1. Republic of Ghana Presentation to Investors September 2014

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3. Presentation Team 3 Hon. Seth Terkper Governor Henry Wampah Hon. Kweku Ricketts Hagan Dep. Governor Millison Narh Honourable Minister of Finance Deputy Governor, Bank of Ghana Governor, Bank of Ghana Hon. Deputy Minister for Trade and Industry Dr. Samuel AmeyawDirector, Debt Management Division, Ministry of Finance Dr. Alhassan Iddrisu Director, Economic Research and Forecasting, Ministry of Finance

4. Contents 1. Introduction 2. Economic and Policy Update 3. Foundations Remain Strong 4. Financing for Growth 5. Conclusion

5. 1. Introduction

6. Introduction Territory & Capital238,537 sq. Km; Accra Population (2013)27 million Nominal GDP (US$ bn 2013)42.48 (using period end exchange rate / 47.68 (using period average exchange rate of 1.96) GDP Growth (2013)7.1% GDP Per Capita (US$, 2013)1,604.1 (using period end exchange rate ) / 1,804.3 (using period average exchange rate of 1.96) Sovereign Credit RatingsMoody’s: B2 (Negative) / Fitch: B (Negative) / S&P: B (Negative) CurrencyGhanaian Cedi (GHS) Average Exchange RateGHS:USD: 2.75 (through August 28, 2014) System of Government Multi-party democracy with five (5) year election cycles since 1992. Next general elections scheduled to take place in December 2016 BordersCôte D'Ivoire, Togo, Burkina Faso Ghana is one of the key lower middle income economies in Africa. Despite short term challenges, Ghana’s broad-based commodities endowment and strong institutional framework support a bright future outlook Background Starting in 2008, Ghana embarked on an ambitious adjustment program to rationalise its public sector wage structure labelled Single Spine Salary Structure (SSSS)- Ghana’s fourth attempt at rationalising public sector wages SSSS implementation, starting in 2010, was undertaken from a position of strength with record high commodity prices, very high GDP growth rates and accelerated infrastructure development Short Term Challenges The rise in wages and arrears related to SSS implementation, combined with rising subsidy expenditure, higher interest payments, a shortfall in corporate income tax from the oil sector and grants put pressure on the budget resulting in large deficit overshoots in 2012 and 2013 Economic management was further compounded by the onset of external pressures in 2012 and 2013, notably disruption in gas supply and fall in gold and cocoa prices, which have put stresses on the fiscal and current account deficits, the exchange rate and the broader macro-economy Our Plan As a result, we are engaging the IMF to get policy support as well as funding for temporary balance of payments support We are also committed to consolidating the gains from our “home-grown” programme which largely adheres to IMF recommendations in the 2014 Article IV Report on Ghana and has already set the foundation for sounder public financial management We anticipate the IMF Programme will entail tightening our budget substantially. We have a strong institutional history with the IMF and believe our working relationship will facilitate the negotiation process Encouraging Outlook Despite the short term pressures Ghana’s fundamentals are robust: a diverse economy, large commodities base with rising oil and gas production, and strong institutional framework to support our long-term growth targets 6

7. Understanding Ghana’s Short Term Outlook Ghana faces short term challenges on the back of fiscal imbalance and underperformance combined with macroeconomic pressures In 2010, we started to gradually implement the revised public sector pay structure under the Single Spine Salary Structure (SSSS) This was done in a bid to reduce the disparities in pay across the public sector and increase productivity However, challenges with determining relativities and scales including unanticipated payments of arrears led to the wage bill exceeding budget during 2011-2013 and contributed to an expanding fiscal deficit and rising public debt burden At the moment, we have migrated over 99% of public sector workers onto the new SSSS pay structure, and paid all of the arrears owed to workers 7 Source: Ministry of Finance, Government of Ghana, Ghana Statistical Services Structural adjustments lead to fiscal challenges 2012 Deviations2013 DeviationsH1 2014 Deviations GHS millions% of GDPGHS millions% of GDPGHS millions% of GDP Revenues Grants(389.4)(0.52)(519.0)(0.56)(293.5)(0.26) Corporate Income Tax (oil)(384.1)(0.51)311.00.33182.50.16 Non-oil Tax Revenue(112.3)(0.15)(3,155.3)(3.38)(828.2)(0.72) Expenditures Wages and Salaries1,028.01.37777.60.83139.20.12 Wage Arrears881.01.18922.60.99(124.3)(0.11) Interest Payments245.00.331,202.61.29203.00.18 Utility and Fuel Subsidies339.00.45135.80.1517.70.02 Goods & Services354.70.47(293.2)(0.31)(95.2)(0.08) Causes of fiscal overruns (deviations from budget)

