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T H E E C O N O M Y O F GH A N A S I X T Y Y E A R S
AFTER INDEPENDENCE
 The Economy of
Ghana Sixty Years
after Independence
Edited by
ERNEST ARYEETEY
and
RAVI KANBUR

1
OUP UNCORRECTED PROOF – FIRST PROOF, 6/1/2017, SPi

3
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First Edition published in 2017
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Links to third party websites are provided by Oxford in good faith and
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 Acknowledgements

The Editors would like to acknowledge the invaluable assistance of Sue Snyder of
Cornell University as the administrative anchor of the project.
 Preface

Ghana will celebrate 60 years of independence in 2017. As one of the first

countries to receive independence in sub-Saharan Africa, Ghana’s development
has been followed with great interest by the development community. After a
period of high growth in the first two decades of independence the economy fell
into a deep slump through the 1980s. Economic recovery gathered pace through
the 1990s, alongside a restoration of democracy after a long period of intermittent
military rule.
At the 50th anniversary of Ghana’s independence in 2007, political stability and
economic growth gave some cause for optimism, even though it was noted by
many observers that Ghana’s economy had not achieved the structural transform-
ation to a more diversified production base that was desired by policymakers. At
the same time, oil and gas discoveries held out the prospect for an oil boom which
could underpin further economic development, although there were worries
about the natural resource curse witnessed in many resource rich countries.
As Ghana approaches its 60th birthday, it would be fair to say that optimism
and worries for the future continue to be present in equal measure. Economic
growth in the last decade has been high by historical standards. Indeed, recent
rebasing of gross domestic product (GDP) figures has put Ghana over the per
capita income threshold into middle-income country status. However, structural
transformation has lagged behind. Further, fiscal discipline has eroded signifi-
cantly and heavy borrowing especially on the commercial market is being engaged
in, while elements of the natural resource curse have already manifested them-
selves. The question most observers ask is whether the gains from two decades of
reforms are being reversed.
Given this background, this volume brings together leading established and
young economists, from within and outside Ghana, to analyse and assess the
challenges facing Ghana’s economy as it enters its seventh decade and the nation
heads towards three-quarters of a century of independence. The chapters in the
volume cover the major macroeconomic and sectoral issues, including fiscal and
monetary policy, trade and industrialization, agriculture, and infrastructure. The
volume also covers the full range of social issues including poverty and inequality,
education, health, gender, and social protection.
Our hope is that this volume will take its place as a contribution to the ongoing
debate and discussion on the future and the promise of Ghana’s economy to
fashion a better life for its citizens.
Ernest Aryeetey
Ravi Kanbur
 Contents

List of Figures xi
List of Tables xv
List of Contributors xix

PART I. THEMATIC ISSUES

1. Ghana at Sixty: Learning from a Developing African Nation’s Past 3
Ernest Aryeetey and Ravi Kanbur
2. W. Arthur Lewis and the Roots of Ghanaian Economic Policy 16
Ravi Kanbur
3. Property and Freedom 28
Franklin Obeng-Odoom

PART II. MACROECONOMY AND FINANCE

4. Economic Growth in Ghana: Trends and Structure, 1960–2014 45
Ernest Aryeetey and Ama Pokuaa Fenny
5. Sixty Years of Fiscal Policy in Ghana: Outcomes and Lessons 66
Robert Darko Osei and Henry Telli
6. Monetary Policy and Inflation Management in Ghana: Inflation
Targeting and Outcomes 88
Peter Quartey, Bernice Owusu-Brown, and Festus Ebo Turkson
7. Trade and Exchange Rate Policies since Independence and
Prospects for the Future 103
A. D. Amarquaye Laryea and Bernardin Senadza
8. Banking and Capital Markets: The Evolution of Ghana’s Financial
Sector and Future Prospects 117
Sam Mensah
9. Oil and Ghana’s Economy 137
Augustin Kwasi Fosu

PART III. SECTORAL PERSPECTIVES

10. Flickering Decades of Agriculture and Agricultural Policy 157
Fred Mawunyo Dzanku and Christopher Udry
11. Industrial Policy in Ghana: From a Dominant State to
Resource Abundance 176
Nkechi S. Owoo and John Page
x Contents

