Index trend
Previous quarterly editions
Expropriation risk: 54 53 46 45 ► Political violence risk:39 39 39 39 ►Terrorism risk:48 47 45 45 ▼Exchange transfer and trade sanction risk: 55 55 55 55 ►Sovereign default risk:74 73 65 65 ►
Overall Risk Temperature: 53 (Medium -1) TREND ►
Special topic: Gray zone aggression
Degree to which the country relies on outbound gray zone action to achieve its strategic objectives1 = Not at all5 = Gray zone action is a core tactic
1
Impact of inbound gray zone attacks on the country1 = Negligible impact5 = Significant impact on economic growth and/or political stability
Although Ghana has been confronted by an increase in threats posed by rising piracy in the Gulf of Guinea, along with the decade-long threat of violent jihadi extremism in the Sahel, there are no documented cases of gray zone attacks by or against the West African country.
Ghana’s relations with its regional neighbors, Cote d’Ivoire to the west and Togo to the east, are cordial — although relations with Burkina Faso to the north have been increasingly strained following the military coup in Ouagadougou in 2022. Accra is at pains to maintain constructive ties with its main development partners — China, the U.K. and the European Union — but it also maintains close diplomatic relations with Russia, despite recent reports of Moscow backing opposition demonstrations in the run-up to the December 2024 elections.
Courting increased foreign direct investment from China and the West remains the focus of the country’s pro-development foreign policy objectives, but with a mere 16,000 men at arms — mostly used for domestic security and international peacekeeping operations — Ghana is unable to project military force and is not perceived by regional or international neighbors as a hostile power.
With internet penetration in Ghana now standing at 70% of the population, and most government departments and corporations heavily reliant on modern communications, the potential for the country to conduct or be targeted by malicious gray zone cyber activities in the future is now clearly evident, as an increase in cybercrime and hacking testify.
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Ghana continues assiduously to court international investment and remains highly unlikely to embark on any acts of arbitrary expropriation or confiscation that would jeopardize much-sought-after flows of foreign direct investment.
The country’s investment laws in the main provide general protection for foreign investors from arbitrary or uncompensated expropriation, confiscation or nationalization. The Ghanaian legal system does, however, give the government powers to expropriate in certain circumstances, including the expropriation of property or assets for public safety and national defense, but with fair compensation.
Nevertheless, the judicial process for determining what is fair compensation can be protracted and costly. A number of international companies have also complained of being asked to pay bribes to secure regulatory approvals or licenses — including a particularly notorious recent case where judges were caught demanding payments to swing cases in a particular direction.
In addition, land rights in Ghana can often be opaque as a result of the existence of both private and traditional land rights and, on occasions, the difficulty of establishing whether a given piece of land is governed by the former or the latter. This situation has been known to catch out the unwary foreign investor. Finally, freehold tenure is barred to foreigners, although foreign interests can hold long-term leases.
A violent attack by the opposition National Democratic Congress on a ruling New Patriotic Party (NPP) campaign office in Accra in July sparked fears of renewed outbreaks of election violence in the run-up to the December general election. During the attack, office property was damaged and two NPP vehicles were set ablaze, with police reporting at least seven arrests.
No explanation was given for the incident, although violent outbursts are not uncommon in Ghanaian elections. At least five deaths were recorded in the 2020 ballot, along with scores of injuries — not to mention multiple reports of police brutality.
Ghana has had eight general elections since the return to civilian rule in 1992, with largely peaceful transfers of power between the two main parties in 2001, 2009 and 2017, although no election has been violence-free since the military returned to barracks.
The West African country is often complimented for its “peaceful” transfers of power, but this often understates or ignores the endemic culture of violence perpetrated by militia groups, violent gangs, and political parties and factions. There are also mounting fears of the increasing loss of confidence in Ghana’s institutions among the rising generation and the stresses arising out of declining standards of living.
TREND ▼
Ghana, along with most other coastal West African states, continues to be affected by the rising tide of jihadist violence arising out of the Sahel, which accounted for 43% of all global terrorism-related deaths in 2022.
West Africa has also seen a series of coups in neighboring countries, including Niger, Burkina Faso and Mali — where Russia’s Wagner Group is active — raising questions about the stability of the wider region. Ghana is often seen as an oasis of peace in a volatile region, although that status continues to be extremely precarious.
Ghana’s inflation fell to a 29-month low in August, increasing the prospects for a much-needed interest rate cut. Inflation fell for the fifth month in a row year-on-year in August to 20.4%, down from 20.9% in July — still way above the central bank’s target of 8% plus or minus 2% but well below its peak of 54% in December 2022.
The decline was due in part to a fall in food-price inflation, but the finance ministry expressed confidence that inflation was now on target to fall to 15% by the end of 2024. The ministry insisted that the economy was rebounding from its largest crisis for a generation faster than expected, as a result of the International Monetary Fund’s (IMF’s) financial bailout package and the government’s macroeconomic stabilization policies.
Ghana has witnessed a steady improvement in its debt sustainability outlook since the IMF bailout package was announced in 2023, although prospects for a reduction in the country’s debt-to-GDP ratio from 105% in 2022 to 55% by 2028 remain ambitious.
The government reached a deal in January 2024 to restructure $5.4 billion in loans from official creditors, mostly through yield reductions, maturity extensions and write-offs. A deal with commercial lenders to restructure some $13 billion in international bonds — also through yield reductions and maturity reductions — was approved by 90% of bondholders at the end of September.
