Pulse.com.gh logo

Post- Independence Ghana: 5 events that sent Ghana into economic doldrums

Singapore, who was predicted to be extinct by 1980, has a GDP 2000% higher than that of Ghana's. Singapore's GDP Per Capita currently stands at 85,000 dollars,  the third in the world, whereas Ghana;s GDP Per Capita is a paltry $4000. I'm sure this leads to the next logical question of what happened.

  • Published:
Dr. Kwame Nkrumah, Sworn in as President play

Dr. Kwame Nkrumah, Sworn in as President

Ghana, at independence,  was the wonder kid on the block; not just for black Africa; but for the world at large because the world needed to see exactly how "capable" the black man would be in taking care of his own affairs.

We started quite well under Dr. Kwame Nkrumah, investing massively in industrial and infrastructural development - the Akosombo Hydro Electric Dam, the Tema Motoway, State Housing projects, free quality education for basic and tertiary students.  Ghana was close to Utopia.

So enormous were the potentials that, in 1960 the World Bank predicted that Ghana would be a first-class economy in two decades, and Singapore who had also been kicked out  by Malaysia about the same time, was predicted to go extinct.

Well, 59 years on, the story is completely, completely different.

Ghana, with all its resources is currently dealing with an unstable economy, an abysmal GDP growth rate of 4%, inflation rate close to 20%, unemployment of unknown proportions as there's no database to even count, a deteriorated energy sector, and a housing deficit of 1.4 million houses a year.

Singapore, who have no natural resources to boast of and was predicted to be extinct by now, has a GDP 2000% higher than that of Ghana's. Singapore's GDP Per Capita currently stands at 85,000 dollars, the third in the world, whereas Ghana's GDP Per Capita is a paltry $4000, 139th in the world.

I'm sure this leads to the next logical question of what happened.

Here are 5 events that happened in the economic history of Ghana that have ensured that we are exactly where we are now:

1 The 1966 Coup And Invitation Of The IMF

play Lt. General Joseph A. Ankrah


By the time the Supreme Military Council under Lt. General Joseph A. Ankrah, Lt. Gen Akwasi Amankwa Afrifa and Lt-Gen Emmanuel Kwasi Kotoka toppled the government of Dr. Kwame Nkrumah, Ghana's economic honeymoon that began in 1957 was over.

The 200 million pounds compensation paid to the Nkrumah government had ran out, inflation was beginning to break the backs of Ghanaians, massive shortage of basic household necessities like milk and sugar, revenue from cocoa was at an all- time low, and Ghanaians were beginning to cry.

So the Gen. Ankrah-led government surrended to the IMF, the U.S government and foreign debt. The economy did not recover. The crisis leaped from bad to worse until the June 4, 1979 uprising swept away the General Akuffo regime and his IMF cohorts in the Ghanaian bureaucracy.  These were the repercussions of this decision:

  • Privatization of state farms and industries

  • university student loan scheme

  • families asked to take more responsibility for education

  • proliferation of private medical practice

  • blue print for sewage system for the whole country

  • devaluation to solve inherited problems

  • elimination of price controls

  • emphasis on staples for domestic consumption



  • unemployment

  • foreign debts and servicing

  • cedi value allowed to fall

  • good excuse for military

                                         Read More

2. 1972 to 1979 Bullish Home- Grown Policies That Were Not Given The Chance To Bear Fruits

play General Kutu Acheampong

  I dare say, Ghanaians have missed the bullish attitude of the General Kutu Acheampong government. His government was assertive enough to cut major ties with the U.S, the IMF and other superpowers who were considered subtle drawbacks to Ghana's economic independence. He took the following stops to build a self- reliant government that concentrated on solving its problems in the most practical ways as possible:

  • Repudiate foreign debts

  • Operation feed yourself and industry

  • revaluation

  • price controls

  • import licensing

  • university loan scheme

  • CMB scholarships for education on whom you know basis

  • increase money supply


  • Kalabule( corruption)

  • inflation

  • smuggling

3. 1979 to 1982, AFRC and Dr. Limann Government

play Dr. Hilla Limann( far left) J.J Rawlings( far right)

At this point, Ghana had been experiencing series of coup d'etaits and very short- lived governments. None really had the chance to repair the difficulties. And the fact that Nkrumah could not build a proper economic structure for the  country meant that there was no foundation to stand on.