8. Understanding Ghana’s Short Term Outlook (cont’d) Ghana faces short term challenges on the back of fiscal imbalance and underperformance combined with macroeconomic pressures External pressures build as commodity prices collapse Cedi depreciation fuels inflation and exacerbates expenses The government has sought to bring the fiscal deficit under control via a mixture of expenditure control and revenue measures However, economic management and fiscal consolidation were further complicated by unforeseen external factors: In 2012 / 2013, prices for Ghana’s key commodities declined Power disruptions contributed to declines in domestic output The pass-through effects of cedi depreciation along with subsidy reductions fuelled inflation 8 Source: Ministry of Finance, Bloomberg Recognizing these challenges, the Government began implementing a far-reaching “home-grown” policy agenda which it expects will be supported by the IMF Programme, when finalised Current account balance deteriorates

9. Expected oil production from TEN and Sankofa fields in 2016/17 Ghana is Implementing Robust Measures to Tackle Key Challenges 9 The home-grown programme aims to restore fiscal equilibrium and stem the impact of external pressures. While many issues have been addressed, we are seeking to resolve remaining challenges with the IMF’s support Revenue below projections, due to decrease in commodity prices and grants, along with a slowdown in economic activity arising from energy shortfalls Wage bill contained, but rising expenditure largely due to increase in domestic funding costs Power disruptions and lower output due to the breakdown of the West African Gas Pipeline Pullback in donor funding Initial cocoa price weakness and continued gold price weakness Inflation bump started with reduction in subsidies for petroleum and utilities to help restore fiscal equilibrium Fueled by pass-through effects of exchange rate depreciation as the Balance of Payment (BoP) came up short Addressing Key Issues Fiscal Deficit  Cedi Depreciation and Inflation Increase  External Pressures  Broaden tax base and strengthen revenue collection Wage containment, curb on public expenditure Oil production exceeds target and cocoa sales at higher prices Monetary policy tightened Greater oversight of the foreign exchange market Proactive public debt management Addressing donor concerns and monitoring disbursements In-country Gas plant expected to feed power stations by Q4-2014 Ghana not yet affected by Ebola Virus Disease but on high alert Ghana has approached IMF for policy support and BoP funding Budget realignment and structural reforms Macro prudential measures

10. 2003-2006 PRGF2009-2012 ECF2014 Article IV“Home-Grown Programme” Tax Policy and Revenue Administration VAT rate increase Increase in Road Fund Levy Debt Levy for Tema Oil Refinery (TOR) Debt Extension of National Reconstruction Levy Creation of a large taxpayers unit National Fiscal Stabilization Levy Royalty rates increased Ad valorem excise duties on tobacco and beverages Administration reforms Higher real estate tax rate Reconsideration of windfall tax Increase in ad valorem tax on fuel Higher excises Streamlining of tax exemptions and administration VAT increased and base broadened Road fund and special import levy National Fiscal Stabilization Levy Change in petroleum tax to ad valorem Environmental tax Increased withholding tax Free zone income tax review Public Expenditure Management and Commitment Control Systems upgrades to cover key Ministries Personnel audit Implement automatic price adjustment for petroleum pricing Systems upgrades to cover key Ministries Civil service payroll audit Freeze on issuing commitment certificates for new investment projects Time-bound targets for removing subvented agencies from government payroll Multi-year wage agreements Review and streamlining of allowances Not replacing staff in areas of overstaffing Ghana Integrated Financial Management Information System (GIFMIS) fully in place New HR management system Weaning off subvented agencies Payroll system upgrade and audits Net freeze on employment in some sectors Moratorium new projects Regular fuel and utility price adjustment Debt Management Fiscal policy focused on reduction of domestic debt Adopt a debt management strategy Full debt management strategy Plan to move to recovery schemes for commercially viable projects Emphasis on paying for counterpart funds to fast-track disbursement of existing loans Previous Experience and Recommendations Have Shaped Current Policies A historical comparison indicates that Ghana’s current home grown measures are built on and conform to the IMF’s recommendations 10 Timeline view of Ghana’s Historical Engagement with IMF Ghana implements and consults IMF on its “home-grown” programme Economic Reform and Structural Adjustment Programmes (ERP/SAP) with IMF Ghana becomes member of IMF IMF grants Ghana a US$581.28 million Extended Credit Facility Ghana requests initiation programme discussion with IMF HIPC Decision Point 19571999-2002 Feb 2002 2003-20062009-20122014 1983-1999 IMF grants Ghana a US$209 million Enhanced Structural Adjustment (ESA) Facility US$258 million Poverty Reduction and Growth Facility 2013-2017

