Development Challenge

With a population of 23 million, Ghana is a strong proponent of democracy and possesses considerable growth potential, setting it apart from other troubled countries in West Africa. Ghana has adopted significant economic reforms needed to strengthen the economy and improve the private sector. Key development trends are positive and include: a steady increase in Gross Domestic Product (GDP) from 5.2 percent in 2003 to 5.9 percent in 2005; a poverty rate of approximately 35 percent, down from 52 percent in 1992; the HIV/AIDS adult prevalence rate has been below 4 percent for several years and is currently at 2.7 percent down from 3.1 in 2004, well below levels in neighboring countries; and primary school enrollment in 2006 is about 86 percent nationwide compared to 80 percent in the 2001/2002 school year.

In addition, on August 1, 2006 the Millennium Challenge Corporation signed a five-year, $547 million Compact with the Government of Ghana. The Compact focuses on USAID's Economic Growth program and aims to enhance the competitiveness of Ghana's agricultural sector.

Despite the fact that Ghana has made significant advances, daunting challenges remain. Key institutions like Parliament and District Assemblies remain weak and lack the resources or capacity to channel citizen concerns and hold government accountable. In addition, civil society groups lack advocacy skills and resources to advocate for their needs and interests.

Agriculture employs 60 percent of the work force, but a vast majority of farmers are subsistence smallholders. They lack access to improved technologies, market information and linkages to the private sector. Environmental degradation especially in forests, is taking an increase toll on Ghana's ability to sustain livelihoods. Natural resource stocks are degraded the equivalent of 10 percent of GDP per year and resource depletion is reducing GDP growth potential by an estimated one percent annually.

Health care delivery at the village/community level is weak. Maternal and infant mortality rates are high. Under five mortality has not changed in the last ten years. The mortality rate has remained at 111 per 1000 live births. Malaria is the cause for 40 percent of outpatient visits as well as 25 percent of deaths of children under five years or age. The HIV/AIDS prevalence rate among high-risk groups, such as commercial sex workers, is as high as 60 percent. In the northern regions, most people live on substantially less than $1 a day and have limited access to clean drinking                                            water and sanitation facilities. 

Another critical development challenge is the low quality of education. Out of every 100 Ghanaian school-age children, it is estimated that close to 90 will enter Grade One, but only 67 of these children will complete Grade Six. Of those completing primary schools, only seven will have the reading comprehension level of a child in Grade Six. Thus, access to quality basic education remains a major challenge in Ghana.

Food insecurity is a problem in Ghana, especially in the three northern regions. Low rainfall, poor soils, and low agricultural productivity are key factors to food insecurity in Ghana. These factors are further worsened by the subsistence nature of agriculture as well as low incomes, inadequate education and poor health status of the population. Most households lack stable foods for several months of the year, resulting in high rates of malnutrition.

USAID/Ghana's Response

The USAID Country Strategic Plan (2004 -2010) was developed in close consultation with the Government of Ghana and development partners. USAID/Ghana supports Government of Ghana's Poverty Reduction Strategy by strengthening decentralized governance systems, promoting private sector competitiveness, improving health care delivery, enhancing access to quality basic education, and increasing food security. Funding levels have averaged around $37 million per year from 2004 to 2007, plus an additional $22.5 million in food aid.