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29.02.2012 Feature Article

Discourse On Political and Economic History of Ghana-The Slide of A Political Hero, Kwame Nkrumah and The Depletion of Country’s Foreign Reserves

Discourse On Political and Economic History of Ghana-The Slide of A Political Hero, Kwame Nkrumah and The Depletion of Country’s Foreign Reserves
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The history of Ghana was one of despondency and tragic, of unnecessary tragedy. The post-independence history is normally washed up with rhetoric of a charismatic leader providing for the populace on a flight of the imagination or fantasy that takes decades to pass though. An instance of appeal was Argentina where it was Juan Peron, and likewise in Ghana it was Kwame Nkrumah.

It will be prudent prior to delving into the highlights of the Nkrumah era, it will be helpful to dig up some observation on the character of the flight of imagination or the fantasy that bait so many countries and its people.

Most important, the legacy and overload of ancestral and feudal spectrum of the social order is the suggestion, that leaders have the potential to get to the bottom of problems and bring about justice and social transformation. A critical reflection is village ruler who takes properties from the villagers and to the helpless villagers the ruler gives the impression comparable to, as being a repository and a potential base of their well-being, wealth and comfort. To those who seek out to be rulers it seems that if only they could attain that standing within the society, they could not have a satisfying living, save for a fact that they be could helpful to the villagers.More so like fairytale godmothers, solving all problems with the wave of a magic wand.

So the prospect of becoming a fairy godmother, do become a potent impetus and motivation for those who seek out leadership. As a substitute for the powerless who have no hope of becoming a leader, the concept of there being fairy godmothers can put an end to all problems is as well a potent inspiration. However there are no fairy godmothers and can be no fairy godmothers. The resources that the village ruler gives out come solely from the productive labors of the people themselves. If the people decide to abandon their own productive labors in seeking benefits from the ruler, then soon than later even the ruler will have no resources.

The romance of Third World leaders with socialism inclination is just an enterprise to establish a standing like the village chief on a bigger platform. Ideologically, Socialism's is to provide a rationale function that concentrates all power absolutely in the hands of the central government. Citizenry must be wary of people who belief in the practice Socialism. We do not have to make the mistake of thinking that socialism will feed the people. We must understand that socialist and communist political parties use rhetoric and propaganda but lacking prudence to build sound economic policies.

The impressive leader of Cote d'Ivoire (Ivory Coast), Felix Houphouet Boigny, remarked, "Don't make the mistake of thinking that socialism will feed the people." Boigny associated with socialist and communist political parties early in his career but he had the good sense not to be deluded by the rhetoric and established sound economic policies in Cote d'Ivoire that led to economic success, The Ivory Coast Miracle.

Quite the reverse happened in Ghana. Kwame Nkrumah inherited a much more looking good economy and on the whole ruined it. What can be said in his defense is that he took up policies that the British had start out. He took bad policies and plunge these policies to their obvious termination. The kind of social democratic policies that more or less nearly shattered the British economy did tore down the Ghanaian economy. On the other hand, many of his bad policies were his own creation and not from the British. The one-party state was one such of the several disappointing building blocks that Nkrumah produced.

Again, it will be sensible that before digesting and dissecting the details further, at this point is what took place under Nkrumah.

Present day Ghana then Gold Coast had developed a prosperous cocoa growing industry, which started in the 1870's with the importation of cocoa growing by indigenous farmers. Cocoa is native to Mexico and it was the adventure and the ingenuity of the indigenes and good sense to appreciate, that the crop could be productively produced in West Africa. The development of the cocoa industry was the result of the efforts of individual indigenous farmers. At the turn of twentieth century the British or the Colonial government recognized the industry and took control.

The rationale was the following. In view of the fact that the quantity of cocoa put on the market at whatever time, the end result was that of ungainly, un-coordinated results and assessment of small-scale farmers, that the price for their produce showed disparities in pricing to a large extent. A government marketing board may possibly purchase the cocoa from the farmers and with awareness manage, and at a time market it, as a consequence to keep up a regular price. This possibly will have been appropriate but the government did not have it in mind to play a part as middleman in cocoa selling for free of charge. The set price paid by the marketing board to the farmers was to a large extent, less than the price it obtains from the sale of cocoa on international market. To all intents and purposes, this price difference was a tax on the cocoa industry. Through this kind of informal Taxation the Colonial government built up substantial funds to its credit. Thus, when Ghana achieved its independence the funds build up as a result of this tax on the cocoa industry had a value of hundreds of millions of dollars which stood at $502.2 million (about five hundred million plus dollars) in external or foreign reserves.

