Project LINK Submission in October 2015 Country Report: Ghana

Project LINK Submission in October 2015 Country Report: Ghana Prepared by Ghana Country Report Oct. 2015 Cletus K. Dordunoo, Abubakari Zakari and Anthony K.K. Dordunoo 1 ClayDord Consult, University Post Office, Box LG 46, Legon, Accra, Ghana E-mail: claydord@gmail.com, ckdordunoo@gmail.com or profcletuskdordunoo@yahoo.com 1. Recent Macroeconomic Trends and Developments The year-on-year inflation as measured by the Consumer Price Index (CPI) reveals that a rise from 13.5 percent in December 2013, inflation increased to 14.5 percent in March 2014, mainly driven by depreciation of the Cedi as well as change in utility tariffs and transport costs. It increased further to 16.9 percent in October as second round effects from earlier price shocks emerged. Inflation, however, ended the year at 17.0 percent. It is important to note that the dumsor-dumsor led to further increase in the cost of generation of electricity as the prices of generators and petroleum kept on rising into 2015. The CPI inflation stood at 17.3 percent in August 2015, down by 0.6 percentage point from the 17.9 percent recorded in July 2015. In the real sector, revised GDP estimates for 2014 showed a growth of 4.0 percent over the 2013 final estimates. The Services sector recorded the highest growth of 5.6 percent, followed by Agriculture (4.6%) and the Industry sector (0.8%). Services remain the largest sector. Its share of GDP increased marginally from 49.8 percent in 2013 to 51.9 percent in 2014. The sector's growth rate also decreased from 10.0 percent in 2013 to 5.6 percent in 2014. Two of the subsectors in this sector recorded growth rates above 20 percent. These are the Financial and Insurance subsector (22.9%) and the Crops remain the largest activity in the economy with a share of 16.8 percent of nominal GDP. In the Industry sector, the least growing sector with a share of 26.6 percent, growth declined from 6.6 percent in 2013 to 0.8 percent in 2014. Of all the industrial activities, the Mining and Quarrying subsector recorded the highest growth of 3.2 percent in 2014.The Non- Oil annual GDP growth rate declined from 6.6 percent in 2013 to 3.9 percent in 2014. The 2014 Non-oil GDP for Industry grew by -0.3 percent compared with 3.6 percent in 2013. Monetary Sector: Annual growth in broad money supply (M2+), including foreign currency deposits, recorded year-on-year growth of 36.8 percent to GH 36,843.2 million at the end of 2014 compared with 19.1 percent in 2013. The growth in M2+ was reflected in all of its components. The domestic currency component (M2) increased by 33.0 percent in 2014 compared with 18.2 percent in 2013 while foreign currency deposits also increased by 49.1 percent, up from 22.0 percent in 2013. Growth in M2+ in 2014 was underpinned by increases in both Net Foreign Assets (NFA) and Net Domestic Assets (NDA). Net Foreign Assets recorded a growth of 57.7 percent in 2014, mainly due to a significant increase in the NFA of the BoG which grew by 45.3 percent, compared with a decrease of 19.5 percent in 2013, while NDA increased at a slower pace by 31.2 percent in 2014 compared with a growth of 36.7 percent in 2013. Interest Rate Developments: The Monetary Policy Committee of the Bank of Ghana raised the Monetary Policy Rate by a cumulative 500 basis points (bps) from 16.0 percent in 2013 to 21.0 percent in 2014. This was supposedly broadly in line with the tight monetary policy of the Bank during the year to deal with the high inflation expectations and depreciation of the domestic currency. Consequently, Bank of Ghana bills that are used for fine tuning in the transmission process of monetary policy generally trended upwards with 1 Prof. C.K. Dordunoo is the Chairman and Chief Executive of the ClayDord Consult (of ClayDord Enterprises Ltd A Knowledge-Based Group of Enterprises). This report is prepared for the Project LINK (UN Group of Experts on the World Economic Outlook) Meeting from 21 st to 24 th October 2015. The third quarter of 2015 has not been fully updated owing to lack of data. Mr. Abubakari Zakaria is Assistant Research Fellow at ClayDord Consult. Mr. Anthony Dordunoo is Research Associate of the ClayDord Consult. 1

