Ghana's Economy
The 1983 Economic Recovery Programme
How Ghana's economy collapsed in the late 1970s and early 1980s, and how Jerry Rawlings' government adopted IMF and World Bank reforms in 1983.
Ghana’s economy collapsed by the early 1980s.
Causes
- Price controls and an overvalued currency.
- Falling cocoa production as farmers got low prices.
- A drought in 1983 and the expulsion of Ghanaians from Nigeria.
Reforms
Jerry Rawlings’ government launched the Economic Recovery Programme in 1983:
- Devaluing the cedi.
- Raising cocoa prices for farmers.
- Cutting deficits.
- Liberalising trade.
Results
Growth returned, and Ghana became a model for structural adjustment.
Costs
Job losses and cuts to public services hurt some groups.
The cocoa price rise
Higher farmgate prices encouraged farmers to replant cocoa after years of neglect.
Thinking reforms had no costs
Some groups lost jobs.
Key takeaways
- Ghana's economy collapsed by the early 1980s.
- Rawlings launched reforms in 1983.
- The cedi was devalued and cocoa prices raised.
- Growth returned.
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