1. Ghana – which way now? Bob Digby Senior Vice-President Geographical Association

2. Ghana @50: Success or failure? Frank Agyekum "Ghana has done well. It’s a thriving democracy with a stable economy; kids go to school and are fed.” Samuel Ablakwa "So many kids are still on the streets hawking. I'm still carrying buckets of water on my head! Maybe our economists are cooking the figures."

3. Some background Size: 230 000 km2 (nearly that of the UK) Population: 24.9 million (about 40% of the UK’s) Scale: 0 100 miles

4. Focus for tonight How far has Ghana come in 50 years? How far can Ghana be considered ‘independent’? Which way should it go from 2011 onwards?

5. Economic progress? 19872010 GDP total (US$ - PPP) US$5.7 billion$31.08 billion ($62 bn at PPP) Per capita (US$)$385$1250 ($2500 PPP) Annual GDP growth rate % 5.3%5.7% (previously 6.2%, 8.4%, 4.7%) Annual Inflation % 39%11% Unemployment %26%11% est. Exports$863 million (Cocoa 60%, timber, gold, tuna, bauxite, and aluminum) $7.5 billion (Gold, cocoa, timber, tuna, bauxite, aluminum, manganese ore, diamonds, horticulture) Main export markets US 23%, EU countries 25%EU countries 40%, Ukraine 6% Imports$783 million (Petroleum, consumer goods, food, capital equipment) $10.7 billion (Capital equipment, petroleum, foods) Main import sources US, EU, Japan, South KoreaChina, Nigeria, EU, US, South Africa Total Debt (US$)$3.3 billion (400% of export value) $6.7 billion (64% of export value)

6. Trade pattern (typical of a developing economy) has barely changed in 100 years Primary product exports dominate Imports remain mainly manufactured goods An example of dependency theory: developing countries remain dependent upon developed nations for trade. Key economic issues

7. Social progress? 19872010 Population in millions13.924.8 Population growth rate per year 2.9%1.8% Birth rate per 10004227.6 Death rate per 1000108.8 Infant mortality per 1000 live births 6848.5 Life expectancy at birth in years 59.561 Fertility rate per woman5.63.5 Literacy of adults30%58%

8. Ghana’s cocoa trade Colonial times: Ghana the world’s largest producer of cocoa Britain dictated the global cocoa price 2010: the world’s second largest producer Who controls Ghana’s cocoa trade now?

9. Who controls trade? 1 Upward pressure Price of cocoa decided in commodity trading exchanges in London and New York Buyers buy cocoa for companies e.g. Cadbury or Nestle Traders compete for supplies Cocoa prices depend on global supply and demand, which vary Downward pressure Other countries produce cocoa e.g. Ivory Coast now the world’s largest producer If Ghanaian prices are too high, dealers purchase elsewhere

10. Global price patterns Global price of cocoa is volatile 1991-5: the price of cocoa changed 60 times 1996-2002: it changed 90 times Between Jan 1991 and Dec 1993 it increased by 112% Between June 1998 and Dec 2000 it fell by 32.5% Cocoa price 1971-2004 Cocoa price Sept 2007-Jan 2008

11. Impacts upon people? Unstable prices cause: irregular income for workers low tax returns for government poor government planning.

12. Why not market Ghanaian chocolate? Sustained chocolate consumption Western Europe & US are biggest markets; Asia, E Europe & Latin America growing rapidly Consumers react badly to high prices or shortages Very strong response to FairTrade brands but not to unknown brands Opportunities for Ghana to market its own chocolate are few.

13. Dependency theory Poverty in developing countries caused by a reliance on developed economies Trade in primary goods keeps countries poor, because no value is added by processing or manufacturing. Therefore, no jobs & profit for investment Countries trapped in a vicious cycle

14. Development Theory Andre Frank’s ‘Development theory’ Colonialism causes low levels of development, Keeps colonies poor Tariffs (duties) on imported manufactured goods used to protect from cheaper imports

15. In 2011 EU Import tariffs on cocoa beans are lower than on processed cocoa. EU uses 'tariff escalation' 0% duty on imported raw cocoa beans 7.7% on cocoa powder 15% on chocolates Japan & USA – no duty on raw cocoa beans but tariffs of up to 65% on imported chocolate Who controls trade? 2

16. Who controls trade? 3 WTO (World Trade Organisation) Ghana joined the WTO in 1995 Previously, subsidies paid to farmers to grow food WTO policy – abolish subsidies, develop free trade

17. WTO ‘Agreement on Agriculture’ Allows ‘domestic support’ for producers. Three categories: Green, Amber and Blue. Green – subsidies for environmental reasons, e.g. if farmers reduce grain output and plant woodland; Amber – subsidies that governments have agreed to reduce but not to cut. Blue – subsidies given where production will be reduced in the long- term. Impacts EU and USA still subsidise farmers $400 billion annually 50% of EU subsidies go to largest 1% of producers 70% of US subsidies go to largest 10% Large farmers produce huge volumes, which governments buy and ‘dump’ on poorer countries as ‘aid’

18. Impact of WTO Policies Reduced domestic prices Farmers put out of work. Ghana’s tomato- growers can’t sell produce, as EU tomatoes are cheaper Canning factories closed Rice growers also flooded by imported rice from the US

19. Where next? To develop, countries seek a virtuous cycle whereby they keep surplus production, and invest in processing and manufacture, adding value. Many cocoa farmers now form co-operatives. Kuapa Kokoo (‘good cocoa farmers’) began in 1993; now has 40 000 members, producing 1% of global crop. Strong bargaining power, selling to European FairTrade companies. 1998 The Day Chocolate Company formed in UK, making ‘Divine’ chocolate. Provides members with cheap loans, improved drinking water in rural areas, & health insurance.