11. Support Requested from IMF To support the ongoing rebalancing, Ghana has approached the IMF for support in addressing current challenges Ghana submitted its “home-grown” programme to the IMF board during the Article IV consultations in 2014 and received feedback from IMF on how to improve the home-grown programme Ghana requested formal support from the IMF in early August to initiate discussions on an economic programme that could entail receiving policy and credit support from IMF The IMF Programme, when agreed, should enhance more significant and durable consolidation over the medium term and provide policy tools to manage volatilities and productivity Ghana’s Request Full mission to arrive in country in September to initiate discussions Earliest expectation is that any agreed Programme might be ready for IMF Board approval before end of 2014 Timelines Ghana’s Commitment Ghana is committed to reaching an agreement with IMF as it has always done Ghana has already begun preparing to receive the IMF mission and is targeting the end of 2014 to reach an agreement to a medium term programme of policy support [should be able to be in place before the end of 2014 Ghana has a long history with IMF and has a track record of fulfilling IMF programme requirements Expected Impact Ghana is seeking a funded IMF program that would provide temporary balance of payments support and encourage resource flows from our development partners Ghana to be eligible for both a stand-by arrangement or concessional funds via an Extended Credit Facility (ECF) Previous IMF program was a three-year ECF under which IMF provided Ghana with US$581.28 million 11

12. A Beacon for Democracy Rising Middle Class Advantage Diverse Economy and Focused Approach to Address Challenges Committed to fiscal reforms and development agency support to tackle short term pressures Economic diversity supports the long-term outlook for Ghana, including moving into value-added sectors such as gas-processing Ghana benefits from a relative diverse domestic economy with services sector which accounted for an estimated 49% of GDP in 2013 Robust framework for managing oil wealth ensures that oil revenues are put to productive use (Petroleum Revenue Management Act (PRMA) and Ghana Petroleum Funds) Ghana’s Medium-Term Prospects Remain Bright 12 One of Africa’s emerging oil exporters New hydrocarbon projects coming on-line (including second FPSO, TEN, Sankofa fields) Gas production expected in Q4 2014 2nd largest producer of cocoa and among top 10 gold producers globally Strong political stability and government effectiveness promote growth Improved regulatory quality and anti- corruption measures encourage investments Large middle class at 47% of the total population Outranks peers on most measures of human development Evidence of successful poverty reduction A Growth OutperformerAn Emerging Commodities Powerhouse One of the fastest growing countries globally with 13 consecutive years of robust growth above Sub- Saharan Africa average Nominal GDP has more than doubled since 2006 Growth of over 7% in 2013 despite challenges Despite current challenges, Ghana’s robust fundamentals will support continued inclusive development and high growth *TEN- Tweneboa-Enyera-Ntomme *FPSO- Floating production, storage and offloading vessel

13. OperatorDiscoveriesHydrocarbon TypeStatus GNPCEbonyCondensate/GasMarginal Tweneboa-1Gas CondensatePlan of Development Tweneboa-2OilPlan of Development Owo/Enyenra-1OilPlan of Development NtommeOil & GasPlan of Development WawaOil & GasExploration Odum-1Heavy OilMarginal Teak-1Oil & GasAppraisal Teak-2GasAppraisal Banda-1OilMarginal Mahogany DeepLight OilAppraisal Akasa-1Light Oil & GasAppraisal Sankofa-1GasAppraisal Completed Gye Nyame-1GasAppraisal Completed Sankofa EastOil & GasExploration Paradise-1Oil & CondensateExploration Hickory NorthOil & CondensateExploration AlmondOil & CondensateExploration BeechOilExploration PecanOilExploration PN-1OilExploration CobOilExploration Dzata-1Oil & GasAppraisal New discoveries in 2013 adds up to a total of 28 new fields discovered. Gas also coming on-line in Q1-2015 Ghana’s Oil Sector to Boost Future Growth TEN Project: Recoverable reserves of 245 mmbls of oil and 365 bcf gas. First oil expected in 2016/ 2017 Sankofa – Gye Nyame Project: 116mmbls of oil and 1,110bctf gas. First oil expected in late 2016 / early 2017 Western Corridor Gas Project: Pipelines installed and tie-in to the Jubilee floating production, storage and offloading vessel (FPSO) in Q4 2014 Will supply 120 mm btu gas daily to VRA to fuel thermal power plants Funded by a US$850mn loan from CDB and US$150mn counterparty funding from Government of Ghana New Discoveries: 2 new discoveries in 2013 at Cob and PN-1 fields World-class partners helping to deliver key projects As at June 2014 Proven Oil Reserves (mnboe) 1,284 Proven Gas Reserves (Bcf) 2.177 Snapshot of current reserves Source: GNPC 13 Post-Jubilee discoveries being developed with world-class partners *TEN- Tweneboa-Enyera-Ntomme