Dr. Hilla Limann's People's National Party- government was a temporary democratic respite to the coups which took a socio- capitalist approach to stabilizing the economy. The government tried doing the following:

  • relax price controls

  • reestablish credibility with donor and donor countries



  • inflation persists

  • balance of payment problems persist

  • kalabule persists

4. 1982 to 1984 Rawlings' Attempt To Voilently Restore Economic Sanity

play JJ Rawlings in the PNDC days

Then came the  Provisional National Defence Council led by Ft. Lt. Jerry John Rawlings. This would be his second coup d'etait, toppling the Limann-government he had initially handed power to. Under his second reign, which will be the longest any president had gotten in the history of Ghana, Chairman Rawlings had an agenda to clean-up the massive corruption and smuggling in the country at the time. This was rooted on a purely socialist ideology, running on intense military dictatorship.  With massive support of the massive, he believed he was here to save the ordinary Ghanaian from economic hardship by taken from the corrupt rich and redistributing to the poor. The following are the decision's of the PNDC government between 1982 and 1984 that stood out:

  • socialist path to development

  • price controls

  • rationing

  • PDC's in charge of distribution

  • WDC's in charge an as part of the IMCC

  • use of force to control prices, smuggling

  • confiscate 50 cedi notes

  • blame the rich


  • embargo on Ghana

  • Inflation

  • queuing

  • lack of medicine, food, transportation, etc.

  • Rawlings chain and necklace

Boy did these policies backfire terribly. There was severe drought in 1984 which precipitated a severe food shortage. Again Ghana's exports of cocoa, timber and gold hit record lows due to severe economic downturn in the economies of  Ghana's primary export destinations.  To make matters worse, Cote d'ivoire, Togo and Burkina Faso closed their borders to Ghanaians. At the same time, over 1 million Ghanaians were sent home from Nigeria. That, pretty much was the hardest time for Ghanaians and the Ghanaian economy.

5.1984 to 2000- The Brighter Days And Their Wasted Opportunities

play JJ Rawlings in the 1998

  • Economic recovery program

  • free markets

  • layoffs at civil service

  • students bear more of cost

  • patients bear more of cost

  • stock exchange


  • more privatization of state industries

  • float the cedi

  • boost exports

  • VAT, then UNVAT



  • inflation

  • massive unemployment

  • schools/health care is broken down

  • interest rate at close to 50%

  • Goods available but not affordable

The Rawlings administration turned to the place all African countries at the time were going to for help- The IMF.
So it was that at the behest of the pro-IMF neoliberal Ministers, the IMF/World Bank wagon rolled into town in 1983. Rawlings became the chief apostle of the IMF and chief architect if the Economic Recovery Programme (1983-1985) and won international acclaim; while Ghana was praised by western journalists and their consultants as a “success story”. It was the former Nigerian premier, Tafawa Balewa who is quoted as saying that “when the West praises an African leader, he must be doing something wrong to his own people”.

Thousands were laid- off from the Public Sector under the Structural Adjustment Program.

 Private sector was inactive after the closure of many businesses in the Kalabule days, but will pick up in the late 90s, when the socialist- democratic government of Rawlings allowed economic institutions to strengthen the economy.

This prepared the way for the J.A Kufuor administration in the year 2000, albeit heavily debt- laiden.

By the mid '90s under President Rawlings and his ministers, the Ghanaian economy got the semblance of some foundation and character. Prices got more stable, supply of goods on the market picked up, and businesses began to gain confidence. But the economy took the bad habit of import- dependency. Industrialisation was minimal, and factories began to see neglect.

play John Agyekum Kufuor


As capitalists as the Kufuor administration was,  they took steps to open up the economy to the private sector, laying emphasis on the opening of businesses, and  a free market economy.

Foreign Direct Investment increased tremendously. But still industrialisation was poor.  All attempts to set up factories under the President's Special Initiative failed woefully. The services sector was, however,  on the rise with the influx of foreign investors in the financial and telecom industry.

Then comes President Jonn Mahama's politically- induced economic struggles and the attempts being made to solve it. That's a story in progress anyway, that will be told another day.

Do you ever witness news or have a story that should be featured on Pulse Ghana?
Submit your stories, pictures and videos to us now via WhatsApp: +233507713497, Social Media @pulseghana: #PulseEyewitness & DM or Email: eyewitness@pulse.com.gh.

Recommended Articles

Recommended Videos

Top Articles

1 Police arrest 6 Menzgold customers trying to lock up Zylofon officebullet
2 How to create a verified PayPal account Learn how to create a verified...bullet
3 Capemay Properties unveils 209 Signature Apartmentsbullet
4 How to write a memo How to write a memo like a probullet
5 Investment banks in Ghana Top 5 investment banks in Ghana and...bullet
6 1D1F: Nana Addo commissions diaper making factory in Bortianorbullet
7 Don’t pay victims of financial scams; it sends bad signals-...bullet
8 PR Dear Menzgold customers, here are 8 key things about...bullet
9 How to create an NGO in Ghana How to register and start...bullet
10 Menzgold suspends online trading; ask staff to go on...bullet

Top Videos

1 Former Capital Bank staff grills pork for survivalbullet
2 Forbes 2018 Africa's billionaires rich listbullet
3 New Phone Nokia’s MWC 2018 Event in Under 10 Minutesbullet