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Michigan State
University

 

This is to certify that the
thesis entitled
POLITICAL ECONOMY OF RURAL DEVELOPMENT:
THE GHANAIAN EXPERIENCE

presented by

Ernest Kweku Dumor

has been accepted towards fulfillment
of the requirements for

Ph.D. degree in Sociolog;

,J Aka/4x

r
\ Major professor

Date Apr“ 18, 1979

 

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© Copyright by
ERNEST KWEKU DUMOR

1979

POLITICAL ECONOMY OF RURAL DEVELOPMENT:
THE GHANAIAN EXPERIENCE

By

Ernest Kweku Dumor

A DISSERTATION

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

DOCTOR OF PHILOSOPHY

Department of Sociology

1979

ABSTRACT

POLITICAL ECONOMY OF RURAL DEVELOPMENT:
THE GHANAIAN EXPERIENCE

By
Ernest Kweku Dumor

This study examines some issues related to development and
underdevelopment in terms of past historical and social processes and
the consequences of these processes for contemporary Ghana. The
analysis, therefore, aims at providing an explanation for under-
development, particularly 'rural poverty,’ through focusing on the
institutional and structural elements of the Ghanaian economy which
were products of colonialism and nee-colonialism.

In doing so, the conventional sociological explanations of
underdevelopment rooted in the theories of modernization, were
rejected. Instead, the conflict tradition, and more specifically,
the dependency framework was used. This tradition, as well as the
dependency framework provided the intellectual thrust, tools and
concepts for analysing the complex historical and developmental
processes in Ghana. In essence, it permitted a more comprehensive
answer to the question of Ghana's failure to make a breakthrough in
its development efforts. The comprehensive nature of this framework
allowed an in-depth analysis of underdevelopment in its general and

concrete manifestations.

Ernest Kweku Dumor

By taking account of the problems of external and internal
domination, exploitation and forms of inequality, this study brings
into sharp focus the contradictions inherent in peripheral
capitalist development.

The study also shows how the subjection of the rural economy
to the requirements of external capital and market forces constitute
the core of poverty and marginality in Ghana. Furthermore, it
demonstrates how external and internal dominations are structurally
linked. By taking a microcosmic view of the development process,
this study shows the ways in which underdevelopment is maintained
and perpetuated through the operations of dominant external and

domestic classes.

I too understand

What it is

To want to remain
Absolutely free.

I have felt the fear
Of chains that bind
And anchors that hold
And people who cling
In loving dependence.

- Ayi Kwei Armah: Aftermath

ii

ACKNOWLEDGMENTS

The choice of this subject for study is not entirely
fortuitous. I have long been preoccupied with the problem of
experiencing and rediscovering the scope and depth of Ghana's under-
development and dependency. The analysis in the following pages,
therefore, is an expression of one dimension of my apprehension of
the reality of Ghana's progression and distortion through history
as that nation struggles with its development. While this process
of rediscovery was both tedious and demoralizing at times, I have
had the support of a number of organizations including the United
Nations Development Program and the Ministry of Economic Planning,
Ghana. It was through them that I received a United Nations Fellow-
ship in the initial years of my program. I have also received the
support of the University of Cape Coast for which I am thankful.

I am very grateful to Dr. Ruth Simms Hamilton, my Academic
Advisor, for her time, encouragement and support. To the other
members of my Graduate Committee, Drs. Jay Artis, Allan Beegle and
John Hunter, I am sincerely grateful for their help. Ann Brown
Typing Services did a really superb job. To the staff, including
Jo Grandstaff, Cara Vaughn and Jan High, I am most grateful.

Finally, to my family, Cecila Kokui Gbeho, Mawuena, Komla,
Korshie, who shared in my pain, anguish and joy in this process of

rediscovery. They deserve the most that I can give.

iii

TABLE OF CONTENTS

LIST OF TABLES .
LIST OF FIGURES

Chapter
I. INTRODUCTION AND CONCEPTUAL FRAMEWORKS

Statement of the Problem
Theoretical Framework . . . . . .
Competing Conceptualizations: Modernization
versus Dependency
Modernization Framework
Dependency Framework
Dependency Relations as a Framework.
Metropolis- Satellite Relation

The New Dependencia of Multinational Corporations:

Peripheral Capitalism, Dependency and Rural
Development .
Disarticulation of Production Structures
The Role of the State and Changing Class
Relations .
Working Propositions .
Methodology and Data Analysis
Some Research Problems in Using the Dependency
Model . . . . . . . . .
International Trade . .
Foreign Capital and Technology Transfer . .
Procedures and Methodology Used in the Study.
Historiography .
Documentary Analysis . .
Evaluation and Policy Analysis .
Contribution of the Study.

II. THE HISTORICAL AND SITUATIONAL CONTEXT OF
UNDERDEVELOPMENT IN GHANA. . .

Pre- Colonial Class Relations . .
Developments in the Pre-Colonial Economy.

iv

Page
vii

ix

Chapter

III.

IV.

