Argument

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Ghana’s ‘Success’ Exposes the West’s Toxic Development Model

Standard theories of global progress continue to be largely limited to raw extraction.

Howard French
Howard French
Howard W. French
By , a columnist at Foreign Policy.
Men stand atop a wooden platform over a muddy river holding a long pole down into the water.
Men stand atop a wooden platform over a muddy river holding a long pole down into the water.
A group of galamseyers, illegal gold panners, use a motorized pump to scrape the riverbed as they look for gold in the Kibi area of southern Ghana on April 12, 2017. CRISTINA ALDEHUELA/AFP via Getty Images

At first glance, an item of business news that crossed my transom one morning this week seemed like a clear economic win from Africa: Ghana, which enjoys a reputation as one of the continent’s most successful nations, had signed a $3.2 billion contract with an international consortium to rehabilitate a defunct railway line between its western port city of Takoradi and its second-largest city, Kumasi, in the nation’s interior.

Putting the 210-mile route back into service would allow Ghana to deliver the minerals and commodities it produces to international markets more easily. Before the line became inoperable in 2006, worn out by years of heavy use and inadequate maintenance, it had been used to transport raw manganese, bauxite, and unprocessed cocoa, earning export income in dollars intended to power the country’s development. Read quickly, the contract sounded like unadulterated progress for a country that is seeking to broaden prosperity for its fast-growing population.

But as someone who just this month had just driven the entire breadth of Ghana, from its western border with Ivory Coast to its eastern frontier with Togo, and who has been visiting the country for decades, routine news items like these, so positive-seeming on their surface, raise deep and disquieting questions that resonate well beyond the territory of this modest-sized country and implicate the entire African continent and its relationship to the international economy.

At first glance, an item of business news that crossed my transom one morning this week seemed like a clear economic win from Africa: Ghana, which enjoys a reputation as one of the continent’s most successful nations, had signed a $3.2 billion contract with an international consortium to rehabilitate a defunct railway line between its western port city of Takoradi and its second-largest city, Kumasi, in the nation’s interior.

Putting the 210-mile route back into service would allow Ghana to deliver the minerals and commodities it produces to international markets more easily. Before the line became inoperable in 2006, worn out by years of heavy use and inadequate maintenance, it had been used to transport raw manganese, bauxite, and unprocessed cocoa, earning export income in dollars intended to power the country’s development. Read quickly, the contract sounded like unadulterated progress for a country that is seeking to broaden prosperity for its fast-growing population.

But as someone who just this month had just driven the entire breadth of Ghana, from its western border with Ivory Coast to its eastern frontier with Togo, and who has been visiting the country for decades, routine news items like these, so positive-seeming on their surface, raise deep and disquieting questions that resonate well beyond the territory of this modest-sized country and implicate the entire African continent and its relationship to the international economy.

In December 1982, under then-Ghanaian President Jerry Rawlings, the country engineered a radical shift in its economic management policies, abandoning attempts by past leaders, including Rawlings himself, at such things as building socialism, reducing its financial dependency on the West, limiting imports from abroad to encourage local industry, and imposing state control on the prices of many goods. Ghana’s dramatic change in direction—which also included the democratization of its politics under Rawlings, who had first seized power in a violent military coup in 1979—led to an opening of the tap of the Western-led international economic system for the country.

By the end of the 1980s, Ghana was receiving over $700 million in what is often called “development assistance” annually. These funds were overwhelmingly sourced from rich Western nations and from institutions such as the World Bank and International Monetary Fund, which Western powers created and have traditionally led. The policy changes initiated by Rawlings and pursued by other leaders in his wake have continued to draw financial support from the West and have stoked a boosterish international discourse about Ghana, which was often talked about as a “star pupil” of the development strategies being broadly urged upon economically underdeveloped countries by the West.

