Obligation Ghana 9.25% ( XS1470699957 ) en USD

Ghana

98 % ▲

Ghana

XS1470699957 ( en USD )

9.25% par an ( paiement semestriel )

14/09/2022 - Obligation échue

Prospectus brochure de l'obligation Ghana XS1470699957 en USD 9.25%, échue

200 000 USD

750 000 000 USD

L'Obligation émise par Ghana ( Ghana ) , en USD, avec le code ISIN XS1470699957, paye un coupon de 9.25% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 14/09/2022

THE REPUBLIC OF GHANA
US$750,000,000 9.250 per cent. Amortising Notes due 2022
Issue Price: 100.00 per cent.
The US$750,000,000 9.250 per cent. Amortising Notes due 2022 (the "Notes") to be issued by the Republic of Ghana (the "Issuer", the
"Republic" or "Ghana") are direct, unconditional and unsecured obligations of the Republic and will, unless previously redeemed or purchased and
cancelled, be redeemed in three instalments of US$250,000,000 on 15 September 2020, US$250,000,000 on 15 September 2021 and US$250,000,000 on 15
September 2022 (the "Maturity Date"). The Notes will be issued on or around 15 September 2016 (the "Issue Date").
The Notes will bear interest on their outstanding principal amount from and including the Issue Date to but excluding the Maturity Date, at the
rate of 9.250 per cent. per annum payable semi-annually in arrear on 15 March and 15 September in each year, subject as provided in Condition 6.4
(Payment on Business Days). Payments on the Notes will be made in US Dollars without deduction for or on account of taxes imposed or levied by Ghana
to the extent described under "Terms and Conditions of the Notes--Taxation".
The Notes have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), or with any
securities regulatory authority of any State or other jurisdiction of the United States, and may not be offered or sold within the United States except
pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. For a summary of certain
restrictions on resale, see "Plan of Distribution" and "Transfer Restrictions". The Notes will be offered and sold outside the United States in
"offshore transactions" in reliance on Regulation S under the Securities Act ("Regulation S") and within the United States to qualified institutional
buyers ("QIBs") within the meaning of Rule 144A under the Securities Act ("Rule 144A"). Prospective purchasers are hereby notified that sellers
of the Notes may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A.
An investment in the Notes involves a high degree of risk. Prospective investors should have regard to the factors described under the
heading "Risk Factors" on page 14.
This Prospectus has been approved by the Central Bank of Ireland (the "Central Bank"), as competent authority under Directive 2003/71/ EC, as
amended (including the amendments made by Directive 2010/73/EU) (the "Prospectus Directive"). This Prospectus constitutes a prospectus for the
purposes of the Prospectus Directive. The Central Bank only approves this Prospectus as meeting the requirements imposed under Irish and EU law
pursuant to the Prospectus Directive. Such approval relates only to Notes that are to be admitted to trading on a regulated market for the purposes of
Directive 2004/39/EC (the "Markets in Financial Instruments Directive") or that are to be offered to the public in any member state of the European
