Ghana: the price of freedom. Nation struggles to regain wealth it once knew

In 1957, when Ghana became the first black African state to gain independence, it claimed to be Africa's ``black star.'' But 30 years later, Ghana's legacy of economic and political instability has not been much different from many African nations. Ghanaians are thus more likely to want to look forward than backward as they mark their 30th anniversary of independence from Britain.

The future they see will depend on their leader's ability to sustain tough economic reforms amid growing public discontent with the economy.

Shortly after coming to power in 1981, Flight Lt. Jerry Rawlings became one of the first African heads of state to try to bring about economic reform by putting his country's finances into the hands of international lending institutions.

During the last three years, there has been some economic growth but not enough to dispel growing criticism from certain sectors of the public that feel the lending institutions have undermined Ghana's autonomy. The President is aware, say officials, that his greatest need is to mobilize public support for the reforms if the economy is to rebound.

Ghana's founding father, Kwame Nkrumah, was an energetic leader in the crusade against colonialism and promotion of African unity. His country was rich - its people the best educated along West Africa's coast. He had great ambitions for both Ghana and Africa.

Ghana was rich in gold, and in bauxite and other minerals. It was the world's largest cocoa producer, self-sufficient in food, and wealthy in timber resources.

Dr. Nkrumah's economic policies, notably pan-African socialism, proved disastrous. His nation quickly headed down a long slope of decline marked by misguided policies, corruption, inefficiency, and military coups.

When Nkrumah was overthrown in a 1966 military coup Ghana was deeply in debt - the result of huge investments in dams, ports, and mineral projects and a decline in world cocoa markets. ``Nkrumah's political visions collapsed partly because of the lack of a sound financial base,'' a Ghanaian banker said.

Nkrumah's successors - military and civilian - could not end the economic slide or provide political stability. Output and export earnings declined, and leaders tried to cover budget deficits by printing ``mountains of money,'' the banker said. Inflation grew out of control and the local currency, the cedi, became worthless.

The situation exploded in a coup by radical junior army officers led by Lieutenant Rawlings in June 1979. After an elected government failed to stop the economic slide, Rawlings, in 1981, staged what he called a ``revolution'' to change ``the character and face of the nation.'' Its objectives were to rescue the economy, end corruption, redistribute wealth, and promote ``people's power.''

At that time, Ghana was effectively bankrupt. And despite the radical, sovereign political rhetoric, the new regime went outside for help. In 1983 Rawlings called in the International Monetary Fund and the World Bank to launch one of the continent's most far reaching economic reform programs.

The first 18 months of the program were difficult. Food and fuel were scarce.

Since then the situation has improved considerably, but Ghanaians still have a tough time making ends meet.

Although the minimum wage has just been increased by 24 percent it is still well under one dollar a day.

``How can workers be motivated to work harder when they are paid so little?'' Seth Abloso, general secretary of the Maritime and Dockworker's Union, asks.

The country's powerful trade unions are increasingly critical of the economic recovery program, arguing that the interests of Ghana's workers have been sacrificed to the lenders' performance targets.

P.V. Obeng, chairman of the Committee of Secretaries, said that aid donors must be more sensitive to the ``social consequences'' of economic adjustment and ``match the pace of reforms with the mood of the people.''

The Rawlings regime can point to several improvements since the recovery program began:

Three years of real growth of more than 5 percent a year compared to an average decline of 5 percent a year between 1975-83.

A sharp drop in inflation from 123 percent in 1983 to 23 percent in 1986.

Growth in exports - mainly cocoa, gold, and timber - from $440 million in 1983 to $750 million in 1986.

A more realistic exchange rate which encourages producers and exporters. The cedi has been devalued by 98 percent since 1983 so that 150 cedis are now traded against the dollar, compared to 2.75 cedis per dollar in 1983.

But the prices of most goods and services are still beyond the reach of most Ghanaians and Rawlings says that ``a lot more remains to be done.''