20. How to develop in future? Aid or investment? Supplied mostly by western countries Wealth created by employment in construction, manufacturing or developing primary products. Wealth ‘trickles down’ via job creation, spending and increased demand. Known as the ‘multiplier effect’

21. Top down or bottom up? Top-down: Occurs where strategic decisions are needed, about e.g. improving health care or schooling or infrastructure (e.g. provision of energy). Decisions come from above Imposed on communities Useful for major projects Bottom-up : Occurs at community level by identifying people’s needs Develops small-scale projects to meet needs Decisions and working come from communities and by NGOs (Non- Governmental Organisations) e.g. charities

22. Aid or investment? Aid gifts or repayable loans made by one country or organisation Investment repayable loans used to develop a country, with a share in the profits e.g. when TNCs invest in a factory Bi-lateralFrom government of one country to another Multi- lateral From alliances of several countries or organisations TiedGiven with conditions about how money must be spent e.g. drugs, weapons, or a particular project

23. Case Study: the Volta Dam Built 1961-66 from both aid & investment Multi-lateral – World Bank (loans – US$40 million), Ghanaian government (investment – US$69 million) & aid from USA and UK governments. Akosombo Dam created Lake Volta, the world’s largest artificial lake. Designed to provide HEP for smelting raw bauxite into aluminium

24. Benefits Energy Electricity production Cheap electricity for aluminium smelter, expanding industry Aluminium export trade Electricity exports to neighbouring countries Communication Lake Volta provides an inland waterway Links the northern region with the more prosperous south. Economic activity and the environment Increase in tourism; cruises. Source of irrigation water.

25. Problems National scale  Most Ghanaians can’t afford electricity  Aluminium smelter moth-balled in 1998  HEP plant owned by ALCAN, a US company, so profits go to US, not Ghana.  The lake flooded 4% of Ghana’s land forcing 80 000 to relocate. Local scale  Reduced river flow downstream  Reduced freshwater shrimp, so local people have less protein.  Less silt downstream, reducing crop yields and incomes.  Removal of trees to sell as fuelwood to replace income – causing deforestation  Increase in water-borne disease, e.g. bilharzia, malaria  Increased rural-urban migration

26. Benefits for Ghana? ALCAN, USA Kaiser Aluminium, US Formed VALCO Fate Bauxite √ (80% share) & Ghana (20% share) Exports Ghana’s raw bauxite to Scotland & Canada Electricity √ (2 HEP plants) Aluminium smelter Smelter at Tema Imported semi- processed alumina from Jamaica & US 1998 – closed & left it mothballed 2007: sold to Ghana for US$18 million

27. Time to forge ahead? 2005: Ghana’s government bought 90% of shares in VALCO smelter from Kaiser, hoping to re-start it 2006: Production started 2007: Ghana purchased the remaining 10% 2008: Plant closed because of low water levels in Lake Volta caused by drought preventing electricity production 2009-10: Low global prices of aluminium and bauxite kept it closed 2011: reopened with 1 of the 6 smelters working

28. Is there future hope? Ghana was one of the first countries to have many of its debts cancelled after the 2005 G8 conference In 2006, this saved Ghana US$166m in interest alone Investment by the government in people and the economy possible Debt cancellation took place on condition that all savings spent on improved education and health care

29. Joined-up thinking? Ghana’s Needs Safe Water 2008: only 50% of Ghana’s population had access to safe, treated water 60-70% of urban dwellers have access but only 35- 40% in rural areas. Even in urban areas, only 40% have a water tap that flows Affluent Ghanaians buy from private sellers because public supply is so irregular 78% of the urban poor have no piped water. A Millennium Development Goal – to bring clean water to all by 2015 The World Bank says Water treatment must not lead to increased government expenditure or debt Loans for water systems only if they are privatised People now have to pay for connection and supply – which many cannot afford. Jobs are threatened as the new owner cuts costs & maximises profit. Plans are to privatise only the urban water and sanitation systems. What happens to rural water supplies?

30. So who’s in charge? 54 years since independence Loss of British control Debts mostly cancelled Rapid economic growth caused by global commodity prices Greatly improved social indicators Several targets still ahead – e.g. water Has spent most of that time in debt Control of the country’s largest development projects in the hands of the USA Future development influenced by the US- controlled World Bank China seeking to influence Africa – and its resources

31. What change lies ahead for them?

32. Acknowledgments Thanks to the following; all images are for educational reference and use only Photos from Ellie Doidge Images and references ‘A2 Geography for Edexcel’ (2009) Oxford University Press) CIA Factbook for Ghana 1987 and 2011