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27.01.2004 Feature Article

Can Ghana Leap from Agricultural to Industrial Economy?

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If one take a critical look at how the East and South East Asia and Latin American NICs (Newly Industrialised Countries) transformed themselves from mostly agricultural economies into present day Industrial giants (through "Export Led Growth", then most people would want to know why sub-Saharan Africa did not pursue that same strategy?

There has been various studies, ranging from the Temperate/tropics debate (Jeffrey Sachs et el), Agricultural and Land reform debate, the Core and periphery debate (Dependency School), the corruption debate and countless other analyses about why sub-Saharan Africa has been left behind. However, most social scientists and Neo-Liberal economists tend to ignore the pivotal role played by the "Triad" (United States, Japan and the European Union) and geopolitics reality of Development, what has become known in the literature as "Guided Capitalism and Dependency Capitalism".(The Marxist and Dependency School) What African policy makers, and to some degree the former colonial masters and early independence leaders failed to do was to implement drastic Agricultural Land reforms. The monopolies of marketing boards and the policies of Import Subsitution Led Growth in smaller Afican Economies mainly led to their inability to reform. Africans, including Ghana relied solely on catch up industrialisation instead of developing indigenous industries as was the case in every developed country. Almost all the developed countries, including those that were guided by United States and Western Europe (South Korea, Japan, Taiwan, and Hong Kong) embarked on total reform of their agricultural system, gave prevalence to their indigenous industries and incentives to develop their products for export, thus making sure that they were self sufficient in food production and/or had the guarantee of supplies from United States before undertaking industrial reforms.

The motivational aspect should not be ignored as well, as all stakeholders had one ambition i.e. to achieve middle income status, and that became the fundamental goal of those economies. One recent classic example is China. China and all the Asia NICs developed their Human and Infrastructure Capital well before the take, thus all the necessary prerequisites were in place when they embarked on their development.

Like Ghana and various developing countries, the Asia NICs (Newly Industrialised Countries) also promoted "Study Abroad Policy", and hence benefited from the skills acquired by their nationals when they returned Home. A classic example was Malaysia and China. Chinese Skilled nationals in Diaspora are pouring back to their Motherland to help rebuild their country into an Economic and Industrial gaint.

Until the late 1970s to early 1980s, Malaysia and South Korea has the same level of development as Ghana and were an aid recipients. Now both countries have joined the OECD league of countries of Aid donors............... So the question, why has Ghana been left behind?, considering that if one includes Ghana's skilled migrants, she has the same ratio of intellectuals and skilled labour per population.

Ghana is blessed in that it is the only country in the sub-region that had been able to escape the internal crisis that had and still engulfing its surrending neighbours.Despite military coups and brutality, it is still the only country where its citizens can be counted as one of the most peaceful people on the whole sub continent (they would rather walk away than resorting to violence). Like China, Ghana's skilled Nationals in Diaspora have acquired a wealth of knowledge that would greatly aid the Homeland if they choose to return and help to rebuild their country.............. this brings us to the issue of "Brain Drain" and its implications for the Ghanaian economy and Role of Land Reforms and Chieftancy in the Development Debate. What robbed Ghana of acheiving high level of development as its contemporaries in East and South East Asia was the instabilities that engulfed the country from 1972 until 1983, a decade that saw both capital flight and large emigration of her skill labour. This decade has become to be known as Africa's "Lost Decade". Although the flight of skill labour occured in almost all the countries in sub-Saharan Africa, Ghana was the only country that lost almost all her skilled labour.

The institution of Chieftancy which, until the late 1980s had resisted the land reforms are now at the forefront of the drive to develop. The numerous debates by Ghanaians both at Home and Abroad about how their country should procceed in its quest to achieve middle income status by the year 2020 shows their determination of people who had realised that this is now or never. And that ambition is now shared by Academics, Politicians and Traditional Rulers. This was the same ambition and determination that Dr Mahathir Mohamad and other Asian NICs instilled in their nationals during the reforms......"Country before Self" Kwame Nkrumah used the Young Pioneer Movement to built up this same patriotism in Ghanaians, but people misunderstood him and called him every name that one could think of....... Kwame was well ahead of his time..... His pet project, " To Unite the Whole Continent" was classed as a Crazy idea...... the same unity that the European Union are pursuing ! with vigor by bringing in the Eastern Europeans....... showing how mistaken the Africans leaders of yester year were. If Kwame have had his way...............

In order to achieve the middle income status, the government should undertake drastic Land and Financial reforms i.e encourage savings, develop its insurance sector (eg the proposed introduction of National Health Insurance) and redistrubition of Land, undertake the modernisation and building of its infrastructure, reform the education sector by eradicating illiteracy and Primary Health care. Ghana can not pursue Development by solely relying on GDP with Human Development.

