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LEVEL 300- 1



Discuss the contributions of indigenous Ghanaians to economic growth from 1950-2000

1. What Is Economic Growth? 2. Overview of the Ghanas Economy (1950-2000).

3. Contribution of Indigenous Ghanaians to the Economic Growth (1950-2000).

4. Conclusion.

5. References

What Is Economic Growth?

Economic growth refers to an increase in the capacity of an economy to produce goods and services, compared from one period of time to another. Economic growth can be measured in nominal terms, which include inflation, or in real terms, which are adjusted for inflation. Economic growth is best defined as a long term expansion of the productive potential of the economy. Sustained economic growth should lead higher real living standard and rising employment. The main concern of economic growth is to improve the standard of living and this is done by the increase in the level of amount of goods that on average an individual purchases or has access to. There are various element of economic growth among these are: Sustained increase in GDP This means the GDP should be on the upward moving trend and that economic goods produces in a current year should be higher or exceed the preceding year. Technological advancement There should be an improvement in the production technologies thus the way production processes are carried out, packaging etc. New Technological inventions and institutions. Increase in infrastructure and diverse economic goods.


The growth record of Ghana has been one of unevenness when the post-reform period is compared to the earlier period. With a reasonably high GDP growth in the 1950s and early 1960s, the Ghanaian economy began to experience a slowdown in GDP growth in 1964. Growth was turbulent during much of the period after the mid-1960s and only began to stabilize after 1984. In 1966, 1972, 1975-1976, 1979, 1980-1983, the growth rate was negative. It is interesting that the years in which negative growth was experienced generally coincided with changes in government and sometimes with policy changes or reversals. In order to achieve sustained economic growth, increased production and productivity must be at the Centre of an economic recovery strategy. But to formulate strategies for achieving sustained increased production and the rapid growth necessary for poverty reduction, relevant information is absolutely

necessary. It is therefore important to decompose the structure of Ghana's economy and its growth rate, to gain a better understanding of those factors that have produced differences in growth rates in the various periods.

Contributions of indigenous Ghanaians to economic growth

In order to clearly point out the contributions of Ghanaians to economic growth there is the need to reveal the growth records of the Ghanaians economys sectors. They are the: Agricultural sector Manufacturing sector Service sectors of the economy.

The Trends In The Agricultural Sectors And Indigenous Ghanaians

Agriculture has been the backbone of Ghana's economy in the entire post-independence history (McKay and Aryeetey, 2004). While policy and political failure had caused per capita GDP growth declining until 1980s, the agricultural sector had been less affected than the non-agricultural sector because it was less intervened by the government than the non-agricultural sector and its growth is primarily led by smallholders for subsistence purpose of production. Agriculture is predominantly practiced on smallholder familyoperated farms using (rudimentary technology) obsolete tools to produce about 80 percent of Ghanas total agricultural output. About 2.74 million households operate a farm or keep livestock. According to the 2000 Population and Housing Census, 4.2 million people or 50.6 percent of the labour force is directly engaged in agriculture. Some major players in the Agricultural sector of Ghana include the Volta Tropo farms which produces tilapia establish in 1997 and is the second largest tilapia farm in Africa, Cottage farms Ghana which breeds pigs and Joetex farms owned by a young Ghanaians. About 90 percent of farm holdings are less than 2 hectares in size. Larger farms and plantations cultivate mainly oil palm, rubber and coconut and to a lesser extent, maize, rice and pineapples. Agricultural production is generally totally dependent on rainfall although an estimated 6,000 farm enterprises nationwide were using some means of irrigation in 1999, according to the Fourth Ghana Living Standards Survey (GLSS 4; 2000). Cocoa is Ghanas most important traditional export crop. The vast majority of Ghanaians who were in the rural areas have all found their way to the cities living the farm lands behind in a quest for non-agricultural jobs .Also Ghanaians have been on the prowl of selling

their lands for money which they dont even invest in profitable ventures. During the period of 1950-2000, indigenous Ghanaians have focused attention on cocoa and neglected the chance of improving and promoting other agricultural produce. For example, increasing urbanization and a growing middle class has increased the demand for meat and processed foods but this demand has increasingly been supplied through imports, as evidenced by the surge in rice and chicken imported through the 1990s.