Economic Area ("EU Member States"). Application has been made to the Irish Stock Exchange for the Notes to be admitted to its official list (the
"Official List") and trading on its regulated market (the "Main Securities Market"). In addition, application will be made after the Issue Date to the
Securities and Exchange Commission of Ghana and the Ghana Stock Exchange for the Notes to be admitted to the main market of the Ghana Stock
Exchange. Admission of the Notes to listing on the Ghana Stock Exchange is expected to be obtained within four weeks of the Issue Date. The Notes will
not, however, be traded or cleared through the Ghana Stock Exchange.
The Notes are expected to be rated B by Fitch Ratings Ltd ("Fitch"), B3 by Moody's Investors Service, Inc. ("Moody's") and B- by Standard &
Poor's Credit Market Services Europe Limited ("Standard & Poor's"). All references to Fitch, Moody's and Standard & Poor's in this Prospectus are to
the entities as defined in this paragraph. Each of Fitch and Standard & Poor's is established in the European Union and registered under Regulation (EC) No
1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (the "CRA Regulation"). Moody's is not
established in the European Union and has not applied for registration under the CRA Regulation. However, Moody's Investors Service Ltd. (an entity
which is established in the European Union and registered under the CRA Regulation) has endorsed the ratings of Moody's, in accordance with the CRA
Regulation. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the
assigning rating organisation.
The Notes will be offered and sold in registered form in denominations of US$200,000 or any amount in excess thereof which is an integral
multiple of US$1,000. Notes that are offered and sold in reliance on Regulation S (the "Unrestricted Notes") will be represented by beneficial interests in a
global Note certificate (the "Unrestricted Global Note Certificate") in registered form without interest coupons attached, which will be registered in the
name of BT Globenet Nominees, as nominee of a common depository for Euroclear Bank SA/NV ("Euroclear") and Clearstream Banking, société anonyme
("Clearstream, Luxembourg"). Notes that are offered and sold in reliance on Rule 144A (the "Restricted Notes") will be represented by beneficial
interests in one or more global note certificates (the "Restricted Global Note Certificate" and, together with the Unrestricted Global Note Certificate, the
"Global Note Certificates") in registered form without interest coupons attached, which will be deposited on or about the Issue Date with Deutsche Bank
Trust Company Americas, as custodian (the "Custodian") for, and registered in the name of Cede & Co. as nominee for, The Depository Trust Company
("DTC"). Interests in the Restricted Global Note Certificate will be subject to certain restrictions on transfer. Beneficial interests in the Global Note
Certificates will be shown on, and transfers thereof will be effected only through, records maintained by DTC, Euroclear and Clearstream, Luxembourg and
their participants. Except as described herein, certificates will not be issued in exchange for beneficial interests in the Global Note Certificates.
Joint Lead Managers
BofA Merrill Lynch
Citigroup
Standard Chartered Bank
Co-Manager
IC Securities
Dated 13 September 2016

