US embassy cable - 05ACCRA634

UNCLAS SECTION 01 OF 04 ACCRA 000634 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: GH, OVIP 
SUBJECT: SCENESETTER FOR DEPUTY COMMANDER, EUCOM, GENERAL 
CHARLES F. WALD VISIT TO ACCRA 
 
 
For General Wald from Ambassador Mary C. Yates 
 
SENSITIVE BUT UNCLASSIFIED - PLEASE HANDLE ACCORDINGLY 
 
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INTRODUCTION 
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1.  (SBU)  U.S. interests center on support for Ghana's 
fifteen-year-old democracy and promotion of open markets. The 
long-term success of Ghana's constitutional democracy is not 
guaranteed.  Government institutions are still evolving, and 
economic challenges, left unresolved, could erode popular 
support for democracy. A top Mission priority is to encourage 
respect for rule of law, individual rights and accessible, 
open, corruption-free civic institutions.  This effort goes 
hand-in-hand with our support for economic policy reform and 
pursuit of market-based growth, primary education, and 
combating HIV/AIDS.  On May 6, 2004, the U.S. designated 
Ghana eligible for assistance under the Millennium Challenge 
Account.  In July 2004, the Government of Ghana reached HIPC 
completion point.  The events of September 11 have led to 
increased emphasis on anti-terrorism, particularly in 
successfully lobbying the Ghanaian Government on 
anti-terrorism conventions and suggesting improvements to 
Ghana's financial systems. 
 
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Internal Political Situation 
---------------------------- 
 
2.  (U)  President Kufuor of the New Patriotic Party (NPP) 
won reelection in a free and fair election in December 2004, 
defeating John Atta Mills of the National Democratic 
Congress.  The NPP controls 128 of the 230 seats in 
Parliament.  The NDC controls 94 seats, with the remainder 
held by independents and two small parties.  Kufuor,s vice 
president is a northern Muslim, Alhaji Alieu Mahama.  The 
election was close (52% NPP, 44% NDC) and split the nation 
almost evenly between voters in the north and east (NDC) and 
the NPP stronghold in the south and west.  There is 
significant intra-party tension at the moment. 
 
3.  (U)  The Kufuor government frequently proclaims its 
dedication to the rule of law and to constitutional 
government.  It repealed colonial-era criminal libel laws, 
dropped a number of libel suits against journalists, 
initiated abolition of sometimes abusive community tribunals, 
established a juvenile justice system, and generally takes a 
more balanced attitude toward individual freedoms and 
personal expression. The President signed a new labor bill 
into law in October of 2003, bringing its law into conformity 
with ILO conventions. 
 
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Peacekeeping/Military Cooperation 
--------------------------------- 
 
4.  (U)  Ghana's 8,000 strong military establishment is 
characterized by its allegiance to elected civilian 
leadership, a rich peacekeeping tradition and a close 
relationship with the United States.  From 1960 through 
present day, 80,000  Ghanaian soldiers and police have 
participated in peacekeeping missions across the sub-region 
and abroad with the United Nations and the Economic Community 
of West African States (ECOWAS).  This makes Ghana one of the 
leading contributors of peacekeeping troops in the world. 
The Ghana Armed Forces (GAF) have received peacekeeping 
training under ACOTA, (the USG's Africa Contingency 
Operations, Training and Assistance), and Operation Focus 
Relief.  The armed forces, leadership role in regional 
peacekeeping operations was once again on display in 
2003-2005 in both Liberia and Cote d'Ivoire.  Ghana has made 
further contributions to peacekeeping with the opening of the 
Kofi Annan International Peacekeeping Training Center in 
2004.  Many of Ghana's senior officers have benefited from 
the USG's International Military Education and Training 
program, while the Navy received three ships from the U.S. 
Excess Defense Article program.  They recently pursued 
purchase of T-37 trainer aircraft through the Excess Defense 
Article program, but decided to cancel the purchase in late 
March 2005.  In addition, DOD/EUCOM humanitarian assistance 
programs have constructed and equipped a new clinic in the 
Western Region, rebuilt a destroyed dam in the Upper West 
Region, and assisted small-scale community-based self-help 
projects throughout the country, including an HIV/AIDS 
hospice in Tamale.  In February/March 2005, the USS Emory S. 
Land conducted a port visit in Sekondi which included five 
days of engagement and training.  The Exercise Reception 
Facility in Accra was completed in mid-2004 and has planned 
electrical upgrades scheduled for early 2006.  Ghana recently 
hosted a visit by the Adjutant General of North Dakota to 
move forward Ghana,s participation in the State Partnership 
Program. 
 