2 Ghana Country Report Oct. 2015 the rates on the 28 day bill, 56-day bill and the 270-day bill increasing by 500 bps, 656 bps and 697 bps respectively to 24.78 percent, 25.35 percent and 26.82 percent, respectively, as at the end of December 2014. Interest rates on the 91-day and 182-day bills also went up by 699 bps and 756 bps respectively to 25.79 percent and 26.39 percent respectively, at end December 2014. Rates on the 1-year note, 2-year note and 3- year bond also increased while the rates on the 5-year and 7-year bonds, remained unchanged at 19.04 percent and 18.00 percent, respectively. In the interbank market, the weighted average rate also increased by 760 bps from 16.34 percent to 23.94 percent compared with a decrease of 77 bps in 2013. The average lending rates increased by 342 bps from 25.56 percent in December 2013 to 28.98 percent at the end of December 2014. Exchange Rates: The Cedi depreciated by 26.7 percent between January and June, 2014 but remained relatively stable during the second half, depreciating by 4.5 percent. The cumulative depreciation for 2014 was 31.2 percent compared with 14.5 percent in 2013. In the forex bureau market, the Cedi depreciated by 27.6 percent, 24.5 percent and 20.2 percent against the US dollar, the pound sterling and the euro, respectively. This compares with depreciation of 16.3 percent, 17.5 percent and 19.3 percent against the US dollar, the pound sterling and the euro respectively, in 2013. The decline was due to increased demand pressures, speculative activities and declining forex inflows. However, the Cedi gained marginal stability during the last quarter of the year on the back of tight monetary policy, proceeds from the Eurobond floatation and the cocoa syndicated loan. Balance of Payments: The overall balance of payments improved significantly from a deficit of US$874.2 million in 2013 to a deficit of US$85.2 million. This was as a result of improvements in the current account balance, which outweighed the deterioration in the capital and financial accounts. The current account balance recorded a deficit of US$3,698.2 million (9.2 percent of GDP) in 2014 compared with a deficit of US$5,704.1 million in 2013 (11.9 percent of GDP). This development was as a result of significant reductions in the trade deficit as well as improvements in the current transfers account. The trade balance improved from a deficit of US$3,848.3 million recorded in 2013 to a deficit of US$1,386.9 million in 2014. This was the net result of a sharp slowdown in imports and moderate reduction in exports revenue in 2014. The fall in import was due to the sharp depreciation in the value of the Cedi while exports suffered from the falling commodity prices. The value of merchandise exports for 2014 was estimated at US$13,213.1 million, indicating a decrease of 3.9 percent compared with the outturn of US$13,751.9 million in 2013. Falling commodity prices on the international market, especially for gold and crude oil, accounted for the decline. The value of merchandise imports was estimated at US$14,600.1 million in 2014, down by 17 percent compared with that of 2013. The decline in imports was due to a significant reduction in non-oil imports, mainly on account of sharp depreciation in the value of the Cedi. The value of non-oil imports declined by 22.4 percent to US$10,906.1 million while oil imports rose by 4.0 percent to US$3,694.0 million in 2014. International Reserves: The country s gross international reserves decreased by US$171.1 million to US$5,461.0 million in 2014 from a stock position of US$5,632.2 million at the end of December 2013. This level of reserves was sufficient to provide 3.2 months of imports cover compared to 3.1 months as at December 2013. The stock of net international reserves declined by US$85.2 million to US$3,199.3 million at the end of 2014. Fiscal Performance: In line with Government s medium term fiscal objectives as outlined in the Budget, fiscal policy in 2014 aimed at ensuring fiscal prudence and debt sustainability. The fiscal policy objective was to be achieved through improved revenue mobilization, rationalisation of public expenditure, realignment and enhancement of the efficiency of public expenditures, as well as implementation of new debt management reforms. In this regard, the 2014 Budget targeted a reduction in the deficit from 10.1 percent of GDP in 2013 to 8.5 percent. The implementation of the revenue and expenditure measures was expected to result in an increase in tax revenue from 15.3 percent of GDP in 2013 to 17.0 percent in 2014. On the

