Newspaper article The Christian Science Monitor

Ghana Seen as Showcase for Africa - in a Manner

Newspaper article The Christian Science Monitor

Ghana Seen as Showcase for Africa - in a Manner

Article excerpt

LIKE a good pupil, Ghana has enthusiastically followed the advice of the World Bank and International Monetary Fund to become a showcase of sorts on a continent blighted by despair and war.

As civil wars shake neighboring Sierra Leone and Liberia and corruption drains Nigeria's oil wealth, Ghana has quietly posted 5 percent economic growth per year over the past decade.

At Ghana's tiny stock exchange, neatly dressed traders swap a handful of shares three times a week, contacting their bosses with cellular telephones and recording deals with felt-tip pens. The exchange was one of the world's best-performing emerging stock markets in 1994.

But is the progress really as good as it seems? Can it last?

"All the indicators are negative. Inflation and money supply are increasing," says Ken Ofori-Atta, chairman of the Accra-based Databank Brokerage Ltd., an investment house. "Even though we have achieved so much over the past 10 years, we have increased our commodity exports as opposed to ... manufacturing."

His doubts are echoed across the country, where frustration is rising over 40 percent unemployment and 60 percent inflation. The cedi currency has declined steadily against the dollar, eroding people's purchasing power.

Last May five Ghanaians died as normally nonviolent Accra residents protested a 17.5 percent value-added tax on goods.

Among the other problems economists see:

*Government overspending and dependence on foreign aid and commodity exports will prevent Ghana from emulating the rapid industrialization of Singapore, Malaysia, or South Korea.

*Interest rates of 50 percent provide scant incentives for those wanting to borrow money to start new businesses.

*Growth is not keeping pace with soaring population numbers, so the average Ghanaian is worse off than he or she was several years ago. Unlike 10 years ago, there are light bulbs, steaks, and toilet paper in Accra shops; but most people lack electricity and plumbing in their homes. …

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