But, at the end of the day, the taxation on the cocoa industry had a number of undesirable secondary effects. The not attractive price paid by the government weighted against that of the international price gave rise and made smuggling cocoa beneficial enterprise. Other aspect was the market dominance of government marketing board that enabled it, increase the prices more than levels that would have been real in its absence. The price hike became incentive for other countries such as Brazil to build up its cocoa industry. Eventually, it impacted negatively on the price of cocoa and the end result was that, the Ghanaian or Gold Coast cocoa industry lost market share and faced a to a great extent lower price. The impact of the lower price did not manifest itself immediately; however these events came to culmination years later, when Kwame Nkrumah came to power.

At the time Kwame Nkrumah assumed power he had large reserves of funds and a buoyant cocoa industry that was producing and creating more funds. Added to it was a substantial physical and social infrastructure that was non-existent in many Third World countries. His decision to undertake a program of industrialization on a massive scale became a washout rather than a Big Push. The Big Push industrialization was to be a large-scale industrialization in a far-reaching front of industries. This industrialization would not only replace the imports, it was rather to aid reverse products that Ghana would produce and was not in position to procure or import.

If there is someone whose naivety and outrageous analysis on history with regards to Kwame Nkrumah, is Kwesi Pratt, The Editor of Insight, he is as ignorant as the word ignoramus. He is alleged to have stated that the country's colonial masters left nothing behind of substantial value for development. Pratt's statement is an analytical fraud and not factual. There are those CPP analysts who think Nkrumah was infallible and would go to great extent distorting facts, even when there are facts to support such position. Pratt must understand that he is not an authority or repository of knowledge.

Contrary to Kwesi Pratt platitudes, Nana Akomea's discourse on the foreign reserves at independence is not speculations as being bandied by CPP apologetics, but a fact. Pratt will do himself a lot of good if he researches before making statements. Like Tony Aidoo they harbor and conceive hate for the Danquah/Busia tradition, so much so that anything said of their Messiah is an abomination and will travel great lengths to cast aspersions, .

Pratt must read, he lacks the capacity for intellectual discourse and must spare the good people of Ghana his pre-history Marxist discourses. More so he should understand that Nkrumah's governance did not take place on a different planet; Kwame Nkrumah was callous and cunning as he Pratt. Better still his penchant to ridicule Danquah/Busia tradition remains only sour grapes in those who believe in the immortality of Kwame Nkrumah.

More important and prior to the CPP assuming the reins power in 1951 the Gold Coast external or foreign reserves stood as £113.3 million or $316.107 million. By 1955 they had grown or increased to £208.2 million or $580 million. Then at the date of independence they were in the region of £180 million or S502.2 million (exchange rate-£1.00 = $2.79 in year 1955 and 1957) respectively.

By the beginning of 1963, Ghana external or foreign reserves had fallen to £71.5 million or $200.2 million. When Kwame Nkrumah was ousted from power, Ghana foreign reserves were almost depleted, down to a few millions of dollars.

Ghana's economic structure was a queer mixture of “welfare socialism” of the type seen in Western Europe and typical neocolonialism. Such a combination hardly seems possible-until the consideration is brought in, that the per capita gross national product in Ghana in 1955 was three times that of Nigeria and nearly ten times higher than that of India – the remarkable figure of $460, which appears to be equal to or above that of Turkey!

Ghana is mainly a cocoa exporting country. Its economy has all the shortcomings flowing from monoculture – its fate hinged essentially on the price of cocoa. When prices started to slide, the currency reserves built up to $580 million during the forties and fifties began to melt away (they were down to a few million dollars at the time Nkrumah was overthrown). Ghana's economic development plan, based on the assumption that cocoa earnings would amount to $280 million annually in the late sixties, including 1970, was upset when earnings stagnated around $200 million.