other hand, total expenditure including the clearance of arrears was expected to rise from 31.0 percent of GDP in 2013 to a modest 32.0 percent in 2014. Despite the overall positive performance in 2014, the economy faced some macroeconomic challenges such as a sharp depreciation of the Cedi, rising interest rates, high inflation and a slowdown in economic activity resulting mainly from falling commodity prices, EBOLA Knock-on effect and energy supply shortages (leading to dumsor-dumsor ). These, coupled with delays in the implementation of some of the revenue and expenditure measures affected the fiscal performance during the first few months of the year. This necessitated a review of the revenue and expenditure estimates in the 2014 Budget and resulted in a revision of the fiscal deficit target from 8.5 percent of GDP to 8.8 percent. Provisional fiscal data for the 2014 fiscal year indicates that, both revenue and expenditure were below their respective targets for the period. However, with the shortfall in revenue exceeding that of expenditure, the resulting cash fiscal deficit was equivalent to 10.2 percent of GDP against the revised target of 8.8 percent. Total revenue and grants for the period amounted to GH 24,745.5 million (21.8 percent of GDP), against a target of GH 26,230.3 million (22.9 percent of GDP). The shortfall in total revenue and grants for the period was as a result of lower than anticipated domestic revenue collections and low disbursement of grants, mainly budget support from development partners. In nominal terms, the provisional outturn was 27.1 percent higher than the outturn for the same period in 2013. Total tax revenue amounted to GH 19,229.8 million (17.0 percent of GDP), 2.8 percent lower than the revised budget target of GH 19,788.6 million (17.2 percent of GDP). The shortfall in tax revenue compared to the target was partly on account of the slowdown in economic growth resulting from the energy challenges as well as lower import volumes. This led to lower than estimated corporate income taxes and import duties. In nominal terms, tax revenue was 34.4 percent higher than the outturn recorded for the same period in 2013. The sturdy year-on-year growth in tax revenue was mainly the result of the strong growth in oil tax revenue and VAT by 78.3 percent and 40.8 percent, respectively. Of the total tax revenue, oil tax revenue for the period was GH 1,350.7 million, 25.5 percent higher than the revised Budget target of GH 1,076.2 million. Disbursement of grants from development partners was 41.5 percent lower than the budget target of GH 1,390.8 million and 10.1 percent higher than the outturn for the same period in 2013. The lower than expected outturn of grants was mainly due to the slow disbursement of programme grants from our Multi Donor Budget Support partners. Total expenditure, including payments for clearance of arrears and outstanding commitments amounted to GH 36,296.1 million (32.0 percent of GDP), against a target of GH 36,358.3 million (31.7 percent of GDP). The outturn was 0.2 percent lower than the budget target and 25.5 percent higher than the outturn for 2013. The lower than estimated expenditure for the period was mainly as a result of lower than estimated interest costs, delays in the payment of Social Security of Government employees, as well as delays in the transfer of grants to other government units such as the District Assemblies Common Fund (DACF) and the Ghana Education Trust Fund (GETFund), the latter mainly due to the need to control government spending in light of the unexpected shortfall in revenue. Total expenditure on Wages and Salaries