VZCZCXYZ0001
RR RUEHWEB

DE RUEHAR #0015/01 0031658
ZNR UUUUU ZZH
R 031658Z JAN 08
FM AMEMBASSY ACCRA
TO RUEHC/SECSTATE WASHDC 5938
RUEHEG/AMEMBASSY CAIRO 0043

UNCLAS ACCRA 000015 
 
SIPDIS 
 
FROM AMBASSADOR BRIDGEWATER; CAIRO PLEASE PASS TO CODEL JOHNSON 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: OTRA PREL PGOV ECON AMGT GH
SUBJECT: GHANA SCENE SETTER FOR CODEL JOHNSON, JANUARY 7-9, 2008 
 
¶1.  (SBU) I look forward to your return visit to Ghana and am 
pleased to provide some background information for you and the 
delegation. 
 
¶2.  (SBU) SUMMARY:  Your visit comes at the beginning of what 
promises to be another eventful year for Ghana.  After celebrating 
50 years of independence in 2007, Ghana is preparing to hold 
parliamentary and presidential elections in late 2008.  At that 
time, Ghana will choose a successor to President Kufuor, who is 
constitutionally prohibited from seeking a third term.  In addition 
to holding independence celebrations in 2007, Ghana hosted the 
African Union (AU) summit and co-hosted with the United States the 
Sixth African Growth and Opportunity Act (AGOA) Forum.  Ghana has 
made impressive progress in democratic and economic development but 
challenges such as poverty, corruption, lack of adequate 
infrastructure, an improving but still difficult business climate, 
and narcotics trafficking must be overcome if Ghana is to achieve 
its goal of reaching middle income status by 2015.  U.S. interests 
center on support for Ghana's fifteen-year-old democracy, the 
promotion of poverty reduction, shared prosperity, and private 
sector development, security cooperation, and enhanced 
people-to-people ties.  As President of the African Union and during 
its just-completed tenure on the UN Security Council, Ghana has been 
a reliable partner in peacekeeping, conflict resolution, 
counter-terrorism, and economic development.  END SUMMARY. 
 
2007 AN IMPORTANT YEAR FOR GHANA 
-------------------------------- 
 
¶3. (SBU) In addition to marking 50 years of independence, in 2007 
Ghana hosted the African Union summit (AU), of which Ghana is the 
Chair for 2007, and co-hosted with the United States the African 
Growth and Opportunity Act (AGOA) Forum.  Ghana is now gearing up 
for the 2008 Presidential election to succeed President Kufuor who 
is barred by the Constitution from seeking a third term.  The 2007 
independence celebrations provided an opportunity for many Ghanaians 
to consider what Ghana has achieved in the past 50 years, but the 
year has also been marked by reflections on perceived missed 
opportunities since independence. 
 
POSITIVE STEPS FORWARD 
--------------------- 
 
¶4. (SBU) Ghana is relatively stable, with an apolitical military, a 
generally good record on human rights, and a lively, free media. 
After 15 years of democratic governance, Ghanaians are committed to 
democracy.  Ghana has held four consecutive free and fair national 
elections.  While parliament is weak and the main parties are 
increasingly polarized, there is political space for the opposition 
and almost half of parliamentary seats are held by the main 
opposition National Democratic Congress (NDC) party.  Civil society 
groups, particularly religious associations, are well organized. 
Politics is increasingly focused on the 2008 presidential and 
parliamentary election, which promises to be a close race between 
the NDC and the ruling New Patriotic Party (NPP).  The NPP defeated 
the NDC in the two previous elections by thin margins.  On December 
22 the ruling New Patriotic Party (NPP) selected Nana Akufo Addo, 
former Minister of Foreign Affairs, as its candidate from among 17 
aspirants, and the National Democratic Convention (NDC) has selected 
2000 and 2004 party flag-bearer John Atta Mills, and former Vice 
President in the Rawlings administration, to contest once again for 
the presidency.  The People's National Convention (PNC) has chosen 
Edward Mahama who also ran in the 2004 election.  The Convention 
People's Party (CPP) has chosen Paa Kwesi Ndoum, formerly Minister 
for Public Sector Reform and the lead in developing Ghana's MCC 
Compact.  In 2004, the NPP received 53.4% of votes, the NDC received 
43.7% of votes, the PNC received 1.9% of votes and the CPP received 
1% of votes. 
 
¶5.  (SBU) The economy has performed generally well under the Kufuor 
administration.  Sound macro-economic policy accompanied by major 
debt relief, large inflows of donor resources and relatively high 
cocoa and gold prices have been key to the steady improvements in 
the real GDP growth, which was more than 6 percent in 2006 and 2007, 
declining inflation and reductions in poverty.  In 2008, Ghana will 
be the first sub-Saharan African country to meet the Millennium 
Development Goal of reducing poverty by 50 percent and in October 
2007, Ghana became the first sub-Saharan country other than South 
Africa to successfully enter international capital markets by 
issuing a $750 million sovereign bond. 
 
¶6.  (U) USAID provides significant support for Ghana's development, 
averaging about $40 million annually 2004-2007 in addition to $22 - 
$25 million in food aid prior to FY 2007.  The food aid program is 
being phased out.  Ghana's strong performance was recognized in 2006 
with the signing of a five-year, $547 million Compact with the 
Millennium Challenge Corporation. The Compact has three main 
components: enhancing profitability of small farmers; reducing 
transportation costs affecting agricultural commerce through 
improvements in transportation infrastructure; and expanding basic 
E 
community services and strengthening rural institutions. 
 
