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Economic

Growth and Development


Strategies in Ghana:
A case study

April Allison

(Image: CIA World Factbook)

U n i v e r s i t y o f N o r t h T e x a s | S p r i n g 2 0 1 2

Growth & Development Strategies in Ghana A. Allison


May 2012

Abstract
Propelled by foreign aid, investment, and counsel, Ghana steadily moves
toward increased social development and economic growth by fostering
efficient sustainable agricultural practices, education, gender equity, and the
expansion of its infrastructure. Although Ghana currently maintains an
approximate 11% unemployment rate, as the economy continues to mature,
debt may be reduced and more government spending may be directed
toward supporting programs that nurture and sustain social improvements.

Background
Ghana, located in West Africa, is nestled between Cte dIvoire, Togo,
and Burkina Faso, and is bordered by the Gulf of Guinea. Historically, Ghana
has consisted of several independent kingdoms, including:
Gonja,
Dagomba, Asante, and Fante. The Fante depended upon the British for
protection from the Asante. In 1872, the British purchased Elmina Castle, a
Dutch fort, which stripped the Asante of their only access to the sea for
trade. This then prompted an attack in 1873 by the Asante in an attempt to
re-establish trade on the Guinea coast. In 1874, allied with the Fante
states, the British defeated the Asante in order to suppress any further
invasions (Britain and the Gold Coast).
After having gained its independence in 1957, Ghana, still upholding a
decentralized government, aspired to secure improvements in its economy
and the quality of life of its people. Through government policies, local
programs, and foreign initiatives, Ghana strives for both economic growth
and development. Through international and domestic cooperation, Ghana
hopes to break the vicious cycle to which most Less Developed Countries
find themselves, seeking a better standard of living for its people.
At the turn of its independence, Ghana showed promise in achieving
these aspirations as it had significant natural resources, such as gold and

Growth & Development Strategies in Ghana A. Allison


May 2012

cocoa, and had an encouraging educational system in comparison to the rest
of Africa. Utilizing its resources, Ghana temporarily established a role in the
global market as a leading cocoa producer. Due to its interconnectedness to
the global market, however, and fueled by corruption and political mishap,
this dependence on a primary product export prompted the Ghanaian
economy to collapse in the 1970s (Ghanas Story).
A major contributing factor of this economic decline was the plummet
of cocoa prices in the mid 1960s. Like a domino effect, a reduction in world
cocoa prices led to less foreign revenue entering into Ghana. This decline in
foreign revenue added difficulty to Ghanas repayment of foreign loans,
leading Ghana to take out more loans (Modern Ghana). Swept up in a
vicious circle, Ghanas debt increased rapidly as production fell.
This
economic decline continued into the early 1980s, having endured a 66%
drop in cocoa production by 1983. Currently, Ghana has an external debt of
about eight billion dollars (CIA World Factbook). Over the next 25 years,
Ghana showed miraculous economic and agricultural growth as cocoa
production surpassed all prior levels of output. See Figure 1 on page 10.
Staple food output rose faster than population growth, curbing
malnourishment.

Introduction
The growth in the supply of Ghanaian fruits and vegetables has been
quite beneficial as it has provided food for local consumption, and, thanks to
high yields, has also allowed for exportation to foreign markets. This food
surplus is notable as many Less Developed Countries are burdened with the
expense of importing foodstuffs or become dependent on donated food
supplies in the form of foreign aid; and many others are burdened with the
necessity of subsistence farming which tends to restrict individuals,
especially women, from acquiring education and paid work. Thanks to the
shift from subsistence farming to paid work, the Ghanaian labor force has
become more mixed. See Figure 2 on page 10. Some Ghanaians, however,
still rely upon subsistence agriculture due to insufficient means to acquire
the readily available food sources (Ghanas Story).

