GHANA
* History of Ghana * Elmina Castle
* Highlights *
Republic of Ghana : Summary Facts
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6th March 1957
At midnight, on the old-Polo Ground in Accra, Dr Kwame
Nkrumah, wearing his own prison cap and flanked by his lieutenants--Gbedemah,
Kojo Botsio, Welbeck, Casely-Hayford and Krobo Edusei- declared "Ghana our
beloved country is free forever!." He went on to say "The independence of
Ghana is meaningless unless it is linked up with the total liberation of the
African Continent"
Medieval Ghana (4th - 13th Century) The Republic of Ghana is named after the
medieval Ghana Empire of West Africa. The actual name of the Empire was
Wagadugu. Ghana was the title of the kings who ruled the kingdom. It was
controlled by Sundiata in 1240 AD, and absorbed into the larger Mali Empire.
(Mali Empire reached its peak of success under Mansa Musa around 1307.)
Geographically, the old Ghana is 500 miles north of the present Ghana, and
occupied the area between Rivers Senegal and Niger. Some inhabitants of
present Ghana had ancestors linked with the medieval Ghana. This can be
traced down to the Mande and Voltaic peoeple of Northern Ghana--Mamprussi,
Dagomba and the Gonja. Anecdotal evidence connected the Akans to this great
Empire. The evidence lies in names like Danso shared by the Akans of present
Ghana and Mandikas of Senegal/Gambia who have strong links with the Empire.
There is also the matrilineal connection. Gold Coast & European Exploration
Before March 1957 Ghana was called the Gold Coast. The Portuguese who came
to Ghana in the 15th Century found so much gold between the rivers Ankobra
and the Volta that they named the place Mina - meaning Mine. The Gold Coast
was later adopted to by the English colonisers. Similarily, the French,
equally impressed by the trinkets worn by the coastal people, named The
Ivory Coast, Cote d'Ivoire. In 1482, the Portuguese built a castle in Elmina.
Their aim was to trade in gold, ivory and slaves. In 1481 King John II of
Portugal sent Diego d'Azambuja to build this castle.
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Elimina Castle In 1598 the Dutch joined them, and built
forts at Komenda and Kormantsil. In 1637 they captured the castle from the
Portuguese and that of Axim in 1642 (Fort St Anthony). Other European
traders joined in by the mid 18th century. These were the English, Danes and
Swedes. The coastline were dotted by forts built by the Dutch, British and
the Dane merchants. By the latter part of 19th century the Dutch and the
British were the only traders left. And when the Dutch withdrew in 1874,
Britain made the Gold Coast a crown colony. By 1901 the Ashanti and the
North were made a protectorate. Britain and the Gold Coast.
The first Britons arrived in the early 19th century as traders in Ghana. But
with their close relationship with the coastal people especially the Fantes,
the Ashantis became their enemies. Some important dates and events:
1817 - 1821: Two ambassadors were sent to Kumasi to discuss peace with King
Osei Bonsu.
This failed. 1823 - 1824: In Asante Denkyira war, Sir Charles Macarthy and
his Fante allies supported the Denkyiras. Marcathy was killed. 1826: The
Asantes were defeated in the Battle of Kantamanto near Dodowa. 1831: George
Maclean signed treaty with the Asantes. 600 ounces of Gold kept for the
Asantes. Two princes sent to Britain. Returned after 6 years in 1842. 1844:
Commander Hill and the bond of 1844 1863: Battle of Bobikuma. Britain
defeated . 1864: Britain lost another war. 1873-1877: Kofi Karikari invaded
Southern and coastal areas. Major General Sir Garnet Woseley with British
expedition forces defeated the Asantes. Treaty of Fomena in 1874. Asante
forced to recognize the Independence of all states south of the Pra River.
1888: Nana Agyeman Prempeh I ascended the throne of the Asante Kingdom.