for the period totalled GH 9,448.6 million (8.3 percent of GDP), 2.5 percent higher than the budget target of GH 9,218.9 million (8.0 percent of GDP) and 14.6 percent higher than the outturn for 2013. In addition, an amount of GH 567.6 million was spent on the clearance of wage arrears. Total interest payments was GH 7,080.9 million (6.2 percent of GDP), against a Budget target of GH 7,884.7 million (6.9 percent of GDP). The outturn was 10.2 percent lower than the Budget target but 61.0 percent higher than the outturn in 2013. The growth in interest payments is mainly on account of rising domestic interest rates and increased short term domestic debt. Of the total interest payments in 2014, domestic interest payment constituted 86.3 percent. Total capital expenditure amounted to GH 6,095.7 million (5.4 percent of GDP), 1.8 percent higher than the Budget target of GH 5,990.2 million (5.2 percent of GDP) and 27.2 percent higher than the outturn in 3

2013. The higher than estimated outturn for capital spending was on account of higher foreign-financed capital expenditure driven mainly by higher than estimated disbursement of project loans. Overall Budget Balance and Financing: Based on the revenue and expenditure performance outlined above, an amount of GH 11,550.6 million (10.2 percent of GDP) was registered as the cash fiscal deficit for 2014. This compares with the Budget target of GH 10,128.1 million (8.8 percent of GDP). The deficit was financed mainly from foreign sources, with total foreign financing amounting to GH 5,874.1 million (5.2 percent of GDP), including GH 3,161.9 million from the issue of the Eurobond. Net Domestic Financing (NDF) of the Budget was GH 5,676.5 million, 35.4 percent higher than the Budget target and 9.1 percent lower than the outturn in 2013. Developments in Public Debt: Ghana s total public debt stock as at end-december, 2014 stood at GH 79,665.5 million, representing an increase of 52.8 percent from the end-2013 stock of GH 52,125.9 million. Out of this, external debt was GH 44,625.3 million and domestic debt was GH 35,040.2 million, representing 56.0 percent and 44.0 percent of the debt stock, respectively. In dollar terms, the debt stock was US$24,817.1 million, representing an increase of 3.3 percent from the end-2013 stock of US$24,021.2 million. Out of this, external debt was US$13,901.5 million and domestic debt was US$10,915.6 million. The increase in the total debt stock was largely on account of high domestic net issuance, the US$1billion Eurobond issue, net disbursement of externally financed infrastructure projects and the depreciation of the local currency. Total public debt as a percentage of GDP stood at 70.2 percent at the end of December 2014, an increase from the end 2013 ratio of 54.9 percent. This has risen to about 72 percent in the third quarter of 2015. Total public external debt stock at the end of 2014 stood at GH 44,625.3 million, representing an increase of 79.4 percent from the end-2013 stock of GH 24,871.9 million. Total external debt as a percent of GDP stood at 39.3 percent in December, 2014 up from 26.2 percent recorded in 2013. In US dollar terms the debt stock increased from US$13,901.5 million, representing an increase of 21.3 percent from the end-2013 stock of US$11,461.7 million. The total domestic debt stock amounted to GH 35,040.2 million at the end of December 2014. This represented a 28.6 percent increase from the GH 27,254.0 million recorded at the end of December, 2013. In US dollar terms, the domestic debt stock stood at US$10,915.60 million at the end of December 2014. This represented a 13.1 percent decrease from the US$12,559.5 million recorded at the end of December, 2013. Total domestic debt as a percent of GDP, which stood at 28.7 percent as at the end-2013, increased slightly to 30.9 percent by the end of 2014. 2. National Policy Assumptions As in the October 2014 projections, ClayDord Consult still maintained the two scenarios (i) high and (ii) low in this Report. 