Country Study 1

Set against a background of almost continuous economic decline since independence in 1957, the stabilization and adjustment programme pursued by Ghana since 1982-83 is a qualified but also a considerable success. Certainly it has achieved stabilization and the first steps towards recovery. Some progress has also been achieved in rehabilitating basic services - essential for human, social, productivity and longer-term development reasons. But the sustainability of the economic recovery remains far from assured.Real consumption per capita in Ghana has fallen by more than one-third from its peak in 1960. The growth of food production has lagged behind the growth of population for 25 years. Wages probably cover only a half of the typical household expenditure. Incomes are supplemented by many illicit activities: moonlighting, taking bribes, stealing information and products, sending women and children out to work for longer hours, and at the extreme the 'pawning' of children - i.e. selling children a family cannot support. Corruption is widespread throughout the public sector: investigations, tribunals, firings, trials and sentences abound but at best corruption is being beaten back very slowly.The government's ability to provide benefits - however defined or distributed - declined rapidly in the 1970s. During much of the decade there was no economic policy in any coherent or operational sense. The infrastructure of transport, communications and public services were falling apart.As the following paper makes clear, the economic decline stems from the fall in exports and the prolonged overvaluation of the cedi - related in turn to domestic political forces. The tendency to overtax and underpay cocoa producers is linked to the fact that the main cocoa-growing regions (Ashanti and Brong Ahafo) have been 'outsiders' in every government coalition except one. Ghana now faces debt service ratios of over 65 per cent for the foreseeable future. But no overall, coherent strategy for raising exports to meet minimum import requirements has been articulated.The paper by Prof. Green draws many lessons from this experience not only for Sub-Saharan African countries but also for the World Bank and IMF. In his view, these lessons are probably applicable also to many economies in Asia, the Pacific, the Caribbean and Latin America.