Strfucturfal Adjustment Programmes in Ghana

Introduction

During the 1950’s to the 1960’s the African Continent was gradually going through the process of de – colonization. This newly emerging independence era and the outbreak of the cold war, which saw the emergence of the United States and the Soviet Union as uncontested super powers of the 20th century brought an abundance of challenges and influences in Africa, particularly from the two powerful ideological blocs of the West and the Soviet Union. African states were thrown into the deep end after independence and forced to compete with their developed counterparts on the international economic level, regardless of the various factors that contributed to underdevelopment and poverty in Africa. Newly independent states in Africa “also had no voice in the international system, and this became detrimental to the realisation of their goals” (Van Niekerk: 2001: 287).

The African continent is the poorest and most underdeveloped region in the world, even though it possesses an abundance of material and human resources. Ojo defines underdevelopment as “inadequate social and economic structural changes to give the economy a balanced, integrated and self - sustaining growth in the Gross Domestic Product (GDP). (Ojo: 1985: 53). African states are also involved in the struggle for economic survival and independence in order to preserve their political independence and sovereignty from external and internal forces. One of the main theories associated with underdevelopment in African international relations, is the dependency theory respectively. Each of the above mentioned theories are critical in explaining and understanding the economic and socio – political status of independent Africa during the de – colonization and cold war era.

There are also various ideological factors to take into account, such as Kwame Nkrumah’s Consciencism. This philosophical element of African socialism is critical in understanding the African perception or world view and the meaning of life in the post - colonial independence era especially with the rise of African Nationalism, Pan – Africanism and the principle of self – determination after the Second World War. The above mentioned factors are essential components to the concept of African socialism and from these factors we can understand why Africa is in its current state and why Africa occupies the position it does in the international system. African socialism is derived from a communal form of thought and is best explained in terms of the meaning of life in the African socio – political context.

Africa is the worlds largest supplier of hydro – electric power and according to Ojo “Africa produces approximately 55 percent of the worlds cobalt…47 percent of this mineral is found in Zaire (known today as the Democratic Republic of the Congo –DRC) while the further 8 percent is found in Zambia. About 15 to 20 percent of the worlds copper is produced in Zambia and Zaire and for percent of the worlds tin in Nigeria and Zaire and about the same proportion of the worlds iron ore is mined in Liberia and Mauritania. And of petroleum in Nigeria, Angola, Gabon and Zaire, excluding the North African production” (Ojo: 1985: 52). One must take into account a relevant case study in order to gain a more meaningful insight towards the political and economic upheaval that affect African states during the decolonization, independence and the current state of political and economic affairs. A classic example of this would be Ghana since independence in 1954.

The independence of Ghana is regarded by many scholars as one of the most important events in the political history of Africa. It was an example that freedom can be achieved throughout the whole of Africa. However, with her independence, Ghana had to endure a series of economic and political set backs before the first republic, which was headed by Kwame Nkrumah, was over thrown. Nkrumah seemed to be making rapid progress towards independence after winning the 1954 elections. However, due to the conduct of his government, he encountered unexpected resistance. Ghana appeared to be in danger of breaking up, as it was plagued by bitterness, violence and division even though it was a model colony during colonial rule when it was called the Gold Coast.

“Ghana has a population of 18.4 million people (2000 census). Like most African nations, Ghana’s population is predominantly Black, with enormous ethno-linguistic diversity. The major ethnic groups include Akan (44 per cent), Mole-Dagomba (16 per cent), Ewe (13 per cent), Ga (8 per cent), and others (0.2 per cent); each of these has several subgroups. The Akans are predominant in southern, south-western, and central Ghana; the Ewes and Gas are mostly in the south and southeast; and the Mole-Dagombas are mainly in the north” (Mensah, Koranteng & Yeboa: 2004: 4). The official language of Ghana is English; however, there are more than fifty different dialects and languages that are spoken. “Islam and Christianity are the main non-African religions in the north and the south, respectively. Like many African countries, Ghana’s basic culture, while undergoing some changes now, is still couched in traditional values such as communalism, extended family linkages, reverence for the elderly, patriarchy, and environmental sustainability” (Mensah, Koranteng & Yeboa: 2004: 4).