Slave Trading and the Process of Underdevelopment
l500- l880 . . . . .

"Legitimate" Trade and the Process of
Underdevelopment 1880- l957 . .

Colonial Consolidation and the National Struggle
1900-1957

COLONIALISM--THE STRATEGY OF UNDERDEVELOPMENT

Colonial State and Rural Development

Disarticulation of Rural Production .

Colonial Agricultural Extension. A Continuation of
the Disarticulation Process . . . .
Cash Crop Extension
Food Crop Extension
Fertilizer Extension . .

Mechanical and Animal Cultivation Extension

Financing Colonial Agricultural Development.

Colonialism and Class Relation

Hereditary Upper Class and Changing Class Relations.

Capitalist Agricultural Enterprise and Class
Relations .
Farmers, Brokers and Monopoly Capitalism
Structural Dependence: A Characteristic of
Underdevelopment

THE NKRUMAH ERA: THE STRUCTURAL TRANSFORMATIONIST
STRATEGY 1957-1966 . . . . . . . .

Nkrumah and Underdevelopment. .
Socialism and Economic Development. .
Economic Policies and the Transition to Socialism .
Organizing Agricultural Production . .
Agricultural Extension .
Manpower and Agricultural Extension .
Financing Agricultural Development
The Politics of Extension Organization
Agricultural Extension Strategy
Agricultural Mechanization .
Socialism and Class Formation
Review of Economic Conditions

THE GRADUALIST STRATEGY: THE NATIONAL LIBERATION
COUNCIL AND THE BUSIA ERA: 1966-1972 . . .

The Gradualist Stretegy: Its Background .
The N. L. C. [Busia Administrations and
Underdevelopment . . . .

Page

65
68
78
95

96
99

112
114
115
118
119
120
126
130

134
142

149

159

161
166
169
174
177
179
182

193
201
211
220
232
234

236

Chapter

The Welfare 'Democratic" System and Economic
Theory . .
Economic Policies and. the Transition to the
Welfare State . . . .
Organizing for Agricultural Development
Agricultural Extension Service.
Agricultural Mechanization . .
Financing Agricultural Development .
The Welfare Democratic System and Class Relations .
Review of Economic Conditions . . . .

VI. SUMMARY OF FINDINGS .

VII. WHAT CAN BE DONE: THE POSSIBILITIES FOR GHANA AND
AFRICAN COUNTRIES . . . . . . . . .

Ghanaian Development Through African Cooperation
Toward a National Stretegy for Ghana . .

v" The Basic Needs Approach . . . . . . . .
A Rural Development Approach: The Policy Package
for Ghana . . . .

Agricultural Production . . .
Agriculture and Rural Industrialization .
Public Works Programs .

APPENDICES
A. Map l: Distribution of Cash Crops
B. Map 2: Distribution of Food Crops

BIBLIOGRAPHY .

vi

Page

240

245
250
253
260
268
272
281

293

302
306
310
311
312
313

315
319

324
325

326

.b

00000000

KDCDN

LIST OF TABLES

Cocoa Exports .
4
Guggisberg Ten-Hear Development Plan l920-1930 .

Anticipated and Actual Expenditure on Agriculture
and Forestry . . .

The Ten-Year Plans: l945-l946 Proposed Expenditure
Development Plan, l951 .

The l95l Plan: Financial Allocations .

Development Expenditure on Agriculture

Extension Projects

Imports of Selected Items as Percent of Total Import
Bill . . . . . . . .

Development of Selected Food Imports, 1951-61
Overall Employment in Agriculture l964-l970 .

Establishment of the Ministry of Agriculture and
Related Agencies . . .

Establishment of the Agricultural Extension Service
l963-l965 . . .

Structure of Investment (in l960-l962 Average Prices).

Summary of Financial Allocations in Agriculture

Budgetary Allocation as Percentage of Total
Expenditure

Allocation of Resources

State Farms Corporation: Crops and Acreages Planted .

vii

Page
lOB
l22

123
124
125
127
128
129

155
172
179

180

181
183
185

186
187
198

Table

4.11
4.12
4.13

Fertilizers Sold by Pilot Scheme to Peasant, Large-
Scale and Institutional Farming Sector l965-66
in cwt. . . . . . . . . . . .
Major Suppliers and Value of Machinery, l96l-l967 .
The Debt Structure

Composition of Private Consumption Ex enditure
l962-l969 (at current market prices

Charges for Tractor Services .

Selected List of Continuing Projects and Programs--
Fiscal Year l968-l969 . . . . . .

Capital Budget l969/7O and l970/7l .

Central Government Current Expenditures
Ghana: Percent of Total Exports, 1960-l969 .
Import Requirements by Sectors, l967

Ghana--Value of Imports in l969 of Commodities that
Could be Produced Locally . . . . .

