Identifier
Created
Classification
Origin
04ACCRA1608
2004-08-04 16:25:00
UNCLASSIFIED
Embassy Accra
Cable title:  

GHANA ECONOMIC HIGHLIGHTS JULY 2004

Tags:  EFIN ECON ETRD EAGR EINV GH 
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UNCLAS SECTION 01 OF 02 ACCRA 001608 

SIPDIS

E.O. 12958: N/A
TAGS: EFIN ECON ETRD EAGR EINV GH
SUBJECT: GHANA ECONOMIC HIGHLIGHTS JULY 2004


UNCLAS SECTION 01 OF 02 ACCRA 001608

SIPDIS

E.O. 12958: N/A
TAGS: EFIN ECON ETRD EAGR EINV GH
SUBJECT: GHANA ECONOMIC HIGHLIGHTS JULY 2004



1. This report covers noteworthy economic events and
activities in Ghana for July 2004. The issues covered are:

-- Launch of Private Sector Development Strategy
-- Ghana Hosts Talks on ECOWAS Common External Tariff
-- One to Watch: Economy of Ghana Network Launched
-- New Fees on Food Imports

Launch of Private Sector Development Strategy
--------------

2. On July 14, 2004, President Kufuor launched the National
medium-term Private Sector Development Strategy (PSDS),which
aims to fulfill the GoG vision of achieving the "Golden Age
of Business" in Ghana. Numerous GoG, private sector and
donor representatives were present and stated their support
for and commitment to the strategy. In his speech, Kufuor
argued that now that the GoG has achieved a level of
macroeconomic stability, it is time to tackle the
microeconomic environment, to enable the private sector to
fulfill its role in powering the economy.


3. The PSDS assesses Ghana's current business environment and
outlines the strategies to achieve economic targets. The
strategy promotes broad-based pro-market reforms through
consultation with the private sector and monitoring by
development partners. The strategy identifies four strategic
objectives as part of the institutional framework: 1) to
enhance Ghana's position in global and regional markets; 2)
to improve the efficiency and accessibility of national
markets; 3) to increase the competence and capacity at the
firm level; and 4) to strengthen the GoG's private sector
policy formulation, implementation, and monitoring and
evaluation. The GoG expects the strategy to improve Ghana's
investment rating and to remove barriers to doing business in
Ghana.

Ghana Hosts Talks on ECOWAS Common External Tariff
-------------- --------------

4. Delegations from Ghana, The Gambia, Guinea, Nigeria, and
Sierra Leone met July 28-30 to discuss progress and negotiate
positions on adopting the ECOWAS Common External Tariff
(CET). The USAID West Africa Regional Program (WARP) is
funding this effort to complete the CET, which is based on
the existing CET shared by the eight member states of the
predominantly francophone West African Economic and Monetary

Union (WAEMU). The five countries plus Cape Verde plan for
the ECOWAS CET to go into effect January 1, 2005, with each
country phasing in new tariff levels over three years so that
all ECOWAS member states have harmonized tariff structures by
December 31, 2007.


5. Although the CET treaty was originally signed by ECOWAS
heads of state in 1975, and revised in 1993, the process was
resuscitated by the EU's declaration that it will only
negotiate trade agreements with or disburse European
Development Funds to regional groups after 2007, not
individual countries. Under the new Cotonou Agreement, the
negotiation of WTO-compatible new trading arrangements
between the EU and African, Caribbean and Pacific (ACP)
countries must be completed by 2008. The European Commission
proposes that regional reciprocal free trade agreements
replace the current non-reciprocal preferences in the trade
relations between the EU and ACP countries.


6. Delegations were expected to report on their progress on
adopting the CET, propose tariff exceptions and exemptions,
report their findings on the economic impact of adopting the
CET, and present specific plans to introduce the new tariff
structure over the three-year phase-in period.
Representatives from The Gambia, Guinea and Sierra Leone were
well prepared for the meeting, and offered comprehensive
reports on the above subjects. Larger economies Ghana and
Nigeria, however, were only prepared to brief on expected
economic impact, though both expressed commitment to adopting
the CET within the proposed timeline. The next round of CET
negotiations will take place in September 2005.

One to Watch: Economy of Ghana Network Launched
-------------- --

7. More than 80 economists, policymakers and industry leaders
have created the Economy of Ghana Network (EGN),a virtual
community that promises to become a leading voice on economic
development in Ghana. The intent of the EGN is to invite
global participation to ensure that healthy criticism and
independent external perspectives contribute to Ghana's
economic policy. The network pledges to remain non-partisan
while providing substantive evaluation of economic proposals
by all political parties. Conference papers and future EGN
activities will be posted soon at www.isser.org.


8. Organizers launched EGN on July 20 at the "Ghana at the
Half Century" conference, an event jointly sponsored by
Cornell University and the Institute of Statistical, Social
and Economic Research (ISSER) at the University of Ghana.
The conference attracted 186 participants from academia,
government, and the private sector from Ghana, the U.S., UK,
and Canada.


9. During the three-day conference, speakers and participants
debated the role the GoG should play in private sector
development. Several participants spoke of the inadequacy of
existing institutions, such as the Council of State and the
judiciary and regulatory bodies, as well as the demoralized
civil service. It was also apparent that many participants
thought that the need for politically palatable macroeconomic
policies overshadowed the role of pure research in policy
formulation


10. A speech read on behalf of President Kufuor highlighted
the need for institution-building and the expectation that
deliberations would generate ideas on how to fast track
Ghana's economy to a middle-income status by identifying
critical pathways to poverty reduction and human capital
development. Though never fully blessing the EGN, Kufuor
cautiously aligned himself with the conference agenda,
acknowledging that a large part of Ghana's strategy for
faster growth and development will hinge on deepening Ghana's
knowledge base and using it to strengthen interaction with
the rest of the world.

New Fees on Food Imports
--------------

11. Ghana's Food and Drug Board announced it will begin
charging registration fees for all regulated imported goods,
effective September 1. The fees will be levied on imported
food products, such as rice, sugar, poultry, fats and oils,
tomato paste, juices and flour products. (Note: U.S. rice,
poultry, and wheat exports to Ghana will be affected. End
Note). The stated goal is to protect the health and safety
of consumers, and the fees will ostensibly provide funding
for laboratory analysis of products, post-market surveillance
activities, and administrative needs.
YATES