12. Formal and Informal Enterprises as Drivers and

Absorbers of Employment 192
William F. Steel
13. Urbanization in Ghana: Retrospect and Prospects 207
George Owusu and Paul W. K. Yankson
14. State of Ghana’s Infrastructure and its Implications
for Economic Development 223
Edward Nketiah-Amponsah and Patricia Woedem Aidam
15. Managing the Environment for Development 242
Daniel K. Twerefou and K. A. Tutu
16. Mining in Ghana: Critical Reflections on a Turbulent Past
and Uncertain Future 261
Gavin Hilson and Abigail Hilson

PART IV. HUMAN DEVELOPMENT

17. Inequality and Poverty in Ghana 279
Andy McKay and Eric Osei-Assibey
18. Employment and Labour Market 299
William Baah-Boateng
19. Closing the Gender Gaps in Ghana 317
Abena D. Oduro and Charles G. Ackah
20. The Prospects and Challenges of a Youthful Population in
Achieving Economic and Social Transformation in Ghana 333
Emmanuel A. Codjoe
21. Education in Ghana: Access, Quality, and Prospects for Reforms 349
Kwabena Gyimah-Brempong
22. Health and Healthcare in Ghana, 1957–2017 365
Ama de-Graft Aikins and Kwadwo Koram
23. Social Health Insurance in Ghana: The Politics, Economics,
and the Future 385
Isaac Osei-Akoto and Clement Adamba

Index 401
 List of Figures

4.1. GDP growth rate, 1960–2014 46

4.2. GDP growth, 1960–1983 47
4.3. Capital investment, 1960–1983 49
4.4. Savings; value and share of GDP, 1975–1983 50
4.5. Money supply growth, 1960–1983 51
4.6. Trade balance as per cent of GDP 52
4.7. GDP growth, 1983–1995 53
4.8. GDP growth, 1995–2010 56
4.9. Sectoral contributions to GDP, 1996–2009 57
4.10. Budget deficit, 1996–2008 58
4.11. Trends in exports and imports, 1993–2010 59
5.1. Trends in overall fiscal deficits for Ghana, 1950–2014 69
5.2. Trends in broad government expenditures for Ghana, 1950–2014 69
5.3. Trends in broad government fiscals for Ghana, 1950–2014 70
5.4. Trends in tax and non-tax revenue for Ghana, 1950–2014 71
5.5. Trends in the extent of slippages for Ghana, 2005–2014 75
5.6. Scatter plot of deficits and government expenditures for Ghana, 1970–2014 76
5.7. Scatter plot of deficits and government expenditures for Ghana, 1970–2014 76
5.8. Scatter plot of deficits and government revenues for Ghana, 1970–2014 77
5.9. Fiscal deficits and GDPPC growth for selected years, Ghana and comparator
countries 79
5.10. Expenditure and GDPPC growth for selected years, Ghana and comparator
countries 80
5.11. Government revenue and GDPPC growth for selected years, Ghana and
comparator countries 81
5.12. Correlates of growth and fiscal indicators for Ghana, 1957–2014 82
6.1. Transmission mechanism 91
6.2. Interest rates, 2003–2014 95
6.3. Monetary policy regimes, money growth, and inflation rates, 1970–2014 97
7.1. Growth of per capita real GDP (%), 1961–2013 112
7.2. Total trade as per cent of GDP, 1961–2013 112
7.3. Trade deficit as per cent of GDP, 1961–2013 113
7.4. External debt as per cent of GNI, 1961–2012 115
8.1. The dialectic of financial sector change in Ghana 118
8.2. Nominal and real interest rates, 1971–1983 123
8.3. Market capitalization/GDP 128
8.4. Number of listed companies, 1991–2014 129
xii List of Figures

