Lecture 3: Ghana as a Developing Economy

S. A. Kuffour

Department of Human Resource and General Studies

UCOMS, Kumasi Campus.
sakuffour@ucoms.edu.gh

June 8, 2021

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Outline of Lecture

Introduction

General Features of Developing Economies

Causes of poor performance of developing countries

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Introduction
Classification of Countries

There are several ways of classifying countries. Major among them

are;
By region
By income
By level of Industrialization
By lending
By level of development

Classification by level of industrialization;

1 Highly Industrialized
2 Non Industrialized

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Introduction
Classification of Countries Cont’d

This links directs students to the World Bank page that gives more
information on modes of classifying countries and the countries under
each classification.
World Bank’s Classification of Countries

NB: The Hyperlinks to the right of the web-page gives answers and
additional information on other important issues like;
a. What is used for the classification and;
b. Why do the use a particular index (GNI per capita) rather than any
other measure among others.

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Ghana as a Developing Country

A developing country is also known as an LMIC, or a low and

middle income country.

It is less developed than countries classified as “developed

countries” but these nations are ranked higher than “less
economically developed countries.”

Countries that are poor but are economically and socially trying
towards betterment by economic and social maintenances and
proper policy implementation.

Poor but accumulating capital for development.

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General Features of Developing Economies

From the definitions above and the conclusions drawn so far,

Developing coutries tend to exhibit these common characteristics.
Low living standards,

Underdeveloped industrial base owing to structure of production.

Low Human Development Index (HDI) To sum it up,

Let us visit Features of Developing Countries for some more varying
description of developing countries.

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General Features of Developing Economies

From the definitions above and the conclusions drawn so far,

Developing coutries tend to exhibit these common characteristics.
Low per capita real income

High population growth rate/size

High Dependency Ratio

High rates of unemployment

Substantial(Heavy) Dependence on the primary sector, eg;
Agriculture

Over reliance on primary exports

Heavy External Debts

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Causes of poor performance of developing countries
Cont’d...
The factors may be classified as under two major factors; the external
factors and internal factors.
External Factors: Factors that are not as a result of the country’s
features and as such the developing country can not control.
Unequal Trade Relations; for example exporting raw materials
without adding values importing manufacturing or finished goods.
Unfavourable market forces; For eg, EU Trade policies on imports
of food products like Banana from Ghana.
Internal Factors: Factors that are as a result of the country’s
features and as such the developing can control.
Poor governance
Conflicts, social unrest and political instability.
Low levels of infrastructural development; poor road and railways
systems.
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Causes of poor performance of developing countries

CLASS ACTIVITY

Find out some more internal factor that also causes poor
performance of developing countries.

NB: Take this a bit serious.

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 End of Lecture 3.

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In the Next Lectures...

To be considered...

Economic Growth and Development of Ghana

National Income Accounting

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 All the best and See you in the next Lecture.

Thank you

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