The rural areas in Ghana consist of the majority of the population; however there has been an increase in urban migration in recent years. “In 1948 the urban share of the nation’s population of 4.4 million was only 13 per cent. By 1960, the urban share of the national population of 6.7 million had reached 23 per cent; today more than a third of Ghanaians live in cities. The main cities include Accra, the national capital, Tema, Kumasi, Cape Coast, and Temale. Accra is a typical primate city with a population of about 1.2 million. It is home to nearly all national government ministries, all the regional administrative offices of the Accra Metropolitan Area, and almost all international organizations and embassies in Ghana” (Mensah, Korantenge & Yeboa: 2004: 4).

Since her independence in 1957, Ghana remains one of the few West African states that have not experienced a civil war or any violent clashes related to ethnic differences. “Not surprising, it has served, and continue to serve, as a regional safe haven for many West African refugees, escaping from conflicts in places such as Liberia, Sierra Leone, and Cote d’Ivoire” (Mensah, Korantenge & Yeboa: 2004: 4).

International influence on Ghana’s Ideology and African Nationalism

Nkrumah had dreams of leading the first independent West African nation into a Socialist future. Nkrumah also had ambitions of being president for life in that republic in a one party system governed by his CPP (Convention Peoples Party). African socialism is a communal form of thought and political governance. In African societies, to be human was regarded as belonging to the whole community, and to do so involved participating in the beliefs and rituals of that community. African socialism is characterized by the concept of “ubuntu”, which means people – hood, hence the phrase “umuntu umuntu ngabantu” – a person is a person with and through other people. According to kwame Nkrumah “A peoples parliamentary democracy with a one party system is able to express and satisfy the common aspirations of a nation as a whole, than a multi – party parliamentary system, which is in fact only a ruse for participating and covers up, the inherent struggle between the “haves” and the “have – nots” (Nkrumah: 1964: 101).

Nkrumah uses consciencim as a tool to defeat the negative impacts of colonialism in African societies. Consciencim can be seen as a solution towards the problem of Euro – centric and Islamic control and dominance of the African mind. Its aims were to eradicate the uneasy co – existence that conflicts with the African personality, bombarding him with “malignant schizophrenia”. Consciensm is largely based on thought and individual development and at the same time gives an egalitarian surrounding to the individual without losing the egalitarian base in each individuals surrounding. “Practice without thought is blind; thought without practice is empty. The three segments of African society, the traditional, western and the Islamic are often in conflict with one another… capitalism is in conflict with the socialist egalitarianism of the traditional African society” (Nkrumah: 1967: 79).

African politics and society have largely been influenced by the changes in the international system. When Fascist Italy’s invasion of Ethiopia ensured the crushing defeat of Emperor Haile Selassie , a proud symbol of African independence and black achievement had been had been violated. In his autobiography, Nkrumah relates to the disgust and outrage he felt when he learned about the invasion: “At that moment it was as if the whole of London had declared war on me personally. For the next five minutes I could do nothing but glare at each impassive face wondering if those people could possibly realise the wickedness of colonialism, and praying that the day might come when I could play my part in bringing about the downfall of such a system. My nationalism surged to the force; I was ready and willing to go through hell itself, if need be, in order to achieve my objective” (Nkrumah: 1957: 27).

The Second World War significantly influenced the international balance of power and the evolution of African politics and society. The Second World War caused the decline of Europe as the most powerful region in the world, which constituted the rise of the Soviet Union and the United States of America as the uncontested super – powers of the 20th century. “The centre of gravity for African nationalists’ intent upon seeking independence for their respective colonies gradually shifted towards Moscow and Washington” (Shraeder: 1999:131). The Soviet Union had never been a colonial power in Africa, and in many respects the Soviet Union also enjoyed ideological advantages over the U.S and the European powers during the Cold War.