RESPONSIBILITY STATEMENT
The Republic accepts responsibility for the information contained in this Prospectus and declares that, having taken all reasonable care
to ensure that such is the case, the information contained in this Prospectus is, to the best of its knowledge, in accordance with the facts and
contains no omission likely to affect its import.
To the best of the knowledge and belief of the Republic, the information contained in this Prospectus is true and accurate in every
material respect and is not misleading in any material respect, and this Prospectus, insofar as it concerns such matters, does not omit to state any
material fact necessary to make such information not misleading. The opinions, assumptions, intentions, projections and forecasts expressed in
this Prospectus with regard to the Republic are honestly held by the Republic, have been reached after considering all relevant circumstances and
are based on reasonable assumptions.
IMPORTANT NOTICE
No person has been authorised to give any information or to make any representation other than those contained in this Prospectus in
connection with the offering of the Notes and, if given or made, such information or representation must not be relied upon as having been
authorised by the Republic or the managers listed in the section entitled "Plan of Distribution" (the "Managers"). Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, constitute a representation or create any implication that there has been
no change in the affairs of the Republic since the date hereof. This Prospectus may only be used for the purpose for which it has been published.
This Prospectus does not constitute an offer of, or an invitation by, or on behalf of, the Republic or the Managers to subscribe
for, or purchase, any of the Notes in any jurisdiction in which such offer or invitation is unlawful. This Prospectus does not constitute an
offer, and may not be used for the purpose of an offer to, or a solicitation by, anyone in any jurisdiction or in any circumstances in which
such an offer or solicitation is not authorised or is unlawful. The distribution of this Prospectus and the offering, sale and delivery of the
Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes are required by the
Republic and the Managers to inform themselves about and to observe any such restrictions.
This Prospectus is not intended to provide the basis of any credit or other evaluation and should not be considered as a
recommendation by the Republic or the Managers that any recipient of this Prospectus should purchase any of the Notes. Each investor
contemplating purchasing Notes should make its own independent investigation of the financial condition and affairs, and its own appraisal of the
creditworthiness, of the Republic.
The Managers have not separately verified the information contained in this Prospectus. Accordingly no representation, warranty or
undertaking, express or implied, is made and no responsibility or liability is accepted by the Managers or any of them as to the accuracy or
completeness of the information contained in this Prospectus or any other information provided by the Republic in connection with the Notes or
their distribution.
For a description of certain restrictions on offers, sales and deliveries of the Notes, see "Plan of Distribution".
The Republic of Ghana is a foreign sovereign state. Consequently, it may be difficult for investors to obtain or realise upon certain
judgments. See "Risk Factors--The Republic of Ghana is a foreign sovereign state and it may be difficult for investors to obtain or realise upon
judgments of courts in England or the United States against the Republic".
The Notes have not been approved or disapproved by the US Securities and Exchange Commission, any State securities commission
in the United States or any other US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the
offering of the Notes or the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offence in the United States.
IN CONNECTION WITH THE ISSUE OF THE NOTES, CITIGROUP GLOBAL MARKETS LIMITED AS STABILISING
MANAGER (THE "STABILISING MANAGER") (OR PERSONS ACTING ON BEHALF OF THE STABILISING MANAGER) MAY
OVERALLOT NOTES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE NOTES AT A
LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT THE
STABILISING MANAGER (OR PERSONS ACTING ON BEHALF OF THE STABILISING MANAGER) WILL UNDERTAKE
STABILISATION ACTION. ANY STABILISATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE
PUBLIC DISCLOSURE OF THE TERMS OF THE OFFER OF THE NOTES IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY TIME,
BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE DATE OF THE NOTES AND 60 DAYS AFTER
THE DATE OF THE ALLOTMENT OF THE NOTES. ANY STABILISATION ACTION OR OVER ALLOTMENT SHALL BE
CONDUCTED BY THE STABILISING MANAGER (OR PERSONS ACTING ON BEHALF OF THE STABILISING MANAGER) IN
ACCORDANCE WITH ALL APPLICABLE LAWS AND RULES.
This Prospectus may not be copied or reproduced in whole or in part nor may it be distributed or any of its contents disclosed to
anyone other than the prospective investors to whom it is originally submitted.
Each purchaser or holder of interests in the Notes will be deemed, by its acceptance or purchase of any such Notes, to have made
certain representations and agreements as set out in "Transfer Restrictions".
Notwithstanding anything herein to the contrary, from the commencement of discussions with respect to the transaction contemplated
by this Prospectus, all persons may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the
transaction described herein and all materials of any kind (including opinions and other tax analyses) that are provided to such persons relating to
such tax treatment and tax structure, except to the extent that any such disclosure could reasonably be expected to cause this transaction not to be
in compliance with securities laws. For the purposes of this paragraph, the tax treatment of this transaction is the purported or claimed US federal
income tax treatment of this transaction and the tax structure of this transaction is any fact that may be relevant to understanding the purported or
claimed US federal income tax treatment of this transaction.
i

