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Economic and Commercial Brief

Economy Overview

Ghana’s economy continued to expand in 2019 as the first quarter gross domestic product (GDP) growth was estimated at 6.7%, compared with 5.4% in the same period of last year. Non-oil growth was also strong at 6.0%. The relatively high quarterly growth was driven by a strong recovery in the services sector which grew by 7.2% compared with 1.2% in 2018.

The Government of Ghana continued with its fiscal consolidation efforts in 2019 even though there were still challenges in meeting the revenue targets. Fiscal performance for the first half of 2019 showed an overall budget deficit (on cash basis) of 3.3% of GDP higher than the target of 2.9% of GDP. This is because the revenue shortfalls of 1.6% of GDP was higher than expenditure cuts of 1% of GDP.

Private sector credit grew stronger, supported largely by the well-capitalized banking sector. Inflation continued to be in single digits in the first six months of 2019; gradually rising from 9% in January to 9.5% in April 2019 but reduced to 9.1% in June 2019 mainly driven by low food inflation.

Ghana’s current account in the first half of 2019 was estimated at a surplus of 0.1% of GDP supported by favorable trade conditions of Ghana’s three main export commodities—oil, gold and cocoa, resulting in a trade surplus of 2.8% of GDP. The current account surplus, combined with significant inflows to the capital and financial accounts, resulted in an overall balance of payments surplus equivalent to 1.9% of GDP. With the issuance of the $3 billion Eurobond in March 2019, the international reserves significantly improved in 2019 with Gross International Reserves (GIR) of $8.6 billion (equivalent to 4.3 months of import cover) at the end of June 2019.

Economic growth is projected to increase to 7.6% in 2019. Non-oil growth is expected to accelerate to 6%.  Inflation is expected to remain within the Central Bank’s target range of 6-10% over the medium term.
(Source : World Bank)

Commercial Relations

Trade

India is one of the major trading partners of Ghana. Bilateral trade crossed US$ 1 billion mark in 2011-12 and over US$ 4.5 billion in 2018-19. Ghana has a positive trade balance with India. The trade figures for the last few years are as follows :
(in US$ million)


Year

India’s exports to Ghana

India’s Imports from Ghana

Total Trade

Balance of Trade

2016-17

682.27

1938.54

2620.82

-1256.27

2017-18

635.78

2710.05

3345.83

-2074.27

2018-19

717.33

3763.41

4480.74

-3046.08

2019-20

617.42

1773.55

2390.97

-1156.13

2020-21 (Apr-Jul)

204.04

353.13

557.17

-149.09

(Source: Department of Commerce, Government of India)
India’s major exports to Ghana include pharmaceuticals, packaging materials, rice, electrical equipment, transport vehicles, agricultural machinery, etc. India’s major import items are gold, mineral fields, edible fruits and nuts, wood and articles of wood, etc.

Investment

According to Ghana Investment Promotion Centre (GIPC) Indian companies have invested in more than 700 projects with total investment of around US$ 1.73 billion in between September 1994 and December 2019. In 2018, Indian investment in Ghana was to the tune of US$510.7 million in 18 Projects. India was second both in terms of number of project and monetary value of investment. Indian investments cover sectors including construction, manufacturing, trading, pharmaceuticals, agro-processing, services and tourism, etc.

Development Cooperation

Ghana was included as one of the nine West African countries under the GOI’s TEAM 9 initiative launched in 2004. India has been supporting Ghana’s development by providing assistance in setting up projects through provision of Lines of Credit and grants. Some of the projects have been completed while a few are in various stages of implementation. Amongst the recent projects are the India-Ghana Kofi Annan Centre of Excellence for ICT; the Flag Staff House (Presidential Complex); the Pan African E-Network Project and Rural Electrification Project. Two projects under EXIM Bank of India’s Line of Credit were successfully commissioned – Komenda Sugar Plant on 30 March 2016 and Elmina Fish Harvest & Processing plant had been completed and handed over to the Government of Ghana in May 2017. A Line of Credit facility for supply of 104 fire tenders to Ghana National Fire Services was also completed on 3rd December 2016.

