Introduction
Ghana is a small country located in West Africa and rated among the developing countries according to the World Bank report (2011). The GDP of the country in 2009 was $15.51 billion with real growth rate of 3.5 percent while per capita GDP in the same year was $ 671.
The inflation rate of the country in 2009 was 9.44 percent, which has remained almost constant since then. Agriculture is the main domestic economic activity that contributes to about 35 percent of the total GDP and provides employment for about 55 percent of the country’s workforce.
The country is also endowed with several economic resources including cocoa, timber, gold, bauxite, and oil. Oil fields were discovered in 2007 and their contribution to the total GDP has continued to increase over the years (Country Conditions, 2011, p.11).
Economic growth trend
The trend of economic growth of the country has changed over the years depending on the government in power. At the time of independence, the economic growth of the country was low but Nkrumah’s government, which took power after independence, began to develop the country slowly by slowly through public investment and infrastructural development.
Other governments came to power thereafter but they have not raised economic development of the country to a substantial level. Some governments such as Akuffor’s government mismanaged the economy of the country through corruption, which led to retarded economic development. For instance in 1977, the inflation rate of the country had exceeded 100 percent.
Economic analysis
Just like many developing countries, mismanagement of the economy has led to misallocation of resources resulting to income inequality in the country. Though the growth rate of the GDP is 4.7 percent and GPD per capita stands at $1,500, the resources of the country are allocated only to a few people.
About 28.5 per cent of the country’s population lives below the poverty line. The inflation rate of the country is still high thus affecting the purchasing power of the larger proportion of the population. According to Opoku (2010), the country is also among the countries that are highly indebted in Africa(p.155).
The rate of unemployment is also high leaving so many people in the economy without jobs. The rate of unemployment is 11 percent; a high percentage compared to that of developed countries in the world.
The maternal mortality in Ghana is also high despite government efforts to control it (Asamoah, Moussa, Stafstrom, & Musinguzi, 2011, p.159). These factors have raised the cost of living in the country where many people in the population are not affording quality health, education, food, and many other basic needs.
Hindrances
Several factors have hindered economic development in the country for the past 45 years. Poor governance tops the list as political leaders have mismanaged the scarce resources of the country. For instance, Akuffor’s government contributed greatly to the economic retardation of the country for many years.
Corruption by government officials and politicians has thrown the country to a huge debt both internally and externally. However, this political trend is changing especially after introduction of democratic rule (Abdulai & Crawford, 2010, p.26).
Secondly, the price of cocoa, one of the main exports of the country, has been fluctuating over the years thus affecting the economy of the country.
Thirdly, implementations of ineffective economic recovery programs have also affected economic development of the country. Finally, as indicated by Kuwornu, Darko, Osei-Asare and Egyir (2009), there has been overreliance on few resources such as cocoa leaving other resources unexploited (p.90).
Conclusion
Ghana is one of the developing economies in Africa that has been affected by poor governance, corruption, and reliance on few sectors of the economy. The cost of living in the country is high with large proportion of the country living below the poverty line. However, the country is improving since adoption of democratic rule.
References
Abdulai, A., & Crawford, G. (2010). Consolidating democracy in Ghana: progress and prospects? Democratization journal, 17(1), 26-67.
Asamoah, B., Moussa, K., Stafström, M., & Musinguzi, G. (2011). Distribution of causes of maternal mortality among different socio-demographic groups in Ghana; a descriptive study BMC Public Health, 11(1), 159-168.
Country Conditions. (2011). Political Risk Yearbook: Ghana Country Report. Special section, 1-16.
Kuwornu, J., Darko, F., Osei-Asare, Y., & Egyir, S. (2009). Exports of Palm Oil from Ghana: A Demand Analysis. Journal of Food Distribution Research, 40(1), 90-96.
Opoku, D. (2010). From a ‘success’ story to a highly indebted poor country: Ghana and neoliberal reforms. Journal of Contemporary African Studies, 28(2), 155-175.
The World Bank. (2011). Ghana: Sub-Saharan Africa (Developing only). Web.