PRESENTATION OF ECONOMIC AND OTHER INFORMATION
Annual information presented in this Prospectus is based upon the calendar year (which is the fiscal year for the
Republic), unless otherwise indicated. Certain figures included in this Prospectus have been subject to rounding adjustments;
accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in
certain tables may not be the sum of the figures which precede them. Statistical information reported herein has been derived
from official publications of, and information supplied by, a number of agencies and ministries of the Republic, including the
Ministry of Finance, the Bank of Ghana (the "BOG" or the "Bank"), Ghana Statistical Service, the National Development
Planning Commission (the "NDPC") and Ghana Investment Promotion Centre. Some statistical information has also been
derived from information publicly made available by third parties such as the International Monetary Fund (the "IMF") and the
World Bank (the "World Bank"). Where such third party information has been so sourced, the source is stated where it appears
in this Prospectus. The Republic confirms that it has accurately reproduced such information and that, so far as it is aware and is
able to ascertain from information published by third parties, it has omitted no facts which would render the reproduced
information inaccurate or misleading.
Information contained herein that is identified as being derived from a publication of the Republic or one of its
agencies or instrumentalities is included herein on the authority of the Republic as an official public document of the Republic.
All other information contained herein with respect to the Republic is included as an official public statement made on the
authority of the Minister for Finance of the Republic.
Similar statistics may be obtainable from other sources, but the date of publication, underlying assumptions,
methodology and, consequently, the resulting data may vary from source to source. In addition, statistics and data published by
one ministry or agency may differ from similar statistics and data produced by other agencies or ministries due to differing
underlying assumptions, methodology or timing of when such data are reproduced. Certain historical statistical information
contained herein is provisional or otherwise based on estimates that the Republic and/or its agencies believe to be based on
reasonable assumptions. The Republic's official financial and economic statistics are subject to internal review as part of a
regular confirmation process. Accordingly, the financial and economic information set out in this Prospectus may be
subsequently adjusted or revised. While the Republic does not expect such revisions to be material, no assurance can be given
that material changes will not be made.
All references in this document to "Ghana Cedi", "Cedi" and "GHS" are to the currency of the Republic of Ghana; to
"US Dollars", "US$" and "$" are to the currency of the United States of America; to "Euro" are to the currency introduced at the
start of the third stage of European economic and monetary union pursuant to the Treaty establishing the European Community,
as amended by the Treaty of European Union; and to "Ghanaian Authorities" are to the Ghanaian Ministry of Finance, the Bank
of Ghana and the Ghanaian Statistical Service. For ease of information, certain financial information relating to the Republic of
Ghana included herein is presented as translated into US Dollars at the US Dollar/Ghana Cedi rates of exchange which the
Republic deems appropriate. Unless otherwise specified, such rates were applicable as of the end of such specified period(s). To
the extent that the Republic has calculated US Dollar values, as well as ratios and percentages derived from these values, using
period-end Cedi/US Dollar exchange rates rather than average exchange rates, these calculations will have resulted in different
US Dollar values than if it had used average exchange rates. Such translations should not be construed as a representation that
the amounts in question have been, could have been or could be converted into US Dollars at that or any other rate. References
to "SDR" are to the Special Drawing Right, a unit of account having the meaning ascribed to it from time to time by the Rules
and Regulations of the IMF. References to "Ghana" or the "Republic" are to the Republic of Ghana and to the "government" are
to the government of Ghana.
Certain figures included in this Prospectus differ from previously published figures for a number of reasons, including
continuing implementation of a debt management system and ongoing statistical revisions. Also, certain monetary amounts
included in this Prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may
not be an exact arithmetic aggregation of the figures that precede them.
ii

