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Banking

Africa: Ghana’s power failure

The country’s last administration borrowed heavily from banks to sustain inefficient state-owned energy companies at the expense of the private sector – can the newly elected government repay the debt and get banks lending again?

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March 6 marked 60 years of independence in Ghana. In Accra, Ghana’s capital city, thousands of people took to the streets in celebration. Ghana’s bright green, yellow and red flags adorned every building, street sign and tree. The celebrations also reflected a sense of optimism in Ghana after the election in December 2016 of Nana Akufo-Addo, leader of the New Patriotic Party (NPP), as president and the defeat of John Mahama of the National Democratic Congress (NDC). 

It was Akufo-Addo’s third attempt at the presidency. His persistence had paid off.

But Ghana’s optimism will only last if it is accompanied with economic change. Akufo-Addo pledged a shift in direction for Ghanaians struggling with higher taxes, power shortages and rising living costs that brought GDP growth in Ghana down to 3.6% in 2016 – the lowest in two decades. As one stallholder in Accra tells Euromoney: “No matter how great democracy is, it doesn’t put food on the table.”

“Being independent means you have the freedom and ability to make informed decisions in life without having to ask other people for permission,” said Akufo-Addo in a speech delivered during the Independence Day celebrations.

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