Surely, Some Free SHS Will Do For K. Pratt Jnr.! (4): The Recklessness and Hazard of the 7-Year Development Plan.
Kwabena Amikaketo sat in his favourite chair on his balcony, viewing the setting sun which was making way for the shadows to grow longer and soon cover his part of the world like some dark blanket.
Theweather that evening was a bitcolderthan last night with temperatures hovering around 23ºC. The tropical winter continues unabated.
Tonight, Kwabena would want to contemplate on the economy under Kwame Nkrumah and facts brought out by the first president’s trusted economic guru, K.A. Gbedemah spoke volumes about what the Nkrumaists always hid from Ghanaians.
Gbedemah stated that during Nkrumah’s reign, no serious discussions were held on the 7-Year Development Plan entitled “Work and Happiness” before decisions were taken. Sadly, that was the way things were done in his government.
Gbedemah went on to warn that the 7-Year Development Plan would create more unemployment and unhappiness for many, because among others, Ghana was in no position to fund the 7-Year Development Plan, nor was it possible for donor nations to fund it. In effect by 1961, Ghana went broke and poor.
Nkrumah’s government started with a credit balance on account of £240 million, which in today’s present value at an annual inflation rate of 10%, will be over £117 billion or over GH¢1.3 trillion.
The Akosombo dam which cost £130 million to constructed, between 1961 and 1965, was supported with an external loan of £84 million, from the USA, World Bank and United Kingdom.
Ghana could not wholly fund the construction of the dam, because by February 1963, Ghana’s accounts had depleted to £500,000.00.
To Gbedemah, as finance minister, this new policy was at variance with his past record of providing millions to be spent on development from 1954 to 1961.
This success made it possible for Nkrumah to presume that, what was achieved in the previous seven years could be doubled or even trebled in the next seven years without any strain on the economy.
Any government therefore planning, whether in Ghana or elsewhere, for the reasonable and balanced economic and industrial development of their country, deserved to be lauded. There can be nothing wrong with such lofty aims.
What Gbedemah found wrong with Nkrumah’s proposals as contained in the draft document were twofold: 1) the obvious intention to regiment and state control everything, and 2) the vastness of the proposals for the size and potentialities of Ghana, over the rather limited 7-year period.
Full employment (work for all), industry on the largest possible scale, including light and heavy industry, trade and commercial exchange, transport on land, sea and air on a scale hardly compatible with Ghana’s size and trade (both import and export), banking and insurance, handicrafts, social security, leisure and even happiness would all in due course come under state control.
With such a proposed programme as Nkrumah’s declared aim, his continued talk of encouragement to private enterprise and investment would cease to have much meaning and interest.
No private investor with money, either his own or borrowed, was going to be attracted to Ghana as a good investment field, when it was known that the state was a competitor in every field, and can, whenever convenient to it,make laws to its own advantage but to the detriment of the private entrepreneur who would be a keen competitor.
Ghanaians with money to invest, and these can be counted on the fingers of one hand, Gbedemah continued,would not be likely, under such conditions, to have courage to compete with state enterprises, and would simply not bother.
He said, Nkrumah might soon have a situation where everyone would be employed by the state and one in Ghana would be imbued with any motive to make a little more effort because of the extra little reward to be gained therefrom.
This may be the ideal of Socialism, with the state only as employer, but Gbedemah asked Nkrumah, where in the world had this worked to 100% perfection?
Gbedemah concluded that he did not think it was fair for a small country such as Ghana, unlike some other big countries with population in the hundreds of millions, also to try to make a great leap forward.
He insisted that the proposed plan was overambitious. Ghana had only 7 million people, more than 75% of whom earned less than £ 200 per annum, an income rate hardly sufficient to provide them with the bare necessities of life.
The remaining 25% of the population could have not more than an average per capita income rate of £ 500 per annum. If this was all the market Ghana was assured of, in its intended leap forward to become a great industrial power, then the future was indeed very gloomy.
It must be said that as a great industrial power with huge factories roaring at full capacity, Ghana was likely to be compelled to look outside its own confines for markets to dispose of production which its limited home could not absorb.
