese 8 9 8 9 10 11 11 11 12 13 13 14Oil Residual 23 33 17 23 25 25 27 30 33 37 41 46Electricity 20 33 49 54 57 57 57 57 60 62 64 67Bauxite 1 4 5 6 5 5 5 5 5 5 5 5Other 5 17 16 18 19 19 20 21 22 24 25 26

Exports of 6oods 566 632 773 r77 828 868 899 930 978 1029 1081 1137

Non-Factor Services 38 39 45 55 60 63 65 70 74 79 84 89---- -- - ---- ----- _ _ _ , .. _..... ---- ---- ---- -- - -----. _____

Total Exports 604 671 819 832 888 931 953 1000 1052 1106 1164 1226

Source: Bank staff estimates.

- 80 - ANNEX B

Page 5

ORAN Ai N as I C E X P E N D 1 T U R E I N D I C A T 0 R S

IContinurd Rofore Cau; in 1994 Price)

Indicator 1994 1985 1994 1997 1988 1999 1990 1991 1992 1993 1994 1995

1eports/lDP 10.7X 11.1? 11.92 12.72 12.9? 13.02 13.01 12.91 12.8X 12.71 12.5? 12.4?Exportsl6DP 9.0? 9.32 10.12 10.21 10.61 10.89 10.91 11.1l 11.0X 10.92 10.61 10.5XLonsueption/GDP 95.12 95.3? 92.52 90.91 88.12 96.9% 95.92 85.4? 85.12 84.72 84.42 84.12Total Investeent/6DP 7.,6 7.32 9.12 11.42 '4.3? 15.5? 16.2? 16.42 16.92 17.22 17.51 17.92

Source: Bank staff estmsates.

- 81 - ANNEX B

Page 6

6 H a N A: B A S I C E X P E N D I T U R E I N D I C A T 0 R S

(Adjustaent Fatigue Case; in 1984 Prices)

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

loports/6DP 10.71 11.12 11.81 12.71 11.8% 11.71 11.71 11.61 11.52 11.51 11.71 11.5%Exports/GDP 8.0X 9.31 10.1 10.2% 10.3% 10.3% 10.21 10.1% 9.9% 9.8X 9.7% 9.5%Consueption/6DP 95.1% 94.5% 92.5% 90.9% 93.41 93.11 92.9% 92.51 92.4% 92.6% 92.71 92.51Total Investment/lDP 7.61 7.3% 9.1% 11.6% 8.0% 8.3% 8.bZ 9.0% 9.22 9.1Z 9.31 9.5%

Source: Bank staff estioates.

- 82 -

ANNEX BPage 7

6 H A N B 8 A L A N C E O F P A YM E N T S…._ ------------------------

(Continued Reforo Casi. .lillions of Current US$)

Category 1984 1985 1986 1987 1988 1909 1990 1991 1992 1993 1994 1995- -- -. - - - - - - - - -

Exports 604 671 BIB 832 898 975 1047 1154 1241 1333 1429 1528Merchandise (fob) 566 632 773 777 845 920 992 1096 1179 1267 1357 1453Non-Factor Services 38 39 45 55 53 55 55 58 62 66 70 75

Ioports 810 876 955 1100 1210 1309 1409 1516 1630 1750 1867 2000Herchandise 'cif) 681 727 780 891 985 1072 1159 1253 1353 1458 1560 1676Non-Factor Services 129 149 175 209 225 237 250 263 277 292 307 324

Resource Balance -206 -204 -137 -268 -312 -335 -362 -362 -399 -416 -440 -472

Factor Payoents (Net) -81 -111 -105 -113 -125 -125 -118 -113 -107 -108 -113 -119of which: Interest -79 -108 -101 -108 -121 -121 -118 -113 -106 -105 -107 -110

Net Transfers 73 32 49 50 80 120 140 150 161 172 194 199

Current Balance -215 -283 -193 -331 -357 -340 -339 -326 -335 -352 -368 -393

Capital Account 94 166 131 439 478 446 401 413 440 440 422 434Grants 141 93 115 161 157 194 215 213 206 198 192 195Official MLT 70 32 99 252 235 211 195 191 209 209 206 209Disbursesents 211 287 358 418 425 396 365 360 363 369 379 394Amortization -141 -255 -259 -166 -190 -185 -170 -169 -155 -160 -172 -185

Private (Net) 4 5 18 24 38 21 -26 -11 4 12 4 12Other -121 36 -95 2 48 20 1o 20 21 21 19 18

Overall Balance -121 -117 -56 108 121 106 62 87 105 80 54 41

…-… -___ - - _ . - ------------------------------…- ------ __ ___-__-_-__ ,-_--… _ - _

Source: Bank staff estioates.

- 83 - ANNEX C

Page 1

A Brief Description of the Flow-of-Funds Model

1. A five sector flow-of-funds model is used to ensure consistencybetween the current and the capital accounts of the public, monetary andprivate sectors, the balance of payments, and the national accounts. Theapproach starts from the sectoral accounts and ends by consolidating theseinto two flow-of-flunds matrices, one for the current and one for thecapital accounts.

2. The public sector is an extended version of the budget. Itidentifies the foreign financed share of public investment while the budgetdoes not. Grants are included as a financing item. The eacimated costs ofthe planned retrenchment progr;n for the civil service are identifiedseparately. The treatment of the monetary sector is standard anddistinguishes between Net Foreign Assets and Net Domestic Credit to thepublic and private sectors as counterparts to the Money Supply. It alsoincludes a re-evaluation account which represents the adjustments to NetForeign Assets following an adjustment in the exchange rate. Treatment ofthe balance of payments is also standard. However, it differs from theofficial BOP in one respect. Public transfers are excluded from theCurrent Account definition and instead included in the Capital Account.The private sector is a residual account.

3. In the public sector account, total revenue and currentexpenditure represent budgeted values for the next three years. Within therecurrent expenditures, the major component are identified separately. Theallowed overall deficit is also known from the resources available tofinance it by the other sectors. From this, the model generates the totalvdlue of the capital expenditures which are composed of two parts. Thefirst one is the externally financed. Assumptions are made on foreign aidflows for the balance of payments which are reflected in the public sector.The second part is the domestically financed and is the residual in thissector.

4. A cocoa sector module estimates production based on the stock oftrees in Ghana, projected replanting rate, and an econometrically estimatedcocoa supply function. The function takes into account farmers' responseto changes in price and the impact of improved husbandry and diseasecontrol. Using this data and taking into account the planned reduction inthe costs of the Ghana Cocoa Board, the module also estimates Governmentreceipts from cocoa.

5. For the monetary sector, assumptions are made about the growthrate of money supply. They reflect the remonetization of the economy aswell as the increa'e in nominal GDP. The changes in net foreign assets arederived from the balance of payment forecasts and ret domestic credit is aresidual. In this model, credit to the public sector is fixed, leavingcredit to the private sector as the final residual.

- 84 -

Page 2

6. The balance of payments is derived frcm projections made in theBank's Revised Minimum Standard Model (RMSM). it also includes thosevariables which are needed in other accounts such as exports, imports andtransfers for the national accounts. Assumptions on the exchange rate haveto be made to convert dollar denominated aid flows into local currency.

7. For the national accounts, the values for GDP growth rates inreal terms are supplied by the RMSM, while assumptions are made for GDPdeflators. Real investments estimates are again provided by the RMSM, andusing public and private investment deflators, nominal investment figuresare projected. Since public consumption is derived frotm the public sectoraccount, private consumption becomes a residual.

8. The current account in the private sector is completely residualand includes State-owned Enterprises' accounts. In the capital accountsome assumptions on loans to the public sector are made. The remainingvalues are derived from other sectors.

ANNEOv C- 85 - Page 3

GHANAs Flow of Funds Framework

(Ratio to GDP at Current Market Prices)

TABLE 1. PUBLIC SECTOR BUDGET

1984 1985 1986 1987 1988 19H9

TOTAL REVENUE 8.0o. 10.4X 13.6b 16.1. 16.2% 16.5X_____________

Current Receipts 8.0X 10.4. 12.3X 15.4. 15.57. 15.1XDirect Taxes 1.5X 2.1. 2.8X 2.89 3.0X 3.07.Indirect Taxes 5.1% 6.5X 8.12 1 .1X 11.17. 10.7%Cocoa 1.4X 2.47 2.7% 4.3X 4.2X 3.67.Other 3.7X 4.17. 5.4X 6.9X 6.9X 6.97

Other Revenues (income & fees) 1.4Z 1.89 1.57 1.4% 1.4X 1.4Xmemos current rac. net of cocoa 6.67 8.07 10.97 11.87. 12.0X 12.7X

Additional Resources Mobilization 0.07 0.07 1.3X 0.7X 0.7% 1.4%New Measures 0.07 0.0X 1.3% 0.77. 0.7% 1.4XImprovements in Tax Admin. 0.0 0.07 0.0 0.07. 0.07 0.07.

TOTAL EXPENDITURES 11.87. 14.17 17.97 22.98 23.6X 24.4X

Current Expenditures 8.4X 10.3X 11.9% 12.97 12.7X 12.97.Wages and Salaries 1.9X. 3.92 5.1% 5.5 5.7X 5.8XOther Purchases of SDS 3.92 3.52 2.4% 2.62 2.87. 3.0XInterest Payments 1.3% 1.42 2.2X 2.77 2.37 2.27

To Banking Se'tor 0. X 0.0X 0.07 0.0% 0.07. 0.0%To Non Banking Sector 0.6O 1.2X 1.1X 1.0Z 0.8X 0.7XTo Rest of World 0.7X 0.17 1.22 1.7X 1.57 1.57

Subsidies 1.0t 1.1X 1.4X 1.4X 1.57 1.5XTransfers 0.47 0.5X 0.77 0.72 0.57 0.5X

Government to PrivateCapital Expenditures 3.62 3.82 5.92 9.2X 9.9X 10.87

Development Exper.iture 3.17 3.07 3.67 5.57 5.5X 6.67- Financed from Government and

Aid Counterpart Funds (1) 1.67 2.02 1.9% 2.92 2.9X 3.67- Project Aid Financed 1.42 1.07 1.72 2.67 2.67 3.0Z

Project Loans 0.52 0.5 0.92 0.87 0.97 1.07Project " ints 0.92 0.6b 0.92 1.82 1.7X 2.07

Net Lending 0.67 0.87 2.22 3.7X 4.4X 4.2XProject Aid Financed 0.32 0.37 1.72 2.9X 3.4% 3.27.Other (1) 0.37 0.67. 0.52 0.82 1.07% 1.07.

Special Efficiency 0.02 0.07 O.O 0.77 0.97 0.b7less Funds not included in Budget 0.22 0.07. 0.0 0.07. 0.0 0.0X

Current Account Savings (-) -0.4X 0.1X 1.7X 3.2Z. 3.5S 3.6XOverall Deficit (enlarged definition) -4.02 -3.87 -4.12 -6.62 -7.4X -7.9XOverall Deficit (budget definition) (1) -1.52 -2.07 0.17 0.22 -0.47 -0.37

Deficit Financing 4.07 3.82 4.17 6.67 7.42 7.9Xof which

DOmestic Financing 1.12 1.17 1.07 -0.62 0.47 0.52Private to Government (net) 0.52 0.32 0.67 0.37 0.47. 0. SMonetary to Gvt (net) 0.77 0.82 0.52 --0.9% 0.07. 0.0

Foreign Financing 2.9% 2.7X 3.1 7.2X 7.0X 7.42Loans 2.82 3.7 Z S.1X 7.57 8.4X 7.57.

Project loans 0.82 0.72 2.52 3.3X 4.0X 3.8XNon-Project loans 2.0w' 2.67 2.62 4.17 4.42 3.72

Concessional 1.3% 1.02 1.62 2.32 3.27 2.72of which, SAL 0.02 0.02 0.07. 1.57. 2.27 1.4X

Non-Concessional (oil) 0.77 1.67 1.02 1.87 1.27 0.97Srants 1.72 1.02 1.7X 3.52 3.17 3.7X

Project grants 0.97 0.62 0.97 2.22 2.07 2.47Non-Project grants 0.82 0.42 0.87 1.22 1.02 1.47

Repayments to rest of -1.67. -1.62 -3.7X -3.7X -4.44% -3.9XWorld

Note X (1) This corresponds to the present definition which oxcludesProject Aid Financed Expenditures

Source: Bank staff estimates.

-86- ANNEX CPage 4

GHANAt Flow of Funds Framewrk______________________________

(Ratio to GOP at Current Market Prices)

TABLE 2. PRIVATE SECTOR ACCOUNT(includes State Owned wntsrprises)

1984 1795 1986 1987 1999 19t9

Disposable Income 94.5X 92.12 89.3x 837.5 87.9s 99.12SOP at factor costs 95.92 94.67. 92.4x 99.72 89.82 89.7XTransfers, Government to Private 0.92 1.7X 1.72 2.4Z 2.2X 1.9%Transfrrs, Foreign to Private. 1.0 0.52 0.92 1.3S 2.02 2.9X- Direct Taxes 2.9s 3.92 4.62 4.42 4.52 4.7X- Nat Factor Payments 0.4% 0.82 1.2% 1.5t t.h% 1.5%

Uses of Disposable Income 94.5s 91.4x 99.62 87.12 94.92 87.52Private Consumption 89.4. 99.42 84.82 81.82 78.2% 74.2XPrivate Savings 5.12 3S0O 4.92 5.3% 8.72 11.22

Capital Sources 7.92 10.02 t1.4x 16.52 21.0% 2t.0XPrivate Savings 5.1% 3.02 4.8X 5.3% 8.72 11.22Compensation for retrenchment 0.0 0.0 0.0% 0.72 0.9X 0.6hLoans, Government to Private 0.6% 0.82 2.2% 3.72 4.4% 4.2%Loans, Monetary to Private 3.82 h.02 3.92 2.4% 2.0% 2.3%of whichs Cocoa 0.62 2.72 0.72 0.8% 0.4% 0.3%

Loans, Foreign to Private (net) -1.8x -0.42 -1.0% 3.6% 4.3% 1.92Direct Fo sign Investment 0.07 0.17. 0.17. 0.22 0.3% 0.5%Other Mos.atary Assets 0.0O 0.52 1.12 0.22 -0.22 -0.52Capital Grants, Foreign to Private 0.27 0.27 0.32 0.62 O.62 0.72

Capital Uses 7.92 1t0.0X 11.4% 16.5% 21.0% 21.02Private Investment 4.52 4.3X 6.72 11.4% 15.52 14.1%P + am 3.67 5.62 5.9% 4.5X 4.72 4.3%Loans, Private to Government 0.57 0.3X 0.67 0.32 0.42 0.52Other -0.62 -0.22 -1.72 0.12 0.3% 0.1%

Sources Bank staff estimates.

ANN=. C- 87 - Pa1ge 5

GHANAs Flow of Fundg Framework-- __--------------------------

(Ratio to GDP at Current Market Prices)

TABLE 3. MONETARY SECTOR - CAPITAL ACCOUNT ONLY-------------------------------------------------

FLOWS INs 1994 1995 1996 1987 1989 1909

TOTAL ASSETS 4.1X 5.92 7.3X 4.52 4.7X 4.32____________

Not Foreign Assets -1.62 -4.68 -16.02 2.82 3.0% 2.52

Net Domestic Assetts 4.52 7.3X 5.5% 1.82. 2.02 2.3XLoans, Monetary to Government 0.72 0.ex 0.5s -0.92 0.02 0.02Loans, Monetary to Private 3.82 6.0% 3.92 2.42 2.02 2.3X

Cocoa 0.62 2.72 0.72 0.62 0.42 0.3%Non-cocoa 3.32 3.32 3.32 1."2 1.62 2.12

Other items, not 0.02 0.5X 1.42 0.32 0.0% 0.02Long-term foreign liabilities

of development banks 0.02 0.0% -0.32 -0.22 -0.22 -0.52Revaluation Account 1.22 3.22 17.8 0.0 0.02 0.02

TOTAL LIABILITIES 4.12 5.92 7.32 4.52 4.72 4.32

N + WI 3.62 5.6x 5.9X 4.52 4.72 4.3XSDR allocations 0.62 0.22 1.42 0.02 0.02 0.02

STOCK at cloa of t

TOTAL ASSETS 14.22 16.22 19.12 19.9X 21.52 23.32

Not Foreign Assets -11.62 -13.12 -25.62 -17.82 -12.02 -8.22

Net Domestic Assets 14.72 18.02 18.62 16.72 15.92 15.82Loans, Monetary to Government i 8.92 7.32 5.92 3.82 3.2% 2.82Loans, Monetary to Private 6.42 10.62 11.72 11.8X 11.92 12.81

Cocoa 1.32 3.62 3.3X 3.42 3.3% 3.12Non-cocoa 5.12 7.02 8.42 9.42 9.72 9.72

Other items, not -0.62 0.12 1.42 1.52 1.32 1.12Long-term foreign liabilities

of development banks 0.02 0.02 -0.32 -0.42 -0.&2 -1.02Revaluation Losses 11.12 11.22 26.02 21.0X 17.7X 15.72

TOTAL LIABILITIES 14.2X )6.22 19.12 19.9X 21.51 23.32

M + am 13.02 15.1X 16.9X 18.12 20.0X 22.0XSDR allocationn 1.1% 1.12 2.2X 1.82 1.5S 1.32

Sourcas Bank staff Qetimates.

- 88 - ANX CGHANAs Flow of Funds Framework Page 6

(Ratio to GDP at Current Market Prices)

_______-______________________

TABLE 4. BALANCE OF PAYMENTS------------------------------ 1984 1985 1986 1987 1998 1989

Exports of Goods (fob) 7.5X 9.3X 14.97. 20.2Z 20.9% 21.4%Cocoa beans and products 5.1% 6.17 10.0X 12.47 12.1t 12.2XOther exports 2.4X 3.3X 4.9Z 7.9A 9.97 9.2%

Imports of Goodd (cif) -9.07 -10.71 -15.1X -23.2X -24.4X -25.07.Oi' -2.17 -2.9X -2.4X -3.9X -3.87 -3.77Non-os 1 -6.97 -7.8X -12.7Z -19.37 -20.67 -21.3%

Trade Balance -1.57 -1.47 -0.17 -3.0. -3.5X -3.67

Non-factor Services -1.27 -1.67 -2.57 -4.0X -4.3X -4.2%Receipts 0.57 0.6X 0.97 1.42 1.37 1.37.Payments 1.77 2.27 3.4X 5.42 5.67 5.5X

Resource Balance -2.7X -3.07 -2.67 -7.07 -7.7X -7.87

Net Factor Payments -1.1X -1.6X -2.0Z -2.92 -3.1t -2.9XInterest Payments -1.17 -1.67 -2.0X -2.8X -3.07. -2.ex

PuSlic -0.77 -0.97 -0.92 -1.42 -1.57 -1.57Private -0.12 -0.17 -0.0X -0.17 -0.27 -0.3XBanking -0.37 -0.7X -l.1X -1.3Y -1.3X -1.07

Factor Payments & other -0.07 -0.0X -0.1X -0.1X -0.17 -0.17Not Private Transfers 1.0. 0.57. 0.9X 1.37 2.07 2.87SIL 0.07. 0.0X 0.0Z 0.07. 0.0Z 0.0

Current Account Balance- Foreign Savings -2.87 -4.27 -3.7% -9.67. -9.82 -7.979

External Capita) Inflow -0.11 0.67 0.87 7.22 9.07 5.9XPublic Foreign Borrowings 0.9X 0.5X 1.9X 6.62 5.82 4.9X

NLT net 0.92 0.67 2.17 6.92 6.17 5.27Gross Inflows 2.87 4.27 6.97 10.92 10.57 9.27

Concessi anal 1.82 2.01 4.7X 6.97 7.7X 6.82of whichs SALs 0.07 0.0% 0.07 0.32 0.47 0.3XV

Non-concessional 1.07 2.22 2.27 3.9X 2.82 2.47.of which: oil 0.7X 1.7? 1.12 1.82 1.27 0.97

Amortization 1.92 3.7X 4.M2 4.02 4.4X 4.07Trust Fund -0.07 -0.1t -0.2% -0.3X -0.3X -0.3X

Private Foreign Borrowing(Net) 0.17. 0.t17 0.3X 0.67 0.97 0.52Direct Foreign Investment 0.0. 0.17 0.1t 0.27. 0.37. 0.5Short term Lorrowing(Incl.IDA sp. acct.) -1.17 0.27 -1.67 -0.17 0.97 0.07.

Transfers to Government 1.92 1.4X 2.22 4.27 3.9X 4.57of which s to private (incl. SOEu) 0.22 0.27 0.37 O.62 O.67 0.77

Errors & Omissions -0.57 0.27 -0.42 0.07 0.07. 0.0

Overall Balance -1.67 -1.77 -1.17 2.82 3.0X 2.57

Financing 1.67 1.7. 1t.1 -2.82 -4.37 -2.97Net use of IMF Resources 2.82 1.82 0.32 -O."7 -2.22 -0.77Changes in SWR Holdings 0.07 O.O 0.3Z 0.0 0.07. 0.07Foreign Exchange -0.37 0.2Z 0.3x 0.22 -0.42 -0.57Payment Arrears a/ -0.82 -0.87 -0.17 -0.77 -1.8. -1.72SXT Liabilities of SBW aj 0.0% 0.57 0.47 -1.17 0.02 O.OMedium-Term Liabilities of BO 0.07. 0.07 O.OX -0.97. 0.07. 0.0Bilateral Balances -0.1. 0.1X -0.2X 0.32 O.O 0.0.Residual Financing Sap -0.07 0.07 -0.0X 0.02 1.32 0.47

aI A major portion of arrears may constitute short termliabilities and therefor are intorchangoeablo.

Source: Bank staff estimates.

-89 - AINNEXCPage 7

GHANA: Flow of Funds Frammwork

(Ratio to GDP at Current Market Pricoo)

TADLE 5. NATIONAL ACCOUNTS 1984 1985 1986 1987 1980 1989

Real GDP growth 9.61 5.11 5.3X 5.0X a.3X 5.3XGDP deflator 3.51 31.2X 30.21 19.01 12.51 7.51Nominal GDP growth 12.41 37.91 37.11 23.91 18.51 13.21

GDP, market prices 100.02 100.01 100.01 100.0 100.01 100.01SUP, factor cost, 95.91 94.6Z 92.4X 99.71 89.89 99.7xIndirect Taxes 5.1X 6.51 9.11 11.71 11.61 11.82Subsidies (- 1.02 1.1 1.41 1.41 1.5S 1.51

Resource Gap -2.71 -3.01 -2.61 -7.01 -7.71 -7.81

Total ExpenditurGs 102.71 103.01 102.61 107.01 107.7X 107.91Consumption 95.11 95.71 92.31 89.61 E6.7t 95.01

Public Consumption 5.7X 7.4X 7.6% 9.0o 9.51 9.89Privato Consumption 89.41 99.41 94.9S 81.98 79.2x 76.21

Investment 7.61 7.31 10.3% 17.11 21.0X 22.v-.Budgetary Capital Expenditures 3.6X 3.8X 5.9X 9.21 9.9X 10.8XPrivate Investment 4.01 3.41 4.41 7.91 11.1 11.91

National Savings 4.7X 3.1X 6.61 9.51 12.21 14.92Public Savings -0.4X 0.12 1.71 3.21 3.51 3.62Private Savings 5.11 3.01 4.8X 5.31 8.71 11.21

Foreign Savings 2.82 4.21 3.7Z 8.61 8.89 7.91

Total Savings 7.61 7.3X 10.31 17.12 21.01 22.91

Sources Bank staff estioates.

ANNEX D-90- Page I

Ghana: Balance of Paysents

(in current US$ million)

1984 1985 1996 1987 1989 1989

Exports of Goods (fob) 566 632 773 777 945 920Cocoa beans and products 382 412 519 475 490 524Other exports 184 220 254 302 355 396loports of Goods (tif) -681 -727 -780 -891 -985 -1073Oil -161 -200 -125 -148 -153 -158Non-oil -520 -527 -655 -743 -832 -915

Trade Balance -115 -94 -7 -114 -140 -153

Non-factor Services -91 -110 -130 -154 -172 -182Receipts 39 39 45 55 53 55Payments 129 149 175 209 225 237

Resource Balance -206 -204 -137 -268 -312 -335

Net Factor Payments -81 -111 -105 -113 -125 -125Interest Payments -79 -108 -101 -109 -121 -121Publit -53 -59 -44 -54 -60 -63Private -5 -5 -2 -2 -9 -13Banking -21 -44 -55 -52 -51 -45

Factor Paysents & other -2 -3 -4 -5 -4 -4Net Private Transfers & SIL 73 32 49 50 80 120

Current Account BalanceForeign Savings -215 -283 -193 -331 -357 -340

External Capital Inflow 132 150 155 439 478 446Grants 141 93 115 162 157 194Public Foreign Borrowings 70 31 99 252 235 211lILT net 71 39 111 264 247 222

Gross Inflows 211 287 359 418 424 396Concessional 138 134 243 266 312 293Non-concessional 73 153 115 151 112 103

of which: oil 49 116 59 68 50 40Asortization 140 248 248 154 178 173

Trust Fund -1 -7 -11 -12 -12 -12Private Foreign Borrowing(Net) 4 5 1B 24 38 21Direct Foreign Investeent 2 6 4 6 12 20Short tern borrowing -85 15 -81 -5 36 0

Errors & Omissions -38 16 -18 0 0 0

Overall Balance -121 -117 -56 108 121 106

Financing Gap 0 0 0 0 56 17

Source: Bank of Ghana and Bank staff estimates.

- 91 - ANNEX D

Page 2

MERCHANDISE EXPORTS, 1983-89

(US$ million)

1983 1984 1985 1986 1987 1988 1989

COCOA (beans)Volume (MT) 159,280 149,574 171,747 198,335 210,000 224,000 240,000Unit Value ($/MT) 1,583 2,351 2,189 2,434 2,100 2,000 2,000Total Value ($ million) 252 352 376 483 441 448 480

COCOA (products)Volume (MT) 15,000 15,-z65 15,966 17,657 20000 2,OOO0 ?0,000Unit Value (S/MT) 1,573 1,967 2,254 2,06.2 1,700 2#1Cv 2,200Total Value (S million) 24 30 36 36 34 42 44

COCOA (Total)Volume (MT) 174,280 164,839 187,713 215,992 230,000 244,000 260,000Unit Value ($/MT) 1,582 2,315 2,195 2,403 2,065 2,008 2,015Total Value ($ million) 276 382 412 519 475 490 524

GOLDVolume ('000 fine oz.) 278 286 285 288 337 384 434AGC 250 255 249 290 320 344SGMC 36 30 39 47 64 90

Unit Value (S/fine oz,) 367 361 319 369 386 390 394Total Value ($ million) 102 103 91 106 130 150 171

DIAMONDSVolume ('000 carats) 439 425 640 565 678 785 785Unit Value (US cents/carat) 640 690 860 850 885 890 890Total Value 3 3 6 5 6 7 7

MANGANESEVolume ('000 MT) 127 248 263 257 270 278 285Unit Value ($/MT) 39 34 34 32 33 32 35Total Value (5 million) 5 8 9 8 9 9 10

TIMBERVclume ('000 cu. meters) 103 126 247 354 375 434 477Unit Value ($/cu. meter) 142 167 113 135 144 150 155Toi.al Value 15 21 29 48 54 65 74

RESIDUAL OILVolume (MT) 112 124 199 204 200 200 200Unit Value ($/MT) 180 182 168 86 125 125 130Total Value ($/million) 20 23 33 18 )5 25 26

ELECTRICITYVolume (mn kwh) 624 1,700 2,500 2,750 3,025 3,025Unit Value ($/mn kwh) 31,971 21,798 19,600 19,636 19,835 19,835Total Value (S million) 12 20 35 49 54 60 60

OTHER GOODSVolume (Constant 1984 S) 6 17 18 20 33 40Unit Val'se 100 101 114 118 120 122Total Value (S million) 8 6 17 20 24 39 48

GRAND TOTAL 440 566 632 773 777 845 920

Source: Bank of Ghana for 1983-R6; World Bank Staff estimates for 1987-89.

