Identifier
Created
Classification
Origin
05ACCRA416
2005-02-28 10:41:00
UNCLASSIFIED
Embassy Accra
Cable title:  

GHANA ECONOMIC HIGHLIGHTS - FEBRUARY 2005

Tags:  ECON EAGR EINV ENRG ETRD GH 
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UNCLAS SECTION 01 OF 02 ACCRA 000416 

SIPDIS

E.O. 12958: N/A
TAGS: ECON EAGR EINV ENRG ETRD GH
SUBJECT: GHANA ECONOMIC HIGHLIGHTS - FEBRUARY 2005

UNCLAS SECTION 01 OF 02 ACCRA 000416

SIPDIS

E.O. 12958: N/A
TAGS: ECON EAGR EINV ENRG ETRD GH
SUBJECT: GHANA ECONOMIC HIGHLIGHTS - FEBRUARY 2005


1. This report covers noteworthy economic events and
activities in Ghana for the period December 2004 to February

2005. The issues covered are:

-- IAEA in Ghana
-- UK Firm Negotiating Power Deal
-- West African Agribusiness Conference
-- Information Technology Conference
-- World Bank Water Project
-- Trade Strategy: Down this Road Before
-- Miller Beer Coming to Accra

IAEA in Ghana
--------------

2. Director General ElBaradei of the International Atomic
Energy Agency was in Ghana for 3 days in February, primarily
to commission a new radiotherapy center for cancer treatment
in Kumasi. Ghana also requested, however, that the IAEA
conduct an energy assessment needs study for Ghana, to
provide direction and options for Ghana,s energy
development. Ghana,s Atomic Energy Director, Professor
Akaho, told Econoff that he hopes to use the assessment as a
justification for introducing nuclear power to generate
electricity in Ghana and to market to TOGO and Benin for
income generation. Despite the commencement of the West
Africa Gas Pipeline, Professor Akaho believes volatility in
Nigeria may make oil unreliable for Ghana,s
industrialization. He said that the assessment request was
approved and that he was waiting for GOG approval to supply 5
percent, or USD 45,000, toward the cost of the study. Ghana
is currently on the IAEA,s Board of Governors.

UK Firm Negotiating Power Deal
--------------

3. A UK firm, Globeleg, is in negotiations with a Ghanaian
partner to establish a gas-powered thermal plant that would
supply power from the West Africa Gas Pipeline, according to
local press. Globeleg--a fast growing operating power company
that focuses on emerging markets in Africa, Asia and the
Americans--envisions generating about 300 megawatts of power,
or 20 percent of what is produces at Akasombo and Aboadze
power plants. A representative from the potential Ghanaian
partner, Cenpower, reported that the UK investor could invest
more than USD 100 million in the project.

West African Agribusiness Conference
--------------

4. On February 8, Econoff attended a U.S.-West Africa
Agribusiness conference, sponsored by the Corporate Council

on Africa. Minister of Trade Kyeramaten stated that due to
the potential of agricultural exports, there was no real
reason for Ghana to be poor, but he mentioned that West
Africans needed to be armed with information to break into
the complicated commercial market in the U.S. He said AGOA is
an opportunity, but there were several challenges: creating a
supply base large enough for the U.S. market,
sanitary/phytosanitary requirements, and finding a network of
potential buyers, including intermediaries and agents to help
access the U.S. market. Ghana exported USD 83.6 million worth
of goods to the U.S. in 2003, 49 percent of which were under
AGOA; in 2004, exports were USD 140.5 million with 53 percent
under AGOA.


5. The West Africa Trade Hub (WATH),a USAID-funded program
to facilitate West African exports in the U.S., reported that
it was focusing its strategy on five export-ready products:
apparel, seafood, shea butter, cashews and handicrafts. WATH
said that U.S. trends in natural and organic foods, with
their higher profitability, present a great opportunity for
West Africa. Despite the dizzying array of U.S. import
restrictions on agricultural products, as presented by
USDA/APHIS, Ghana,s agricultural produce exports to the U.S.
have increased from USD 3.3 million to USD 4.7 million
between 2002 and 2003.

Information Technology Conference
--------------

6. Ghana hosted an international ICT Conference in February
that presented Ghana,s ICT for Accelerated Development
(ICT4AD) policy. The policy is intended to accelerate
Ghana,s socio-economic development through the development,
deployment and exploitation of ICT. The national process,
approved by Parliament, is between the policy and planning
stages and well before the implementation phase, according to
one presenter; GoG is now reaching out for necessary
stakeholder input. Information and knowledge can be the basis
for wealth and competition and for transforming the
agriculture-based economy. Ghana needs interoperability and
compatibility within the government, and presenters urged
public participation to help develop the technological
platform.


7. Panel members, however, were not very responsive when an
audience member questioned why Ghana,s bandwidth
capabilities were so limited, referencing the monopoly that
Ghana Telecom has on the SAT3. The interlocutor first said
that Ghana should focus on developing within Ghana first and
not focus on international capacity. When the audience member
pressed that this contradicted the premise of the
presentation, the interlocutor replied that the bandwidth
issue was a private sector matter, and he moved on.

World Bank Water Project
--------------

8. The World Bank approved a USD 103 million grant, the
largest ever for Ghana, to improve access to safe, reliable
and affordable water and to include private sector
participation in water delivery. Additionally, the GOG is
contributing USD 12 million and the Nordic Development Fund
will pay USD 5 million. The project targets about 10 million
Ghanaians, nearly 50 percent of the population and mostly
urban poor, who don't have access to potable water. A World
Bank economist told Econoff that most of the grant will go to
improve financial viability of the Ghana Water Company
Limited (GWCL) and build its capacity by paying down the
company's debt, rehabilitating and expanding the water
system, and replacing old pipelines. A key project component
will be to engage private sector participation, through a
bidding process, to improve water system management and
delivery. This innovative public-private element will
constitute only 6 percent of total project costs, which will
be disbursed over five years.

Trade Strategy: Down this Road Before
--------------

9. Post's FCS officer attended the official launching of the
Ghana Trade Policy, which featured components seen before in
the Golden Age of Business Plan and trade-related
Presidential Special Initiatives. This time, policy will be
implemented through the Trade Sector Support Program (TSSP),
and the goals are to increase export-led industrialization,
increase and assist production for domestic consumption,
improve Ghana,s WTO participation, increase sub regional
economic integration and widen Africa integration, and
broaden economic partnership with the EU. Minister Kyeramaten
said he would implement the plan over a five-year period and
that the GoG has committed to supporting the TSSP by
facilitating trade, improving the customs clearance process,
reducing corruption, increasing transparency, and improving
availability of export financing to increase production for
export.


10. The Minister said that before the TSSP can begin, the
Ministry must identify sources of funding and technical
assistance. The design implementation phase will begin over
the next few months. One of the MPs commented that trade
policies have been launched in the past, but they never end
up being implemented; he encouraged the GoG to move beyond
the development stage this time.

Miller Beer Coming to Accra
--------------

11. Accra Breweries Limited (ABL) announced that Miller
Genuine Draft (MGD) from the U.S. would soon be introduced to
the Ghanaian market. Miller-South African Breweries Limited,
which owns ABL, is currently introducing MGD in several
Africa markets. MGD is the best-selling beer in the world.
YATES