Structure of the economy of Ghana
- Principally focused on agriculture
- Although minerals are also exported to some degree
- The new oil finds and exports will alter the structure of Ghana’s economy
Agriculture forms 5% of Ghana’s formal work force.
Timber, coconut, cashew, shear nuts
Plantain cassava, millet
The industrial base has not done badly in comparison to other African nations. Unfortunately the industrial base has not been really built upon since Nkrumah’s time. Some of these include the beverage industry.
The structure of the economy as at now is divided into numerous sectors.
Agricultural Sector
Agricultural dominates all of the sectors in Ghana’s economy. The sub-sectors under agriculture include
- Livestock
- Crop
- Forestry and logging
- Fishing
- Cocoa production and marketing (counted as separate due to its singular magnitude)

The Industrial Sector
Manufacturing
- Production of Agricultural inputs (processing of agricultural products)
Mining and Quarrying
Construction
- Another dominating sub-sector as well as acting as a large employment base
- Housing and road construction come under this sub sector
Water
Educational Sector
Health Sector
Tourism Sector
Energy Sector
- Electricity
- Oil & Gas: the recent discovery and production of oil and gas has boosted this sector.
The Financial sector
- The banking system which is governed by the central bank
- Securities and Exchange commission that look at the capital and money markets
- The insurance commission which supervises the insurance companies

The government plays a large role in the economy of Ghana. It can be considered as a sector or a sub sector
Service sectors should not be left out. Even though tourism is one, we have wholesale/retail sectors are among
Economic Trends
We are looking at many economic indicators from independence till today. One strong indicator over the years is the GDP. What is GDP? GDP is the gross domestic product; it is essentially the market value of all goods and services over a time period (usually a year).
GDP is calculated from the national income accounting. We also have national income determination. We are measuring the national income of the economy. There are three methods of measuring
- Income approach: it measures the incomes received from the factors of production. These are wages and salaries
- Output approach: a term for the goods and services produced in an economy in a given year
- Expenditure approach: aggregates…. Investment expenditures and government expenditures, as well as net exports
If you use any of these three approaches you should get a similar result
GDP falls under the income approach
The net national product
Net National Product (NNP) = Gross National Product (GNP) – Depreciation
Net factor income from abroad is the difference between goods and services produced by Ghanaians living abroad or foreigners living in Ghana
Uses of the Net National Indicator
- It is used as a measure of standard of living of people within a nation
- Used as a comparison between countries
- A trend analysis can be used as a performance indicators
Problems when calculating Economic Indices
Double counting: possibilities are that if you are looking at the output approach there is the likelihood that you can count a certain good twice. Some products are used as inputs for other products. Eg if cotton is used in the production of a shirt, cotton becomes an input in the shirt manufacturing process. These things must be taken into consideration when doing economic calculations
Problem with statistical data; Most figures that come with some manner of suspicion since data gathering techniques are not too good and data gathering institutions lack qualified personnel.
The underground economy; Black marketing, illegal activities as well as the informal sector are difficult to capture effectively. Thus the information that would be used to compute these national statistics is not captured and therefore is not included in calculations.
GDP
GDP growth rate since independence has fluctuated greatly. E.g. In 1990’s the average growth rate was 4.2%.
Between 2000-2005 we have had an average growth rate of 5%. Historically before the economic recovery programme we have had negative GDP growths due to military coupe’s and other political instabilities.
It is possible with the recent oil finds as well as emerging industries our GDP growth rate
Inflation
Ghana had large inflation rates which have always been in the positive (i.e. rising). It has not been steady and has been subject to fluctuations.
1977 116%
1982 117.1%
1985 10%
1986 24%
1992-3 27%
1995 74%
2000 40.5%
2001 21%
2002 15%
2004 11.8%
2006 10.5%
2007 10.7%
2008 16.5%
2010 9%
GDP and Inflation
The link between GDP and general price levels does not exist. When GDP increases, it does not mean necessarily that prices will go up.
Population information is usually gathered from censuses. The one that is the most accurate was the 1960 census then our population was 6,727,000 and then 1970 which put the population at 8,559,000. The rate of change between the two was 2.4%.
In 1984 the population was 12,206,000.
Unemployment
The exchange rate
The current exchange rate is approximately 1.5 Cedi to the Dollar.
Depreciation
The main cause of depreciation is demand and supply. When more dollars are required, the exchange rate goes up, if the demand for the Cedi goes up its strength will also increase. External loans may come with the requirement to reduce the strength of the nations currency. The general trend is that the cedi depreciates over time.
The cedi in 1985 the cedi depreciated by 15%
1990 12%
1995 27%
1999 33%
The central bank can stabilize the exchange rate by pumping foreign currency into the system. This can only be done when the country has a large reserve. Foreign inflows are beneficial but if they are less than the country’s exports there will be an overall negative effect.
Devaluation

Imports and Exports
Resources are required for any form of development. The source of these resources is from what we produce. After production, if there is surplus of goods that cannot be used within the country, we export to foreign countries and receive foreign currency.
What we need but do not produce would be bought from other countries or imported.