Profit and Loss Record of Selected Agricultural
Enterprises l964-l965 and l969-l970 .

viii

Page

200
204
221

222
263

270
271
272
282
284

285

290

LIST OF FIGURES

Figure

l. Administrative Regions of Ghana

Railroads of the Gold Coast

00

Extension Organization
4. Agricultural Extension Districts of Ghana

5. Annual Fertilizer Imports--1962-1973

ix

Page

81
191
192
199

 

 

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CHAPTER I

INTRODUCTION AND CONCEPTUAL FRAMEWORKS

An analysis of the problems of development in contemporary
Africa must seek to explain the causes and consequences of under-
development. Central to the analysis then is an answer to the
question: why have African countries not been able, despite their
natural and human resource endowments, to make a breakthrough in
their development efforts? The answer to this question must, of
necessity, go beyond the conventional explanations: "African
countries are poor because they are poor," or "African countries
are poor because their economies are not developed." These claims
lack historical grounding, and more importantly, fail to address
the core problem of providing an explanation of the causes and
factors in African underdevelopment. What is critical in the
analysis of African development problems is that underdevelopment
be treated in a way that permits a more rigorous analysis of this
historical process,in both its general and specific forms. This
calls for a sociological perspective that considers questions
related to external and internal domination and exploitation as
well as forms of inequality that result from this process.

The sociological tradition that addresses these issues in
a dynamic and comprehensive way is the conflict and change tradition.

1

In the area of development this tradition maintains that "develop-
ment" is essentially a historical process, and that to understand
this process it is necessary to examine the past history as well
as the present conditions of societies. But this historical
process--its character and concrete manifestations--are determined
by the relationships among existing social classes. Consequently
the nature of these relationships largely affects and determines
how surplus is accumulated and rewards distributed.

The dominant figures in this tradition were Karl Marx and
later Lenin. Marx argued that human society cannot be understood
in terms of an agreement made among equals who shared commonly
desired objectives. In his analysis of the dominant social
formation, capitalism, it was maintained that the emergence of
this mode of production was not an act that could represent the
common will, but one which stemmed from the imposition of the
interests of the dominant classes through the ownership of the
means of production. With this control and ownership of the means
of production, the dominant classes through state apparatus are
able to exploit other classes and social groups in order to
further their own class interests.

The hallmark of this sociological tradition lies in the
explanation of the predicament of non-Western societies and
resulting contradictory tendencies inherent in the expansion of
capitalism in these societies. It is therefore maintained that

the history of capitalist development shows that this social

formation thrives on exploitation, inequality or unequal exchange.
Consequently, the laws of motion in capitalist development imply
that some societies develop at the expense of others. In short,
the problems of development in African nations can be meaningfully
understood in terms of the development of capitalism as a global
phenomenon. TO that extent this tradition provides the develop-
mental contours of the dependency framework which is used in this
study to establish the historical and structural explanations of
underdevelopment in Ghana.

In its application to rural development in Ghana, this
sociological tradition and the dependency framework in particular,
provide the concepts and tools with which 'rural poverty' in terms
of both internal and external economic and social forces may be
examined. While this tradition maintains that capitalist expansion
includes the penetrationnythe countryside of African countries, it
also argues that the problems of rural development derive essen-
tially from the subjection of the rural economy to the requirements
of market forces. In essence, agricultural and rural development
cannot be treated in isolation, since this process is related in a
complex way (based on exploitation and unequal exchange) to the
world capitalist system. This process is reflected in rural
production systems: the appropiation of land for export production
through low wages for capitalist accumulation. Consequently, the
subsistence sector becomes stagnated and the rural producer or

peasant becomes progressively separated from the means of production.

This tradition further emphasized the critical role of various
rural social groups in effecting success of this captialist process.
‘These groups act as the connecting circuit between rural production

and the national and worldeconomic systems.

Statement of the Problem

This study is thus a inquiry into selected aspects of
rural development in Ghana aimed at discovering the relationships
between development policies and underdevelopment. The crucial
question here is whether underdevelopment is a consequence of
‘ 'development' policies pursued during colonial and post-colonial
periods. If these policies have resulted in underdevelopment,
in what ways has rural development been affected? In this respect
policy is understood to refer to operative guidelines by which
governments allocate resources, organize productive activities and
determine the distribution of rewards.

In undertaking this study a number of assumptions derived
essentially from the dependency perspective are made. First it is
assumed that the underdevelopment of the rural sector is a conse—
quence of the progressive incorporation of Ghanaian pre-colonial
economies into the world capitalist system. Consequently rural
poverty cannot be explained in terms of the constraints imposed by
tradition--a fundamental assumption implied in the modernization
perspective. Secondly the expansion of capitalism in the rural
sector resulted in the alteration of rural production structures in

such a way as to make the development or rural areas dependent upon

external supply and demand factors. Thirdly, for this process to
succeed, it is assumed also that rural class relations are affected
in such a way as to maintain internal and external exploitative
networks.