In those markets over which, unlike its own home market, government of Ghana could have no control, Ghana would be competing with other industrial countries, as great as or greater than, herself.
No amount of nationalistic or even internationalistic sentiment will make outside customers pay more for goods because they are the product of a particular country, assuming that qualities are identical.
What was more, some of these competitors might have seemed generous to Ghana by extending “credit” to her in the form of machinery, that they themselves had used till they had become absolute, but which would be reconditioned to look like new.
Gbedemah, drew Nkrumah’s attention to the fact that Ghana’s population of 7 million, would not be able to absorb all the products of the large factories he was planning, assuming even that by the time his giant factories came into full swing, a higher average of per capita income would have been achieved than the present low figures, stated above, thus providing the means for higher spending by the masses.
Gbedemah now arrived at the most important point of all the whole discussion: “the ability of Ghana to find the financial means for implementing such a huge programme”.
In the last ten years, Gbedemah, reminded Nkrumah, Ghana was fortunate owing to high world prices for her major commodities, and to her relative prosperity generally, to finance both the public and private sectors of development, which by any standards, had been spectacular, out of the country’s own resources.
Over the first development plan, through the sandwich plan to the first two years of the second plan, government spent nearly £200 million. Ghana did not owe anything to other nations, except for few ill-advised credits and agreements made in the last 12-16 months.
Gbedemah suggested that, this could be the reason why Nkrumah decided not to consult him before announcing in Parliament on the 18th of April 1961, that the Budget Bureau would come under Nkrumah’s direct control immediately.
At this juncture, Gbedemah added that there may be those more advanced countries who enjoyed the fruits of colonial domination of Ghana, and also some socialist friendly nations willing to give Nkrumah genuine aid to help develop the country to give Ghanaians a higher standard of honest living.
But those nations would all withdraw like snails into their shells, and the flow of their help would dry up, like a rivulet does in drought season, when these nations find, as they are bound to do soon, that Ghana’s actions were not governed by sober realism, or that government did not act according to any accepted principles or economic rules, or also that Nkrumah did not show any evidence of his ability to grapple with and solve his problems in orthodox ways, but keep postponing facing up to them till they crash on his head.
They may be the most law-abiding and union-loving workers one could find anywhere; they may even be forced into docility by laws which threatened their freedom whenever they rebeled against injustice, but when the pay pockets failed to buy their needs, and not desires, or when the pay packets ceased to arrive at scheduled times, then trouble would begin to brew.
It would be next to the impossible for Nkrumah to get the hundreds of millions required to implement such a programme.
Gbedemah, stressed that Nkrumah would not get the money in loans from either the capitalists or the socialists or from his own resources, no matter how austere or self-denying on a national scale he would make his budgets in the 7-Year plan period.
Already Nkrumah must have seen in the first year of socialist budgeting that there was such a thing in economics as the law of diminishing returns or the Cournot Point, and that his estimates for 1961/62 had come out heavily unbalanced.
How then,could Nkrumah hoped to succeed the following year in more than doubling the rate of expenditure or the tax expectation, was inconceivable.
If even his friends in the East and West would all rush to lend him money, they would not give him hundreds of millions; and Gbedemah reminded him that loans would have to be repaid unless they were given for political reasons.
Ending this section, Gbedemah stated that the only pity would be that those politicians who worked with Nkrumah, would not offer him honest advice, because they knew he would not listen to anything but flattery and adulation,and they would have taken to their heels and would leave others to clean up the mess.
Gbedemah ended by stating that he would pray and continue to pray that Nkrumah would arrest the downward plunge before Ghana was finished.
Kwabena Amikaketo, was taken aback as to why Kwesi Pratt Jnr., and others like him never read Gbedemah’s take on the 7-Year Development Plan, but always portrayed it as the solution of Ghana’s economic challenges, while it was what wrecked us and triggered off the state of poverty in this country.
All too soon, Echele came around to usher her father indoors.
Hon. Daniel Dugan
