Ghana’s economy: Is it 60 or 24 years of economic stability? (II)
On March 6, 1957, Ghana was declared independent by her colonial master, Great Britain. The declaration of independence freed Ghana from the shackles of colonial rule and slavery.
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However, 60 successive years down the line, it is difficult to determine economically whether Ghana is indeed 60 years or not. This write-up is a continuation of an earlier publication on the evolution of Ghana’s political development after independence and its impact on her socio-economic advancement and growth. Discussion in the previous feature ended on the National Liberation Council’s (NLC’s) approach to economic leadership.
PP’s economic approach
Incessant pressures from the citizenry compelled the NLC to organise elections and hand over to a democratically elected President (Government). In 1969, the NLC handed over political power to the Progress Party (PP) led by Dr Kofi A. Busia.
Dr Busia’s Government was formed in the 2nd Republic; like the NLC, the PP pursued market-oriented or neo-liberal policies – private sector focused; the PP sought to tackle inflation.
In 1971, the Dr Busia-led Government prepared an austerity budget which included the introduction of development levy; introduction of import taxes; trade liberalisation; withdrawal of subsidies; abolishing of free transport and free education; and devaluation of the Ghanaian currency (cedi) by 44 per cent.
The austerity measures of the Progress Party attracted public uproar; a large portion of the population was discontented with PP Government’s neo-liberal stance.
NRC/SMC’s economic approach
On 13th January, 1972, the Dr Busia-led Government was toppled by the National Redemption Council and Supreme Military Council (NRC/SMC). The NRC and SMC were led by Col Ignatius K. Acheampong and F. W. K. Akuffo. The NRC/SMC promised to propel Ghana’s economy to greater heights. The NRC sought to abolish the market-oriented economic approach.
Under the NRC, benefits to public sector workers were fully restored; the country’s currency (cedi) was revalued by 42 per cent; most of the country’s foreign debts were cancelled by the NRC – refused to pay; development levy was abolished; and efforts were made to achieve food sufficiency through Operation Feed Yourself (OFY).
The NRC’s economic measures gained immediate domestic popularity, but later worsened the nation’s economic position.
The NRC/SMC regime was believed to be characterised by corruptive practices; incompetence; economic mismanagement; siphoning of the nation’s limited resources, and diversion of substantial part of foreign exchange earnings from sale of cocoa.
AFRC’s economic approach
On June 4, 1979, the Armed Forces Revolutionary Council (AFRC) led by Flt Lt J. J. Rawlings toppled the NRC/SMC Government. A section of Ghanaians describes the 1979 Coup as the “1st Coming of J.J.” The AFRC succeeded in fighting economic mismanagement, corruption, and profiteering and exploitation. After cleaning the “mess” in Ghana’s economy, the AFRC supervised a Presidential Election in 1979.
PNP’s economic approach
The baton of leadership was passed on by the AFRC led by Flt Lt J. J. Rawlings to the People’s National Party (PNP) led by Dr Hilla Limann in September 1979. Dr Limann’s Government was formed in the 3rd Republic.
The PNP Government inherited weak state institutions; limited foreign exchange earnings; limited supply of goods; economic mismanagement under the NRC/SMC regime, and deteriorating social infrastructure.
Under the PNP, external assistance, including IMF loan were sought to revive the economy; negotiations with the IMF were opposed, vehemently, by pressure and labour (professional) groups such as the National Union of Ghana Students (NUGS), Ghana Bar Association (GBA) and Association of Registered Professional Bodies (ARPB). The pressure and labour groups were concerned about the negative implications of the IMF policies for the Ghanaian economy.