14. 2. Economic and Policy Update

15. Growth Steady but Macro Challenges Persist 15 2012 Actual 2013 Projected 2013 Outturn 2014 Projected* Real GDP Growth (%)8.88.07.1 Headline Inflation (end of year %)8.88.913.513.0% (+/-2%) Revenues (Ghs mn)16,66822,53319,47226,230 Expenditures (Ghs mn)25,31730,54428,92636,358 Budget Deficit (% GDP)(11.5)(9.0)(10.1)(8.8) Public Debt (% GDP)48.0-55.8- Current Account Deficit(4,922)(5,337)(5,704)- Gross International Reserves (US$ mn)5,349-5,632- Reserves (Months of Import Cover)3.0 3.13.0 GHS:USD Exchange Rate (period end)1.88-2.20- Although growth has remained strong, macroeconomic headwinds and fiscal challenges persist and Ghana is now engaging the IMF on implementing a Programme to help realign the economy Source: Budget Statements 2013 and 2014 * Supplementary Budget 2014

16. Curbing Fiscal Deficit is a Key Focus for Ghana Targeted action improved Ghana’s fiscal situation with signs of improvement seen in H1 2014 Revenue pressures and Cedi depreciation effect on expenditure figures compounded the fiscal and current account deficits Key pressure points identified Revenues (% of GDP)20122013Comments Total revenue22.24%20.83% Income & Property Taxes7.39%6.74% Economic headwinds resulted in reduced domestic activity which led to shortfalls in tax revenues Taxes on Domestic Goods & Services5.62%5.17% International Trade Taxes3.69%3.39%International trade taxes came in below budget due to lower import volumes Non-Tax Revenue3.99%4.73%Non-tax revenue trending higher to provide much needed buffer Grants1.55%0.79%Slower disbursement of donor grants exacerbated the deficit Expenditures (% of GDP) Total expenditure27.94%29.38% Compensation of Employees9.58%10.14%Higher than expected wage bill due to single spine salary structure related arrears Goods & Services1.76%1.55%Cost-cutting measures which resulted in a smaller goods and services bill Transfers (subsidies and grants to govt units)5.29%5.64% Macroeconomic and external pressures led to an increase in interest payments and transfers Interest Payments3.25%4.70% Capital Expenditures (Total)6.63%6.49% Prudent management of capital and other expenditures but avoid curtailing growth Others1.43%0.85% 16 Source: Ministry of Finance, 2014 Mid-Year Budget Review Statement Fiscal deficit (% of GDP)

17. VAT increase of 2.5 percentage points and a broadening of the VAT base Withholding tax on commercial rent now 15% from 8% Broaden tax base and remove inefficiencies A proposal of a moratorium on public sector wage increase in 2014 (with only a COLA uplift) Net freeze on employment into some sectors of the public service Aggressively manage public sector wage bill Tax Reform Wage Measures Strengthening expenditure management through GIFMIS Restrain utility and petroleum subsidies Reduce the public sector wage bill as a share of tax revenue Reduce “ghost” workers via payroll audits and electronic payroll platforms (ESPV) Curb and streamline public expenditures Realign Expenditures Move to a credit and refund system from upfront exemptions Ghana Investment Promotion Centre (GIPC) Act being reviewed to reduce exemptions Strengthening tax compliance through electronic platforms (TRIPS) Minimize abuse, tax evasion and tax avoidance Exemption Reduction Focused Action to Reduce Fiscal Deficit in 2014 17 2014 Budget introduced a number of policy initiatives, which have been implemented, to control the deficit Source: A Policy Statement on the Ghanaian Economy, April 1, 2014 Stricter programme-based budgeting process and fiscal decentralization being adopted

