By Richard Valdmanis and Kwasi Kpodo

ACCRA (Reuters) - Ghana electoral workers tallied ballots on Saturday in elections troubled by technical hitches, but which authorities hoped would ultimately burnish the country's reputation as a model African democracy.

Ghanaians had queued up for a second day in parts of the West African nation to vote after hundreds of newly-introduced electronic fingerprint readers - used to identify voters - malfunctioned.

The decision to extend polling into Saturday was broadly accepted by voters and rival parties, easing worries the problematic poll would trigger the kind of street violence common during elections in West Africa.

"I was happy they extended the time," said Yaw Krampah, a 29-year-old metal worker, as he waited in line on the outskirts of the capital Accra. "But I couldn't sleep at all - this election means so much to me."

Three decades of peace combined with a recent oil-driven boom have made Ghana a darling among investors who say its growth prospects contrast sharply with the economic woes of Europe and the United States.

President John Dramani Mahama, who replaced the late John Atta Mills after his death in July, faces main rival Nana Akufo-Addo of the New Patriotic Party (NPP), who has vowed to provide free education and root out graft.

Early tallies from polling stations point to a tight race, raising the prospect of a repeat of the near-deadlock of the 2008 elections, in which Mills defeated Akufo-Addo in a run-off with a margin of less than 1 percent.

GLITCHES AND DELAYS

Hundreds of electronic fingerprint readers malfunctioned on Friday, causing some people who had waited hours to vote to burst into tears as they were told they had to come back the next morning.

An election commission official said 1.6 percent of the country's 26,000 polling stations had to reopen on Saturday to clear the backlog, adding that officials would launch an investigation into why the machines broke down.

"We are trying to find out what caused this situation," said spokesman Sylvia Annor.

Results are expected within two days with a second round possible at the end of December if no one wins an outright majority. Ghanaians are also electing a parliament, where Mahama's National Democratic Party has enjoyed a slim majority.

"I would like to ask the Ghanaian people to remain very calm...We are on course, and there should be no apprehension," Mahama's campaign director Elvis Afriyie-Ankrah told a news conference.

"Our people should be law-abiding, they should follow the rules of the game...The electoral commission will speak, and when it speaks, we will listen," he said.

A spokesman for Akufo-Addo said late on Friday that the election could still be free and fair if voters delayed by technical glitches are given the opportunity to vote.

Election observers said the poll remained credible.

"Yes, there have been problems, but we are generally satisfied with the process," said Miranda Greenstreet, the co-chairman of Ghana's Coalition of Domestic Election Observers, which has deployed 4,000 poll-watchers.

OIL HOPES

Ghana has had five peaceful and constitutional transfers of power since its last coup in 1981, in stark contrast to the turmoil that surrounds it in the region.

Neighbouring Ivory Coast tipped into civil war last year after a disputed 2010 poll and regional neighbors Mali and Guinea-Bissau have both suffered coups this year.

"These elections are important not just to Ghana but for the growing number of states and actors seeking to benefit from increasing confidence in Africa," said Alex Vines, Africa Research Director at Chatham House.

Akufo-Addo, a trained lawyer and son of a former Ghanaian president, has criticized the ruling party for not creating jobs and easing poverty fast enough, and says he would use oil money to pay for free primary and secondary education.

Mahama, meanwhile, says he aims to boost Ghana's per capita annual income to $2,300 by 2017 - double that in 2009.

In a country where campaign messages rarely influence voting choices, many believe most of the 14 million voters will cast their ballots based on ethnic, social or regional ties. Mahama comes from Ghana's north while Akufo-Addo is from the east.

(Writing by Richard Valdmanis; Editing by Joe Bavier and Stephen Powell)