US embassy cable - 05ACCRA416

UNCLAS SECTION 01 OF 02 ACCRA 000416 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON, EAGR, EINV, ENRG, ETRD, GH, economy 
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