From: barnhart@gagme.chi.il.us (Mr Aaron Barnhart)
Subject: IPS: STRUCTURAL ADJUSTMENT: GHANA, MIXED FEELINGS
Originator: barnhart@gagme
Organization: Evanston, Illinois
Date: Sat, 3 Oct 1992 21:39:42 GMT

Copyright Inter Press Service 1992, all rights reserved.  Permission to re-
print within 7 days of original date only with permission from 'newsdesk'.

Area: Europe, western
Reference: Third World Dvpmnt; Africa, west
Title: STRUCTURAL ADJUSTMENT: GHANA, MIXED FEELINGS /SERIES/


/attn editors: the following feature is the third in a series
of four examining the effect of structural adjustment on african
countries. the last, zambia, will follow shortly./

accra, sep 25 (ips/mawusi afele) -- to the international
monetary fund, the world bank and western donor countries which
have supported ghana's structural adjustment programme since
1983, the west african country may be one of their best
students.

however, at home the government does not score high marks,
especially on the score sheet of the urban poor and rural
people feeling the effects of the controversial imf/world bank
medicine.

bureaucrats, especially in the finance ministry, and
government officials argue that sap was one of the best things
that has ever happened to the ghananian economy.

they do not have to go too far to find proof. as the
secretary for finance and economic planning, kwesi botchwey has
pointed out umpteen times, before the economic recovery
programme took off, the ghananian economy was in a mess.

it was characterised by declining real output, continued
budgetary deficits, a runaway inflation in three digits, an
overbloated currency, serious distortions in fiscal policies, a
thriving black market, empty store shelves, collapse of
infrastructure, smuggling, corruption and decline in the export
production.

thanks to sap, however, this gloomy picture has been
repainted brighter. gross domestic product which declined at 6.1
percent in 1972-82, has been growing at an average of about five
percent. inflation has been cut from 123 percent in 1983 to
about 12 percent today.

budget deficits are now a matter of history. export
earnings have increased, the supply situation improved through
the trade liberalisation programme, capacity utilisation of
industries has doubled from 18 percent, albeit still not very
encouraging.

social services such as water supply, electricity,
telecommunications, health care, education, roads and rail lines
have been rehabilitated.

''the economic recovery programme halted the decline in the
economy and has laid the foundation for growth'', botchwey said.
(more/ips)


structural adjustment: ghana (2)

but to critics all has not been rosy. ''the government has
only been throwing empty statistics at us. we don't eat
statistics'', said kwesi pratt, a bitter critic of the
government.

the programme has made people poorer, reduced purchasing
power, with prices well beyond the reach of many people and has
created unemployment, he said. shops may be full, but few can
afford the goods on display.

according to kwame pianim, economics spokesperson for the
centre-right new patriotic party (npp), some four million
people are either unemployed or underemployed in ghana.

hundreds of thousands of workers who have been laid off
have not been properly retrained to be employed, pianim said.

a wave of strikes in the past couple of months involving
doctors, nurses, teachers, bank workers and civil servants
clearly point at how badly salaried workers are feeling the
pinch.

in the rural areas, the government's programme of action to
mitigate the social costs of adjustment (pamscad) designed in
1988 to help vulnerable groups has yet to make a meaningful
impact.

even head of state jerry rawlings admits that the imf/world
bank programme, although halting the decline in the economy,
had been difficult for the ordinary person.

''we are still feeling the pinch of the economic bite, high
rents, school fees and cost of drugs'', rawlings told a rally at
cape coast, some 160 km west of here on saturday.

critics also say the government has been piling up debts
through the large amounts of loans the imf, world bank and
western donor countries have given ghana to sustain the
programme.

government officials say the country had received about 6.8
billion dollars from the international community but the bulk is
long-term concessionary loans which are almost grants. the
country's external debt is put at about 3.6 billion dollars.

sadly, so dependent is ghana on external resource flows that
a shortfall creates ripples in the economy. according to
botchwey, a shortfall of 50 million dollars in programmed
external financial flows this year has aggravated the country's
budget.

manufacturers have also been complaining about the trade
liberalisation programme which is virtually killing local
industries which cannot compete with cheap imports.
(end/ips/ma/oa/92)