How J.H Mensa tried to save the Progress Party Government of 1969-72

JH Mensah The late J.H. Mensah

Tue, 14 Aug 2018 Source: Cameron Duodu

In a tribute I paid to the late J H Mensah in the Daily Guide of 14 July 2018, I disclosed that although I suspected that the devaluation of the Cedi on 27 December 1971 – which led directly to the coup of 13 January 1972 – was carried out by Prime Minister Busia and not by his Finance Minister, J H Mensah, I never asked J H about it.

I didn't quiz J H because I could tell he was depressed and I thought it would indecent for me, knowing what I did about the goings-on inside the Busia Government, to get him to express his thoughts about an issue that constituted a personal defeat to himself.

Well, I have now read a paper written by someone who had made a special study of the issues of the time. He is Professor Ronald T Libby, and his paper is entitled “External Co-optation of a Less Developed Country's Policy Making: The Case of Ghana, 1969-1972.” It was published in the periodical, World Politics, Vol. 29, No. 1 (Oct., 1976), pp. 67-89.

Prof Ronald T. Libby makes it clear that foreign advisers with whom the Prime Minister, Dr Kofi Busia, surrounded himself , had the objective of negating the policies of J H Mensah. They didn't care a tinker's dime about Ghana's right to evolve an economic policy that suited her own interests. Instead they acted as the agents of the Western Powers and their companies many of whom had sold unviable projects to Ghana and were ruthlessly demanding payment for them. The Breton Woods institutions – the IMF and the World Bank – were their allies in this endeavour.

Prof Libby writes: QUOTE: Between 1969 and 1972, the World Bank, the International Monetary Fund, and creditor countries structured the context in which their client, Ghana – a less developed country (LDC) – formulated its economic policy.

The intergovernmental organizations (IGO's) and creditor countries failed to take into account the client country's domestic

political situation. When the LDC became heavily dependent upon the IGO's and creditors for financial assistance to enable the government to survive a disastrous shortfall in foreign exchange earnings, it was forced to accept extreme, and politically dangerous, measures in

order to secure assistance.

“The policies that were adopted were catastrophic for the LDC, and destroyed what remained of the democratic government's public support. This dramatic change in public climate made the government fatally vulnerable to a military coup d'etat.

During the period under discussion, Dr. Kofi Busia's democratic government found itself locked into a network of inter-governmental economic relations. Within that network, the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF) effected a linkage of policy formation and transmission.

“For purposes of lobbying their policies within decision-making

circles inside the government, the international organizations created

a base of operations consisting of Ghanaian officials and foreign advisers

who informally coordinated their work with them.” Their “policies turned out to be disastrous... for the Busia government, undermining its already precarious

public support. In the wake of public disaffection, a military coup

d'etat was successfully carried out [on 13th January 1972], putting an end to Ghana's short-lived experiment in democracy. UNQUOTE

J H provided me, as editor of the Daily Graphic, with a quote that explained his bone of contention with the Western creditors and the Governments that backed them. They wanted “to relieve Ghana's debt by increasing it”, he said.

That's a succinct way of describing “rescheduling” of debt, with the “rescheduled” debts attracting interest and thereby eating, in the near future, into the very foreign exchange earnings the paucity of which had brought about the necessity for rescheduling repayments debts.

Prof Libby reveals that “the co-optation of Ghana's economic policy-making started in 1967 with the placement of a team of Harvard Development Advisory Service (DAS) economists into the planning and economic policy-making units of the government. Harvard specialists worked directly with the World Bank in assessing project feasibility, obtaining data on the economy, and drafting Ghana's development plans. The system was inherited wholesale by the Pr ogres Party government of Prof. K A Busia.

One official of the World Bank said: "If the Harvard people had been [World] Bank people, they could not have done differently. They were like the Bank.... They looked at things from the same vantage point as the Bank....

The Bank and the DAS never disagreed.... They were in ... a perfect position to brief the [Bank] on development policies and internal politics”. For example, they knew where J. H. and Busia differed, “and they let the Bank know.”

The key infiltrators were Tony Killick, Joseph Stern, Michael Roemer, and Sieb Miedema of the DAS. Two other members of the group were John Odling-Smee and Babu Niculescu, who, operating from the Prime Minister's office, were instrumental in coordinating the coalition's efforts to influence him. One member of the group described Niculescu's role in the coalition: Niculescu did personal errands for Busia. He talked to... the British Treasury. He was in Ghana during IMF visits; he had direct access to Busia. “he had Busia's ear.” Whenever J. H. urged a point on Busia, “Niculescu would be there to get in his points against it.” One official is quoted by Prof Libby as saying that “with the support of the World Bank, they broke J. H.'s back."

This was the backdrop to the economic crisis that shook Ghana after it had been led to a debt rescheduling conference in London in July 1970, that was a complete and utter failure. From August I97I until December I971, an intense contest for control of Ghana's economic policy took place between the coalition of the DAS and the Bank of Ghana, backed by the IGO's on one side, and the Minister of Finance, J. H. Mensah, on the other.

The lines of demarcation between the two sides surfaced in late January

I97I on the occasion of the Prime Minister's announcement of a major Cabinet reshuffle... The most significant change was that of the division of the Ministry of Finance and Economic Planning into two ministries. The Prime Minister himself took control of the planning portfolio, leaving Mensah with only the Ministry of Finance.”

J H soldiered on, but in December 1971, a 44% was decided upon without his approval. But unwilling to resign and cause a problem from his brother-Brong Prime Minister, he tried to make the best of the devaluation by actually suggesting suggesting that if there was to be one, then the rate of devaluation should be hiked to 48 percent, so as to try and improve Ghana's budgetary position, at the very least.

But this was rejected. On 13th January 1972, General Kutu Acheampong carried out a coup to overthrow the Progress Party Government. Acheampong carried out a debt repudiation programme which could have been authored by J H. But Acheampong kept J H in jail, even as he was winning plaudits from the Ghanaian public for being so bold in opposition to the Western creditors, in the same manner that J H had been.

Rest in peace, J H Mensah. You fought for Ghana's economic independence and you will be a Ghanaian – nay Third World – hero, for ever”!

Columnist: Cameron Duodu
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