1896: British troops marched to Kumasi, led by Sir Francis Scott. The king
was exiled first to the Elmina Castle, then to Sierra Leone and later to
Seychels. 1900: Arnold Hodgson went to ask for the golden stool. The Asantes
were infuriated. Yaa Asantewaa, the queen mother of Edwiso (Ejisu) led
attack on the British Fort in Kumasi. 1924: Nana Agyemang Prempeh I returned
. Died in 1931. Other events Events occurred that made Fantes and others to
react: Fante Confederation - In Mankesssim. 1897 Aboriginess right
Protection society. 1925 Guggisburg Constitution Legislative Council (legco)
15 Govt Officials, 14 non officials (9 Ghanaians, 6 elected by chiefs and 3
from Accra, Cape Coast and Sekondi). Central Administration was made of the
Governor, the Executive Coucil and the Legislative Council. The latter only
in advisory capacity. 1935: Prempeh II Asante Confideracy Council.
Otumfuo Nana Osei Agyeman Prempeh II In the North were also Mamprusi,
Dagomba and Gonja State Councils. Economic and Social Development (Before
1957) 1874--Gold Mine in Wassa and Asante. Between 1946-1950 gold export
rose from 6 million pounds to 9 million pounds. 1898--1927 Railway expansion
in Ghana. 1928--Takoradi Harbour. 1878--Tetteh Quarshie brought cocoa from
Fernado Po. 1885--Cocoa first eported to Britain. 1951--Revenue from cocoa
was 60 million pounds. Cocoa Marketing Board (CMB) was found in 1947.
Poilitical Movements and Nationalism in Ghana (NA (1945 - 1957) The educated
Ghanaians had always been in the fore-front of constructive movements. Names
that come into mind are --Dr Aggrey, George Ferguson, John Mensah Sarbah.
Others like king Ghartey IV of Winneba, Otumfuo Osei Agyeman Prempeh I
raised the political consciousness of their subjects. However, movements
towards political freedom started soon after WWII. This happened because
suddenly people realised the colonisation was a form of oppression, similar
to the oppression they have just fought against. The war veterans had become
radical. The myth surrounding the whiteman has been broken. The rulers were
considered economic cheats, their arogance had become very offensive. They
had the ruling class attitude, and some of the young District Commissioner
(DC) treated the old chiefs as if they were their subjects. Local pay was
bad. No good rural health or education policy. Up to 1950 the Govt Secondary
schools in the country were 2, the rest were built by the missionaries.
There was also the rejection of African culture to some extent. Some
external forces also contributed to this feeling. African- Americans such as
Marcus Garvey and WE Du Bois raised strong Pan-African conscience. In 1945 a
conference was held in Manchester to promote Pan African ideas. This was
attended by Nkrumah of Ghana, Azikwe of Nigeria and Wallace Johnson of
Sierra Leone. The India and Pakistani independence catalysed this desire.
Sir Alan Burns constitution of 1946 provided new legislative council that
was made of the Governor as the President, 6 government officials, 6
nominated members and 18 elected members. The executive council was not
responsible to the legislative council. They were only in advisory capacity,
and the governor did not have to take notice. These forces made Dr J.B.
Danquah to form the United Gold Coast Conversion (UGCC) in 1947. Nkrumah was
invited to be the General Secretary to this party. Other officers were
George Grant (Paa Grant), Akuffo Addo, William Ofori Atta, Obetsebi Lamptey,
Ako Agyei, and J Tsiboe. Their aim was Independence for Ghana. They rejected
the Burns constitution. Events hastened this desire 1948: Nii Kwabena Bone
II--an Accra chief organised the boycott of Europen and Syrian, Lebanese
goods. 28 Feb 1948: Ex-servicemen marched on Christianborg Castle to hand
petition to the governor about their poor conditions. The order was given
and 3 laid dead. UGCC was held responsible and its officers were detained.
