France and Ghana/B_descRubAff1>
Since President Mahama’s official visit to Paris in May 2013, bilateral relations between France and Ghana have been growing stronger. An annual bilateral political dialogue has been set up at the level of the Secretaries-General of the two Ministries of Foreign Affairs. This dialogue was held in October 2013 in Paris, then in October 2014 in Accra, and preceded each time by a meeting between the Ministers of Foreign Affairs. In particular, there is close dialogue between the two governments on regional and international issues. The third session should be held in Paris in autumn 2015.
Recent visits to Ghana:
- February 2008: Visit of the Minister of State for Youth and Sport, Mr Bernard Laporte, for the final of the Africa Cup of Nations.
- September 2008: Visit of Mr Alain Joyandet, Minister of State for Cooperation and Francophonie, for the Third High Level Forum on Aid Effectiveness.
- February 2009: Visit of Ms Anne-Marie Idrac, Minister of State for Foreign Trade.
- August 2012: Visit of Ms Benguigui, Minister Delegate for Francophonie, for the funeral of President Atta Mills.
- January 2013: Visit of Ms Benguigui, Minister Delegate for Francophonie, for the inauguration of President Mahama.
- November 2013: Visit of Ms Nicole Bricq, Minister of Foreign Trade, to meet with the Ministers of Energy and Trade and Industry.
- October 2014: Visit of the Deputy Secretary-General of the Ministry of Foreign Affairs to Accra, for the second session of political dialogue.
- August 2015: Visit of Ms Ségolène Royal, Minister of Ecology, Sustainable Development and Energy.
Recent visits to France:
- June 2007: Visit of President John Kufuor and the Minister of Foreign Affairs, Nana Akufo-Addo.
- March 2008: Working visit of Mr Samuel Owusu-Agyei, Minister of Public Sector Reform.
- December 2009: Visit of Ms Hanna Tetteh, Minister of Trade and Industry, to Paris.
- May 2010: Visit of the Vice President, Mr John Mahama, and the Minister of Trade and Industry, Ms Hanna Tetteh, for the Africa-France Summit in Nice.
- May 2013: Official visit of President Mahama.
- 10 October 2013: Visit of Ms Hanna Tetteh, Minister of Foreign Affairs, for a meeting with her counterpart, Laurent Fabius, in Paris.
- 24 October 2013: Visit of a delegation led by the Chief Director of the Ministry of Foreign Affairs, Mr Leslie Kojo Christian, for the first session of political dialogue.
- December 2013: Visit of President Mahama for the Élysée Summit.
- September 2014: Visit of Ms Hanna Tetteh, Minister of Foreign Affairs, for a meeting with her counterpart, Laurent Fabius, in Paris.
- May 2015: visit of the Speaker of the Ghanaian Parliament, Mr Edward Adjaho.
- October 2015: Visit of President Mahama to Paris and Bordeaux; meetings with the President of the French Republic and Alain Juppé, Mayor of Bordeaux.
- October 2015: Visit of Ms Hanna Tetteh, Minister of Foreign Affairs, for a meeting with her counterpart, Laurent Fabius, in Paris.
- November 2015: Visit of a delegation led by the Chief Director of the Ministry of Foreign Affairs, Mr Leslie Kojo Christian, for the third session of political dialogue.
- November 2015: Visit of President Mahama for a lunch held in Paris by the President of the French Republic for African Heads of State in preparation for COP21.
- December 2015: Visit of President Mahama for the opening session of COP21.
Bilateral trade between France and Ghana plummeted in 2014, from €1170 million to €959 million. This can be explained by the significant drop in French exports (€198 million, -36.2%), due to lower Ghanaian demand for imported goods and the lack of major contracts underway. The bilateral deficit rose to -€563.5 million.
French exports rebounded strongly during the first half of 2015, however (€144 million, +89% year on year), marking the start of a recovery in our trade position in Ghana.
France’s success in Ghana is largely due to Technip, which, since 2009, has signed contracts worth €2.5 billion for the development of various Ghanaian oil fields. Other notable contracts include those signed in the last five years by Forclum (electrical equipment), Alcatel Lucent (fibre optic and 4G mobile network) and Gemalto (information systems).
