Country Profile: Ghana

Lying roughly half way along the southern coast of West Africa, a transect of Ghana from south to north would straddle coastal grasslands, a wide rainforest belt and a dry northern Savannah. The Volta Lake, created in the 1960s by the building of the Akosombo dam, is the world's largest artificial lake, and provides a livelihood to fishing communities, as well as a route for North-South passenger and freight traffic. Economically, Ghana has depended for much of its recent history on two commodities, gold and cocoa, with timber from the now depleted rainforests also a significant export.

Following post-independence economic decline, Ghana became a much cited success story for structural adjustment in the 1980s. But while boosting its traditional export sectors, adjustment policies also put many ordinary Ghanaians under increased pressure; hospitals and schools introduced charges and fees, putting them beyond the reach of poorer families, and farm productivity also declined, with lower public spending on agriculture, and removal of subsidies on farming inputs. Despite attempts to broaden Ghana's economic trading base, non-traditional exports such as pineapples, tuna and roses, still only comprise a fifth of the total.

Cocoa
Grown in six of Ghana's 10 regions, cocoa is experiencing a revival of fortunes. Once the world's biggest producer, falling world prices and heavy government taxes in the 1960s and 70s reduced grower earnings, and led to a huge fall-off in production. However, under structural adjustment policies, prices paid to growers have been regularly increased, and production has recovered impressively. Forecasts for the 2002/03 harvest predicted a 40 year high of close to half a million tonnes, which if achieved could restore Ghana to second place behind Côte d'Ivoire, among producers. The Cocoa Board has attributed the rise in production to improved farming techniques and a major disease control campaign.

As well as encouraging the government to raise prices paid to producers, structural adjustment has also brought liberalisation of cocoa marketing. This has allowed the growth of farmer-led marketing organisations, most notably Kuapa Kokoo. Established in 1993, the organisation now has 35,000 farmer members, belonging to over 900 village societies. The organisation works through four distinct operations. A farmers union composed of village representatives organises the buying of cocoa from member farmers; a trading arm deals with cocoa exports; a credit union provides credit and banking services; and a farmers' trust provides funding for community projects. Through Kuapa Kokoo, some farmers have been able to earn premium, fairtrade prices for their cocoa, and recently the organisation has become a major partner in a fairtrade chocolate manufacturing company.

The North
While poverty can be found throughout Ghana, it is most widespread in the northern half of the country. During the colonial period, the region was used more as a source of labour than an area to be developed, and the pattern of unequal investment between north and south has persisted. The north has also "drawn the shorter straw" environmentally; its dry savannahs are much less fertile than the rainforest belt that covers the centre and south, and the region faces serious problems of erosion and desertification. The majority of people in the north are small scale farmers, whose productivity is hampered by numerous factors. A high population density means that land is scarce, but many families also have insufficient labour as large numbers of young people, particularly men, have migrated southwards. Land tenure systems have also affected productivity. Poorer farmers have to 'beg' for land from traditional authorities and, without guarantees of long term access, their incentives for investment is reduced. As a result, yields tend to be low and farmers typically face a hunger period before the new harvest.

Because of its poverty and underdevelopment, hundreds of non government organisations have set up offices in northern towns such as Tamale, taking advantage of the trend among international aid agencies to contract out their fieldwork. Many of these are genuine and effective, but others are simply fakes, known locally as 'husband and wife' NGOs. According to a recent statement, of the 3000 NGOs in the country, only 150 have submitted their annual reports and statements of accounts, as required by law. In response, the government has recently written a blacklist of offenders, which will be circulated to potential sponsors.

Cotton
Cotton production is one sector found in the north of Ghana that offers increasing economic rewards. Formerly the sector was controlled by the Cotton Development Board, but there are now numerous private companies involved, providing inputs on credit, and buying cotton from growers at the end of the season. Women, who generally struggle to access credit or farm labour, have particularly benefited from the more commercial approach of the cotton companies. However, a report last December, for the Pesticide Action Network, suggests that pesticide poisoning is a serious problem for many cotton farmers, few of whom use protective clothing or equipment. Of thirty farmers interviewed in the Tamale region, all said they suffered symptoms of poisoning after spraying their crops, and these were at times severe enough to stop them working for several days. There are also environmental concerns over the expansion of cotton growing, including long term reductions in soil fertility and pollution of water bodies.

Gold and forests
Ghana's tropical rainforests have been severely depleted by commercial and illegal logging. Less than 10 per cent of the original forest survives, and despite control measures even this is shrinking. A recent controversy has pitted conservationists against the mining industry, after Newmont, a giant American company, applied to mine gold from land covered by a forest reserve. Local people were largely in favour of the mine, which would bring jobs and amenities, and with the company planning to invest $450 million in two sites, the government granted the licences. Newmont is just one of six companies currently looking to open new mines in Ghana, thanks to a six year high in gold prices and new government legislation on royalties and acquisition rights

With elections this year, onlookers will be keen to see whether Ghana can continue its progress towards greater democracy and political stability. If it can, the hope of greater foreign investment, and a broadening of Ghana's economic base beyond gold and cocoa would be strengthened. Such diversification is vital if serious inroads are to be made into tackling poverty, and regional disparities are to be addressed.

1st May 2004

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