John Atta-Mills was sworn in as Ghana’s new president in a relatively peaceful handover.  Investors, however, have good reason to be weary, according to The Economist

“Mills, a former academic who was vice-president in the late 1990s, is a moderate with little apparent inclination to change the broadly free-market policies of [former President] Mr. [John] Kufuor’s governments over the past eight years. But he will hear calls from the left wing of his own party to do so. They will be amplified by the populist and charismatic former president, Jerry Rawlings. He did much in the campaign to rally the party’s rank and file, so he and his supporters will expect the government to spend more on their people through social projects as a reward. Yet opening the spending taps would widen the current-account deficit and increase inflation, which is already rising. A contest between Messrs Mills and Rawlings over the new government’s direction may be as intense as the battle Mr. Mills has just won for the presidency.”

That said, perhaps a call for populism can be fueled by the recent discovery of oil.   The paper notes that “its discovery offshore two years ago could provide the new government with revenues of as much as $3 billion a year as early as 2010, half as much again as it gets at the moment.”

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