Policy paper

UK–Ghana development partnership summary, July 2023

Published 17 July 2023

Introduction

The Strategy for International Development (IDS) places development at the heart of the UK’s foreign policy. It sets out a new approach to development, anchored in patient, long-term partnerships tailored to the needs of the countries we work with, built on mutual accountability and transparency. This approach goes beyond aid and brings the combined power of the UK’s global economic, scientific, security and diplomatic strengths to our development partnerships. Our 4 priorities are to deliver honest, reliable investment, provide women and girls with the freedom they need to succeed, step up our life-saving humanitarian work, and take forward our work on climate change, nature, and global health. The Integrated Review Refresh (IR23) reiterates that sustainable development is central to UK foreign policy and sets out how the UK will go further and faster on development to reduce poverty and reinvigorate progress towards the Sustainable Development Goals (SDGs). This Country Development Partnership Summary details how the IDS and IR23 will be put into practice with Ghana.

Country context

Viewed over 30 years, Ghana has been seen as a development success story generating growth, reducing poverty and strengthening governance and democracy. Ghana was the first country in Sub-Saharan Africa to meet Millennium Development Goal 1 – halving its poverty rate from 53% in 1991, to 21% in 2012.  Extreme poverty declined even more, dropping from 38% to 10%. The UK has provided approximately £2 billion in Official Development Assistance (ODA) since 2000 supporting key achievements including:  the roll out of universal health insurance, free education up to age 17, competitive elections, and peaceful transfers of power. Life expectancy increased from 58 to 64 and over 80% of the population has access to grid electricity. Ghana is now classified as a lower-middle income country.

Ghana thus became known as a beacon of development, while the Government announced its ambition to ‘exit from aid’. Ghana is also a confident development leader in the region and globally – hosting the Africa Continental Free Trade Agreement Secretariat, leading regional security engagement, and actively pursuing its interests at the UN, Bretton Woods institutions, Economic Community of West African States (ECOWAS), and global bodies for health security, climate and trade.

Development experts identified Ghana’s evolving ‘developmental state’ as a key part of the story: Ghana’s rulers have progressively recognised the importance of providing public services in return for taxation and legitimacy. However, this bargain is far from complete or secure: Ghana’s budget drew increasingly from natural resource revenues, and then the bond markets in the last decade, weakening the social contract between government and taxpayers. Development gains were already stagnating pre-COVID (extreme poverty increased from 10% in 2013 to 13.6% in 2019) while the current severe macro-economic crisis, declining human development and corruption indicators, climate impacts, environmental degradation and conflict threats have exposed the weak foundations of Ghana’s earlier success. The economy is still dominated by exports of oil, gold and cocoa, rather than modern sectors that create more and better jobs. Democracy is still linked to traditional loyalties rather than taxation, policy or delivery and there are signs of decline in governance and public financial management. The north of Ghana remains especially poor, with increasing conflict and climate risks.

Since early 2022, an economic crisis in Ghana has made its development challenges again serious and urgent: Sustainable Development Goal (SDG) 1 – the elimination of extreme poverty by 2030 - is far off track. Sustained inflation at over 50% has rapidly eroded living standards while harvests have fallen as imported fertiliser is priced out of reach. Damage is being caused to the financial sector, pensions, businesses, and to the public services that drove previous development gains. 1.2 million children are out-of-school, while education’s share of the budget has decreased from 18.4% in 2020 to a projected 12.9% for 2024, as COVID costs and debt repayments eat into the Government’s budget. The poor are disproportionately affected and have the least resilience to shocks. Even with the May 2023 International Monetary Fund (IMF) package, the underlying structural weaknesses noted above, climate risks, and incomplete progress in health and education, threaten to hold development progress far below its potential.