FORWARD-LOOKING STATEMENTS
This Prospectus includes forward-looking statements, which involve risks and uncertainties. These forward-looking
statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates",
"anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative, or other variations or comparable
terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of
places throughout this Prospectus and include statements regarding the government's intentions, beliefs or current expectations
concerning, among other things, the general political and economic conditions in the Republic of Ghana. All forward-looking
statements are based upon information available to the Republic on the date of this Prospectus, and the Republic undertakes no
obligation to update any of these in light of new information or future events. The Republic derives many of its forward-looking
statements from its budgets and forecasts, which are based upon many detailed assumptions. While the Republic believes that its
assumptions are reasonable, it cautions that it is very difficult to predict the impact of known factors, and, of course, it is
impossible to anticipate all factors that could affect the Republic's general political and economic conditions. These factors
include, but are not limited to:
External factors, such as:

the impact of changes in international oil prices;

the impact of decreases or fluctuation in oil production;

the impact of changes in other international commodity prices including cocoa and gold;

interest rates in financial markets outside Ghana;

the impact of changes in the credit rating of Ghana;

economic conditions in Ghana's major export markets;

the impact of possible future regional instability;

changes in the amount of remittances from non-residents; and

the decisions of international financial institutions and donor countries regarding the amount and terms of their
financial assistance to Ghana; as well as
Internal factors, such as:

general economic, political and business conditions in Ghana;

present and future exchange rates of the Ghanaian currency;

the levels of foreign currency reserves;

the impact of changes in other international commodity prices including cocoa and gold;

the ability of Ghana to implement important economic reforms, including implementation of the economic
programme with the IMF;

the ability of operators of Ghana's offshore oil fields to resolve logistical and infrastructural issues to enable
commercial production free from unscheduled disruption;

the level of domestic and external debt;

the levels of domestic interest rates;

domestic inflation;

the ability of Ghana to monetise oil and gas reserves;

the ability of Ghana to resolve its on-going power shortages;

the ability of Ghana to stabilise the financial position of state-owned enterprises which operate in the power
sector;

the impact of possible future social and political unrest;
iii

the impact of natural disasters, health epidemics and agricultural blights;

the ability of Ghana to upgrade its infrastructure; and

the levels of foreign direct and portfolio investment.
iv

ENFORCEMENT OF CIVIL LIABILITIES
The Republic of Ghana
The Republic of Ghana is a foreign sovereign state. Consequently, it may be difficult for investors to obtain or realise
upon judgments of courts in England or the United States against the Republic. The Republic has submitted to the jurisdiction of
the courts of England and waived any immunity from the jurisdiction (including sovereign immunity) of such courts and any
objection to venue, in connection with any action arising out of or based upon the Notes brought by any holder of Notes.
Investors may effect service of process within the United Kingdom upon the Republic through its High Commissioner in London.
The Republic has not, however, waived immunity from execution or attachment in respect of certain of its assets. See "Terms
and Conditions of the Notes--Governing Law and Submission to Jurisdiction--Consent to Enforcement and Waiver of
Immunity".
The Republic's waiver of immunity is, however, limited. Such a waiver constitutes only a limited and specific waiver
for the purposes of the Notes, and under no circumstances shall it be interpreted as a general waiver by the Republic or a waiver
with respect to proceedings unrelated to the Notes.
The enforceability in Ghana of final judgments of English courts is subject to the rules governing enforcement in
Ghana of civil judgments of foreign courts specified in the Courts Act, 1993 ("Act 459") and the Foreign Judgments and
Maintenance Orders (Reciprocal Enforcement) Instrument, 1993 ("L.I. 1575"). In accordance with Act 459 and L.I. 1575, the
courts of Ghana would recognise and enforce a judgment obtained in the following courts of the United Kingdom, which are duly
registered with the High Court of Ghana: the High Court of England, the High Court of Northern Ireland and the Court of Session
in Scotland.
The courts of Ghana would recognise and enforce a judgment obtained in named courts of certain specified countries
including, inter alia, the following countries and named courts, which are duly registered with the High Court of Ghana: in
France, the Cours De Cassation and the Cours D'Appel; in Italy, the Corte D'Appello and the Corte Di Cassazione; and in Spain,
the Tribunal Supreme, the Audiencia Territorial, the Juez de Primera and the Instencia.
Judgments of the courts to which an appeal lies from these courts may also be enforced by registration in Ghana.
To be capable of enforcement by registration, the foreign judgment:
(a)
must be final and conclusive between the parties; and
(b)
there must be payable under it a sum of money, not being a sum payable in respect of taxes or other charges
of a similar nature or in respect of a fine or other penalty; and
(c)
must have been given after the coming into operation of the order directing that judgments from that country
may be enforced by registration.
In respect of the aforementioned provisions, a judgment is deemed to be final and conclusive even though an appeal
may be pending against it or that it may still be subject to appeal in the original court.
The courts of Ghana would not recognise or enforce a judgment obtained from a court in other jurisdictions, including
the United States, unless new proceedings are instituted in Ghana, and the merits of the judgment are re-examined.
Ghanaian courts may enter and enforce judgments in Ghana Cedi or in foreign currency. Choice of law clauses made
by parties to a transaction are recognised under Act 459; however, under the Evidence Decree, (1975, NRCD) 323, (the
"Evidence Decree"), foreign law is presumed to be the same as Ghana law. Consequently, the party alleging the difference
between Ghana law and the foreign law has the burden of rebutting the presumption. In original actions brought before Ghanaian
courts, there is doubt as to the enforceability of liabilities based on the US federal securities laws. US federal securities laws
must be specifically pleaded as the governing law in proceedings before a Ghanaian court.
v

