RELATIONS WITH THE EU
The European Union and Ghana
Political Relations
Ghana gained its independence from the United Kingdom as the first sub-Saharan country on 6 March 1957. It has achieved remarkable progress in deepening its democracy since the return to democratic rule in 1992. It has experienced eight successive democratic elections, resulting in three peaceful transitions of power. The latest elections took place in December 2020.
Ghana and Europe are bound together by common history, interlocking cultures, and shared values and objectives. They have a long history of a prosperous partnership enhanced by an existing framework for political dialogue. This practice was strengthened under the Cotonou Agreement adopted in 2000 to replace the 1975 Lomé Convention for a 20-year period. The initialling of the new Partnership Agreement between the European Union and members of the Organisation of African, Caribbean and Pacific States (OACPS) on 21 April 2021 marked the formal conclusion of the negotiations of the Post-Cotonou Agreement, setting the political, economic and sectorial cooperation framework for the next twenty years. The new Agreement substantially modernises the cooperation and extends the scope and scale of the EU and OACPS' ambitions to better address current and future challenges.
Since the entry into force of the EU Lisbon Treaty in 2010 and the creation of the European External Action Service (EEAS), the political dialogue has been coordinated by the EU Delegation on behalf of the High Representative of the EEAS and takes place on a regular basis between the EU ambassadors and the Government of Ghana.
In line with the Paris Declaration and the Accra Agenda for Development, other platforms for dialogue and coordination among Development Partners (DPs) have been established in Ghana: the Heads of Mission (HoM) and the Heads of Cooperation (HoC) Groups. These groups allow Development Partners (DPs) to coordinate among themselves in order to jointly align their development programmes and activities to national priorities and strategies.
Economic Relations - Green growth for jobs
The European Green Deal provides a roadmap with concrete actions to boost the efficient use of resources by moving to a clean, circular economy, to mitigate and to adapt to climate change, halt the loss of biodiversity and cut pollution, in line with the Political Guidelines of the 2019–2024 Commission. Along with the EU Gender Plan III, these policies constitute the guiding principle for our cooperation. Fostering a green digital economy through industry and the financial sector, while tackling inequalities and discrimination, in particular against women, will be essential for meeting the Green Deal objectives.
To meet the objectives of the Green Deal, it will be essential to foster a green digital economy through industry and the financial sector, while tackling inequalities and discrimination, in particular against women. A greener economy means new growth and job opportunities according to a circular and sustainable model. Through our projects, the EU is actively contributing to building an industrialised, inclusive and resilient economy through enhanced competitiveness and support to the private sector; employment policies, skills development and social protection; energy generation and supply, including renewable energy; agriculture, agribusiness and rural development in line with SDGs: 1, 2, 5, 7, 8, 9, 12, 13, 14, 15, 16. In addition to this, the EU’s efforts is aimed at building effective, efficient and dynamic institutions for national development through decentralisation; Public Finance Management, Tax policy and tax administration support; Accountability, anti-corruption and rule of law in line with SDGs: 1, 10, 16, 17.
The COVID-19 pandemic has highlighted the excessive dependence of the African continent on external supplies of medical products, particularly vaccines. Ghana has clearly stated its ambition to participate in the Team Europe Initiative (TEI) on Manufacturing and Access to Vaccines, Medicines and Health Technologies in Africa (MAV+). This Team Europe Initiative, currently under development, wishes to tackle barriers to manufacturing and access to health products and technologies in Africa from all angles.
Trade
Ghana is becoming increasingly engaged in international trade with Ghana's total external trade in US Dollar terms increasing by over 70% over the last five years. Foreign Direct Investment (FDI) inflows to Ghana have also increased significantly in the past few years, excluding a significant drop in 2020 due to COVID-19. Before the pandemic, in 2019, Ghana featured among the top five recipients of FDI into Africa, according to the World Investment Report 2021.
Ghana is part of the World Trade Organisation (WTO) as well as a member of Economic Community of West African States (ECOWAS) and other major international trade, investment and industrial bodies. In parallel, Ghana is one of the active proponents of the African Continental Free Trade Area (AfCFTA), signed in 2018. The Secretariat of the AfCFTA is based in Ghana's capital, Accra.
