Ghana Economic Growth | Economics Dissertations

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Ghana. What are you doing here? An analytical review of the effect of conflict, politics and resources on the economic growth of the country.

1.0. Introduction

1.1. Ghana in 1957

Some fifty years ago, Dr Kwame Nkrumah stood before a throng of cheering fellow Ghanaians, proclaiming independence from the British Empire. “At long last, the battle is ended”, he bellowed triumphantly, “Ghana, your beloved country is free forever” (Nkrumah, 2007).

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Such were the words that signalled the end of British rule and the start of a new era for the former Gold Coast, which had succeeded in becoming the first independent nation in Africa. By doing so, she set a hopeful precedent to other former colonies which would shortly and eagerly follow in Ghana’s footsteps.

For the “model colony” the future, at this point, looked bright. As a nation with “advantages of wealth and attainment unrivalled in topical Africa” (Meredith, 2005, 22), Ghana was expected to take the world by storm, swiftly join the ranks of the industrial nations, and proudly serve as a shining example to the post-colonial world (Dzorgbo, 2002, 2-3).

There was nothing far-fetched about this optimism. She was, in 1957, one of the most economically advanced countries in sub-Saharan Africa. Income per head was double that of the Tanganikans, substantially more than the Zambians, and almost on a par with the Rhodesians (Alpine and Pickett, 1993, 64). Contributing to this private wealth was the lucrative trade in the export of cocoa whose production Ghana dominated by this time. Such a presence within the international commodity market helped shore up the already substantial amounts of foreign reserve her government held.

Yet all of this failed to happen. Several years after independence, Ghana’s economy began to totter, her foreign reserves evaporated, and reckless public spending placed the country on a financial precipice – all this by the end of the 1960s (Konadu-Agyeman, 2000, 473). There was to be no let-up.

The economic downturn continued into the 1970s where Gross Domestic Product (GDP) fell more than three percent each year. Price inflation averaged at around 50 to 100 percent. Worse was to follow. By the beginning of the 1980s, inflation reached more than 100 percent, GDP levels fell further into the abyss, and one of the worst famines hit the country (Sandbrook, 1982, 2). Nothing, it now seemed, could go right. She had little choice but to solicit help from abroad.

1.2. International intervention and neo-liberalism

Following the implementation of economic restructuring programmes, created by the International Monetary Fund (IMF) and the World Bank, Ghana finally emerged out of her desperate trough in 1983. Inevitably questions were asked. Why had Ghana struggled for so long? How could she so comprehensively dash the hope and goodwill in the immediate years after independence?

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