Excerpts from IEA Lecture by Professor Gareth Austin

29-09-2017

Excerpts from IEA Lecture by Professor Gareth Austin

Ghana 60 years ago was richer than Malaysia, South Korea among others. 60 years down the line, these nations give aid to Ghana. What happened? What caused the switch?

In a lecture at the IEA on Tuesday, 26th September 2017, Prof Gareth Austin presented some of his research findings on what caused Ghana’s boom, decline and now what we see as a steady growth over the 60 year span post-independence.

In his submissions, Professor Austin mentioned that the economy of Ghana was growing steadily until the period of 1975-1983 where Ghana faced a decline and more than one-third of national income lost. This was what he called the ‘disaster period’. Just before this period, Ghana had in place import-substitution industrialization which was promoted a lot in the fifties but majorly based on cheap and abundant labour for success. Researcher and lecturer W.A Lewis however had warned Kwame Nkrumah at the time that Ghana was not ready for that approach since labour was scarce and expensive. Ghana also faced the OPEC shock of 1973 which in his opinion was managed better by other countries than Ghana and the other fact that Ghana also missed the opportunity to take advantage of the cocoa price boom. Along the years, other factors included limited economic liberalization, policy u-turns which saw a spontaneous fiscal revolt by cocoa farmers for which government shares fell by nearly 40%, real wages ratio and the occupational structure which was focused more on agriculture than manufacturing which could count for just 10% of the economy or even less. Professor Austin later mentioned that Ghana managed to regain its income per head of 1957 only in 1977 (which meant that, it took Ghana 40 years to get back to ‘square one’) and the economy had been growing steadily since then.

Some of his concerns also bordered around the One-District one Factory  agenda, which he rather thought to pilot with one region one factory which could enable clustering for industrialization a better option than the numerous district base. He also stressed his concerns about Climate Change and the effects on our resources and atmosphere, especially environmental degradation and air pollution. He entreated Ghana to ensure that at least the fossil fuels from industrial operations which constitutes the major cause of climate change should be ‘kept in the ground’, especially now that Ghana’s oil industry has taken a high rising turn. Addressing the concern of automation, Prof Austin stressed the need for Ghana to be up to date with technology or face the consequence of robots displacing the advantage of cheap and available labour.

In conclusion, Prof. Austin mentioned that he was very positive about the growth of Ghana and more so about Ghana’s industrialization agenda mostly because labour is now abundant, relatively cheaper and better educated than before. He then charged Ghanaians to take charge of Ghana’s resources and optimize its usage for Ghana’s development.

In attendance at the lecture was also the South Korean Ambassador and the former first Lady Nana Konadu Agyeman Rawlings. 

 

Lecture was attended by GNBCC's Joana Chemel on Tuesday 26th of September at IEA Accra. For reactions contact joana@gnbcc.net

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