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General News Tue, 29 Apr 1997

There Is Little Change In Ghana's Economny - Visiting Professor

Accra Professor Tony Killick, a senior research fellow at the Overseas Development Institute (ODI), today said there has been little change in Ghana's economy from the 1960s, in spite of structural reforms started in the 1980s. He said though there have been positive changes in health and enrolment in education, the productive and macro-economic structure has not improved correspondingly to expectations at the onset of the Structural Adjustment Programme (SAP). The Prof was delivering a lecture on "Ghana's Economy", organised by the Institute of Statistical, Social and Economic Research (ISSER) at the School of Administration, University of Ghana, Legon.

Professor Killick, who was a former adviser to the government between 1962 and 1972 and specialises in Third World economic development, said Ghana's economy is still fragile, using education, health, imports, exports, domestic savings and investments as indices. He said the initial growth of local industries was due to the protective banner placed on them by the post-independence government and described their growth as "superficial modernisation".

According to Prof Killick, the protectionist strategy, which he described as "indiscriminate", should have been applied rationally and systematically so that more attention was given to companies whose products have an importance on the international market. He noted that most of such parastatals crumbled with the withdrawal of government subvention and resulted in the production of shoddy goods which could not compete on the world market. He said the public sector also resorted to a high level of borrowing from the commercial banks and this starved the private sector of the credits needed for their growth.

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Prof Killick said even though government revenue from tax has recovered from six per cent in the 80s to almost 20 per cent, the level is still below that of the 60s. He said the reduction in government revenue compelled it to use about a quarter of export earnings to service external debts, adding that despite the recovery in the investment rate, savings are still low. Prof Killick said this is against a backdrop of four-fifth of the total number of exports being primary, including the top three earners; cocoa, gold and timber. He noted that between 1980 and 1994 there was a huge increase in imports without a corresponding increase in exports. He said this has created a resource gap the bridging of which is uncertain, especially with the reduction in foreign aid and the fact that earnings from the few diversified exports could hardly make up for the huge deficit.

On the general effect of the structural adjustment programme, Prof Killick said Ghanaians have been very responsive to the changing economic trends, adding that they have been "flexible while the economy is still inflexible". This he attributed to too much bureaucracy and government intervention in the economy.

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