18. Pay Policy - Key Deficit Driver is Being Tackled 18 Wage Negotiations Single Spine Salary Structure (SSSS) cost has been higher than expected due to legal challenges within Ghana and union negotiations Public sector wage containment to manage down costs going forward – negotiations with labour ongoing with encouraging signs both for this year and medium term Wage freeze in inflationary environment lowers costs considerably – with only extra cost one-off Cost of Living Allowance (COLA) negotiated in May 2014 Committed to reducing level of wages as a percentage of revenue Removing Agencies from Payroll 12 agencies have been identified as able to independently meet personnel payments Recruitment and Replacement Hard constraints set on budgeted wages and salaries at Ministry level for recruitment and replacement of staff Payroll Audit Payroll audit to focus on Ghana Education Service and Ghana Health Service (1 st Phase) The review and headcount exercise extended nationwide IT and Systems Upgrades Payroll system upgrade Electronic salary payment vouchers (ESPV) to reduce the phenomenon of “ghost” workers and reduce the size of the payroll Successful negotiations have resulted in a salary freeze (apart from COLA) for government employees in 2014 while ongoing reforms aim to rationalise the government wage bill Source: 2014 Budget Statement, 2014 Mid-Year Budget Review Statement Wage bill overshoot has been one of the key drivers of the deficit

19. Budget On-Track for H12014 but Risks Remain 19 Tighter fiscal management is evidenced in H1 2014 with the wage bill under control and the overall deficit reaching -3.4% of GDP versus projected level of -3.6% of GDP GHS millionsProjectionOutturn Total Expenditure15,40113,532 Compensation of Employees5,3585,051 Use of Goods and Services421395 Interest Payments3,3143,243 Subsidies4058 Grants to Other Government Units3,2881,900 Social Benefits271 Others358460 Capital Expenditure2,5942,425 GHS millionsProjectionOutturn Total Revenue and Grants12,15311,145 Tax Revenue9,0448,630 Taxes on Income and Property4,2173,946 Taxes on Domestic Goods and Services3,0902,955 International Trade Taxes1,7371,729 Social Contributions82113 Non-Tax Revenue2,4702,061 Grants556342 Slower than expected growth and macro headwinds affected income taxes Compensation to employees below forecast Reduced expenditure to other government units and social benefits Slower utilisation of capital budget due to grant shortfalls and revenue constraints Jan – June 2014 Revenues largely in line with budget Jan – June 2014 Expenditure lower than forecast, despite overruns in interest payments Source: 2014 Mid-Year Budget Review Statement Total revenues and grants lower than expected signalling that risks persists

20. Tight Policy Stance to Deal with Rising Inflation 20 Inflation rose through H1 2013 with the combined impact of petroleum prices adjustment, the energy crisis and demand pressures from an expansionary fiscal stance during the 2012 pre-election period Seasonal food harvest results in marginal decline Reduction in subsidiaries for petroleum prices, transport fares and utility tariffs see inflation rise in Q4-2013 to 2014 20 Source: Bank of Ghana Inflation Outlook Report, February 2014, Bank of Ghana Pressures from Cedi depreciation, the fiscal deficit and effects of fuel price adjustments have pushed headline inflation out of the target band. As a result the BoG has maintained a tight policy stance Evolution of inflation (%) through 2013 reveals key drivers are non-food-related elements BoG used the Monetary Policy Rate (MPR) as a tool to address inflationary pressures BoG has raised MPR by 300bps since Dec 2013

21. Reining-In Cedi Depreciation Cedi has depreciated rapidly over the last 12 months Rate of depreciation is now expected to slow following targeted action from BoG Shortfalls in balance of payments and reduced confidence have led to currency pressures over the past year. However, a tightening of regulation and monetary policy is beginning to help to stem depreciation pace Monetary policy tools are the primary mechanism for managing the Cedi depreciation: MPR raised to 18.00% in March 2014 then to 19.00% in July 2014 Cash Reserve requirement raised by 200bps to 11.00% Net open position of banks lowered on both single currency and aggregate currency basis In order to complement these traditional measures, in Q1 2014, the Bank of Ghana implemented a series of enhancements to ensure transparency, streamline activity and reduce leakages in the foreign exchange markets: Strengthening the requirements for banks to repatriate export proceeds to local banks to ensure more foreign exchange supply to banks More stringent Anti-Money Laundering measures for forex bureaus giving greater oversight on retail demand Measures are being monitored to determine their efficacy and amended where necessary BoG deployed multiple measures to restore exchange rate stability Source: Bank of Ghana, Bloomberg (Jan 2014- Aug 2014) 21