EXCHANGE RATES
The currency of Ghana is the Cedi. The following table sets forth information on the weighted average transaction
exchange rates between the Cedi and the US Dollar for each of the periods specified.
Average
High
Low
Period End
(GHS:US$1.00)
2011......................................................................
1.51
1.55
1.49
1.55
2012......................................................................
1.81
1.89
1.65
1.88
2013......................................................................
1.96
2.20
1.88
2.20
2014......................................................................
2.94
3.20
2.39
3.20
2015......................................................................
3.77
4.33
3.24
3.79
2016 (through 31 August)...................................
3.87
3.95
3.78
3.95
________________
Source: BOG
As at 8 September 2016, the US Dollar to Ghana Cedi exchange rate was GHS3.95: US$1.00.
vi

TABLE OF CONTENTS
Presentation of Economic and Other Information....................................................................................................................................ii
Forward-Looking Statements ...................................................................................................................................................................iii
Enforcement of Civil Liabilities................................................................................................................................................................ v
Exchange Rates ......................................................................................................................................................................................... vi
Overview..................................................................................................................................................................................................... 1
Risk Factors .............................................................................................................................................................................................. 14
Use of Proceeds ........................................................................................................................................................................................ 29
The Republic of Ghana ............................................................................................................................................................................ 30
The Economy............................................................................................................................................................................................ 38
Balance of Payments and Foreign Trade ................................................................................................................................................ 68
Monetary and Financial System .............................................................................................................................................................. 74
Public Finance .......................................................................................................................................................................................... 86
Public Debt ............................................................................................................................................................................................... 98
Terms and Conditions of the Notes.......................................................................................................................................................116
The Global Note Certificates.................................................................................................................................................................135
Clearing and Settlement Arrangements ................................................................................................................................................136
Transfer Restrictions ..............................................................................................................................................................................140
Taxation ..................................................................................................................................................................................................143
Tender Offer ...........................................................................................................................................................................................148
Plan of Distribution ................................................................................................................................................................................149
General Information ...............................................................................................................................................................................151
vii

Overview
This Overview must be read as an introduction to this Prospectus. Any decision to invest in the Notes should be based
on a consideration of this Prospectus as a whole. This Overview does not purport to be complete and is qualified in its entirety
by the more detailed information elsewhere in the Prospectus. Prospective investors should also carefully consider the
information set forth in the "Risk Factors" below prior to making an investment decision. Capitalised terms not otherwise
defined in this Overview have the same meaning as elsewhere in this Prospectus. See "The Republic of Ghana" and "The
Economy", amongst others, for a more detailed description of the Issuer. References in this Overview to a "Condition" are to
the numbered condition corresponding thereto set out in the Terms and Conditions of the Notes.
The Republic of Ghana
General
The Republic of Ghana lies in West Africa, on the Gulf of Guinea, and is bordered by Côte D'Ivoire to the west, Togo
to the east, and Burkina Faso to the north. Ghana has an estimated population of over 27 million, with over 50 per cent. of the
population living in urban areas. The greater metropolitan area of Accra, the capital of Ghana and its largest city, has an
estimated population of over 3.5 million.
After a prolonged period of instability, Ghana has become one of the more stable democracies in Africa, with
democratically elected governments since 1992. The government held its most recent presidential and parliamentary elections on
7 December 2012, which resulted in the election of incumbent President John Dramani Mahama of the National Democratic
Congress (the "NDC"). The next presidential and parliamentary elections are scheduled to be held in December 2016. On 6
March 2016, Ghana commemorated the 59th anniversary of its independence from British colonial rule.
Economy and Fiscal Consolidation
Ghana's overall economic growth and relatively stable macroeconomic environment facilitated its upgrade to a lower
middle-income economy in late 2010, and the economy has expanded in key sectors, including oil production. Although the
Ghanaian economy is currently in its fifteenth consecutive year of growth, it has recently faced a number of serious economic
challenges as it seeks to consolidate its transition to a lower middle income country, such as significant depreciation of the Cedi,
high fiscal and current account deficits, rising inflation, ongoing power shortages, addressing the significant levels of debt and
poor operating performance of state-owned enterprises ("SOEs") which operate in the power sector, rising levels of external and
domestic debt, high domestic interest rates and declining prices of its key exports, oil and gold. In particular, important economic
indicators have been negatively impacted:

