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Csisafrica Notes Number 175 August 1995 CSISAFRICA NOTES A publication of the Center for Strategic and International Studies, Washington, D.C. Can Ghana's Economic Reform Survive the 1996 Elections? by Todd J. Moss and David G. Williams Ghana (comprising Britain's Gold Coast colony and the UN Trust Territory of [British] Togoland) became an independent state in 1957 under elected Prime Minister (later President) Kwame Nkrumah, who was ousted in 1966 in the first of a series of alternating military coups and short-lived civilian governments. (See "The Governments of Ghana, 1957-1985" by J. Coleman Kitchen, CSIS Africa Notes no. 42, May 1985.) The last of these coups occurred on December 31, 1981 under the leadership of Flight­ Lieutenant Jerry Rawlings, who subsequently won a 1992 multiparty presidential election as part of the process that ushered in the civilian-ruled Fourth Republic. Under the terms of the new constitution, Rawlings is permitted to run for one more four-year term in the next (1996) presidential election. Over its first quarter century of existence, a combination of governmental instability and statist economic management reduced Ghana from one of the most prosperous African nations-with a per capita income at independence roughly equal to South Korea's-to one of the poorest. In 1983, Ghana began a vigorous and relatively successful economic reform program. Many observers, particularly in the World B,ank, see the Ghana of the 1990s as the model of reform in Africa. Now, however, a real danger exists that political pluralism (the 1996 elections in particular) could derail the economic reform process. Even though the current consensus among most external donors is that political and economic liberalization are two parallel and complementary parts of the same process, pursuing both with equal fervor in the present Ghanaian context could ultimately be self-defeating. The Economic/Political Reform Sequence Numbers alone (for example, the 15 percent decline in gross domestic product and 44 percent fall in cocoa exports from 1974 to 1981) cannot convey the depth of the crisis that had built up in Ghana over the decades prior to the 1981 coup. Rising crime and rampant venality by politicians, along with the economic malaise, contributed to a sense of imminent social collapse. Rawlings came to power on a platform of radical populist change, 2/ CSIS AFRICA NOTES including popular participation in decision making, a advocated by the "Washington consensus." Virtually all redistribution of wealth, and an end to "corrupt donors involved in African development agree that practices." Despite his sometimes fiery rhetoric, African governments should pursue market-led economic however, he proved to be a pragmatist. (See "The development. With regard to politics, however, there are Rawlings Revolution in Ghana: Pragmatism with Populist important differences among the key players. Rhetoric" by Donald Rothchild, CSIS Africa Notes no. The World Bank, which has set much of the economic 45, May 1985.) In 1983, he led Ghana into an development agenda in Africa and is prohibited by its Economic Recovery Program supported by the charter from advocating particular political systems, International Monetary Fund and the World Bank. The champions "good governance" as essential to economic exchange rate was liberalized, trade controls were drastically growth. To this end, the Bank has encouraged improved reduced, and Ghana embarked on an ambitious program of public-sector management, legal reforms to encourage privatization and encouraging private-sector growth. By private-sector growth, accountability, and increased 1991 real GOP growth was 5 percent, inflation was-down transparency (see Governance and Development, World to 18 percent (and would fall to 10 percent in 1992), Bank, 1992). exports were rising, government finances were in surplus, On the other hand, the U.S. government, many and Ghana had eliminated its debt arrears. nongovernmental organizations (NGOs), and (to a lesser This turnaround is especially impressive when degree) other Western governments attempt to export considered in the context of continent-wide economic the values and institutions of liberal democracy as ends in stagnation and decline. From 1983 to 1993 Ghana themselves. Overtly demanding multiparty elections, they experienced average annual GOP growth of 4.9 percent; sometimes resort to threats, withdrawal of aid, and even the corresponding figure for the rest of sub-Saharan limited sanctions. The U.S. Agency for International Africa was only 2.1 percent. Between 1980 and 1989 Development (USAID) has committed itself to developing domestic investment rose by 6. 