22. In light of ongoing pressures in the economy since the budget was proposed, the Government presented in July a mid-year review and supplementary estimates for 2014. The supplementary estimates make adjustments to key macro targets to account for: Higher interest costs due to rising interest rates, borrowing and exchange rate depreciation Erratic gas supply from West Africa gas pipeline and delays in completing gas infrastructure Grant shortfalls Higher subsidy costs due to slower than expected implementation of automatic utility and petroleum price adjustments The cost of public sector wages including the COLA (Cost-of-Living Allowance) 2014 Targets and Medium Term Goals The Government is taking decisive action to correct current imbalances in the economy and ensure positive future prospects for Ghana Achieve and Sustain Macroeconomic Stability: Average GDP growth of 8.7% (2014-2016) and average non-oil real GDP growth of 8.2% Stabilization of public debt to GDP at 45% by 2016 Fiscal Consolidation: Gradual consolidation to achieve deficit of 6.0% of GDP by 2017 Programme-based budgeting and fiscal decentralization Wage bill reduction Shit to commitment-based budgeting and automation Monetary Policy: Inflation of 9.5% within a band of +/- 2 percent Gross international reserves ≥4 months of import cover Reduce BoG lending to Government to at or below 5% of current- year revenue Real GDP Growth: 7.1% from 8.0% End Period Inflation: 13.0% (+/-2%) from 9.5% Gross International Reserves: Unchanged at 3x months of import cover Fiscal Deficit: 8.8% of GDP from 8.5% of GDP 2014 Revised Targets Medium Term Goals Source: 2014 Mid-Year Budget Review Statement 22

23. 3.Foundations Remain Strong

24. RankCountryScore Change since 2000 1Mauritius82.97.3 2Botswana77.65.6 3Cape Verde76.76.0 4Seychelles75.05.5 5South Africa71.30.6 6Namibia69.52.3 7Ghana66.85.3 8Tunisia66.04.4 9Lesotho61.97.7 10Senegal61.04.3 A Beacon of Democracy in Africa 24 Ghana is one of the most stable and best governed countries in Africa with an institutional maturity that provides the ideal foundation for future growth Source: Mo Ibrahim Index 2013, World Bank 2013 Ease of doing business survey, World Bank Governance Indicators 2013 Sub-Saharan Average derived from top 20 most populated countries * Distance to Frontier measures economy’s performance against the highest performers globally. Frontier score is 100 Consistently Ranks in Top 10 for African Governance (Mo Ibrahim Index 2013) Ghana Continues to Outrank Peers Across All Measures of Governance YearRankChange 2014 67 10 2010 77 Economy Ease of Doing Business Rank Sub Saharan Africa Rank Mauritius201 Rwanda322 South Africa413 Botswana564 Ghana675 Seychelles806 Zambia837 Namibia988 Cape Verde1219 Swaziland12310 Ghana’s business environment achieves scores close to those for the highest performers Ghana Distance to Frontier*

25. Strong and Consistent Growth Profile 25 Robust and Consistent Nominal GDP Growth Growth continues to surpass sub-Saharan regional averages Well Balanced Sectoral Contributions to GDP with a Leading Services Sector 2009 2013 Despite challenges, a diverse domestic economy ensured that overall growth remained strong at 7.1% in 2013, with services boosting output Lower growth rate in 2013 can be attributed to disruptions in gas and hydro supply which contributed to power shortages, higher interest and inflation rates, declining world-wide prices of gold and cocoa (key exports for Ghana) as well as lower than forecasted Oil & Gas receipts Nominal GDP (GHS billions) Real GDP Growth (%) Source: Ghana Statistical Services, Ministry of Finance