Despite reductions in Official Development Assistance (ODA) since 2013, and emerging development actors such as China, the UK has retained development leadership. Ghana is a key diplomatic ally, sharing close ties through history, culture, science, education and a large, prominent diaspora. Our relationships, expertise and adaptability (including a strong in-house team of advisers) have kept us at the heart of addressing the macro crisis, while also delivering impressive, low cost and pioneering wins in other sectors. A recent £60,000 contribution to feasibility study for a vaccine plant, for example, has helped secure £60 million in committed financing, while the UK has played a strong role in building international support for the ‘Accra Initiative’ for regional security thanks to our expertise and diplomatic influence. The UK retains strong influence amongst other development partners and the Government of Ghana. Our advisers are often invited to collaborate and shape programmes and policies beyond our own direct funding. Our reputation is partly built on the perception that the UK supports and shares Ghana’s own priorities in economic development, health, education and security, where we benefit from regular, Ministerial level engagement, such as the 6-monthly UK-Ghana Business Council, and the annual Ministerial UK-Ghana Security Dialogue.

Why and how: the UK’s development offer with Ghana

The UK’s development objectives in Ghana are closely aligned with the International Development Strategy, the Integrated Review, and the SDGs. While macro-stability is a major new focus, British High Commission Accra (BHC Accra) retains its focus on:

• patient partnerships in revenue reform
• economic diversification and transformation, targeting export-oriented, high productivity sectors
• access to high quality health and education services and safety nets, especially for women, girls and other vulnerable groups
• resilience to climate change and health security
• a stronger democracy
• a reduced conflict risk

BHC Accra has also developed leadership in several niche areas including mental health services and carbon market development, and in developing a UK-Ghana Science, Tech and Innovation (ST&I) strategy for development outcomes. Key near term outcomes include UK’s support for:

Economy and climate

• implementation of an IMF package that provides economic recovery and stability, protects the poorest, and drives reform in energy, revenue and agriculture
• new investment policies that will secure $100 million in foreign direct investment (FDI) in targeted sectors by 2025
• British Investment International’s (BII’s) new Technical Assistance Fund launched: 2 new investees by 2024
• two agro-forestry carbon credit-based business models secure investment
• a UK-Ghana Science Tech and Innovation Strategy launched and operating

Human development, women and girls

• a programme of reforms in the health and education system including the new Health Security Framework

• a new national social protection shock response system

• new partnerships supporting Ghana’s vaccine capability and health security

Governance and security

• a safe and fair Presidential election in 2024, contested on policy
• stronger anti money-laundering systems and a new Serious and Organised Crime Strategy
• greater Ghanaian capability to reduce risks of instability and violence, especially in northern and western border areas, protecting development potential and building the state/citizen contract
• Ghana is contributing fully to effective regional security efforts

Ghana’s recent increases in poverty and persistent regional inequality drive our focus on Northern Ghana, led by a senior Northern Ghana attaché. Results will not be secured through large programmes or service delivery, but through strengthening regional development plans and delivery systems, securing coalitions, building investment pipelines and showcasing successes. Similarly, in health, education and social protection: UK expertise will be used to strengthen systems, rather than deliver services, except where there are strong cases for pilot testing new approaches.

The merger of the Department for International Development (DFID) and the Foreign & Commonwealth Office (FCO) has brought benefits and new ways to do development. ODA programming is enabling our political and governance team to approach the 2024 elections with innovative ways to amplify the impact of our political counsellors. In economic development, the 6-monthly Ministerial level ‘UK-Ghana Business Council’ meetings sets the agenda for economic development and identifies mutual economic benefits in a partnership that is now more equal than the donor/recipient relationship of 1 or 2 decades ago. Our new business cases will set out how diplomatic skill sets can support the evolution of the ‘developmental state’ amongst government and the political elite.

