VZCZCXYZ0001
RR RUEHWEB

DE RUEHAR #0798/01 1751814
ZNR UUUUU ZZH
R 231814Z JUN 08
FM AMEMBASSY ACCRA
TO SECSTATE WASHDC 6636

UNCLAS ACCRA 000798 
 
FROM AMBASSADOR BRIDGEWATER 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: OTRA OVIP PREL PGOV ECON AMGT GH
SUBJECT: GHANA: SCENE SETTER FOR CODEL PRICE'S VISIT TO GHANA JUNE 
27-29, 2008 
 
1.(U)  Representative Price and delegation members:  Our entire mission 
joins me in extending to you a very warm welcome to Ghana.  We hope 
your visit here helps inform you and your team, and we look forward 
to supporting your objectives. 
 
2.(U) SUMMARY: After celebrating 50 years of independence in 2007, 
Ghana is preparing to hold Parliamentary and Presidential elections 
in December 2008.  At that time, Ghanaians will choose a successor 
to President John A. Kufuor.  Reflecting its growing prominence in 
the region, Ghana has played host to a number of major events over 
the past year, including UNCTAD XII, the Sixth African Growth and 
Opportunity Act(AGOA) Forum and the Cup of African Nations soccer 
championship.  In February, 2008, President Bush visited Ghana.  He 
reinforced the positive and very strong bilateral relationship, 
highlighted existing trade and development programs and announced 
funding for health programs.  Considerable press attention also 
focused on President Bush's emphatic denial of rumors regarding a 
possible U.S. military presence in Ghana with the newly formed U.S. 
Africa Command (AFRICOM). 
¶3.  (U) Summary continued:  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 (cocaine and 
heroin) 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 democracy, poverty 
reduction and shared prosperity, private sector development, 
security cooperation, and enhanced people-to-people and cultural 
ties.  Ghana is a reliable partner in peacekeeping, conflict 
resolution, countering terrorism and in economic development.  As 
evidence of Ghana's leadership role President Kufuor served last 
year as President of the African Union and Ghana was a non-permanent 
member of the UN Security Council.    END SUMMARY. 
 
2007 AND 2008: IMPORTANT YEARS FOR GHANA 
---------------------------------------- 
 
¶3. (SBU) Ghana is gearing up for its December 2008 Presidential and 
legislative elections.  President Kufuor cannot seek another term 
under Ghana's constitution.  The 2007 independence celebrations 
provided an opportunity for many Ghanaians to celebrate the 
country's many achievements over the last 50 years, as well as to 
reflect on ways to meet the challenges that remain. 
 
POSITIVE STEPS FORWARD 
---------------------- 
 
¶4. (SBU) Ghana is generally stable country, with an apolitical 
military, a 
solid  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 democratic national 
Elections deemed to be free and fair.  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, 
particularly religious associations, is active. 
 
¶5.  (U) Politics is increasingly focused on the 2008 election which 
promises to be a close race between the National Democratic Congress 
(NDC) and the ruling New Patriotic Party (NPP).  The NPP defeated 
the NDC in the two previous elections by thin margins.  In December, 
the ruling NPP selected Nana Akufo Addo, former Minister of Foreign 
Affairs, as its candidate from among 17 aspirants. The NDC has 
selected 2000 and 2004 party flag-bearer, and former Vice President 
in the Rawlings administration, Professor John Atta Mills to contest 
once again for the presidency.  The People's National Convention 
(PNC) has chosen Dr. Edward Mahama who also ran in the 2004 
election.  The Convention People's Party (CPP) selected  Dr. Paa 
Kwesi Ndoum, former Minister for Public Sector Reform and the lead 
official in moving Ghana's MCC Compact to approval.  In 2004, the 
NPP received 53.4% of the votes, the NDC received 43.7% of the 
votes, the PNC received 1.9%  and the CPP received 1%. 
 
 
¶6.  (SBU) The economy has performed generally well under the Kufuor 
administration but inflation and fiscal pressures have been growing 
in 2008 in the face of rising energy and food prices and a bloated 
public sector wage bill.  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, reductions in poverty and, until 2008, a downward trend in 
inflation.  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. 
In 2008, Ghana is well positioned to become the first sub-Saharan 
African country to meet the Millennium Development Goal of reducing 
poverty by 50 percent. 
 