8.5. Interest rate spread, 2014 133

9.1. Share of petroleum output in GDP (%) 138
9.2. Share of petroleum output in industry (%) 139
9.3. Sectoral patterns of the Ghanaian economy, 2000–2014 139
9.4. Share of petroleum output in mining and quarrying (%) 140
9.5. Share of petroleum exports in total exports (%) 140
9.6. Share of petroleum revenue in domestic revenue (%) 142
9.7. Ghana’s petroleum revenue allocation 146
10.1. A negative relationship is observed between agricultural GDP share and
economic growth, 1960–2014 159
10.2. Relationship between agricultural productivity and labour shift from
agriculture to nonagriculture, 1960–2014 160
10.3. Agricultural value added growth has been much more erratic than overall
GDP growth 162
10.4. There is a positive association between cocoa producer price and output,
1957–2014 166
11.1. Sectoral contributions to GDP, 1970–1984 178
11.2. Share of sub-sector in total industrial GDP 179
11.3. Sub-sectoral contributions to industrial GDP, 2006–2012 181
12.1. Sectoral composition of GDP, 1957–2013 195
12.2. Male and female active employment participation rates, 1960–2013 197
12.3. Shares in total employment (ages 15–64), 1960–2013 198
12.4. Shares of employment absorption by period, 1960–2013 (%) 199
12.5. Detailed shares of employment absorption, 1992–2006 and 2006–2013 200
12.6. Sectoral distribution of informal self-employment, 1991–1992 and
2005–2006 203
13.1. Ghana: urbanization growth rate and real GDP growth rate 208
14.1. Ghana’s air transport freight in relation to her comparator countries 232
14.2. Ghana’s internet users (per 100 people) in relation to her
comparator countries 233
14.3. Ghana’s telephone lines (per 100 people) in relation to her
comparator countries 233
14.4. Ghana’s paved road (% of total roads) in relation to her comparator
countries 234
15.1. Trends in emissions by type of gas (TgCO2e) 246
15.2. Annual freshwater withdrawals by sector as a percentage of total
freshwater withdrawal 253
15.3. Trends in resource rent as a percentage of GDP 254
16.1. Mineral revenue in Ghana, 2013 (US$ millions) 268
17.1. Highest educational level: secondary or higher by wealth quintile, 1988–2008 292
17.2. Under-five mortality per 1000 live births, 1993–2008 293
17.3. Vaccinations by background characteristics, 1993 and 2008 294
17.4. Trends in stunting, underweight and wasting, 1988–2008 295
 List of Figures xiii

18.1. Educational attainment of Ghanaian workforce, 1960–2013 (%) 302

18.2. Growth of employment and GDP, 1960–2013 303
18.3a. Employment distribution by economic sector, 1960–2013 (%) 304
18.3b. Sectoral composition of GDP, 1960–2014 (%) 304
18.4. Real national daily minimum wage and earnings 307
18.5. Unemployment by level of education 310
20.1. Trends in population size, 1921–2015 334
20.2. Ghana population pyramid, 2010 336
22.1. The WHO health systems building blocks (concepts and strategies for
strengthening health systems) 370
23.1. Change in total revenue of the NHIF and claims paid to service
providers (%) 391
 List of Tables

3.1. Private land purchases in Ghana 31

3.2. Corporate land investment-driven displacements, 2002–2012 33
4.1. Average annual real growth of GDP and agriculture 48
4.2. Industrial sector performance, 1971–1983 48
4.3. Fiscal deficit, 1970–1983 50
4.4. Contribution from oil to GDP, 2010–2014 60
4.5. Growth by sector, 2010–2014 61
4.6. Actual oil revenue relative to selected fiscal indicators 61
5.1. Pairwise Granger causality tests for GDP and other fiscal variables 84
6.1. Monetary policy and target 89
6.2. Selected macroeconomic indicators, 2003–2014 96
8.1. Financial Sector Indicators, 1970–1983 122
8.2. Size and concentration of banks, 1989–1996 126
8.3. Stock market indicators for selected African markets, 2012 129
8.4. Selected banking indicators 131
8.5. Growth of capital market institutions in Ghana 132
9.1. Real GDP growth rates: overall and non-oil (%) 138
9.2. Oil and developments in balance of payments (USD mil.) 141
9.3. Sources of petroleum revenue, 2011–2014 141
9.4. Terms of trade, and Ghana’s economic growth and export performance (%) 143
9.5. Distributed-lag regression results: terms of trade and Ghana’s GDP growth,
1960–2007 (dependent variable = GGDP) 144
9.6. Distribution of petroleum receipts, 2011–2014 (US$ millions,
unless indicated) 149
9.7. Measures of institutional quality (IQ)—Ghana vs. SSA, 2011–2014 151
10.1. Both agricultural employment share and agricultural GDP share has been
declining over time 158
10.2. There is a strong link from agricultural growth to non-agricultural growth,
the reverse is not so strong 161
10.3. Growth in overall and agricultural performance since independence (%) 163
10.4. Growth performance of some agriculture sub-sector indicators (%) 164
10.5. Proportion of household involved in agricultural production 168
10.6. In most cases farm sizes have either increased marginally or remained
largely unchanged 168
10.7. Yields have generally been erratic and much lower than that provided
by the macro data 169
10.8. The share of households using chemical fertilizer and quantity of fertilizer
use is increasing over time 170
xvi List of Tables

