Sunday, February 23, 2014

The Coup - 24 February 1966

The 24th of February marks the 48th anniversary of the military coup that overthrew Kwame Nkrumah, the first president of Ghana. The coup had an extremely detrimental effect on the subsequent development of Ghana. In particular it seems to have permanently damaged the national psyche of the country. The energy, optimism, and innovation of the Nkrumah era of 1957-1966 has never been fully restored. The idea of modernizing Ghana as an industrial state seems to have permanently died with the removal of Nkrumah from power. But, no subsequent government has come up with a better plan. Indeed no country in the world has ever become rich without actually producing value added products. The countries that became rich in the 19th and 20th century all followed a common pattern of industrialization that allowed them to produce goods for either domestic consumption or for export. No country has become rich exporting only low value raw materials and importing much more expensive value added goods from abroad. Nkrumah made a serious attempt to change this pattern in Ghana. Since his overthrow there has been no serious support from the Ghanaian government for creating an indigenous industrial base in the country. Instead the major exports remain gold, oil, and cocoa rather than any manufactured goods such as pharmaceuticals, textiles, and processed foods. The advantage of exporting manufactured goods is that it transforms the labor of the workers into hard currency at a much higher margin than the extraction and export of unprocessed raw materials. Countries far poorer than Ghana was in 1957 such as South Korea have managed to become rich by exporting manufactured goods in the last forty years. There is no reason other than a lack of leadership committed to such a result that Ghana can not also follow the pattern of the Asian Tigers. But, the 1966 coup seems to have permanently destroyed any commitment to such a development by the Ghanaian political elite. Instead we are left with a situation where there is little real support for creating a economy based on the export of manufactured goods rather than raw materials.

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