Since 1966 Ghana has been stuck in a cycle of debt, weak commodity demand, and forex overvaluation,

which has resulted inside the decay of effective capacities and a crippling foreign debt.[1] Once the rate
of cocoa fell within the mid-Nineteen Sixties, Ghana acquired much less of the foreign currency
necessary to pay off loans, the fee of which jumped nearly ten times between 1960 and 1966.[1] Some
economists recommended that Ghana devalue its foreign money, the cedi, to make its cocoa price
greater appealing on the sector market, but devaluation would additionally have rendered loan
reimbursement in United States bucks lots greater difficult.[1] Moreover, such a devaluation might have
multiplied the costs of imports, both for clients and nascent industries.[1]

Until the early 1980s, successive governments refused to devalue the forex (except the authorities of
Kofi Abrefa Busia, which devalued the cedi in 1971 and changed into directly overthrown).[1] Cocoa
expenses languished, discouraging cocoa manufacturing altogether and main to smuggling of current
cocoa vegetation to neighboring international locations, wherein francs in place of cedis could be
obtained in price.[1] As production and reputable exports collapsed, sales vital for the survival of the
economic system became acquired thru the procurement of similarly loans, thereby intensifying a self-
destructive cycle pushed by means of debt and reliance on susceptible world commodity markets.[1]