10.9. Combining non-exports with non-farm work is not welfare reducing,

particularly in rural areas 171
10.10. Average partial effects and elasticities of poverty with respect to
agricultural productivity 173
12.1. Public and private shares of formal wage employment (ages 15–64),
1992–2013 197
12.2. Summary of strategy, sectors, and employment trends by period 202
13.1. Proportion of urban population and annual growth rate, national and
region, 1960–2010 209
13.2. Selected list of urban development and related policies 215
14.1. Progress on some of the projects from 2012–2014 225
14.2. Overview of aircraft, passenger, and freight movement (international) 227
14.3. Main sources of water supply for drinking per locality 228
14.4. Proportion of population using improved drinking water sources (total) 229
14.5. Transmission losses since 2008 230
14.6. Pearson correlation analysis of the relationship between economic growth
and infrastructural development variables 237
15.1. Some environmental related policies and legislation 245
16.1. Contribution of GDP by economic activity, Ghana 266
16.2. Royalties from mining 267
16.3. Trends in manufacturing in Ghana, 1970–1990 267
16.4. Oil production in sub-Saharan Africa, thousand barrels of oil per day 274
17.1. Some socio-economic indices by administrative region, 1970s 282
17.2. Some socio-economic indices by administrative region, 2000s 282
17.3. Stock of houses and annual rate of increase, 1960–2010 283
17.4. Consumption poverty in Ghana from the first three GLSS surveys 286
17.5. Consumption poverty in Ghana, 1991–1992 to 2005–2006 287
17.6. Poverty in Ghana, 2005–2006 to 2012–2013 288
17.7. Trends in consumption-based inequality in Ghana, 1987–1988
to 2012–2013 289
17.8. Highest educational level: Secondary or higher by region, 1988–2008 292
17.9. Under-five mortality by region, 1998–2008 293
17.10. Regional distribution of doctors (population per doctor) 295
18.1. Trend and distribution of employment, 1960–2013 300
18.2. Female–male ratio of sex representation (incidence) in employment 306
18.3. Unemployment rates, by age, sex, and location (%) 309
18.4. Underemployment rates by sex and location for aged 15+ (%) 311
19.1. Performance in the Basic Education Certificate Examination, 2012 (%) 325
19.2. Composition of employment by industry, persons aged 15 years
and above (%) 326
19.3. Employment status of women and men aged 15 years and above (%) 327
 List of Tables xvii

19.4. Average time spent on activities by persons aged 18 years and

above (in minutes) 328
19.5. Women’s share of gross household wealth and incidence of ownership of
agricultural land and businesses (%) 329
20.1. Youth school attendance rates by age category and gender, 2000 and 2010
(in percentages) 337
20.2. Employment status of persons aged 15 years and older by locality and
gender, 2012–2013 (in percentages) 338
20.3. Activity rates by age categories and gender, 1960–2010 (in percentages) 339
20.4. Type of work engaged in by currently employed population aged 15 years
and older by locality and gender, 2012–2013 (in percentages) 339
20.5. Economically active population 15+ years by employment sector and sex 342
20.6. Employment status of economically active population by gender, 2010 342
21.1. Educational attainment in Ghana, 2010 350
21.2. Enrolment rates over time 354
21.3. Enrolment rate by gender in Ghana 356
21.4. Other educational statistics, 2005, 2010, and 2014 357
22.1. Ranks for top 25 causes of premature deaths in Ghana, 1990, 2010 367
22.2. Health facilities by type and (public/private) ownership, 2007 372
22.3. Health professionals: population ratio, 2006–2012 374
22.4. Ghana—National expenditure on health, 2000–2013 379
 List of Contributors