Given these assumptions, the utility of the conflict tradi-
tion becomes apparent. In this respect, the incapacity of the
Ghanaian economy to become self-sufficient or self-sustaining, the
problems of rural poverty, exploitation and economic inequalities
are seen as integral parts of the world capitalist system. It
also provides a framework from which to explain rural development
in terms of a vertically integrated world development process in
which some parts are exploited for the benefit of others. In
short, the conflict tradition allows a holistic examination of
rural development as part of a world system of unequal resource

transfer and exchange.

Theoretical Framework

 

Competing Conceptualizations:
Modernization versus Dependency

Two dominant conceptual frameworks have dominated the social
science literature on development in the past decades--modernization
and dependency frameworks. The modernization framework derived
from several decades of classical and neo-classical theorizing on
how 'traditional' non-Western societies could be transformed into
'modern' economically advanced societies. The problem with this

perspective has been that it fails to answer the most compelling

questions about the nature of the development process in non-
Western societies. It does not address the core issue of the
causes of underdevelopment. Since it does not take into account
of' the history of these societies, this framework ignores the
influence of external domination and internal social processes
that result from this domination and the ways in which these in
turn hamper economic transformations in these societies.

In the past few decades however, there has emerged a set
of ideas referred to as the dependency framework which concerns
the nature of development in non-Western societies. The central
premise is that the processes of development in these societies
can be fully understood within the social-historical context of the
expansion of capitalism into these societies. In short, the
dependency framework focuses on external penetration of the
economies of these societies as a key explanatory factor in the

creation of underdevelopment.

The Modernization Framework

 

The "development" literature is replete with the concept
of modernization. Thus, most social scientists interested in the
development process in Third World countries have carried out their
analyses from the modernization perspective. The concept of
modernization implies the transformation of a traditional or re-
mgggrg_society into a mpggrg society based on new technology and
its attendant forms of social organization. This implies a modern

society that is more in line with European and American forms of

societal organization. Basically modernization theories have had, as
an implicit assumption, unilinear development along the lines of what
has happened in Western European and capitalist nations. But more
importantly, modernization theory assumes that development problems
in Third World countries stem from the static nature of their tech-
nologies. To modernize, therefore, there is need to change from

simple traditionalized techniques to the application of scientific

 

knowledge, i.e., industrialization and the expansion of technical
innovations. Thus, significant opportunities for growth will become
available only through changes in technology--new husbandry techniques,
better seed varieties, more efficient sources of power and cheaper
plant nutrients (Schultz, 1964).

Over the years, there has emerged some general agreement
within this framework on the assumption that an effective economic
development strategy must depend on the achievement of rapid
technical change which in turn would lead to productivity growth
in agriculture. But this flow of technical knowledge, it is
argued, must be complemented by investments in general education
and in production education for farmers (Hayami and Ruttan, l97l).
Because of such general agreements, only a few of the paradigms
which have dominated current thinking on development in Third
World nations will be discussed here.

The first paradigm to be considered here is that of Rostow.
Rostow (l960) identifies five stages in the transition from a
primitive to a modern economy, i.e., the traditional society, the

preconditions for take-off, take-off, the drive to maturity and

the age of high mass consumption. His primary interest was to
identify the processes by which a society moves from one stage to
another but more importantly to provide policy guidelines for
developing nations. Rostow's paradigm looks at development as a
transition from an agricultural to industrial society. He further
argues that to achieve industrial growth, emphasis must be placed
on the leading sectors within agriculture, and the commercial
agricultural sector must be based on the adoption of technical
innovations which serve to increase the output of food and export
commodities.

The second paradigm-~dual economy--has its contemporary
foundation in the works of Arthur Lewis. Lewis (1954) argues that
the economies of Third World nations are characterized by the
co-existence of two sectors--a relatively large and overwhelmingly
stagnant subsistence sector and a relatively small but growing
commercialized sector. The essential elements of Lewis' model
have been elaborated by Fei and Ranis (l975) and Jorgenson (l969).
This framework argues that the subsistence sector has disguised
unemployment and underemployment; the marginal productivity of
labour is zero and there is fixed land input. It further contends
that wage rates for agricultural labour approximates the average
productivity of labour in the subsistence sector. In view of this,
Hayami and Ruttan (l97l) concur with Fei and Ranis' suggestion that
a transfer of labour from the subsistence sector to the commercial

industrial sector is possible without reducing agricultural output

and without increasing the supply price of labour to the industrial
sector. The Fei and Ranis model has been criticized by Helleiner
(1975) who argues that in Africa, the marginal productivity of
labour in agriculture is positive. He maintained that the release
of a worker from subsistence to industrial sector provides no
guarantee that enough wage funds will be available to sustain

that sector. Jorgenson therefore argued that labour is never
available to the industrial sector without sacrificing agricultural
output. Consequently, the terms of trade tend to move against the
industrial sector. The dual economy model insists, however, that
any terms of trade unfavorable to industry could be offset by a
more rapid rate of technological change in agriculture.

