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  • Financing risk

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GDP USD 38.65bn ( World ranking 92, World Bank 2014)
Population 26.4 mn (Wolrd ranking 48, World Bank 2014)
Form of state Constitutional Democracy
Head of government John Dramani MAHAMA
Next elections Presidential and Legislative 2020
  • Established track record of good governance, with a functioning democratic system and peaceful transfer of power among political parties.
  • Natural resource base (cocoa, gold, forestry etc.) now supplemented by discovery of commercially-exploitable oil reserves – output from 2011.
  • Strong GDP growth in recent years, even with a downturn in 2014-15.
  • Market-oriented policy framework.
  • Positive relations with the IFIs.
  • While some safeguards are established, the ability and capacity to manage oil wealth is yet to be tested fully.
  • Continuing twin deficits (fiscal and current account) require careful management.
  • Frontier markets, including Ghana and Nigeria, are not immune from sell-off pressures in emerging economies. There is therefore periodic risk of currency depreciation, FX reserve depletion and capital flight.
  • Although per capita incomes have improved, poverty remains pervasive in some rural areas.
  • Regional instability and uncertainties, including in Burkina Faso, Nigeria and Mali.

Ghana successfully smoothed volatile growth cycles

Ghana made key economic progresses during the last years. A welcomed rebalancing of the economy (lower fiscal and external deficits) triggered an improvement of the liquidity of the economy (particularly FX liquidity). As a result of the progresses made the country is now able to live without IMF financing.

Growth is in general quite volatile, since the country is exposed to the volatility of its export prices and procyclical pressures on its currency. However, the overall flexibility of the Cedi proved a good medicine. It had some consequences on inflation (+17% in 2015 and 2016) but it also helped to restore the country’s competitiveness in front of neighbors with fixed exchange rates (CFA zone, Nigeria). Cedi flexibility also helped to save FX reserves when comparable economies burned it in lose FX interventions

 It helped to live with a quite low import cover of foreign reserves (usually about 3 months), since Ghana easily qualified for IMF financing (including for precautionary backing, without a need to disburse effectively). A lower current account deficit (reduced from -11.9% of GDP in 2013 to -3.5% in 2018) and higher capital inflows recently allowed an increase of the import cover to 4 months. This good evolution reflects the major improvement of the fiscal balance.

Growth is commodity driven first, but also reform driven

Annual average GDP growth was above +5.5% in 2000-10, a relatively good rate of expansion but around the pace required for a country like Ghana to make positive advances in socio-economic development. Since then, Ghana experienced several boom-bust cycles led by commodity investment booms (gold, cocoa, oil). E.g. growth accelerated to 14% in 2011 and to +8.1% in 2017. The impetus from that significant economic development was not maintained in 2018 but annual GDP growth should be resilient to +5.7%.

The World Bank Doing Business 2019 survey ranks Ghana 114 out of 190 countries rated. Contract enforcement involves more time but less cost than the regional average and insolvency resolution requires less time and is more likely to result in a higher recovery rate than the regional average.

The resolution of boundary dispute with Côte d’Ivoire in a favorable way for Ghana should help the business environment in the oil sector. Progresses made on issues like dealing with construction permits, the ease to pay taxes and trading across borders also contribute to make Ghana one of the top reformers on the continent.

Politics are not perfect, but among the best in the region

These reforms are progressing along with efforts (improving connectivity) to transform Ghana into a trade and logistics hub in West Africa. In our more optimistic scenario, more openness to trade within the African continental free trade area should help Ghana to multiply its exports by 5 by 2030. It shows the potential that more regional trade integration can create in areas where the trade remains dominated by trade with advanced economies.

The country is somewhat of a model of development in relation to governance and adoption of market economic reforms. General elections are generally judged free and fair by independent poll observers. However, Ghana exhibits high correlation between spending and electoral cycles. It can increase at some point the volatility of the economic cycle.

As elsewhere in the region, however, there are ethnic and tribal balances requiring careful management and local chiefs have considerable powers. Domestic stability is relatively good and, to date, there are no signs of contagion from terrorist and extremist activity in Sahel or in Nigeria). The country should also benefit from better relationship with its neighbors.

Trade structure by destination/origin

(% of total)

Exports Rank Imports
South Africa 13%
20% China
United Arab Emirates 11%
8% United States
Switzerland 11%
5% Nigeria
France 7%
5% Netherlands
China 7%
5% Côte d'Ivoire

Trade structure by product

(% of total)

Exports Rank Imports
Gold, non-monetary (excluding gold ores and concentrates) 41%
13% Road vehicles
Coffee, tea, cocoa, spices, and manufactures thereof 23%
7% Petroleum, petroleum products and related materials
Petroleum, petroleum products and related materials 14%
6% Specialised machinery
Vegetables and fruits 4%
5% Other industrial machinery and parts
Metalliferous ores and metal scrap 4%
5% Other transport equipment

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings


Contact Euler Hermes

Economic Research Team

Contact Stéphane Colliac

Senior Economist for France and Africa 

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