Charles G. Ackah, University of Ghana

Clement Adamba, University of Ghana
Patricia Woedem Aidam, University of Ghana
A. D. Amarquaye Laryea, University of Ghana*
Ernest Aryeetey, University of Ghana
William Baah-Boateng, University of Ghana
Emmanuel A. Codjoe, University of Ghana
Robert Darko Osei, University of Ghana
Ama de-Graft Aikins, University of Ghana
Fred Mawunyo Dzanku, University of Ghana
Ama Pokuaa Fenny, University of Ghana
Augustin Kwasi Fosu, University of Ghana
Kwabena Gyimah-Brempong, University of South Florida
Abigail Hilson, Royal Holloway University of London
Gavin Hilson, University of Surrey
Ravi Kanbur, Cornell University
Kwadwo Koram, University of Ghana
Andy McKay, University of Sussex
Sam Mensah, University of Ghana
Edward Nketiah-Amponsah, University of Ghana
Franklin Obeng-Odoom, University of Technology Sydney
Abena D. Oduro, University of Ghana
Isaac Osei-Akoto, University of Ghana
Eric Osei-Assibey, University of Ghana
Nkechi S. Owoo, University of Ghana
George Owusu, University of Ghana
Bernice Owusu-Brown, University of Ghana
John Page, Brookings Institution
Peter Quartey, University of Ghana
Bernardin Senadza, University of Ghana
William F. Steel, University of Ghana
Henry Telli, International Growth Centre

* We are sad to record that A. D. Amarquaye Laryea passed away during the final
stages of the preparation of this volume.
xx List of Contributors

Festus Ebo Turkson, University of Ghana

K. A. Tutu, University of Ghana
Daniel K. Twerefou, University of Ghana
Christopher Udry, Yale University
Paul W. K. Yankson, University of Ghana
 Part I
Thematic Issues
 1
Ghana at Sixty
Learning from a Developing African Nation’s Past

Ernest Aryeetey and Ravi Kanbur

1. 1 IN TR O D U C T I O N

Many Ghanaians like to remind themselves and the world that Ghana was the
first country in sub-Saharan Africa to be returned to independent status fol-
lowing agitations to break away from colonial rule in many parts of Africa in the
1950s. For many Ghanaians, that achievement signalled tenacity of purpose and
a strong desire to lead the rest of Africa into a new era of transformation and a
better life for all. They took the fight for independence seriously considering
that the Gold Coast, as it then was, had a relatively large number of educated
persons and educational institutions compared to many other places in the region
(Wallerstein, 1964).
As Ghanaians celebrated fifty-nine years of independence in March 2016, many
newspaper articles expressed doubts about the extent to which expectations at
independence had been met. Most conveyed the perception that the high expect-
ations that accompanied the independence celebrations had not materialized.1
The people of Ghana had expected rapid industrialization, employment for all,
higher incomes, a more democratic system of governance, greater access to
education and healthcare, and general improvements in welfare. The idea that
these had not been realized to the extent that many had thought was coming, was
quite pervasive as reported by most newspapers covering the fifty-ninth inde-
pendence celebrations.
The view that expectations had not been met was presented against a backdrop
of economic uncertainty and weakened economic performance. By the end of
2015 gross domestic product (GDP) growth was at 3.5 per cent for the year. By the
end of March 2016, inflation stood at 19.2 per cent and unemployment was
estimated to be more than 6 per cent. A year of very poor power supply had left

1
In the editorial of the Daily Graphic of Monday 8 March 2016, it was noted that ‘the flame of
national passion has died, and even though the President lighted the symbolic flame on 6 March to
symbolize (the) passion that spearheaded national development, that symbolic gesture was probably a
futile attempt to reignite a passion that no longer exists’.
4 Ernest Aryeetey and Ravi Kanbur

many manufacturing enterprises struggling. It had been estimated that erratic

power supply had cost the small and medium enterprise sector in Ghana an
average of $2.2 million daily or 2 per cent of GDP in 2015 (ISSER, 2015).
The recent economic challenges of Ghana saw it return to the adoption of an
International Monetary Fund (IMF) programme in April 2015 after almost a
decade, when a $900 million financing arrangement was put in place. The IMF
noted that ‘Ghana, considered one of West Africa’s most stable democracies, until
recently was a model for economic growth. However, the economy has taken a
turn for the worse, with growth down from 8 per cent in 2012 to 3.5 per cent in
2015’ (IMF Survey, 2016). At the time the programme was agreed the fiscal deficit
had been as high as 10.6 per cent of GDP and went down to 6.7 per cent in 2015.
In effect the state of the economy has been quite shaky in the years leading up to
the sixtieth anniversary celebrations of independence, thus feeding into the
widespread perceptions that expectations had not been met.
There is obviously a lot more to consider in determining how the Ghanaian
economy has performed over the post-independence period compared with what
has been seen in the last few years. The irony, however, is that the period of poor
performance in the last few years is not peculiar. The various reviews in this book
will show that there have been several periods of similar poor economic perform-
ance since independence, interspersed with some periods of good performance
and very high expectations. What is also clear is that the periods of poor
performance have almost always been associated with poor economic policies
and weak economic management. By poor economic policies, we mean policies
and actions associated with fiscal indiscipline and poor budgetary policies often
associated with strong political influences and considerations. This is in addition
to various structural and institutional bottlenecks that make poor policymaking
and implementation possible.
In this overview chapter, we first provide a pre-independence account of the
state of the economy and how that economy was managed in section 1.2. It is
followed by a short presentation in section 1.3 of economic policymaking in the
first two and a half decades after independence which we call the pre-reform years.
The same process in the reform and post-reform years beginning in 1983 are
discussed in section 1.4. Beginning from section 1.5 we introduce the stories of
each chapter in this volume in relation to how they reflect the general theme of
understanding the relationship between economic policymaking and economic
performance.