Exports/GHCEMl

- 92 -ANNEX DPage 3

AID COMMITMENTS TO GHANA IN 1985 BY TYPE OF ASSISTANCE AND DONOR

(US$ millions)

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

CG Members

Canada 23.7 3.6 5.8 - 33.1 33.1France - 0.2 12.2 - 12.4 0.2Germany 3.7 - 9.7 - 13.4 -Italy 13.7 - - 2,1 15.8 2.1Japan 27.1 3.3 5.7 - 36.1 9.0Switzerland - - 9.1 - 9.1 9.1UK - - 9.9 1.4 11.3 11.3USA 2.2 11.2 - 3.6 17.0 6.0ADB/ADF 41.0 - 38.0 - 79.0BADEA - - 9.0 - 9.0 -EEC/EIB 18.9 2.9 - 3.7 25.5 25.5IFAD - - - - - _UNDP - - 4.0 4.0 4.0WFP _ 7.9 - - 7.9 7.9World Bank 100.0 - 87.0 - 187.0 -

Others

Australia - - - -

Brazil - - - -

CDC - - - 0.9 0.9 0.9China - - - - -Denmark - - 5.0 - 5.0 5.0India - - -

Korea - - - -

Kuwait Fund - - - - - -Netherlands - - 4.5 1.0 5.5 5.5OPEC 6.0 - - - 6.0 -Spain - - -

Saudi Fund 8.5 - - - 8.5NGOs - - - -

Total 244.8 29.1 195.9 16.7 486.5 119.6Bilateral 78.9 18.3 61.9 8.1 157.2 81.3Multilateral 165.9 10.8 134.0 8.6 319.3 38.3

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

Commitments/GHCEMl

- 93 - ANNEX DPage 4

AID COMMITMENTS TO GHANA IN 1986 BY TYPE OF ASSISTANCE AND DONOR

(US$ millions)

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

CG Members

Canada 11.2 a/ 8.3 3.6 - 23.1 18.0France 24.5 - - - 24.5 -Germany 5.6 - 8.3 9.7 23.6 11.7Italy - - - 1.0 1.0 1.0Japan 9.8 - 3.4 0.6 13.8 13.8Switzerland - - 6.1 - 6.1 6.1lK - - 23.0 3.3 26.3 26.3lJSA 1.0 10.3 - - 11.3 4.3ADB/ADF 29.0 - - - 29.0 -BADEA - - - - -

EEC/EIB 47.7 3.5 16.9 - 68.1 14.4IFAD _- - - -_UNDP - - 4.0 4.0 4.0WFP - 9.0 - - 9.0 9.0World Bank 24.5 - 68.5 - 93.0 -

Others

Australia - - - - -Brazil - - - -

CDC 24.4 - - - 24.4China _- - - -_Denmark - - - - - -India -- - - -Korea - - - - -

Kuwait Fund - - - - - -Netherlands - - 17.0 1.0 18.0 18.0OPEC - - - - -Spain - - - - -Saudi Fund 12.8 - - - 12.8 -NGOs 3.0 - - - 3.0 3.0

Total 193.5 31.1 146.8 19.6 391.0 129.6Bilateral 64.9 18.6 61.4 15.6 160.5 99.2Multilateral 128.6 12.5 85.4 4.0 230.5 30.4

Source: World Bank staff estimates based on information suppli;,d byMinistry of Finance and Economic Planning and Donors.

a/ Includes $6.2 million for Petro-Canada project.

Commitments/GHCEM1

- 94 - ANNEX DP&e 5

AID DISBURSEMENTS IN 1985 BY TYPE OF ASSISTANCE AND DONOR

(US$ millions)

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

CG Members

Canada 5.8 3.6 5.7 - 15.1 15.1France - 0.2 - - 0.2 0.2Germany 14.7 - - 3.7 18.4 4.6Italy - - - 2.1 2.1 2.1Japan 8.0 3.3 5.4 - 16.7 8.7Switzerland - - 3.9 - 3.9 3.9UK - 3.8 4.3 3.6 11.7 11.7USA 3.6 13.0 - - 16.6 6.0ADB/ADF 4.1 - 17.6 - 21.7 -BADEA - - - - - -EEC/EIB 11.3 3.5 - 1.7 16.5 13.1IFAD 2.0 - - - 2.0 -UNDP - - 4.0 4.0 4.0WFP - 14.0 - - 14.0 14.0World Bank 34.2 - 37.5 - 71.7 -

Others

Australia - - - -Brazil - - - -CDC - - - 0.9 0.9 0.9China _ _ _ _ _Denmark - - - - - -India -- - - -Korea - - - - - -Kuwait Fund -Netherlands - - 5.6 1.0 6.6 6.6OPEC -Spain _- - -Saudi Fund NGOs 2.0 - - - 2.0

Total 85.7 41.4 80.0 17.0 224.1 90.9Bilateral 32.1 23.9 24.9 10.4 91.3 58.9Multilateral 53.6 17.5 55.1 6.6 132.8 32.0

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

Disbursements/GHCEM1

- 95 - ANNEX DPage 6

AID DISBURSEMENTS IN 1986 BY TYPE OF ASSISTANCE AND DONOR

(US$ millions)

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

CG Members

Canada 6.5 3.6 3.5 - 13.6 13.6France Germany 16.5 - - 5.8 22.3 5.6Italy - - 1.0 1.0 1.0Japan 11.9 3.6 - 0.6 16.1 4.8Switzerland - - 8.8 - 8.8 8.8UK 0.9 - 17.4 2.9 21.2 21.2USA 2.5 10.0 - - 12.5 6.5ADB/ADF 18.0 - 1.8 0.5 20.3 -BADEAEEC/EIB 17.2 1.8 16.C 0.7 35.7 14.9IFAD 1.5 - - - 1.5 -UNDP - - 4.0 4.0 4.0WFP - 25.4 - - 25.4 25.4World Bank 44.0 - 121.6 - 165.6 -

Others

Australia - -

Brazil - - -CFTC - - - 0.9 0.9 0.9China - - -Denmark - - - - -

India - _Korea 0.3 - _ _ 0.3Kuwait Fund - - -Netherlands - - 4.6 0.5 5.1 5.1OPEC 0.2 - - - 0.2 -Spain _ _- -Saudi Fund - -IWGOs 3.0 - - - 3.0 3.0

Total 122.5 44.4 173.7 16.9 357.5 114.8Bilateral 38.6 19.0 34.3 10.8 102.7 66.6Multilateral 83.9 25.4 139.4 6.1 254.8 48.2

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

Disbursements/GHCEM1

- 96 -

GHANA: POLICIES & ISSUES OF STRUCTURAL ADJUSTMENT

STATISTICAL APPENDIX

1. Population and Employment

1.01 Population Estimates, 1970-851.02 Estimated Population by Age and Sex, 19861.03 Population and Density by Regions, 1960, 1970, 19841.04 Labor Force Estimates, 1980

2. National Accounts

2.01 National Income Estimates, 1970-852.02 GDP, By Kind of Economic Activity, Current 'rices, 1970-852.03 GDP, By Kind of Economic Activity, Constant 1975 Prices,

1970-862.04 Deflators of GDP, 1970-852.05 Expenditure on GNP in Purchasers' Value, Current Prices, 1970-852.06 Expenditure on GNP in Purchasers' Value, Constant 1975 Prices,

1970-842.07 Capital Transactions, Current Prices, 1970-842.08 Gross Capital Formation by Type of Good, Current Prices, 1970-84

3. Balance of Payments

3.01 Summary of Balance of Payments, 1979-863.02 Values of Total Exports by Country of Consignment, 1975-823.03 Imports by Section, 1970-823.04 Values of Imports by Country of Origin, 1975-823.05 Petroleum Imports, Exports, and Retail Prices, 1979-863.06 Index Numbers of Exports and Imports, 1970-83

4. External Debts

4.01 External Public Debt as of December 31, 19854.02 External Public Debt: Projections of Service Payments and

Disbursements based on Debt Outstanding as of December 31,1985

5. Public Finance

5.01 Summary of Central Government Finances, 1974/75-19855.02 Summary of Government Revenue and Grants, 1974/75-19855.03 Recurrent Expenditures, Functional Classification, 1974/75-19845.04 Economic Classification of Government Current Expenditures,

1975/76-1984

- 97 -

GHANA: OLICIES & ISSUES OF STRUCTJRAL ADJUSTMENT

STATISTICAL APPENDIX

5.05 Developmnnt Expenditures, Functional Classification,1974/75-1984

5.06 Central Government Debt: Domestic and Foreign, 1975-855.07 Central Government Debt: Domestic, 1975-85

6. Money and Credit

6.01 Summary Accounts of the Banking System, 1970-846.02 Consolidated Balance Sheet of the Banking System, 1970-856.03 Assets and Liabilities of the Bank of Ghana, 1970-856.04 Assets and Liabilities of Commercial Banks, 1970-856.05 Assets and Liabilities of Secondary Banks, 1975-856.06 Purpose-Wise Classification of Loans and Advances, 1970-856.07 Money Supply and Liquidity of the Public, 1970-856.08 Reserve Requirements: Commercial Banks, 1970-856.09 Reserve Requirements: Secondary Banks, 1970-856.10 Velocity Ratios, 1970-846.11 Interest Rates, 1970-86

7. Agricultural Sector

7.01 Cocoa Beau. Production, Consumption, Prices, Payments to Farmersand Export Receipts, 1974/75-1986/87

7.02 Purchases of Cocoa Beans by Regions, 1974/75-1985/867.03 World Production of Cocoa Beans, 1974/75-1984/857.04 Production of Important Crops, 1970-867.05 Area Under Important Crops, 1970-867.06 Yield of Important Crops, 1970-867.07 Domestic Catch of Fish, Imports and Consumption, 1970-857.08 Production of Timber, Veneer and Plywood, 1970-867.09 Distribution of Cocoa Proceeds Between Producer, the Ghana Cocoa

Board and the Government, 1974/75-1985/867.10 Operations of the Ghana Cocoa Board, 1975/76-1985/86

8. Industrial Sector

8.01 Mineral Production, 1970-868.02 Diamond Produc..tion, 1970-868.03 Gold Production, 1970-19858.04 Production of Some Selected Manufactured Commodities, 1975-858.05 Railway Traffic, 1970-85

- 98 -

GHANA: POLICIES & ISSUES OF STRUCTURAL ADJUSTMENT

STATISTICAL APPENDIX

9. Prices

9.01 Consumer Price Index Numbers, 1978-849.02 Monthly Consumer Price Indices, 1982-869.03 Wholesale Price Index Numbers, 1978-859.04 Index Numbers of Prime Building Costs, 1977-859.05 Average Wholesale Prices of Selected Agricultural Commodities,

1970-859.06 Average Retail Prices of Selected Commodities in Accra City,

1977-859.07 Monthly Earning per Employee in Establishments Employing 10 or

More Workers, 1975-839.08 Index Numbers of Employees' Earnings, 1970-85

TABLE 1.01: POPULATION ESTMIATES(IN THOUSANDS)

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985…----------------------------------------------------------------------------------------------------------------------------------------------

POPULATION 3559 9760 10020 10280 10550 10820 11100 11390 11690 11990 12206 12620

SOURCES: 1984-85 FROM QUARTERLY DIGEST OP STATISTICS, MARCH 19861975-83 IPRM QUARTERLY DIGEST OF STATISTICS, JUNE 1984, PP. 1.741970 FROM ECOWNOIC SURVEY 1975-76. PP. 2-3

TABLE 1.02 ESTIMATED POPULATION BY AGE-GROUP AND SEX(MID-YEAR 1986)(IN THOUSANDS)

AGE-GROUP MALE FEMALE TOTAL

0- 4 1,180 1,190 2,3705- 9 1,104 1,095 2,19910-14 780 740 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 21660-64 114 108 222 °65-69 72 70 143 070-74 64 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

TABLE 1.03. POPULATION AND DENSITY BY rEGIONS(POPULATION IN THOUSANDS)

1960 1970 1984

SQUARE NM POP. DENSITY POP. DENSITY POP. DENSITY

ALL REGIONS 238533 6726.8 28.2 8559.3 35.9 12205.6 51.2

WESTERN 23921 620.2 26.2 770.1 32.2 1116.9 46.7

CENTRAL 9826 751.4 76.5 890.1 90.6 1145.5 116.6

GREATER ACCRA 3425 541.9 158.2 903.4 263.8 1420.1 414.6

EASTERN 19323 1044.1 54.0 1209.8 62.6 1679.5 86.9

VOLTA 20570 777.3 37.8 947.3 46.1 1201.1 58.4

ASHANTI 24389 1109.1 45.5 1481.7 60.8 2089.7 85.7 0

BRONG AHAFO 39557 587.9 14.9 766.5 19.4 1179.4 29.8

NORTHERN 70384 531.6 7.6 727.6 10.3 1162.6 16.5

UPPER WEST 18476 288.7 15.6 319.9 17.3 439.2 23.8

UPPER EAST 8842 468.6 53.0 542.9 61.4 771.6 87.3

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

SOURCES: 1960, 1970, 1984 CENSUSES OF GHANAJUNE 1986 QUARTERLY DIGEST OF STATISTICS, P. 89.

TABLE 1.04: LABOR FORCE ESTIMATES(IN THOLSANDS)

1980

MALE FEMALE TOTAL

AGE GROUP 10-14 62 38 100

15-19 280 235 515

20-24 409 252 661

25-44 1078 760 1837

45-54 327 246 573

55-64 182 128 310

65+ 87 50 137

TOTAL 2424 1709 4133

SOURCES: IBRD, ILO

Table 2.01: National InCooe Esti atesKillions of Cedis

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985--------------------------------------------- __--------_---------____--------__------_-------------------_---------------------------------------__--------

Natlonal Incoem (M. Cadis)At Current Prvces 2077 4918 6100 10599 20213 27080 41159 70186 83598 178202 262160 349363At 1975 Prices 4918 4918 4718 4850 5321 5183 5171 4986 4607 4389 4759 -

Per Capita National Income (C)At Current Prices 216 493 595 1038 1916 2503 3708 6162 7151 14863 21331 27683At 1975 Prices 511 493 460 459 504 479 466 438 394 371 393 -

CDP #-rket Prices (M. Cedis)At Current Prices 2259 5283 6526 11163 20986 28231 42853 72626 86451 184038 270561 372982At 1975 Prices 5349 5283 5097 5212 5654 5512 5538 5344 4974 4747 5158 5420

Index of Nationarl ZncAt Current Prices 42 100 124 215 411 551 837 1427 1700 3623 5330 7103At 1975 Prices 100 100 96 99 108 105 105 101 94 89 97 -

IndX of Per Cap Nat. Inc.At Current Prices 44 100 121 210 388 507 752 1249 1450 3013 4324 5612 1At 1975 Prices 104 100 93 93 102 97 94 89 80 75 80 -

wInlda of GDP Market PricesAt Current Priees 42 100 124 215 411 551 837 1427 1700 3623 5330 7103At 1975 Prices 100 100 96 99 108 105 105 101 94 89 97 0

------------------------------- ___-----------__-----__------------------__---__-----------__-__-------------------------------------.-----------------__---

Sources: 1978-85 data are provided by Statistical Service, Accra.1975-77 data are from Quarterly Digest of Statistics, June 1984.1970 data are from Economic Survey 1972-74, pp. 4-5 oemgiaa from 1968 prices into 1975 prices usifg the 1971 data as basis.

Note: Data in 1984 and thereafter are provisional estiates.

Table 2.02: Gross Domnstic Products, By KLnd of Economic ActivityIn Producers' Values(Current Million Cedis)

-------------------------------------------------------------- __-------------__------------------------------_-----------_------____------_-_____-_------__

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

A. AGRICULTURE 1051 2518 3300 6274 12742 1692. 24820 38553 49572 109927 133232 153373Agriculture and Livestock 634 1567 2347 5 °- 10011 12858 19776 33538 44003 92047 110422 118026Cocoa Prod. Marketing 317 577 494 UZ4 1469 2294 2269 1197 639 10228 11138 18755Forestry and Logging 74 293 374 440 1002 1301 1805 2135 3235 5609 9300 11350Fishing 25 81 85 143 260 472 971 1663 1695 2044 2372 5241

S. iNDUSTRY 412 1109 1254 1768 2524 3466 5086 6653 5401 12199 28631 57651Mining and Quarrying 38 105 87 90 119 238 462 369 285 1944 3214 3739Manufacturing 258 736 858 1204 1813 2448 3346 4338 3117 7101 17306 40087Electrlcity and Water 23 33 48 53 74 122 223 456 513 358 2166 4045Construction 93 236 262 422 517 659 1055 1491 1486 2796 5945 9780

C. SERVSCES 705 1637 2003 3124 5717 7939 13202 27993 32740 62764 109068 162649Transport, Storage, Comm. 97 206 259 331 553 759 1130 2329 2568 7663 17451 27031Wholesale, Retail Trade 261 642 856 1294 2786 3994 7327 19074 22951 43120 76544 105944Fiancwe, Insurance, Business 122 276 314 471 648 1066 1314 1927 2621 3311 4676 7750Gov't and Other 225 513 574 1029 1731 2121 3430 4663 4601 8670 10398 21i23

SUB-TOTAL 2167 5264 6557 11167 20982 28330 43;08 73199 87712 184890 270931 373672Less Imputed Bank Charge 11 77 128 188 304 521 651 1207 1802 2259 2865 5476Import Duti-s 81 96 97 1,.5 308 422 397 634 541 1407 2494 4786

GMP at Market Prices 2259 5283 6526 11163 20986 28231 42853 72626 86451 184038 270561 372982

Percentage distribution

A. Agriculture 472 482 511 562 61S 60S 58X 532 572 602 49S 41XAgriculture and Livestock 282 302 362 451 48S 462 462 462 51X 50X 41X 322Cocoa Production. Marketing 142 11S 82 62 72 82 5 22 12 62 Al 5XForestry and Logging 3S 63 6S 4X 52 52 42 3S 4X 3X 32 32Fishing 12 22 1X 12 12 22 22 22 2X 1S 12 12

B. Industry 18S 212 192 16S 122 122 122 92 62 72 112 152Minlng and (harrying 22 22 12 12 12 12 12 1X 0X 12 1S 1XManufacturing ill 142 132 lX 9$ 92 8S 62 42 42 62 1llElectricity and Water 12 12 12 0X 0X 0X 1X 12 12 02 12 1ZConstruction 42 42 42 42 22 2X 22 22 22 22 22 32

C. Services 312 312 312 282 272 282 312 392 382 342 402 442Transport, Stcoag-, Comm. 42 42 42 32 32 32 3S 32 32 42 62 72Wholesale, Retail Trade 122 122 132 122 132 142 172 26X 27X 232 282 28XFinance, Insurance Business 52 52 5 42 32 42 32 3X 32 22 2X 21Gov't and Other 102 102 92 92 82 82 82 62 52 52 *2 62

Imputed Bank Charge 0X 1S 22 22 1X 22 22 22 22 12 12 ItImport Duties 42 22 1X 22 12 12 12 1X 12 12 1X 1S

Sources: 1978-85 data ,re from StatistLceal Service, Accra.1976-77 data are from QDS, June 1984, p. 751975 dat are from Economic Survey 1977-80, pp. 22-24.1970 data are from Economic Survey 1972-74, pp. 4-5.

Notes:1. 1968 prices were converted into 1975 prices usLng the 1971 data as a basis.2. Data for 1985 are provisional estimates.

Table 2.03: Gross Dmestic Products, By Lind of Economic ctxivityIn Producers' Values

(Constant 1975 Million Cedis)

1970 1975 1976 1977 1978 1479 1980 1981 1982 1983 198 1985 19S6

A. Agriculture 2712 2518 2477 2343 2789 2894 2957 2881 2724 2534 2780 2802 2951Agriculture and Livestock 1472 1567 1346 1376 1861 2015 2017 2001 1916 1763 2035 2001 2102Cocoa Production, Markoting 899 577 747 569 523 498 545 521 432 370 339 384 427Forestry and Logging 243 293 304 300 308 298 304 266 287 309 313 313 316Fishing J 81 81 98 6 84 92 93 89 92 9. 104 107

S. Industry 1033 1109 1080 1121 1040 892 895 752 624 550 599 707 752Minitg and Quarrying 130 105 100 90 84 73 71 66 61 52 59 66 66Manufacturing 679 736 704 724 701 583 575 464 369 328 370 452 483glectrieity and Water 16 33 37 37 32 38 43 48 44 41 39 47 51Construction 208 236 239 270 222 198 206 174 151 129 132 142 152

C. Services 1466 1637 1568 1778 1910 1806 1765 1824 1158 1798 1917 2064 2154Transport, Storage, CoCD. 156 206 168 191 181 191 166 177 179 192 217 2i8 249Wholesale, Retail Trade 629 642 595 607 588 609 556 545 489 463 510 557 591Finance. Insurance Business 302 276 294 330 360 358 372 389 401 415 453 495 514Gov't and Other 379 513 511 651 781 649 671 713 689 728 737 774 s8o

SUB_-OTAL S211 5264 5124 5242 5738 5592 5617 5457 5106 4S81 5296 5573 5857Less Imputed Bank Charge S8 77 112 137 176 169 160 166 166 177 191 2.6 223Import Duties 195 96 85 81 92 89 81 53 34 44 53 63 71

GDP Market Priees 5349 5283 5097 5212 5654 5512 5538 5344 4974 4747 5158 5420 5705

Real GMP Growth -12.4S -3 S 2.3X 8.5S -2.5 0.51 -3.51 -6.91 -4.62 8.62 5.11 5.31 -

Percentage diatribution

A. Agriculture S1S 482 491 452 49S 532 532 54S 552 532 542 522 522Agriculture and Livestock 282 30S 262 262 332 37X 362 372 392 371 392 371 372Cocoa Production. Marketing 17X 112 152 11S 92 92 102 101 92 8S 7' 72 372Forestry and Logging 52 61 62 62 52 52 52 52 62 62 62 62 71Fishing 1S 22 21 21 22 22 22 21 22 22 22 22 62

B. Industry 192 211 212 222 18S 162 162 142 132 122 122 132 132Mining and Quarrying 22 22 22 22 11 1S 1S 12 1S 1S 1X 1S 1XManufacturing 132 142 142 142 122 112 102 92 71 72 72 8X 82Electricity and Water 0X 12 12 12 2 12 12 1X 12 12 12 12 12ConstructLon 42 4S 51 52 42 42 42 32 3Z 32 32 32 32

C. Services 27X 312 312 34X 342 332 322 34X 352 382 372 382 381Transport, Storage, Corn. 3X 42 32 42 32 32 32 3 41 42 *2 4.2 l2Wholesale. Retail Trade 122 122 122 122 101 112 102 102 102 102 102 102 102Finance, Insurance- Business 62 52 62 62 6S 62 72 72 82 92 9S 92 92Gov't And Other 72 102 102 122 142 122 122 132 142 152 142 142 141

Les Imputed Bank Charge 2 12 22 32 3 32 31 31 32 42 42 42 42Import Duties 4S 22 22 22 22 22 12 I2 12 12 12 12 22

Sources: 1978-86 data are fr Statistical Service, Accrc.1976-77 data are fr QDS, June 1984, p. 75.1975 data are frm Economic Survey 1977-80, pp. 22-24.1970 data are from Economic Survey 1972-74, pp. 4-3.

Notes:1. 1968 prices were converted into 1975 prices using the 1971 data s a basis.2. Data for 1985 are provisional estimates, and those for 1986 are preliminary.

Table 2.04: Deflators of Gross Domestie Product (1975-100)

---------------------------------------------------------- __-----------------__---------------------------.,----------------------------__-----------------_

1970 1975 1976 1977 1978 1979 1980 1981 1982 198. 1984 1985---------------------------- _.-------------------------------------__--------__------------------------------------------------------------------__--------_

A. Agriculture 39 100 1337 268 4S7 585 839 1338 1820 4339 4793 5476Agriculture and Livestock 43 100 174 368 538 638 981 1677 2297 5222 5426 5899Coeoa Production, Marketing 35 100 66 l11 281 461 416 230 148 2762 3285 4887Forestry and Logging 28 100 123 147 325 437 595 802 1126 1818 2973 3622Flshing 32 100 106 146 271 560 1055 1789 1902 2219 2559 5049

S. Indus2t- 40 100 116 1S8 243 389 568 885 865 2220 4777 8158MinIng and Quarrying 29 100 87 99 142 326 652 562 469 3746 5457 5631Manufacturing 38 100 122 166 259 420 582 935 845 2166 4676 8879KlectricSty and Water 145 100 129 144 229 32G 520 947 1162 871 5611 8681Construction *5 100 109 156 233 333 512 857 988 2173 4514 6877

C. Services 48 100 128 176 299 440 748 1535 1863 3491 5690 7880Transport, Storage, Corm. 62 100 154 173 306 397 682 1316 1435 3991 8060 11348Vholoasle, Retail Trade 42 100 144 213 474 656 1318 3497 4695 9311 15006 19038FPirnce Insurance, Business 40 100 107 143 180 298 353 496 653 798 1032 1565Gov't and Other 59 100 112 158 222 327 511 654 668 1191 1410 2832

Less Iaputed Bank Charge 42 100 128 213 366 507 767 1341 1718 3788 5116 6706 0Ico-t Duties 19 100 114 137 173 309 *07 727 1085 1274 1497 2532GDP Market Prices 42 100 114 228 335 476 692 1192 1576 3212 4723 7560

…_-_______________________________________________________________________________________________________________________________________________________Sources: All figures calculated as the ratio of current to constant values.Notes: Data for 1982 and thereafter have been reviced.

