Economic Transformation in Ghana: Where Will the Path Lead?

Abstract

In the context of the Ghanaian government's objective of structural transformation with an emphasis on manufacturing, this paper provides a case study of economic transformation in Ghana, exploring patterns of growth, sector transformation, and agglomeration. We document and examine why, despite impressive growth and poverty reduction figures, Ghana's economy has exhibited less transformation than might be expected for a country that has recently achieved middle-income status. Ghana's reduced share of agriculture in the economy, unlike many successfully transformed countries in Asia and Latin America, has been filled by services, while manufacturing has stagnated and even declined. Likely causes include weak transformation of the agricultural sector and therefore little development of agro-processing, the emergence of “consumption cities” and consumption-driven growth, upward pressure on the exchange rate, weak production linkages, and a poor environment for private-sector-led manufacturing.

Population density, urbanisation and agricultural mechanisation in modern Ghana

“…Where mainly the local population determines the agricultural labour supply, we might expect that high population density lowers the agricultural wage, which will discourage farmers from adopting labour‐saving machinery. However, where there is high labour mobility, local population density may not be a determinant of agricultural labour supply (Kolavalli et al, 2012; Otiso & Owusu, 2008).…”

“…The manual work to prepare this land for planting each year is considerable, but it must be done quickly to take advantage of the variable rainfall patterns. This is particularly true for farmers who wish to cultivate maize, a crop that fetches a high price in urban markets and is highly profitable—but which must be planted early to produce a crop successfully within this agro‐ecology (Food and Agriculture Organization, 2017; Kolavalli et al, 2012). In this way, machinery allows for a highly profitable shift in cropping patterns in locations in northern Ghana with high rainfall variability and few total days of rainfall over the season.…”

“…This reflects the bimodal pattern typical of the region, with some areas receiving over 230 days of rainfall a year over two seasons, and other areas receiving 160–220 days of rainfall and only one growing season. There are three agro‐ecological zones categorised in Ghana—north, transition and south (HarvestChoice, 2015a; Kolavalli et al, 2012). Figure 2 maps the surveyed districts in relation to these agro‐ecological zones.…”

Partnerships Blending Institutional Logics for Inclusive Global and Regional Food Value Chains in Ghana; with What Smallholder Effect?

“…In the recent decades, Ghana attained sustained economic growth and is lauded for political pluralism (Resnick 2016). Downside is that politicians display a high interest for urban constituencies and remunerative export sectors but less for the rural food sector (Kolavalli et al 2012). Meanwhile, bilateral development donors in Ghana shifted from 'Aid' to 'Aid for Trade' (Ministry of Foreign Affairs of the Netherlands 2013; Mawdsley 2015; Savelli et al 2018).…”

“…In the last three decades, the government did not invest in the structurally development of the domestic food sector (Resnick 2016). The Ministry of Food and Agriculture (MoFA) lacked pro-active policies for the development of an food-processing industry, the promotion of diversification (Kolavalli et al 2012), and capacity building of Farmer Based Organisations (FBOs)s at all levels (Senadza and Laryea 2012). When world prices rocketed and food was scarce in 2008, the Ghanaian government launched a national fertiliser subsidy programme.…”