A large part of government revenue is derived from various taxes, including a duty on cocoa, import duty, customs and excise duties, sales tax, income tax, property tax, and other taxes. Tax concessions are available to certain classes of business, and special incentives are offered to those generating foreign exchange through exports. In the late 1980s measures were instituted to widen the tax net so as to increase revenue, and subsidies on many goods—especially food items and imported fuel—and on public utilities were drastically reduced.
Despite attempts at reform, excessive bureaucratic controls and inefficiency continue to hamper trade and orderly economic development and to foster a flourishing underground economy. In addition, the massive devaluations of the cedi (from 1.02 cedis to the U.S. dollar in 1970 to 227 cedis to the U.S. dollar in 1989) have had mixed effects on both trade and the cost ofliving.
Although there is a minimum wage for workers, the gap in wages between the lowest-paid and well-paid workers is still wide. This disparity, coupled with rising living costs and instability in the national currency, impose severe hardships on a large section of the working population.
The trade union movement played a role in the struggle for self-government, and after independence the government, recognizing the importance of the movement as a political force, sought to make it a more direct instrument of policy. All trade unions in the country were brought under the authority of the Trade Union Congress, which was virtually an integral part of the government; this curtailed the freedom of workers to bargain with employers and the government. After the fall of the Nkrumah government, the monopoly of the Trade Union Congress was abolished and other unions were able to function. In 1972 the Trade Union Congress was revived, but the military government in 1982 once again suppressed its activity.
Resources
Although Ghana has a wide range of minerals, only a few—e.g., gold, diamonds, manganese, and bauxite—are exploited. These minerals are found mostly in the southern part of the country.. There are important reserves of limestone and iron ore, although they are not exploited..
The soil and climate favour a wide range of crops. The most important is cocoa, of which Ghana is a leading world producer. Timber and the crops of the forest zone constitute additional important biological resources. Yams and such cereals as rice and millet are produced primarily in the northern savanna zone; cattle are also raised there. The forests yield shea nuts and kola nuts. Ghana's offshore waters are rich in fish, and the creation of Lake Volta added another important source of fish for the domestic market.
Many of Ghana's rivers have the requisite regimes and rates of flow to permit exploitation for hydroelectric power. The Akosombo Dam on the Volta River and a second dam a few miles downstream at Kpong have a combined electrical capacity of more than one million kilowatts. Electricity from Akosombo meets most of the domestic requirements, leaving a surplus for sale to Togo and Benin.
Because of their intrinsic poverty in nutrients, most of the soils are heavily dependent upon the humus supplied by the vegetation cover. There is, thus, a delicate balance between vegetation and soil fertility, which may be upset by uncontrolled burning or overuse.
Ghana has one of the best-developed educational systems and one of the highest adult literacy rates in tropical Africa, but the cost is high. In April 1974 the government began implementation of a new educational system. Teacher training and technical education are approximately equivalent to secondary education, though they tend to attract pupils who are not aiming at university careers. University education is provided at three institutions. All three institutions are financed by the government.
Despite the heavy national expenditure on education and the large school population, Ghana still has a relatively low literacy level by world standards. Thanks to the extensive use of the sound and visual media, however, illiteracy is not as serious a handicap as it formerly was. English is widely spoken, especially in the urban areas.
Year in Review 2002: world-affairs
Area: 238,533 sq km (92,098 sq mi)
Population (2002 est.): 20,244,000
Capital: Accra
The economy
Agriculture, forestry, and fishing
Apart from providing the bulk of national income, agriculture, forestry, and fishing employ morethan half of the population. The annual output of cocoa—which is cultivated on more than one-half of Ghana's arable land—provides between three-fifths and three-quarters of the total revenue from exports. Consequently, the world price paid for cocoa directly determines Ghana's economic fortunes. Cocoa production fell sharply during the 1970s. It was underminedby aging and diseased trees, drought, bush fires, poor transport facilities, lack of adequate price and other incentives to farmers, and widespread smuggling across Ghana's borders. The Cocoa Marketing Board was abolished in 1979 following charges of corruption but was reconstituted in 1985 as the Ghana Cocoa Board. The government has repeatedly raised the production price of cocoa in an effort to stimulate production and to decrease the country's balance of payments deficit. These efforts and slight improvements in the world price have hada favourable effect on the economy, but the outlook remains far from promising.
Timber is also an important foreign exchange earner. Ghana's timber marketing is controlled by the Timber Export Development Board. Since the beginning of 1973 all foreign-owned timberexport firms have been required to incorporate locally, so that the purchasing of timber is conducted only through this board.
The Ghana Oil Palm Development Corporation built a mill for the production of palm oil on its plantation near Kade. One of the largest in western Africa, the mill is designed to fulfill industrialand domestic consumption needs.
The Ghanaian domestic market is important. The value of food produced for local consumptionis considerable. Successive governments have strongly supported diversification of food production to reduce reliance on a few crops and to cut the need for imported foodstuffs, but their measures have often been contradictory because of the emphasis on exports capable of earning foreign exchange. Besides cocoa, timber, and palm oil, other agricultural products thatare exported include sugar, coffee, palm kernels, copra, and various fruits and vegetables.
The various types of fish caught include cape hake, grunt, sea bream, tilapia, herring, mackerel, barracuda, and tuna. Most of the catch is sun-dried or smoked and consumed locally, but an increasing proportion is refrigerated; certain fishes, especially tuna, are mainly directed toward the overseas market. Government and private research agencies are working to increase the cash income of rural fishing communities and also to modernize the processing, distribution, and marketing of the catch. The State Fishing Corporation and a number of private companies operate a fleet of deep-sea trawlers.
Industry
A policy of industrialization has resulted in the establishment of a wide range of manufacturing industries, producing food products, beverages, tobacco, textiles, clothes, footwear, timber and wood products, chemicals and pharmaceuticals, and metals, including steel and steel products. These are produced mostly for local consumption. Among the announced program directives of a five-year plan (1975–80), however, was the maintenance of a reasonable balanceon external trade, and a number of industrial projects were directed to the export market in either the short or long term. Ghana's industrial development has been hampered by a lack of capital, and official industrial development policy in the early 1980s recognized the importanceof attracting foreign capital for the purpose of an effective economic take-off.
During the 1960s there was a decline in the mining industry, but in the 1970s increased world market prices for gold and manganese, new discoveries in the Prestea goldfields, and the formation of a National Manganese Corporation in 1975 to carry out a five-year plan to rehabilitate the manganese mines at Nsuta improved prospects for these minerals. The production of bauxite, on the other hand, has been well below capacity, and other minerals, notably diamonds, are close to depletion.
The development of Ghana's mineral industry has been hampered by a shortage of equipment, skilled personnel, and capital in the form of foreign exchange. The mineral industry failed to regain the economic preeminence it enjoyed before the 1960s. In the late 1980s, however, renewed efforts at revitalization with massive foreign investments and the encouragement of local and foreign private entrepreneurs were begun. Ghana possesses substantial bauxite reserves, though the output, all of which is exported, is less than half of capacity. High-quality sand in the Tarkwa mining area provides the basis for a small but important glass industry. Cement factories have been developed at Tema and Takoradi.
Revenue from tourism has increased gradually, with most of the tourists coming from Nigeria, the United Kingdom, Côte d'Ivoire, the United States, and Germany. The Ghana Tourist Board and Ghana Tourist Development Company supervise the regulation, financing, and development of the tourist industry. Hotels are located at Accra, Tema, Takoradi, and Kumasi, and there is a hotel at Akosombo overlooking Lake Volta.
