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Operational Plan 2011-2015: DFID Ghana, Updated June 2013

1) Context

Two decades of sustained economic growth, six free and fair elections, political stability and relatively strong institutions have led to significant poverty reduction in Ghana. The country is on target to halve extreme poverty by 2015. A re-estimation of the size of the economy in 2010 showed Ghana to have achieved middle income country status with per capita GDP of around $1,300. Major new commercial oil production started in December 2010 and will soon be contributing over $1 billion a year to the public purse. Today, Ghana is a significantly different place to the highly indebted, poor country it was 10 years ago.

The next few years will be crucial for Ghana, offering an opportunity to transform the country’s development, firmly establishing its middle income status and delivering significantly better health, education and wealth creation outcomes. To achieve this, Ghana will need to tackle a set of challenges: over 6 million people live below the national poverty line; progress against a number of the Millennium Development Goals (MDG) is disappointing; there are major regional inequalities, with the North of the country suffering significantly higher levels of poverty than elsewhere; girls and women perform worse across all the main social indicators; educational attainment is poor; oil is potentially a blessing, but it could also prove to be a curse; businesses are often too small, unproductive and lacking in innovation; domestic revenue collection is lower than it should be; macroeconomic stability remains at risk; and Ghana’s rightly-praised democracy is less robust than some think, especially now that oil has raised the stakes. Other challenges could include rising oil and food prices, though how these will impact on Ghana is not clear. As an imminent net exporter of oil, Government revenues could benefit from higher prices. The impact on the poor will depend on how the Government manages such increased revenues. On food, the majority of Ghana’s poor people live in rural areas and are food producers, so would not be significantly affected by food price increases, but significant and growing numbers of urban poor would be negatively affected.

The Government of Ghana recognises these challenges and has set out plans to tackle them. The Ghana Shared Growth and Development Agenda (GSGDA) 2010–13 establishes an ambitious framework and identifies national development priorities, including: human development, transparent and accountable governance, infrastructure development, agricultural modernisation and natural resource development. Building on the GSGDA, a ‘Compact’ was signed between the Government of Ghana and development partners in June 2012, aimed at ‘leveraging partnership for shared growth and development’ for the period 2012-2020. The Compact incorporates the development priorities of the GSGDA and also focuses explicitly on reducing disparities and inequality and strengthening public sector institutions and systems. Building on previous joint statements that in 10 years time Ghana should not need aid, the Compact points towards reduced dependence on ODA and full financial responsibility of government for investing in accelerated development to reduce poverty and inequality.

Donor coordination is effective in Ghana, but could be strengthened. Most donors are planning to continue to support Ghana during these critical years. Division of labour is fairly advanced. DFID enjoys a close working relationship with the Foreign and Commonwealth Office through the British High Commission. Joint priorities include governance and security, wealth creation (also with the Department for Business Innovation and Skills, and UK Trade and Investment) and climate change (also with the Department for Energy and Climate Change).

Ghana has an important role regionally in West Africa and across the continent. Its political, economic and social success offers lessons for other countries. Its respect for institutions and the rule of law set important precedents that influence neighbours and those further afield. It is a respected voice in the African Union, and had a pivotal and much admired role in the process of decolonisation. Although yet to be fully capitalised on, its potential role in regional trade, transport and communications, could help to bind together one of the most economically fragmented areas of Africa. New priorities around development in the north of the country could provide the platform necessary to promote regional trade and achieve growth and development benefits for neighbours as well as for Ghana.

- Private group -
International Federation of Red Cross and Red Crescent Societies
Original Publication Date: 
27 Jun 2013
Document type: 
Work Plan
Humanitarian Assistance
Humanitarian Financing