By Agbesi BCIL
5th March, 2022

Introduction

Development can be defined in numerous ways depending on the context. It is one of the ambiguous concepts that generate a lot of arguments, both theoretically and politically. Despite all the different schools of thought on this controversial concept, almost all agree that development is a continuous change in the variety of human society. The dimensions of development include political, economic, social, legal, religious and cultural. According to Agenda for Development, Development is a multidimensional undertaking to achieve a higher quality of life for all people. Economic development, social development and environmental protection are interdependent and mutually reinforcing components of sustainable development. Even though there are many dimensions of development outlined above, this write-up focuses on economic development because economic development triggers development in other sectors. Economic development is more challenging to define and measure than economic growth. Economic growth refers to a quantitative change. And it is usually measured as increases in the output or Gross Domestic Product of a country. Economic development has a qualitative dimension; it entails structural change; and encompasses the reduction of poverty and widespread gains in nutrition, health, education and the standard of living. Economic development involves the transformation of poor, stagnant, primarily agrarian economies into diversified, urban-based economies capable of sustained growth. In short, Economic development implies a diffusion of economic growth and an expansion of economic opportunities.
It is possible to have skewed growth (growth without much development) where there is a concentration of income increases in a specific sector, and economic mobility is very limited. For instance, when Ghana discovered and started drilling oil, its real GDP shot up significantly from 7.9 per cent in 2010 to 14.0 per cent in 2011, compared with non-oil GDP growth rates of 7.9 per cent and 8.4 per cent, respectively (IMF, 2015). However, the oil sector employs just an infinitesimal fraction of the population; hence, growth in this sector is skewed towards just a few. Economic growth may be a necessary but not a sufficient condition for economic development; even though there can be growth without much development, it is unlikely to have a significant economic development without moderate economic growth. We can measure economic development by the level of per capita GNP. (This can be misleading sometimes because of the difficulty in comparing the purchasing power of different national incomes), human development index (which measures people’s ability to live a long and healthy life, to communicate and to participate in the life of the community and to have sufficient resources to obtain a decent living) and Human Capital Index (which quantifies the contribution of health and education to the productivity of next generation of workers).
Ghana was the first African country to break the yoke of colonization when it gained independence in 1957. Since March 1957, the country's development ambitions have been on a rough-and-smooth surface over the years, spearheaded under different political regimes. This essay focuses on the assessment of Ghana's development programs since independence. The write-up analyzes the benefits and consequences of the programs. And also suggests the way forward for Ghana.

The Import – Substitution – Industrialization (Big Push)