The mOdernization framework is given its current expression
in the diffusion approach to development in Third World nations.
The underlying thesis is that development occurs through the
transfer of certain material benefits from 'advanced' industrial
nations to the less developed areas. Within the less developed
areas the process of development is assumed to occur through the
diffusion of modern ideas to the traditional sector. This model
presupposes the existence of a dual society. Thus it is argued
that what is required for development is the transfer of material
inputs such as capital and technology and that this transfer is
to be primarily carried through foreign investment and aid

(Bodenheimer, 1971). In this respect Rostow and Millikan (1957)

10

maintain that "external capital is required to prepare a country
for the transition to self-sustained long-run economic growth" (56).

This viewpoint remains at the root of contemporary economic
thought as well. Mikesell (1968), for example, shows that the
foundations for most foreign-aid policies can be found in economic
growth models. In the growth models there is great emphasis on
the importance of external inputs. In other words, "growth can
only be enhanced by capital exports to primary commodity-producing
countries" (28).

Thus, many "development" economists consider that external
capital and aid must supplement domestic savings as a principal
means of raising the level of investment to a critical level. The
major opposing tendency in the "development" literature is to
reject this assumption. Marx, for example, argues that capital
exports to the less developed countries are means of maintaining
the rate of profit and the expansion of imperialism. He further
argues that while trade and export of capital have expanded, the
beneficiaries have not been indigenous populations (1973, part iv).
From the perspective of dependency framework foreign aid and capital
export intensify the dependent nature of the national economies of
less developed nations, and reinforce the metropolitan satellite

relations.

The Dependency Framework
The dependency perspective as a way of conceptualizing the

problems of development in Third World nations owes a great deal

11

to the works of Marx and Lenin. As an analytical perspective, it
addresses the contradictions inherent in capitalist development

and more specifically the consequences of peripheral capitalist
development in areas that have experienced colonial domination and
exploitation. However, this framework became a useful alternative
to the "classical" modernization theories because of their apparent
failure to grapple with the compelling questions about the develop-
ment of underdevelopment in Third World nations.

This framework derives largely from Marxist-Leninist concep-
tions of the impact of an expanding capitalist economy buttressed
by colonialism on colonized areas. According to Marx (1977),
capitalist development in peripheral nations undermines their
economies and social systems. Following this line of thought,

Lenin (1974) argues that colonialism is an earlier stage in the
development of capitalism and imperialism is the highest stage in
the development of capitalism. At this latter stage the fundamental
attributes of capitalism are transformed so that monopoly and
finance capital become important in determining the relations among
nations. It is a phase of "the joint exploitation of the world by
internationally combined finance capital" (94). This imperialism does
not lessen the unevenness and contradictions inherent in capitalist
development, but increases the problems by reinforcing the diversi-
ties in economic and political relations. This causes an acute
disparity in the rate of development in colonized countries.

The Marxist-Leninist thesis of uneven development provides

the intellectual thrust for the dependency framework. The

12

dependency framework assumes a relationship among nations of the
world based on exploitation and unequal exchange. In this respect
it starts with the assumption that development and underdevelopment
are integral parts of a global economic phenomenon. The global
economy itself is seen as a total system of which Third World
nations are ipso facto, subsystems. What the dependency framework
attempts to do therefore is to assume the existence of a global
economy from which to develop laws of peripheral capitalist
development (O'Brien, 1975). Furthermore, the framework seeks to
establish that the problems of development and underdevelopment
are essentially conditioned by the mechanics of the global economy.
Dos Santos (1970) thus defined dependency as

A situation in which the economy of certain countries is

conditioned by the development and expansion of another

economy to which the former is subjected. The relation

of interdependence between two or more economies and

between these and world trade, assumes the form of

dependence when some countries (dominant ones) can

expand and can be self sustaining while other countries

(dependent ones) can do this only as a reflection of

that expansion which can have either positive or a

negative effect on their immediate development (231).

This definition introduces two conceptual elements which

are critical. The first is that the global system is a conditioning

 

situation. By a conditioning situation is meant a situation that
determined the limits and growth possibilities of dependent nations.

The second conceptual element has to do with domination. In this

 

respect the work of Hveen (1973) is insightful. He sees the
global system in terms of dominance relationships in which there

exists a vertically integrated system of control and accumulation,

13

production and distribution. To Hveen, domination and the resultant
situation of dominance represent a social relationship where some
unit exercises control over and accumulates value from other units.
Dominance is a relatively permanent state in which the patterns of
control, that is, the capacity to influence some social unit to

act according to defined wishes and accumulation, the process of
growth through appropriation of surplus value systematically

favour the dominant unit (320).

What is suggested therefore is that the dominance relation-
ship is exploitative. At the same time it is a vertically integrated
system of control and the pattern of control is therefore manifested
at various levels throughout the entire system. The penetration of
the global economic system and its vertical integration into
"integrated multi-level hierarchies of control and accumulation
result in relationships of dependency" (Hveen, 321).

It is evident therefore that relationships of dependency
are essentially asymmetric because

development of parts of the system occurs at the expense
of other parts; . . . it is the combination of inequali-
ties plus the transfer of resources from underdeveloped
to developed countries which explains inequality, deepens
it and transforms it into a necessary and structural
element of the world economy . . . (Booth, 1975; 15).