Gross Domestic Product. Real gross domestic product ("GDP") grew by 3.9 per cent. in 2015, compared to 4.0
per cent. in 2014 and 7.3 per cent. in 2013. The slowdown in the GDP growth rate resulted from disruptions to
energy supplies, higher interest rates and falling commodity prices world-wide, and also reflects rising input costs
from the depreciation of the Cedi, which partly contributed to a reduction in the GDP growth rate of the industry
sector and a significant slowdown of the services sector. Historically, Ghana's economy has relied heavily on
gold production and agriculture, in particular the production of cocoa, as the primary drivers of GDP growth.
Since the Republic began producing oil in 2010, oil has become an additional driver of GDP growth. In the first
quarter of 2016, real GDP grew by 4.9 per cent., compared to growth of 4.1 per cent. during the same period in
2015.

Inflation. The Consumer Price Index ("CPI") decreased from 18.1 per cent. in 2008 to a low of 8.6 per cent. in
2011, increasing again to 17.0 per cent. in 2014 and 17.7 per cent. in 2015, primarily as a result of exchange rate
depreciation, increased fuel prices and a significant increase in utility tariffs in December 2015. Inflation
increased to 19.0 per cent. in January 2016, and decreased to 16.7 per cent. in July 2016.

Interest Rates. The BOG policy interest rate was 12.5 per cent. in December 2011 but it has subsequently
increased to 15 per cent. as at December 2012, 16 per cent. as at December 2013 and 21 per cent. as at December
2014. The BOG increased its policy rate to 26 per cent. in November 2015 in an effort to meet the target inflation
rate.

Exchange Rate. Between 2009 until 2012, the Cedi maintained relative stability against the major international
currencies. However, the Cedi depreciated sharply beginning in 2012 due to a high demand for foreign reserves.
In 2013, the Cedi cumulatively depreciated by 16.85 per cent., 20.05 per cent. and 14.51 per cent. against the
British Pound, the Euro and the US Dollar, respectively. In 2014, the Cedi cumulatively depreciated by 26.26 per
1

cent., 20.48 per cent., and 31.25 per cent. against the British Pound, the Euro and the US Dollar, respectively. In
2015, the Cedi cumulatively depreciated by 11.51 per cent., 6.15 per cent., and 15.66 per cent. against the British
Pound, the Euro and the US Dollar, respectively. Between January 2016 and June 2016, the Cedi cumulatively
appreciated by 6.02 per cent. against the British Pound and depreciated by 4.78 per cent. and 3.35 per cent. against
the Euro and the US Dollar, respectively. Although the rate of depreciation has declined, the Cedi continues to
depreciate against the Euro and the US Dollar. The government attributes depreciation of the Cedi to various
factors including higher trade deficits resulting from declining prices of commodities, such as oil and gold, and
lower production of key exports, gold and cocoa, declines in grants from development partners, speculative
activities of certain companies and individuals and increases in domestic demand for imported goods and, more
recently, the economic recovery in the United States and the consequent appreciation of the US Dollar.