3 The high scenario reflects the objective of achieving US$1,900 per capita income by 2015, which reflects the Millennium Development Goals, the Sustainable Development Goals (SDGs) and long-term development of Ghana. This target implies growth in real GDP should range from 8 to 12 percent (compared with the current average of less than 6% excluding petroleum contribution), investment rate between 38 and 45 percent (compared with the current average rate of 30%) and the financial intermediation to accelerate from the current 3 In the full model simulation and scenario building, ClayDord Consult simulates three types of futures paths for Ghana. These are the high, middle and low. The high scenario assumes a GDP growth path which is between 3 and 4 percent higher than the middle scenario. The per capita GDP was projected to be US$60,000 by the Year 2057 (i.e. Ghana at 100 years). The simulations and scenarios are in ClayDord Macro Model of Ghana (2006). For an example of the use of the model for forecasting, refer to [Government of Ghana (2007), 2057 Budget Celebrating Ghana s Achievements, Ministry of Finance and Economic Planning, Accra: G-Pak Ltd, A Subsidiary of Graphic Communications Group (with the Padmore ISBN 9988-8378-8-7)]. The middle scenario is what we designate as the high scenario in this Report with a GDP per capita target of US$1,900 by end-2015 and US$35,000 by 2057. The third scenario is the low scenario in this Report. It assumes the worst scenario which has specific assumptions or business as usual and constraints that may impede progress in the socio-economic development of Ghana. 4

rate from about 30 percent to 57 percent. With the domestic savings rate of about 12 percent it implies a resource gap of over 28 percent of GDP from external sources in the form of foreign direct (both equity and portfolio) investment as well as loans. This is a laudable target, however, the investment implications seem to suggest doubt of achievement (it is not impossible but extremely doubtful given the business as usual attitude and stance of economic management especially as evidenced in the first three quarters of 2014 and the first three quarters of 2015). The investment climate has already fallen and doing business in Ghana is no more conducive as a result of high cost and interruption of energy supply, exchange rate distortions and increased tax burdens. The low scenario, on the other hand, is based on some specific policy assumptions that have to be articulated. In case we fail to satisfy these conditions the outcome may even be worse than the low scenario. These include the following: 1. Continuation of market based economic policies, and the divestiture of the remaining State-Owned Enterprises (SOEs) including partial off-loading of Ghana s shares (to the buyers/investors) to lead infusion of new technology, 2. Intensification of fight against crime on all fronts (both preventive and curative) especially corruption, 3. Effective and efficient administration of public funds (loans and internally generated), 4. Exploiting and taking advantage of the international initiatives such as the MDG/MDA, AGOA, NEPAD, etc. and the implementation of the recommendations of the Ghana s APRM Report which seems to be relegated to the background, 5. Continuation of cordial international relations with UN, EU, AU, as well as other multilateral and bilateral partners, 6. Inclusive and pro-poor economic growth policies, 7. Continuation of the vibrate private sector development, 8. Increases in exports as against imports through diversification, and high value added exports and widening of export based products. However, this becomes possible if the cost of doing business in Ghana is further brought down, creation of enabling environment, as well as strong and autonomous public and private institutions, 9. Effective and efficient administration of the funds from the oil and gas industry to avoid resource curse, and 10. Increase in investment to over 50 percent of GDP in the medium-term and beyond. The projections of Ghana s macro-variables in this report have been influenced by medium-term plans and to some extent Ghana Vision 2020 which has been relegated to the background since 2001. The high scenario in this Report reflects some of the objectives of achieving