The first-ever development program undertaken after independence was the "Big push" development program under Ghana's first president, Osagyefo Dr Kwame Nkrumah. The "Big push" of the 1960s hinged on industrialization and emphasized import substitution. The investment committed into the economy at the time, specifically into physical capital and infrastructure, aimed at 600 firms producing hundred different products purposely to substitute imports (Asmah et al., 2017). Notable projects that saw the light of operation under this program include the Tema Harbour, Volta River power system (Akosombo dam, which till the “Messiah” of electric power to the country), the Tema motorway, as well as the Volta aluminium company (VALCO). These projects still provide substantial social benefits to the public. These projects have also maintained their capacity of generating revenue for the country through their operations. However, the Pawlugu tomato processing factory, the Asutuary sugar factory, Atonsu shoe factory, to mention just a few, were all planted on the soil of the "Big Push" development strategy. Various departments and agencies were born, under the program, to facilitate the success of the development program. Considering the boom in economic activities, it necessitated healthy human capital to mount the stage of several economic opportunities that germinated from the program and maintain a balanced level of development across all regions of the country. Upon achieving this goal, the government initiated free education and healthcare. There was substantial investment in education to provide necessary skills to the labour force. The introduction of free education for primary and middle schools saw the light of day. As part of the development agenda, the government established the Ghana Education Trust Fund (GETFund) to set up other secondary schools and Teacher Training Colleges.
In the health sector, there was a conscious development investment as well. The aim was to bridge the health gap between the south and north as the few health centres were in the south. According to a medical historian, Stephen Addae, the country’s health sector was “curative oriented, could handle only about 20% of the population whose organization was outdated and which had a grossly inadequate medical staff consisting mostly of European doctors and a small cadre of auxiliary medical staff." By 1960, the number of health centres had increased from three to twenty-three. There were also about twenty-three others under construction all across the country. The centres and seven other training schools (built for nurses) were positioned to render health education, and treat minor ailments. Some of these medical centres were equipped to train medical auxiliaries. Improvement in health at a time resulted in free healthcare as the government laid public health and welfare of the human capital on the priority table.
Despite the countless achievements of this comprehensive development program, the obvious challenges that characterized the implementation must be mentioned. According to Asmah et al. (2017), the quest to rapidly develop social and economic infrastructure led to a quick drain of the country’s foreign reserves, huge budget deficit, overvalued currency, coupled with a balance of payment difficulties which were concomitant of the tight import control measures that were instituted against importation due to the import substitution drive of the development strategy. For instance, in 1965, the inflation rate stood at 26% which inflicted untold hardship on Ghanaian households and livelihoods.
Economic Liberalization and Stabilization Program
This program was initiated in 1966 through the sponsorship of the IMF to arrest the wind of economic predicaments that blew from the big-push program. Under the “Big push” there were stringent trade policies that were levied on importation and trade which landed the country in an unpalatable trajectory. Some of the initiatives under the program include liberalization of import control, devaluation of the country’s currency to encourage importation, conscious effort to reduce government expenditure, rural development, and later investment in agricultural development.
The initiative of liberalization of import control and reduction in government expenditure was introduced as an antidote to the struggling budget deficits, drain in the country’s foreign reserve, and rescue the balance of trade difficulties. This premise for these initiatives was to raise the necessary funds for the development that the country sought. The liberalization, for instance, brought some relieves to livelihood as it opened the way for other employment opportunities like auctioneers, importers, and exporters. This was the period where history records the country to be doing much of commercial activities with the major activities being trading. Unfortunately, the liberalized external trade policy coupled with a downturn in cocoa prices put an enormous strain on the balance of payment position, this necessitated devaluation by 44% in 1971.
Contrary to the earlier program, there was a conscious effort to embark on rural development due to the inequality gap that existed even at that time. The government of K. A. Busia and Edward Akuffo Addo focused on the privatization of state institutions due to mismanagement and economic inefficiencies. The privatization agenda led to the development of small-scale businesses as the consciousness of entrepreneurship was aroused in the citizenry. It is worthy of note that the development programs under this administration also held human capacity development in high esteem. For this reason, the student loan scheme was introduced to cater to the financial needs of higher education students. The loan scheme allowed individuals from less privileged backgrounds to access higher education.
However, the country immediately plumped into sharp economic difficulties since most of the input used by the industries was imported and most trading activities were also slowed as a result of the BoP difficulties. The wave of unemployment coupled with high surging figures of inflation hit every sector of the economy resulting in a massive retrenchment of workers from the public sector.

“Operation Feed Yourself and Operation Feed Your Industries”

Interestingly, most of the development programs under this Acheampong administration were inspired by the policies of Dr Kwame Nkrumah. Specifically, the government opted for a state-controlled economy characterized by tight import controls, domestic price controls, and fixed exchange rates in an attempt to hedge inflation. The spirited idea of focusing on agricultural programs brought about “Operation Feed yourself” and “Operation Feed your industries” in 1974 to reduce the dependency on imports. (Asmah et al., 2017). The household was encouraged to undertake backyard farming to supplement the family budget and also enhance food security across the country. Under this program, mechanized farming was adopted. According to the economic history of Ghana, there were large-scale irrigation projects under which rice and vegetable farming was prioritized on large scale, especially in Northern Ghana. In terms of food, the country was self-sufficient and secured as organic nutritious foods were grown and consumed in Ghana. There were several industrial activities as value addition to raw materials was prioritized.
During this period there had been a significant increase in the country’s population leading to pressure in social infrastructure, particularly electricity due to the urbanization drive. The Kpong Hydroelectric Dam was constructed to augment the power supply from the Volta Dam. Unfortunately, the success could not be sustained. In addition, the fiscal, monetary rate policies put subsequently in place became a disincentive to production. Value added in agriculture and industry declined as strong disincentives developed against production and in favour of retail trade. For instance, the food self-sufficiency index which stood at 83% between 1964 to 1966 fell to 71%, capacity utilization rate in the industry also dropped to 30% from 53% in 1975 (Asmah et al, 2017). Inflation peaked at 123% in 1978.
Corruption hawked the country off her revenue leading to an incredible decline of tax revenue as a percentage of Gross Domestic Product. The unattractive levels of real interest rates drove investors away. These were hard times along the country’s development path because the country recorded general shortages of essential commodities (soap, milk, sugar, fuel, etc). After all, hoarding was rife with rampant illegal economic activities. The development woes were heightened the more by the increment in world oil prices. Considering the financial burden, the government at a point announced the withdrawal of the students’ loan scheme which made tertiary students very agitated.