As a reporter covering West Africa for the New York Times, I was writing about this with some skepticism already in the 1990s, when drought derailed what for some time already had been the country’s much-touted fast growth, thus demonstrating this supposed success story’s inherent fragility. Looking back, it is important to give credit where credit is due. Ghana’s growth was no flash in the pan, nor even less a mirage sustained by Western countries—which, it has often been said, needed an apparent success story to sell structural adjustment and other neoliberal policies as widely as possible on the African continent.

After barely budging in the 1980s, the era when I began writing about Ghana’s political economy, as well as in the following decade, per capita income there has leapt this century, increasing from about $258 per person in 2000 to about $2,400 today, according to World Bank data. During this same timespan, extreme poverty in Ghana has fallen apace and, according to some projections, is on track to decline to 4.5 percent of the population by 2030, from roughly 12.5 percent at present.

Yet beyond advances like these, which have helped lift Ghana into the lower echelons of the overly broad category of “middle-income countries,” there is good reason to worry about the upside prospects of countries that, like Ghana, follow the standard Western development advice over the longer term.

The theory behind such advice has been remarkably static. Poor countries that lack the capital they need to develop should focus on generating exports in areas where they are believed to possess competitive advantages. To develop, these states should maintain strict fiscal discipline, accumulating as much capital as possible for importation of technology from more advanced countries and for prudent investment in productive industries.

Little by little, the theory goes, those who stay the course should begin to close the gap separating them from far more prosperous parts of the world, putting them in a position to deliver wealth and opportunity for their citizens.

In almost every case, the competitive advantages the countries on the receiving end of such advice are said to possess lie in raw materials, generated via extractive industries such as mining and the production of agricultural commodities. In Ghana’s case, this has long meant cocoa and gold, each with very old roots in the country’s economic history.

As I argued in my recent book, Born in Blackness: Africa, Africans, and the Making of the Modern World, gold from the territory that later became Ghana played a vital role in the launching of the modern age by, among other things, strengthening circuits of commerce between Northern and Southern Europe in the late 15th century, as the Portuguese sought goods in distant parts of Europe that they could use to trade for gold with Africans along the Ghana coast.

In 1948, in the wake of World War II, as the historian Caroline Elkins and others have written, cocoa from Ghana was the second leading overseas source of colonial income for Britain, after palm oil from Malaya, pulling in $47.5 million a year at a time when London was struggling with a massive postwar deficit. Cocoa paid off so handsomely for Britain because it kept the prices paid to African farmers for their crop artificially low, paying them in pounds while selling Ghana’s cocoa at considerable profit on international markets for badly needed dollars.

Gold and cocoa are still mainstays of Ghana’s economy, ranked No. 1 and 3 in terms of revenue, but in recent years, Ghana has added a third commodity pillar to its economy. The country became an oil-producing nation in 2010, when an underwater field off the country’s western coast entered production. Its very name, Jubilee, reflects the strong wave of optimism at the time in Ghana about the contribution that oil could make to the country’s development. Since then, two other fields have come online, making Ghana the eighth-largest oil producer in Africa.

However, Ghana’s oil output only accounts for about 3 percent of the country’s GDP, according to the World Bank. That is due in part to the modest share that Ghana, like many other developing countries dependent on foreign oil companies for capital and technology to exploit their oil reserves, takes from the production income. According to one Ghanaian analyst, this amounts to only about 17.5 percent of the value of the roughly 173,000 barrels of oil per day that the country produces at present.

Gold, Ghana’s leading pillar, produces even stingier returns for the country, which receives only about 9 percent of the proceeds from the production of big, foreign-operated mines, according to one local analyst I spoke to.

By themselves, net financial proceeds are a poor basis for evaluating the costs and benefits inherent to the standard development model Ghana and many other African nations are following. Everywhere I drove in Ghana during my recent three-week stay in West Africa, I was confronted with the ugly signs of extraction: enormous hillside excavations, pipelines carrying gas, cleared forests.

