Economic Progress Is Slow In World Bank `Showcase'
GHANA: AFRICAN MODEL?
ACCRA, GHANA — FARMER Ossei Dwomoh and his wife, Victoria, may be just the ones to watch to see whether reform strategies carried out in Africa really work.
While living standards are sliding in most African countries, life is gradually improving for the Dwomoh family and many others in Ghana, a country billed as a World Bank "showcase" for economic reforms.
Mr. and Mrs. Dwomoh saw Ghana's economy hit rock bottom after years of socialist policies, corruption, and mismanagement. What followed was a seemingly endless series of economic reforms, but little improvement in their standard of living. Now, however, they see initial signs of recovery.
"It's starting to change," Mr. Dwomoh says. He and his family are weeding rows of lettuce, onions, sweet peppers, and corn. Their small farm, about half the size of a football field, is on the edge of the village of Abokobi, a short drive from the capital, Accra.
In 1985, Dwomoh was earning enough to start raising pigs to boost the family income. Last year he added chickens. All six of his children go to school. He complains, however, that he still cannot get a loan to expand his farm. Credit is scarce in Ghana. Small steps forward
Achieving even small progress in Ghana has taken nearly a decade of economic reforms backed by more than $2.5 billion of World Bank and other foreign aid, and, some Ghanaians say, the firm hand of a military dictator, Jerry Rawlings.
"Only a military regime could have implemented [the reforms]," says Albert Adu Boahen, a history professor, who finished second, with 30 percent of the vote, to Mr. Rawlings in Ghana's multiparty presidential election in November.
Reforms are working at the national level, a Western diplomat says.
"Bridges are being built, new roads are being constructed, schools are being built," says Mohamed ibn Chambas, deputy secretary for foreign affairs.
This, in turn, has translated into gains at the local level, a World Bank official argues. "There's been a general improvement in the efficiency of the economy, which benefits everyone."
Despite such signs of progress, however, some World Bank officials and Ghanaian economists say the recovery in Ghana has only just begun.
It will take "25 to 30 years for the benefits to work through the system," or for the average Ghanaian to see significant gains in income, says a World Bank official here.
Ghana's economy grew at about 5 percent between 1984 and 1989 compared with only about 1 percent from 1965 to 1980, says Ghanaian economist Kwadwo Tutu. A drought slowed that growth to 2.7 percent in 1990.
Production has increased in agricultural, industrial, and services sectors. But further progress, he adds, requires Ghana's moving away from its heavy reliance on cocoa exports, improving marketing of exports, adopting better farming technology, and expanding credit to farmers and businessmen. Critics dispute plan
Some Ghanaian analysts argue that Ghana is not really a "showcase" at all, because the average Ghanaian has yet to receive tangible benefits.
Others, including some in the middle class, say life has actually gotten harder in the past few years because of inflation and the centerpiece of the reforms: devaluation of the New Cedi.
"I don't think [Ghana] is a showcase," says Tutu. "If it's a showcase, you must have increased employment and people getting incomes they can survive on."
But even middle class salaries are insufficient, he adds, and "for the poor it's terrible."
"The whole recovery program is working against the working man," says Kwame Karikari, a lecturer in communications at the University of Ghana.
Education is getting more expensive, along with health care, he says. "Wages can't catch up with prices."
One aspect of of the nation's reform program included cuts to the federal budget, leading to more than 100,000 layoffs. Many of those laid off, however, were from cocoa marketing boards, which previouly absorbed a big share of the world cocoa price, more of which is now passed through to farmers.
Another reform involved devaluing Ghana's highly inflated currency, the New Cedi, dropping it from about 3 to the dollar in 1982 to roughly 500 to the dollar today. While this was supposed to make Ghana's exports more attractive to foreign buyers and encourage more local production, it has also cut local purchasing power.
Many small cocoa farmers, for example, cannot afford to spend as much on insecticides and are hiring fewer extra workers than in the 1970's, a government study shows.
Import restrictions have been slashed to allow foreign goods to be sold more cheaply to Ghanaians, but at the cost of wiping out many local industries and causing more layoffs.
Once nearly empty shop shelves have filled up with imported goods, but prices are high.
"Things are very expensive," says Edward, a plumber who also drives a taxi in Accra. "There's many things I can't buy."
Nevertheless, Edward, a father of two who asked that his last name not be used, is making progress. He quit his government job three years ago to earn more as a trained plumber. Today he owns a refrigerator and a TV.