the Ghana Shared Growth and Development Agenda (GSGDA I) which ended in 2013 and GSGDA II expected to be implemented from 2014. The GSGDA II is the macroeconomic framework for the medium-term development of Ghana 2014 2017. The main goal of the medium term macroeconomic programme is to achieve and sustain macroeconomic stability for the promotion of growth and development. The strategy for achieving macroeconomic stability will include (i) ensuring fiscal discipline that hinges on prudent public expenditure management, (ii) enhanced domestic revenue mobilization, (iii) public sector reforms, with particular emphasis on right-sizing the public service, (iv) reclassification of public debt and improvement in public debt management, and (v) encouraging the private sector to participate in the accelerated growth agenda through Public Private Partnerships (PPPs). With regards to the Medium Term targets of 2014 2017 (though not driven by any long-term perspective vision), the 2015 Budget and Mid-year review ushered in decisions to re-structure the debt situation. Even though the 15-year US$1.0 billion Eurobond may help to improve the situation a little, the huge proportion 5

of short-term debt, the continuing adverse global and domestic developments posed challenges to economic management in since 2013 through to 2015. In terms of subsequent Medium-Term Targets for 2015 2017 (which is not driven by any long-term perspective plan or vision), the specific macroeconomic targets to be pursued are expected to include the following: an average real GDP (including oil) growth rate of at least 6 percent per annum; an average nonoil real GDP growth rate of at least 8; an inflation target of 9 percent with a band of ±2 percent; an overall Budget Deficit of 6 percent by 2017; and gross International Reserves which will cover not less than 4 months of imports of goods and services by 2017. 3. Forecasts Summary High Growth Module: Accelerated and Sustained Growth : If the growth in real GDP is to reach double digit in a few years (as was the case in 2011) what does it mean and take? By implication it means removing constraints in the way of production (i.e. strengthening the supply-side capacity) and allowing the economy to unleash all its potentials that will raise the per capita income far above the low scenario of per capita income of about $1,000 attained prior to and at end-2006. It also means further diversifying the export sector through adding value to most of the primary products. The investment implications for the high scenario include capital formation rising from the current 33.5 percent of GDP to 45 percent and above by 2015. The analysis of the output-incremental capital ratio (OICR), which measures investment efficiency, shows that there must be improved efficient use of investment resources that will increase the ratio to levels attained in 2010 (30.59%) to a high attained in 2011 (45.52%). This efficiency rates are attainable rather than the low rates ranging from 17.50 to 22.44 percent which can easily slip us into the low scenario growth path. Low Growth Module: Business as Usual : If the old policy regime persists, growth rates may not exceed 4.0 percent as against 14 percent experienced in 2011, maybe for exceptional outliers due to extra-ordinary performance of the rain-dependent agricultural sector. The major elements in the old policy regime are as follows: low level of financial intermediation resulting from high lending rates and low deposit rates, low domestic savings rates and investment, inadequate infrastructure, lower term savings, high reserve ratio, rates of inflation in double digit but close to 19%, and the depreciation of the nominal cedi which is determined by demand for and supply of foreign exchange. The situations continued in the last three quarters of 2015 and highly contributed to the deviation from the target real GDP growth rates of 7.0/8.0 percent to the actual real GDP growth rate of 4.0 percent in 2014. Forecasts and Analysis (2015-2017): The macroeconomic objectives for 2015 include real GDP growth of 4.0 percent. Average inflation is targeted by Government to continue