(The dead were sergeant Adjetey, Corporal Attipoe, and Private Odartey
Lamptey). The six detained were Kwame Nkrumah, Obetsebi Lamptey, Ako Adjei,
Ofori-Atta, Dr Danquah and Akuffo Addo. Mr Aiken Watson was appointed by the
British Government to look into disturbances. He recommended a new
constitution. Mr J Cousey headed this committee. 1949: Internal trouble in
UGCC. Nkrumah broke off to form his own Convention Peoples' Party (CPP),
with the slogan of SELF GOVERNMENT NOW. 1951: First General election . CPP
won 34 seats , UGCC --3. Kwame Nkrumah who was in prison for positive
action, won the seat in central Accra, and was released to become the leader
of Govt business, and Prime Minister on 21 March 1952. 1954: New
Constitution with assembly and speaker. 104 elected representatives. CPP
--72 seats, Northern People's Party (NPP) - 15, Independents - 11, and
others - 6. The NLM (National Liberation Movement ) was formed by linguist
Baffour Akoto. Leader was J B Danquah, and Dr K.A. Busia - member. This
group wanted a federal government. 1956: There was another election. CPP won
72 of the 104 seats. The NLM and its allies won the remaining seats and so
became the parliamentary opposition. The former British Mandated Togoland
also voted to join the Gold Coast--Ghana. 1957: Independence. 1-7-60:
Republic of Ghana, with Nkrumah as the President. Immediate Benefits
++++++++++++++++++ Free primary and middle school education. Increased
infrastructure in roads, rail, Black Star Shipping Line, and Hospitals. And
of course--THE GHANA BLACK STAR FOOTBALL TEAM-- that evokes sentiments in
Ghana.
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Political highlights
1957 - independence, Nkrumah of CPP is PM, 2 key parties
1960 - declared republic, one party system, presidential system
1966 - military overthrow of 1st republic
1969 - 2nd republic, Busia of PP is PM, 2 key parties
1972 - military overthrow of 2nd republic
1978 - palace coup to restructure military government
1979 - junior officer uprising and military housecleaning
1979 - ushered third republic, Limann of PNP is President, 3 parties
1982 - military overthrow of 3rd republic
1983 - palace coup to restructure the military government
1992 - ushered 4th republic, Rawlings of NDC is chairman, 2 parties **
1996 - elections in november
Summary: multiparty system 9 years
military system 21 years
one party system 6 years
pseudo multiparty system 3 years **
** fraud allegations led to an electoral boycott resulting in an
effective one party system. Also, marks the first time when the head
of a military regime had contested in an election.
Economic highlights
1957 Inherited 200 million pounds from British
1957 to 1966
Development Projects/Policies:
socialist path to development
proliferation of state farms and industries
no linkages between farms and industries
universities and secondary schools (free for all)
health care facilities
negative NPV projects (e.g., Job 600)
WET (e.g., Akosombo Dam)
Price controls
emphasis on cocoa for export
Cost:
inheritance is fully spent (no more free lunch for the future)
balance of payment deficits
inflation
disguised unemployment
Foreign debts
1966 to 1972
Privatization of state farms and industries
university student loan scheme
families asked to take more responsibility for education
proliferation of private medical practice
blue print for sewage system for the whole country
devaluation to solve inherited problems
elimination of price controls
emphasis on staples for domestic consumption
Cost:
unemployment
foreign debts and servicing
cedi value allowed to fall
good excuse for military
1972 to 1979
repudiate foreign debts (a la yentua)
Operation feed yourself and industry
revaluation
price controls
import licensing
university loan scheme
CMB scholarships for education on whom you know basis
increase money supply
Cost:
Kalabule
inflation
smuggling
1979
seize assets from cheats
burn down makola, the citadel of kalabule
enforce tax code
price controls
rationing
1979 to 1982
relax price controls
reestablish credibility with donor and donor countries
cost:
inflation persists
balance of payment problems persist
kalabule persists
1982 to 1984
socialist path to development
price controls
rationing
PDC's in charge of distribution
WDC's in charge an as part of the IMCC
use of force to control prices, smuggling
confiscate 50 cedis note
blame the rich
Cost:
embargo on Ghana
Inflation
queing
lack of medicine, food, transportation, etc.
Rawlings chain and necklace
1984 to present
Economic recovery program
free markets
layoffs at civil service
students bear more of cost
patients bear more of cost
stock exchange
PAMSCAD
more privatization of state industries
float the cedi
boost exports
VAT, then UNVAT
Cost
inflation
cedi is worthless
massive unemployment
schools/health care is broken down
everyone is a trader
interest rate at close to 50%
manufacturing sector is dead
Goods available but not affordable
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Geography, demography
Ghana is a tropical country south of the Sahara Desert in West Africa,
with a short 539km long coastline on the South Atlantic Ocean. The country
has a land area of 239 thousand square kilometres, which places Ghana as
slightly larger than the State of Victoria. The capital Accra is 5 degrees
north of the Equator and lies nearly on the prime meridian (0 degrees
longitude), due south of London. Thus, Accra time is eight hours behind
Perth time, there being no time adjustment in summer. Accra can be reached
from Perth on flights via Europe (London, Amsterdam, Zurich, Frankfurt or
Rome) on any day of the week, or via Johannesburg three times a week.