Table 2.05: ExpendIture on Gross National Product in Purchasers' Values(Current Killion Cedis)

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

1. Private Final Consumption 1665 3873 5171 8655 17473 23464 35953 63333 77619 172140 243972 3132622. Govt. Final ConsumptLoan 290 689 799 1409 2371 2903 4784 6384 5603 10787 17050 336023. Gross Fized Cap. Formation 271 614 641 1032 1355 1899 2613 3430 3053 6922 18542 326894. Chage an Stocks 48 59 -62 186 66 -54 -203 -109 -133 -21 65 705. Exports of Goods and Sees 523 1023 1025 1171 1754 3170 3628 3454 2886 11238 21583 331856. Imports of Goods and Sees 539 974 1047 1289 2033 3150 3923 3866 2578 17028 28914 398267. GDP Purchasers' Values: 2259 5283 6526 11163 20986 28231 42853 72626 86451 1840X8 272298 3729828. Less Factor Income Paid AD 48 42 48 40 48 99 182 222 225 1640 2890 57699. Gross National Product: 2212 5241 6418 11123 20938 28132 42670 72404 86226 182398 269408 36721310. Less DeprciLatLon 134 323 378 525 724 1052 1512 2218 2628 4197 7248 1785011. Uatlonal Income: 2077 4918 6100 1059 20213 27080 41159 70186 83598 178202 262160 34936312. Net Current Transfers -2 51 31 67 122 201 219 228 227 2200 5136 742113. National Disposable Income 2075 4970 6131 10666 20336 27280 41378 70414 83824 180402 267295 35678414. Per Cap Nat Inca=e (Cedis) 216 493 595 1038 1916 2503 3708 6162 7151 14863 21331 27683

Percntage DLstribution

1. PrLvate Final Consumption 75S 741 80X 78X 831 832 842 872 902 94X 91S 85S o2. Gowt. Final Consumption 132 132 122 132 112 lOX lX 9x 62 62 62 92 .3. Gross Fixed Cap. Formatlon 121 121 102 92 62 72 62 52 42 42 72 924. Chang, in Stocks 22 1X -12 22 OX -O0 -O0 -02 -OX -02 OX OX5. Exports of Goods and Scas 241 20X 16X 1ll 82 II% 92 52 32 6X 8X 916. Less Imports of GNPS 241 192 162 122 1OX lX 92 5 3X 92 112 1127. GDP Purchasers' Values: 102X 1012 1O0X 1002 100l 1OO2 1OO2 1002 1002 1O01 1011 102S8. Less Factor Income Paid AD 22 it 12 O0 OX OX OX O0 OX 1X 12 229. Gross National Product: 1001 1002 1OOX 1002 1002 1002 1002 1002 1002 1002 1OO2 1OO210. Less Depreciation 61 62 62 52 3X 42 42 32 3X 22 3X 5X11. Nationsl Income: 942 942 942 951 972 961 96X 972 972 981 971 95212. Net Current Transfers -OX 1X O0 11 12 12 12 OX OX 1S 21 2213. National Disposable Income 942 952 952 96X 97X 972 97X 972 972 991 992 972

Sources : Information provided by the Statistical Service, Accra.

Table 2.06: Empenditure on Gross National Product Xn Purchasers Values(Millions of Constant 1975 Cedis)

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

In M11ions 1975 Codis: 1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984

1. Private Final Consumption 3941 3873 3714 3711 4124 4112 4253 3892 3382 3396 38682. Govt. Finl Cons.znption 687 689 705 907 1066 876 982 1136 1010 990 10133. Gross Flixed Cap Forzmation 643 614 576 691 S85 547 516 456 352 344 3914. Chung in Stocks 114 59 -46 82 20 -10 -26 -9 -8 -1 1S. Exports of Goods and Services 1239 1023 1074 806 771 758 655 597 688 486 4106. Less Ipacrts of GONS 1275 974 926 984 911 770 842 727 449 469 5267. GOP Pnrech4ers' Values: 5349 5283 5097 5212 5654 5512 5538 5344 4'74 4747 51588. LeaS Factor Income Paid AB 113 42 50 28 22 23 54 42 40 30 299. Grosa National Product: 5236 5241 5046 5185 5633 5489 5483 5302 4935 4717 512910. Leon Depreciation 318 323 328 334 312 306 312 316 328 329 36911. National Income: 4918 4918 4718 4850 5321 5183 5171 4986 4607 4389 475912. met Current Transfers -5 51 32 46 55 49 55 45 40 54 7013. National Disposable Income 4912 4970 4750 4897 5376 5233 5225 5030 4647 4442 482914. Per Cap Eat Incoea (Cedis) 511 493 460 459 504 479 466 438 394 371 393

PercentaGe Distribution1. Private Final ConsusetLcr 752 742 742 72X 731 75S 782 73X 692 722 7522. Govt. Final Ccnsutption 132 132 142 171 192 16X 18S 212 202 212 202 O3. Gross Fixed Cap Forsmtlon 122 122 112 132 10X 102 92 9S 7t 72 8S4. Change In Stocks 22 1X -12 21 OX -Ox -0 -OS -O0 -02 O05. Xuports of Goods nd Services 242 202 212 161 142 142 122 11X 16X 102 8x6. Loss Imports of GFS 242 192 182 192 16X 146 152 142 9X 102 1027. COP Purcha&ers' Values: 1022 1012 101X 1012 1002 1001 101X 1012 101X 1012 101S

.8. Less Factor In¢coe Paid AB 22 1S 12 12 OX 0 12 1X 12 1X 129. Gross National Product: 1002 1002 1002 1002 1002 1002 1002 100X 1OO2 lOX 110210. Leas Depreclation 62 62 72 62 6X 6e 62 62 72 72 7211. National Incao": 94X 942 932 942 942 942 942 942 932 932 93212. Net Current Transfers -02 12 1X 12 1X 1X 12 12 12 1X 1X13. National Disposable In¢o 942 952 942 942 952 951 952 952 942 942 942Sources---------------------------------------------,na----------Stat__------__-------st----------cal-------------Serv----------------ce.---------

Soures: 0 hn Statlsti¢aL Service.

Tabli 2.07t Capital Transactions(Current Million Cedis)

19t0 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984

1. Gross Savin8s 253 731 .540 1126 1216 19C4 2153 2915 3231 1671 13522

2. Depreciation 134 323 378 523 724 l0S2 1512 2218 262S 4197 11206

3. not SaVing 118 408 161 602 492 914 641 697 603 -2526 2316

4. Less Current Traow .tions -67 59 -39 -97 -205 122 -258 -406 3tO -5231 -508S

5. Statitical LDiS¢repancy 0 0 -0 0 0 0 0 0 0 0 a

6. Finance of Gross Cap. Formation 320 672 579 1218 1421 1844 2410 3321 2921 6902 18607

Gross Capital Formation:7. Iore s. in Stocks 48 59 -62 186 66 -54 -203 -109 -8 -21 65

S. Gross fixae Capital Ponation 271 614 641 1032 1355 1899 2613 3430 2929 6923 18542

9. Gross Capital Pormation 320 672 579 1218 1421 1844 2410 3321 2921 6902 18607------------------------------------------------------------------- __--------__------------------------------------------------------------------

Sources: QDS JAn 1986, p. 85 for data 1979-84.QDS, match 198. p. U2 for data 1978.Economic Surmvy 1976-76, p. 8 for data 1975

Hotc: Data for 1983 and 1984 are provisional and those for I078-82 are revised.

a-

Table 2.08: Grosg Capital Formation by Type of Good, 1970-84(Current Eillon Cedis)

1970 1975 1976 1977 1978 1979 1980 1991 1982 1983 1984------------------------------------------------------------------- __--------__--------------------_-__-------_--_________-----------------------

1. Buildings 118 296 246 459 593 966 1627 2277 2121 4750 104942. Other Construetion Works 35 92 137 208 209 169 216 325 322 349 10273. Lan Improvement 2 8 21 17 20 15 18 27 30 32 694. Tranport Equipment 24 93 98 122 222 366 349 365 283 871 34655. MachLnery Equlpmnt 93 125 140 226 311 382 403 437 297 920 34876. Gross Fixed Capita1 Fora tion 271 614 641 1032 1355 1899 2613 3430 3053 6922 18542

7. Change in Stocks 48 59 -62 186 66 -54 -203 -109 -133 -21 658. Gross Capital Pormntion 320 672 579 1218 1421 1844 2410 3321 2920 6901 186079. Les Depreciation 134 323 378 525 724 1052 1512 2218 2628 4197 1120610. Net Capital FormitLon: 185 349 201 694 697 792 898 1103 292 2704 7401

Sources: QOS, Ju 1986 p. 86 for data 1979-84.QDS, March 1986, p. 83 for data 1978.

Rota: Data for 1983-84 are provisional and those for 1978-82 are reviLed.

t

TABLE 3.01: GHANA: BALANCE OF PAYMENTS(tUSS Millions)

1979 1980 1981 1982 1983 1984 1985 1986------------------------------------------------------------------- __--------__------------------------------------

A. Merchandise 184 132 -310 10 -100 -115 -95 -7

Exports (f.o.b.) 1066 1104 711 641 439 566 632 773Imports (c.i.f.) -882 -972 -1021 -631 -539 -681 -727 -780

B. Non-Factor Services -95 -104 -113 -85 -65 -91 -110 -130Receipts 82 107 120 105 38 38 39 45Payments -177 -211 -233 -190 -103 -129 -149 -175Government (n.l.e.) -79 -84 -85 -66 -43 -39 -31 -70Travel -27 -33 -34 -26 -10 -12 -10 -11Other -70 -94 -114 -98 -50 -79 -107 -94

C. Resource Balance (A+B) 89 28 -423 -75 -165 -206 -204 -137

D. Met Factor Income -46 -80 -81 -82 -82 -81 -111 -105Receipts 2 2 1 2 0 2 2 1Payments -48 -82 -82 -84 -82 -83 -113 -105Interest payments -48 -82 -82 -84 -82 -82 -108 -101

E. Private Transfer (net) -3 -3 -4 -1 17 73 33 49

F. Current Account Balance (C+D+E) 40 -55 -508 -158 -230 -215 -283 -193

Financed by:Grants (Official Transfer) 82 83 87 84 72 141 93 115Official Long Term Loans(net) 108 96 49 16 15 131 108 213Disbursements 123 120 78 55 84 157 134 243Amortization -15 -24 -29 -39 -69 -26 -26 -30

Official Medium-Term Loans(ne -14 -13 42 97 13 -42 -70 -102Disbursements 0 0 49 103 68 54 153 115Amortization -14 -13 -7 -6 -55 -97 -222 -217

Trust Fund 34 0 0 0 0 -1 -7 -11Direct Foreign Investment -3 16 16 16 2 2 6 4Private Capital (net) -5 0 . -13 -5 12 -14 5 18Dlsbursements 0 0 4 4 42 7 9 24Amortization -5 0 -17 -9 -30 -21 -5 -6

SDR Allocation 14 14 14 0 0 0 0 0Capital n.e.s. -26 12 0 13 61 -85 15 -81Errors and Omissions -105 -141 63 -36 -187 -38 16 -18

G_ Net Capital Account 85 67 258 185 -13 94 165 138

H. Overall Balance (F-G) 125 12 -250 27 -243 -121 -117 -56

I. Monetary Movements -125 -12 2so -27 243 121 117 56FinancingIMF (net) 28 31 -12 -5 259 214 122 17Purchases - - - - 259 214 122 39

Repurchases - - -12 -5 0 0 0 -22Changes In SDR hRoldings -5 15 -6 -10 17 2 0 16Foreign Exchange -68 27 110 -44 0 -24 11 15Payments Arrears -75 -79 141 35 -34 -61 -24 19Bilateral Balances -5 -6 17 -3 1 -10 8 -9

Sourc----------------a--------of--------hana-------and------Ban---------__taff_-----------t-----------t------------

Source: Bank of Ghana and Bank staff estimates.

TABLE 3.02: Values of Total Exports by Country of Cousignmnat(Percentage distributlon)

ITEKS 1975 1976 1977 1978 1979 1980 1981 1982

AfricaNigeria 0.8 0.8 0.6 0.2 0.1 0.1 0.0 0.0

Gambia 0.0 0.0 0.6 0.1 0.0 0.0 0.0 0.0

Togo Republic 0.9 0.4 0.1 0.2 0.5 0.0 1.1 1.6

Senegal 0.0 0.0 0.4 0.0 0.0 0.0 0.0 0.0

Liberia 0.1 0.1 0.3 0.1 0.1 0.1 0.0 0.0

Upper Volta 0.1 0.2 0.1 0.1 0.0 0.0 0.0 0.0

Ivory Coast 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Egypt 0.8 0.3 0.4 0.: 0.2 0.4 0.4 0.3

Congo-Brzzaxi&llo 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0

Zaire Republic 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0

Total: 3.1 2.4 2.5 1.S 1.0 0.8 1.5 1.9

AmericaCanada 0.7 0.6 0.5 0.2 0.1 0.1 0.0 0.0

Argentina 0.9 0.4 0.0 0.1 0.0 0.0 0.0 0.0

United States 13.9 18.2 16.5 18.4 7.8 8.8 22.3 20.3

Total: 15.5 19.1 17.0 18.8 7.9 8.9 22.3 20.4

AsiaCALMa 1.9 1.3 1.7 2.0 1.9 3.1 1.2 2.8

None Kong 0.1 0.0 0.0 0.4 0.3 0.0 0.0 0.0

Malaysia 0.0 0.2 0.1 0.2 0.4 0.7 1.2 0.9

Japan 8.7 7.1 6.8 6.4 9.3 8.4 12.8 7.8

Total: 10.8 8.6 8.7 9.0 12.0 12.2 15.3 11.6

EurpUnited tingden 17.7 17.6 19.9 17.4 16.4 19.1 10.7 14.5

3elsigLILunx5*ourg 0.9 1.1 0.9 1.3 0.6 0.3 0.6 0.4

France 0.7 0.8 1.0 0.5 0.9 0.9 0.5 0.5

Italy 2.6 1.8 2.1 1.3 1.7 1.1 0.7 0.3

Yugoslavia 6.1 3.0 2.8 2.5 1.7 0.2 1.6 0.6

Rommais, 0.5 0.3 0.5 0.5 1.3 0.1 0.0 0.4

netherlands 12.5 14.1 15.7 20.2 16.5 16.4 12.7 16.4

Fod Rep Germany 10.1 10.2 9.3 9.5 10.4 6.8 9.0 9.9

Switzerland 10.4 8.7 7.8 6.2 7.9 17.4 18.1 16.8

u.s.S.R. 8.3 11. 11.0 11.1 21.4 15.8 7.0 6.3

Sv*d#.n 0.7 0.8 0.8 0.0 0.2 0.0 0.0 0.0

Total: 70.6 69.9 71.8 70.7 79.1 78.1 61.0 66.2

Orad Total: 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Sources: Quarterly Digest of Statistics, June 1986, pp. 63-64.

Quarterly Digest of Statistics, June 1972, pp. 19-20.

TABLE 3. 03: Zoert. by Sectlon(MIllin Ca dis)

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982------------------------------------------------------------------- __--------__--------------------------__-__-_--___-------------------_---_----__--------__--------

Total: 419000 445100 393293 525950 943706 909297 991691 1193312 1681777 2344174 310354 3484311 2781632

Food, Lve Aninals 79500 62600 72221 111734 140627 104936 118803 95568 143470 178433 241530 247310 276317Beverses, Tobacco 3900 4600 2342 4905 7109 6751 11587 11010 22472 27693 43046 29321 11560Crude raterials, Inedible 9400 12400 13244 22761 28670 27879 34305 45800 42551 48343 56881 63829 29939Minerals, Fuels, Lubricants 24400 27000 45297 46823 136543 150861 147962 206405 230892 483605 827418 1056169 990693Anlaals Vegetable Oils, Fats 3800 5200 3800 5200 3217 9933 11578 11305 28633 22452 28388 30796 9153Cheamcals 66900 71600 63897 91135 123341 126627 155910 159049 242807 377666 482703 413256 305176Nausfactured Goods Classified 100800 99400 68196 105804 221008 207876 187657 240071 287082 40337 380484 394851 299937Machinery, Transport Equipment 108100 131500 104294 111287 212380 228072 270638 343232 547562 768775 922818 950476 577511"iscellaneous Manufactured Articles 16400 19200 11310 14897 27698 28939 32320 40929 50368 62078 64512 120078 134170Co-od, Transact not Classified 5801 9604 7275 10581 10928 17402 20931 39943 85939 42200 55805 178225 147176

--------------------------------------------------------------- __------------__---------_-----------_--_-__-_____-__------____--_--_--------___------------__-__-----

Sources. Quarterly DLgest of Statistics, June 1986. p. 55.Economic Survey 1972-74, p. 33 for data 1970.

Table 3.04: Values of Iuports by Country of Origin(Percentage Distribution)

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

3975 1976 1977 1978 1979 1980 1981 1982-----------------------------------------------------------------.- __--------__------------------------------------

Africa 16.5 14.4 17.4 14.3 18.3 26.8 32.9 40.6

Asia 13.3 11.6 11.7 10.8 8.9 7.5 7.2 5.0

AmericaCanada 2.4 2.8 1.7 2.3 2.7 1.0 1.8 0.9Jamaica 1.4 1.4 0.4 3.3 2.4 3.2 4.6 2.4Argentina 0.0 0.3 0.2 0.0 0.3 0.2 0.4 0.5United States 18.4 17.8 16.4 12.4 11.5 12.9 11.9 16.1

Total: 22.2 21.2 18.7 18.0 16.9 17.3 18.7 19.9

EuropeUnited Kingdom 17.1 18.8 0.0 22.5 21.8 23.3 17.3 14.9Belgium/Luxembourg 2.0 1.7 0.1 1.3 1.8 1.2 0.9 2.1France 4.4 4.4 1.5 3.7 3.6 3.3 2.7 2.6Italy 3.0 2.9 2.9 4.8 4.2 2.5 2.5 2.9 -Yugoslavia 0.9 1.1 1.1 1.2 1.5 1.0 0.2 0.0Romania 0.2 0.5 0.8 1.1 0.3 0.5 0.0 0.3Fed Rep GCemany 13.0 16.5 15.4 14.8 14.3 10.1 11.5 7.0Svitzerland 1.4 1.7 3.0 5.7 3.3 1.2 1.6 1.1U.S.S.R. 1.2 1.1 2.6 0.5 0.4 0.0 0.0 0.1Sweden 1.2 1.0 1.0 1.1 0.5 0.6 0.4 0.3Netherlands 3.1 2.6 2.2 2.9 2.7 3.0 3.4 1.7Denmark 0.6 0.7 0.6 1.1 0.5 0.4 0.3 0.2Norvay 3.8 3.2 2.4 1.9 1.0 0.4 0.4 1.3

Total: 51.8 56.2 54.5 62.5 55.9 48.4 41.2 34.5

Grand Total: 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

----------------------------------------------------------..----- __----------__-------------------------------------

Sources: Quarterly Digest of Statistics, June 1986, pp. 61-61.Economic Survey 1972-74, p. 42.

TABLE 3.05: PESROLEUM IMPORTS, EXPORTS, AND PRICES

1979 1980 1981 1982 1983 1984 1985 1986

Imports (FOB):Volume ('000 Tons) 1220 1016 870 1189 511 884 949Value (US$ Millions) 131 227 344 217 204 211 199 123

Exports (FOB):Volume ('000 Tons) 238 237 224 239 112 124 199 204Value (USS Millions) 21 30 34 34 20 23 33 18

Net Imports (FOB):Volume ('000 Tons) 1082 779 646 950 404 740 710 -Value (US$ Millions) 110 197 310 183 164 160 166 105

Retail Prices(ceditimp. gallon): btSuper Gasoline 7.50 10.50 11.30 12.30 25.00 60.00 105.00 150.000Regular Gasoline 7.00 10.00 10.30 11.30 21.50 56.00 100.00 145.000Kerosene 3.50 5.00 5.50 3.00 13.20 35.00 55.00 80.000

Sources:1. Ghana National Petroleum Comany2. Ministry of Fuel and Power

xoteW.a. tl>rt volu¢es include small quantities of petroleum products imports.b. As of end-year.

TABUE 3.06: =NDEX NUEURS OF EXPOMRS AND IMPORTS(1968-100)

_______________________________,__________________________________ _______________________________________________________________________-----__-----------_____---------------

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983

Quantity Indices:Exports 128.6 61.3 73.7 66.8 55.1 56.4 59.1 48.7 40.1 38.2 39.5 40.7 46.0 32.6Imports - 86.1 44.5 53.0 71.5 62.0 59.7 62.0 51.4 39.1 39.9 45.0 25.8 18.4

Unit Value Indices:Exports - 109.3 126.1 176.7 274.1 297.7 286.1 433.7 449.7 536.5 651.9 420.2 319.6 2,013.5Imports - 134.6 175.8 197.2 272.1 311.1 359.2 419.5 475.3 564.4 686.3 682.2 663.0 4,196.7Terms of Trade - 81.2 71.7 89.6 100.7 95.5 79.6 103.4 94.6 95.1 95.0 61.6 48.2 48.2

SOURCES: QDS, JUNE 1986, P. 51 FOR DATA 1977-83ECOKcoC SURVEY 1977-80, PP 282, 290 FOR DATA 1970, 1975-76

0%

Table 4.01: GHANA

EXTERNAL PUBLIC DEST OUTSTANDING INCLUDING UNDISBURSED AS OF DEC 31, 1985

INCLUDES ONLY DEBT COMMITTED 000000 - DEC 31. 1985DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS

(IN THOUSANDS OF U.S. DOLLARS)

D E 8 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 CREDITSAUSTRALIA 24 - 24 24 6BRAZIL 10.035 - 10.635 - -EGYPT. ARAB REPUBLIC OF 72 - 72 72 19FRANCE 8,205 - 8.205 265 100GERMANY. FED.REP. OF 44.340 - 44,340 1.478 554tSRAEL 276 - 276 276 93ITALY 4,417 - 4,417 1S9 60JAPAN 10.001 - 10.681 343 131

NETHERLANDS 23.270 - 23,270 776 290NORWAY 1.33G - 1.356 44 18UNITED KIGDOM 30,043 - 30,043 996 376YUGOSLAVIA 7,263 - 7,263 - -

TOTAL SUPPLIERS CREDITS 140.582 - 140.582 4.433 1.644

CREDITOR TYPE FINANCIAL INSTITUTIONSINDIA 3,132 978 4,110 1.360 782

TOTAL FINANCIAL INSTITUTIONS 3.132 978 4.110 1.360 782

CREDITOR TYPE MULTILATERAL LOANSAFRICAN DEV. BAKK 26.907 43,061 69,968 380 302AFRICAN DEV. FUND 33.034 63.280 96,314 - -BADEA/ABEDA 11,866 107 11.973 - -EEC t§0oo0 11.500 26.600 - -EUROPEAN DEV.FUND 19.215 .76 19.91 - 94EUROPEAN INVEST BANK 1g,121 2.110 21.231 362 806IRD 122,488 8 122.496 - -IDA 251,459 319.476 570.935 - -IMF TRUST FUND 44,778 - 44.778 - -NIGERIA S67 2.678 3.245 - -OPEC SPECIAL FUND 21,440 - 21.440 195 50

TOTAL MULTILATERAL LOANS S5.87S 442.896 1.008.771 937 1.251

CREDITOR TYPE : BILATERAL LOANSBRAZIL 7,495 - 7,495 - -BULGARIA - 7.000 7,000 - -CANADA 59,457 355 59,812 718 241CHINA - 1.562 1.562 - -CZECHOSLOVAKIA 8.366 - 8.366 - -DENMARK 2,503 - 2.503 139 -FRANCE 2,550 - 2,550 S01 928

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 ARREARS

Table 4.01: GHANA (continued)

EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC 31, 1985

INCLUDES ONLY DEBT COMMITTED 000000 - DEC 31, 1985DEBT 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 BILATERAL LOANSGERMANY, FED.REP. OF 122,737 37.i20 i59,857 1.627 1,243%JAPAN 9.572 i9.797 29.369 - -KUVWAIT 36.279 - 36.279 761 -POLAND 7.303 - 7,303 - -SAUDI ARABIA 23,056 - 23.056 - -UNITED STATES 161,0S 8.131 169,146 1,305 1,782USSR 20,214 7,500 27.714 - 750

TOTAL BILATERAL LOANS 460,547 81,465 542.012 5.151 4.944

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 ARREARS

Table 4.01: GHANA (continued)

EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISOURSED AS OF DEC 31, 1985

INCLUDES ONLY DEBT COMMITTED 000000 - DEC 31, 198SDEBT 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

SUPPLIERS CREUITS 140,582 - 140.582 4,433 1.644FINANCIAL INSTITUTIONS 3.i32 978 4.110 1.360 782MULTILATERAL LOANS 565.875 442,896 1,008.771 937 i.251BILATERAL LOANS 460,547 81.465 542.012 5,151 4.944

TOTAL EXTERNAL DEBT 1.170,136 525.339 1,695,475 11.881 8,621

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 ARREARS

Table 4.02: GHANA

SERVICE PAYMENTS. COMMITMENTS. DISBURSEMENTS AND OUTSTANDING AMOUNTS OF EXTERNAL P DESTPROJECTIONS BASED ON DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC 31. 1985

INCLUDES ONLY DEBT COMMITTED 000000 - 198512DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS

(IN THOUSANDS OF U.S. DOLLARS)* * + TABLE TOTAL * * '

DATE DEBT OUTSTANOING AT T R A N S A C T I O N S D U R I N G P E R I OD OTHER CHANGESEND OF PERIOD

DISBURSED INCLUDING COMMIT- DISBURSE- S E q V I C E P A Y M E N T S CANCEL- ADJUST-ONLY . UNDISBURSED MENTS MENTS ------- ----------- : LATIONS ' - MENT **

PRINCIPAL INTEREST TOTAL(t) (2) (3) (4) (5) (6 : (7) (8) (9)

1980 1,099.467 1.5t3.106 t92,068 i71.072 65,554 28.356 93.9tO 1.157 -1981 1.11i.312 1t484.218 104,i77 111,842 28.225 24.944 53.169 82 -104.7581982 1.116,916 1.481,165 92.497 80.406 34.339 27.710 62.079 3.377 -57.8041983 1.132.176 1.459.156 104.559 123,348 61.041 38.616 99,657 74 -65.4531984 1.1t2.572 1.455.853 142.769 97.625 56.774 25.720 82.494 92 -89.2061985 1,170.136 1.695.475 275.288 118.983 57.136 24.650 81.786 1i0.470 129.940

* * * * * * THE FOLLOWING FIGURES ARE PROJECTED . * *

1986 1.266.923 1.617.413 - 174.852 66.185 32.520 98,705 - -11.8771987 1,333.029 1.550.628 - 132,890 66.780 31,852 98,632 - -51988 1.343.876 1.484.998 - 76.481 65.649 31.048 96.697 - 191989 1.329.317 1.419.485 - 50.953 65.513 30.045 95.558 - -1990 1.304.185 1.357.945 - 36,415 61.546 28,705 90.25i - 6 01991 1.269.390 1.298,307 - .14,844 59.643 27.098 86.741 - 51992 1.227.623 1.240.471 16.066 57.831 25.298 83.129 - -51993 1.183.512 t1.87.339 - 9.022 53.138 23.306 76.444 - 61994 1.130.452 1.130.896 - 3.383 56,446 2t.411 77.857 - 31995 1.072.737 1.072.747 - 435 58.i49 19.443 77.592 - -1996 1,013.433 1.013.443 - - 59.306 17.500 76.806 - 21997 955.014 955.024 - - 58.424 15.689 74.113 - 51998 904,592 904.602 - - 50.425 13.985 64.410 - 31999 854,843 854.853 - - 49.747 12,51S 62.262 - -22000 807,382 807.392 - - 47.458 11.055 58.513 - -32001 770.155 770.165 - - 37.224 9.912 47,136 - -32002 735.226 735.236 - - 34.924 9.132 44.056 - -S2003 700,161 700.171 - - 35.064 8.438 43.502 - -12004 665.036 665.046 - - 35.121 7.726 42.847 - -42005 630,441 630.451 - - 34,590 7.008 41.598 - -5

PROJECTED AMOUNTS IN THIS COLUMN ARE AMOUNTS EXCLUDED FROM PROJECTIONS BECAUSE OF UNKNOWN TERMS.

** THIS COLUMN SHOWS THE AMOUNT FF ARITHMETIC IMBALANCE IN THE AMOUNT OUTSTANDING INCLUDING UNDISBURSED FROM ONEPERIOD TO THE NEXT. THE MOST COMMON CAUSES OF IMBALANCES ARE CHANGES IN EXCHANGE RATES AND TRANSFERS OF DEBTSFROM ONE CATEGORY TO ANOTHER IN THE TABLE.