1 . 2 F R O M G U G G I S B E R G T O IN D E P E N D E N C E ( 1 9 1 9 –1 9 5 7 )

In 1919, when Sir Gordon Guggisberg took office as Governor of the Gold Coast,
the colony had experienced twenty years of very high growth due to predomin-
antly high returns from cocoa exports, and this was despite the occurrence of the
First World War. Guggisberg’s ambition was to sustain this growth and prosperity
by channelling the newly-obtained resources into important sections of the
economy such as health, education and other human capital development. His
plan to further develop the infrastructural state of the colony would facilitate
 Learning from a Developing African Nation’s Past 5

production and export activity, which would be expected to bring in more revenue
for increased development of the colony. In 1920, Governor Guggisberg intro-
duced a Ten-Year Development Programme (1920 to 1930), which was aimed at
the transformation of the economy from its sole dependence on cocoa, to other
commodities. By 1920, for example, 83 per cent of the colony’s exports consisted
of cocoa. The programme included plans for the growth and development of the
then-Gold Coast through infrastructural development (Hymer, 1969).
An important aspect of Guggisberg’s development plan was the diversification of
the agricultural sector (Hymer, 1969; Agbodeka, 1972). Guggisberg believed that
given the unpredictability of cocoa prices on the world market, it would be safer to
focus on other crops such as rubber. Additionally, there was an attempt to shift
production of cocoa from small-scale farming to large-scale plantations, and ex-
plore the cultivation of other crops such as sisal, rice, coconut, oil palm, among
others. These attempts were however largely unsuccessful given that many of the
alternative crops were not as suited to the climate as cocoa was, and therefore
plantation farming never progressed past the infant entrepreneurial stage. Indeed,
the colonial government’s lack of research and proper understanding of underlying
cultural factors and farming practices in the Gold Coast played a significant role in
the unsuccessful outcome of the agricultural policies pursued (Sederberg, 1971).
Plans to develop the transportation network, particularly railway lines and a
harbour, within the country were also met with a number of challenges. First,
Takoradi, in the Western region, was selected as the site for the development of
the national harbour. Although the manganese industry was based in Takoradi,
the returns from this industry were not large enough to justify the situation of the
harbour there. Rather, the eastern part of the country would have benefited more
from the construction of a harbour. Indeed, even after the harbour was completed,
the eastern parts of the country continued to use inefficient and costly means to
bring goods ashore, that is, small surf-boats and head-loading.2 The introduction
of road networks also reduced the potential contribution of the railway system.
Despite attempts and policies such as the Carriage of Goods Road Ordinance
of 1934 to discourage the use of road networks for the transport of goods, it
continued to be a dominant form of transportation for commodities, given the
more flexible routes of goods transport that roads provided. An unfortunate
consequence of the colonial government’s deliberate attempts to slow down the
expansion of the road network in the Gold Coast was that the development of
regional specialization and exchange of food was inhibited. Additionally, potential
business opportunities in cocoa, transport, and distribution were stemmed. As
mentioned already, the colonial government’s focus on the economy appeared to
be more outward, and therefore the opportunity for the development of trade
within Ghana was missed. It is ironic to note that as the colonial government
persisted in directing the Ghanaian economy outwards, the Great Depression
occurred and the world economy collapsed. The impact on the Ghanaian economy
may have been significantly mitigated if trade within the country (e.g. north and

2
The Tema Harbour was constructed in 1962, which provided a more modern means of goods
unloading for the eastern parts of the country.
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