French sales nevertheless remain heavily concentrated in the three major sectors that account for almost 70% of the total: refined petroleum products, pharmaceutical specialities and agrifood. There is therefore plenty of scope for development, especially in sectors linked to delegated management (water supply, waste treatment, urban transport, health services, etc.), intermediate luxury consumer goods, agrifood and tourism.
It should also be noted that the delimitation of the maritime boundary with Côte d’Ivoire is a sensitive issue which was the subject of informal discussions until 2013. At the end of 2014, the dispute was referred to a special chamber of the International Tribunal for the Law of the Sea. In February 2015, Abidjan requested that the Tribunal prescribe provisional measures preventing Ghana from carrying out any oil exploration or exploitation in the offshore area near the maritime boundary between the countries. This could affect current investments in the TEN oil field, where Technip is one of the main contractors.
According to the United Nations Conference on Trade and Development (UNCTAD), foreign direct investment (FDI) received by Ghana in 2014 totalled $3.36 billion, a rise of 4% from $3.23 billion in 2013.
According to figures from the Banque de France, in 2014 Ghana was the eighth most popular destination for French direct investment in sub-Saharan African, with flows of $107.2 billion and stock of $861 billion. Currently, this mainly consists of modernization and capacity investments by the forty odd local branches of French businesses present in Ghana (new Société Générale headquarters, modernization of the Total distribution network, extension of port facilities by Bolloré, increase in the capacity of existing production plants by Air Liquide, Grel and Golden Exotics), as well as around twenty investments by French individuals.
Other notable investments include the exploitation of over 20,000 hectares of rubber plantations by GREL, a subsidiary of SIPH in which Michelin has a 24.4% stake; the acquisition by Danone, in partnership with the investment fund Abraaj, of Fan Milk, a manufacturer and distributor of dairy products and fruit juice; the investment by Touton in a cocoa factory; and the choice of Ghana as a regional platform by consumer goods companies such as L’Oréal and Pernod Ricard, which are attracted by the emerging middle class.
Two very important French projects are also worth mentioning. In the framework of its joint venture with Maersk, Bolloré Logistics is going to invest $750 million in the extension of Tema container port. EDF is also investing around $200 million in a thermal power plant project.
French cooperation in Ghana has increased significantly in recent years with the signing of the debt reduction and development contract (C2D) in 2004, followed by our decision to join the Multi-Donor Budgetary Support mechanism in 2005 and to resume support via the AFD (French Development Agency).
France and Ghana signed a new Partnership Framework Document on 28 May 2013 for the period 2013-2016. The signing took place during the official visit of President Mahama. This document outlines our commitments in terms of the targeting, coordination and effectiveness of our assistance. The France-Ghana Partnership Framework Document 2013-2016 is in line with the European Union (EU) Joint Programming initiative. It addresses the Ghanaian government priorities for development, growth and poverty reduction set out in the Ghana Shared Growth and Development Agenda (GSGDA) 2010-2013.
This partnership between France and Ghana for 2013-2016 is structured around four priority areas of focus and represents between €300 million and €440 million of new commitments (90% loans):
- sustainable development (€371-431 million): AFD support, mainly loan-based, potentially supplemented by EU subsidies, in the farming sector (with monitoring of social and environmental impacts) and in the energy sector (renewable energy production, transport and distribution).
- support for growth (€323-396 million): AFD support, mainly loan-based, for comprehensive urban development projects (transport, district planning, waste treatment and sanitation), and support for very small and medium-sized enterprises (ARIZ guarantees and micro- and meso-finance facilities, excluding PROPARCO).
- governance (€24-31 million): support for public sector reform and decentralization (Priority Solidarity Fund - FSP - project), support for civil society (FSP), defence and security cooperation (liaison officers, support for French-language training in a military context, “maritime security” FSP project) and overall budget assistance.
- culture, French language, academia and research (€3.7-5.1 million): Institut Français activities, support for the preparation of a reform making French compulsory in secondary schools, development of the activities of the five Alliance Française branches, dialogue with the International Organisation of La Francophonie (OIF), dialogue with the University of Ghana, support for development research via French institutes (CIRAD, IRD, IFRA), and a policy of scholarships and invitations.