9 percent per annum in "strong democratic values" abroad. Toward that end, it Ghana, while it fell by 3.9 percent in sub-Saharan Africa. has allocated $10 million for 1994-1997 to a Supporting During the same period exports from Ghana rose by 5.6 the Electoral Process (STEP) program in Ghana. percent per annum while they fell by 0.6 percent overall The emergence of democratization as a pillar of U.S. in sub-Saharan Africa. Ghana has consistently foreign policy has contributed to the creation of a new outperformed the rest of the subcontinent in cottage industry of prodemocracy organizations and manufacturing, industrial, and service sector growth. "electorocrats," which unfortunately perceive democracy Meanwhile, Ghana's return to civilian rule has been as simply a technical process. Indeed, in their effort to relatively smooth. The junta-era Provisional National promote, design, and supervise elections, various groups Defense Council was dissolved in January 1993, at which such as the National Democratic Institute and the time Rawlings became president and the elected International Republican Institute (both funded by the Parliament was inaugurated. The present constitution National Endowment for Democracy) have developed a (approved in an April 1992 referendum} enshrines liberal missionary zeal for liberal democracy rivaling that of any democracy and the balance of powers as well as evangelical church. providing for the protection of human rights and civil Instituting multiparty democracy may be a laudable liberties. Unlike the case in some other African countries, the new constitution seems to be more than a pro forma response to donor pressure. According to the CS/5 AFRICA NOTES is a briefing paper series designed latest U.S. State Department Human Rights Practices to serve the special needs of decision makers and analysts report (for 1994), the number and severity of human with Africa-related responsibilities in governments, rights abuses has continued to fall. corporations, the media, research institutions, universities, There were various problems associated with the 1992 and other arenas. It is a publication of the African Studies presidential election, including allegations that the Program of the Center for Strategic and International electoral register was inaccurate (although Rawlings Studies, Washington, D.C. CSIS is a private, nonpartisan, nonprofit policy research institute founded in 1962. would almost certainly still have won even if the polling had been completely free of irregularities). The Editor: Director of African Studies Helen Kitchen opposition accused the government of "election rigging Deputy Editor: J . Coleman Kitchen of gigantic proportions" and subsequently boycotted the parliamentary election. In an effort to ensure that the SUBSCRIPTION RATE: CS/S Africa Notes is sent November 1996 balloting runs smoothly and that all airmail/first class to subscribers worldwide. The annual political parties participate, a new voter registration subscription price for 12 issues and occasional initiative is being undertaken with intensive donor supplements is $48.00. Please make checks payable to: involvement and support. CSIS Africa Notes, 1800 K Street, N.W., Washington, D.C. 20006, U.S.A. Telephone: (202) 775-3219. Telex: 7108229583. The Muddled "Washington Consensus" Cables: CENSTRAT. Fax: (202) 775-3199. Ghana appears to be the prime example of an African country pursuing the economic development strategy ISSN 0736-9506 CSIS AFRICA NOTES I 3 goal, but some caution is advisable. In many African that many of the foundations of liberal democracy­ countries an election is only a small step toward individualism, equality, consent by the governed-exist in "democratization," and the entire process may amount to the hearts and minds of most Ghanaians. Communal little more than a meaningless ritual if carried out solely to voting patterns and the persistent patrimonial nature of satisfy donor demands. African leaders are becoming authority in rural areas (where a majority of the increasingly adept at playing the election game; Kenya's population lives) are signs that liberal conceptions of Daniel arap Moi and Gabon's Omar Bongo are cases in individual actors and interests may not correspond to the point. (See "African Democratization: An Update" by realities of political life in West Africa. · Marina Ottaway, CSIS Africa Notes no. 171, April1995.) More important, the distinction between effective Lessons of the 1992 Elections government and democracy seems to have been lost. Some academic studies suggest that democracy and The 1992 elections destabilized an economy that some economic growth are not necessarily correlated (see, for analysts believe might otherwise have been on the verge example, Stephan Haggard and Robert R. Kaufman, The of a "takeoff" (see "A Slow Recovery in Danger of Politics of Economic
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