From the foregoing discussion, it seems that the global
economic system is causally related to structures of dependency.
Bodenheimer, for example, argues that this is too simplistic a
generalization to make. She however accepts the notion that the

global economic system indirectly causes dependency relations by

generating and reinforcing an infrastructure of dependence. This

14

represented by incipient industrialization, urbanization, creation
of social institutions and processes and social classes (bridgeheads)
who function in response to the needs of the international systenI(38).

Galtung (1971) also refutes such direct causal linkages.
However he argues that the consequence of dominance relationship
established by imperialism leads to dependency. Since imperialism
is a sophisticated type of dominance relation it cuts across
nations as it bases itself on bridgeheads which the core nation
establishes in the center of the periphery nation for the joint
benefit of both. Galtung further points out that the economic
consequences of this dominance relationship, i.e., high levels of
concentration on trade partners and the tendency for periphery
nations to have only one or a few primary products for export,
have the effects of creating dependency relations between the
Third World and advanced industrial nations (81).

Yet others, using the Marxist frame of reference, see a
direct linkage between colonialism, capitalism and imperialism on
the one hand and dependency structures on the other. Colonialism,
monopoly capitalism and imperialism are seen as variants of the
same phenomenon. Lenin (1974) maintains that

Colonialism is monopolistically regulated trade and or
investment abroad at higher rates of profit than those
obtaining in the metropolitan country. Colonialism is
to a large extent privileged investment, namely invest-
ment in projects that carry with them some differential

advantage (71-76).
This viewpoint is supported by O'Connor (1970) who argues that

15

The precondition for a fairly favourable investment
climate is indirect or direct control of internal
policies in the backward regions. Economic penetration
therefore leads to the establishment of spheres of
influence . . . and backward regions assume a depend-
ency status in relation to the metropolitan powers
(llO-lll).

What is suggested is that the contemporary world capitalist
system through colonial administration and through free trade
assured itself that production in the periphery would be geared
towards exports. In essence the Marxist interpretation postulates
that the international capitalist system is exploitative; it
remains aggressive and expansionist. Its dynamics allow for
control over the liquid and real economic resources as well as
foreign exchange and capital.

In summary, the dependency framework implies external
domination and exploitation. The dominance and exploitative relations
are reproduced within the internal structures of Third World nations.
The dependency theory therefore is a

macro-structural paradigm of the way in which economic
underdevelopment in dependent economies is actively
maintained in a vicious spiral by the very forces--
foreign economic investment and aid which conventional
economic theory held to be necessary for development
Of such societies (Oxaal, Barnett and Booth, 1975: 2).

It therefore represents "a framework of reference within
which various heterogeneous phenomena are analysed to see how
they link and interact with each other to form a total system"

(O'Brien, 12).

l6
Dependency Relations as
a Framework

The dependency framework is not a monolithic entity. It
is a perspective with varying theoretical orientations since
proponents of this perspective operate at different analytical
levels. The major orientations emphasize the inadequacy of present
patterns of development in Third World nations. This inadequacy
is explained in terms of the structural relations between these
nations and the advanced industrialized nations. Other explanations
emphasize the role of multinational corporations whose involvement
in these nations conditions relationships of dependency.

Closely related to these explanations is the view that
dependency relations are as much an internal problem as they are
external. As a result a major orientation within this framework
is the examining of dependency relations in terms of internal
social and economic processes i.e., the nature of class relations,
urbanization, incipient industrialization. Thus it is argued,
for example, that the nature of internal class relations is related
to the maintenance of dependency structures. There are several
directions, but only three major conceptions appear as recurrent
paradigms in the literature. The first paradigm, Metropolis-Satellite
relations is associated with the works of Andre Gunder Frank (l969a,
1969b), whose concern was to demonstrate historically that the develop-
ment and expansion of capitalism have transformed developing countries
into underdevelopment economies. The second paradigm--The New

Dependence--is closely identified with the works of Dos Santos

17

and Sunkel. The main thesis in this paradigm is that underdevelop-
ment cannot be explained in terms of metropolis-satellite relations
but rather in terms of the involvement of multinational corpora-
tions, the internal social process that results, and particularly
in its approach are the questions of technology and resource trans-
fers. The third paradigm identified with Cardoso is an extension
of the two already stated. In this case, the contention is that
dependency cannot be viewed as an external variable only but must
be related to a system of relations among different social classes
in an environment characteristic of dependent nations. Like the
other two, dependency relations are traced through history but

the perspective is elaborated by the suggestion that politics and
internal forces are equally, if not more decisive as external
forces, in determining forms of dependency.

