GHANA
Economic Freedom Score
25
World Rank:
71
Regional Rank:
Least
free
hanas economic freedom score is 63.0, making its econG
omy the 71st freest in the 2015 Index. Its overall score is
1.2 points lower than last year, with improvements in free-
50
75
Most
100 free
63.0
Freedom Trend
68
dom from corruption and monetary freedom outweighed by
declines in the management of government spending, investment freedom, and labor freedom. Ghana is ranked 5th out of
46 countries in the Sub-Saharan Africa region, and its overall
score remains above the world average.
Over the past five years, economic freedom in Ghana has
increased by 3.6 points. Along with an improvement of more
than 20 points in its score for control of government spending,
the countrys scores have advanced in half of the 10 economic
freedoms including freedom from corruption and monetary
freedom. These improvements have propelled Ghana into the
ranks of the moderately free.
These steady advances, however, have masked deeper structural and institutional problems. Ghana remains well short
of solidifying the foundations of macroeconomic fundamentals necessary for sustained growth and prosperity. Fiscal
improvements have been overshadowed by the malinvestment of future oil revenues, forcing the government to seek
IMF assistance in 2014. The judiciary is poorly funded and
subject to bribery. Land titles are hard to obtain, and the process is lengthy, compromising the ability of individuals and
firms to invest in their property.
BACKGROUND: Ghana has been a stable democracy since
1992. Following the death of President John Atta Mills in July
2012, Vice President John Dramani Mahama became interim
head of state. Mahama was elected president in December
2012. Ghana is rich in natural resources, including gold, diamonds, manganese ore, and bauxite, as well as oil. It is Africas second-biggest gold producer after South Africa. In 2013,
Ghana deported thousands of Chinese nationals for illegally
mining gold. Economic challenges include managing new oil
revenue while maintaining fiscal discipline.
How Do We Measure Economic Freedom?
See page 475 for an explanation of the methodology
or visit the Index Web site at heritage.org/index.
66
64
62
60
58
56
2011
2012
2013
2014
2015
Country Comparisons
Country
63.0
World
Average
60.4
Regional
Average
54.9
Free
Economies
84.6
0
20
40
60
80
100
Quick Facts
Population: 25.6 million
GDP (PPP): $88.5 billion
5.5% growth in 2013
5-year compound annual growth 8.0%
$3,461 per capita
Unemployment: 4.5%
Inflation (CPI): 11.7%
FDI Inflow: $3.2 billion
Public Debt: 60.1% of GDP
2013 data unless otherwise noted.
Data compiled as of September 2014.
221
GHANA (continued)
THE TEN ECONOMIC FREEDOMS
Score
RULE OF
LAW
Country
World Average
Property Rights 50.0
Freedom from Corruption 46.0
0
20
40
60
80
Rank
1Year
Change
56th
63rd
0
+5.6
100
Successive governments have deployed robust legal and institutional frameworks to combat
corruption in Ghana, which is comparatively less corrupt than neighboring countries, but few
Ghanaians feel that the situation has improved. Scarce resources compromise and delay the
judicial process, and poorly paid judges can be tempted by bribes. The process for obtaining
clear title to land is often difficult, complicated, and lengthy.
Fiscal Freedom 84.6
GOVERNMENT
Government Spending 70.8
SIZE
51st
81st
0
20
40
60
80
0.8
12.5
100
Ghanas top individual and corporate income tax rates are 25 percent. Other taxes include a
national insurance levy, a value-added tax, and a capital gains tax. The total tax burden equaled
17.1 percent of GDP in the most recent year. Public expenditures equal 31.2 percent of gross
domestic product, and public debt equals 60 percent of domestic output.
REGULATORY
EFFICIENCY
Business Freedom 62.5
Labor Freedom 56.9
Monetary Freedom 69.2
98th
113th
155th
0
20
40
60
80
0.1
3.3
+3.4
100
Recent regulatory reform measures have yielded reductions in bureaucracy, but progress in
enhancing overall regulatory efficiency has lagged compared to other economies. Labor regulations have been under modernization, but informal labor activity remains significant. The
government has reinstated a fuel-price adjustment mechanism to eliminate subsidies and has
sharply increased electricity and water tariffs to reduce the fiscal deficit.
OPEN
MARKETS
Trade Freedom 64.8
Investment Freedom 65.0
Financial Freedom 60.0
149th
68th
39th
0
20
40
60
80
0
5.0
0
100
Ghana has an 8.6 percent average tariff rate. Government procurement procedures can favor
domestic firms. Freely repatriating profits, foreign investors are typically treated equally with
domestic investors under the law. The financial sector has undergone restructuring, and there
are over 20 commercial banks. However, high interest rates on bank loans limit financing
opportunities for new firms.
Long-Term Score Change (since 1995)
RULE OF LAW
Property Rights
Freedom from
Corruption
222
0
24.0
GOVERNMENT
SIZE
Fiscal Freedom
Government
Spending
+18.3
11.0
REGULATORY
EFFICIENCY
Business Freedom
Labor Freedom
Monetary Freedom
2015 Index of Economic Freedom
OPEN MARKETS
+7.5
+6.7
+3.0
Trade Freedom
+33.6
Investment Freedom +35.0
Financial Freedom +10.0