¶7.  (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.  While food aid is being 
phased out, additional support for malaria and education under the 
special Presidential Initiatives has increased overall funding for 
USAID to approximately $70 million in FY 2008.  Ghana's strong 
performance was recognized in 2006 with the signing of a five-year, 
$547 million Compact with the Millennium Challenge Corporation, 
aimed at transforming Ghana's agricultural sector.  The Compact has 
three main components: enhancing profitability of small farmers; 
reducing costs affecting agricultural commerce through improvements 
in infrastructure, including roads; and expanding basic services in 
twenty-three key  agricultural districts. . 
 
DIFFICULT CHALLENGES REMAIN 
--------------------------- 
 
¶8. (SBU) Despite Ghana's democracy and stability, politics is 
polarized, political power is  centralized, and democratic 
institutions are weak.  Corruption is becoming endemic  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 a growing problem with narcotics trafficking. This 
trafficking involves the transshipment of cocaine from Latin America 
into Europe and the U.S., and to a lesser degree heroin from Central 
Asia. The Ghana Police Service and other authorities have requested 
assistance in countering narcotics; the police has also been at the 
center of scandals involving the disappearance of seized cocaine. 
Later this year the U.S. Drug Enforcement Administration will open 
an office in Accra. 
 
¶9.  (U) Economically, Ghana is vulnerable to external price 
shocks in cocoa and gold, which account for about 65 percent of 
exports, and the country is heavily dependent on foreign  assistance 
and remittances.  While macro-economic management remains generally 
sound, the economy shows signs of overheating as energy and food 
prices rise and government spending is increasing.  The fiscal 
deficit is expected to move into double digits as a percentage of 
GDP and inflation has increased to almost 17 percent as of April 
2008, up from around 10 percent at the end of 2007.  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 the discovery in 
2007 of commercially viable oil reserves in Ghanaian waters is a 
wild card in Ghana's energy and economic future.  Oil production is 
expected to begin in 2010 and could provide a considerable fiscal 
cushion but it also presents significant revenue management and 
development challenges. 
 
¶10.  (SBU) Social indicators such as maternal and infant mortality 
rates are well below levels in the 1980s but remain high and have 
not changed significantly in ten years.  Access to education has 
grown but quality is lacking.  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. 
 
GHANA IN THE WORLD 
------------------ 
 
¶11. (U) Ghana has been playing an increasingly significant and 
positive global leadership role.  It is an active member of the 
Economic Community of West African States (ECOWAS), chaired the 
African Union in 2007, and just concluded a term as a non-permanent 
member of the UN Security Council.  Ghana is a major contributor of 
troops to UN Peacekeeping Missions and currently has personnel 
serving in Liberia, Cote d'Ivoire, Democratic Republic of the Congo, 
and Lebanon.  Ghanaian elder statesman and former UN Secretary 
General Kofi Annan helped broker a fragile power-sharing agreement 
in Kenya. Ghana is also a member of the International Atomic Energy 
Agency. Ghana prefers multilateral solutions to global problems and 
has a history of committed African leadership, based on consensus 
among players. 
 
GHANA AND THE U.S. 
------------------ 
 
¶12. (SBU) Our bilateral relations are exceptionally good, and 
Ghanaians and citizens of the U.S. share a love of democracy, human 
rights, educational opportunity, free enterprise, peace and 
stability.  There is a deep reservoir of goodwill toward the United 
States and a genuine appreciation of our role and contributions to 
this society.   Approximately 3000 Ghanaian students are studying in 
the United States and the Mission nominates many strong candidates 
for International Visitor Programs that enhance professional 
development.  Ghana, in partnership with AFRICOM, has made great 
strides in developing its maritime domain awareness, improving its 
commercial port security and safeguarding its territorial waters. 
Africa Partnership Station, a six-month U.S. deployment to the Gulf 
of Guinea, recently wrapped up training in Ghana, providing courses 
to nearly one-third of the Ghana Navy.   Again, look forward to 
welcoming you to experience  some  of Ghana's successes and 
challenges first hand. 
 
 
Bridgewater