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May 2012

This food surplus is also advantageous as food shortages are common
in northern Ghana due to erratic rainfall and a short harvest season
(Integrated Approach), allowing the purchase of foodstuffs to be kept within
the borders. This economic and agricultural growth has also lessened the
percentage of people living in extreme poverty, slightly shrinking the
economic inequality, although it should be noted that an income distribution
gap is still prevalent in Ghana.
Participation in the global market has positively impacted the
Ghanaian economy through the combination of remittances and exports,
namely the exportation of fruits, vegetables, cocoa, and gold; additionally,
Ghana has recently added petroleum to its exports (CIA World Factbook).
Ghana began officially exporting oil in December of 2010. In the first
quarter of 2011, the exportation of crude oil accounted for around $484.2
million USD (Ghana Business News, Dogbevi).
Petroleum has created a new sector in the economy, bringing in
foreign revenue and investment, as well as stimulating job creation. Former
President J. A. Kufuor, in reference to funds generated by Jubilee Field
offshore drilling, asserted that, Oil is money and we need money to do the
schools, the roads, the hospitals (Joy Online). Apart from focusing on
economic development, Ghana has also implemented policies and has
received funding and foreign advice on promoting and sustaining social
growth, seeking better education and health for all of its citizens. Current
revenues in Ghana are estimated at $7.358 billion and are depleted by
$9.431 billion in expenditures, adding to the Ghanaian debt; however, it is
expected that petroleum exports will begin to relieve this debt, and will
shrink annual deficits.
The Organization for Economic Co-Operation and Development, or the
OECD, is a collective group whose mission is to promote policies that will
improve the economic and social well-being of people around the world,
including Ghana. Recently, Jeffrey Owens, head of the OECD Tax Centre,
advised against Ghanas continuing position as a tax haven due to its
geographic location, as it would be a prime location for corruption. Wilson
Prichard of the Institute of Development Studies backed this assertion,
claiming that, in the absence of a very strong regulatory framework and
very strong standards of transparency theres a particularly high risk that a

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May 2012

tax haven in west Africa, which is home to major oil wealth and high levels
of corruption, could facilitate large-scale corruption and tax evasion, and
pose a correspondingly large risk to good governance and economic growth
in the region. (Ghana Web) Advice from outside institutions, like the OECD,
is believed to be one of the main contributing factors facilitating growth and
development in Ghana.
Many of the transnational organizations influencing development in
Ghana employ multiple tactics or seek multiple objectives. The United
Nations Development Programme, for example, promotes economic growth
via economic policy, and promotes private sector expansion through
sustainable practices. The main goal of the UNDP is to achieve poverty
reduction via sustainable development through the use of environmental
management and energy efficiency. The UNDP is coordinating with both the
Environmental Protection Agency and the National Disaster Management
Organization to promote sustainable acts and preventative measures against
additional enablers of climate change as well as policies and strategies for
dealing with the consequences of climate change. This collective effort
promotes sustainable land management and warning systems against
factors that threaten human health and safety. The UNDP encourages the
reduction of energy waste and more efficient technologies, reducing Green
House Gas emissions (UNDP.org).
In addition to lending guidance in an array of affairs, many
International and local Nongovernmental Organizations also promote and
fund programs that foster development in Ghana. These organizations
promote, for instance, more efficient and sustainable agricultural practices,
education, and gender equity that will lead to social improvements in the
long run. Having learned from the ills of the Green Revolution and the
environmental degradation and social harm of industrialized farming, small
sustainable farms are promoted within Ghana. As a result, soils are not
deprived of organic material, and water-intensive irrigation projects have not
led to waterlogging, salinization, and desertification, as is the problematic
case found in many African countries. The government is also actively
seeking foreign investors for improvements to Ghanas infrastructure.
The National Food and Agricultural Show, or FAGRO, is an event held
in Ghana that gathers innovators in agribusiness and efficient agrarian