DIFFICULT CHALLENGES REMAIN 
--------------------------- 
 
¶7. (SBU) Despite Ghana's democracy and stability, politics is 
deeply 
polarized, political power is highly centralized, and democratic 
institutions are weak.  Corruption is a serious problem and Ghana 
faces human rights challenges relating to child labor and human 
trafficking.  Ghana also faces a range of security challenges, 
including a rise in violent street crime and vigilante justice, 
sometimes violent chieftaincy disputes, a proliferation of small 
arms, and narcotics trafficking. 
 
¶8.  (U) Economically, Ghana is vulnerable to external price 
shocks in cocoa and gold, which account for about 65  per cent of 
exports.  It remains heavily dependent on foreign inflows of aid and 
on remittances.  Infrastructure necessary to support growth is poor, 
particularly power generation and water supply.  Last year's energy 
crisis, with scheduled 12 hour power outages every second day has 
subsided, but concerns over long-term energy policies remain.  The 
impact of discovery in 2007 of potentially commercially viable oil 
reserves in Ghanaian waters is a wild card in Ghana's energy and 
economic future. 
 
¶9.  (SBU) Social indicators such as maternal and infant mortality 
rates are well below levels in the 1980s but remain high and have 
not changed in ten years.  Access to education has grown but quality 
is a major challenge.  Many Ghanaians do not feel they have 
benefited from the country's macroeconomic success.  According to 
the Center for Democratic Development's 2005 Afrobarometer survey, 
53 percent of respondents thought their standard of living had 
declined over the previous year, compared to 38 percent in a similar 
survey in 2002. 
 
WATER AND TRANSPORT 
------------------- 
 
¶10.  (U) WATER: According to the World Bank, about half of Ghana's 
population does not have access to safe water and two-thirds do not 
have access to adequate sanitation.  Water-related diseases such as 
guineaworm infection remain major problems, especially for the poor. 
 The main sources of water for urban households are piped supply 
from treated water sources, untreated piped water from groundwater 
sources, shallow boreholes, wells, and ponds, springs, lakes, 
rivers, and streams.  Funds for maintenance and upgrading of the 
urban water system are scarce.  Of every 100 liters of water pumped 
into the network only half is registered on the meters of 
connections. The rest is lost through leaks, administrative errors 
or illegal connections.  The operating cash flow is, therefore, far 
from adequate even to maintain the status quo.  In rural areas, 95% 
of water comes from groundwater sources, some of which has high 
levels of metal which poses a health hazard. 
 
¶11.  (U) TRANSPORTATION:  Ghana's transport infrastructure is better 
than in many Africa countries but is still far short of what is 
necessary for smooth, safe flow of goods and services.  More than 
half of the rural population lives more than a mile from the nearest 
road and 55% of the land area is inaccessible to modern transport. 
Traffic jams are a regular feature of urban life and road accidents 
are frequent.  According to Government statistics, road crashes 
killed an average of four persons daily in Ghana in 2004 (latest 
available).  Many vehicles are overloaded and poorly maintained. 
When combined with uneven road quality, speeding, and unsafe driving 
practices, the mix can be deadly.  Addressing Ghana's transport 
infrastructure challenges, including the high cost, is critical to 
its development.  Ghana's MCC Compact will devote $195 million to 
transportation with the goal of reducing transportation costs 
affecting agriculture, a mainstay of the economy.  Under the Compact 
a 14 kilometer stretch of the National Highway between Accra and the 
Tema Port will be upgraded, 230 kilometers of feeder roads in the 
Afram Basin area will be constructed or rehabilitated, 950 
kilometers of trunk roads will be upgraded in northern Ghana, and 
ferry service between the "mainland" and the Afram Basin will be 
modernized.  USAID is supporting an innovative road governance 
program that is documenting delays and corruption along major 
trucking routes in West Africa.  The results have attracted 
considerable press and government attention and pressure for reform 
is increasing. 
 
GHANA IN THE WORLD 
------------------ 
 
¶12. (U) Ghana has been playing an increasingly significant global 
leadership role.  It is an active member of the Economic Community 
of West African States (ECOWAS), was chosen to chair the African 
Union in 2007, and just-concluded a term as a non-permanent member 
of the UN Security Council,   Ghana prefers multilateral solutions 
to global problems and has a history of African leadership. 
 
GHANA AND THE U.S. 
------------------ 
 
¶13. (SBU) U.S. - Ghana relations are excellent and wide-ranging. 
The 
U.S. Mission in Ghana is the third-largest U.S. Mission in Africa, 
and it has the oldest Peace Corps program in the world.  The U.S. 
has strong commercial, political, military-military, and 
people-to-people relations with Ghana, and there is a deep reservoir 
of goodwill toward the United States.  Approximately 3000 Ghanaian 
students are studying in the United States and the Mission 
consistently has many strong candidates for International Visitor 
Programs for professionals.  President Kufuor has met President Bush 
seven times and hosted the First Lady in January 2006. 
 
BRIDGEWATER