TALI 5. 01t SUM5 RY OF CENMRL COVERM FIAUnS(MILION CEDIS)

1974175 1975176 1976177 1977178 1978179 1979180 1980181 1981182 1982 1983 1984 1985

Total Revene and Grants 811 870 1152 1393 2578 2950 3279 4856 5254 10241 22641 40312Tax Revenue 728 765 1056 1252 2389 2747 2972 4381 4441 8459 17929 32130

TSaes on Income and Property 165 203 233 304 383 611 856 1341 1506 1780 4125 7993TSas on dometie goods and services 137 243 354 411 424 832 1555 2127 2147 1689 5562 8373Teaxs an International transactions 426 319 454 537 1583 1304 561 913 788 4990 8242 15764

Rkntax Renna 83 104 95 141 189 203 262 423 761 1725 3798 6562Grants 0 0 0 1 0 0 45 52 52 57 914 1620

Expendlture 1162 1439 1945 3018 4094 4672 7719 9529 8846 14755 26694 45765Recurrent 875 997 1308 2322 3335 4077 6329 8603 8029 13401 22700 38462

NaBs. and Salaries - - - - - - - - - 3800 5055 14524Development 286 441 637 695 760 595 1390 927 817 1354 3994 7303

Net Lending 126 273 250 276 247 115 267 174 374 420 791 2127

Current Account Deficit -65 -128 -156 -929 -756 -1127 -3050 -3747 -2775 -3160 -59 1850

Overall Sud4t Deficit -477 -842 -1043 1900 -1763 -1837 -4707 -4847 -3966 -4934 -4844 -7580

Flnancing 477 842 1043 1900 1763 1837 4707 4847 3966 4934 4844 7580Internal Loans 230 1060 941 1904 1045 1470 4225 4211 3718 3964 3028 4058

of whlch Banklng System 183 605 646 1437 419 380 3226 1673 434 2145 2437 3006External Loans (net) 3 -1 5 -6 -8 290 482 389 215 970 1816 3522Other Recelpts 244 -218 98 2 726 76 0 247 33 0 0 0

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

Sources:1. Ministry of Finance and Economic Planning and staff estimates.2. Quarterly Digest of Statistics, March 1984, p. 34.

TABLE 5. 02: SOURCES OF GOVERNMENT REVEIIUE AND GRANtTS(MIPLLIOM CEDIS)

174175 1975176 1976177 1977178 1978179 1979180 1980181 1981182 1982 1So3 1984 1985…------------------------------------------------------------------__--------__------------------------------------------------------------_-----__------

Total Revenue 810.5 869.8 1151.6 1392.1 2578.4 2949.9 3234.3 4803.3 5251.2 10184.3 21728.0 38691.0

Tax Revenue: 727.5 765.4 1056.3 1252.0 2389.0 2746.5 2972.1 4380.3 4440.7 8458.6 17931.0 32131.0

Taxes on Income, Profits 160.1 198.1 225.2 298.0 380.7 603.8 849.7 1328.6 1502.3 1777.9 4125.0 7451.0Cospanies 91.3 114.5 131.5 126.7 168.7 295.9 466.2 655.0 745.2 902.0 2402.0 4368.0

Individuals 68.8 83.6 103.7 171.3 212.0 307.9 383.5 673.6 747.9 864.0 1650.0 3083.0

Payroll Taxes 3.0 2.8 1.9 2.2 1.9 2.1 1.9 1.6 1.2 1.6 1.4 11.0

Taxes on Property 1.9 1.9 6.1 3.4 - - - 0.1 0.1 11.9 0.0 0.0Property Taxes - 0.2 4.1 1.6 - - - 0.1 0.1 0.0 0.0 0.0

Rental, Capital Gains 1.9 1.7 2.0 1.8 - 5.4 4.2 10.3 9.2 11.8 0.0 0.0

Taxes on Domestic Goods, Services 133.1 237.8 345.8 403.2 416.0 826.0 1548.1 2112.4 2079.9 1628.5 5620.0 8592.0

Sales, Purchase Tax 46.3 52.9 65.3 72.2 86.0 97.9 204.2 219.0 219.7 237.5 441.0 1175.6Select Excise on Goods 85.0 182.7 276.0 324.0 321.0 720.0 1320.9 1857.4 1860.2 1391.1 5121.0 7197.3Select Excise on Services 1.8 2.1 3.5 7.0 - - - - - - 53.0 219.4

Taxes on International Trade 426.0 319.3 453.8 537.1 1583.2 1303.6 561.0 912.6 789.4 4939.9 8241.7 15824.0Import Duties 139.5 131.7 177.3 240.8 3S54.8 361.2 438.9 776.6 685.8 1972.0 3159.0 6591.0Custom Duties 107.1 96.3 128.0 231.7 354.8 361.2 411.7 516.4 457.2 1481.0 2378.0 4630.0

Other IMport Duties Goods 32.4 35.4 49.3 9.1 . - - 27.2 260.2 228.6 491.0 781.0 1961.0Export Duties 286.5 187.6 276.5 285.9 1228.4 926.1 27.5 1.4 1.4 2934.3 4973.7 9172.0

Cocoa 279.7 179.8 269.0 278.1 1220.0 920.0 25.7 - - 2800.0 4509.0 8861.0Cdher Export Duties Goods 6.8 7.8 7.5 7.8 8.4 6.1 1.8 1.4 1.4 134.3 464.7 311.0

Other Taxes International Trade - - - 10.4 0.0 16.3 94.7 134.6 102.2 83.6 109.0 61.0Miscellaneous Taes 3.5 5.5 7.9 8.1 8.3 5.6 9.8 18.2 2.8 48.8 63.9 41.0

Business, Prof. Licences 0.9 2.7 0.7 1.5 1.0 1.0 4.0 10.8 - 17.6 8.8 -Stamp Taxes 0.7 1.2 1.5 1.5 1.1 0.0 2.7 3.5 2.8 6.2 7.7 41.0Motor Vehicles 1.S 1.1 5.0 4.2 4.7 3.9 - - - - - -Others 0.4 0.5 0.7 0.9 1.5 0.7 3.1 3.9 65.0 25.0 47.4 -

Non-Tax Revenue: 83.0 104.4 95.3 141.1 189.4 203.4 262.2 423.0 760.5 1725.7 3797.0 6560.0

Sale of Goods, Fees. etc. 15.2 11.8 24.2 26.1 26.0 44.4 43 4 55.1 - -

Property Income 64.4 86.1 67.2 109.5 158.4 145.0 202.5 - - - 3555.0 4147.2

From Public Enterprises 51.6 78.5 43.4 55.0 156.4 145.0 202.5 - - 3533.2 -Rents, Royalties, Interest 12.8 7.6 23.8 54.0 2.0 0.0 - - - - 17.0

Transfers from OT Level Govt. 0.8 0.0 0.1 1.0 2.0 1.1 - - - -

Other Non-Tax Revenue 2.6 6.6 3.8 4.5 5.0 14.0 16.3 - - 24.7 225.0 781.8

Foreign Grants 0.1 - - 1.0 - - 45.0 52.0 52.0 56.6 914.0 1620.0

Total Revenue and Grants: 810.6 869.8 1151.6 1393.1 2578.4 2949.9 3279.3 4855. 5253.2 10241.0 22642.0 40311.0

…______________________________________________________________________________

SOURCES: MINISTRY OF FINANCE AND ECONOMIC PLANNINGIMF REPORT SM/831161, JULY 1983, P. 90WORLD BANK REPORT NO. 3072GC. FEB 1981. P 26

NOTES: DATA FOR 1979180-1981/82, 1982-85 ARE PRELIMINARY ACTUALS

TABLE 5.03: RECURRET EXPENDITURES, FUNCTIONAL CLASSIFICATION(MILLION CEDIS)

------------------------------ ________-----------------------__--------------__------------------------------------------------------------__---

1974175 197576 1976177 1977178 1978179 1979180 1980181 1981/82 1982 1983 1984------------------------------------------------------------------- __--------__-----------------------------------------------------------------

A. General ServicesGeneral Administration 101.3 150.0 177.7 314.7 373.7 539.4 1265.1 965.2 1284.9 2829.4 4016.5Defense 88.6 86.0 80.3 129.3 189.6 124.6 356.6 490.1 438.8 647.9 1458.7Justice and Police 47.7 54.3 67.6 126.3 162.8 185.7 248.5 320.0 326.5 531.2 1149.2Total: 237.6 290.3 325.5 570.3 726.1 849.7 1870.2 1775.3 2050.2 4008.5 6624.4

B. Community ServicesRoads and Waterways 28.7 36.8 19.5 42.0 78.5 81.4 135.8 131.6 123.4 177.8 423.3Fire Protection, water Supplyand Sanitation 8.7 11.5 12.7 22.7 35.1 40.5 71.6 69.4 72.8 189.7 331.0

Other Comnity Services 12.4 14.5 16.4 35.9 31.8 43.7 79.7 85.4 80.5Total: 49.8 62.8 48.6 100.5 145.4 165.6 287.1 286.3 276.8 367.5 754.3

C. Social ServicesEducation 202.5 254.3 313.7 553.1 836.2 964.9 1253.8 1696.3 1703.7 2883.4 5251.0Health 77.2 86.9 116.8 203.7 289.8 278.2 429.9 501.4 485.7 586.6 2112.3Social Security, Welfare 75.9 93.8 78.2 63.1 132.3 242.0 378.2 316.2 738.4 618.3 1111.0Other Social Services 22.1 28.3 30.9 59.8 54.7 44.8 130.7 82.6 73.5 245.8 515.8

Total: 377.7 463.3 539.6 879.7 1313.1 1529.8 2192.6 2596.6 3001.3 4334.1 5990.1

D. Economic ServicesAgri. Non-Mineral Resources 53.8 70.1 125.7 343.6 342.9 487.0 721.4 803.1 827.6 1389.3 936.3Fuel and Power 0.5 0.5 0.6 5.9 2.1 1.8 4.2 2.7 2.7 18.5 32.9Other Mineral Resources,Manufacturing, Construction 24.2 26.8 27.5 50.9 69.2 82.2 108.0 101.1 104.3 213.4 487.7

Transport, Storage, Comm. 7.6 6.4 18.2 47.4 69.6 79.6 125.2 80.4 98.5 210.7 300.7Other Economic Services 0.1 4.4 2.2 2.5 4.3 3.2 4.4 4.3 4.1 492.0 360.1Total: 86.3 108.2 174.3 450,4 488.3 651.7 963.2 1011.5 1037.1 2323.9 2117.7

E. Unallocable ExpenditureGen Transfer to Local Govt. 23.3 31.3 43.6 79.7 112.0 154.4 214.6 274.1 308.7 463.6 708.6Other 74.1 100.4 176.7 241.5 513.7 725.5 1021.0 1973.3 2168.1 2204.0 3425.0* Total: 97.4 131.7 220.3 321.3 625.7 880.0 1236.2 2247.4 2476.8 2667.6 4133.6

Statistical Discrepancy 26.6 -58.9 -0.341 -0.035 35.985 -0.003 -219.946 685.469 -812.69 -300.6 79.9

Grand Total: 875.4 997.4 1308.0 2322.2 3334.5 4076.8 6329.3 8602.6 8029.4 13401.0 22700.0

…________________________,___________________________________________________________________________________________- - _____________.___________SOURCES: MINISTRY OF FINANCE AND ECONOMIC PLANNING

QUARTERLY DIGEST OF STATISTICS, JUNE 1986, PP 42-43.NOTES: DATA FOR 1979/80-1981/82, 1982-84 ARE PRELIMINARY ACTUALS

TAUSE 5.04: ECOXCMIC CLASSIFICATION OF GOVERNMENT CURRENT ECPUNDITURESOGELLION CED!S)

1975176 1976177 1977178 1978179 1979180 1980181 1981182 1982 1983 1984------------------------------------------------------------------ __---------__-----------------------------------------------------------------

Consaumption 767.3 857.7 1497.2 1806.7 2245.4 3867.8 4237.7 4461.3 7265.4 15631.9

Compensatlon of Emplo7ees 425.2 453.2 823.2 991.2 1249.6 2273.9 2301.1 2302.2 3743.2 5282.2

Other Goods and Services 314.6 364.6 597.9 746.7 930.9 1434.6 1837.7 2103.4 3423.9 10154.4ContingenciLes - - - - - - - -

Military Expenditure 17.8 24.9 12.4 46.1 39.3 122.4 60.2 13.5 19.0 111.3

Rent 9.7 15.0 63.7 22.7 25.6 36.9 38.7 40.2 79.3 84.0

Transfers 288.9 503.0 866.7 1171.5 1926.5 2476.9 3526.3 4A51.6 5816.0 7681.7

Domestic Sectors 184.2 316.9 620.2 679.8 1175.3 1429.1 1524.4 1959.3 3305.1 3891.6

Interest an General Debt 100.0 176.7 241.5 477.1 725.4 1021.6 1973.3 2168.1 2204.0 3425.0

Abroad 4.7 9.4 5.0 14.6 23.8 26.2 28.8 24.2 306.9 365.1

Statistical Discrepency -58.8 -52.7 -41.7 356.3 -95.1 -15.4 838.4 -583.3 319.6 -613.6

Total Current Expenditure "97.4 1308.0 2322.2 3334.5 4076.8 6329.3 8602.6 8029.4 13401.0 22700.0

Sources:1. 1979180-1984 frue Quarterly Digest of Statistics, arch 1986, pp. 37-38.2. 1975t76-1979180 fram Economic Survey 1977-80, p. 280.

TABLE 5.05: DEVELOPMENT EXPENDITURES, FUNCTI;)NAL CLASSIFICATION(MILLION CEDIS)

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

1974175 1975176 1976/77 1977178 1978179 1979/80 1980181 1981182 1982 1983 1984-------------------------------------------------------------------__--------__-----------------------------------------------------------------

A. General ServicesGeneral Adinistration 55.6 64.7 89.6 98.5 126.6 116.7 93.2 103.7 38.0 59.7 653.2Defense 0.5 6.1 32.0 27.6 34.9 50.2 131.5 97.2 25.0 25.0 146.5Justice and Police 6.0 10.8 13.5 17.3 20.1 5.4 20.1 9.2 10.7 15.4 26.8Total: 62.1 81.6 135.4 143.4 181.7 172.3 244.9 210.1 73.7 100.1 826.5

B. Comumity ServicesRoads and Watervays 36.8 74.6 130.1 150.5 123.0 104.4 244.1 209.1 261.3 739.5 1467.4Fire Protection, Water Supply

and Sanitatton 19.2 28.1 39.1 42.3 35.7 34.4 56.8 50.4 27.0 54.2 259.8Other Comvunity Services 4.6 7.8 13.0 13.1. 18.3 18.4 28.9 14.5 13.9Total: 60.6 110.5 182.2 205.9 177.0 157.2 329.8 274.1 302.1 793.7 1727.2

C. Social ServicesEducation 33.3 67.4 102.6 107.2 114.6 60.7 65.1 82.3 90.1 130.1 135.9iealth 18.2 31.1 42.2 53.4 62.6 47.1 62.9 48.1 53.0 60.3 158.1Social Security, Welfare 3.4 6.4 9.9 9.4 0.8 1.5 6.1 5.2 5.8 10.3 20.3Other Social Services 24.5 32.3 49.9 44.4 36.6 14.4 38.2 22.1 8.3 14.0 82.3

Total: 79.4 137.2 204.7 214.4 214.5 123.7 172.4 157.7 157.2 214.7 396.8

D. Economic ServicesAgri. Non-Mfneral Resources 22.4 36.8 66.5 82.8 133.0 84.1 220.2 166.4 134.9 147.3 384.3Fuel and Power 2.3 2.1 2.1 4.5 9.9 2.7 10.1 11.7 0.6 6.3 60.8Other Mineral ResourcesManufacturing. Construction 4.2 5.8 23.5 11.5 34.1 20.7 55.4 50.5 21.4 .38.2 176.2

Transport, Storage, Com. 5.4 5.2 16.2 16.3 22.0 13.5 119.2 50.9 22.1 35.7 216.0Other Economic Services 0.1 2.8 6.3 16.1 7.6 6.3 8.0 1.1 0.5 18.4 206.2Total: 34.4 52.7 114.6 131.1 206.4 129.4 413.0 280.6 179.6 245.9 1043.5

E. Unallocable ExpenditureGen Transfer to Local Govt. - - 0.3 0.7 16.2 12.0 10.0 4.5 4.8 - -Other - - - - - - - - 218.6 - -Total: - - 0.3 0.7 16.2 12.0 10.0 4.5 223.4

Statistical Discrepancy 49.6 59.2 0.0 -0.0 -36.0 -0.0 220.0 -0.1 -119.3 -0.4 -0.0

Grand Total: 286.1 441.2 637.2 695.4 759.8 594.7 1390.0 926.9 816.7 1354.0 3994.0

--------- _-----------------------------------_--------------_____-_--------____--------------------------__----------------------------------__-

SOURCES: MINISTRY OF FINANCE AND ECONOMIC PLANNINGQUARTERLY DIGEST OF STATISTICS, JUNE 1986, P. 43.

NOTES: DATA FOR 1979/80-1981/82, 1982-4 ARE PRELIMINARY ACTUALS

TABLE 5.06: CENTRAL GCOERNMENT DEBT: DOMESTIC AND FOREIGN(DOMESTIC DEBT. MILLION CEDIS, END JUNE)(FOREIGN DEBT, USS MILLION, END DECEMBER)

1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

Domestic Debt 1441.3 2245.6 3160.3 5136.0 6110.7 7621.1 11846.2 17487.7 29315.2 32907.9 36334.3Monetary Authorities 697.6 1225.7 1868.8 3308.4 3727.6 4080.7 7334.1 9155.6 16747.2 19880.7 21099.6Deposit Money Banks 104.0 191.4 333.2 561.3 822.9 1410.4 1604.0 3016.2 4894.2 4535.2 4660.4Soclal Security Fund 324.1 450.0 549.3 649.6 837.0 985.0 1270.0 1480.0 1951.0 2388.0 2522.5Non-Financial Private Sector 108.8 164.7 185.1 330.7 373.3 600.6 889.4 2551.9 3035.9 3365.1 3453.2Financial Intennediaries 76.9 106.6 126.9 151.4 219.3 367.0 570.0 1076.6 1763.8 1481.0 3139.1Public Enterprises 129.9 107.2 97.0 134.7 130.6 177.4 178.7 207.4 923.1 1257.9 1459.5

(Killions of US$, End December)Foreign Debt 688.4 667.4 750.1 819.1 930.4 1099.5 1111.3 1116.9 1132.2 1112.6 1170.1International Development Instit. 83.2 89.8 119.4 162.5 271.5 341.5 376.5 404.8 425.5 470.2 565.9

Foreign Govt. Otber Institutions 245.6 246.7 301.3 332.1 337.7 535.2 548.9 544.8 554.1 513.4 460.5Suppliers' Credits 202.0 330.9 329.4 324.5 321.2 222.8 185.9 167.3 152.5 125.9 140.6

________________________________________________________________________________________________________________________________________________---

Source: Bank of Ghana a'

TABLE 5.07: CENTRAL GOVERNMENT DEBT: DOMESTIC(MILLION CEDIS)

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

ITEMS 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985------------------------------------------------------------------- __--------__-----------------------------------------------------------------

By Holdings:Br'k of Ghana 589.9 1235.0 2255.3 4221.9 4184.2 5607.1 7334.1 9155.6 16747.2 19880.7 21099.6Ct*mercial Banks 102.8 208.0 4b4.1 532.9 891.2 1320.9 1603.9 3016.2 4894.2 4535.2 4660.4Secondary Banks 65.1 115.2 167.2 170.5 354.0 479.2 983.9 1763.8 1481.0 3139.1S.S.N.I.T. 477.1 584.5 723.5 873.0 1081.0 1270.0 1480.0 1951.0 2388.0 2522.5Private Sector 757.1 320.6 378.9 538.0 577.5 977.5 1159.0 2852.0 3959.0 4623.0 4912.7

Total Domestic Debt: 1267.9 2305.8 3758.0 6183.5 6696.4 9340.5 11846.2 17487.7 29315.2 32907.9 36334.3

By Type:A. Short Term

Ways and Means Advances - 50.0 0.0 200.0 270.0 659.5 659.5 613.8 1816.0 1800.0 1800.0Treasury Bills - 322.7 322.7 434.4 822.7 1110.7 1137.1 1787.0 3475.4 3475.4 3475.4Govt. Current Account - - - 345.1 33.4 294.2 - - - 859.4 2209.9

Sub-Total: - 372.7 322.7 979.5 1126.1 2064.4 1796.6 2400.8 5291.4 6134.8 7485.3B. Long Term

ICompulsory Stocks - 8.5 8.4 7.9 7.7 7.4 7.4 7.0 5.6 4.5 4.5Stocks and Bonds - 1888.7 3401.3 5160.5 5527.3 7233.6 10007.1 13786.0 22789.6 25652.4 27741.8C.M.B. Loans - 20.6 20.6 20.6 20.6 20.6 20.6 20.6 20.6 20.6 20.6Railway Loan - 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5Compensatory Savings - 6.8 6.5 6.5 6.2 6.0 6.0 6.0 6.0 6.0 6.0Others - - - - - - - - 1193.5 1081.1 1067.6

Sub-Total: - 1933.1 3445.3 5204.0 5570.3 7276.1 10049.6 15086.9 24023.8 26773.1 28849.0Total Short. Long Term: - 2305.8 3768.0 6183.5 6696.4 9340.5 11846.2 17487.7 29315.2 32907.9 36334.3

SOURCE: BANK OF GHANA, UPDATED DATA.ECONOMIC SURVEY 1977-80, P 216

NOTE: SUBTOTAL IN 1982 INCLUDES ALSO 1258.8 M CEDIS FROM OTHER LOANS.

TABLE 6.01 SUN>ARY ACC>UNTS OF THE BANXING SYSTEM(MILLION CEDIS END PERIOD)

----------------------------------------- _------------------------__-------_-__------------_-__---------------------------------_-__-----------__

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984------------------------------------------------------------------- __--------__------------------------------------------------___-_-------____-_

Net Foreign Assets: -S6.5 48.6 -157.0 -149.0 -898.0 -529.0 -358.0 -1159.0 -1023.0 -16676.0 -32903.0aenking System 44.0 188.2 76.0 111.0 407.0 608.0 477.0 24.0 238.0 4031.0 7683.0

Net rKF Position -47.0 -52.0 -52.0 -54.0 -123.0 -203.0 -119.0 -78.0 -59.0 -8403.0 -23388.0Post-1972 Payment Arrears - - -75.0 -92.0 -906.0 -713.0 -537.0 -955.0 -1051.0 -10399.0 -15402.0Pre-1972 Payment Arrears - - -71.0 -69.0 -160.0 -108.0 -75.0 -54.0 -54.0 -335.0 -392.0Participation Arrears - - -36.0 -46.0 -116.0 -112.0 -104.0 -97.0 -98.0 -1568.0 -1404.0

Not DometLe Assets: 313.7 1559.6 2106.0 3229.0 6056.0 6540.0 8416.0 13329.0 16008.0 22603.0 29843.0 4Claims on Gowernsent 294.2 902.5 1584.0 2780.0 4500.0 4906.0 6526.0 10655.0 11064.0 21059.0 22818.0Claims on Public Entities -12.0 100.6 124.0 141.0 234.0 290.0 400.0 441.0 527.0 813.0 676.0Cocoa FLnaneLnS 97.2 188.3 259.0 271.0 867.0 1340.0 1559.0 2950.0 5533.0 521.0 3484.0Claims on Non-Bank Fin. 7.2 72.2 77.0 85.0 79.0 74.0 73.0 99.0 129.0 200.0 897.0CLaims on Private Sector 127.1 865.3 395.0 572.0 751.0 79".0 943.0 1345.0 1362.0 2841.0 6231.0 4Net Other Assets -97.5 -69.3 -334.0 -619.0 -374.0 -869.0 -1085.0 -2161.0 -2826.0 -2831.0 -4261.0

Revaluation Account 16158.0 34716.0 O

Komne and Quasi Money (M2): 347.9 1368.4 1907.0 3038.0 5116.0 5944.0 7951.0 12031.0 14839.0 20497.0 28552.0 1MOney (MI) 237.1 990.9 1433.0 2386.0 4111.0 4682.0 6087.0 9415.0 11205.0 16411.0 23439.0Quast-MuOey 110.8 377.5 474.0 651.0 1005.0 1263.0 1864.0 2616.0 3634.0 4086.0 5113.0

SDR Allocation -11.8 41.9 42.0 42.0 42.0 68.0 108.0 146.0 146.0 1588.0 3106.0_________________________________________________________________________._______________________________________________________________________

SOURCES: BANK OF GEANAIMF REPORTS. 1973-83

NOTES: 1. FOR 1971-75, NET FOREIGN ASSETS VALUED AT 1 CEDI - SDR .718422. THE SERIES AFTER SEPTEMBER 1978 IS NOT STRICTLY ComPARABLE wITE

THAT OF THE PRECEDING PERIOD BECAUSE PRIOR DATA ON ARREARS PAYMENTSDID NOT INCLUDE ARREARS ON SERVICE PAYMENT.

3. EXCLUDES SECONDARY BANKS4. INCLUDES MAIZE FINANCING OF 127 MILLION CEDIS.

TABLE 6.02: CORSOLIDATED BALANCE S'I OF THE BANKING SYSTEM(MILLION CEDIS AT END PERIOD)

------------------------------------------------------------- _----____---_---__----------------------_.-----------------------------------------__--_------_

19 0 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985------------------------------------------------------------------- __--------__------------------------------------------------------------------__--------

Litabilities: 572.7 1745.3 2462.4 3903.9 6728.6 7766.6 9862.2 15393.0 18929.9 31628.8 39395.8 60589.71. Money Supply 305.4 1008.8 1430.2 2386.4 4088.4 4630.8 6058.4 9745.0 11439.5 18770.1 26643.3 43471.1

A. Currency with Public 150.7 485.6 706.9 1154.1 2101.7 2458.5 3521.3 6049.5 6957.2 10036.6 13943.2 21896.1B. Demand Deposit 154.8 323.2 723.3 1229.2 1986.7 2172.3 2537.1 3695.5 4482.3 8733.5 12700.1 21574.2

2. QuasL-Haney 121.2 377.5 472.0 651.2 1005.0 1262.3 1861.6 2613.5 3632.5 5553.4 7192.6 11565.0A. Savings Deposits 80.0 263:6 365.6 535.7 888.3 1165.1 1763.5 2547.1 3566.7 4985.9 6020.7 8832.2B. Time Deposits 41.2 103.9 106.4 115.6 116.7 99.2 98.1 66.5 65.8 567.5 1171.9 2732.8

3. Other Liabilities 146.1 359.0 560.3 866.3 1635.2 1873.5 1942.2 2621.6 3815.6 7305.3 5559.9 5553.6

Assets: 572.7 1745.3 2462.4 3903.9 6728.6 7766.6 9862.2 15393.0 18929.9 65646.1 39395.8 60589.71. Net Credit to GOVernment 291.8 938.7 1511.8 2709.8 4407.3 5108.5 6960.4 10949.6 11341.1 21794.1 16319.2 27566.2

A. By Banking System 258.8 964.5 1601.8 2801.4 4455.9 4808.0 6522.2 10499.1 10942.8 22057.9 24100.9 27566.21. By Bonk of Ghana 159.9 863.6 1412.4 2461.4 4087.9 4101.1 5452.9 8811.5 8183.9 16195.8 18551.8 20644.72. By Coaercial Banks 98.9 100.9 169.4 339.1 368.0 706.9 1069.3 1687.6 2758.9 5862.1 5549.1 6921.5 I

B. Net Use of IME Resources 33.0 -25.8 -90.0 -91.7 48.6 300.5 418.2 450.5 398.3 -263.8 -7781.7 -2. Credit to Rest of Public Sector 93.5 190.2 219.6 240.8 390.6 373.6 482.4 590.7 707.6 1406.7 2221.7 6120.5 r.