African nationalists often aligned themselves with one of the two major ideological blocs. “Prior to the close of the Cold War, the adverse relationship between the United States and the Soviet Union meant that African states could generate support through client – based relationships. This engendered a certain sense of autonomy and manoeuvrability as both superpowers fought low intensity conflicts or sought support among these peripheral states” (Stephan: 2005: 331). Bidding wars were prompted between the United States and the Soviet Union as each sought to gain favour with particular nationalist movements. “President John F Kennedy noted that; “the perceived stakes of the Cold War contest were tied to whether the emerging leaders of Africa would look West or East – to Moscow or to Washington – for sympathy, help, and guidance in their effort to recapitulate, in a few decades, the entire history of modern Europe and America” (Shraeder: 1999: 132).

Self – Determination has always been a characteristic of African Nationalism. The post – Cold War era is nonetheless unique in that the demands for the self – determination of individual peoples rose intensively. Consciensm stands behind the social revolution, and standing firmly behind it is the intellectual revolution. The African way of thinking and world view is directed towards the redemption of the African society. Philosophical consciensism aims to give a solution by means of categoral conversion instead of Euro – centric parallelism.

Nkrumah claims that society is governed by ethical rules, many societies claim the same or similar ethical principles, however where the principles are effective they may differ in the rules. Nkrumah states that, “God found it necessary to regulate human relations by an ethical rule mentioning them specifically. Though shalt not covet thy neighbour’s ass. If god designed to give us a similar rule today, he would no doubt forbid us to covet thy neighbour’s motor car, hardly his ass. Here God would be giving a new ethical rule, designed at giving effect to an unchanging ethical principle, but taking full account of modern times” (Nkrumah: 1964: 94). The conquest of man is his progress and achieving that progress has a profound effect on the content of ethical rules.

The philosophy of consciencism is characterized by the concept or ideology of African socialism. “The cardinal ethical principle of philosophical consciencism is to treat each man as an end in himself and not merely as a means. This is fundamental to all socialist or humanist conceptions of man” (Nkrumah: 1964: 95). This view is corroborated by the characteristic of egalitarianism.

Dependency and the Road to Political and Economic Crisis

Ghana and many other African states have been placed at the bottom of the economic the global ladder. Due to the dependency theory it has become increasingly difficult for African states to realize economic prosperity. Many African states have been placed in backwardness because of imperialist tendencies and exploitations of dominant countries. As Van Niekerk noted; “Economic dependency is a term used to portray the relationship of inequality between the under developed countries and the advanced” (Van Niekerk: 2001: 287). Many third – world states do not have a place in the inter – country market, while their economies rely heavily on first world societies. African states are in a situation in which their economies are monopolised and conditioned by the development and expansion of first – world countries.

According to Van Niekerk “states in the developing world, found themselves thrown into the international state system expected to compete on an equal base with the industrialised states. These states also had no voice in the international system, and this became detrimental to the realisation of their goals” (Van Niekerk: 2001: 287). Due to domestic social and political issues, it was very difficult for developing states to sustain social and economic development. As Van Niekerk noted; “the more industrial states developed, the further the developing world lagged behind” (Van Niekerk: 2001: 287).

Many African states were exploited by their colonial masters, extracting natural resources without providing any sort of compensation for the state. “As colonial powers withdrew, the developing states found themselves in a difficult situation. Much of the expertise was lost as the colonial powers withdrew. With no considerable industries to sustain economic growth the developing world started to decline to the underdeveloped situation in which it finds itself today. Leaders of the developing world frequently still blame the developed world for their situation” (Van Niekerk: 2001: 287) In the Scramble for Africa in the 21st century, Harry Stephan states that; “whether one takes purely economic indicators as a basis for comparison, the continuation of political failure, civil unrest, famine, and the aids pandemic are surely signs of the increasing problems that face the continent” (Stephan: 2005: 329). These factors are the driving force behind the political and economic upheaval experienced by Africa due to dependency.