Manufacturing sector
Ghanas manufacturing is rising at 7.8% and is the 38th fastest industrial production in the world. After independence, the Nkrumah government launched an industrialisation drive that increased the manufacturing share of GDP from 10% in 1960 to 14% in 1970. During the 1960s, manufacturing grew at relatively high rates benefiting from a state-led development strategy that included import substitution. A series of largest industrial enterprises, including Volta Aluminum Company (Valco) smelter, saw mills and timber processing plants, cocoa processing plants, breweries, cement manufacturing, oil refining, textile manufacturing operations, and vehicle assembly plants were created in that period. However, this period of growth was followed by over a decade of deindustrialisation and most of these enterprises did not survive in an era of restrictive trade regimes that led to scarcity of foreign exchange to import necessary intermediates combined with poorly designed industrialisation policies and high protection barriers (Steel 1972; Dinye and Nyaba 2001; Ackah and Kutsoati 2008). Since independence there are about 5 foam manufacturers in 6hana,14 paint manufacturers ,23 pharmaceutical manufacturers and 29 plastic manufacturers. Only few Ghanaians own manufacturing companies in Ghana and have their market in eastern Asia and other foreign market. Also most home based manufacturers are large importers of raw materials. As at 2000 manufacturing employed about 134,692 or 67.3% of industrial employment in Ghana. During the period from 1950-2000, there was no improvement in the technology used in production neither were new ones invented by Ghanaians but rather the obsolete machines were used until the collapse of most of these state owned processing plants. Another failing aspect is Ghanaian handcraft which caught the international eye but has also been faced with the problem of obsolesce .Ghanaians who are into basket weaving and kente are still using the old ways of production (the hand) since inception. The automobile parts sector in the Suame magazine area of Ghana represents another example of homegrown manufacturing that has yet to play an important role in Ghanas transformation.

Service Sector

Ghana has so many service industries such as banks, investment services, healthcare services, education etc .The service sector has become the largest sources of employment since the 1950s.An estimated figure of 531,668 persons are engaged in the sector .The whole sale and retail subsectors employed the largest number of people in Accra (249,164) constitute 47% of service sector employment in 2000. Accra is the major center for marketing , finance, insurance, transportation and has a central bank,9 commercial banks (with 81 branches,3 discount houses ,1 home finance mortgage bank, building societies, a stock market and 9 insurance companies as at 2000).there are about 526 private schools . Most of this service industries especially banks are not owned by Ghanaians except a few. Ghanaians are not therefore actively in ownership of the service industry in Ghana. However Ghanaians provide skills and expertise to the service industries to achieve economic goals

Technological Inventions And Advancement

Ghana after independence lacked technological inventions and advancement such as internet connections and well equipped 1994 however Ghana was the first west-African nation to be connected to the internet. Internet cafes were not common in Ghana by 2000.And as at 2001 there were about 12 internet service providers in Ghana.

Since the paradigm shift in technology in 1994, however, the computers used in Ghana are all shipped from foreign countries .These computers are old and recycled then sent to Ghana which we buy at low cost e.g. old televisions ,radios ,mobile phones ,monitors etc. are been shipped to Ghana every day and the habour is choked with such items. No single computer has been made in Ghana yet except the parts are imported and assembled in Ghana. Tools and machinery used in the construction of infrastructure in the country are relatively obsolete .Ghanaians are merely beneficiaries of technology not inventors and not inventors.

Infrastructure And Diverse Economic Goods

The constructions of infrastructures such as road in Ghana are seriously poorly constructed. Almost most of the roads in Ghana were constructed in the early post-independence era. These and other infrastructure such as schools, hospitals and other social amenities were not in abundance during the early 1990s.economic goods in Ghana were few and was a one-way kinds of product. In summary, despite the trends in technology Ghanaians havent fully exploited nor invented anything new. Capital accumulation which entails service and investment has been on the downward trend due to the fact that most Ghanaians saved money the traditional way (keeping them in safe boxes at home) thereby indirectly affecting investment projects possibilities in the economy. Natural resources exploitations which should be a thriving source of economic growth had faced a lot of diverse problems.

Over exploitation of the resources endowed in Ghana and the inability of Ghanaians to tap the resources have rendered Ghanaians being put out of the process. Education in Ghana had being under-utilized in a sense that educated Ghanaians did not come up with any new thing or added any value in terms of meeting diverse needs of the economy. Large proportions of graduates have the mind set of looking for jobs in a service sector neglecting the fact that the service sector is supposed to support the two major sectors (Agriculture and Manufacturing) and this has finally lead to the disproportionate performance of the agriculture and manufacturing sector as compared to the service sector in recent times.


African Unification Front, (2005).

Ghana Living Standard Survey Round 5 (GLSS5). Accra, Ghana: Ghana Statistical Service.