A. By Bank of Ghana 44.5 78.1 80.8 81.0 153.2 157.2 196.9 175.2 205.8 287.6 1080.1 2797.1 %OB. By Comercial Banks 49.0 112.1 13B.8 159.8 237.4 216.4 385.5 415.5 501.8 1119.1 1141.6 3323.4 1

3. Credit for Cocoa Financing 82.0 185.0 255.4 270.6 820.7 1340.0 1559.0 2949.7 5552.9 523.4 3579.5 14520.1A. By Benk of Ghana 70.0 85.0 105.0 90.0 560.0 1016.0 1328.6 2162.6 4937.1 115.0 3430.0 12515.6B. By Ca-rciel Banks 12.0 100.0 150.4 180.6 260.7 324.0 230.4 787.1 615.8 408.4 149.5 2004.5

4. Credit to the Private Sector 126.2 298.0 380.5 552.6 725.4 796.3 939.6 1341.6 1557.4 5248.9 11086.4 19798.6A. By Bank of Ghana - - - - - - - - - - - -B. By Comercial Banks 126.2 298.0 380.5 552.6 725.4 796.0 939.6 1341.6 1557.4 5248.9 11086.4 19798.6

5. Overseas Assts (Net) -20.8 133.5 95.1 130.1 384.6 148.2 -59.3 -438.6 -229.1 2562.6 6189.0 -7415.7A. With Banking System 26.7 187.2 76.0 110.9 406.6 564.6 475.6 16.9 172.4 3122.3 6647.1 7127.9

1. With Bank of Ghana 44.7 191.5 83.2 120.4 420.2 592.5 531.8 152.5 327.5 3365.5 7853.3 10398.32. With CoDmercial lanka -18.0 -4.3 -7.2 -9.5 -13.6 27.9 -56.2 -135.6 -155.1 -243.2 -1206.2 -3270.4

B. Net Use of XNF Credit -47.5 -53.7 19.1 19.1 -22.0 416.4 -534.9 -455.5 -401.5 -559.7 -458.1 -14543.6

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

SOURCE: BANK OF GHANA

NOTE: FIGURES FMR NET rMF ACCOUNTs HAVE BEEN REVISED FRCM FEB 1972TO REFLECT ADJUSTMENT IN THE EXCHANGE RATE OF THE CEDI IN FEB 1972.EXCL8DES SECONDARY BANKS

TABLE 6.03: ASSETS AND LIABILITIES OF THE BANK OF GHANA

(MILLION CEDIS AT END PERIOD)

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

Assets:Foreign Assets:

Total 76.4 197.6 120.2 223.8 733.4 802.7 547.8 554.9 576.4 6452.0 19549.8 31703.4Gold 5.7 7.8 7.8 8.7 13.9 14.7 47.3 132.5 134.2 2175.0 4584.2 2764.5

SDR Holdings - 11.4 10.9 14.7 35.6 48.8 7.9 25.0 51.6 70.0 2.4 1087.9

Foreign Currency Balance with Bank 5.0 113.4 62.1 170.4 587.4 632.5 391.3 336.1 348.0 3911.6 14028.6 26922.4

Foreign Securities 27.2 43.5 32.0 21.7 89.7 56.2 55.5 54.8 27.0 260.0 358.5 482.1

Other 38.5 21.5 7.4 8.3 6.8 50.5 45.8 6.5 9.6 35.5 576.1 446.5

Claims On Government:Total 208.5 902.2 1526.2 2539.8 4221.9 4211.4 5607.2 9369.0 10067.3 16734.2 19880.7 21633.8

Ghana Stocks 71.0 591.1 1075.0 2166.5 3613.9 3755.0 4637.5 7711.6 9167.2 13564.7 16665.8 16631.5

Treasury Bills 13.6 29.6 46.2 100.0 173.1 153.0 153.0 19.1 286.3 1353.6 555.5 14.6

Loans and Advances 84.8 117.7 291.2 293.6 545.1 303.4 953.8 1638.3 613.8 1816.0 2659.4 4987.7

Other 3.9 - - - - - - - - - - -

Claims on Public InstitutionsTotal 44.5 90.8 108.6 90.0 627.9 1093.6 1346.5 1191.5 5019.9 222.6 3556.4 12666.1 1

Bills Discounted 70.0 85.0 105.0 90.0 560.0 1016.0 770.0 1151.0 863.0 115.0 3430.0 12170.0 FF

Other - 5.8 3.6 _ 67.9 77.6 576.5 1093.1 4156.9 107.6 126.4 496.1 0

Claims on:Coocercial Banks - 3.0 4.5 7.5 9.0 6.0 6.0 22.8 22.7 22.1 23.1 22.1 1

Development Banks 2.1 72.2 77.2 78.0 76.2 73.6 78.0 70.8 100.3 212.1 930.6 2624.5Other Financial Institutions - - - - - - - - - - -

Other Assets: 177.7 241.9 221.0 2204.3 315.4 793.4 599.9 312.4 1642.7 17476.4 21563.4 23434.4

Total: 579.2 1507.7 2057.7 3142.9 5983.9 6980.7 8185.4 12574.0 17423.3 41119.6 65504.0 92084.3

Liabillties:Currency in Circulation:

Total 167.0 524.4 753.2 1331.0 2302.4 2624.4 3897.0 6552.0 7488.0 11435.0 16234.4 25326.5

Notes 159.0 510.3 737.2 1313.0 5372.4 2597.1 3857.4 6497.2 7400.0 11356.0 16159.6 24989.8

Coins 8.0 14.1 16.0 18.0 20.0 27.3 39.6 54.R 88.0 79.0 74.8 336.7

Deposits:Total 139.4 622.3 811.5 1092.1 2007.0 2635.9 2576.1 3631.6 6424.0 16341.4 18857.9 20191.9

Commercial Banks 60.8 325.9 452.8 567.9 1109.6 1423.1 1371.1 1989.9 2288.8 1307.4 2047.3 1732.7

Development Banks - 17.7 37.3 58.2 172.1 276.7 391.4 360.7 331.9 510.3 304.5 1725.8

Other Financial Institutions - 0.1 2.8 0.6 0.7 0.6 0.2 -0.4 - - - -

Public Institutions 3.8 10.7 4.2 52.1 27.1 22.5 55.5 25.0 102.0 539.0 135.9 784.S

Government 45.7 118.2 166.6 149.9 204.6 226.2 271.0 557.4 1884.0 538.0 1328.9 989.1

Special Deposits - 149.7 149.8 263.4 492.9 686.8 486.9 699.0 1817.3 13446.1 15041.3 14959.8

Foreign Liabilities 143.6 6.2 36.9 103.4 312.9 166.8 17.2 400.5 243.0 3910.0 19936.3 35484.7

Capital and Reserves 33.0 168.9 197.4 272.2 416.0 664.0 572.1 117.3 144.8 3943.5 5077.4 6656.9

Other Liabilities 11 125.3 185.9 258.7 244.2 855.6 889.6 1123.0 1872.2 3123.5 5490.3 5398.0 4060.4

Total Liabilities: 579.2 1507.7 2057.7 3142.9 5983.9 6980.7 8185.4 12573.6 17423.3 41120.0 65504.0 92084.4------------------------------------------------------------- __--------------__------------------------------------------------------------__--------------

Source: Bank of Ghana

11 Include rev luation.

TABLE 6.04: ASSETS AND LIABILITIES OF COCO9CIAL BANKS 11(MILLION CEDIS AT END PERIOD)

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

Cash Reserves:Total 87.9 371.5 506.7 710.5 1442.9 1664.0 1850.6 1950.9 3365.9 4341.0 5705.3 10857.5Ghana Currency 16.4 36.8 46.3 173.9 290.7 165.9 375.7 357.2 531.1 1046.0 1709.2 2778.9Balance at Bank of Ghana 71.5 332.7 460.4 536.6 1152.2 1498.1 1474.9 1593.7 2834.8 3295.0 3996.1 8078.6Foreign Assets 0.1 0.2 10.2 7.2 5.7 2.3 2.3 10.7 10.0 917.4 461.9 3208.6Claims on Government:

Sub Total 119.0 158.8 240.1 434.2 555.0 873.4 1300.6 1643.4 3030.3 4863.0 4433.8 5169.3Stocks and Bonds 67.4 116.0 189.2 322.3 408.2 489.2 711.2 1060.9 2041.1 3874.0 3306.9 3857.0Treasury Bills 51.6 42.8 50.9 111.9 146.2 384.2 589.4 582.5 989.2 989.0 1126.9 1312.3Claims on Public Institutions:Bills Discounted:

Sub Total 12.1 107.1 154.7 188.0 273.6 324.2 35.0 22.0 419.9 397.6 710.3 3137.0Cocoa Bills - 99.5 150.0 180.0 260.0 323.4 29.7 9.7 419.9 403.0 - 1594.0Other Bills - 7.6 4.7 8.0 13.6 0.8 5.3 12.3 - - 0.2 150.3Claims on Private Sector: 710.1 1392.7Loans end Advances 175.3 403.0 515.0 729.3 953.1 1012.5 1517.2 1888.1 2281.0 3636.1 5997.3 10496.7Other Assets 46.4 194.9 208.4 311.2 541.0 1125.6 909.1 1553.5 4060.6 4997.9 10661.9 7298.5

Total Assets: 440.8 1235.5 1635.1 2380.4 3771.3 5002.0 5614.8 7068.6 13167.7 19153.0 27970.5 40167.6

Private Sector Deposits:Total - 711.3 235.1 1350.0 2105.6 2579.3 3635.8 3895.6 6285.9 8416.3 11667.8 18117.5Denand Deposits 150.9 351.1 479.7 730.8 1126.3 1343.5 1795.9 1688.8 2671.5 4365.1 6563.0 9738.7Savings Deposits 80.0 260.0 362.6 531.3 886.3 1158.8 1758.4 2118.5 3561.3 3984.9 4777.5 6888.4Time Deposits 41.4 94.2 92.8 87.9 93.0 77.0 81.5 88.3 53.1 66.3 327.3 1490.4Public Sector Deposits:

Total - 160.8 217.8 406.7 675.4 542.1 305.4 453.7 1392.4 1145.0 2239.0 3526.8Demand Deposits - 137.5 199.2 388.2 660.5 529.0 294.1 438.9 1377.5 1111.9 2215.1 3501.4Savings Deposits - 3.6 3.0 4.4 4.7 4.3 5.1 6.0 5.4 3.7 5.1 5.9Time Deposits - 19.7 15.6 14.1 10.2 8.8 6.2 8.8 9.5 29.4 18.8 19.5

Government Deposits 21.2 57.9 68.7 93.0 185.1 180.0 241.7 304.7 272.9 552.5 601.3 989.4Foreign Liabilities 0.8 4.4 17.3 16.7 29.2 30.2 58.5 30.4 165.2 255.4 623.3 2298.4Credit from Bank of Ghana - - - - - - - - - - -

Paid-up Capital, Reserves 18.8 56.7 65.9 86.3 127.0 186.9 216.2 151.0 525.0 2085.0 3576.6 2337.8Other Liabilities 101.6 244.4 330.3 427.2 649.0 1483.5 1157.2 2188.9 4526.3 6698.8 9272.4 12897.7

Total Liabilities: 440.8 1235.5 1635.1 2380.4 3771.3 5002.0 5614.8 7068.6 13167.7 19153.0 27970.5 40167.6…------------------------------------------------------------__--------------__------------------------------------------------------------__--------------

SOURCE: BANK OF GRANA

1I EXCLUDES SECONDARY BANKS

TABLE 6.05: ASSETS AND LIABILITIES OF SECONDARY BANKS(MILLION CEDIS AT END PERIOD)

----------------------------------------------.------------------ __----------___-----_--_----------------

1975 1980 1981 1982 1983 1984 1985------------------------------------------------------------------- __--------__--------------------------

Assets:Cash on Band 3.6 93.7 104.4 229.6 355.1 2102.9 5316.2Balance vith Bsnk of ra-na 19.6 435.1 244.9 264.9 267.8 39.7 2524.4Balances Due By Other Banks 5.5 55.0 64.3 322.8 861.5 426.8 1108,0Treasury Bills 6.0 157.3 301.2 274.7 376.4 550.1 674.2Comercial Bills 11.1 0.0 19.1 0.3 4.5 - 40.0Loans and Advances 201.1 865.6 1355.3 1595.5 2787.3 5464.2 9832.8Investments:1. Securities 41.2 200.3 323.5 884.0 1235.1 1267.0 2589.22. Enterprises 10.3 30.8 32.7 44.7 53.3 129.7 198.3Other Assets 56.3 541.5 836.4 1288.2 2661.9 3799.3 2260.4

Total Assets: 354.7 2379.3 3281.8 4904.7 8602.9 13779.8 24543.5

Liabilities:Paid-up Capital and Reserves 56.4 243.8 289.3 357.9 526.5 818.5 1216.0Balances Due to Other Banks 3.1 100.7 23.0 35.2 164.0 138.9 519.0Borrovings From Other Banks 83.9 114.2 237.9 306.9 1353.5 2301.3 5467.7Deposits of Other Banks - - - - - - _Demand Deposits 52.4 687.3 911.1 1427.1 2733.4 3857.5 7641.7Savings Deposits 30.4 370.5 386.8 803.1 1003.5 1271.5 1937.9Time Deposits 54.7 247.3 291.6 398.1 474.6 850.5 1331.6Other Liabilities 73.8 615.5 942.1 1576.4 2297.4 4541.6 6429.6

Total Liabilities: 354.7 2379.3 3281.8 4904.7 8602.9 13779.8 24543.5------------------------------------------------------------- __--------------__-----_,-----------..-_____--

SOURCE: BANK OF GHANAQUARTERLY DIGEST OF STATISTICS, MARCH 1984, P 30.

TABLE 6.06: CLASSIrICATION OF LOANS AND ADVANCES 11 BY PURPOSE(MILLION CEDIS AT END PERIOD)

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

Conmercial Banks:

Agriculture, Forestry, Fishing 11.6 32.5 44.8 57.3 80.0 88.2 145.3 323.1 486.7 1105.4 2155.0 2897.4Mining and Quarrying 4.5 6.0 19.4 44.1 63.6 47.2 49.6 124.8 205.8 238.9 234.0 470.9Manufacturing 51.4 109.0 135.2 157.4 209.5 265.6 311.6 325.0 357.9 587.1 1366.8 2350.1Construction 16.2 44.5 58.2 90.9 141.6 160.0 168.4 241.0 309.0 411.5 716.2 959.6Electricity, Gas and Water 1.2 1.5 1.8 2.1 15.2 2.6 115.2 23.5 40.3 47.8 17.8 31.0Commere. and FLnance:Import Trade 32.8 33.9 31.7 25.5 46.1 30.0 25.5 40.2 37.0 78.2 275.4 778.8Export Trade 4.7 19.1 21.0 26.2 23.8 40.0 260.8 336.7 250.1 90.4 187.0 430.9Other 14.7 75.4 94.2 146.2 194.1 168.9 210.0 262.2 258.3 636.3 954.9 2363.2Transport and Cozausnications 6.3 42.9 50.2 69.1 87.8 125.5 147.6 188.5 176.1 215.2 345.7 663.9Services 21.9 19.7 31.0 40.9 54.3 58.4 53.9 93.1 81.8 166.1 306.0 578.4Miscellaneous 8.4 9.2 16.6 23.7 21.7 22.5 29.1 40.8 27.4 41.5 92.9 212.4

Total: 175.3 393.6 504.1 693.4 938.4 1009.0 1517.2 1999.6 2251.6 3618.5 6651.7 11736.3

Secondary Banks:

Agriculture, Forestrv, Fishing 11.5 72.0 89.4 92.0 185.0 219.5 267.1 346.6 615.2 907.5 1624.1 2310.5Mining and Quarrylng 4.5 7.2 10.6 20.0 24.4 24.1 11.7 26.9 37.2 183.7 263.5 489.3Manufacturing 51.9 27.2 36.9 61.9 121.0 147.0 171.0 303.7 277.3 781.5 1921.6 3696.3Construction 16.3 33.1 47.1 48.4 84.6 122.9 113.3 159.0 202.2 383.2 557.7 1058.2Electricity, Gas and Water 1.2 0.8 0.4 1.3 0.1 0.6 0.8 2.5 1.9 1.8 3.6 6.8Ccmerce and Finance:Import Trade 32.8 0.6 6.7 2.7 5.3 3.8 4.6 6.0 5.4 29.2 32.3 211.9Export Trade 4.7 0.0 1.7 1.8 8.7 3.8 8.6 92.9 13.0 8.1 0.4 59.1Other 14.7 22.4 14.8 20.0 58.7 47.9 42.1 54.2 35.1 47.5 220.1 457.1Transport and Ccammications 6.3 19.1 25.4 22.8 31.0 57.6 64.2 130.4 122.9 184.2 308.0 490.4Services 21.9 6.6 12.6 25.8 20.7 27.6 43.6 88.7 93.2 81.6 227.7 646.2Miscellaneous 8.5 1.4 10.7 22.7 28.3 30.0 49.0 101.4 68.6 85.7 185.0 238.5

Total: 174.3 190.4 256.2 319.3 567.9 684.9 776.3 1312.3 1471.8 2694.0 5344.0 9664.3

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

SOURCE: BRAK OF GEUUtQURTERLY DIGEST OF STATISTICS, MPUCE 1984. PP. 31-32.

11 EXCLUDES STAFF LOANS, UPAID INTEST, COCOA MARKEING ADVANCES, AND CONSORTIUM LOANS.

TABLE 6.07: M9ONEY SUPPLY AND LIQUIDITY OF THE PUBLIC(MILLION CEDIS AT END PERiOD)

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

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985------------------------------------------------------------------- __--------__---------------------------------------------------.--------------__--------

Money Supply:1. Currency in Non-Bank Sector 150.7 485.6 706.9 1157.1 2101.7 2458.5 3521.3 6049.5 6957.2 11435.0 13943.2 21896.92. Demand Deposits 154.7 523.2 723.3 1229.3 1986.7 2172.3 2537.1 3365.6 4482.3 6472.0 12700.1 21374.23. Money Supply (1+2) 305.4 1008.8 1430.2 2386.4 4088.4 4630.8 6058.4 9415.1 11439.5 16861.0 26643.3 43471.1

Saving.:Primary Commercial Banks4. Time Incl. Certificate Deposits 41.2 113.9 106.4 115.6 116.6 99.2 98.1 69.0 71.9 100.4 330.3 1510.9S. Savings Deposits 80.0 263.6 365.6 535.7 888.3 1163.1 1763.5 2545.6 3560.6 3983.6 4777.5 6894.3

Quasi-Money (4+5) 121.2 377.5 472.0 651.3 1004.9 1262.3 1861.6 2614.6 3632.5 4084.2 5107.8 8405.2Secondary Banks6. Time Deposits - - - 80.3 131.0 171.6 240.0 291.6 398.1 474.6 841.6 1221.97. Savings Deposits - - - 71.0 138.3 204.3 369.9 586.8 803.1 1003.5 1243.2 1937.9

Deposits:8. Other Financial Institutions 3.0 7.2 9.6 13.7 19.8 23.7 - u.4 - - - -9. Total (4+5+6+7+8) 134.8 476.2 601.9 816.3 1294.0 .661.9 2471.5 3493.4 4833.7 5562.1 7192.6 11565.0

Money and Quasi-Money 426.6 1386.3 1902.2 3037.7 5093.3 5893.1 7920.0 12029.7 15072.0 20945.0 31751.1 51876.3

Total (3+9): 440.2 1485.0 2032.1 3202.7 5382.4 6292.7 8529.9 12908.5 16273.2 22423.1 33835.9 55036.1

SOURCE: BANK OF GHANABANK OF GHANA, FEB 1983. P 2 FOR DATA 1981-82BANK OF GHANA, JUNE 1981, P 63 FOR DATA 1979-80BANK OF GHANA, JUNE 1980, P 65 FOR DATA 1977-78BANK OF GHANA, JUNE 1977, P 55 FOR DATA 1970-75

NOTES: 1. MONEY AND QUASI-MONEY EXCLUDING SECONDARY BANKS2. QUASI-MONEY INCLUDES ONLY TIME AND SAVINGS DEPOSITS

OF PRIMARY CO4MERC'AL BANKS

TABLE 6.08: RESEtVE REQUIREMENTS: COHMECIAL BANKS(MILLION CEDIS AT END PERIOD)

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

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

Reserve Requirements:Cash Reserves 68.2 373.0 477.0 705.0 1400.2 1723.2 2022.7 2563.0 2896.2 3129.6 4306.5 5339.0Other Liquid Reserves 101.9 151.3 217.6 402.5 448.7 849.3 1254.7 1966.4 3007.4 4850.5 4426.2 4582.2Total Reserves 170.1 524.3 694.5 1197.6 1848.9 2572.6 3277.4 4529.4 5903.6 7980.1 8732.7 9921.2

Deposits: 291.3 919.5 1203.6 1774.3 2823.8 3239.6 4060.0 5660.3 7638.2 10089.5 13658.8 21219.1

Percentage to Deposits:Cash Reserves:Mininmm Ratio ktequired 30.0 20.0 20.0 42.8 48.0 48.0 42.0 35.0 35.0 30.0 10.0 15.0Actual Ratio Returned 23.4 40.6 38.8 39.7 49.6 53.2 49.8 45.3 37.9 31.0 31.5 27.8

Other Liquid Reserves:Minis Ratio Required 20.0 20.0 20.0 25.0 40.0 40.0 25.0 25.0 25.0 25.0 35.0 25.0Actual Returned 35.0 16.4 17.7 22.7 15.9 26.2 30.9 34.7 39.4 48.1 32.4 30.3Total Reserves:

Ratio Required 50.0 40.0 40.0 67.8 88.0 88.0 67.0 60.0 60.0 55.0 45.0 40.0Actual Ratio Returned 58.4 57.0 56.4 62.4 65.5 79.4 80.7 80.0 77.3 79.1 63.9 58.1

SOURCE: BANK OF GHUMA

TABLE 6.09: RESERVE REQUIREX{ENS: SECONDARY BANKS(MILLION CEDIS AT END PERIOD)

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

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

Reserve Requirements:Cash Reserves - - - 85.6 234.1 370.1 526.9 603.0 635.6 1020.0 1045.1 2330.7Other Liquid Reserves 290.3 688.5 799.0 143.8 162.5 164.5 324.9 592.2 11._ 1488.3 1984.6 3817.4Total Reserves 271.4 613.8 640.8 229.4 396.6 534.7 851.8 1195.2 1805.7 2508.3 3029.7 6148.1

Deposits: 48.3 58.5 -62.0 360.0 624.9 331.7 1260.1 2179.4 2812.6 4243.5 6670.7 9986.4

Perceutage to Deposits:Cash Reserve:

Minimu Ratio Required 523.2 1022.6 1025.2 20.9 30.0 30.0 25.0 20.0 20.0 10.0 10.0 10.0Actual Ratio Returned 538.6 973.5 1047.3 23.7 37.5 27.8 41.8 27.7 22.6 24.0 15.7 23.3

Other Liquid Reserves:Minlm- Ratio Required 2259.3 5283.0 6526.2 25.0 40.0 40.0 25.0 25.0 25.0 35.0 35.0 30.0Actual Ratio Returned 47.8 41.9 48.1 40.0 26.0 12.4 25.8 27.2 41.6 35.1 29.7 38.2

Total Reserves:Ratio Required 2211.5 5241.2 6478.1 45.9 70.0 70.0 50.0 45.0 45.0 45.0 45.0 40.0Actual Ratio Returned - - - 63.7 63.5 40.2 67.6 54.9 64.2 59.1 45.4 61.5

SOURCE: RANK OF GHANA

TABLE 6.10: VELOCITY RATIOS(GDP, M, MI, M2 IN MILLION CEDIS)

1970 1975 1976 1977 1978 1979 1980 19;1 1982 1983 1984-------------------------------------------------------------------__--------__-------------------------------_-----------------------------------

Gross Dagstic Product (M.P.) 2259.3 5283.0 6526.2 11163.3 20986.1 28231.0 42853.0 7262C.0 86451.0 184038.0 270561.0

money (M) 284.0 781.0 1156.0 1736.0 3058.0 3970.0 :9.0 7536.0 9397.0 14738.0 20172.0

Quasi-May 112.0 347.0 426.0 530.0 854.0 1134.0 1644.0 1486.0 3201.0 3827.0 4493.0

NtWy and Quasi-Kocny (M2) 396.0 1138.0 1582.0 2286.0 3912.0 5104.0 7073.0 9022.0 12598.0 18565.0 24665.0

Ratio GDP I Ml 8.0 6.8 5.6 6.4 6.9 7.1 7.9 9.6 9.2 12.3 13.4

Ratio GDP I Hz 5.7 4.6 4.1 4.9 5.4 5.5 6.1 8.0 6.9 9.9 11.0--------------------------------------------------------------------__-------__------------------------------------------------------------------

Source: Bank of Chana

Note: HonY atnd Quasi-money are based on monthly svera$es and exclude secondary banks.