In the structural adjustment programmes in Ghana, Kwame Boafo - Arthur notes that, “Nkrumah's rejection of the institutions' pressures shook foreign confidence in the Ghanaian economy” (Boafo: 1992: 120). Sadly however this was very unfortunate because Ghana achieved a lot in developmental terms with limited resources under the Nkrumah government. When the coca price, which was the sole earner of foreign exchange in Ghana, was at a decline, Nkrumah needed support for development programmes in the country. “With the trim resources provided by cocoa he had raised the levels of medical and educational facilities; improved the road and rail network; constructed Tema harbor and the township together with related industrial facilities; and built the Akosombo dam”(Boafo - Arthur: 1999: 2).

These development projects coupled with his financial commitments in the struggle against colonialism naturally led to broad financial expenses. “A strict financial discipline as called for by the two institutions, Nkrumah and the CPP leadership might have thought would not only have affected the momentum of the economic development strategy but could have equally scuttled it. Moreover, accepting such conditions for financial assistance would have meant compromising his transformation of Ghana's economy. It would seem to appear, therefore, that Nkrumah's rejection of IMF package was influenced much more by political dictates than economic prudence” (Boafo – Arthur: 1999: 2).

Olantunde Ojo explains that “economic stagnation and desperate poverty deprive the governing classes of Africa of the chance of maintaining even a veneer of legitimacy…Only their vertical economic links with the bourgeoisie of the capitalist core sustain what little legitimacy they have” (Ojo: 1985: 59 – 60). This explains why foreign powers are so quick to give military and economic aid to African states. It can be regarded as a strategy to keep and maintain puppet regimes in power. If a governing class refuses to play, then there are economic sanctions which will be imposed. “Ojo states that the economic weapons at their disposal include declines in foreign investment…delays in the delivery of new parts or in other areas of trade; snags in licensing or other technology transfers…drying up or outright elimination of credit lines” (Ojo: 1985: 60).

Ghana faced some of the above mentioned sanctions. The result of these sanctions was a military coup de tat against Nkrumah’s regime in the last years of his rule between 1963 and 1965. “It was clear that Nkrumah was not the darling of the West and her financial institutions. He could not have been because of Nkrumah's anti-imperialist attacks and crusades, immense stature in Third World politics, and pragmatic and independent leanings at a time of intense cold war rivalry between the East and the West. In effect, though Nkrumah was dictatorial and should have won the admiration of the IMF and World Bank, his economic philosophy rooted as it was in centralized state planning was at odds with that of the financial institutions” (Boafo – Arthur: 1999: 2).

“Cocoa production in Ghana fell from an estimated 413,000 tons in 1970 to a mere 159,000 tons in 1983, while mineral production fell by 55 per cent between 1975 and 1983 (Anyinam: 2001: 199). Ghana also suffered from a sever brain – drain as a large number of skilled professionals, left the country in pursuit of a better life somewhere else, especially in Nigeria, Code d’Ivoire, and other foreign states such as Canada, Germany, Holland, United States, and Britain. “To aggravate the situation, Ghana’s worst drought of the 20th Century occurred in 1978/79 and again in 1982/83, resulting in high incidence of bush fire, which, in turn, undermined agriculture and food production across the country. Both drought episodes were so intense that the generation capacity of Ghana’s main hydro-electric dam at Akosombo was reduced, resulting in power rations to both industries and residences” (Mensah, Koranteng & Yeboa: 2004: 11).

As if things couldn’t get any worse, “more than one million Ghanaians were repatriated from Nigeria in 1983, putting more pressure on the already fragile national economy” (Mensah, Koranteng & Yeboa: 2004: 11). There are a number of factors that are associated with Ghana. “Exogenous factors, notably the global economic upheaval sparked by the OPEC crises of the 1970s, the repatriation of Ghanaians from Nigeria, and the perennial unfavourable terms of trade for Ghana’s primary export products such as cocoa, timber, and gold were equally responsible for the economic crisis” (Mensah, Koranteng & Yeboa: 2004: 13). After all attempts had to obtain assistance from the states of the Communist bloc, such as Cuba and the former Soviet Union. Rawlings and his socialist revolutionaries were forced to turn to the West for economic aid and poverty alleviation.