Economic Recovery, Structural Adjustment and Financial Sector Adjustment Programs

This program was launched in 1983 by the PNDC through the guidance of the World Bank and IMF. The program was key to reducing Ghana's debts and improving its trading position in the global economy. The stated objectives of the program focused on restoring economic productivity at minimum cost to the government and included the following policies: lowering inflation through stringent fiscal, monetary, and trade policies; increasing the flow of foreign exchange into Ghana and directing it to priority sectors; restructuring the country's economic institutions; restoring production incentives; rehabilitating infrastructure to enhance conditions for the production and export of goods; and, finally, increasing the availability of essential consumer goods. According to Tan and Rockmore (2019), this program was instituted against the draught which persisted from 1980 to 1983 leading to nationwide hunger that has never been witnessed before. Intensive initiatives such as trade liberalization, restructuring of the fiscal environment allow for a more transparent and market-determined foreign exchange regime and a general program to create an enabling environment for trade and investment promotion and development, Asmah et al (2017).
Also, the government introduced the Structural Adjustment Programme (SAP) as a sub-program under the ERP. The SAP which took off in 1986 was characterized by a period of deregulation of the economy to a diversified, dynamic, efficient, and export-oriented with a greater role for the private sector. The Enhanced Structural Adjustment Program (ESAP) proceeded with the SAP and sought to consolidate gains under the stabilization program and SAP, and accelerate economic growth to create a middle-income country status by the year 2020. This was put together in a development framework called Vision 2020. In this, the role of government in development was to create an enabling environment for private sector-led growth and development.
In addition, the Financial Sector Adjustment Program (FINSAP) was initiated in the last quarter of 1987. The reforms were pursued with very little national debate. Most of the discussions which took place were between sector participants, the government, and the World Bank. The implementation of the major part of the program took place in 1988-90. The aim was to establish a sound prudential and regulatory framework for banking operations, to ensure uniform accounting and auditing standards for all banks, to put in place a more effective Banking Supervision Department (BSD) endowed with the requisite personnel and skills to enforce the prudential rules and regulations and a code of conduct for the banking sector, and to create a framework for restructuring distressed banks to transfer their non-performing assets, which had choked their balance sheets and stunted initiative in credit operations. The Non-Performing Assets Recovery Trust (NPART) was established to engage efficient top management for distressed banks, and finally to develop fully liberalized money and capital markets in Ghana. The reforms were expected to bring about benefits, such as the effective mobilization of domestic savings and a more efficient allocation of loanable funds. They have established a more market-based system of bank intermediation and government financing through the financial system. A new banking law was enacted in 1989, which specifically defined capital adequacy, minimum capital requirements, and prudential lending guidelines.
The liberalization of the financial sector led to the inflow of different foreign banks coupled with the privatization of some state-owned banks. The achievement for this program was quite interesting as lots of jobs were created in the financial sector with high demand for ‘semi-skilled’ labour. This brought some adjustment in the education system as most tertiary institutions including polytechnics began to introduce courses such as bank bookkeeping, accounting, and financial management, and auditing. The government was consciously keen on rural development and social inclusiveness hence the implementation of the rural electrification project which resulted in many rural areas getting connected to the national electricity grid. The social inclusiveness agenda led to the free and compulsory basic education which was a component of the restructuring of the whole education sector through curricular change and reduction in the school-going years. Other educational facilities were established including training colleges in the Northern part of the country including the first university in the region, the University of Development Studies, Tamale. A significant achievement was bagged but these could not stand the test of time as corruption and many unpopular pursuits of government officials griped the country.