to be in single digit and to be 6.5 percent with a deviation of ±2. ClayDord Consult simulation exercises, on the other hand, estimates a real GDP growth of 4.5 percent by the end of 2015. (ClayDord Consult forecasts are in the attached Table). The fiscal deficit of 8.5 percent of GDP has been programmed by Government for 2015. In view of the commitment to improve revenue mobilization through the Ghana Revenue Authority (GRA) and to cut expenditure through realigning the key budget items as well as enhancing the efficiency of public expenditures by use of Public Financial Management (PFM) including Ghana Integrated Financial Management and Information System (GIFMIS), and the removal of petroleum and energy subsidies as evidenced in the first two quarters of 2015, we projected deficit to be about 7.9 percent of GDP if government continues with these actions by end of 2014 vis-à-vis 10.16 percent in 2013. The external sector is anticipated to experience trade deficit of US$3,291.94 million and a current account deficit of US$5,203.80 million at the end of 2014. 6

4. Policy Issues and Uncertainties In view of the performance in 2013 and first eight months of 2014, the macroeconomic objectives of the government in 2014 are partly realistic and in some cases unrealistic given the targets of the Medium Term development plan which draws from the GSGDA II and the specific targets of 2014 in particular. Total Revenue which is made up of Direct and Indirect Taxes, Grants and other Non-tax revenue fell short of the budget but moderate than 2013 fiscal year. Though total expenditure increased, it is expected to be moderate due to the implementation of the removal of subsidies especially on energy and utility and reduction of government subvention to some agencies which are believed can be weaned off public payroll. Despite the fact that the policies and focus areas are fairly consistent with the general and sectoral appropriations along the statutory and discretionary expenses, the growth rate of at least 8.0 percent is likely not to be achieved because the components such as capital accumulation in the previous years has fallen due to the high cost of doing business (high lending rate, low private saving rate, high cost of energy, high cost of transportation, etc.) and the decline in the business and consumer confidence and relatively low job creation and employment opportunities (as against number of new graduates). Government effort to fight these challenges seems to be slower because it requires long term to period. The reality with this issue is that investment in capital accumulation involves a trade-off between current and future consumption. However, the government as a political entity wants to stay in power and thus will prefer short term investment to long term. This brings the uncertainties as to whether the targets development targets will be achieved. On the other hand, the effect of exogenous factors such as high international crude oil prices causing the upward revision in prices of refined petrol and gasoline by the National Petroleum Authority (NPA) as well as weather vagaries on the macroeconomic objectives leaves much to be desired. However, there are a few policy issues and suggestions that have to be borne in mind. Government must resolve to remove all the bottlenecks in the way of the industry and commercial sectors (private sector development and incentives for local investment and provision of conductive business climate). As part of these measures, bank lending interest rate must come down in line with other rates in order to reduce the cost of borrowing to private businessmen and women. Another main risk is how to sustain the prudence in economic management (or better still to improve upon it) in order to sustain the single digit inflation rates, among others by 2014 and beyond. The fight against corruption in Ghana must be intensified in order to prevent all forms of looting of national (including financial) resources. Government must also intensify its fight to curb the high rate of unemployment especially of the youth which is over and above 24.3 percent of labour supply. Any changes in these policy directions may affect the forecasts. The summary of forecasts by ClayDord Consult is in the Attached Table. 7

