Falcon Family Fund manager Jim Leitner noted a few years ago that “Ghana is a good example of the value of reading The Economist. There were a few stories about their president–(John) Kufuor–detailing his economic views and policies. He was very impressive and the upshot was that I started looking at it favorably. Leitner, as usual, was early in the trend. The Ghana Investment Promotion Centre reported a total of $460.7 million in new investments in the first quarter of the 2008 fiscal year, according to Robert Ahomka Lindsay, its Chief Executive, and the country continues to be considered one of the continent’s most economically and politically stable.
But will this be a sustainable trend that leads to long-term economic stability and viability? A recent discovery of oil off of Ghana’s western coast has some analysts wondering. Because while Kufuor trumpeted the find and declared that oil would transform Ghana’s economy into an “African tiger,” other observers wonder whether or not the discovery by London-based Tullow Oil of up to 600 million barrels last June will turn out to be a curse for the now 51-year old nation. For instance, the continent’s leading oil producer, Nigeria, has received more than $400 billion since its own oil boom began back in the early 1970’s; yet Nigeria’s Gross National Income per capita is about 25 percent lower than the average for sub-Saharan Africa. Some call it the ‘oil curse.’ “What most people don’t understand about oil is that, not only does the money not filter through to the majority of the population, but it’s much worse than that,” says Nicholas Shaxson, an oil analyst at the London-based Chatham House. “It actively makes most people poorer.”
In an unrelated, but equally interesting development, it seems that African-Americans are fueling a large chunk of Ghana’s foreign investment. Per this August 2006 piece from TIME (“Ghana’s New Money):
Ghana, a major source of human cargo during the slave trade, has been a favored destination for African Americans since it won independence from Britain in 1957. Those who make the pilgrimage often talk of an epic search for their roots and a grand narrative of Pan-Africanism. But increasingly, it’s trade, investment and entrepreneurship anchoring those high ideals. . .in African Americans, [the government sees] investment possibilities and start-up capital that [the] country badly needs. Although Ghana is in much better shape than many other African countries, its GDP is $9.4 billion, or about $420 per capita, which ranks below most Asian countries. ‘The potential for economic impact is very significant,’ says Jake Obetsebi-Lamptey, Ghana’s Minister for Tourism and Diasporan Relations. ‘As you look around now, you see the role African Americans are playing in the corporate world, as mechanical engineers, architects, doctors–right across the gamut.'”
Finally, some news last January from Ghana’s chocolate industry, as Cadbury Schweppes Plc launched an investment program to help Ghana’s cocoa farmers improve their yields, hoping to create a sustainable supply chain. Cadbury has run similar programs already in India, Indonesia and the Caribbean, and stated that its investment followed a Cadbury-commissioned report from universities in England and Ghana that showed average crop production for a Ghanaian cocoa farmer had dropped to 40 percent of its potential yield. Cadbury gets roughly 70% of its cocoa beans from Ghana, which is Africa’s second cocoa producer, behind the Ivory Coast.