Ghana

Since 1992, the level of poverty in Ghana has been falling thanks to a stable political situation and remarkable economic growth. However, the State is currently heavily indebted. AFD is contributing to strengthening the national economy by supporting public and private actors.
Ghana Accra sky view
AFD and Ghana: Diversifying the economy and improving electricity supply
Ghana Accra sky view

Supporting farmers

Ghana Village rubber outgrowing in Takarodi

Supporting farmers

Agriculture is the backbone of Ghana’s economy and employs some 40% of the working population. However, for the past seven years, its share in the country’s GDP has been constantly falling and currently stands at the 20% mark. This poses a challenge for the new government. It has just launched a program called “Planting for Food and Jobs” to attract Ghanaians to farming. AFD operates in two sectors: rubber and rice. 

Supporting smallholder rubber outgrower plantations 

AFD has allocated two loans to Agricultural Development Bank (ADB). The result: 5,500 smallholder outgrowers are able to farm 18,000 ha of rubber plantations. This project came about through a tripartite agreement between the bank, the technical operator, Ghana Rubber Estate Ltd., and the Rubber Outgrowers and Agents Association. 

Strengthening the rice-growing sector

For some fifty years now, AFD has been helping rural communities in the north of the country strengthen the rice-growing sector. We have financed lowland development (small valleys with flat bottoms used for rice growing). We are supporting 7,500 producers and are contributing to developing an additional 5,000 ha of agricultural land. The benefits: improvement in technical skills, increase in rice production, sales on a fast-growing national market, and fall in the cost of food imports. 

Developing transport and infrastructure

Ghana Accra sky view

Developing transport and infrastructure

With an annual urban population growth rate estimated at 3.6%, the urbanization rate in Ghana follows the general trend in Sub-Saharan Africa. According to forecasts, some 60% of Ghana’s population will be living in urban areas by 2030. AFD is a major partner in Ghana’s decentralization and urban development process and today focuses on the transport and urban mobility sector.

We are financing the Ghana Urban Management Pilot Project in four of Ghana’s secondary cities: Kumasi, Tamale, Sekondi-Takoradi and Ho. The project, which is part of the national urban and decentralization policy, aims to:

  • Equip the four cities with markets, abattoirs, drains, etc.;
  • Regenerate neighborhoods;
  • Train officers from local authorities in public infrastructure management and territorial development. 

In Ghana, 95% of passenger and freight transport is by road. The lack of appropriate transport infrastructure causes major congestion and environmental pollution.

We are supporting the extension of road and drainage infrastructure in Kumasi to reduce traffic jams and flooding.

We are improving urban transport (Kumasi bypass, widening of the Awoshie-Pokuase road, construction of double lanes reserved for Bus Rapid Transit ) to reduce the negative environmental impact of traffic congestion and increase urban productivity.
 

Strengthening the power grid

Ghana Implementation of the electrification strategy

Strengthening the power grid

Access to electricity for rural and urban populations is a major challenge. In recent years, the Ghanaian Government has been implementing major institutional, organizational and tariff reforms. AFD is supporting this energy policy via a range of projects which concern power generation and distribution:


• Rehabilitating the hydropower dam to secure hydropower generation at the Kpong power plant and, eventually, irrigating important areas for agriculture, while reducing the use of fossil fuels;


• Strengthening the power grid in the North. The existing 160 kV line will be replaced by a new 330 kV high-voltage line. The project also provides for the construction of power substations and the extension of the interconnection power line between Ghana and Burkina Faso. The objective: support Ghana’s target of exporting electricity to neighboring countries.
 

Supporting the private sector

Ghana Accra Hair salon which has benefited from microfinance

Supporting the private sector

Small and medium-sized enterprises (SMEs) are sources of job creation and economic growth. But they have difficulties in obtaining the capital required for the development of their commercial activities. AFD and PROPARCO, its private sector financing arm, allocate credit lines to Ghanaian commercial banks to increase their capacity to lend to SMEs.

Supporting companies in the energy and agriculture sectors

PROPARCO also finances infrastructure and agro-industry. At the Takoradi 2 power plant, the installation of a combined cycle has increased the installed generation capacity (220 MW) by 110 MW. Ghana Rubber Estates Limited has benefited from financing for the development of rubber outgrower plantations.

Banking on microfinance

AFD is also supporting the Ghana Association of Microfinance Companies. The project’s objective: improve the service standards of the most efficient microfinance institutions in the sector in order to reduce costs, lower interest rates and improve management.

900
million euros committed since 2004
60
projects financed in the past 10 years
7,500
outgrowers benefit from an increase in their incomes

Despite its remarkable growth, Ghana’s economy needs to face three challenges: the decline in world prices for most of the raw materials exported by the country (gold, cocoa), the sharp fall in oil prices, which has halved its oil revenues, and an electricity grid which is still underdeveloped and unstable.

Ghana must now diversify its economy and increase its energy supply. To achieve this, the Government has just launched a new industrial policy, which plans to build a factory in each of the country’s 126 districts (One-district-one-factory-policy).

AFD has been a partner of Ghana for over 30 years. It focuses its activities on the country’s main economic development projects, particularly in the agriculture, transport and energy sectors.

In view of the level of debt of the Ghanaian State, AFD is now refocusing its activities on financing non-State actors: local banks, State-owned companies (without a State guarantee) and the private sector.

AFD in Ghana: over EUR 1.2bn committed over the past 30 years via over 150 projects.
 

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