Question

Economic policy in Ghana since 1957 can br delineated into many phases. Briefly outline the major Economic policies under each of the phases of Ghana's development.

Answer 1

Ghana is a developing country. Income levels in Ghana are comparatively low in comparison to other countries in the world . The distribution of gross national product in Ghana is uneven the economic development of Ghana is divided into five stages:-

Phase 1 (Nkrumah Regime):-

• This period was mainly related to to economic prosperity with an Open Economy where private sector was the main engine of growth and public sector was mostly concerned with public administration
• The first phase started from 1957 and continued till 1961
• There was no restriction on international trade and this period was marked as the period of liberalisation.
• This period was characterized by price stability and economic growth of above 5% per annum

Phase 2 :-

• This phase started from 1961 and continued till 1966
• This phase was characterized by restricted trade with tariff and quotas and growth and social and economic infrastructure
• This period led to drain in foreign exchange reserve, overvalued currency, budget deficit and balance of payment problems
• The power was shifted from private sector to public sector which became the source of economic development
• By the end of this era, economy went into stagnation

Phase 3 :-

• This period started from 1967 and ended at 1971
• In this period attempts were made to liberalise and stabilize the Ghana economy why devaluing its currency in order to reduce government expenditure
• This period saw abolition of some public sector activities along with employees retrenchment

Phase 4 ( Acheampong regime) :-

• This period started from 1972 and ended at 1982 which constitutes one decade
• This Era witnessed currency revaluation along with strict import controls and high inflation rates
• The economy faced stagnation and virtual collapse.
• The flourishing illegal economic activities increase the black market rates in the economy

Phase 5 :-

• This is the longest running face in ghana's economy which started in 1983 and is running till date
• This is a period of economic reforms which emphasized on decentralized decision-making where invisible hand of the market behaviour was given much importance
• This phase is characterized by trade liberalisation, privatisation, globalisation decanalization of imports and Exports and selling of government Enterprises to private sector