John Atta-Mills was sworn in amid ceremonial drumbeats as Ghana's new president on Wednesday in a peaceful handover after a slim election win that reinforces the country's image as a model of African democracy.

Speaking to a jubilant crowd of more than 20,000, Atta-Mills hailed the "dawn of a new era" at an outdoor ceremony attended by several African heads of state, including Nigeria's Umaru Yar'Adua, Sierra Leone's Ernest Koroma, and Senegal's Abdoulaye Wade.

Clad in a white gown draped with the traditional Kente cloth, the 64-year-old Atta-Mills took his oath of office at Accra's Independence Square, thronged with cheering crowds and hung in the national colours -- green, yellow, red and black.

"It is a dawn of a new era for Ghana and I hope to tap the experiences of the two former presidents ... to build a better Ghana," he said, referring to the outgoing John Kufuor and his predecessor Jerry Rawlings.

Four huge drums from Ashanti, the region from which Kufuor originates, occupied pride of place.

Two of the drums, which are reserved for presidential ceremonies, were three metres high and the drummers had to climb on scaffolding to beat them.

Atta-Mills served as Rawlings' vice president from 1997 to his exit from power after the 2000 election.

"During the elections Ghana's democracy was stretched to the limits but at the end of the day the sovereign will of the people prevailed," he said, referring to his less than half a percentage point victory against rival, Nana Akuffo-Addo.

"It will be my duty as president to heal wounds and unite our dear nation," he added.

Also sworn in was new vice president John Dramani Mahama.

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 Rawlings and Kwame Nkrumah, the country's first president.

Ghana, best known for its cocoa and gold and as the home country of former UN secretary general Kofi Annan, in 1957 became Africa's first independent nation.

The handover is the second time in a decade that power has switched between one of the country's two rival parties.

It also marks the second time a democratically chosen leader peacefully handed over to another.

But 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 a recent oil find.

And while the new president ran his campaign under the slogan "A Better Man for a Better Ghana", he takes office amid a credit crunch expected to see capital inflows dry up and export revenue drop.