L&

TABLE 6.11: INTEtEST RATES(IN PERCENT AT END OF PERIOD)

------------------------------------------------------------------ __---------__-----------------------------------------------------------___-____---------__-----_---

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986

Bank of Ghana:Rate of Govt. Stocks From 4.0 5.0 5.0 5.0 5.0 5.0 5.0 19.5 5.0 5.0 5.0 5.0

To 6.5 8.0 8.0 8.0 13.5 13.5 13.5 19.5 10.5 19.5 19.5 19.5 -

Treasury Bill Rate 4.0 7.8 7.8 7.8 12.0 12.0 12.0 18.5 9.5 13.0 16.8 17.8 19.8

Other Advances 6.5 9.0 9.0 9.0 14.5 14.5 14.5 19.5 10.5 14.5 18.0 18.5 20.5

Bank Bate 5 5 8.0 8.0 8.0 13.5 13.5 13.5 19.5 10.5 14.5 18.0 18.5 20.5

Coamercial Bank Rates:Borrowing Rates:

FLied Deposits:3 Months 7.5 7.6 7.6 7.6 12.1 12.1 12.1 18.3 8.5 11.5 14.8 16.8 -

6 Months 2.8 7.9 7.9 7.9 12.4 12.4 12.4 18.5 8.5 11.5 15.0 17.0 19.0

12 Months 3.5 8.0 8.0 8.0 13.0 13.0 13.0 19.0 9.0 12.5 16.0 18.0 20.0

24 Months - - - - - - - - - - - 19.0 22.0

Savings Deposits 2.5 7.5 7.5 7.5 12.0 12.0 12.0 18.0 8.0 11.0 14.5 16.5 -

Bill Discount Rate From. 7.0 7.8 8.5 8.5 14.0 14.0 14.0 25.5 12.0 - - - 18.5

To: 10.0 8.5 8.5 8.5 14.5 14.5 14.5 25.5 12.0 - - 23.0 18.5

Lending Rates:Loans and Advances Secured by:Govervnnt Securities 6.5 10.5 10.5 10.5 16.5 16.5 16.5 25.5 12.0 16.5 16.5 20.5 -

Stocks in Trade 7.0 12.5 12.5 12.5 18.5 28.5 18.5 18.5 18.5 19.0 22.5 23.0

Inorvable Property Froa 7,0 11.5 11.5 11.5 17.5 17.5 17.5 17.5 17.5 14.5 16.5 23.0 -

To 10.0 12.5 12.5 12.5 18.5 18.5 18.5 18.5 18.5 14.5 16.5 23.0 -

Bank of Ghana Guarantees Fron - 11.5 11.5 10.5 15.0 15.0 15.0 15.0 15.0 16.5 20.0 20.5 -

To - 12.5 12.5 10.5 15.0 15.0 15.0 15.0 15.0 16.5 20.0 20.5 _

Other Froa 7.0 12.5 11.5 11.5 17.5 17.5 17.5 17.5 17.5 19.0 22.5 23.0 -

To 10.0 12.5 12.5 12.5 18.5 18.5 18.5 18.5 18.5 19.0 22.5 23.0 -

Unsecured Loans From 7.0 12.5 11.5 11.5 17.5 17.5 17.5 17.5 17.5 19.0 22.5 23.0 -

To 10.0 12.5 12.5 12.5 18.5 18.5 18.5 18.5 18.5 19.0 22.5 23.0 -

First Ghana Building Society:Saviags Rates Frao 8.5 5.0 5.0 5.0 5.0 8.0 8.0 8.0 6.0 6.0 8.0 _ _

To 8.5 5.5 5.5 5.5 5.5 8.5 8.5 8.5 6.0 6.0 8.0 - -

Lending Rate From 9.0 10.0 10.0 10.0 10.0 14.0 14.0 14.0 10.0 10.0 15.0 23.0 22.5

To - - - - - - - - - - - 23.0…--------------------------------------------______-------------------__---_-__----------_----------------------------_--------------------______---__-----__--------

Source: Bank of Ghana

TABLE ?.01: COCOKA BEAN PRODUCTION, CONSUMPTION, PRICES,PAYMENTS TO FARMERS AND EXPORT RECEIPTS

(QUANTITY IN THOUSAND TONS, VALUES IN MILLION CEDIS)

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

1974t75 1975176 1976177 1977/78 1978179 1979180 1980181 1981182 1982/83 1983184 1984185 1985186 1986187--------------------------------------------------------------- __------------__--------------------------------------------------------------__------------__-------

Production:Main Crop 365 382 305 263 250 282 255 216 177 154 165 205 -Mid Crop 8 12 14 8 1S 15 3 8 2 5 9 14 -Total 373 394 319 271 265 296 258 224 179 159 174 219 230

Consumption:Domestic It - - - - - 35 26 31 25 15 20 25 30Export 334 342 270 233 221 253 240 201 160 148 162 193 210

Export Receipts - - - 2423 2649 2541 1123 950 4828 12391 17628 40225 52869met Payments to Farmers 209 237 242 362 727 1186 1132 269" 2192 3230 5477 12876 21590

Prices In Cedis Per Ton:From Exports 1688 1526 2596 10399 11986 10043 4679 4726 30175 83723 96077 183676 229865To Farmer 2/ 561 602 758 1333 2743 4000 4000 120D0 12 20000 30000 56600 85500Remainder 1127 924 1838 9066 9243 6043 679 -7274 30163 63723 66077 127076 144365------------------------------------------------------------------- __ -------- __ ------------------------------------------------------------------ __ -------- __ -------

Sources: Ghana Cocoa Board.1985186 Data are provisional and those of 1986/87 are estimates.Data for 1977178-1882183 are from Table 3 of Paper on Cocoa Sector.

Notes:1. Includes changes ln stocks2. 1982/83-87/87 include only main crop.

TABLE 7.02: Purchases of Cocoa Beans by Re.ons(Ouantities in Thousand Tons, Values in Million Cedis)

--- ___.-------------------------------------------------------__-------------__-------------------------------------------------------------__-------------

1974175 1975176 1976177 1977178 1978179 1979180 1980181 1981182 1982183 1983184 1984185 1985186-------------------------------------------------------------- __-------------__------------------------------------------_------------------__-------------

1. AshantiMain Crop :Q. 106 120 99 87 82 98 91 69 55 46 43 52

Values 59 72 74 116 218 392 363 826 660 920 1290 2948

Mid Crop: Q. 2 2 4 38 32 35 26 31 1 1 - -

Values 1 2 4 4 20 9 3 24 6 30 - -

Sub-Total. : Q. 108 122 103 125 114 133 117 100 56 47 - -

Values 60 73 78 119 238 401 366 849 666 950 - -

2. DonogAhaafoMain Crop :Q. 79 85 75 68 468 73 47 49 35 29 28 35

Values 44 51 56 91 129 292 188 584 420 580 840 2003

Mid Crop .Q. 1 2 2 1 2 2 1 1 0 1 - -

:Values 1 1 2 2 8 8 2 13 0 30 - -

Sub-Total : Q. 80 87 77 70 50 75 48 S0 35 30 - -

Values 45 52 58 93 137 300 190 597 420 610 - -

3. EasternMain Crop :Q. 69 65 48 39 47 41 46 34 31 25 27 32

Values 39 39 36 53 125 165 184 410 372 500 810 1798

Mid Crop :Q. 2 3 4 2 3 4 1 3 0 1 _ _

:Values 1 2 4 2 14 15 3 33 0 30 - -

Sub-Total : Q. 71 68 53 41 50 45 47 37 31 26 - -

Values 40 41 40 55 138 180 187 443 372 530 - -

4. CentralMain Crop :Q. 58 57 37 21 24 16 25 21 17 13 18 26

Values 33 34 28 28 65 65 100 249 204 260 540 1453

Mid Crop :Q. 2 3 1 1 1 3 1 1 0 0 - -

:Values 1 2 1 1 5 11 2 16 0 0 - -

Sub-Total :Q. 60 59 38 22 26 19 26 22 17 13 - -

Values 33 36 29 29 70 76 102 265 204 260 - -

5. WesternMain Crop :Q. 39 42 37 41 44 49 45 42 35 38 48 60

Values 22 25 28 54 116 195 179 504 420 760 1440 3371

Mid Crop :Q. 2 2 3 1 2 4 0 2 1 1 - -

: Values 1 1 3 2 9 15 2 20 96 30 - -

Sub-Total Q. 40 44 40 42 46 52 45 44 36 39 - -

Values 23 27 30 56 125 209 ll 524 516 790 - -

Continued ...

TABLE 7.02: Purwchass of Cocoa Bonm by ReSians(Quantities in Thousand Ton, Values in Millian C*d0s)

1974/75 1975176 1976177 1977178 1978179 1979180 1980181 1981182 1982183 1983184 1984/85 1985186

6. VoltaMain Crop :Q. 13 13 9 7 5 5 1 1 4 3 1 1:Values 7 8 6 10 13 18 6 15 48 52 26 57Kid Cop tQ. 0 1 1 0 1 0 0 0 0 0 - -*Values 0 0 1 0 4 1 0 5 0 0Sub-Total :Q. 14 13 9 7 6 S 1 2 4 3 - -:Values 8 8 7 10 17 19 6 20 48 52 - -

TOTALr'ain Crop Q. 365 382 305 263 250 282 255 216 177 154 165 205ValuCs 204 228 227 351 667 1127 1020 2588 2124 3072 4950 11603urchase Price: Cedis/Ton 1 1 1 1 3 4 4 12 12 20 30000 56600Mid Crop :Q. 8 12 14 8 15 15 3 8 2 5 9 14Values 5 9 14 11 60 59 12 110 102 120 509 1190Purchase Price: CedslsTon 1 1 1 1 4 4 4 14 51 24 56600 85000Total Q. 373 394 319 271 265 296 258 225 179 159 174 219 I-Values 209 237 242 362 727 1186 1032 2699 2226 3192 5459 12793Purchase Price: Cedis/Ton 561 602 758 1180 2743 4000 4000 12000 12000 20234 31376 58416

Sources: Ghana Cocoa Board.notes: No values siven for 1973174 crop because of frequent changes in producers' prices.

TABLE 7.03: WORLD PRODUCTION OF COCOA BEANS(THOUSAND TONS)

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

1974175 1975/76 1976177 1977/78 1978/79 1979180 1980/81 1981/82 1982/83 1983/84 1984185------------------------------------------------------------- __--------------__------------------------------------------------------------__-----

1. Caemroon 118.0 96.0 82.0 108.0 106.0 122.0 115.0 123.0 107.0 109.0 12D.0

2. Ghana 382.0 401.0 329.0 271.0 265.0 296.0 258.0 223.0 178.0 159.0 175.0

3. Ivory Coast 242.0 231.0 230.0 304.0 312.0 373.0 352.0 457.0 355.0 411.0 552.0

4. Nigeria 214.0 216.0 165.0 205.0 137.0 169.0 165.0 181.0 156.0 118.0 150.0

S. Other African Countries 55.0 59.0 49.0 54.0 51.0 60.0 59.0 8.0 8.0 60.0 59.0

All African Countries 1011.0 1003.0 855.0 942.0 871.0 1020.0 949.0 994.0 804.0 857.0 1056.0

6. Brazll 273.0 243.0 234.0 283.0 314.0 294.0 350.0 314.0 336.0 303.0 406.0

7. Ecuador 78.0 63.0 72.0 75.0 90.0 98.0 75.0 83.0 55.0 39.0 85.0

8. Oth-r American Countries 88.0 86.0 86.0 100.0 105.0 108.0 97.0 78.0 78.0 78.0 80.0

9. West Indies 41.0 42.0 42.0 42.0 47.0 35.0 37.0 50.0 52.0 50.0 56.0

10. Asia 60.0 63.0 60.0 64.0 69.0 77.0 79.0 113.0 116.0 148.0 188.0

World Production: 1551.0 1500.0 1349.0 1506.0 1496.0 1632.0 1587.0 1634.0 1441.0 1475.0 1871.0 ,

Ghana's Production in X 24.6X 26.71 24.4X 18.01 17.71 18.1X 16.3X 13.8X 12.41 10.81 9.41 .8

Sources: International Cocoa Organization (ICCO), for data 1983184 and 1984185, February 5, 1986.

Gill and Duffus, and Ghana Cocoa Board.Econmic Survey 1977-80, p. 43 for data 1971/72-1980/81.

Economic Survey 1972-74, p. 80 for data 1969170-1970/71.Note: Data for 1984-85 are eatinates.

TABLE 7.04: PRODUCTION OF IMPORTANT CROPS(TUOUSAND TONS)

1970 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986------------------------------------------------------------------- __--------__------------------------------------------------------------------__--------__-------

1. Cereals 858 890 672 689 639 540 780 674 725 544 308 955 780 905maize 482 486 343 286 274 218 380 382 378 346 172 574 395 495Rice 49 73 71 70 109 108 93 78 97 36 40 66 80 80Millet 141 154 122 144 125 93 149 82 119 76 40 139 120 140Guinea Corn 186 177 135 189 131 121 158 132 131 86 56 176 185 190

2. Starchy Staples 6077 7990 5452 4423 3995 4105 3927 4349 4114 4431 3649 6150 4891 NACassava 2388 3606 2398 1819 1811 1895 1759 2322 2063 2470 1721 4065 3075 3040Cocoyam 1136 1510 1099 773 722 726 749 643 631 628 720 600 580 KAYam 909 S50 709 575 535 544 602 650 591 588 866 725 560 660Plantain 1644 2024 1246 1256 927 940 817 734 829 749 342 760 676 OA

3. Pulses and nuts 1113 1397 1339 1260 986 1188 1287 - - - - - -Groundnuts 102 157 111 113 81 83 107 - - - - - -Coconut 302 307 311 229 152 159 159 - - - _ _Oil Palm 696 917 901 901 739 935 1012 - - - - - -Seens and Peas 13 17 16 17 14 11 9 - - - - - -

4. Vegetables 299 534 396 347 283 287 339 - - - - -Tocntoes 93 105 90 100 103 104 125 - - - - - - -Pepper 95 148 118 113 76 78 92 - - - - -Okro 102 252 160 108 92 93 110 - - - -Garden Eggs 10 29 29 26 12 12 12 - - -_ -

S. Otsers 285 364 378 276 286 302 293 - - - - - _Sugar Cane 112 171 205 190 258 272 272 - - - - -Orange 129 150 150 52 19 21 11 - - - - - - -Pineapple 29 35 16 25 5 5 3 - - - - _ _San-n 16 8 7 9 4 4 7- - - -

Sources: Ministry of Agriculture.Quartely Digest of Statistics, June 1984, pp 4-5 for data 1976-83.

Note: Data for 1981, 1982, 1983 are forecast estimates.

TABLE 7.05: AREA UNDER IMPORTANT CROPS(THOUSAND HECTARES)

1970 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986

1. Cereals 999 960 805 843 768 645 924 854 911 822 83S 1,275 964 1,060Noise 452 425 320 273 256 205 358 355 440 373 400 724 405 450Rlce 55 67 79 77 129 123 105 99 116 61 40 69 87 90killet 249 222 199 243 208 157 250 139 157 172 175 231 222 240Guinea Corn 243 246 208 249 175 160 211 261 198 216 220 251 250 280

2. Starchy Staples 1,070 1,148 897 728 636 646 621 688 686 736 742 - -Cassava 351 389 285 250 232 235 219 315 308 339 339 436 356 375Cocayrn 259 284 20S 167 147 155 158 137 134 145 147 - - _ye 172 133 177 lO 89 95 105 113 116 111 113 223 111 120Plantain 288 343 230 211 168 161 139 123 128 141 143 - - -

3.Puls aand puts 398 443 430 426 373 359 391 0 0 0 0 0 0 0Crocalduts 98 111 102 91 85 71 92 - - - - -

coconut 36 38 se 28 23 21 21 - - - -

0o1 Paln 111 146 144 144 10 149 157 - - - - -

Boom cd Pe" 133 149 147 163 157 118 121 - - - - - B

4. Vsgetables 78 136 98 93 74 72 86 0 0 0 0 0 0 0Talst.e. 19 23 19 22 16 22 27 - --- - -Pepper 28 53 40 39 28 26 31 - - -S t - -

Ok"r 28 51 32 23 24 20 24 - - - - -

Carden E88s 4 10 7 9 6 4 4 _ _ _

5. Othrs 41 44 42 21 14 14 14 0 0 0 0 0 0 0SugoxC ne 4 6 6 6 7 8 8 - - - - - -Or-nWe 20 23 27 8 3 3 2 - - - -

Pineapple 9 11 5 3 2 2 1 - - - - - - -

Banana 8 5 4 5 3 2 4 - - -

SoUrces: inLsttry of AgricultureQuarterly Digest of Statistics, June 1986, P. 5 for data 1978-84

Note: Data for 1981-86 are estUimtes.

TABLE 7.06: YTIE OF IKPORTANT CRPS(Ka. PE RHA.)

1970 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986

1. Cereals 858 927 834 818 832 837 844 718 860 661 369 ---matte 1,065 1,143 1.074 1,047 1,070 1,063 1L06 1.080 1.016 928 430 790 1,000 1,100lice 887 1,096 906 909 845 878 886 788 836 590 1,000 1,100 920 890MLIllet 567 695 613 592 601 592 596 610 758 442 229 600 540 S80Guinea Corn 766 718 650 758 749 756 749 506 662 394 255 700 740 680

2. Starchy Staples 5,680 6.961 6,078 6.078 6,281 6,354 6,324 6,321 5,997 6,020 4,918 - -Cassava 6,813 9,282 0,429 7,276 7,806 8,064 8,032 7,420 4.700 7,286 5.100 5,000 8,600 8,100Cocoys- 4,379 5,323 5,358 4,629 4,912 4,684 4,741 4,693 4,709 4,331 4,898 4.400 4,700 -YOM 5,275 6,402 3,998 5,767 6,011 5,726 5,733 5,752 5,095 5,297 7,664 3,250 5.000 5,500Plantain 5,714 5,905 5,418 3,953 5,518 5,839 5,878 5,967 6,477 5,310 2,392 5,390 5,820 -

3. Pulses and Nuts 2,799 3,151 3,113 2,959 2,643 3,309 3,292 - - - - - --Groumdn,jts 1,040 1,411 1,087 1,236 953 1,169 1,163 - - - - ---Coconut 8,291 8,162 8,269 8,297 6,609 7,571 7,571 - - - - - - -Oli Palm 6,276 6,273 6.272 6,257 6,843 6,275 6,446 - - - - - - - UBeans and Peas 88 112 110 104 89 93 74 - - - - - - -

4. VPegtables 3,810 3,912 4,027 3,747 3,824 3,986 3,942 - - - - - -Tmmtoes 4,973 4,612 4,758 4,525 6,438 4,727 4,630 - - - - -Pepper 3,387 2,800 2,970 2,935 2,714 3,000 2,968 - - - -Okro 3,642 4,941 4,923 4,635 3,833 4,650 4,583 - - - - - - -Garden 585s 2,525 2,938 3,904 2,989 2,000 3,000 3,000 - - - - - -

5. Others 6, 983 8,270 9,053 13,143 20,429 21,571 20,347 - - -Sugar cone 27,950 31,073 35,328 33,929 36,857 36,267 36,267 - - - - - -Orange 6,515 6,511 5,550 6,582 6,333 7,000 5,789 - - - - - - -Pineapple 3,065 3,286 3,327 10.000 3,667 2,000 3,000 - - - -Banana 2,026 1,653 1,700 1,800 1,600 2,000 1,750 - - - - - -

Sources: Ministry of AgricultureQularterly Digest of Statistics, Juno 1984, pp. 4-5 for data 1976-79

note: Data for 1981-86 are forecast estimates.

TABLE 7.07: DOMESTIC CATCH OF FISH, IMPORTS AND CONSUMPTION(QUANTITIES IN THOUSAND TONS, VALUES IN MILLION CEDIS)

1970 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

Quantities:Imports 30 22 17 43 16 3 10 5 0 1 4 3 5Domestic Catch1. Marine 158 182 213 196 226 222 188 184 200 199 205 231 2352. Volta Lake 40 37 42 39 35 A0 40 40 40 42 43 41 43

Sub-Total: 198 219 255 235 261 262 228 224 240 241 248 272 278Landings Foreign Vessels 22 5 1 1 1 18 1 1 2 1 - 2 _Tun sold locally 0 1 3 3 3 2 2 4 9 - -

Total: 250 247 276 282 281 285 241 234 251 - - -

Values in Million Cedis:Imports 14 17 15 18 14 8 9 5 0 3 75 57 250Domestic Catch1. Marine 27 61 103 110 161 302 503 1,058 1,888 950 2,576 5,592 12,7502. Volta Lake 9 12 13 12 35 70 80 80 90 84 86 1,230 2,580 _

Sub-Total: 36 73 115 122 196 372 583 1,138 1,978 1,034 2,662 6,822 15,330 SLandings Foreign Vessels 3 2 0 0 1 10 1 1 2 2 - 22 - 0'Tuna sold locally 0 0 1 1 1 1 2 5 0 - - -

Total: 53 92 131 141 212 391 595 1,149 1,980 - - - -

…---------------------------------------------.--------------------------__--__------------------------------------------------------------------------__--

Sources: Ministry of AgricultureEconomic Survey 1977-80, p. 73 for data 1976-80Economic Survey 1975-76, p. 84 for data 1972-75Economic Survey 1972-74, p. 89 for data 1970-71

Note: Data for 1983-85 are estimates.

TASL 7.08: PRODUCTION OF TIMOER, VEEER ASD PLYWOOD

(Quantities in MUllions of Cubic Meters)

1970 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986

-------------------------------------------------------------------

__--------__--------------------------_-_----------_---------------------------------------------

SuOntities:(in millIois of cubic meters)

Logs:Recorded Exports

0.601 0.43 0.43 0.34 0.40 0.38 0.19 0.12 0.05 0.05 0.06 0.07 0.14 0.22

Sa%MtL Intake 0.876 0.a5 0.77 0.85 0.54 0.53 0.28 0.34 0.35 0.26 0.28 0.26 0.32 0.40

Veneer/Plywood Intake 0.076 0.13 0.11 0.19 0.10 0.06 0.02 0.02 0.12 0.09 0.13 0.13 0.08 0.12

Unrecorded Use/Stocks

0.10 0.12 0.08 0.16

Total Output: 1.560 1.42 1.31 1.38 1.04 0.99 0.48 0.55 0.55 0.41 0.56 0.58 0.62 0.89

Sawn Timber

Recorded Exports 0.24 0.17 0.16 0.14 0.10 0.17 0.08 0.07 0.05 0.04 0.05 0.06 0.09 0.11

Local Sales 0-09 0.20 0.23 0.22 0.40 0.16 0.!0 0.05 0.10 0.09 0.09 0.07 0.12 3.09

Own Use (Hills, Mines) 0.03 0.03 D.03 0.08 0.0 0.07 0.03 0.02 0.01 0.09 0.02 0.03 0.02 0.03

Addition to Stocks -0.01 0.05 -0.03 0.01 0.03 -0.08 0.03 0.01 0.03 -0.07 0.02 0.03 -0.00 0.01

Total Output: 0.36 0.45 0.39 0.45 0.58 0.32 0.24 0.15 0.19 0.15 0.19 0.18 0.22 0.23

Veneer:Exports

0.42 8.70 7.40 2.00 0.50 27 10 5.50 7.30 6.00 5.00 9.00 0.01 0.01 0.01

Local Sales 0.03 0.10 0.00 0.00 0.70 0.30 0.50 0.20 0.10 0.10 0.60 0.00 0.00 0.00

Own Use 0.00 0.10 0.10 9.00 0.30 16.00 12.20 16.00 17.00 17.00 12.00 0.01 0.01 0.01

Addition to Stocks -0.01 9.40 7.60 3.10 11.00 -6.80 -1.S0 -1.20 -3.00 -1.00 2.50 0.00 0.00 0.00

Total Output: 0.46 18.30 15.10 14.10 12.50 36.60 16.70 22.20 20.00 21.00 24.20 0.02 0.22 0.02

PLyvoo4dEzports

21.71 18.50 17.50 17.30 36.30 18.00 2.00 2.00 0.20 0.30 0.20 0.00 0.00 0.00

Local Sales 7.99 12.50 12.40 46.10 53.40 20.20 33.50 47.50 60.00 39.30 31.90 0.02 0.02 0.02

Own Use 0.12 2.10 0.30 0.60 2.60 2.70 3.10 0.50 1.00 0.40 1.60 0.00 0.00 0.00

Addition to Stocks 1.50 25.30 9.70 -7.00 -34.30 -0.90 -0.30 1.20 2.00 -1.23 3.00 0.00 0.00 0.00

Total Output: 31.32 58.40 39.90 57.00 58.00 40.00 38.00 48.00 63.00 39.00 36.70 0.02 0.02 0.02

Values in Million Cedis

Exports of Loss 19.88 63.90 49.10 47.50 62.70 53.50 51.10 37.30 26.80 9.50 130.90 5.30 - -

Sawn Timber:

Recorded Exports 17.09 33.90 28.20 27.10 27.60 30.80 56.40 47.30 33.60 18.30 269.00 9.80 _ _

Local Sales 4.50 31.50 40.30 42.50 67.40 45.20 34.90 48.70 39.20 41.10 874.30 - - -

Own Use (Mills, Mines) 1.20 3.90 15.30 14.20 11.00 19.80 10.50 19.50 50.40 41.10 134.50 - - -

Addition to Stocks -0.30 7.50 -4.60 1.50 16.90 -22.70 10.40 6.70 -39.20 -36.50 -67.30 - - -

Total Values: 22.71 77.50 69.20 85.30 123.00 73.10 112.20 122.20 84.40 64.00 1361.40 - - -

Total Values (Logs + Savn) 42.59 141.40 118.30 132.80 185.70 126.60 163.30 159.30 111.20 73.50 1512.30 - -

Veneer:Exports

0.08 1.96 1.26 0.40 0.20 1.50 6.40 7.80 5.90 2.70 38.80 - - -

Local SaLes 0.00 0.01 0.00 0.00 0.20 0.80 0.50 0.20 0.00 0.10 18.90 - - -

Own Use 0.00 0.01 0.02 0.90 0.10 5.30 14.30 17.40 14.10 9.06 r6.70 - - -

Addition to Stocks 0.00 1.00 1.09 0.60 3.60 -2.20 -1.70 -1.30 -0.80 0.70 -0.90 - - _

Total Values: 0.08 2.98 2.37 2.90 4.10 5.40 19.50 24.10 19.20 12.60 103.5 - - -

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

Continued ...