AFD in Ghana
Since its work in Ghana began 30 years ago, AFD has provided €1.3 billion in funding, through around one hundred projects. In 2012, we froze our sovereign loans, in line with the Lagarde doctrine (priority poor country, at moderate risk of debt distress, without an IMF programme), which led to a sharp decrease in AFD activity. From 2013, Ghana’s macroeconomic and budgetary problems, combined with the Ghanaian government’s decision not to renew its programme with the IMF, forced AFD to suspend all new commitments in the form of sovereign loans. Although an agreement was signed with the IMF in April 2015, the IMF decided, at the same time, to downgrade its debt sustainability assessment to high risk (red country), preventing us from resuming our sovereign loans.
In accordance with the Partnership Framework Document 2013-2016 signed in May 2013, AFD is present in four priority sectors (energy, agriculture, urban development, and water and sanitation), as well as the financial and private sector, through its subsidiary Proparco in particular. But a subsidy of €1.5 million to build the capacities of microfinance actors was all it could provide in 2015. Since 2013, commitments have totalled scarcely €2.5 million, which is far below the amount forecast (€250-400 million).
Given the severe deterioration of the economic environment, commitment forecasts for 2016-2017 remain low. Since it is hard to predict whether the debt sustainability assessment will improve, we are unable to proceed with initiatives begun on the basis of sovereign loans, and in particular to respond to the Ghanaian government’s request in August 2014 for another contribution to the District Development Fund, to support rural electrification in the north of the country via NEDCo, or to continue our long-running action to support the development of perennial crop farming.
With no clear improvement in the macroeconomic situation, it remains difficult to take concrete action in terms of non-sovereign financing. In the energy sector in particular, the operators, which have traditionally acted as a counterpart to AFD, are suffering from the crisis in the sector and the State’s outstanding debts, which are affecting the entire chain of operators via the Electricity Company of Ghana (ECG).
The country is now turning to non-sovereign loans.
Nevertheless, the Kumasi extension project, which was launched in December 2012 thanks to a sovereign loan of €37.5 million, then suspended like the other sovereign loans, was relaunched by the President of the French Republic, at the request of President Mahama, on 5 October 2015. Its aim is to supplement two other major road and drainage infrastructure projects in Kumasi and enable two roads to be improved and extended. It includes technical assistance in the following areas: monitoring and capacity-building in relation to work safety, support for the resettlement and compensation process, and drain maintenance and road safety.
The contracting authority will be the Department of Urban Roads (DUR) of the Ministry of Roads and Highways. The project was set up on the basis of innovative institutional arrangements, through a memorandum of understanding between the district of Kumasi and the DUR, ensuring coordinated management of the road and the drain. The signing of the memorandum needs to be approved by the Ghanaian parliament.
Military and defence cooperation
Our military cooperation with Ghana is mainly focused on training. It includes French participation in the Kofi Annan International Peacekeeping Training Centre (KAIPTC), French-language teaching in the military sphere, and the training of Ghanaian officers in France or at regionally-oriented national schools (ENVRs). A liaison officer works as a course director at the KAIPTC. He is responsible for organizing annual training courses for West African field officers and for the relations with other peacekeeping training centres in the Economic Community of West African States (ECOWAS) area. In liaison with the non-resident defence attaché posted in Lomé (Togo), he is the interlocutor for the Ghanaian Armed Forces and proposes and coordinates military and defence cooperation initiatives.
Our cooperation complements British assistance, particularly as regards combating international trafficking. Several expert missions have been deployed for training (investigation and surveillance techniques) and audits.
Internal security cooperation in Ghana is led jointly by the Ministry of Foreign Affairs and International Development and the Ministry of the Interior.
For the period 2014-2020, in the framework of the 11th European Development Fund (EDF), the EU has set aside funding of €323 million for Ghana (compared with €373.6 million for the 10th EDF), specifically for governance, farming, social policy and employment. This consists of donations, which can be combined with loans. AFD is authorized to run EDF projects on behalf of the EU (delegated management).
Ghana’s main donors are the World Bank ($1.5 billion for 2013-2016), the African Development Bank ($200 million in 2012), the United States ($166 million in 2012), the United Kingdom ($150 million in 2012) and the European Union ($180 million in 2012).