The climate is tropical. The eastern coastal belt is warm and
comparatively dry; the southwest corner, hot and humid; and the north, hot
and dry. There are two distinct rainy seasons in the south: May-June and
August-September, whereas in the north, the rainy seasons tend to merge. A
dry but gentle, north-easterly wind, the Harmattan, blows in from the Sahel
and the Sahara Desert in January and February. Annual rainfall in the
coastal zone averages 83 centimetres (33 in.).
The coastline is mostly a low, sandy shore backed by plains and scrub and
intersected by several rivers and streams, most of which are navigable only
by canoe. A tropical rain forest belt, broken by heavily forested hills and
many streams and rivers, extends northward from the shore, near the Cote
d'Ivoire frontier. This area produces most of the country's cocoa, minerals,
and timber. North of this belt, the country varies from 91 to 396 meters
(300-1,300 ft.) above sea level and is covered by low bush, savanna, and
grassy plains, which resemble Northern Australia in character. The man-made
Lake Volta extends from the Akosombo Dam in south-eastern Ghana to the town
of Yapei, 520 km (325 mi.) to the north. The lake generates electricity,
provides inland transportation, and is a potentially valuable resource for
irrigation and fish farming.
The population is about 19 million and is densest in the main urban areas
(eg Accra, 1 million plus) and the cocoa farming areas in the south. Urban
population growth rates are probably twice that of the country as a whole.
English is the official national language and is widely read and spoken as
education and government structures are derived from British models.
Inter-ethnic strife is not a feature of the country despite a multiplicity
of African language and dialects, and a diverse history. About 1.5 million
Ghanaians live abroad, mainly in Europe and North America, with a total
annual contribution of about 300 to 400 million US dollars into the national
economy, at an informal level. A small number are resident in Australasia.
Political and economic structure
Ghana is a unitary republic within the Commonwealth, having become
independent from colonial Britain on March 6th, 1957, and the
first sub-Saharan African country to become a State free from a European
power. Despite its turbulent history in the first decades following
independence, Ghana has emerged in the 1990s as a stable, multi-party
democracy. Between independence and Flight Lieutenant Jerry John Rawlings's
advent to power in 1981, Ghana had two political traditions - initially the
socialist policies followed by Kwame Nkrumah immediately after independence,
and a laissez-faire tradition, which succeeded him. Rawlings introduced a
third element - policies of broad-based development favouring rural areas,
and the expansion of the private sector.
Under the terms of the 1992 Constitution (Fourth Republic), executive
power is vested in the President, who is Head of State and
Commander-in-Chief of the armed forces. The President is elected by
universal adult suffrage for a term of four years, and appoints a
Vice-President. Rawlings was re-elected President in 1996 for his second
and final term. Legislative power is vested in a single chamber parliament
consisting of between 160 and 200 members elected by direct adult suffrage
on a first-past-the-post basis for a four-year term.
At the last elections held in December 2000, His Excellency John Agyekum
Kufuor was elected President and sworn in on 7th January 2001,
and his political party, the New Patriotic Party forms the government in
Parliament.
Ghana's economy is based primarily on agriculture (cocoa, domestic food
crops, forestry, and fishing), which accounted for 40-45% of GDP in the
period 1991 to 1995, but has now declined to some 20%. The mining and
manufacturing industry accounts, however, for only a fifth of GDP, with
services making up the remainder.
Cocoa is Ghana's best known crop, and it accounted for between 45% and
70% of commodity exports from the 1970s to the 1990s, when increased mineral
revenues led to a decline in its share of exports, to some 37%. Between
January and September 1999, cocoa prices fell by 33% reaching a 5 year low
in May, causing a severe revenue loss for the country.
