At 50 Years, Ghana's Economic Record is Decidely Mixed

ACCRA, Ghana -- The green, red and yellow colors and the black star of Ghana's flag symbolized the rush of pride felt by many people here as their country celebrated 50 years of independence from Britain.
Some sported hats and wristbands, while others wore t-shirts, emblazoned with the government slogan, "Championing African excellence." A few even donned the flag like a cape as they enjoyed their Mar. 6 holiday, the date of founding President Kwame Nkrumah's declaration of independence in 1957.

The vibrant displays of patriotic fashion certainly pleased the eye, but they could not disguise the dissatisfaction with Ghana's achievements many feel.
"Probably you would not see it in our infrastructure, you would not see in terms of what you call factories and those things," Kwadjo Agyemang Prempeh, 29, said.

About 70 percent of Ghana's economy is hand sales--people selling things on the streets and having small stands like this one.

He suggested the Ghanaian sense of unity, not to mention friendliness, humor and hospitality, defined his country.
Of those, national unity matters most because it prevented any outbreak of civil war, despite several coups d'état in the 1960s and 1970s. That is no minor feat in West Africa, where too many countries, including Ivory Coast, Liberia and Sierra Leone, suffer or are trying to recover from conflicts.

Ghana's unity eventually fostered political stability when it achieved a peaceful transition of power after then-president Lt. Jerry Rawlings stepped down in 2000 to make way for the winner of the poll, President John Kufuor. That peace and stability can be considered one of Ghana's true accomplishments.
But for Abdul-Rahman Sakara, born in his country's north but now a property manager in the capital, the majority of Ghanaians have nothing to celebrate economically.
"They are still living below the poverty line," he said. "Some hardly find the three square meals to even eat."
More than 30 percent of Ghanaians are estimated to be living on a dollar a day; a separate estimate indicates as many as 30 to 50 percent of the population belongs to the underemployed and the working poor.
At independence, Nkrumah envisioned an industrialized and prosperous nation that would be free of deprivation. Back then, Ghana boasted a $400 per capita income, putting it on par with Korea or Malaysia; today, the two Asian economies are nearly five (Malaysia) to almost ten (South Korea) times the size of their West African counterpart. And Ghana is now dependent on foreigners, a donor favorite receiving more than $1 billion annually in aid.
Nii Moi Thompson, a U.S.-educated economist and activist, said the fact that his country is now living off the charity of others would severely disappoint Nkrumah.
"Its leaders are so bankrupt they are willing to spend millions of dollars to create employment in Europe by buying luxury vehicles," he said. "Because that's what you end up doing when you buy a Mercedes or a BMW from state funds."
Yet after making those purchases, Thompson said the government went around and begged others to build toilets for Ghanaians. That lack of self-reliance frustrates him because he contends there is a domestic alternative.
Consider Kufuor's's government last year applauded the decision of the United States' Millennium Challenge Corp., which bankrolls developing countries that are considered to have good governance, to give it $547 million over a five-year period.
Thompson, however, said the government could raise $2 billion within a year if it improved its collection of the 15 percent tax that all businesses are supposed to charge their customers.
Ghana does not suffer from a lack of money.
The government said last year that foreign remittances, money earned abroad and sent to family here, amounted to $2 billion in the first quarter of 2006. The country is the world's second-largest cocoa producer, a state-run industry that earned more than $1 billion in 2006. It is also Africa's second-largest gold producer, which earned it close to $1 billion in 2006, and it possesses timber and diamonds.
That Ghana is one of the most unequal societies in the world undermines those assets, according to Thompson. He said the richest 10 percent accounts for close to half of the national income, while the bottom 40 percent earns less than one-tenth of it.
Even the World Bank, which lauds Ghana's 6 percent annual growth rate, strikes a cautionary note about that gap. Its representative, Mats Karlsson, warned "poverty is deep and may be growing in urban areas"; he cited urban poverty, along with youth unemployment, as potential long-term risks.
That effectively depicts the Ghanaian paradox. Though admirable politically and laden with resources, it remains but another so-called Heavily Indebted Poor Country that has been granted debt forgiveness by western creditors and agencies in sub-Saharan Africa.
If judged by its regional neighbors, except Nigeria and Ivory Coast, whose economies are much stronger, then the country is indeed a relative success. However, if judged according to its potential, then it can be considered an underachiever.
"It is still a society sitting on the bridge of a potential, that potential not having been explored or exploited fully because of simply bad leadership and bad policies," Thompson said. "The second we make that critical change to good policies, good leadership, I think we'll able to explore our potential to its fullest."
Blake Lambert has covered Africa for the Economist, Canadian Broadcasting Corporation Radio, the Christian Science Monitor, and the Washington Times.

Link to World Politics Watch | At 50 Years, Ghana's Economic Record is Decidely Mixed