Government of Ghana signed a Buyers’ Credit agreement with EXIM Bank of India for US $ 398.33 million for Tema-Akosombo railway line on 22 November 2016. The project has been extended to cover upto Mpakadan and consequently the credit assistance has been enhanced to US$ 447.17 million. This project is expected to be completed by July 2021.

A LOC for US$ 5 million was signed by Government of Ghana in 2016 for construction of Foreign Policy Training Institute, which is currently under implementation. An additional LOC of US$ 2 million has also been approved by the Government of India for construction of extended facility of FSI as requested by the Government of Ghana. LoC agreements of US$ 150 million for Agriculture Mechanization and US$ 30 million to upgrade Potable Water Supply System in Yendi Town were signed in April 2019 and are currently under implementation.

The Government of Ghana has signed and ratified International Solar Alliance Framework Agreement, an initiative of Government of India, for solar resource rich country to harness renewable source of energy to complement their energy mix for development.

A MOU was signed on 26 August 2019 between the Government of Ghana and TCIL for participation in the e-VBAB (tele-education & tele-medicines) Network Project. Ghana was the pilot country to roll out the e-VBAB Network Project. Under the e-VBAB Network Project, tele-education & tele-medicine services from India shall be offered to African countries through specially developed web based platforms. The e-VBAB Network Project seeks to provide good quality, affordable and effective tele-education and tele-medicine (including continued medical education and tele-medicine tele-consultation) services by linking educational institutions and hospitals in India with those from participating countries in Africa using the medium of internet. The project is currently under implementation.

Recent Business Exchanges

There has been active cooperation between the trade associations of Ghana and India over the years. The Deputy Minister of Power of Ghana, Hon. William Owuraku Aidoo, attended the 2nd Global Sigma Summit 2020 held in New Delhi from 9-11 January, 2020. A 8 member delegation led by Hon. Dr. Mohammed Amin Adam, Dy. Minister of Energy of Ghana, visited India from 21-25 January 2020, and thedelegation also attended business meetings and visited LPG Bottling Plants and other LPG installations in the country. M/s SAPE Events and Media, an events management and educational promotion of Asia and Africa, in association with the High Commission of India organised the 2ndIndia Education Fair in Accra on  21 February 2020.

There are several delegations that visited India from Ghana to participate in Indusfood 2020 held at Greater NOIDA from January 8-10, 2020;  Jutexpo 2020 on 12th& 13th Jan, 2020 at Maple Lawns of P.C. Chandra Garden, Kolkata; ELECRAMA-2020 in January 2020 in New Delhi and WINGS India 2020 from 12-15 March, 2020 at Hyderabad. 

Some of the meetings/business seminars held during 2020 are :

1)  On 30 January 2020, H.E. Mr. Sugandh Rajaram, High Commissioner of India, launched Ghana-India Trade Advisory Chamber International Foundation at Accra, Ghana.

2)  Federation of Indian Export Organizations in collaboration with High Commission of India conducted a Webinar on 29th May 2020 for export opportunities available to Indian exporters in Ghana, Sierra Leone and Togo.

3)  The 15th CII-EXIM Bank Conclave on India-Africa Project Partnership was held in New Delhi from 22-24 September 2020 on Virtual      Platform. Minister of Railway Development and Deputy Minister of Trade and Industry participated in the Conclave.

4)  The Ghana-India Trade Advisory Chamber (GITAC) in collaboration with High Commission of India launched its regional office at Takroadi, Ghana in September 2020.  Industry leaders across the country participated and networked during the event.

5)  Indian Electrical and Electronic Manufacturers Association (IEEMA) in collaboration with the High Commission of India organized a webinar on 5th October 2020 to promote bilateral trade and investment in electrical, power and energy sector.

As part of trade promotion activities, Mission is also interacting with local business leaders regularly to promote bilateral economic and commercial activities.

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