Newly elected President John Kufour has promised to be more business friendly and accelerate economic reforms. This may sound like typical rhetoric of an incoming administration, but his party's strong ties to the local business community may give these pledges some credence. That's good news for entrepreneurs kept down by the previous government - and bad news for the old regime's cronies

Ghana's new President John Kufour is saying all the right things. Since assuming power on January 7, after beating the prot?g? of former President Jerry Rawlings in second round elections, he has vowed to crack down on corruption, tighten fiscal policy, and build a cooperative relationship with the private sector.

Cynics might dismiss this as the usual empty promises of a new administration. But the ascendancy of Kufour will undoubtedly mean major changes for the business sector. His New Patriotic Party (NPP) is strongly tied to the country's indigenous entrepreneurial elite, a group that suffered under Rawlings.

While Rawlings' government was closely associated with IMF-supported reforms and is credited with turning around a moribund economy, its relationship with much of the local business community was severely strained. Upon seizing power in 1981, Rawlings' military junta launched an aggressive anti-corruption campaign that quickly turned into a witch-hunt, often equating any wealth at all with wrongdoing. Bank accounts were frozen, legitimate businesses closed, and prominent business leaders exiled or jailed.

The arrival of the IMF in 1983 and the return of civilian democracy in 1992 made things only slightly better. Rawlings and his inner circle continued to view most Ghanaian businessmen as a potential threat - no doubt fuelled by well-known links between many business leaders, the NPP, and the government Rawlings originally deposed. (Foreign investors were considered less threatening politically and thus fewer barriers were erected against them.)

Kufour's win heralds the return of this local business elite to power. Presumably, this will translate into more business-friendly policies, or at least an end to prevailing animosities.

Ashanti Goldfields in particular may benefit. Ashanti was the national gold mine until privatization in 1994 and remains an important symbol of national pride. Yet in recent years - as the company faced low gold prices and a dangerous hedge book, which nearly forced liquidation in October 1999 - the company has battled openly with the government. Most strikingly, Rawlings and Ashanti chief executive Sam Jonah exchanged vicious insults in the press.

With Kufour's arrival, Ashanti should get a fresh start. The new president hails from the Ashanti region and is extremely keen to see the company rebound. Kufour has already hinted that he will be more flexible in helping to find a long-term solution to the company's financial straits. (The government retains a 20% stake and a golden-share veto, which Rawlings used to limit Ashanti's maneuverability during its cash crisis.)

But not all of the business sector will be happy. Officials at state-owned companies and those that rely heavily on government contracts are probably in for a shock. In his first day in office Kufour froze all public sector contracts not yet signed, promising to review the procurement process. In an interview with the Financial Times last week, he also said he would examine what waste could be trimmed from parastatals, suggesting that the gravy train for those profiting from political connections could soon end. Kufour specifically named the loss-making national oil and gas company, headed by Rawlings confidante Tsatsu Tsikata, as a target for investigation.

None of this will be easy. Many of Rawlings' pals have carved out powerful niches not only in the military and civil service, but also in business. Kufour will also have to reconcile his high-minded promises for free education and other goodies with harsh financial realities. And, as with any incoming government, jobs will have to be provided for his boys - or, in this case, his Big Men - who have been outside the halls of influence for two decades.

Yet if Kufour can create a more amenable environment for the local private sector, then he will go a long way toward accelerating economic growth - and delivering on some of his campaign promises. If, on the other hand, he falls into the familiar African pattern of simply replacing his predecessor's cronies with his own, then he will miss a golden opportunity. And in Ghana, missing gold is never taken lightly.