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Sub-Regional Issues 
------------------- 
 
5.  (U)  Sub-regional issues:  Ghana has been a strong leader 
within the sub-region.  President Kufuor served as the Chair 
of the Economic Community of West African States (ECOWAS) for 
two terms, ending in January 2005.  The Executive Secretary 
of ECOWAS is Ghanaian (Mohammed Ibn Chambas).  Ghana 
contributes troops to peacekeeping missions in Liberia, 
Sierra Leone and Cote d,Ivoire.  Ghana also hosts around 
43,000 refugees, mostly Liberian. 
 
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Counter-Terrorism 
----------------- 
 
6.  (U)  The GOG condemned the September 11 attacks, publicly 
and privately, and expressed its sympathy, again publicly and 
privately, for the victims of the attacks.  Local security 
forces have offered enhanced cooperation, both in terms of 
security of Mission personnel and in exchange of information. 
 The Government in December 2001 signed the Convention on 
Suppression of Terrorist Financing, and has indicated its 
willingness to exercise greater oversight of suspicious 
transactions.  The Bank of Ghana drafted anti-money 
laundering legislation, which is currently waiting 
Parliamentary action. The Ministry of Justice is amending 
local laws to bring them into conformity with this and other 
anti-terror conventions.  In July 2002, the GOG ratified the 
five remaining conventions to which it was not yet a party, 
and now subscribes to all 12 conventions.  The computerized 
PISCES system has been installed at the airport and two other 
entry points to track visitors.  One of Africa,s largest 
drug busts of cocaine was made in December 2003 by Ghana,s 
Narcotics Control Board. 
 
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Development Assistance 
---------------------- 
 
7.  (U)  Ghana is one of USAID's largest programs in 
Sub-Saharan Africa, receiving approximately USD 55 million in 
grant assistance and food aid per year.  In July 2003 USAID - 
Ghana,s Country Strategic Plan for 2004 - 2010 was approved 
with improved health an important component.  USAID works in 
the education, health/population and HIV/AIDS, environment, 
trade and investment, and democracy/governance sectors.  The 
trade and investment program focuses on macroeconomic and 
trade policy reform, and technical assistance to business 
groups and individual entrepreneurs. USAID has also provided 
technical assistance to the Government for the West African 
Gas Pipeline (a project of great interest to CMS Energy, a 
U.S. corporation in Ghana), and the West African Power Pool. 
In February 2000, Ghana launched a USAID-funded "Stop AIDS, 
Love Life" campaign to help slow the rate of infection, now 
hovering well below the critical 5 percent level. 
 
8.  (U)  September 2003 marked the Peace Corps' 42nd 
anniversary in Ghana, the first country in the world to 
receive Peace Corps volunteers.  Ghana currently hosts some 
130 volunteers who are working as teachers, agro-foresters, 
small business and water/sanitation advisers, and youth 
development volunteers. The USG-funded African Development 
Foundation supports grassroots development and small-scale 
community-based enterprises, including micro-financing 
projects.  Ghana also participates in the Leland (computer 
and internet connectivity) and Education for Democracy and 
Development (EDDI) initiatives thru USAID. 
 
9.  (U)  Donor coordination is excellent in Ghana, with 
active coordination groups in 14 sectoral areas including 
health, education, and governance/democracy.  Assistance to 
Ghana in forms of grants and concessional loans from over 20 
multilateral and bilateral donors was approximately USD 1 
billion in both 2002 and 2003. The United States ranks third 
among bilateral donors and contributes approximately 6 
percent of that total.  On May 06, 2004, the United States 
Millennium Challenge Corporation (MCC) designated Ghana as 
one of the sixteen countries eligible to apply for funding 
under the Millennium Challenge Account program.  Ghana is 
currently working with the MCC to complete its proposal for 
MCA funding. 
 
10.  (U)  Japan and Great Britain are among the largest 
donors with programs in public administration, health, 
education, rural infrastructure, and agriculture.  Other 
major donors include the World Bank (infrastructure, 
education, and health), United Nations agencies, the European 
Union, Denmark, the Netherlands, Germany, France, Canada, 
Italy, and Spain.  Ghana signed an IMF Poverty Reduction and 
Growth Facility (PRGF) program in May 2003 and to date has 
met most performance targets. 
 
--------------------------------- 
Child Labor and Child Trafficking 
--------------------------------- 
 
11.  (U)  Ghana is a source, transit, and destination country 
for trafficked persons and has an internal trafficking 
problem. An ILO/IPEC-sponsored household survey of child 
labor by the Ghana Statistical Service released in March 
found that 2.47 million Ghanaian children were engaged in 
some economic activity, of which 1.27 million children were 
found to be engaged in child labor as defined by age and 
hazardous working conditions.  Most trafficking victims are 
children trafficked internally for casual labor. 
 