Sub- Saharan Africa is the only region where inequality and poverty are marked. More than two thirds of its people are classified as the poorest of the poor and where HIV/AIDS is rampant. It is also the only region where intra and inter conflict has killed and displaced more of its people. This situation can be found across the whole continent including Ghana.

Ghana, like many sister nations in sub-Saharan Africa rely on either one or two cash crop as a major export earner. Due to the nature of relationaship and the level of development between agricultural producers in the developing countries (mainly sub-Saharan Africa) and the industrial producers of the developed world, this relationship will always be one of subordination. This is exacerbated by the impact of Globalisation and the financial dependency of sub-Saharan Africa countries on the Industrialised countries and their MNCs. The assets of a Multi Nationals like Shell or British Petrolum are more than 45 sub-Saharan African countries put together, hence their influence on national governments, including their home country governments can have a huge impact on policy making. Although Africa's share of world trade is less than 3% with South Africa accounting for 80% of the total, its economies have been locked into the global econom! y due to Africa's high level of debt owed to the western financial institutions. Ghana and the rest of the countries in sub-Saharan Africa spend over three quaters of their GDP to service their debt, thus leaving its people to go hungry. Every child born in Africa come into the world owing $317 to the Western Financial Institutions including the World Bank/IMF. Again sub-Saharan Africa is the only region with high level of persistent hunger among its people.....( where more people go to bed at night with out food), a very sad and frightening situation that is made worse by the high level of HIV/AIDS infection among its people, making Black Africans an endangered species.In Ghana and other African countries Street children are a common site. In the major towns in Ghana, school school as young as 5years old have given up school to hawk...... children as young as 12years old have become the breadwinners of their families.

In Ghana HIV/AIDS is now the highest killer, second only to malaria and TB. The rapid spread of HIV/AIDS among Ghanaian girls is quiet frieghtening. Although this fight has been taken up by Ghana's leading Traditional Rulers, it requires the effort by all stakeholders. In a lecture that I attended at South Bank University in London on Development in sub-Saharan Africa, I posed the question about the impact of HIV/AIDS on the African Economies and its implications for the future generation, to Professor John Taylor (Director of Development Studies and an Expert on China and the Far East - he was also my former lecturer during my post graduate studies at South Bank University). Professor Taylor stated that, "If the HIV/AIDS pandemic is not taken seriously and addressed by African Leaders, then sadly the continent would be heading towards liquidation".

In their book, " Can Africa claim the 21st Century?" the World Bank analysis of the Africa put sub-Sahara! n Africa at the bottom of every scale... from Human Development index to GDP.The Human Development goals that Africa acheived in the past are now being eroded. Thus, until Ghana addresses these issues in the form of a very strigent poverty reduction strategies, then its quest to achieve middle income status this side of the 21st century would be quiet impossible. Lack of research in Science and Technology due to lack of resources and out dated laboratories (identified by Professor Jeffrey Sachs of Havard University) Ghanaian intellectuals and skilled workers are leaving the country in droves, again hampering the effort being made by the government and Nananom towards development. A research that I conducted in the early 1990s and other studies all revealed that these intellectuals did not migrated for financial reasons but lack of resources. In major Western Institutions one can see various Ghanaian academics excelling in their field of study........ The question is, What is the Ghanaian Government doing to entice these nationals back?

The first place to start is to eradicate the endemic and excessive corruption that is entrenched in the Ghanaian society. The government should enlist the advice of these skilled nationals in the formation of its policies on every aspect of its development policies. Another issue that the government need to seriously address is the issue of the large inflows from these same "lost Ghanaians" and its uses in term of social development. Remittances has become the third largest earner for the country. Is these inflows included in the 5 year Development Plan? These sons and Daughters are repaying the debt they owe the Motherland as a result of the free education that they had, hence they (the Diaspora) have the legitimate right to know the uses of these funds.

The task of leaping from Subsistence Agricultural Economy into Industrial Economy is a huge task for Ghana, thus the question - Can Ghana make that leap?, i.e. Can they achieve the Vision 2020 mission? It is gratifying to know that every Ghanaian that one comes across have the same burning ambition of seeing their country acheiving middle income status by 2020..... ambition that both Ghanaian Politicians, Diplomats and Nananom wear on their sleeves in any international forum that one comes across, vigorously selling the potential of their country to foreign businessmen as the gateway to the entire sub region. Although Geopolitics plays an important and crucial part Development, Ghana can once again show the way forward to pull the entire sub region with them. P. Jeffrey MSc, BSc. London. Views expressed by the author(s) do not necessarily reflect those of GhanaHomePage.

Peter Nee Jeffrey
Peter Nee Jeffrey, © 2004

The author has 54 publications published on Modern Ghana.Column: PeterNeeJeffrey

Disclaimer: "The views/contents expressed in this article are the sole responsibility of the author(s) and do not neccessarily reflect those of Modern Ghana. Modern Ghana will not be responsible or liable for any inaccurate or incorrect statements contained in this article."

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