Gross Foreign Assets. Since 2011, the amount of gross foreign assets has fluctuated, increasing to US$5.63 billion
at the end of 2013, decreasing to US$5.46 billion at the end of 2014 and increasing to US$5.88 billion at the end
of 2015. Gross foreign assets decreased to US$5.20 billion as at June 2016, sufficient to cover 2.8 months of
imports, compared to US$4.54 billion at the end of June 2015, which was sufficient to cover 2.9 months of
imports, partly as a result of the decrease of prices of major export commodities, the seasonal variability of foreign
exchange flows during the year and delayed funding from development partners.

Fiscal Deficit. The overall fiscal deficit amounted to 6.5 per cent. of GDP at the end of 2010, was reduced to 4
per cent. for 2011 and increased to 11.5 per cent. for 2012 due to shortfall in grant disbursement, unanticipated
higher spending on public sector wages resulting from the implementation of a new salary structure, higher
interest cost and increased subsidies as a result of the challenges stemming from the rupture of the West African
Gas Pipeline ("WAGP"). The deficit decreased to 10.1 per cent. of GDP for 2013. The deficit in 2013 was
primarily attributable to shortfalls in tax receipts, resulting from lower domestic output and imports, a decline in
commodity prices, continued increased spending on public sector wages, higher interest costs and lower than
projected development partner grants. In 2014, the fiscal deficit rose to 10.2 per cent. of GDP due to shortfalls in
domestic revenue as a result of the slowdown in economic activity, lower grant disbursements and higher than
expected payment of domestic arrears. In 2015, the fiscal deficit fell significantly to 6.3 per cent. of GDP
primarily as a result of the impact of the government's fiscal consolidation programme and, in particular, higher
tax revenues (including VAT on fee-based financial services and a 5 per cent. flat rate on real estate, a special
petroleum tax of 17.5 per cent. and special import levy of 12% on certain imported goods) and contained
expenditure for the period. The fiscal deficit for 2016 is budgeted to be 5 per cent. of GDP.

Domestic and Public Debt. Public debt as a percentage of GDP increased from 37.8 per cent. of GDP at the end
of 2010 to 71.63 per cent. of GDP at the end of 2015. Domestic debt increased from 18 per cent. of GDP at the
end of 2010 to 28.81 per cent. of GDP at the end of 2015 and 63.07 per cent. of GDP in May 2016 compared to
68.53 per cent. in May 2015.
On 13 November 2015 the Minister for Finance presented to parliament the 2016 Budget Statement and Economic
Policy of the Government of Ghana for the 2016 Financial Year (the "2016 Budget Statement"). Parliament approved the 2016
Budget Statement on 10 December 2015.
2016 Mid-Year Review of the Budget Statement
On 25 July 2016, the Minister of Finance presented to parliament a Mid-Year Review of the Budget Statement for the
2016 Financial Year (the "Mid-Year Review"). The Mid-Year Review identified developments in both the global and domestic
economic environment that had affected certain assumptions which underpinned the 2016 Budget Statement. In particular, the
Mid-Year Review identified the following key challenges:

Although crude oil prices had increased from a low of US$28 per barrel in January 2016 to US$46.04 on 20 July
2016, prices are still below the benchmark oil price of US$53.05 which was used in the 2016 Budget;

Oil production has been adversely effected at the Jubilee Field for most of the first half of 2016 as a result of the
technical problems at the Jubilee Field;

Crude oil exports had declined significantly to US$212.3 million for the first four months of 2016, compared to
US$687.3 million recorded in the same period in 2015. The decrease in value was due to both price and volume
effects. The volume of crude oil exported decreased for the first four months of 2016 by 48.1 per cent to 6,589,482
barrels compared to 12,697,779 barrels for the same period in 2015. The average realized price of oil also
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