Other major exports are gold and timber. Both the gold and timber
industries were established in the 1880, with gold enjoying a major revival
in the 1990s. Gold production is running at about 2.4 million ounces per
annum. However, gold also suffered in 1999 as prices hit 20 year lows, but
has since recovered to better levels. Ghana also has sizeable deposits of
diamonds, bauxite and manganese. Mineral exports account for almost half of
Ghana's foreign exchange earnings.
The government's privatisation programme, which envisages the outright
sale or reduction of equity in some 300 government-owned corporations and
enterprises, received an important boost in 1994 with the sale of 25 percent
of its equity in the Ashanti Goldfields Corporation, Ghana's largest gold
mining company (1.24 million ounces per annum from 4 mines), and the 9th
largest in the World. Ghana has now sold more than 180 of its state-owned
enterprises to private investors and, since the passing of the Investment
Act in 1994, has recorded 250 new foreign investments, 70% of which are
joint ventures involving Ghanaians.
Economic outlook and opportunities
Ghana is one of the few countries in western Africa to
offer real economic promise, and, as one of the model reformers in Africa,
is unlikely to face sanctions from donors, including the IMF. Fiscal
reforms continue, for example the introduction of a 10% VAT in December
1998, and increases in electricity tariffs, which are linked to improvements
in the over-strained power grid. The regional drought in 1998 crippled the
country’s chief power supply facility, the Akosombo Dam built in 1968, which
was reduced to supplying only 400MW of its 912MW capacity. Additional
thermal capacity has been installed at Takoradi (660MW by 2001) and Tema
(80MW), and there is a longer term plan to pipe natural gas from Nigeria.
Good rain in recent years has restored the dam at its highest levels since
1993.
As capacity constraints are lifted with more power
becoming available, however, real GDP growth was 4.6% in 1999, and remained
strong in 2000, at around 5%. Inflation has increased from moderate levels
in 1998-99 to around 30-40% currently. The relative stability of the cedi,
which averaged C2370:$US1 in 1998, has declined in line with inflation
differentials to be around C7000:$US1 recently.
There are currently over 25 Australian companies with
ongoing operations (mainly mining related) in Ghana, and a resident
Australian community totaling around 500. The success of their activities
has had the effect of encouraging Australian companies to venture further
afield to other parts of West Africa, using Accra as a base.
Figures are not available for Australian investment in
Ghana but it is reliably estimated at $A1billion, primarily in gold mining,
exploration and support operations. The following are the main Australian
firms with operations in Ghana: Minproc Engineering (Perth), African Mining
Services Ltd (Ausdrill-Eltin joint venture), Bayswater Contracting,
Lycopodium Pty Ltd, Ranger Minerals Ltd, and Resolute Ltd. Australian
companies mine 25% of the gold produced in Ghana and are heavily engaged in
exploration and contracting to other mining companies, such as the giant
Ashanti Goldfields Corporation.
In 1997/98, Australian exports to Ghana (industrial
machinery, civil engineering equipment, heating/cooling equipment, chemicals
etc) totalled A$62.9 million. Australian imports from Ghana (mainly cocoa
and wood products) during the same period totalled A$ 6.1 million. As
Ghana's economy develops, there are likely to be increasing opportunities
for Australian exporters in areas such as food and beverages, environmental
services, agricultural and textile manufacturing.
The Ghana Investment Promotion Centre (GIPC) governs
almost all investments within the country except for the mining and
petroleum industries. The latter are handled by the Ministry of Lands,
Forestry & Mines, and particularly the Minerals Commission.
During the year 2000, the GIPC registered 180 projects in
various sectors including manufacturing, service, tourism, building and
construction, agriculture and general trading. These projects were
estimated to cost US$132 million and to generate employment opportunities
for some 9,700 Ghanaians, and 80% were located in the Accra region.
Between September 1994 and December 2000, a cumulative
total of 1160 projects made up of 397 wholly foreign-owned (estimated at
US$1.32 billion) and 763 foreign-Ghanaian joint ventures (estimated to cost
US$0.28 billion) were registered. These investments were expected to
generate a total employment of 63,800 Ghanaians and 4,040 non-Ghanaians
mainly in the manufacturing (21,800), agriculture (10,600), building and
construction (10,800) and services (13,500) sectors.
