Mr Kufuor, a respected figure and one of the few African leaders to bow out gracefully after two four-year terms in office, is the third longest serving leader of Ghana after Mr Jerry Rawlings and Mr Kwame Nkrumah, the country's first president.

The handover will be the second alternation of power between two rival parties in a decade. It will also mark the second time a democratically chosen leader peacefully hands over to another.

Mr Atta-Mills, 64, was to be sworn in by Chief Justice Georgina Wood at a ceremony to be attended by several African heads of states and a representative of the former colonial power, Mark Malloch-Brown, the British secretary of state for Africa.

Among the African leaders expected to attend were Laurent Gbagbo from Ivory Coast, Liberia's Ellen Sirleaf Johnson and Blaise Compaore of Burkina Faso.

Accra's Independence Square has in recent days been spruced up for the ceremony and decorated in Ghana's national colours of green, yellow, red and black. Dozens of white marquees have been erected to take some 5,000 invited guests.

Mills becomes president of Ghana, best known for its cocoa and its gold, after narrowly beating his rival by less than half a percentage point in a bitterly fought run-off.

After the pomp and fanfare, the soft-spoken British-educated law professor, faces the tough task of improving the standards of living of a people whose expectations have been raised by the recent oil find.

Mr Mills who ran his campaign under the slogan 'A Better Man for a Better Ghana", is sweeping into office amid a credit crunch that will see capital inflows dry up and export revenue drop.

Although Ghana - the home of former UN secretary general Kofi Annan - is hailed as a model of prosperity and stability in West Africa, Mr Mills, says the economy is not faring well at all.

'The parliament is virtually evenly divided, meaning he (Mr Atta-Mills) may not get an easy majority in terms of passing bills into law and getting parliament to support all his acts,' outgoing president Kufuor said Tuesday, while bidding farewell to some local traditional chiefs at his office.

With only a slim parliamentary majority, Mr Atta-Mills will need to be flexible and to govern in a transparent and accountable style, Kufuor said.

Mr Atta-Mills had previously lost twice to Kufuor, in 2000 and again in 2004.

Mr Atta-Mills rose to prominence in 1997 when former leader Jerry Rawlings named him vice president - a position he held until the former coup leader-turned-elected president made way for Kufuor after the 2000 election. -- AFP