fosu.pdf - Explaining African Economic Growth Performance The Case of Ghana Ernest Aryeetey Augustin Fosu and Mahamudu Bawumia First Draft of Paper

fosu.pdf - Explaining African Economic Growth Performance...

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Explaining African Economic Growth Performance: The Case of Ghana Ernest Aryeetey, Augustin Fosu and Mahamudu Bawumia First Draft of Paper Prepared for the African Economic Research Consortium Research Project on “Explaining African Economic Growth Performance” April 2001
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1 Explaining African Economic Growth Performance: The Case of Ghana 1. INTRODUCTION It was fairly common in the 1980s and early 90s to read commendations of Ghana’s recent economic growth achievements. Leechor (1994) described Ghana as a frontrunner in the economic reform process, and Ghana was regularly put forward by the Bretton Woods Institutions (BWI) and others as a showcase of success in Africa. But there was a bit of irony to it in the sense that while this was happening, many Ghanaians showed little appreciation of that growth achievement (Aryeetey and Tarp 2000). A possible explanation for this lack of appreciation could have been a certain sense of déjà vu , having seen considerable admiration from the rest of the world for being the first African country to become independent from colonial rule in 1957, and experiencing rapid growth soon thereafter, an admiration whose import fizzled out sooner than it had begun. Another possible reason for the perceived lack of appreciation was the likelihood that the measured growth figures had little meaning for the livelihoods of people. This is a point that has recently been explored by Kanbur (2001). He asks the question “How can people with seemingly the same ends disagree so much about means, and how can seemingly the same objective reality be interpreted so differently?”. Obviously, the growth of an economy needs not mean the growth in income for most of the people, but should they not ‘feel’ that there has been growth in the economy? A recent twist to the discussion is provided by a questioning of the measured growth figures. Ravi Kanbur (2001) wonders why “people are not dancing in the streets” if the economy has seen growth in the region of 4%-5.5% for almost two decades. This paper will attempt to explain why the measured growth in Ghana has raised questions in the minds of the people. But it will go beyond that. It will seek to show why the measured growth of the early years of reform did not pick up pace after the initial period of significant growth. In this regard it will show that the growth achievements in the period of reforms were not dramatically different from earlier achievements in the 1960s. Some effort will be made to explain that by looking at the micro level evidence of policy outcomes. What this is expected to show will be aggregated into the macro picture of initial good performance and a slack as a result of structural constraints within the production and social environments.
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