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Financial Performance of Ghana's political regimes from 1960 - 2000

Analysis of Economic Growth in Ghana, 1960 – 2000 – ARYEETEY & FOSU

"Economic Growth in Ghana, 1960 - 2000" by Ernest Aryeetey and Augustin Kwasi Fosu examines the fluctuating economic growth in Ghana over four decades, marked by frequent policy changes and military coups. The study highlights the transition of Ghana's economy and its impact on the livelihoods of its citizens.

Period

Key Factors

Impact on Growth

Post-Independence (1960-1965)

Kwame Nkrumah implemented his 7-year Plan, emphasizing high investments into public infrastructure and industry creation.

The economy grew rapidly due to the investments, but the high government spending led to inflation and a decline in living standards.

Busia and the Military (1966-1971)

Busia and the military regime ushered pro-private capital policies, devaluing the Ghanaian Cedi and liberalizing the external sector.

The economy initially grew due to the pro-business policies, but the devaluation of the cedi caused inflation and public anger, leading to another coup d'état.

The Era of Five Regimes (1972-1983)

This period was marked by economic decline due to high government intervention policies, low productivity, and external shocks such as drought and food shortages.

The economy contracted significantly during this period, with GDP growth averaging only 2.2% per year. Inflation soared to 112% in 1983, and the government deficit reached 17% of GDP.

After the Economic Reforms (1984-2000)

The government launched the Economy Recovery Program (ERP) under the World Bank and the IMF, which liberalized the economy and led to increased growth.

The ERP helped to stabilize the economy and promote growth, with GDP growth averaging 5.3% per year during this period. Inflation fell from 112% in 1983 to 10% in 1992, and the government deficit was reduced to 4% of GDP.





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