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practices and technologies, and spreads this information to the farmers of
Ghana. In addition to this organization, the African Green Revolution Forum
is concentrating its focus on several regions of Africa, including Ghana. For
2012, The AGRF plans to bring together Heads of State and government
ministers, business leaders, grass root organizations, farmers, global
thought leaders and numerous other inspiring and leading stakeholders to
discuss and debate current international and national efforts to secure food
security and drive transformative agricultural change and green growth on
the African continent (African Green Revolution Forum). According to the
official AGRF website, this years key focal points will include the following:
Climate change and sustainable agricultural practices; agriculture and
infrastructure investment needs; transformative agricultural partnerships, as
well as the role of smallholder farmers; agricultural trade and investment
environment; and science, technology and innovation (African Green
Revolution Forum).
The United Nations Food and Agriculture Organization also has a
presence in Ghana. In 1999, for instance, the FAO promoted simple but
more efficient agricultural practices. During the time span of May 31
through June 3 of 2011, the FAO held a workshop in Accra, the capital of
Ghana, on post-harvest loss reduction in West Africa (FAO.org). According
to the FAO sponsored video, Missing Food: The Case of Post-Harvest Grain
Losses in Sub-Saharan Africa, as much as 20% of grain harvested in SubSaharan Africa is lost as a result of pests and decay. The FAO projects that
this could feed 48 million people for one year. A reduction in these losses,
worth around $4 billion, would not only add to food security in Africa, but
would also be financially beneficial as grain prices continues to rise in the
global market. Simply put, a reduction in post-harvest losses would lead to
a reduction in expensive, imported grains, as, according to the FAO, these
losses are equivalent to roughly half of Africas annual grain imports.
The FAO encourages efficient practices that do not require additional
land or water. Farmers are encouraged to practice better drying and storing
techniques. Such techniques include the utilization of drying cribs, and
metallic silos and grain cocoons for storage. Additionally, women were
previously burdened with the task of manually grinding the grains, but
electric hammer mills have relieved them of this task. These hammer mills

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not only make work easier, but are also more efficient as grains may be
processed in mere minutes rather than hours, increasing production and
granting women more time to invest in their families and education (Missing
Food, Video).
Education is believed to be a major catalyst for development,
especially the education of women. John Dramani Mahama, the current
Ghanaian Vice President, understands the important role women play in
development. He recently stated that, No nation can move on without
emphasizing the education and emancipation of women. The number of
female entrepreneurs is Ghana is on the rise, as is the female literacy rate,
currently having reached 78%. Armed with education, and funded by
microfinance, women now account for an astonishing 50.1% of the labor
force. This is quite notable as women make up 50.2% of the population,
and typically women have less job opportunities in the developing world
(Gutierrez).
Apart from educational and employment opportunities, gender
equality in Ghana has been furthered by the the 1992 Ghanaian constitution
that banned all cruel and inhumane aspects of cultural and traditional
norms.
This constitution has supported a set of laws that protects
Ghanaian women from defilement, forced marriages, customary servitude,
female genital mutilation, abuse of widowhood rites and the practice of
banishment of witches.; these crimes against women are prevalent in
Africa and typically go unpunished in many developing countries.
Unfortunately, these crimes do still occur in Ghana, especially in rural
areas (Gender Equality and Social Institutions in Ghana). Although the
constitution is sometimes violated in relation to women, its existance is a
stepping stone toward increased equal rights. Women even hold 8.3% of
the seats of the Ghanaian National Parliament, giving women representation
in government. Again, a relatively small feat in comparison to the number
of seats held by men, but it does allow for a female voice to be heard in
parliament (data.un.org).
According to the short film, Why Women Count, forced marriage is
problematic in Ghana, despite laws. The video concentrates on one female
victim of forced mariage, Comfort Adongo. Kidnapped and sexually abused
at the age of 14, Adongo maintains a drive to better her life, and equipped

