Ghana’s formerly strong economy was badly affected by a series of military coups and failed development plans. A highly protected economy and substantial state investment created a large manufacturing sector, which by the 1980s was becoming a heavy burden on national resources. While the economy depended heavily on the export of two commodities, gold and cocoa, it would remain vulnerable to fluctuations in world commodity prices and poor harvests.
The economic situation began to improve with government austerity programmes in the late 1980s, but the early 1990s presented new difficulties including a decline in the international price of cocoa. Donors pledged substantial aid from 1993, in support of IMF-backed economic recovery and reform programmes, which aimed to diversify exports, control public expenditure and privatise a number of state-owned enterprises.
Ghana has benefited from the G8 debt-relief programme launched at the Gleneagles Summit in Scotland, UK, in July 2005.
From the mid-1990s, there followed a period of vigorous economic growth, only dipping below four per cent p.a. in 2000, when cocoa prices were weak and oil costs rising. After dipping once again to four per cent in 2009 in the global economic downturn, strong growth continued in 2010–13, generally of some eight per cent p.a. but, with the start of oil production in December 2010, it soared to 15 per cent in 2011. Then in 2014, as oil prices weakened, growth fell to an estimated 4.5 per cent. Keeping inflation under control, however, proved more challenging.
Significant discoveries of offshore oil were announced in 2007. Oil production began in December 2010 at a rate of 55,000 barrels a day and was at 99,000 barrels a day in 2013. As new wells come on stream, production is expected to rise rapidly.
In 2015 the country was set to become a major gas exporter too, with the opening of its first LNG plant – linked by pipeline to offshore field – with the capacity to produce 4.2 million cubic metres of gas a day.
Gold and diamonds are the main mineral exports. There are large reserves of bauxite and manganese. Ghana’s aluminium smelter was closed in 2007. The government assumed ownership of the operating company, Valco, in 2010 and announced plans to rehabilitate it and establish a domestic aluminium industry.