Who we work with

UK in Ghana has longstanding development partnerships and influence: our high-quality analysis and insight on the current macro-crisis is sought after, we chair donor groups on revenue reform, urban infrastructure, and education, and have shaped the programmes and approaches of other major development partners. The UK’s Department for Business and Trade team, the Home Office, the British Military, the British Council, the Department for Environment Food and Rural Affairs, His Majesty’s Revenue and Customs, and Office for National Statistics all have prominent development activity in Ghana, closely supported by FCDO. We benefit from shared objectives and close relationships with Ministries of Trade and Industry, Health, Gender, Defence and National Security, Environment, Science and Innovation and Education and agencies including the Ghana Revenue Authority, the Environmental Protection Authority and the military. These have delivered several important policy reforms, for example, in investment, health security, education and mental health.

Our political team has strong relationships across government and parliament, and we are bringing those to bear more directly on development outcomes. The UK helped create one of Ghana’s most influential civil society organisation (CSO) umbrella organisations, STAR Ghana, and enjoys constructive engagement with other leading civil society actors, partnering with other UK and other international non-governmental organisations (NGOs) and championing local activists and organisations. UK Export Finance, British Investment International, the UK Ghana Chamber of Commerce, a large Department of Business and Trade team, and FCDO advisers covering economics, revenue, agriculture, forestry, innovation, manufacturing, and infrastructure create a powerful economic partnership offer, delivering policy reform and investment, and place us in the centre of a strong network of UK, diaspora and other businesses. We also support UK Universities as they substantially increase their own footprint and partnerships in Ghana.

Key programmes

Our top 3 spending programmes

1. Partnerships Beyond Aid (PBA): policy reform and government system strengthening for better delivery of health and education outcomes

2. Leave No One Behind (LNOB): policy reform, evidence and advocacy for the extreme poor and disabled, with a focus on mental health

3. Jobs and economic transformation: policy reform and grants that support economic diversification, jobs and productivity in manufacturing

Centrally managed programmes

These include:

1. Global Fund for HIV/AIDs, TB and Malaria

2. Ghana Education Outcome Project: a results-based payment programme in education, to improve access and quality of education – by reducing the number of out-of-school children in Ghana and improving teaching and learning in the classroom

3. Blue Planet Fund: an extensive set of Government-to-Government partnerships across the marine, environment and recycling space, delivered by Defra

4. Partnerships for Forests: supporting development within the forestry sector that will help deliver key forestry and climate commitments from COP26

5. Climate Compatible Growth Programme and High-Volume Transport: 2 research programmes delivering influential infrastructure research

6. British Investment Partnerships: covering revenue reform, financial sector management, agricultural carbon markets, and infrastructure investment

7. A range of tax reform partnerships, including through HM Revenue & Customs and UK contributions to World Bank, IMF and OECD programming

8. A new programme led by the UK Home Office to reduce illegal gold mining in Ghana

9. Conflict, Stability and Security Fund: projects include those that reduce state threats, tackle illegal wildlife trade, and build resilience to local conflict pressures

Portfolio evolution

Over the last decade the UK development portfolio in Ghana has undergone changes linked to budget reductions, the increased role of other government departments, the creation of FCDO, COVID and, most recently, Ghana’s macro-economic crisis. Large scale delivery of services is phased out, with a greater focus on unlocking reform and productive partnerships using a wider set of relationships, and with greater use of UK expertise. The next transition of our development portfolio will include:

• a new suite of development programming to be designed over the next 12 months, implemented up to 2030, maintaining coverage across the themes set out above. This will combine long term planning with the flexibility to opportunities as they arise, as Ghana exits its financial crisis, renews its pursuit of an exit from aid and deals with evolving priorities such as climate, conflict, and persistent poverty
• maintained advisory strength, increasingly focused on a long-term, consolidated development strategy, drawing on Centrally Managed Programmes, other government departments, and direct advisory relationships with donor partners and Government of Ghana counterparts
• a portfolio that is attuned and responsive to governance risks, and the importance of supporting the ‘developmental bargain’ – a hard-won strategic gain that is under threat
• a mature and modern approach, recognising mutual UK benefit and interests, and the value of shifting a narrative from donor/recipient to partnership