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with the backing of the Anglican Diocesan Development and Relief
Organisation, or ADDRO, she has begun to acquire an education and
stability. Marriage of girls under the age of 18 is illegal in Ghana, but this
law is rarely enforced; foreign presence and spotlight on Ghana, however, is
helping to lower this rarity. Forced marriage of girls as young as 8 years old
are still rampant in Ghana, adhering to old customs forbidden by the 1992
constitution (Why Women Count, Video). Apart from providing basic funds
for the acquisition of education for women like Adongo, the Anglican
Diocesan Development and Relief Organisation attempts to improve the
food supply, gender and reproductive health, malaria, disability
rehabilitation, and water and sanitation throughout northern Ghana
(Integrated Approach).
Another organization that promotes gender equity in Ghana is the
Womens Initiative for Self Empowerment, or WISE. This organization is a
local Non-profit NGO. WISE is dedicated to providing counseling and
support services to women and children survivors of violence and to ending
violence and sexual assault. In order to achieve this goal, WISE operates on
a three-prong strategy: response, economic empowerment, and prevention.
The response step is focused on providing multiple services. These
services include: counseling and support; training and capacity
development; research and advocacy; networking and collaboration;
organizational capacity building. The Economic empowerment step operates
under the WISE program:
Womens Economic Empowerment and
Development, or WEED.
This is a program that promotes economic
independence for survivors, drawing on the fundamental benefits of
integrating counseling, micro-credit schemes, skill training, and public
advocacy. And lastly, the third step of prevention is achieved through
advocacy and outreach campaigns to targeted communities, schools,
churches, correctional institutions and the public at large. (www.wiseup.org).
Many other organizations present in Ghana understand the
significance of gender equality and the burden of disease that many women
face, such as UN Women, previously UNIFEM. In Ghana, UN Women has
enhanced the participation and leadership of women living with HIV and
AIDS through a gender and HIV and Aids assessment, conducted by the UN,

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the Society for Women and AIDS in Africa, the Ghana AIDS Commission and
the Ministry of Women and Childrens Affairs. (UN Women: Africa).
Infrastructure is another key component of development. With foreign
investment and active Ghanaian participation in the global market, larger
and better quality airports are becoming a necessity.
The Canadian
Commercial Corporation is one foreign investor that seems keen on an
expansion of the Accra Airport. The current intention of this enlargement
plan is to increase the existing three million-passenger capacity to five
million (Ghana Airports).
The Institute for Infrastructure Development has noted the necessity
of infrastructural improvements in Ghana, and thus has decided to
contribute to the development of Ghana by implementing its services. This
organization believes that good infrastructure encourages additional foreign
investment, creates jobs, drives GDP growth, and improves private sector
competitiveness. (Institute for Infrastructure Development).
The goals of this institution include projects and improvements in
urban development, energy, transportation, environment, and water and
sanitation. This in turn promotes a better quality of life for the citizens
because investment in the [private] sector is the foundation on which
economic and social life are built. (Institute for Infrastructure
Development). Furthermore, this Institute has noted the importance of
infrastructure to industrialization, in which Ghana holds a comparative
advantage. This organization goes on to posit that improvements that
benefit infrastructure and industrialization will in turn help us extend our
limits in agriculture, manufacturing and services. (Institute for
Infrastructure Development).

Conclusion
Armed with a dense presence of foreign aid and investment, and
backed by natural resources, Ghana can continue to expand its economic
growth and reduce its current debt. Through investment of human capital
via education and gender equity, continued social development can be
achieved as well. Development policies also play a vital role in the future of

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May 2012

Ghana. For example, the implementation of fertilizer, and use of improved
varieties have led to an increase in cocoa output. Improvements in social
well being, such as access to affordable health care, will be a natural
outcome of economic development and growth. Moreover, access to preand post-natal nutrition has been proven to aid in brain development and
productivity of individuals. This greater capacity to achieve will lend to
greater productivity in the Ghanaian citizen, leading to even more economic
growth.

(Ghanas Story)

Figure 2: Labor Force

Labor Force
agriculture
industry
services

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