12.  (U)  Ghana has been working diligently to combat the 
problem of child labor and child trafficking.  The Mission 
works hard to create momentum within Ghana's Ministries, 
Security Agencies, trade unions, employers associations, NGO 
community and media outlets to create awareness and start 
addressing the root causes of the problem.  In the State 
Department's 2004 Trafficking in Persons report, Ghana was 
the only Sub-Saharan country to be listed in Tier One Status, 
meaning Ghana met the minimum standards for combating 
trafficking in persons. 
 
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Economics and Trade 
------------------- 
 
13.  (U)  In 2000, the Kufuor Government inherited a 
distressed economy: high levels of debt, accelerating 
inflation, interest rates above 50 percent, a plummeting 
currency (the "cedi"), all exacerbated by declining world 
cocoa and gold prices (the main foreign exchange earners), 
and rising crude oil prices (heavily subsidized on the local 
market).  The government moved to restore macroeconomic 
stability, and promised a new "Golden Age of Business."  It 
imposed badly needed fuel, water and energy price hikes in 
January 2003, and reined in spending by deferring some 
infrastructure projects and also by accumulating arrears to 
creditors.  The government's moves were in good measure 
successful; the 12-month inflation rate, after spiking to 30 
percent in April 2003, was lower than 12 percent for 2004. 
Interest rates have fallen below 20 percent, and the cedi is 
stable.  The decision to seek debt relief under the Heavily 
Indebted Poor Countries (HIPC) initiative was a controversial 
move, but afforded Ghana roughly USD 250 million in debt 
relief in 2002, and over USD 100 million debt relief in 2003. 
 The IMF and World Bank approved HIPC Completion Point in 
July 2004.  Debt relief from IMF, World Bank and other 
official creditors will exceed USD 3.5 Billion. 
 
14.  (U)  The government still has much to do to create its 
"Golden Age of Business."  While voicing support for 
divestiture, the government has yet to sell its big assets - 
the utilities, the airline, and telecommunications.  Ghana 
continues to rely on multilateral and bilateral donors to 
provide a significant percentage of its total revenue. 
Looming revenue constraints, spending pressures, high 
interest rates, and major inefficiencies in agriculture 
continue to limit growth and hamper poverty reduction.  A 
number of nettlesome commercial disputes involving U.S. 
companies raise questions about the long-term investment 
climate.  While each dispute has its unique characteristics, 
most involve a sustained GOG failure to pay its creditors in 
a timely fashion or a failure to abide by contractual 
obligations, though the situation has been improving. 
 
15.  (U)  Despite these problems, the United States and Ghana 
experience a relatively dynamic trade relationship. Ghana 
ranks fifth among African markets for U.S. goods (after South 
Africa, Kenya, Angola, and Nigeria). In 2004 U.S. exports 
rounded to USD 307 million, principally heavy equipment and 
machinery, building materials, and food.  Ghanaian exports to 
the U.S. in 2004 amounted to USD 146 million, primarily 
cocoa, gold and timber.  The Star-Kist tuna plant, owned by 
Heinz, and the CMS Energy thermal power plant are the largest 
U.S. investments in Ghana, and soon will be surpassed by 
Newmont Mining Company.  Ghana has taken steps to take 
advantage of the Africa Growth and Opportunity Act (AGOA); it 
was the first country in Africa to receive certification for 
AGOA apparel benefits.  Secretary of Commerce Donald Evans 
formally opened a Department of Commerce office in Accra in 
November 2002. 
 
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Corruption 
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16.  (SBU)  The Kufuor government claims a "zero tolerance" 
policy for corruption and has pursued some high-profile 
prosecutions, including its Minister of Youth and Sports and 
several former high-level government officials.  In July of 
2003, the President established an Office of Accountability 
within his office to ensure government appointees and public 
servants abide by the code of ethics for government 
employees.  It is still unclear, however, if this initiative 
is sufficient for the government to pursue corruption 
effectively against its own senior officials, and if it will 
succeed against working-level corruption pervasive in Ghana's 
public sector. 
 
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Conclusion 
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17.  (U)  Post is finishing an in-depth think piece on the 
future of Ghana for President Kufuor,s second term.  It will 
be forwarded in the coming week upon completion.  Post warmly 
welcomes General Wald,s visit and will offer a discussion 
with the country team on 15 April 05. 
YATES