Property-owing democracy (capitalism).

This development phase expands from 2000 – 2008. This administration emphasized the private sector which led to the setting up of a ministry in charge of private sector development. This was the period of what they termed as a property-owing democracy (capitalism). The high public debt featuring the declining economic growth and development took the country to the Heavily Indebted Poor Country (HIPC) initiative of the World Bank. Ghana’s admission to HIPC enabled the economy to start on a fresh page and had her debt slashed to US$1billion by the end of the HIPC period. Notwithstanding, the country saw some development programs which need mentioning.
There was a significant plan for the development of healthcare. One major development program is the National Health Insurance Scheme which replaced the existing cash and carry system to increase access to medical care by the poor in society who were denied access under the cash and carry system. There was also the introduction of free maternal healthcare at public hospitals and clinics to reduce maternal death. There was a conscious effort to build skilled human capital and to reduce the low primary school enrollment. On these premises, initiatives such as the introduction of the capitation grant and school feeding programs were introduced to improve access to education. These manifested the desired results of increasing basic school enrollment.
The government further introduced the Livelihood Empowerment Against Poverty (LEAP) program. This was a social cash transfer program providing cash and health insurance to extremely poor households across Ghana to alleviate short-term poverty and encourage long-term human capital development. LEAP started a pilot phase in 2008. However, there was huge capital expenditure on infrastructural projects on the part of the government towards the AU summit, the African Cup of Nations hosted in Ghana in 2008, and the celebration of the country’s 50th anniversary in 2007. This led to the country’s budget deficit increasing incredibly by 2009.

Ghana Shared Growth Development Agenda

“Ghana Shared Growth Development Agenda 2010-2013” emphasized human capacity development, transparent and accountable governance, and infrastructural development in support of agricultural modernization, natural resource development, particularly oil and gas, and private sector development. Some of the initiatives were agribusiness development which increased the production and productivity of high-value cash and food staple crops in some of the poorest regions and enhanced the competitiveness of Ghana’s agricultural products in regional and international markets, rehabilitation and upgrade of roads including National Highway 1 and improvement in the Lake Volta ferry services. The economy witnessed a huge investment in infrastructural development leading to the completion and commencement of crucial social infrastructures such as roads and interchanges, markets, etc.
The government also initiated affordable housing projects to deal with the housing deficit as well as provide accommodation to the low and middle-income segment of the society. The Bui Dam Hydroelectric project was also undertaken to augment the inadequate power supply that the country was going through and to boost industrial production. This phase was a period of strong commitment towards continuing projects started under the previous regime though the period was characterized by stabilization of the economy due to the huge budget deficits inherited. Education received the light of priority as several programs were initiated in the sector. There were free school uniforms, abolishment of the shift schooling system through the construction of structures to accommodate the growing population of school-age students. There was expansion in the school feeding program and piloting of the capitation grant scheme coupled with the National Health Insurance scheme to check identified corruption on the part of scheme officials as well as service providers.
The government prioritized ICT in the quest to build a functional and contemporary human capital with the requisite skills to compete in the world of work. This necessitated the one-student-one laptop project. The mandatory constitutional provision of progressively free education using day students of Senior High Schools was piloted in 2015. The government chopped some success in tackling the menace of schools under trees though the problem persists. The problem of graduate unemployment encountered some battling efforts coupled with an attempt to bridge the development gap in the country resulted in programs like Savana Accelerated Development Authority (SADA) which aimed at rapidly developing the northern corridors of the country.

