Analyst Sees Growth Potential in Ghana

...Ghana's Economy on Gold, Oil, but Worries Over Debt, Foreign Aid
NEW YORK (AP) - Ghana's economy and politics are stable and should continue to grow as the sub-Saharan African nation enters its 50th year, according to a Deutsche Bank analyst.

Deutsche Bank Group analyst, Marion Muhlberger, said with an annual output of 2 million ounces of gold per year, Ghana is the second-largest gold exporter on the continent, behind only South Africa. And with gold prices well above $700 an ounce, the economy should continue to perform, she said in a report published on the bank's Web site Friday said.

"Solid annual economic growth of around 6 percent in real terms, inflation rates only barely into double digits, a relatively stable currency, satisfactory public finances and low foreign debt thanks to forgiveness measures were the icing on the cake," Muhlberger said in the report, originally published in the German newspaper Borsenzeitung.

Also, she noted a recent discovery of at least 600 million barrels of oil off the country's coast, and while production will not happen immediately, the "black gold" will generate "considerable additional revenues for Ghana in the medium term at least," she said.

However, Muhlberger warned that Ghana "still possesses a lot of the less positive characteristics of a typical post-colonial African country." With a gross domestic product reliant on agriculture, gold and cocoa, the country is susceptible to changes in international prices, she said.

Ghana also heavily depends on debt-forgiveness and foreign aid programs, she said.

While no Ghanian stocks trade in the United States, South African gold stocks traded on U.S. exchanges were mixed in afternoon trading Friday, following the price of gold up.

AngloGold Ashanti Ltd. rose $1.62, or 3.5 percent, to $48.64, after earlier hitting an annual high of $49.88.

DRDGold Ltd. fell about 2 cents, or 2.1 percent, to $8.14.
Gold Fields Ltd. fell 70 cents, or 4.1 percent, to $16.29.
And Harmony Gold Mining Co. Ltd. added a penny to $10.48.