26. Ghana’s large middle class, successful poverty reduction and strong human development indicators are evidence of broad based and inclusive development policy The Ghana Shared Growth and Development Agenda (GSGDA) serves as a policy kit for poverty reduction and inclusive growth As incomes continue to rise the large middle class will contribute to increased consumption, bolstering long-term growth Ghana’s infrastructure development plans aim to improve economic conditions in both urban and rural areas Strong Record of Poverty Reduction and Development 26 Ghana’s large middle class is evidence of successful poverty reduction via an inclusive growth agenda and bodes well for future development Source: Ghana Statistical Service, AFDB Middle Class Index, UN Human Development Index Steady income growth has propelled Ghana to middle income country status Ghana has one of the largest middle class populations in Sub-Saharan Africa Ghana still outranks African peers across most measures of human development

27. Viable External Position 27 Trade gap remains a challenge but narrowed in H1 2014 FDI and portfolio inflows which moderated trade deficit effects can still be improved Diversified and growing exports with gold, oil and agriculture as key contributors F.O.B Exports Value (USD millions) (USD mn) Portfolio flows (US$ millions) Prudent reserves management in face of macro challenges and seasonal FX inflows (months) (US$ mn) Source: Ghana Statistical Services, Ministry of Finance, Bank of Ghana (H1 2014 provisional data) *Gross international reserves at US$4.47 billion as at June 2014

28. An Emerging Regional Leader in Commodities 28 A diversified commodities endowment with traditional gold and cocoa, enhanced by rapidly developing hydrocarbon production provides a powerful foundation for future growth Ghana is one of the top 10 gold producers globally Ghana’s oil reserves are comparable in size to other new producers on the continent Rising crude oil production to be boosted by new wells Second only to Cote D’Ivoire, Ghana has a 20% share of the international cocoa market Source: BP Statistical Review of World Energy 2014, Ghana as per Government of Ghana, US Geological Survey, AfDB, FAO

29. Composition of Petroleum Receipts Distribution of Petroleum Receipts H1-2014 Distribution of Petroleum Receipts Item (US$ mn)20122013 Royalties150.7149.0 Carried and Participating Interest 390.4385.2 Surface Rentals0.450.80 Corporate Income Tax0172.2 Gas Receipt0- Total541.6707.3 Item (US$ mn)20122013 Transfer to GNPC230.9186.1 Net Receipts for Distribution to ABFA and GPFs 310.7520.9 o/w ABFA286.6204.9 o/w Ghana Stabilization Fund 16.9221.3 o/w Ghana Heritage Fund 7.294.8 Total541.6707.3 Robust framework for managing oil wealth ensures that oil revenues are put to productive use Oil Becoming Key Revenue Contributor 29 Source: BOG Petroleum Funds Report, June 2013 and Petroleum Holding Fund & Ghana Petroleum Funds Report Jan-June 2014, Budget Statement 2014 Ghana Petroleum Funds Balances (Jan-Sep 2013) US$ mn Opening Book Value AllocationsNet Income Closing Book Value Opening Book Value AllocationsNet Income Closing Book Value Ghana Stabilization Fund71.9221.30.8293.9319.0121.20.9264.7 Ghana Heritage Fund21.794.80.7117.2128.151.90.9181.0 Total93.6316.11.5411.1447.1173.11.8445.7 Ghana Petroleum Funds Balances (H1 2014) Item (US$ mn)H1-2014 Transfer to GNPC80.5 Net Receipts for Distribution to ABFA and GPFs 482 o/w ABFA204.5 o/w Ghana Stabilization Fund121.2 o/w Ghana Heritage Fund51.9 Total562.5

30. Sound Banking System 30 Well capitalized banks Non-performing loans have trended downwards despite macro challenges Due to BOG's robust supervision and sound policies, the banking system has improved in terms of capitalisation, soundness and liquidity, and the industry's expanding loan portfolio has improved in quality Under the current banking system, licensed banks may engage in both commercial banking and investment banking There are currently 27 universal banks which are diversified in geographic origin, corporate character and reach in the global financial markets. In addition to the universal banks, Ghana has a rural banking system in which 139 Rural and Community Banks (RCBs), which are licensed only for domestic banking, operate throughout the country Opportunities still exist to deepen the banking sector as only approximately 25% of the country's population has bank accounts Robust regulatory supervision of the banking sector Regulatory Minimum of 10% Source: Bank of Ghana