Many Nkrumah-era investments were monumental public works projects which were assets for the country, agricultural and industrial schemes. With cocoa prices falling and the country's foreign exchange reserves fast disappearing, the government resorted to supplier credits to finance many projects. By the mid-1960s, Ghana's reserves were gone, and the country could not meet repayment schedules.

Development plans were drawn up and investments undertaken such as the 7-years development plans. For instance, a shoe industry was established. There was the need of a leather industry and a leather industry required sufficient levels of production in the cattle industry. The only drawback to the economic planning was, it got messed up up with political decision-making. The leather production plants were to be found at great distance from the cattle industry of the north. Worse of all the shoe production plants were not to be found where the supplies of leather were within reach.

One of the most outrageous economic blunders of Nkrumah's industrialization plan was the building of a plant to can mangoes. The plant had the capacity to process 7,000 tons of mangoes a year but after it was built at a cost 80 percent over the original budget it was found that there were hardly any wild mango trees near the plant and it would take seven years to grow bearing mango trees.

Kwame Nkrumah did not want to revise the seven-year plan (among other reasons, precisely in order to overcome the dependence of the country on a single crop!), deficit financing was resorted to on a wider and wider scale, the deficit rising to $112 million for the 1963 budget. This in turn meant increased inflation, rising food prices and mounting scarcities in some goods like yams and machetes. These developments were completely opposite to the expectations of the people who had voted Nkrumah into power and who had associated independence with the hope of a steadily increasing standard of living, created the general climate of political unrest.

This was combined with ever-increasing bureaucratization of the Convention People's Party, of severe repression of trade-union autonomy, of rampant corruption among the government and the party functionaries, of growing privileges to the party and state bureaucracy. (The crassest case was that of Minister Edusei's wife ordering a gold (!) bed to be paid for out of the public exchequer. There is no doubt that Nkrumah knew about the corruption of most of his ministers, and that he was both unable and unwilling to eliminate this disease, perhaps because he also participated in it.) Such a policy, based upon lack of confidence in the masses, could only heighten the apathy induced by the unfavorable change in the economic climate of the masses.

Before long the entire enterprise was caught up in difficulties and mix up and the economy was weakening. Corruption was out of control. For instance, a number of purchasing agents were paying the cocoa farmers for their production with rip off checks (counterfeit checks)) and held on to the real payments for themselves. As a final point, the “Big Push” became the “Big Putsch” when the military topple Nkrumah whilst he was heading to North Viet Nam on a state visit.

Nkrumah's Big Push for Industrialization in Ghana
Even though overall Nkrumah's “Big Push” was by and large disastrous flop there were some valuable elements of his program. These by and large came in the early days ahead of the “Big Push” really was got on the way. On the whole, the Volta River Dam is generally picked out to be a worthy asset for Ghana and its neighbors. To a certain extent the Dam has been more of use than projected because of the sudden rise in petroleum prices since the 1970's. The harbor and port at Tema has in addition been a benefit to Ghana.

Nkrumah at first paid attention on infrastructure projects and gave attention to small, meaningful projects. For instance, before 1957 the only means to go across the Volta River was by way of ferries.

In 1957 the first bridge was built for crossing the Volta.

Soon after, Nkrumah and his planners, started on to think in terms of high-flying programs, line up of economic development. Government officials were enveloped in bribe taking and misappropriated state funds. This included Nkrumah himself. He was found to have about $5 million in hidden bank accounts.

The language of his government was socialism, but the officials who were spewing out socialist slogans were making purchase of high-priced imported cars. One such official was Yaw Krobo Edusei to have ordered a gold-plated bed costing about five thousand dollars for his wife.

Matching up with these high-flying plans Nkrumah permitted and even encouraged a personality cult to develop with the intention that a person could be penalized for have misgivings that Nkrumah was immortal. Nkrumah used his political dominance to set up a one-party, despotic state. His political rivals were thrown behind bars or flee into exile. A number of those he locked up died in prison

The Political Corruption of the Nkrumah Regime!
The development planning collapse and the financial corruption of the Nkrumah's regime were almost certainly less significant than the corruption of the politics of Ghana, the institution of a one-party dictatorial state and the atrocious persecution of anyone who was less than a committed worshipper of Nkrumah.