8 Ghana Country Report Oct. 2015 GHANA ECONOMIC FORECASTS AND ANALYSIS 2013-2015 Forecast Table for Ghana for the Project LINK, Oct 21 2013 @\claydord\project\link\ghana economic forecasts KEY ECONOMIC INDICATORS Last Update: 2010 2011 2012 2013 2014 2015 2016 2017 13-Oct-15 03:42 PM Aggregate Demand (Million Ghana Cedis, Current Prices) Gross Dom Prod (GDP) 46042.10 59816.30 75315.10 93416.00 113343.00 129157.19 159058.28 195005.45 Exports (gdp comp) 13571.70 26389.70 33521.70 47124.81 66248.05 93131.51 131115.63 180498.38 Imports (gdp comp) 21133.80 29727.20 41106.80 54589.83 72495.29 96273.75 133072.31 175002.98 Aggregate Demand (Million Ghana Cedis, 2006 Prices) Gross Dom Prod (GDP) 24228.41 27620.38 30189.08 32392.88 33688.60 35002.45 36717.57 38553.45 Private Consumption 19329.30 21829.30 23835.20 25648.71 27726.26 30221.62 33052.26 35912.20 Government Expenditure 3317.90 4968.60 5220.30 6119.35 7220.84 8491.70 10319.79 11958.90 Gross Fixed Investment 6346.00 9194.50 10923.40 12005.75 13446.43 15261.70 18286.53 20994.11 Exports (Goods/Services) 8717.40 11344.60 12420.70 14630.70 17703.15 21146.41 25285.44 29700.36 Imports (Goods/Services) 12222.20 18055.20 20903.10 25021.95 30526.78 36235.28 44895.52 52985.69 Balance of Payments and Foreign Debt (Million Dollars) Merchandise Exports 7960.08 12785.42 13542.73 14158.80 15002.66 15902.82 16936.51 18139.00 Merchandise Imports 10922.11 15837.73 17763.22 18539.90 19465.04 20376.24 21361.55 22378.02 Trade Balance -2962.03-3052.31-4220.49-4381.10-4462.38-4473.41-4425.04-4239.02 Current Account Balance -2767.73-3541.28-4921.62-4940.00-5203.80-5463.47-5642.67-5875.99 Exchange Rate (Official) :$1 1.43 1.54 1.87 2.05 2.94 3.53 4.05 4.56 External Debt */ 6254.55 7652.95 8835.56 10682.35 12772.99 15154.11 18140.21 21642.35 Interest Payments 1439.36 1611.20 2436.20 2036.86 2354.28 2749.76 2896.33 3260.42 GDP Deflators CPI (2006 = 100) & Ex(Im)port Deflators & Money Supply (M2+) GDP Deflator 189.85 214.46 242.90 260.08 295.66 336.11 381.06 426.65 Consumer Price Index 294.98 320.28 348.62 395.69 462.95 498.10 561.19 632.16 Export Deflator 155.69 232.62 269.89 322.10 374.22 440.41 518.54 607.73 Import Deflator 172.91 164.65 196.65 218.17 237.48 265.69 296.40 330.28 Money Supply 13663.00 18195.16 22620.60 32932.51 41110.22 51285.37 63429.34 78290.96 2010 2011 2012 2013 2014 2015 2016 2017 Percent Change (%) Gross Dom Prod (Nom GDP) 25.81 29.92 25.91 24.03 21.33 13.95 23.15 22.60 Exports (gdp comp) 26.60 94.45 27.03 40.58 40.58 40.58 40.79 37.66 Imports (gdp comp) 36.51 40.66 38.28 32.80 32.80 32.80 38.22 31.51 Gross Dom Prod (Real GDP) 7.90 14.00 9.30 7.30 4.00 3.90 4.90 5.00 Private Consumption 9.58 12.93 9.19 7.61 8.10 9.00 9.37 8.65 Government Expenditure 13.99 49.75 5.07 17.22 18.00 17.60 21.53 15.88 Gross Fixed Investment 23.81 44.89 18.80 9.91 12.00 13.50 19.82 14.81 Exports (Goods/Services) 24.60 30.14 9.49 17.79 21.00 19.45 19.57 17.46 Imports (Goods/Services) 20.97 47.72 15.77 19.70 22.00 18.70 23.90 18.02 Merchandise Exports 36.31 60.62 5.92 4.55 5.96 6.00 6.50 7.10 Merchandise Imports 35.74 45.01 12.16 4.37 4.99 4.68 4.84 4.76 Trade Balance 34.24 3.05 37.61-8.37-14.46-3.74-24.06-40.36 Current Account Balance 63.99 27.95 38.98 0.37 5.34 4.99 3.28 4.14 Exchange Rate (Official) **/ -0.48-7.12-17.54-8.75-30.27-16.71-12.84-11.18 External Debt 24.89 22.36 15.45 20.90 19.57 18.64 19.70 19.31 Interest Payments 39.43 11.94 51.20-16.39 15.58 16.80 5.33 12.57 GDP Deflator 16.48 12.96 13.26 7.07 13.68 13.68 13.37 11.96 Consumer Price Index 8.58 8.58 8.85 13.50 17.00 15.25 16.13 15.69 Export Deflator 1.60 49.42 16.02 19.35 16.18 17.69 17.74 17.20 Import Deflator 12.85-4.78 19.44 10.94 8.85 11.88 11.56 11.43 Money Supply 33.80 33.17 24.32 45.59 24.83 24.75 23.68 23.43 Note: Projections by ClayDord Consult under the guidance of Prof. C.K. Dordunoo, Research and data up-dating was undertaken by a Team led by Mr. Abubakari Zakari, & Anthony Dordunoo. **/ Rate of Depreciation and not percentage change

9 Ghana Country Report Oct. 2015