TABUL 7.08: PRODUCTION OF TIMM, VMEUR AJND PLYWOOD(Quantities in Millions of Cubic Meters)

1970 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986------------------------------------------------------------------- __--------__-----------------------------------------------------------__________________________

Plywood:Exports 3.04 6.29 5.18 4.90 2.00 3.20 1.60 1.10 0.20 0.10 1.10 - -Local Sales 1.99 2.45 3.09 13.10 13.40 74.40 29.30 33.90 63.80 16.80 133.40 - -Own Use 0.01 0.42 0.07 0.10 0.50 5.50 2.70 0.40 0.70 0.10 1.40 - --Addltion to Stocks 0.16 4.97 2.09 -2.00 0.40 -1.90 -0.20 0.80 -0.20 -0.50 -0.10 - - -

Total Values: 5.20 14.14 10.42 16.10 16.30 81.10 33.30 36.20 64.50 16.50 135.80 - -------------------------------------------------------------------------- __--__------------------------------------------------------------------------__--__-------

Sources: Ministry of AgricultureEconomic Survey 1977-80, pp 62, 68 for data 1976-80Economic Survey 1975-76, pp 86, 89-92 for data 1972-75Econmic Survey 1972-74, pp. 91-94 for data 1970-71

t

TABU 7.09t DISTURUITM OF CXXX2i PROCEEDS JEINK W PXUCERSSE COCOA MAKEorM£ BOARD AXD SEB OOVXRWXMT8

1974175 1975176 1976177 1977178 1978179 1979180 1960/81 19B1J82 1982a83 1#3/84 1984185 1985In 6

COMA PSsCED ('000 T) 376.0 398.0 320.0 271.0 265.0 281.0 258.0 224 0 179.0 159.0 174.0 219.0

In CEDZS M TootAV9UFA 1.0.B. EF PRICR 1686.0 1326.0 2594.0 3942.0 10396.0 10290.0 5407.0 4648.0 5056.0 86389.0 114027.0 203771.7

-inn PRMOC 1/ 548.8 56S.4 731.7 1333.3 2666.7 4000.0 4000.0 12000.0 12000.0 20000.0 30000.0 56600.0

COMTS C0 NPUaTINC BOARD 314.0 397.0 336.0 1071.0 1492.0 5253.0 5477.0 15799.0 16652.0 43940.0 72862.0 116644.0

COCOA EXPO DRTY 825.2 543.6 1528.3 1537.7 6237.3 2972.0 233.0 0.0 7279.0 37954.0 49812.0 54557.0

EP3ORT DMT AS 2 T.O.B. PR5CE 48.9 35.6 58.9 39.0 60.0 28.9 4.2 0.0 143.9 43.9 43.7 26.8

SWRCE: GRASA COcOA BOARD

21 WAIW CROP.

TABLE 7.10: OPERATIONS OP THE G8ANA COCOA BOARD (1)(IN MILLION CEDIS)

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

1975/76 1976177 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983184 1984185 1985/86

1. Revenue: 551.9 754.9 1181.4 2297.7 2211.3 1444.4 1236.8 5090.1 15136.6 20976.9 47186.71.1 Exports 515.8 700.3 1028.0 2021.8 1933.9 1218.5 1116.2 4828.2 12828.9 18483.9 41416.51.2 Local Deltveries 33.3 51.l 149.4 270.6 266.7 207.4 87.4 242.2 598.5 1983.3 4799.01.3 Miscellaneous 2.8 3.5 4.0 5.3 10.7 18.5 33.2 19.7 17n9.2 509.7 971.2

2. Cost,: 393.6 353.1 547.7 1059.3 1556.8 1412.6 2539.i 3468.6 6932.5 12739.9 25545.72.1 Ploducer Proceeds 236.4 245.8 351.2 618.8 957.7 801.1 2448.1 2157.8 3109.5 5292.5 12518.0

2.2 Li-ensed Buying Agent 29.5 23.2 44.9 105.5 193.8 265.1 301.0 456.7 109.7 1872.42.3 Use of Stocks 2.8 - - - - - - - -

2.4 Freight, etc. 8.9 15.0 9.8 17.1 38.6 47.2 92.6 58.6 109.3 6.82.5 Finance Costs (2) 8.2 5.8 9.5 79.7 188.1 132.9 474.0 500.0 327.5 727.6 1542.62.6 Administration, etc. (3) 19.9 36.9 63.5 67.5 101.6 113.9 144.9 184.3 414.2 445.42.7 Cocoa Div. Grants, etc. (4) 87.8 26.4 68.8 170.7 77.0 52.4 78.5 111.2 2862.0 3894.2

3. Profits/Losses Before Taxes 158.3 401.8 633.7 1238.4 654.5 31.8 -2302.3 1621.5 8204.1 8237.0

4. Duties Paid 266.2 433.3 586.4 1334.4 846.7 52.5 0.0 1300.0 5636.3 8074.6 11948.0 0

5. Profits/Losses After Taxes -107.9 -31.5 47.3 -96.0 -192.2 -20.7 -2302.3 321.5 2567.8 162.4

Memo Items (000's Tons):Purchases 396.0 319.0 268.5 245.0 296.4 257.9 224.0 178.6 158.4 174.8 217.0Shipments: 376.3 300.8 271.0 239.0 284.9 225.7 209.4 174.6 163.6 182.3 218.1Exports 338.0 269.8 231.7 207.5 246.9 200.2 204.4 158.0 148.5 162.1 193.1Local Deliveries 38.3 31.0 39.3 31.5 37.0 25.5 5.0 16.6 15.1 20.2 25.0

Value in Cedis Per Metric Ton:Exports 1526.0 2595.6 4436.8 9743.6 7832.7 6086.4 5460.9 30558.2 86389.9 114027.8 214482.1Producer Proceeds 597.0 770.5 1308.0 2525.7 3231.1 3106.2 10929.0 12081.7 19630.7 30277.5 57686.6Total Costs 993.9 1106.9 2039.9 4323.7 5252.4 5477.3 15799.6 19421.1 43765.8 72882.7 117722.1Duties Paid 787.6 1606.0 2530.9 6430.8 3429.3 262.2 0.0 8227.8 37954.9 49812.5 61874.7

…------------------------------------------------------------__--------------__------------------------------------------------------------__-----

SOURCE: GHANA COCOA BOARDIMF REPORT JULY 23, 1975, P 85 FOR DATA 1969170-1973/74WORLD BANK REPORT. FEB 19, 1981. P 99 FOR DATA 1974/75-1978179.1984/85 DATA REFLECTS THE BUDGET

NOTES: 1. CROP YEAR ENDED SEPTEMBER2. MAINLY DISCOUNTED CHARGES ON BILL DRAWN TO FINANCE THE PURCHASE

OF COCOA, EXPORT DUTY, AND OPERATIONS ON THE BOARD.3. INCLUDES PROVISION FOR DOUBTFUL DEBTS AND DEPRECIATION.4. INCLUDES GRANTS TO THE COCOA DIVISION FOR PRODUCE INSPECTION,

RESEARCH, CONSTRUCTION OF FEEDER ROADS, AND SUBSIDIES FORINSECTICIDES AND SPRAYING.

TABLE 8.01: Mineral Production

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986

Production:Cold (kg) 19935.0 16494.0 16561.8 14957.2 12304.8 11093.8 10981.0 10595.3 10280.3 8601.1 8923.0 9311.2 8941.0Diamond ('000 carats) 2549.5 2336.2 2282.9 1946.6 1422.9 1225.5 1149.3 836.1 684.2 339.0 346.0 636.0 556.0Bauxite ('000 tons) 336.6 325.2 271.6 275.2 327.9 235.3 225.1 181.2 63.5 70.4 49.0 169.5 204.0Mangemeso ('000 tons) 392.3 415.3 316.8 292.4 316.7 253.8 249.9 223.1 159.9 173.0 267.0 357.0 332.0

Index of Production:Gold 122.5 100.0 101.6 91.8 76.7 68.1 67.4 65.0 63.1 52.8 54.0 56.0 54.2Diamond 1091 100.0 9?.7 83.3 60.9 52.5 49.2 35.8 29.4 14.0 15.0 27.0 23.8Bauxite 103.5 100.0 83.5 84.6 100.8 72.4 69.2 55.7 20.0 21.0 15.0 52.0 62.7Manganese 94.5 100.0 76.3 70.4 76.3 61.1 60.2 53.7 39.1 42.4 65.0 87.0 81.0Overall Index 0.0 100.0 96.8 87.4 75.7 65.3 64.4 60.0 54.4 45.6 50.0 58.0 S5.0

Export VolumeCold (kg) - - 16416.0 15208.0 9747.0 11818.0 10820.0 10765.0 9386.0 8621.0 8880.0 8648.0 8941.0 1Dimwnd ('000 carats) - - 2308.0 2079.0 1476.0 1007.0 897.0 944.0 688.0 605.0 425.0 643.0 565.0Bauxite ('000 tons) - - 219.0 250.0 293.0 206.0 195.0 151.0 36.0 81.0 44.0 125.0 226.5MangAnese t('00 tons) - - 360.0 321.0 287.0 223.0 163.0 182.0 136.0 138.0 241.0 252.0 257.0

Export Unit Values:Gold ($1 fine ounce) - - - - - - 546.0 459.0 373.0 366.0 361.0 319.0 369.0Diamond (S/ carat) - - - - - - 11.0 9.0 7.0 6.0 7.0 9.0 9.0Bauxite - - - - - - 14.0 17.0 19.0 20.0 20.0 20.0 20.0Manganese ($1 MT) - - - - - 53.0 56.0 39.0 39.0 34.0 34.0 32.0

Sources: Statistieal Service, AccraChief Irspector of MinesQuarterly Digest of Statistics, June 1984, pp 6-9Economic Survey 1975-76, p. 81Quarterly Digest of Statistics, June 1972, pp 7-9 for Data 1970.

TABLE 8.02: Diamond Production

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986

Total in 000 Carats 2549.5 2336.2 2282.9 1946.8 1422.9 1225.6 1149.2 836.4 684.0 339.0 346.0 636.0 556.0

Companies:000 Carats 2542.6 2251.4 2269.'3 1940.1 1421.5 1225.6 1148.7 836.1 682.0 337.0 342.0 633.0 -000 Cubic Meters Tieated 2913.0 1607.6 1573.1 997.1 0.0 841.7 755.3 755.0 496.0 340.0 356.0 543.0 -Carats Per Cubic Meter 0.9 1.5 1.4 1.2 1.4 1.5 1.5 1.3 1.0 1.0 1.0 1.0 -

Afrlcan Diggers (000 C) 7.9 84.8 13.1 6.7 1.3 2.0 0.5 0.2 2.0 3.0 4.0 3.0 -

________________________________________________________________________________________________________________________________________________________

Sources: Quarterly Digest of Statistics, June 1984 and 1986, p. 7.Quarterly Digest of Statistics, June 1972, p. 8 for data 1970-71.

Lf

TABLE 8 03: Cold Production

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

Total in KS 19955.0 16295.1 16494.2 14957.0 12504.8 11093.8 10981.0 10395.3 10280.3 8601.1 8923.0 9311.0

Quartz Reefs:Tens Crushed 1044.0 1445.0 1345.0 1253.0 976.0 926.0 981.0 960.0 896.6 765.3 887.0 1087.0KGS won 1771.0 14124.1 13558.0 1320).5 10821.4 9744.6 9561.5 9378.7 9194.2 8000.6 8382.0 8804.0DVT Per Ton 11.900 6.300 6.500 6.800 7.100 6.800 6.300 6.300 6.600 6./00 6.000 5.000

BDnket Roefs:Tons Crusbed 319.3 299.6 360.9 287.4 273.1 221.8 212.8 175.2 151.5 89.0 103.0 99.0RaS won 1293.0 1788.5 2637.6 1750.2 1647.9 1219.7 1213.0 1011.7 969.9 502.4 449.0 417.0DOT Per Ton 2.860 3.800 4.700 3.900 3.900 3.500 3.700 3.700 4.100 3.600 3.000 3.000

Alluvial:Cubic Metors Treated 7007.0 2566.0 1629.0 56.0 220.0 980.0 1519.0 1762.0 1486.1 770.1 918.0 893.0IGS Won 958.3 373.2 311.0 6.5 35.3 129.4 206.5 204.9 116.2 98.2 92.0 90.0DWV Per Cubic Meter 0.096 0.072 0.123 0.074 0.09 0.08S 0.087 0.075 0.050 0.089 0.064 0.065 1

Sources: Quarterly Digest of Statistics, June 1984 and 1986, p. 6.Quarterly Digest of Statistics, June 1972, p. 7 for data 1970.

TA3LE 8.04: Production of Soam Selected Manufactured Commodities

---------------------------------------------------- __-----------------------__---------------------------------------------------__.----------

1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985------------------------------------------------------------------- __--------__----------------------------------------------------------------

Milk Reconst (X Liters) 37.8 51.8 40.1 39.9 34.4 13.4 15.9 7.6 10.0 11.0 14.6Ice Cream (000 Liters) 927.0 1466.0 2580.0 2905.0 2101.0 2053.0 2106.0 628.0 444.0 746.0 115.2Milo (Ton.) 1425.0 2026.0 2776.0 1747.0 1845.0 1211.0 969.0 741.0 0.0 0.0 0.0Wheat Flour (Tons) 63204.0 67626.0 74177.0 81594.0 92960.0 89608.0 73245.0 25401.0 17981.0 39590.0 45306.0Sugar (Tons) 11347.0 12140.0 11772.0 6966.0 5787.0 4014.0 1542.0 56.0 0.0 0.0 0.0Cocoa Butt-r (Tons) 17610.0 19368.0 17027.0 13994.0 10560.0 10985.0 9928.0 8764.0 8818.0 3866.0 7674.0Cocoa Liquor (K Liters) 3368.0 3202.0 3325.0 3860.0 3784.0 2257.0 2776.0 2765.0 1558.0 1163.0 3000.0Cocoa Cake (Tons) 22325.0 22798.0 19890.0 15463.0 10241.0 12613.0 10775.0 10178.0 11321.0 4633.0 9178.0Beer (M Liters) 63.3 77.5 71.8 49.6 45.1 44.5 52.7 33.9 31.0 45.0 42.9Soft Drinks (000 Crate) 2167.0 2811.0 1814.0 2229.0 1847.0 1362.0 1459.1 802.0 382.0 553.0 718.0Cigarettes (Millions) 2339.0 3121.0 3219.0 2095.0 1666.0 2028.0 1611.0 1208.0 1074.0 2008.0 1942.0Cloth (N metors) 121.3 102.9 94.4 88.1 66.0 36.5 30.5 7.1 7.1 10.0 12.6Jute Bass (000) 3700.0 3686.0 3920.0 2495.0 0.0 3228.0 3097.0 1723.0 1697.0 2059.0 2431.0Margarine (Tons) 2613.0 3298.0 1399.0 1284.0 766.0 935.0 1271.0 732.0 275.0 527.0 941.0 1Guardian Soap (Tons) 0.0 0.0 4369.0 3138.0 4516.0 6666.0 8358.0 4199.0 2699.0 4383.0 10005.0 IToilet Soap (Tons) 2746.0 2581.0 2109.0 1050.0 1319.0 1059.0 1019.0 504.0 448.0 1082.0 1893.0 LnTooth Paste (Tona) 236.0 279.0 275.0 89.0 181.0 98.0 227.0 70.0 27.0 12.0 122.0 4-Petrol (000 Tons) 252.8 260.0 264.3 268.7 227.6 245.7 252.6 244.0 155.0 172.0 216.0 1Rerosene (000 Tons) 99.6 98.1 111.3 126.3 123.6 119.5 130.7 133.0 77.0 86.0 120.0Diesel, Gas Oil (000 Tons) 345.6 353.3 322.9 311.8 283.1 283.2 296.2 287.0 164.0 218.0 278.0Cement (000 Tons) 666.3 678.5 565.1 489.1 247.8 294.3 396.0 252.0 278.0 235.0 356.0Iron Rods (Tons) 2865.0 6148.0 7280.0 2863.0 3757.0 5378.0 5084.0 2247.0 1535.0 1914.0 3360.0

--------------------------------------------------------------- __------------__-----------------------------.--------------------------------__

Sources: Quarterly Digest of Statistics, June 1984 and 1986. p. 13 for data 1975-85.Economic Survey 1975-76Economic Survey, 1972-74

TABLE 8.05: RAILWAY TRAFFIC

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

FREIGHT:(O000 TONS)COCOA 225.2 117.3 123.6 93.7 68.5 75.8 94.8 71.8 66.1 46.8 16.3 33.2T711ER 445.2 223.4 231.0 176.0 115.6 71.6 53.8 63.9 83.1 61.0 23.0 35.0BAUXITE - 324.9 267.3 285.6 272.3 223.5 191.4 183.3 73.3 59.2 52.0 134.5MANGANESE 428.1 323.0 326.9 352.0 334.2 245.5 238.1 260.6 174.7 137.8 252.4 269.0OTES 546.5 178.7 188.2 52.8 134.2 38.2 63.4 113.2 72.2 51.6 30.5 38.8TOTAL: 1645.0 1167.3 1137.0 960.1 924.8 654.6 643.5 692.8 469.4 356.4 374.3 510.6

(MILLION TONIXA)

TOTAL: 304.0 205.4 192.2 191.5 148.5 109.5 106.4 91.9 74.0 61.0 43.5 -

PASSENGER:

PASSENGER JOURNEYS ('000) 7956.0 6816.0 6063.0 6176.0 5987.0 5331.0 5543.0 3693.0 3114.0 3394.0 2180.5 2104.6 inPASSENGER KILOMETERS (MXM) 539.5 488.8 471.7 568.8 422.4 415.3 459.6 313.5 290.0 380.0 157.4 -

SOURCES: 1984-85 DATE ARE STAFF ESTIMATES.1980-83 DATA FROM QDS JUNE 1983, PP. 17-18.1970-71 DATA FROM QDS JUNE 1982, P. 40.

NOTE: MREIGHT FOR BAUXITE FOR ?ERIOD 1970-74 IS INCLUDED IN 'OTHER*.

TABLH 9.01: CONSUMER PRICE INDME NUMS (1977-100)

ANNUAL AVERAGE 1978 1979 1980 1981 1982 1983 1984 1985

N AT I O N A L:100.0 Combine Index 17S.1 267.3 401.2 868.6 1062.4 2357.4 3304.2 3647.2

49.2 Food 159.4 257.7 392.5 828.5 1125.4 2754.6 3058.5 2717.76.2 Beverage and Tobacco 241.1 317.8 514.3 1178.8 1059.2 2302.8 3907.2 4801.5

19.2 Clothing and Footwear 191.7 283.8 398.6 926.7 1049.0 2085.5 3604.3 4643.76.8 Rent, ue1l, Power 147.7 185.3 297.8 643.2 691.0 1721.9 3142.7 3372.85.1 Furniture, Furnishings 19S.1 287.2 471.8 1207.0 1256.4 2429.1 4765.2 5404.01.8 MedLca1 Care, Health 168.6 280.8 435.8 727.1 995.5 1991.6 3143.8 4100.24.3 Transport, CnmicatLon 159.3 247.0 398.8 789.0 796.7 1608.4 3081.4 4741.55.5 Recreation, EnterteirAiet 173.0 315.1 404.4 744.2 1019.6 1406.6 2660.6 4435.31.9 Misc. Cood and Servlces 181.7 320.7 431.1 890.2 1167.0 2255.1 3919.7 4987.1

U R B A I:100.0 Combired Index 171.5 256.5 363.0 800.4 977.6 2102.6 2959.7 3329.2

48.0 Food 163.8 248.7 342.2 755.2 1059.5 2645.9 2932.4 2496.1 0%5.5 Beverage and Tobacco 235.1 320.7 493.9 1194.3 957.5 1992.3 3916.2 5132.6 1

16.4 Clothing ad Footwear 188.5 271.9 378.6 873.7 950.0 1874.7 2062.1 4129.39.6 Rent, Fuel, Poer 138.9 177.4 266.5 480.0 563.0 1022.0 1735.5 2313.34.8 Furniture, Furnirhings 189.6 278.2 441.2 1209.2 1228.4 2108.1 4389.8 4979.91.2 Medical Care, Health 146.7 261.7 396.8 683.5 937.6 1483.9 2339.8 3528.75.4 Transport, Coamnlcations 155.4 230.5 399.9 833.5 897.0 1470.1 3139.2 5100.96.0 Recreation, Entertanment 183.2 327.0 393.7 .97.2 1063.9 1453.9 2689.8 4341.91.7 Misc. Goods, Services 174.8 311.0 399.1 799.5 1039.0 1927.8 3613.5 4864.0

R R A L:100.0 OCbined Index 174.7 278.2 448.2 938.5 1149.7 2639.6 3652.4 3973.6

49.8 Food 155.0 266.8 442.7 903.3 1212.8 2863.2 3178.4 2939.46.9 Beverage and Tobacco 246.1 315.5 530.9 1166.3 1141.7 2537.5 3899.8 4531.7

22.2 Clothing, Footwear 194.2 292.9 413.7 970.4 1118.6 2301.2 4016.7 5034.94.0 Rent, Fuel, Power 169.2 262.8 375.1 1048.6 1006.7 3456.1 6631.7 5992.15.3 Furniture, Furnishings 200.4 295.6 500.7 1205.0 1288.0 2862.2 5120.7 5809.62.4 Medical Care, Health 179.9 290.4 455.6 749.1 1109.1 2163.2 3550.6 4389.43.2 Transport, Coa mications 170.7 275.8 385.6 714.8 623.3 1849.4 2956.2 4051.44.2 Recreation, Entertairment 155.8 295.4 412.3 655.5 945.4 1320.8 2599.7 4591.52.0 Mlsc. Goods, Services 187.7 328.3 460.7 968.3 1301.7 2538.6 4099.2 5090.8

C--------------------------------------------------------------__------------__----------------------------

ContLnued..

TABLE 9.01: COSSUElR PRICE IINDE NUMBERS: VEW SERIES

(ARIUAL AVERAGE. 1977 - .20) 1978 1979 1980 1981 19P9 1983 1984 1986

A C C R A:Weight:

100.0 Combned Index 169.9 276.4 377.8 772.4 990.8 1877.5 2729.8 3282.7

48.3 Food 163.5 283.7 359.4 686.4 1011.3 2358.8 2629.4 2407.35 6 BevraS and Tobecco 234.3 333.1 508.5 1209.2 941.3 1701.8 4095.2 5147.1

13.7 Clothing and Footwear 165.5 266.7 356.9 903.3 952.2 1441.1 2605.9 3839.211.2 Rent, Fucl. Pouer 134.6 167.9 251.9 411.3 532.9 863.8 1364.7 1947.5

4.8 FuzuLture, Furnishbngs 209.0 388.6 475.7 1172.8 1499.8 1847.8 4400.6 4877.70.3 Medical Cars, Health 169.8 323.1 524.0 1011.0 1538.1 1837.- 2512.5 4465.26.7 Transport, Communications 161.1 271.5 312.4 1012.3 1144.6 1747.7 3768.4 6577.17.2 Rocreation, Cultural Svcs. 211.0 364.5 408.6 833.6 1070.4 1467.6 2531.5 4211.51.7 Kisc. Goods, Servicos 295.8 338.9 428.9 837.9 1038.3 1492.0 2618.4 3781.5

SOuRCES: STATISTICAL NES LER, sTATISTICAL SEmICE, ACORA.

-J

TABLE 9.02: NMTBY LcoNSUXER PRICE INDICES: N A T 1 0 N A L(1977 - 100)

---------------------------------------------------------------------- __-----__----------------------------.-_---------------

CG43IUED POOD 3R37l1CE CLOTHING RlET.PUL FURBSH MZDICAL TRANSPOtT RECREA MISCELIThIS TOBAcCO FOOTWEAR POWF R 2IG HEALTH 0001083NIC TION LANEOUS

DEOUEDtBR 1982 1264.1 1407.8 1204.7 1241.3 744.4 1360.2 1249.9 777.6 1033.0 1377.4

DEC0715 1983 3064.4 3206.6 3139.8 2972.8 2813.2 3695.8 2918.3 2674.7 2075.1 3201.9

JANUARY 1984 3136.8 3303.6 3219.4 3044.3 3019.6 3862.8 2894.5 2256.5 2119.0 3351.2FEBARS 3357.4 3468.7 3592.7 3406.0 3128.0 4317.1 3046.5 2280.6 2188.7 3642.1MARCH 3459.9 3583.7 3674.3 3475.7 3220.1 4549.1 3052.6 2404.5 2257.0 3644.1APRIL 3S52.3 3624.9 3810.3 3559.2 3220.0 4777.8 3001.8 3163.2 2302.2 3734.8MAY 3606.8 3651.8 3859.7 3693.2 3174.6 4935.8 3056.4 3231.0 2336.0 3831.8JUNE 3491.2 3349.8 4139.4 3724.5 3138.0 5010.0 3107.9 3304.9 2396.8 3875.2JULY 3352.1 3078.8 4183.2 3662.6 3198.8 5013.8 3075.2 3221.0 2402.8 3983.3AUGUST 3132.0 2702.8 4047.3 3610.2 3117.3 4682.8 3222.4 3244.6 2436.8 4053.8SEPTE17 R 3106.5 2547.1 4026.2 3639.2 3058.5 4902.6 3242.6 3291.1 3066.3 4176.4OCTOBER 3105.1 2469.0 4060.9 3695.1 3878.9 5041.7 3259.5 3387.8 3304.9 4218.8g307361 3102.1 2414.8 4054.3 3755.9 3093.2 5104.4 3296.1 3361.2 3413.1 4233.0 1DECUSHBR 3247.9 2507.3 4210.3 3985.9 3266.1 4984.1 3490.1 3850.2 3685.7 4291.5

JANUARY 1985 3488.3 2645.7 4200.0 4193.3 3312.7 5070.3 3648.8 4224.2 4060.5 4602.3 coFlRUARTY 3495.4 2745.6 4388.9 4255.2 3230.1 5210.6 3769.9 4351.3 4126.6 4698.9 1MARCH 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 4272.1 4786.1KAY 3647.9 2831.1 48S9.7 4474.4 3390.9 5311.2 3959.6 4612.7 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 5078.6AUGUST 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 4872.1 3414.0 5421.4 4304.6 4997.4 4629.3 5141.8OCTOSER 3672.1 2560.4 5003.4 4843.4 3461.7 5494.8 4347.7 5010.1 4811.6 5174.9

n307361 3737.0 2633.3 5026.0 4904.4 3515.8 5605.8 4447.5 5018.4 4848.2 5299.2DECU3ER 3881.2 2797.1 5124.0 5088.8 3619.9 5762.4 4496.1 5034.6 4909.7 5412.0

JANUlARY 1986 4047.2 2928.6 5571.7 5172.2 3797.0 5919.1 455.6 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 5750.3APJRL 4394.1 3228.2 6073.8 5393.5 4627.8 6477.7 4722.8 6233.6 5170.5 5801.5MAY 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 S327:8 5880.5JULY 4575.2 3309.3 6395.1 5654.5 5024.3 6848.7 4748.9 6526.5 5274.0 5904.6SEPT2E3ER 4517.8 3237.8 6433.5 5636.0 5030.5 6858.4 4743.6 6545.0 5391.8 5949.5OCTOBER 4734.9 3287.4 6819.4 6153.3 5203.9 7276.1 4844.3 6612.5 5468.9 6102.2NOV3MBER 4959.8 3468.3 7114.0 6518.3 5354.2 7749.1 4894.0 6701.1 5579.3 6232.8---O-----CES:--------TATI------TIC------------E---S---LETTER---__-----STATISTI_----------AL----S-------ICE-----------CR------

SOURCES: STATISTICAL NEWS LETTER, STATISTICAL SERVICE, ACCRA.

