The Stumbling Blocks In The Path Of Ghana's Economic Growth By Cameron Duodu

On Saturday 18 April, 2009, the London Guardian carried a piece by one of its columnists, Polly Toynbee, in which she described how a group of women at Mangoase, in Akuapem, Ghana, are using micro-credit to finance small businesses .

She had visited Mangoase in the company of the deputy leader of the British Labour Party, Miss Harriet Harman.

Each of the 50 women in the group sat fanning themselves with their pass books, feeding babies, waiting their turn, she wrote. They added the equivalent of a dollar or two to their savings or to pay back a small loan that had launched “life-changing businesses”, such as smoking fish to sell, buying beans and cassava to sell by the road side, or building a small bar, a few breeze blocks at a time.

“This credit union deals in micro-sums for micro-businesses, but enough to send a child to school, buy a school uniform or exercise books”. Miss Toynbee reported. The credit unions were set up by “Plan UK”, she added. The crash of Wall Street “reaches right here, hitting these women too in soaring prices and threatened social cuts,” said Polly Toynbee.

Ghana, which had “met its millennium goals on children in primary education and cutting poverty”, had been “an economic and political success story”, with high growth. But last year, world food and oil prices had soared. So the last government had borrowed to cover these unexpected costs, with the result that the currency had dropped in value; inflation had risen to 20 per cent; and credit had “dried up.”

Polly Toynbee noted: “If rich countries had kept their 2005 Gleneagles promises, as Britain did, Ghana would have received $1bn, with no need to borrow at all. Where should Ghana turn? To the IMF, of course”.

But there was “deep political and public resistance” to the Fund, after previous bad experience with its prescriptions.

“Remember how humiliated Britain felt going cap in hand to the Fund in 1976?” she asked. “Ghanaians know how World Bank and IMF largesse came with neo-liberal quack remedies. Cutting public services, making the poor poorer, putting cash crops and trade before welfare was the old IMF way…. The World Bank insisted on a private insurance model for Ghana's health service that has been administratively expensive and wasteful… The IMF wants subsidies for electricity removed, again hitting the poorest hardest”.

According to Ms Toynbee, Oxfam's senior policy adviser and economist, Max Lawson, doubts that such cuts are needed — “just a loan to tide Ghana over”, he thinks. He adds: “The IMF is too brutal”; it demands “balanced books within one or two years”.

Polly Toynbee's article was a sympathetic and penetrating appraisal of the economic difficulties of a developing country. But probably because it showed such a deep understanding of Ghana's problems, it brought a torrent of venom on her head.

In a classic demonstration of the 'Little England' mentality that abounds amongst some of the chattering classes in Britain, Polly was pilloried for deigning, not to comment on the burning topic of the day — the uncovering, by a blogger, of a secret scheme hacked by one of prime minister Brown's advisers, Damian McBride, to smear leading Conservative politicians — but on what was going on 'in far-away Ghana.' Many commenters also sneered at “those corrupt Africans”, whose corruption and incompetence had brought them their economic woes.

The debate can be found on the web at:
http://www.guardian.co.uk/commentisfree/2009/apr/18/ghana-economy-imf-polly-toynbee?commentpage=2

Happily, the hostile views expressed were not left unchallenged.

For instance, one Rabbitin pointed out that “in a nutshell, the poverty of Ghana and SubSaharahan Africa in general is imposed. SubSaharahanAfrica is in an economic jail”. I don't have enough space to quote everything he said, but it can be found at the Guardian website.

Kantara Kamara thanked him for acknowledging that we are in an “economic jail. African intellectuals with their heads screwed on right, he said, had been saying this for an infinity of years, yet many Westerners kept regarding Africans as “beggars”.

Kantara Kamara then enlightened the Guardian readership thus:

“SubSaharanAfrica [he wrote] was INSERTED into the Western capitalist economic pattern by force of arms… to fulfil the single purpose of providing the raw materials that enable Britain [for instance] to have enough money to feed and care for its own citizens, while being able to accumulate enough of a surplus to dangle before the countries of SubSaharanAfrica as generous “aid”…

“If Polly [Toynbee] had ventured from Mangoase to Tema, [he continued] she would not have failed to observe a chain of huge silos, which stand empty…. They were meant to store cocoa beans at times when the world cocoa price was too low for cocoa to be exported profitably.

“The IMF, staffed almost entirely by people raised in the gambling houses of the world commodity markets, realised that successfully storing cocoa in the producing countries, instead of in the consuming countries,(as at present) could [alter, or] “distort” the [balance of power in the] traditional cocoa marketing system, by depriving the commodity speculators of the valuable “chips” on which their gambling gains depended.

“In other words, control of the supply by the producers would prevent commodity speculators from being the main beneficiaries of the proceeds from the labour of the cocoa farmers. So when Kwame Nkrumah — who conceived of the idea of storing cocoa in hard times — was overthrown in 1966, the IMF advised the soldiers to abandon the idea.

"The Western-educated advisors of the soldiers concurred. In exchange for “balance of payments support” and “debt rescheduling”, they made sure that work on the silos came to a grinding halt.Thereafter, the silos were never completed and cocoa marches on its merry way, yo-yoing in price in the same way it has done for over a hundred years: the current price, for example, is regarded as 'relatively good', yet in real terms, it is about one-hundredth of the price obtained in the 1954-55 crop season.”

"Ghana's forests [he went on] have been decimated for export [of wood] to America and Europe. (He forgot to point out that this has increased global warming in Ghana).

The imposed system of tree-felling, he wrote, is difficult to alter without a massive outlay of capital. It operates like this: gangs of timber company workers go into the forest and mark the good exportable trees. These are generally felled from the bottom. The big trees, some over seventy feet tall, fall heavily down, killing all the young trees and food crops nearby, both with their trunks and their branches. The tree is then processed into exportable logs; push-driven by labourers to a motorable road, despoiling food farms that happen to be on the way; loaded on to a timber lorry, and driven to the ports, the [heavy] timber lorries ruining the tarred roads with their weight.

“In an American/European furniture factory, [he pointed out further] not even the sawdust from the log is wasted but is used to turn the surface of inferior woods into a semblance of beautiful wood. After over 100 years of this, some of the best Ghanaian woods have been harvested to extinction: you can hardly buy the ultra-beautiful Afromosia, Mahogany or Odum from the country any more.

Thus, a country that should be exporting the best, MOST EXPENSIVE and most beautiful FURNITURE in the world, is left with ruined roads and food farms as well as clogged harbours, while European and American furniture companies who import Ghana's unprocessed wood to turn into such furniture, bask in riches.

“Who owns the ships that cart those huge logs to Europe and America?” Kantara Kamara asked rhetorically. A 'beggar nation' indeed! Gold; manganese; bauxite — all are exported raw, through an imposed system that cannot be altered without huge outlays of capital. A battle constantly rages between local agents of goldsmiths and Western mining companies, over digging in areas given to the companies as “concessions”. The export of gold bullion has not been stopped, though that could encourage Ghanaian goldsmiths into building factories to craft the type of priceless jewellery that turned Asante into an Eldorado, before the whiteman ever put his machine claws into Asante soil.”

Kantara Kamara continued: “The ladies of Mangoase will not necessarily benefit directly from Polly Toynbee's exposition of their situation (they do not have the luxury of being able to log on to the Guardian website, after all!) but if they could, they would appreciate the fact that someone had tried to understand what they are about, and are trying to do about their poverty, and told others about it. Who knows? Even the largely deaf Ghanaian establishment may hear what Polly said and take notice.”