GHANA: SCENE SETTER FOR CODEL INHOFE VISIT TO

UNCLAS SECTION 01 OF 05 ACCRA 000289 FROM AMBASSADOR Teitelbaum SENSITIVE SIPDIS E.O. 12958: N/A TAGS: OREP OTRA OVIP PREL PGOV ECON AMGT GH SUBJECT: GHANA: SCENE SETTER FOR CODEL INHOFE VISIT TO GHANA APRIL 9-10, 2009 ¶1. (U) Senators Inhofe and Enzi and Representative Boozeman: Our entire mission joins me in extending to you a very warm welcome to Ghana. We hope your visit here helps inform you and your team, and we look forward to supporting your objectives. ¶2. (U) SUMMARY. Ghana?s December, 2008 election saw the country?s second transfer of power between political parties since the nation?s return to constitutional democracy in 1992. Professor John Evans Atta Mills, a former vice-president (and Fulbright Scholar) was elected President in a narrow run-off election. His party, the National Democratic Congress, gained enough seats in parliament to be, with minor party support, the governing party. Ghana faces economic challenges, particularly high inflation and growing budget and current account deficits. However, economic growth is expected to be positive in 2009, and the country should begin exporting oil by 2011. Ghana has a good record on human rights, an apolitical military, and a lively media. Progress continues on the implementation of the $547 million compact through the Millennium Challenge Corporation. ¶3. (U) Summary continued: Ghana has made impressive progress in democratic and economic development but challenges such as poverty, corruption, lack of adequate infrastructure, an improving but still difficult business climate, and narcotics trafficking (cocaine and heroin) must be overcome if Ghana is to achieve its goal of reaching middle income status by 2015. ¶4. (U) U.S. interests center on support for Ghana's democracy, poverty reduction and shared prosperity, private sector development, security cooperation, and enhanced people-to-people and cultural ties. Ghana is a reliable partner in peacekeeping, conflict resolution, countering terrorism and in economic development. We share with the Government of Ghana a growing concern about Ghana?s role as a transshipment point for narcotics, particularly cocaine from Latin America. THE 2009 ELECTION -------------- ¶5. (U) Ghana?s 2008 election saw the country?s second peaceful transfer of power between political parties. Former President John Kufuor was constitutionally limited from a third term in office. Ghana?s main political parties, the New Patriotic Party and the National Democratic Congress, along with several minor parties, staged a hard fought campaign. The NPP was led by the former Foreign Minister, Nana Akufo- Addo. In the first round of presidential voting, none of candidates received a majority of the votes cast, necessitating a run-off election, which was won by less than 40,000 votes by the NDC?s candidate, ACCRA 00000289 002 OF 005 former vice-president and law professor, John Evans Atta Mills. Domestic and international election observers declared the election to be free, transparent and to have reflected the will of the people. The U.S. Mission in Ghana fielded eighty election observer teams as part of the international election observation program. ¶6. (U). Even prior to the 2008 election campaigns, the main parties were increasingly polarized. However, Ghanaian voters showed a strong commitment to peaceful elections, and other than a few violent incidents during the campaign, the election was generally peaceful. Civil society, particularly religious associations, is active, and worked for months ahead of the voting to promote peaceful elections. THE MILLS ADMINISTRATION -------------- ¶7. (SBU) Ghana is a stable country, with an apolitical military, a solid record on human rights, and a lively, free media. After 17 years of democratic governance, Ghanaians are committed to democracy. Ghana has held five consecutive democratic national Elections deemed to have been free and fair. The constitution provides parliament with little power relative to the executive, and the legislature lacks basic resources such as staffing. ¶8. (SBU) President Mills? cabinet contains several members who served in the last NDC government under former President Rawlings. The cabinet includes a mix of technocrats and elected Members of Parliament. Mills campaigned on a pledge to have 40% of senior government positions filled by women, and a large number of women have been appointed to positions (even though fewer women were elected to parliament in 2008). ¶9. (SBU) Ghana?s foreign policy is unlikely to change significantly under the Mills? administration. Ghana will continue to provide military support for peacekeeping operations. Domestically, the resident pledged to improve health care, education, and campaigned on a platform of making investments to lead to job creation. Economic conditions, including budget deficits, may delay the implementation of NDC priorities. U.S. ASSISTANCE TO GHANA -------------- ¶10. (U) USAID provides significant support for Ghana's development, averaging about $40 million annually 2004-2007 in addition to $22 - $25 million in food aid prior to FY 2007. While food aid is being phased out, additional support for HIV/AIDS, malaria and education under the special Presidential Initiatives has increased overall funding for USAID to approximately $80 million in FY 2008 and an expected $115 million in FY 2009. Ghana's strong performance was recognized in 2006 with the signing of a five-year, $547 million Compact with the Millennium ACCRA 00000289 003 OF 005 Challenge Corporation, aimed at transforming Ghana?s agricultural sector. The Compact has three main components: enhancing profitability of small farmers; reducing costs affecting agricultural commerce through improvements in infrastructure, including roads; and expanding basic services in thirty key agricultural districts. Ghana is the original Peace Corps country, with volunteers serving here since 1961; today, approximately 130 volunteers are working at the community