31. 4.Financing for Growth

32. Overall Debt Profile Still Manageable but Domestic Interest Rates Remain High Debt has risen due to fiscal overruns in recent years. However, Ghana needs to access more cost effective USD market funding in view of high domestic rates to better manage its interest expenses Debt has increased steadily with an equal split between domestic and external debt External debt is 100% long term and largely concessional (March 2014) Source: Ministry of Finance 32 Domestic yields remain elevated There is a need to curtail interest expense by limiting domestic borrowing Selectively Tap External Markets Tap international bond markets to reduce reliance on short-term, high cost domestic debt Financing CAPEX Long-term debt to finance CAPEX via extended domestic yield curve and selective use of the Eurobond markets Liquidity Management Utilisation of short-term debt for liquidity management purposes and less for capex On-Lending and Escrow Policies Ensure that cost of debt service is managed in commercially viable projects through implementation of matched on-lending and escrow account policy Loans to Priority Projects National priority project registry developed to better identify high-impact projects Ghana Infrastructure Investment Fund (GIIF) Channel a portion of petroleum funds directly into infrastructure development Strategic infrastructure development with private sector partnership Support debt sustainability by requiring commercially viable projects to be self-financing Establishment of Sinking Fund To fund debt redemptions and enhance debt sustainability GHS billions * The External Debt from 2012 has been reclassified to reflect the facility type per creditor *

33. Interim Funding Plans - Why Issue Now? 33 A number of high-impact projects in Ghana remain in need of funding for 2014 and beyond– so while capital expenditure has been reined-in, there are a limited number of capital projects that need to be financed now Ghana is seeking to implement a number of critical projects for this fiscal year and also retire some high interest domestic short term debt Many of these projects are high growth and postponing them would be harmful to economy The 2015 budget must be read in November, and any unfunded projects will be rolled over into next year – producing a drag on growth and distorting capital expenditure planning Funding these long term infrastructure projects with short term domestic debt is still prohibitively expensive IMF is already aware of the bond issue and an IMF programme does not prohibit us from external borrowing (example is the US$ 3billion CDB loan in 2011) Why Now? Projects Have Been Carefully Selected Projects that will help sustain high growth even during the period of fiscal consolidation Focus on infrastructure projects that will form backbone of economy for next decade in sectors such as power, energy, roads, water, housing and transport Selection of projects where funding unlocks counterparty funds with development partners, increasing the impact on the economy partners include the World Bank and the United States

34. Proposed Transaction Terms 34 IssuerThe Republic of Ghana Issuer RatingsMoody’s: B2 (Negative) / Fitch: B (Negative) / S&P: B (Negative) Format144A / Reg S StatusSenior Unsecured CurrencyUS Dollar SizeUSD [ ] million Tenor[ ] years Expected Issuer RatingsMoody’s: B1 / S&P: B / Fitch: B Use of Proceeds Capital expenditures to priority infrastructure projects and repayment of short term domestic debt ListingApplication to list at Irish Stock Exchange Minimum DenominationsUS$200,000 + US$1 Governing LawEnglish law Joint Lead ManagersBarclays Bank PLC, Deutsche Bank AG, Standard Chartered Bank

35. 5.Conclusion

36. A Beacon for Democracy Rising Middle Class Advantage Diverse Economy and Focused Approach to Address Challenges Committed to fiscal reforms and development agency support to tackle short term pressures Economic diversity supports the long-term outlook for Ghana, including moving into value-added sectors such as gas-processing Ghana benefits from a relative diverse domestic economy with services sector which accounted for an estimated 49% of GDP in 2013 Robust framework for managing oil wealth ensures that oil revenues are put to productive use (Petroleum Revenue Management Act (PRMA) and Ghana Petroleum Funds) Ghana’s Medium-Term Prospects Remain Bright 36 One of Africa’s emerging oil exporters New hydrocarbon projects coming on-line (including second FPSO, TEN, Sankofa fields) Gas production expected in Q4 2014 2nd largest producer of cocoa and among top 10 gold producers globally Strong political stability and government effectiveness promotes growth Improved regulatory quality and anti- corruption measures encourage investments Large middle class at 47% of the total population Outranks peers on most measures of human development Evidence of successful poverty reduction A Growth OutperformerAn Emerging Commodities Powerhouse One of the fastest growing countries globally with 13 consecutive years of robust growth above Sub- Saharan Africa average Nominal GDP has more than doubled since 2006 Growth of over 7% in 2013 despite challenges Despite current challenges, Ghana’s robust fundamentals will support continued inclusive development and high growth *TEN- Tweneboa-Enyera-Ntomme *FPSO- Floating production, storage and offloading vessel