From The Notebook, International Socialism, No.30 (1st series), Autumn 1967, pp.6-7.
Transcribed & marked up by Einde O’Callaghan for ETOL.
Andrew Miller (Ghana) writes: A correspondent in a recent issue of the authoritative West Africa pointed out that ‘politics in Ghana are to be given a rest until the economy is sound again.’ At current reckoning the military are going to be in power for a long while yet, for after more than a year and a half in power, the ruling National Liberation Committee is no nearer a solution of Ghana’s economic problems than it was when it seized power in February 1966.
Two major problems facing the NLC are the continuation of a chronic balance of payments deficit accompanied by recurring shortages of essential commodities; and the heavy unemployment which has accompanied the downturn in domestic production resulting from the government’s harshly deflationary measures. It was ironic that the drastic devaluation of Ghana’s currency in July was preceded by much trumpeting of her improved external trade position. It now appears that despite severe pruning of imports, the balance of payments deficit will be some £50 million during the current year (an amount greater than in the last, disastrous, year of the Nkrumah regime) about half of which is to be met by foreign aid and loans. The slowdown in domestic activity has necessitated a 30 per cent increase in food imports over the level in recent years. US food supplies under PL 480 are assessed at more than twice the 1965 figure, while even with a 70 per cent increase in raw material imports domestic industry will only function at slightly over 50 per cent single shift capacity.
The military junta is so anxious to satisfy the demands of its new Western mentors that it is doing everything it can to prove itself an exemplar of economic and fiscal orthodoxy. An increased reliance on the workings of the price mechanism, the progressive dismantling of controls over private sector production and trade, and the de-socialization of the State sector, are evidenced by Ghana’s rulers as a measure of their new-found rectitude, and must be seen as part of the price demanded by her Western creditors and their agencies for continued economic assistance. Thus the devaluation measure was itself accompanied by announcements that the policy of import control via a licensing system is to be progressively abolished, and the remittance of profits and dividends by foreign firms is to be liberalised.
Such measures however, together with other aspects of current economic policy, have been strongly criticised by some sectors of the intelligentsia, and the price asked by the West for continued support is felt to be unnecessarily high. One influential commentator has plainly stated that the dependence of post-coup Ghana on the World Bank and the IMF ‘with their stereotyped remedies’ is an ‘unfortunate development’ and called on the recently formed Economic Committee to pursue policies which will loosen the grip of these agencies on the economy. The immediate impact of the recent economic measures will, of course, be borne by the workers and peasants of Ghana in terms of spiralling prices of imported essentials (rice, sugar, milk, salt, kerosene, etc). The combination of an abolition of import duties on certain goods and an across-the-board wage increase of 5 per cent will do little to cushion the consumer against substantial price increases. Exhortations of sacrificial belt-tightening for the common good have done little to curb the deep-felt but as yet unarticulated resentment of Ghanaian workers.
It is this growing resentment that no doubt prompted the recent urging of the Secretary-General of the government controlled TUC for greater worker participation in decisions affecting the economy.
As under the corporate capitalism of the Nkrumah period, attempts to construct a private capitalism in an underdeveloped country can only be made by attacks on working class living standards – it may be that under the impact of the ‘July measures’ political activity in Ghana will move into a new stage.
Last updated on 31.12.2007