Almost immediately after independence Nkrumah set out restricting political freedoms in Ghana. As soon as regional/ethnic based parties in the Northern Territories and in Ashanti offered a political challenge to Nkrumah's Convention Peoples Party (CPP) he took advantage of his party's overwhelming majority in the legislature to outlaw regional and ethnic based parties. This action of Nkrumah brought the different regional and ethnic parties together into a United Party. He then had laws passed that to all intents and purposes banned all opposition parties. As political activity lived on he had the prominent opposition politicians' in detention or imprisoned. People who had rallied round to achieve independence for Ghana, such as J.B. Danquah, died in prison. J.B. Danquah had asked Nkrumah to return to Ghana and made him the general secretary of the United Gold Coast Convention (UGCC).

Even Nkrumah's devoted friends in the CPP were not even protected from Nkrumah's political vengeance. Komla Gbedemah was a founding pioneer of the CPP and an able administrator. He objected Nkrumah's lack of financial discipline and soon found himself dismissed from the government by Nkrumah in a radio broadcast at dawn in April of 1961.

Komla Agbeli Gbedemah was originally with the United Gold Coast Convention. He left with Kwame Nkrumah to form the Convention People's Party (CPP). Gbedemah was an important member of the CPP because of his organizational ability. He was influential in getting Nkrumah elected to the Legislative Council on February 8, 1951 at the Elections for the Legislative Assembly. He organized Nkrumah's entire campaign while he (Nkrumah) was still in prison, detained by the colonial government. Nkrumah duly won the Accra Central Municipal seat. This led to Nkrumah being released on February 12, 1951 and he being invited to form a government. Gbedemah is in some reports inamed as being the first to welcome Nkrumah after his release from Fort James prison.

The Dawn Broadcast of April 1961 was the culmination of Nkrumah's shift to a militant Marxist Socialism. He had chosen Tawia Adamafio as General Secretary of the CPP and Adamafio made unswerving loyalty to Nkrumah and Socialism, his guiding principles. Sycophants such as Adamafio began to talk of the immortality of Nkrumah and publically attacked any one publically who doubted that Nkrumah lives forever. The personality cult surrounding Nkrumah seemed thoroughly entrenched, even the leftists such as Adamafio were not safe from State persecution in Ghana.

In August of 1962 someone tossed a grenade at Nkrumah. He was injured but recovered soon. But long after he recovered from the physical injuries he seemed psychologically affected. He had about 500 arrested and detained indefinitely. He had the legislature pass the Preventive Detention Act which permitted the government to detain anyone for any reason. He closed the borders of Ghana. And finally Nkrumah took it into his head that Adamafio and his cohorts were behind the attempted assassination. He had them tried for treason, but the court under the Chief Justices found them not guilty. Nkrumah was outraged and had legislation passed which gave him the right to overturn any court verdicts. They were retried with new judges and found guilty and sentenced to death, but Nkrumah commuted the death sentences.

As part of the political corruption were the clandestinely training of terrorist to take up arms against governments Nkrumah perceived as being stumbling blocks for the advancement of his political agenda on the African Unity. Visits from Soviet and Chinese Communist dignitaries became more frequent. On the flip of these visits there was a more unspeakable side to these contacts.

In April of 1965 a terrorist made an effort to assassinate the president of Niger. Proof came out that the terrorist had been trained in Ghana. Nkrumah denied this and maintained that it was all part of a neocolonialist plot. Nkrumah's denial was emphatically challenged by Felix Houphouet-Boigny, as Houphouet made public proof of guerrilla training camps in Ghana manned by Chinese Communist instructors.

At a meeting of the foreign ministers of the Organization of African Unity in June of 1965 Nkrumah tried to, through his representative, to put a stop to criticism but the representative from Niger made public the existence of seven guerrilla training camps operating in Ghana with Chinese and East German instructors.

In February of 1966 Nkrumah left Ghana to visit Hanoi in North Vietnam. He was at a stopover in Beijing on February 23rd when military officers took control of the government. Some people now say that Nkrumah was a visionary, but his was ultimately a hideous vision of absolute, ruthless control.

Nana Akwah
Nana Akwah, © 2012

The author has 146 publications published on Modern Ghana.Column: NanaAkwah

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