TAULS 9.02: FxurLY CONSUMER PR5CE INDICES: U R B A N(1977 - 100)

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

OOCSInED PO0D NEYA2LE CLOTINUG RENT.FUEL PURNISH MEDICAL TRANSPoST RsCIKA NISCELTOBACOO FOOTNEAR POSOER IO EALTH COOKWtNIC TIMH LANEOUS

DEXi5iER 1982 1131.9 1299.8 1000.0 1080.0 599.9 1235.8 1052.2 854.0 1086.6 1039.3

DOEICBgR 1983 2639.5 2930.0 5.0 2691.9 2472.1 1384.8 3356.3 1684.4 2673.2 2080.9

JANUARY 1984 2752.9 3136.0 3111.4 2672.5 1351.4 3568.7 1780.0 3.0 2033.6 3043.3FlUIRARY 2918.4 3212.0 3675.0 2853.6 1483.4 4109.3 2047.3 2169.5 2221.8 3226.0)4ARM 3052.1 3433.7 3784.0 2876.0 1579.2 4051.7 2057.3 2184.5 2329.6 3319.8APRIL 3232.9 3573.4 3821.5 3036.6 1612.4 4401.0 2152.9 3248.2 2397.7 3398.2MAY 3286.3 3617.4 3918.2 3076.4 1704.2 4477.9 2175.3 3286.8 2445.3 3516.0JUnE 3144.0 3299.7 4198.2 3147.5 1724.8 4611.8 2353.3 3383.4 2479.7 3508.2JULY 3131.7 3132.5 4301.3 3136.5 1945.9 4700.8 2397.7 3387.7 2513.0 3722.3AUGUST 2826.2 2596.7 3967.2 3088.3 1883.3 4430.3 2484.2 3389.5 2476.0 3815.5SEFNTB@BSR 2757.8 2369.4 3951.6 3045.2 1815.1 4574.0 2530.3 3495.9 2075.0 3974.6OCTOBER 2756.2 2280.5 4002.6 3119.0 1867.9 4737.5 2568.5 3493.9 2075.0 3974.6NOVDER 2738.9 2230.0 3965.9 3152.1 1909.4 4495.3 2617.2 3535.2 3390.6 3980.7DECEJR 2919.5 2308.0 4297.8 3541.3 1949.4 4511.4 2913.0 4206.1 3615.8 4060.3

JANUARY 1985 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 4493.1KMUUUC 3230.5 2590.4 4744.5 3886.8 2039.2 4775.3 3179.9 4708.5 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.? 5327.0 4139.6 2320.1 4884.1 3378.2 4944.3 4089.6 4729.3JUNE 3372.0 2588.2 5227.6 4162.3 2286.6 4910.3 3518.4 5223. 4168.6 4816.1JULY 3374.3 2502.0 5322.1 4212.6 2351.6 5060.0 3643.7 5246.6 4366.0 5005.5AUGUST 3359.1 2416.4 5292.8 4284.4 2398.9 5020.4 3674.4 5392.3 4395.3 5034.2SEPTlCER 3355.5 2348.7 5294.0 4349.1 2462.6 5011.3 3779.0 5399.9 4557.7 5048.8OCTOUER 3399.1 2405.7 5315.3 4295.1 2507.9 5161.7 3791.9 5410.9 4712.8 5086.0NOVUER 3473.4 2496.9 5351.6 4351.6 2557.2 5317.9 3855.3 5417.2 4758.2 5222.8DEcEMBER 3606.1 2615.4 5525.5 4570.2 2647.3 5519.9 3944.8 5424.1 4833.3 5537.1

JAN11RY 1986 S792.4 2709.8 6293.2 4660.7 2835.1 5747.2 3979.0 6413.0 4855.9 5450.9FEBRUARY 3928.4 2829.5 6562.4 4726.7 3067.2 6028.0 4058.5 6559.8 4946.4 5536.1MAUCH 4046.9 2936.5 6677.3 4803.0 3364.3 6152.0 4089.8 6722.3 4976.4 5650.2APRIL 4135.1 2995.4 6788.0 4860.8 3669.5 6S19.2 4104.3 6815.0 .993.1 5673.6MAY 4213.0 3057.3 6914.5 4966.1 3793.8 6437.7 4111.2 6869.5 5035.4 5673.8JUNE 4306.1 3124.2 7033.0 5098.2 3953.8 6577.2 4163.5 7006.5 5063.0 5703.7JUfLY 4289.4 3002.3 7099.6 5161.0 4022.8 6739.3 4164.2 719S.8 5119.1 5711.9AUGUST 4253.9 2934.0 7133.3 5119.6 4033.7 673S.8 4159.8 7216.9 5125.8 5721.5SEPIEMER 4243.3 2884.5 7139.0 5158.1 4052.8 6789.5 4152.2 7221.9 5155.3 5735.2OCTOBER 4440.1 2991.6 7539.8 5647.1 4198.9 7181.7 4237.7 7295.1 5194.7 5857.000VEMBSER 4664.2 3171.3 7897.2 6031.6 4353.7 7643.6 4304.2 7404.9 5304.8 6014.4

SOURCES:-----------ST----T---------CAL------NE----S---LETT-----__-----STAT---__-STIC-------L---S-----VICE.---------------A---

SOURbCES. STATISTICAL KME LaNrrER, STATSTSiCAL SERICE, ACCRAt.

TABLE 9.02: MONTHLY CONSUMER PRICE INDICES: R U R A L(1977 - 100)

COMBINED FOOD BEVBRAGE CLOTHING RENT.FUEL FURNISH MEDICAL TRANSPORT RECREA MISCEL

ITEKS TOBACCO FOOTWEAR POWER ING MEALTH COOIO(UNIC TION LANEOUS

DECEMBER 1982 1400.0 1515.8 1371.1 1363.9 1101.5 1477.8 1350.0 644.8 948.9 1621.3

DECEtER 1983 3501.3 3482.7 3284.8 3353.6 6344.5 4016.8 3542.7 2677.2 2065.5 3584.7

JANUARY 1984 3531.6 3471.1 3307.4 3377.1 7143.7 4140.8 3428.2 2644.2 2100.7 3793.1

FEBRUARY 3808.9 3725.3 3525.6 3826.2 7193.8 4513.5 3552.1 2474.0 2133.4 3999.5

MARCH 3879.3 3733.6 3584.9 3931.8 7276.9 5019.5 3556.3 2787.3 2135.4 3922.6

APRIL 3880.7 3676.4 3801.1 3956.6 7194.4 5134.0 3431.4 3015.2 2142.4 4023.8

MAY 3936.5 3686.2 3812.0 4162.3 6809.7 5368.8 3502.2 3133.8 2153.0 4102.9

JUNE 3777.2 3325.4 4091.5 4163.4 6631.8 5386.5 3489.8 3168.2 2258.0 4190.4

JULY 3578.8 3025.1 4087.0 4062.7 6296.3 5309.5 3418.1 2931.8 2264.5 3207.4

AUGUST 3446.5 2808.8 4112.6 4007.1 6167.9 4921.6 3596.0 2992.6 2371.3 4258.5

SEPTEMBER 3464.4 2724.8 4087.0 4090.9 6132.4 5213.3 3603.0 2938.3 3051.7 4349.7

OCTOKBER 3464.0 2657.5 4123.0 4133.2 6072.9 5329.4 3609.2 3099.4 3344.1 4404.0

NOVEMBER 3475.6 2599.6 4126.3 4215.2 6019.2 5680.4 3639.7 3058.4 3439.1 4449.6

DECEMBER 3585.7 2706.5 4139.0 4324.1 6521.3 5431.0 3781.7 3230.9 3802.7 4490.0 1

JANUARY 1985 3803.0 2895.4 4096.7 4663.6 6656.3 5537.1 3953.4 3566.1 4244.0 4885.3 Ol

FEBRUARY 3902.9 3048.4 4238.5 4680.3 6345.2 5658.8 4038.9 3085.5 4321.0 4875.6 °

MARCH 3931.1 3048.0 4371.2 4772.0 6035.1 5655.3 4177.2 3936.8 4448.9 4881.5 1

APRIL 3930.3 3046.7 4454.0 4724.0 5908.8 5753.5 4260.4 4017.0 4448.6 4983.6

MAY 3953.9 3071.5 4478.9 4729.1 6038.1 5794.6 4253.8 4035.7 4448.6 4934.9

JUNE 4094.1 3153.8 4556.2 5106.4 5926.3 5905.3 4316.0 4150.6 4461.8 5084.9

JULY 4021.6 2951.3 4630.8 5184.4 5739.2 6019.2 4450.2 4254.3 4464.7 5121.4

AUGUST 3978.1 2844.9 4621.4 5220.4 5760.2 5960.1 4501.0 4279.4 4498.5 5167.9

SEPTEMBER 3947.8 2748.9 4625.7 5270.3 5766.0 5809.2 4570.6 4297.2 4749.1 5222.0

OCTOBER 3951.5 2715.0 4749.6 5260.4 5819.7 5809.7 4628.9 4312.8 4976.9 5251.3

NOVEMBER 4006.. 2769.6 4760.' 5324.9 5885.6 5878.0 4747.2 4324.6 4998.9 5364.8

DECEMBER 4162.4 2978.8 4796.8 5483.3 6024.4 5934.9 47?5.0 4356.9 5037.5 5476.4

JANUARY 1986 4307.4 3147.4 4983.7 5561.3 6174.9 6081.6 4847.4 4669.0 5101.3 5611.0

FEBRUARY 4435.7 3272.3 5236.8 5641.0 6429.4 6232.7 4919.8 4715.8 5255.8 5760.7

MARCH 4561.5 3387.9 5399.4 5740.7 6620.7 6421.4 5007.2 5007.4 5358.5 5836.3

APRIL 4655.6 3460.9 5491.9 5807.5 6996.8 6627.5 5035.7 5127.2 5467.3 5911.4

MAY 4792.0 3616.9 5579.2 5916.5 7228.5 6783.5 5041.4 5207.0 5617.5 6005.7

JUNE 4873.8 3673.9 5682.1 6037.3 7480.2 6939.1 5039.1 5290.9 5770.9 6032.4

JULY 4867.4 3616.3 5821.0 6029.8 7500.3 6952.1 5044.7 5362.2 5800.7 6070.0

AUGUST 4837.2 3541.7 5863.2 6028.8 7494.8 6974.4 5039.0 5376.2 5837.1 6145.2

SEPTEMBER 4798.4 3453.2 5889.9 6031.7 7528.7 69"2.5 5079.1 5368.0 5830.6 6146.5

OCTOBER 5036.4 3583.2 6232.3 6538.4 7688.6 7365.4 5151.3 5424.9 5927.9 6312.8

NOVnMBER 5262.1 3765.4 6475.7 6888.4 7825.1 7848.8 5192.5 5476.5 6038.7 6420.4-------------S-----STATIS--------IC---------------S---LET-----ER_-----STATISTICAL--------------SER-----ICE,--------------A---

SOURCES: STATISTICAL NEWs LETTEgR, sTATIsTICAL SERVCE, AgcnRA.

TABLE 9.02: MONTHLY CONSUMER PRICE INDICES: A C C R A(1977 = 100)

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

COMBINED FOOD BEVERAGE CLOTHING RENT.FUEL FURNISH MEDICAL TRANSPORT RECREA MISCELITEMS TOBACCO FOOTWEAR POWER ING HEALTH COOMMUNIC TION LANEOUS

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

DECEMBER 1982 1196.8 1421.5 987.9 1057.0 524.4 1441.2 1647.4 1049.8 1154.5 911.2

DECEMBER 1983 2207.5 2319.9 2601.3 1947.7 1076.6 2933.7 1180.3 3642.2 1768.4 1897.9

JANUARY 1984 2228.5 2487.7 2607.4 2142.2 1078.0 3036.3 1180.3 2238.1 1768.4 2016.8FEBRUARY 2505.7 2626.9 3872.1 2374.7 1335.6 3979.8 2125.5 2238.1 2075.3 2220.9MARCH 2607.4 2727.0 4107.0 2561.7 1335.6 3980.8 2125.5 2238.1 2248.9 2338.4APRIL 3051.9 3269.7 4107.0 2772.0 1335.6 4493.8 2312.1 3967.9 2379.5 2463.0MAY 3098.0 3307.4 4318.4 2868.0 1347.3 4498.5 2312.1 3967.9 2379.5 2546.2JUNE 3144.0 3299.7 4501.4 2919.9 1354.2 4919.6 2568.3 3967.9 2508.5 2546.2JULY 3125.9 3163.1 4684.6 2966.4 1354.2 5063.7 2830.8 4181.9 2508.5 3015.0AUGUST 2687.3 2380.8 4682.0 2709.1 1354.2 4610.9 2830.8 4181.9 1438.4 3092.4SEPTEMBER 2531.2 2132.1 3732.2 2513.8 1405.7 4649.6 2830.8 4253.6 2887.3 3050.3OCTOBER 2507.9 1989.3 3732.2 2717.1 1405.7 4816.9 2830.8 4325.3 2957.2 3050.3NOVEMBER 2486.6 2009.1 3732.2 2717.1 1405.7 4816.9 2830.8 4325.3 2957.2 3050.3DFC=BER 2783.1 2159.5 4415.4 3109.7 1610.7 4419.7 3372.5 5334.3 3269.3 3039.0

JANUARY 1985 3015.2 2375.0 4489.5 3298.8 1610.7 4501.9 3757.3 6060.5 3843.8 3257.6FFBRUARY 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 3528.6KAY 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 3712.7JULZ 3290.3 2336.5 5287.3 3988.6 1965.7 4866.4 4855.5 6765.4 4264.2 3900.3AUGUST 3287.3 2292.9 5271.6 4018.2 1977.0 4857.6 4797.1 6951.8 4292.7 3900.7SEPTEMBER 3285.6 2207.0 5297.2 4081.7 2060.8 4861.3 4913.9 6951.8 4558.3 3900.7OCTOBER 3336.5 2299.6 5321.1 4022.9 2122.0 4990.8 4913.9 6929.0 4550.6 4018.4NOVEMBER 3403.8 2380.4 5367.2 4078.1 2158.3 5154.5 4913.9 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

JANUAitY 1986 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 4739.8KARCH 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 4259.0 2769.7 7141.5 5191.0 3588.0 6651.3 5158.8 8821.8 5137.9 5102.0SEPTEMBER 4258.1 2714.9 7141.5 5285.5 3628.8 6714.4 5158.8 8832.3 5182 9 5140.4OCTOBER 4444.3 2821.0 7614.2 5799.9 3736.3 7107.3 5241.4 8882.8 5188.9 5325.2NOVEMBER 4640.7 2981.7 8022.2 6103.9 3870.0 7600.3 5266.1 8935.3 5317.2 5478.3DECEMBER 48?8.6 3172.2 8455.4 6551.7 4057.2 8103.1 5284.3 9052.0 5410.8 ''- 4

SOURCE: STATISTICAL SERVICE. NEWS LETTERS.

TABLE 9.03: IWOLEqALE PRICE INDEX NUMBERS (1977-100)

---------------------------------------------------------- __----.------------__----------------------------

(ANNUAL AVERAGE) 1978 1979 1980 1981 1982 1983 1984 1985------------------------------------------------------------------- __--------__----------------------------

Weight:100.0 Combined Index 147.7 244.6 349.5 523.7 712.2 1630.3 2958.6 4624.9

55.0 I. Agric, Forestry, Fishla 146.2 236.8 355.4 474.3 773.3 1758.6 2675.6 3514.441.7 A. Agric, Livestock Pro 147.9 230.5 336.9 527.4 894.8 2009.0 2580.6 3117.5

10.0 S. Forestry, Logging Pr 124.8 244.0 335.5 302.5 230.5 831.1 2881.8 4208.23.3 C. Fish 185.9 291.0 397.5 659.7 882.6 1404.4 3040.8 6383.716.0 II. Mining, Quarrying Prod. 186.7 338.0 449.7 754.2 897.3 1195.8 2078.0 5854.541.4 III. Manufaeturers 148.5 255.8 347.1 546.4 632.8 1538.6 3371.7 6161.814.7 A. Food, Drink, Tobacco 156.0 260.3 376.5 620.1 736.2 1549.1 3028.2 5344.57.3 B. Textiles, Wearing Ap 151.9 220.5 303.0 581.6 669.1 1462.7 3588.4 7124.9

4.0 C. Wood and Furniture 159.4 206.3 206.4 699.4 715.7 774.8 787.9 3072.99.0 D. Chemials 127.7 224.5 378.4 575.5 609.2 1526.7 3332.3 6497.7

1.8 E. Non-Metallic Product 174.1 331.6 428.4 569.2 662.7 3668.3 5619.3 7830.03.8 F. Basie Metal Products 183.4 363.5 353.7 438.8 445.9 1778.8 4555.3 9772.84.4 G. Fabricated Machinery 119.2 243.4 231.1 249.7 250.3 661.6 2361.6 2643.82.0 IV. Electricity, Gas, Water 132.5 159.2 174.2 427.4 519.2 590.8 3159.6 4389.6

31.3 V. Esports 150.6 297.1 376.4 439.3 798.0 1144.4 2734.0 4558.7 0%

SOURCES: STATISTICAL NEWS IElTTER, STATISTICAL SERVICE, ACCRA.PUUAERLY DIGEST OF STATISTICS, JUNE 1984, PP 49-50NEWSLETTER OF CBS NO 4183

TAMLE 9.04: XIDU MEDURS OF PRIME WUILDIE COSTS

(AUWUAL AVERAZE) 197Pt 1979 1980 1981 1982 1983 1984 198S

V.lsht:100.0 Cblned ladoe 155.7 242.0 371.6 636.9 744.0 1784.8 3835.2 5998.1

13.8 Unakilled Labor 141.0 166.3 244.4 407.4 410.3 558.2 1039.1 229.720.2 SkLIled Labor 133.1 164.4 245.6 353.5 357.0 483.6 874.6 1849.24.8 Sand 201.8 315.1 431.8 814.0 118.5 1999.4 3993.6 7776.03.5 Sten- 166.6 304.4 379.8 607.7 786.0 1797.6 4891.4 6407.58.9 Timber 178.5 396.3 637.9 2740.4 1987.9 4329.2 7011.1 8900.0

12.3 Cement 182.8 293.3 433.2 602.7 679.3 2204.6 5064.6 7624.13.4 Steel Katerialn 133.3 231.2 153.4 510.2 789.5 2794.8 5694.7 7894.74.6 RAofIn Materlals 162.0 312.2 323.9 673.5 827.8 1918.1 7002.3 4879.9

28.5 Ksace1aneoua 152.6 232.9 423.4 602.2 720.3 2143.1 4876.5 7630.0

SOURCES: STATISTICAL SERVICE, AccRA.

0w

TABLE 9.05: AVERAGE WHOLESALE PRICES OF SELECTED AGlUCULTURAL CMMDITIES(IN CEDIS PER UNIT)

1970 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 *

Unit:

Maize 220 lbs 7.5 12.8 15.5 20.6 50.3 118.7 121.1 171.9 413.3 773.6 797.5 3857.6 2337.8 2037.9

Millet 204 lbs 8.6 16.6 21.4 21.2 47.7 159.5 185.7 222.8 656.8 878.2 1252.4 4531.2 4435.9 2958.4

Guinea Corn 204 lbs 9.3 1S.5 20.6 24.7 49.5 163.5 178.8 216.0 630.8 884.1 1213.9 5774.4 4402.5 2694.1

Rice 180 lbs 7.5 10.0 15.1 29.6 40.3 182.5 248.0 282.3 763.9 1102.0 2043.8 6155.0 6710.0 5206.7

Yams 100 Tubers 35.0 45.4 48.2 53.4 95.5 286.9 471.6 584.9 875.3 1544.9 2156.3 7019.5 7868.8 6813.2

Cocoyams 200 lbs 6.2 10.6 12.7 13.1 20.3 84.5 101.6 125.7 193.4 403.4 565.4 2806.7 2038.3 1040.7

Cassava 200 lbs 4.1 3.2 6.4 10.3 16.7 59.5 55.4 64.6 138.3 339.8 382.5 1496.9 846.0 -94.6

Plantain 25 lbs 0.4 2.0 1.3 1.1 2.9 9.0 13.9 14.9 21.9 33.8 47.0 200.3 222.3 195.6

Cowpeas 204 lbs 9.3 16.2 20.5 25.6 38.7 189.9 240.2 459.0 802.7 1976.5 2262.1 6494.5 6281.3 5884.7

Tomatoes 112 lbs 5.8 9.5 10.5 12.8 18.8 47.8 61.5 114.3 161.6 303.2 405.9 901.6 1316.6 894.0 >

Groundnuts 180 lbs 11.3 26.5 41.9 51.4 56.7 193.2 320.9 474.1 690.1 1486.0 2371.3 5915.5 5721.3 5942.0

SOURCES: MISISTRY OF AZICULTURE, ACCRA

Estimated

TABLE 9.06: AVERAGE RETAIL PRICES OF SELECTED C(OMMDITIES IN ACCRA(IN CEDIS PER UNIT)

1977 1978 1979 1980 1981 1982 1983 1984 1985

Unit:

Corn - Shelled Ks. 1.1 1.9 3.0 4.1 8.3 8.5 19.5 18.8 19.1Rice kg. 1.3 3.8 10.3 19.0 21.5 - 96.3 94.5 90.4

Kenkey RK. 0.4 0.6 1.8 3.1 5.3 6.8 16.3 16.6 21.9Broad K8. 1.6 2.4 4.2 6.0 ;4.6 22.9 - - 108.6Cassava (Fresh) Kg. 0.4 0.7 1.2 1.7 5.9 5.5 24.9 13.8 9.9Plantain Kg. 0.6 1.3 2.4 e.4 5.9 11.9 50.4 32.1 25.2Yam Kg. 0.7 1.5 2.6 3.6 7.6 11.6 52.4 39.4 30.6Cassava - Garn Kg. 1.1 2.5 3.4 4.5 11.9 14.4 54.9 33.9 22.2Small Beasn K4. 1.2 2.9 10.6 18.1 33.4 58.1 101.3 90.1 81.5

Gromndnut Shelled Kg. 1 2 3.3 13.5 23.8 24.9 48.9 99.5 84.4 73.1Palm Nut Kg. 0.5 0.9 2.4 3.9 6.4 13.3 64.0 24.8 23.4

Palm Oil Beer Btle 3.6 7.4 10.9 14.5 21.4 41.3 111.3 125.6 103.3

Banann Xs. 0.5 1.1 1.9 2.8 4.7 8.1 19.0 31.4 17.2

Cocoyam Leaves KR. 1.1 1.4 2.5 3.2 6.4 10.1 16.9 25.0 17.0Tomatoes - MKedium KR. 1.3 1.8 6.7 11.3 12.6 21.2 49.9 54.2 29.5 I

Beef - Dearer Cut Rg. 3.3 8.5 20.9 38.4 49.2 86.4 135.8 239.0 276.6

Egg One 0.4 0.6 1.1 1.5 2.7 3.1 8.6 10.4 11.0 0%Milk Evaporated Tin 0.4 1.2 1.5 4.4 8.7 2.8 - 18.2 33.0Derrings Sioked K4. 2.4 8.3 22.3 37.1 42.7 63.2 112.7 183.7 147.0

Sugar Granulated Kg. 1.7 4.1 7.2 12.8 15.2 - - 90.3Coca Cola Bottle 0.4 0.9P 0.9 1.1 5.5 1.8 7.6 18.2 39.2

Beer (Club or Star) Bottle 1.4 3.4 4.8 7.0 16.7 11.9 20.4 62.2 78.0

Cigarette - Embassy Packet 0.9 3.1 7.5 10.7 21.9 16.0 25.0 45.0 64.4

Cotton Prints Yard 4.9 7.3 9.1 40.2 64.6 133.7 - - 300.0

GLrls School Uniform One 10.5 12.1 15.4 48.2 93.3 72.7 80.6 160.7 199.7

Rubber Sandals Pair 3.2 5.9 8.3 10.1 15.9 16.5 100.0 100.0 119.4

Kerosene Beer Btls 0.2 0.3 0.8 0.8 1.6 1.5 4.7 12.2 16.2

Charcoal 45.4 kgs. 10.4 20.6 41.4 56.9 111.9 126.7 271.7 455.6 485.9

Guardian Soap One 0.4 0.9 1.0 4.5 6.2 1.3 - - 30.5

Katches Box 0.1 0.3 1.0 2.0 5.4 2.3 4.5 7.0 15.6

Anti-Malaria Tablet 10 1.0 1.0 1.9 2.0 3.6 - 5.0 5.0 11.5Petrol - Super Gallon 1.4 2.2 5.1 7.3 12.2 13.0 26.1 53.5 196.3

Omnibus Services Min.Dist.Cost 0.1 0.1 0.2 0.2 0.6 1.0 1.8 3.0 5.0

Mammy Truck - Trotro Min.Dist.Cost 0.1 0.3 0.4 0.6 1.5 1 S 1.3 5.1 5.560-Page School Book One 3.4 5.4 6.0 7.5 9.7 9.2 10.8 22.6 45.5

…------------------------------------------------------------------__--------__----------------------------------------

SOURCES: GHANA STATISTICAL SERVICE, ACCRAQUARTERLY DIGEST OF STATISTICS, MARCH 1983. P. 53 AND JUNE 1986, P. 57.

TABU. 9.07: KD2MlY EIAINGS Pm EMPLOYER IN ESTABLISBlUMES EXLOYING 10 R NGRE MMWORKERS

-----------------------------------------------------------------. __---------__-------------------------------------

1975 1976 1977 1978 1979 1980 1981 1982 1983-------------------------------------------------------------------- __-------__-------------------------------------

PUBLIC SECTOR: 95.9 108.8 211.5 214.5 269.3 441.0 579.0 607.0 1071.0ACRICULTUREI FOTRESRY FISHINi 66.6 71.1 154.8 171.4 182.1 322.0 490.0 543.0 833.0MINIZO, CUA8RRYIN 116.4 131.2 296.2 305.6 373.9 612.0 862.0 863.0 2214.0MAFACTURIS 116.8 122.2 293.0 229.1 311.3 527.0 631.0 709.0 1256.0SLECTmIC , WATER, GAS 108.9 103.6 214.9 222.8 291.4 526.0 703.0 744.0 860.0CC1o StRUCTION 73.1 77.8 158.4 188.4 221.5 328.0 516.0 518.0 891.0WULESAX., RETAIL TRADES, SSTA. 89.3 97.3 213.1 2-a...8 259.7 417.0 481.0 577.0 859.0TRANSPR, STORAGE, aCfU SCATION 113.5 239.6 190.6 238.3 315.6 530.0 614.0 714.0 1014.0FINANCE, INS. REAL ESTATE, BUS. 1.4 125.0 277.9 364.3 348.0 520.0 640.0 720.0 1211.0COIUONIY, SOCIL, PEuS. SERVICES 103.1 109.5 235.7 225.2 272.5 448.0 553.0 562.0 940.0

PRIATE SECTOR: 119 131 232 292 369 581 - 868 1301AGRICULTURE, FORESTRY, FISIING 67 79 153 194 237 416 688 734 1173MINIGC, QUARRYING 142 158 152 181 185 676 785 1616 2109

AMWWACTURI1C 119 125 209 313 374 567 713 841 1345CLECTRICITY, ATER GAS - - - - - - - - -CONSTRUCTION 71 91 140 169 202 522 - 533 840 aWHOLESALE. RETAIL TRADES, RLESTA. 140 220 434 362 561 803 - 1197 1529 °TRANSPORT, STORAGE, COMICATI0N 138 198 353 347 360 603 955 999 1701 SFINA , INS., REAL ESTATE, BUS. 200 169 298 314 373 715 972 1469 1266COISITY, SOCIAL. PERS. SERVICES 131 120 213 230 305 449 538 775 957

PUBLIC AND PRrIVAZE SECTORS: 102 114 215 226 286 461 - 645 1110AGRICULTURE, FOESTRY, FISING 67 72 155 172 186 329 503 559 886MINING, QJARRYING 117 133 293 304 373 613 859 870 2205MANUFACTUING 118 125 223 306 356 552 689 787 1312ELECTRICITY, WATER, GAS 109 104 215 223 291 526 703 744 860CONSTRUCTINII 72 85 153 185 217 356 - 521 S83WROLESALE, RITAIL TRADES, RESTA. 112 154 281 284 372 553 - 767 1101TRANSPORT, STORAGE, C0IUNICATION 115 237 197 247 318 534 624 721 1119FINANCE, INS., DEAL ESTATE, US. 139 137 283 352 353 545 701 852 1217cWwiTY, SOCIL, PIS. sERvIcEs 106 110 235 225 274 448 553 582 941

SOURCES: GHANA STATISTICAL SERCEQUARTERLY DIGEST OF STATISTICS, JUNE 1984, P44

TABLE 9.08: INDEX NUMBERS OF EMPLOYEES' £ARNINGS

(1977 - 100) 1970 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 198A 1985

Minim=m Wage:Cedis Ptr Day

0.a 1.0 ..0 2.0 2.0 2.0 3.0 4.0 4.0 5.3 12.0 12.0 25.0 1J 35.0 21 70.0

Index Nonlnal WaSe 25.0 33.3 33.3 66.7 66.7 66.7 100.0 133.3 233..' 177.7 400.0 400.0 725.0

- -

Index Real Wage 183.4 203.3 173.0 292.3 225.4 144.2 100.0 77.0 49.c 44.3 46.1 38.0 31.6 _

Average Monthly Earnings;Index Nominal Earnings (1977-100) 43 0 50.2 57.0 78.7 84.3 94.5 100.0 288.2 237.8 352.0 538.6

Iadex Real Earnings (1977 - 100) 315.3 306.1 295.8 345.3 284.9 204.3 100.0 108.7 89.0 87.7 62.0 -

-

SOURCESX GBMA STATISTICAL SERVICE11 FROK APRIL 19832/ FROM APRIL 1984

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