level in education, health awareness, water and sanitation, and environmental protection. The PEPFAR program in Ghana will expand this year to $17 million, and is the largest HIV/AIDS donor supported prevention program in the country. DIFFICULT CHALLENGES REMAIN -------------- ¶11. (SBU) Despite Ghana's democracy and stability, political power is centralized in the executive, and institutions such as the judiciary, are still developing and often under-resourced. Corruption is a factor, and Ghana faces human rights challenges relating to child labor and human trafficking. Ghana also faces a range of security chllenges, including a rise in violent street crime and vigilante justice, sometimes violent chieftaincy succession disputes, a proliferation of small arms, and a growing problem with narcotics trafficking. This trafficking involves the transshipment of cocaine from Latin America , and to a lesser degree heroin from Central Asia, into Europe and the U.S. The Ghana Police Service and other authorities have requested assistance in countering narcotics; the police have also been at the center of scandals involving the disappearance of seized cocaine. In 2009 the U.S. Drug Enforcement Administration opened an office in Accra. ¶12. (SBU) Despite shocks to the economy from the current fiscal crisis based on two years of pre-election over-spending, inflationary trends caused by global food shortages, spiking fuel prices, and currency depreciation throughout 2008, and the global financial crisis, Ghana's growth is still expected to be positive in 2009, largely due to buoyant gold and cocoa prices on the world market. However, Ghana's economic situation is deteriorating. The country is challenged by unsustainable twin deficits-?the current account deficit is at about 11 percent of GDP, and its trade deficit is 26 percent of GDP--mostly due to the high oil prices of 2008. Ghana is running a budget deficit of about 13 percent of GDP, an increase of four percentage points from the previous year. Ghana?s major sources of foreign exchange include exports of cocoa, gold, and diamonds which account for more than 65 percent of exports. Remittances from overseas workers are also economically important, and have already declined 30 percent between December 2008 and January 2009, double the median change over the past four years. The drop in remittances is causing layoffs in the banking sector as well ACCRA 00000289 004 OF 005 as a dearth of foreign exchange available to the government. Ghana is also dependent on foreign assistance, with 40 percent of its budget coming from Development Partners. Inflation crossed 20 percent in February 2009. Meanwhile, the Ghana cedi continues the 2008 trend of depreciation against the dollar and other world currencies--falling by 11 percent the first two months of 2009 alone. he impact of the 2007 discovery of commercially viable offshore oil reserves is a wild card in Ghana's energy and economic future. Oil production is expected by ¶2011. Once the Government of Ghana begins receiving oil revenue the financial windfall will likely present significant revenue management challenges as well as development opportunities. ¶13. (SBU) Social indicators such as maternal and infant mortality rates are substantially better than levels in the 1980s but remain high and have not changed significantly in the last ten years. Primary school attendance in 2007-8 reached 95% of potential students, although quality is lacking. Poverty levels have decreased from 52% in 1992 to 28% in ¶2007. Ghanaians have mixed opinions on whether they have benefited from the country?s macroeconomic success. According to the Center for Democratic Development?s 2008 Afrobarometer survey, 45 percent of respondents thought that the country?s economic policies were fair or good, but a similar percentage disagreed. GHANA IN THE WORLD -------------- ¶14. (U) Ghana has been playing an increasingly significant and positive global leadership role. It is an active member of the Economic Community of West African States (ECOWAS),chaired the African Union in 2007, and recently concluded a term as a non-permanent member of the UN Security Council. Ghana is the world?s sixth largest contributor of troops to UN Peacekeeping Missions and currently has personnel serving in Liberia, Cote d'Ivoire, Democratic Republic of the Congo, and Lebanon. Ghanaian elder statesman and former UN Secretary General Kofi Annan helped broker a fragile power-sharing agreement in Kenya. Ghana is also a member of the International Atomic Energy Agency. Ghana prefers multilateral solutions to global problems and has a history of committed African leadership, based on consensus among players. GHANA AND THE U.S. -------------- ¶15. (SBU) Our bilateral relations are exceptionally good, and Ghanaians and citizens of the U.S. share a love of democracy, human rights, educational opportunity, free enterprise, peace and stability. There is a deep reservoir of goodwill toward the United States and a genuine appreciation of our role and contributions to this society. Approximately 3000 Ghanaian students are studying in the United States in forty-four states, and the Mission nominates many strong candidates for International Visitor Programs that enhance professional ACCRA 00000289 005 OF 005 development. Ghana, in partnership with AFRICOM, has made great strides in developing its maritime domain awareness, improving its commercial port security and safeguarding its territorial waters. Africa Partnership Station, a six-month U.S. deployment to the Gulf of Guinea, recently wrapped up training in Ghana, providing courses to personnel of the Ghana Navy and civilian maritime agencies. Remittances from Ghanaians working abroad sent home about $1.9 billion in 2008, much of it from the U.S., although the level of remittances has declined in recent months. ¶16. (U) Again, the members of the U.S. Mission in Accra look forward to welcoming you to experience some of Ghana?s successes and challenges first hand. TEITELBAUM