Economic and Political Reform in Ghana

“In 1983, Dr Kwesi Botchwey, the then secretary of finance, announced the initiation of the nation’s Structural Adjustment Programmes, locally dubbed Economic Recovery Programme (ERP), designed to last until 1987. In 1987 and again in 1991, ERP2 and EPR3 were announced as part of the national budget” (Mensah, Koranteng & Yeboa: 2004: 5). These timelines were adopted by a number of political analysts who were intent on examining the nation’s reform during the 90’s. These timelines help in explaining the various phases of reform undertaken by Ghana. According to Mensah, Koranteng and Yeboa, “the reform process has continued beyond the mid-1990s, these timelines (i.e., periods coterminous with EPR1, EPR2, and EPR3) necessarily require some alteration, or, at least, extension—if nothing at all, to capture more recent reform policies” (Mensah, Koranteng & Yeboa: 2004: 5).

Ghana’s Structural Adjustment Programme is divided into four Phases. According to Mensah, Koranteng and Yeboa; “the first three phases, which spanned 1983-1986, 1986-1991, and 1992-1996, focused on ‘economic stabilization’, ‘structural changes’, and ‘structural and institutional reforms,’ respectively. And their fourth phase from 1997- 2002 sought to reduce inflation, support a realistic exchange rate, complete the privatization of state enterprises, and promote the efficient allocation of resources for growth; the fourth phase from1997 – 2002 also sought to accelerate real GDP growth. Spanning from 1998 to 2000 was about securing a stable macroeconomic environment and to support economic growth” (Mensah, Koranteng & Yeboa: 2004: 5).

Conclusion

“Since the early 1980s, Ghana has solicited considerable amounts of policy- and non-policy-based loans from the Bretton Woods institutions and other bilateral sources for its structural adjustment. While many factors instigated the nation’s Structural Adjustment Programmes, it was found that by far the leading trigger was the economic crisis that prevailed at the time” (Mensah, Koranteng & Yeboa: 2004: 30). The frame work of Ghanaian politics is structured as a presidential representative democratic republic, whereby the president of Ghana is head of government and head of state at the same time. The government exercises executive power, while legislative power is vested in both parliament and government.

Ghana and the rest of Africa have been subject to economic hardship by imperialist actions from the former colonial powers. The dependency model of international politics is characterized by its intrinsic aspect, which is neo – colonialism. Ghana was among the richest countries in Africa at the time of independence and due to international pressure and resentment of the Nkrumah government, Ghana’s economy dwindled into the depths of crisis over the years.

“The indifference of the institutions to the political excesses of dictators who willingly implemented their sponsored adjustment policies in the 1980s, implied tacit support, either by omission or commission, to rapacious and ruthless dictators who were bent on attaining their political and economic agendas” (Boafo - Arthur: 1999: 14). The economy of Africa has been plundered by many dictatorial puppet regimes. Ghana has experienced a series of military coups which have had a catastrophic effect on her economic development. The inept nature of these dictators and the neo – colonialist attitude of the west leaves an open sore in heart of Africa. The regimes to follow after Nkrumah did little to help Ghana’s development and with the HIV / Aids pandemic, Africa still has a lot of challenges to face.

However as the New Partnership for Africa’s Development gains momentum, one can only hope that Africa has finally found her blueprint for recovery. If Africa’s Human Resources and potential are properly utilized, she could lead to the sustainable growth of the continent. Africa can never win against the powerful force of globalisation, but through constructive engagements and tactful alliances with one another, powerful regional entities can lead to a powerful unified Africa. The only war that Africa can win is the war against dependency. The world is controlled economically and militarily and Africa has the potential to be a global leader. The powerful force of imperialism that sat on a pedestal and watched the progressive de – humanization of Africa and the African, is slowly suffering dethronement.

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