Over the last 15 years, Ghana's international trade has significantly increased. Hence, while in 2004 the country's total value of exports and imports was USD5.74 bn it reached USD27.2 bn by 2019. In parallel, while Ghana's balance of trade during the period 1990 – 2010 was dominated by imports, the last years (2017-2019) have shown a balance of trade surplus driven by a boost in exports of crude oil, gold and cocoa beans.
Since 2008, Ghana is engaged with the European Union through the Economic Partnership Agreement (EPA). The EU-Ghana EPA is a trade and development agreement under which Ghanaian exporters benefit from duty-free and quota-free access to the EU market. Equally, under the EPA, Ghana has agreed to open gradually its market to selected EU products, which are not sensitive for Ghana's local producers. 1 July 2021 marked the start of the effective implementation of the agreement by Ghana. The EU is providing Ghana with development and financial adjustment support to help with the implementation of the iEPA. Some of the adjustment supports are the West Africa Competitiveness Programme, Banana Accompanying Measures Support to Horticultural Companies and the Compete Ghana Project. In addition, the EU is providing assistance to MOTI for managing all obligations from the agreement.
Ghana’s growth largely relies on the increase in demand for Ghana’s export, the recovery in construction and manufacturing sectors and business environment improvement. The successful implementation of recovery initiatives undertaken by the Government, notably the Ghana COVID–19 Alleviation and Revitalization of Enterprise Support program are geared towards supporting the expansion of Ghana’s economy.
Ghana demonstrates strong commitments to trade by being at the centre of regional and continental projects and hosting the AfCFTA Secretariat. The EU continues to be one of the most important trade partners for Ghana. In 2020, the EU was Ghana’s largest source of imports, accounting for 17.3% of Ghana’s imports, ahead of China at 15.2% and the United Kingdom at 13.6% and the second-largest export destination, accounting for 16.3% of Ghana’s export (only behind China with 18.3%). Total EU trade is accounting for around 16.7% of Ghana’s total external trade in 2020, being the second most important partner for Ghana after China. According to the World Investment Report 2020, Foreign Direct Investment (FDI) to Ghana dropped by 22 per cent in 2019. The investment was concentrated in oil and gas facilities, mining (including gold and manganese) and in agriculture (cocoa). However, there are plans for investment diversification.
Ghana remains a favourite destination for investment in West Africa. European businesses are very interested in using Ghana as a gateway for the region. Ghana is valued as an investment destination for its political stability, relatively open democratic institutions, free media and a fairly vibrant civil society. The 2020 Mo Ibrahim Index on African Governance ranks Ghana 8 out of 54 African countries, noting improvements in indicators like 'Sustainable Economic Opportunities' and 'Safety and Rule of Law'.
Development Aid
Ghana's objectives are to build a middle-income economy and to go beyond that status by achieving the Millennium Development Goal (MDG) targets, offering better jobs, diversifying the economy and reducing disparities between the regions.
Ghana has already made significant strides in that direction: the poverty level has been considerably decreased and Ghana is likely to be the 1st Sub Sahara African country to achieve the 1st MDG, halving extreme poverty, well before 2015. However, further efforts are needed to address the MDGs related to child and maternal mortality, and access to sanitation. In October 2012, the European Commission signed a health sector budget support of EUR 52 million to assist Ghana in its effort to achieve MDG5. This support comes as additional resources to Ghana and became available under a special European Commission MDG-initiative to aid countries lagging behind in the attainment of some of the MDGs.
Since 1975 the European Commission has provided an estimated amount of EUR 1,200 million in terms of development aid to Ghana. At present around half of all Official Development Assistance (ODA) received by Ghana is financed by the EU (both European Commission and EU Member States). Contrary to World Bank, African Development Bank and some other major donors, the overwhelming majority of the ODA that stems from the EU are provided in the form of grants, meaning that the Ghanaian Government does not have to repay any of the allocated funding.
European Development Fund (EDF)
As far as the Africa, Caribbean and Pacific (ACP) countries are concerned; the main source of EU funding is the five year European Development Fund (EDF), which at present is in its 10th edition (2008-2013). For all ACP countries together, a total amount of EUR 21.966 billion is available in the 10th EDF, which is completely and directly sourced by the EU member states.
The EU is committed to the principle of ‘ownership’, i.e. that partner countries are fully involved in the process of developing the strategies and programmes which affect them.
This allows the EU’s development assistance to be flexible and adaptive, responding to the specific needs of the beneficiary countries. This results in an agreed Country Strategy Paper (CSP), which includes a multi-annual National Indicative Programme (NIP).