Metropolis-Satellite Relation
TAndre Gunder Frank)

 

Frank's theory stems from his rejection of the g_prjgrj,
assumptions made in the modernization framework, i.e., that foreign
investment and aid would help accelerate economic independence of
Third World nations. Frank denies the possibilities in Third World
countries of self-generating development based on industrialization,
and increased international trade through increases in traditional
exports. What Frank has therefore called into focus are the ways
in which the dynamics of the international capitalist system govern,

hinder and distort the development of peripheral countries. Frank

18

seeks to demonstrate how the historical development of the world
capitalist system has subjected and continues to subject Third

World nations to an increasing subordination. He also seeks to

show how the relationships established between metropolitan and
satellite nations have created and transformed the domestic

economies and class structures. Furthermore Frank shows that the
transformation of the economies of peripheral nations has occasioned
specific political, economic, socio-cultural policies which invariably
result in the development of underdevelopment.

The Frankian thesis is based on the notion of capitalist
underdevelopment. It is the contention in this paradigm that
underdevelopment is a necessary product of capitalist development.
Frank (l969a) maintains that

These contradictions are the expropriation of economic

surplus from the many and its appropriation by the few,

the polarization of the capitalist system into metropoli-

tan center and peripheral satellites, and the continuity

of the fundamental structure of the capitalist system

throughout the history of its expansion and transforma-

tion, due to the persistence or re-creation of these

contradictions everywhere and at all times (3).
He further maintains that the historical development of the capital-
ist system and its contradictions, have generated underdevelopment.

The basic theoretical elements in the Frankian thesis are
three-fold. The first has to do with expropriation of economic
surplus. He takes off from Baran who makes a distinction between
actual economic surplus--that part of current production which is
saved and invested and 'potential' investible economic surplus

which remains unavailable because the monopoly capitalist structure

prevents its production or its appropriation. Emphasizing the

19

'potential' economic surplus embodied in Baran's analysis, Frank
argued that the non-realization and non-availability of this surplus
must be explained in terms of the structure of monopoly capitalsim
(7). Thus the world capitalist system is seen essentially as
monopolistic. The exploitative relation that results from this
extends the capitalist link between the capitalist world
and the national metropolicies to the regional centers
(part of whose surplus they appropriate) and from these
to local centers and so on to large landowners or merchants
who expropriate surplus from small peasants or tenants and
sometimes even from these latter to landless labourers
exploited by them in turn (7).

The second element has to do with the metropolis-satellite
polarization. Frank's discussion of this contradiction is based
on his rejection of the dual society thesis. He argues that this
dichotomy is false and any policy recommendation based on it will
only intensify and perpetuate the conditions of underdevelopment.
It is the contention that all Third World countries have been
thoroughly incorporated into the world capitalist system such that
". . . the expansion of the capitalist system over the past
centuries effectively penetrated even the apparently most isolated
sectors of the underdevelOped world (1969b: 5).

Thus, the metropolis--satellite contradiction characterizes
all levels of the global system and this generates tendencies toward
development in the national metropolis and underdevelopment in the
domestic satellites.

The third contradiction has to do with the ubiquity of the

structural essentials of economic development and underdevelopment.

20

The capitalist system, Frank contends, maintained its essential
structure and generated the same contradictions throughout its
expansion and development on a world scale (1969, 12).

The working hypotheses of Frank therefore were that (l)
the development of Third World nations is limited by their satellite
status, (2) that the satellites experience the greatest economic
development if and when their ties to the metropolis are sufficiently
weak, and (3) the regions which remain underdeveloped are the ones
which have the closest ties to the world capitalist system (l969b:
9-14). The theoretical elements and hypotheses developed by Frank
suggest that the global economy--its monopoly structure and uneven
development--is a conditioning system that sustains dependent and
underdeveloped structures in the peripheral nations.

This model has been criticized on several grounds. For
example it is argued that it fails to establish any strong relation-
ship between external dependence and internal social and economic
structures. In other words, it is too schematic to permit an
in-depth analysis of the relations Of exploitation among domestic
social classes (Booth; Chilote, 1974). Furthermore, it is contended
that this model does not come to terms with the real nature of
underdevelopment. This criticism is based on the notion that the
paradigm is based on orthodox economic theory and revolutionary
ideology that cannot explain why some countries develop at the

expense of others. However,

21

The conclusions reached are not wrong as far as they go,
only they cannot get beyond the level of general ideological
critique. Turning their backs on the law of value the best
they could achieve was a historical account of the process
of underdevelopment elaborated through empirical categories,
such as dependence, metropole and satellite which collapse
into hopeless contradiction in the face of investigation
(Kay, 1975, 103-104).

Although there are limitations to this model, its heuristic
value has not been denied. It certainly serves as a basis for
developing testable hypotheses as to the relationship between
underdevelopment and peripheral capitalism.