In the western region that has produced Ghana’s offshore oil exports, as I traveled along some of the worst roads in the country, I came across the tidy, fenced-in outposts of many international heavy-equipment suppliers and engineering firms associated with this ongoing extraction. Their presence, though, seemed utterly divorced from the lived experience of the people of the area, who gather to trade in dusty, informal markets by narrow, chewed-up tarmac or on the margins of heavily rutted dirt roads.

The most disturbing thing I saw by far was the condition of the numerous rivers I crossed. Their waters, which had been crystal clear in the years when I first made my way by road along the coast of Ghana and supported a rich and plentiful aquaculture that was important to the local trade and diet, had been turned a muddy deep brown from a style of gold prospecting that local people say began with Chinese migrants but is now practiced widely by local chiefs and criminal gangs. They operate from floating platforms using equipment that sucks up mud from river bottoms and sifts it for alluvial gold, depositing the heavy waste sediments directly back into the river, where they choke out animal and plant life alike.

The Pra River in Ghana.
The Pra River in Ghana.

The Pra River, east of Takoradi, Western Region, Ghana, on July 10. Howard French for Foreign Policy

The business of producing things for others in faraway markets, in other words, has taken strong precedence over producing palpable improvements in the lives of ordinary people, and the trickle down is scant. Meanwhile, 65 years after Ghana became independent, precious little of what it produces gets transformed locally beyond its raw state, whether it is the bauxite that the country’s first leader, Kwame Nkrumah, had dreamed of processing into aluminum or the cocoa that goes into the chocolate devoured in ever-increasing quantities in the rich world.

Of course, some of Ghana’s predicament, which can be understood as a proxy for the experience of much of Africa, is due to things like poor policy execution, corruption, or the lack of highly trained personnel in certain areas of management or technical expertise that are key to economic advancement. But this is only a piece of the story—and, I would argue, a relatively small one.

If Ghana has been worth calling a star pupil, that is because by and large it has followed the development blueprint recommended by the West. The fact that this has not led to broader opportunities in manufacturing or to a rise up the so-called value chain through the transformation of its own products calls into question the very soundness of the advice it has received over the last few decades. More despairingly, perhaps, it raises questions about the structural nature of opportunity in the global economy and its openness to hundreds of millions of people on the African continent, which is host to most of the world’s least-developed economies.

The space granted in the international economy to most of Africa’s so-called success stories continues to be largely limited to raw extraction, and scarcely anyone is reckoning with the environmental costs of this model—or of the finite nature of most of the resources in question. Ghana is making about as good a go of things as one could expect under these hellish arrangements, and that is what is most disquieting about what is euphemistically called “the developing world.”

Being a good pupil, Bright Simons, one of Ghana’s leading political and economic analysts, told me, was about sustaining optimism about change being just around the corner, “even as we strip the land to create a semblance of economic growth.” What of horribly run countries like the Democratic Republic of the Congo, whose lands are being ravaged to produce the rare metals that go into cellphones and catalytic converters, or Nigeria or Mozambique, whose oil and gas are prized in the global north?

The game of international economics is as heavily rigged in favor of rich countries today as it was when Britain clung to its late-stage empire in the wake of World War II to fund its recovery. The most prosperous nations will continue to source their needs for fuels, minerals, and commodities from the weakest ones—which are heavily concentrated in Africa—driving environmental devastation and predatory economic behavior there that the rich countries would never countenance at home.

It is high time that humans work out a new deal for the weakest of the world—one that offers to share the fruits of the international economy much more fully and fairly. But until that happens, we should at least stop pretending that the standard theories about global development offer the poor much of a path forward.

Howard W. French is a columnist at Foreign Policy, a professor at the Columbia University Graduate School of Journalism, and a longtime foreign correspondent. His latest book is Born in Blackness: Africa, Africans and the Making of the Modern World, 1471 to the Second World War. Twitter: @hofrench

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