Great Britain remains the major source of GIPC-registered
foreign investments into the country with 116 projects since 1994, followed
by China and India with 93 each, then the USA (82), Germany (79), and
Lebanon (63). Lower down the scale are Canada (23), South Africa (20) and
Australia (18). Mining investment does not form part of these figures.
Fiscal regime
General
Taxation of companies is administered by the Commissioner
of Internal Revenue, through Inspectors of Taxes at various locations
throughout the country. The fiscal year, otherwise referred to as the year
of assessment, is the calendar year ending 31 December. There is no double
taxation agreement with Australia, but there is one with the UK, France,
Sweden and Malaysia.
There are a number of investment incentives available to
foreign companies wishing to invest in Ghana. Businesses involved in
agriculture, manufacturing, construction and building industry, tourism and
general services are entitled to incentives.
Companies are allowed to retain 35% of export proceeds in
an external account to be used to pay incidental expenses of a company sold
to authorised dealers. Capital allowance is granted to all companies
setting up an establishment in Ghana depending on the type of asset. For
example, the write-off of new or second-hand machinery and equipment, annual
wear allowance and a depreciation allowance on the cost of buildings used in
the manufacturing process.
There are investment guarantees in respect of the
following:
· 100% transfer of profits, dividends, fees etc;
· automatic grant of immigrant quota (long term
expatriate work/residence permits) depending on paid up capital;
· membership of Multilateral Investment
Guarantee Agency (MIGA);
· bilateral investment promotion and protection
agreements.
Corporate Tax
The rate of tax is:
· 8% on export income for companies in the
non-traditional export sector (eg pineapples, cashew nuts);
· 25% for hotels;
· 35% for all other sectors;
· a further rebate of 25% for manufacturing
companies located in regional capitals other than Accra-Tema and 50% for
manufacturing companies located outside regional capitals.
Tax Holidays
· Real Estate : 5 years
· Agriculture : 5 - 10 years
· Rural Banking : 10 years
· Manufacturing based on local raw materials : 3
years
Other tax concessions
· Accelerated depreciation allowances at the rate
of 50% per annum for 2 years for Plant Expenditure and 20% per annum for 5
years for Building Expenditure applicable to all sectors except banking,
finance, commerce, insurance, mining and petroleum.
· Loss - carry - over of 5 years for all sectors
except Insurance business which is unlimited. Fully deductible Capital
Expenditure for Research and Development.
· Exemption from minimum chargeable income of 5%
of Turnover during the first five years.
· Exemption from income tax payable on the
provision of accommodation for employees on farms and building, timber,
mining and construction sites.
Withholding tax
· Tax rate on Dividends 10%
· Tax rate on interest 10%
· Tax on Royalties, management, technology
transfer fee 15% (for non-Residents only)
Value Added tax (VAT) & Import Levies
· Tax rate 12.5% on local purchases, exempt for
imports (credit system operates).
· 5% levy on all imports except certain plant,
machinery and equipment items used in mining
· 1% levy on all exempted imports
· 0.5% levy on non-petroleum goods imported for
commercial purposes
Custom duties
100% duty exemptions for plant machinery equipment and
parts thereof.
Export free zones and export
processing zones
In July 1995, the Ghanaian Parliament enacted the
country's Free Zone Act (FZA) which created one of the world's most
attractive packages of incentives for hassle-free business operation for
exporting firms. These incentives serve to amplify business in what is
already a centre for international business.
Highlights of Free Zone Act (FZA) are as follows.
· The FZA allows for production, manufacturing, and
services, including financial services.
· Exemption from taxes of import into free zone
area.
· Exemption from taxes on profits for 10 years.
· Up to 30% of the annual production can be sold in
the national customs zone.
· A foreign investor may take hold of 100% of
shares in Free Zone property.
· Income tax after 10 years shall not exceed 8%.
· Foreign and domestic investors shall have equal
status.
· No nationalisation or expropriation within a free
zone.
· Free Zone enterprises shall have ability to hold
a foreign currency account.
· Contract negotiations and terminations determined
by the free zone enterprise.
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