Current Development Programs

The Akuffo Addo administration introduced many development programs including planting for food and jobs, free Senior High School and One District One Factory agenda, and NABCO to absorb the growing numbers of graduate unemployment. Under this government, there was an aggressive improvement in the financial sector through the financial sector clean-up exercise which saw the collapse and amalgamation of illegal and insolvent financial institutions which improved the financial sector. The improvement of payment systems through the execution of the mobile money interoperability project made it possible to connect a bank account to mobile money wallets. Various digitization initiatives hovered in government organizations with the motive of blocking revenue leakage holes.
In the education sector, the Free Senior High School policy was implemented in 2017 which increased access to secondary education. This program exerted untold pressure on educational infrastructure leading to the double-track system which was to serve as a temporary antidote to the problem. The semester system was then introduced in the second cycle school system. The planting for food and jobs was an agricultural campaign of the government, with five (5) implementation modules. The first module PFJ (Crops) aims to promote food security and immediate availability of selected food crops on the market and also provide jobs. Food Crops (PFJ), Planting for Export and Rural Development (PERD), greenhouse technology villages (3 Villages), Rearing for Food and Jobs (RFJ), and Agricultural Mechanization Services (AMSECs) are the five implementation modules. The inception of COVID 19 thwarted the gains achieved by the project. It was then expensive to buy poultry products because of the shortage of maize and other vegetables as they were imported from near African countries.
The one district one factory program which was an extension of the earlier industrial drive was handed over to the private sector to spearhead. The government supported the private sector through funding and tax waivers. Notwithstanding, the government solely took the responsibility of constructing some of the factories, notable among these are the Ekumfi pineapple juice factory, Walewale melon processing factory, and some others.

Currently, the country has received a fair share of the negative economic shock implemented by COVID-19 in almost all sectors of the economy. The country has been thrown into a deep drain of financial difficulty with suffering to finance her expenditures despite the various fast track financial assistance that the country received from the IMF and the World Bank. Global oil prices have levied untold hardship on the citizens. The government which financed the majority of programs from the Eurobonds and other concessional and non-concessional loan agreements appears financially overwhelmed with swallowing levels of debt which looks quite distressing. In November 2021, the country was listed on the World Bank’s HIPC list.
In assessment, there is evidence to acknowledge that Ghana has journeyed through the serpentine valleys of no clear direction. The country has come far from a period of political unrest, drought, poor and inaccessible medical care coupled with high infant and maternal mortality, solely dependent agrarian economy, social injustice, citizens’ agitations through demonstrations, persistent increment in general price levels, limited opportunities for the youth, increased levels of population, unending struggles with corruption, relegated levels in technology through lack of access to education, excessive borrowing, the balance of payment difficulties, budget deficits, reliance on foreign aids and donations from Europe, periods of vast development disparities between the rural communities and developed cities, etc. We can admit that our country has not achieved the desired development that we wished but there is no ground to also conclude that nothing at all has been achieved. The paragraphs above encapsulated the various programs that have been undertaken in pursuit of economic development and the success yielded by each of those programs spearheaded under the various political regimes with different senses of ideologies towards development.
There have been ups and downs along the development path, but the problems have remained the same no matter which regime is in control of the economy. There is the obviousness of no clear policy directions coupled with no national development framework except for the vision 2020 which was bastardized on the premises of political origination and so-called political ideologies. The menace of corruption among government officials and state institutions has wrestled the progress of development since independence. There is also inadequate research and consultations to ascertain the sustainability of programs and projects before final implementation. The politicization of governance and national interest among others remains the curse to economic development.

Suggestion on the Way Forward

There is still no doubt that the country is pregnant with the potentials to change her development fortunes considering the glaring worth of natural resources and the large labour force at her disposal. What then is the missing link? The country needs to define its priorities through conscious examination and research then translate these priorities into a common developmental framework with the necessary legal backing to elevate it above all political manifestos and ideologies. There must also be an urgent restructuring of our education system through the provision of necessary resources and development suiting curricula to train the labour that is needed for the exploitation and exploration of disposable natural resources. This must be done without compromising; a way to take charge of natural resources, specifically the oil and the mining sector. Integrity, national patriotism, and unadulterated history must be included in the educational syllabi at all levels of education. A similar policy of the “Big push” kind must be carefully put together and executed with a priority of making substantial investments in agriculture and industries. Priorities must be placed on adding value to our raw materials, for instance, cocoa, before exporting it to the global market. The country would improve its development fortunes through the aforementioned suggestion.






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