Recent successes

Beyond those already mentioned, these include:

• Education Beyond Aid: Ghana Education Reform Secretariat established, UK supported over 700,000 boys and girls to attend school over the past 10 years, an estimated 3 million children benefitted from innovative UK-backed TV and distance learning during COVID lockdowns
• substantial wins in revenue reform including Ghana’s participation in bulk exchange of information between global revenue authorities, and a new High Net Worth Unit that has substantially grown the tax revenue from Ghana’s wealthy
• UK supported reforms helped establish a cluster of 8 auto assembly plants
• 32% of Ghana’s population fully vaccinated against COVID as of April 2023 with UK contributing 49% of total bilateral donation of COVID-19 vaccines. The UK directly supported 652,302 doses of COVID-19 vaccines for vulnerable people and communities
• UK trained 10,000 health workers on preparedness for disease outbreaks: helped containment of 2022 Marburg Virus outbreak
• Serious and Organised Crime: implementation of a UK supported asset recovery policy framework
• a thriving set of over 100 science, research, tech and innovation partnerships between Ghana and the UK

Monitoring and evaluation: plans for evidence gaps and for robust evidence of impact.

An inclusive economic growth study is underway as well as new research programmes in energy, transport, and carbon markets. The planned new suite of ODA programmes provides an opportunity for refreshed analysis and improvements to monitoring and evaluation methods such as more systematic data and reflections from partners. Key research needs that remain include climate, specifically a better understanding of the best value climate interventions in Ghana’s context. The UK’s Office for National Statistics has also seconded a senior manager into Ghana Statistical Service in capacity building partnership.

Financial information

Initial allocations have been set internally to deliver the priorities set out in the International Development Strategy (May 2022) and the Integrated Review Refresh 2023, based on the FCDO’s Spending Review 2021 settlement.

The department’s spending plans for the period 2022-2023 to 2024-2025 have been revisited to ensure the UK government continues to spend around 0.5% of Gross National Income (GNI) on ODA. This was in the context of the significant and unexpected costs incurred to support the people of Ukraine and Afghanistan escape oppression and conflict and find refuge in the UK, and others seeking asylum. The government provided additional resources of £1 billion in 2022 to 2023 and £1.5 billion in 2023 to 2024 to help meet these unanticipated costs. The government remains committed to returning ODA spending to 0.7% of GNI when the fiscal situation allows, in line with the approach confirmed by the House of Commons in July 2021.

The country development partnership summaries include the breakdown of programme budgets allocated to individual countries for 2023 to 2024 and 2024 to 2025. These allocations are indicative and subject to revision as, by its nature, the department’s work is dynamic. Programme allocations are continually reviewed to respond to changing global needs, including humanitarian crises, fluctuations in GNI and other ODA allocation decisions.

It should be noted that these figures do not reflect the full range of UK ODA spending in these individual countries as they do not include spend delivered via core contributions to multilateral organisations, or regional programmes delivered by the FCDO’s central departments. Other UK government departments also spend a large amount of ODA overseas. Details of ODA spent by other UK government departments can be found in their annual report and accounts and the Statistics for International Development.

FCDO Official Development Assistance allocation

Figure 1. Financial year 2023 to 2024 % spend against International Development Strategy thematic priorities: investment and economic development, 47%; women and girls, 39%; climate change, nature and global health, 14%.

Allocated ODA budget financial year 2023 to 2024	Indicative ODA budget financial year 2024 to 2025
£5.5 million	£16 million

The UK’s ODA contribution to Ghana is far in excess of the bilateral figure above. In additional to it, the UK makes extensive financial contributions to Ghana through: Centrally Managed Programmes, the work of other government departments (including Defra, the Home Office, the British Military and Department for Business & Trade), and our contributions to the World Bank and other global institutions.

89% of programmes are marked as principally or significantly focused on promoting gender equality, and 44% are marked as principally or significantly focused on disability inclusion.