The New Dependencia of Multinational
Corporations (Dos SantosLand SunkeD

The second paradigm to be discussed is based on an initial
criticism of the Frankian model. The dominant intellectual position
is closely identified with Dos Santos (1973) who argued that the
process which generates underdevelopment cannot be understood simply
in terms of satellization and the drainage of resources available
as economic surplus. The process should be examined in terms of the
formation of certain types of internal structures conditioned by
the international relationship of dependence. To Dos Santos, the
key to modern dependence is the transfer of commercial technology
and the operation of industrial monopoly capital by multinational
corporations. In the first place, financial-industrial dependence
that precedes the new form of dependence, is characterized by the
domination of big capital in the hegemonic centers and by its

expansion abroad through investment in the production of raw

materials and agricultural products. In disucssing this view,

22

O'Brien claims that the new dependence is basically technological-
industrial in character and is consolidated by multinational corpora-
tions. This form of dependence encourages import--substitution and
industrialization as policy strategies. The import-substitution
policy introduces a change in the structure of production and the
system of decision-making, income distribution and patterns of con-
sumption which are consequently related to the internationalization
of capital (17). This new dependency also encourages structural
problems such as the dominance of a primary export product,
incipient industrialization and stagnation of subsistence agricul-
ture.

The first two structural problems create the necessity for
foreign finance. In the quest for foreign finance and capital in
support of these, national governments tend to loose the powers of
decision-making. This is because aid brings with it the right of
donors to take part in policy-making and the necessity for dependent
countries to justify these policies in order to keep the flow of
foreign loans coming (O'Brien, l7-18). The result is continued
financial-industrial dependence or technological dependence. What
is the effect of this form of dependence on the rural social
structure?

To begin with, technological dependence is technical
incapacity to produce capital goods required for modern technology.
This makes a cOuntry's development almost wholly dependent on the

importation of capital goods:

23

Agricultural development becomes an accelerated growth

process through the adoption of foreign techniques. These

techniques are embodied, 'hi physical capital goods which

cannot be produced domestically. This incapacity is what

is)meant by the term technological dependence (Merhav, 1969:

30 .
But the Marxist perspective on the impact of technology is particu-
larly relevant at least in terms of the social structural differentia-
tions that result. Marx (1977) maintains that technology is the
principal object of capital's exploiting power since it raises the
degree of labour's exploitation. This process comes about through
changes in the juridical relations between labourer and capitalist--
relations which previously were based on the assumption that the
parties met as free persons. Marx continues that in the sphere of
agriculture,

modern industry has a more revolutionary effect than else-

where, for this reason that it annihilates the peasant, that

bulwark of the old society, and replaces him by the wage-

labourer. Thus the desire for social changes and the class

and the class antagonisms are brought to the same level in

the country as in the towns (505).
To Marx all progress in capitalist agriculture is a progress geared
towards robbing the labourer as well as the soil. Thus

the more a country starts its development on the founda-

tion of modern industry like the United States, for example,

the more rapid is this process of destruction. Capitalist

production, therefore develops technology and the combining

together of various processes into a social whole, only

sapping the original sources of all wealth--the soil and

the labourer (506-507).
In essence what Marx is suggesting is that the capitalist mode of
production based on technology alters social relations by the
expropriation of the mass of the people from the soil. This happens

when the system of colonization i.e., public property like land and

24

state capital, are converted into private property. With the
transformation of production under the sway of capital, social
structural contradictions are engendered. In this respect Marx
was developing his concepts of class formation and class struggle
which are relevant tools for the sociological inquiry envisaged in
this study.

In summary both paradigms have emphasized that the moderniza-
tion framework is deficient and the policy guidelines inherent in
such a framework have created social structural changes in peripheral
nations. The global economic system operates to the advantage of
industrial nations while Third World nations remain in a vicious
circle of dependence and underdevelopment.

In summary these conceptions maintain that the general
historical process in the development and expansion of capitalism
into all regions and sectors of peripheral nations, produces under-
development both at national and rural levels. The rejection of
the dualistic interpretation in this respect is critical to the
extent that rural development no longer can be regarded as separate
but must be seen as a part of a global network of capitalsim. In a
specific sense, the metropolis-satellite relations have heuristic
value in the sense that it focuses attention on patterns of
inequality within and dependence of national economies on external
market forces. To that extent, it emphasizes the point that the
problems of rural development in contemporary African and non-

Western societies result from the disarticulation of rural production

25

structures. The dependency framework also links the internal class
structure and relations to the external forces of domination. In
short, class relations are treated as a reflection of the contradic-
tions within peripheral capitalism. And in this respect the interests
of the dominant classes in the periphery are seen to be extensions of
metropolitan capitalism. 0n the whole the dependency framework
argues that rural areas are poor not because they are poor; but
because they have been responsive to national and international
market influences.
Peripheral Capitalism, Dependency
and Rural Development

From the dependency perspective the problems of underdevelop-
ment of the rural sector are explained in terms of the operation of
capitalism in the periphery nations. The question lies in the
identification of the distinguishing features of this peripheral
capitalism. Amin (1976) argues that within a peripheral capitalist
system there exists an imbalance in productive structures such that
distribution of resources and income remain unequal. There is a
'disarticulation' (If the production structures in such a way as to
satisfy the market demands of advanced industrial nations. The
peripheral capitalist system is dominated by metropolitan nations
and this is expressed in varying forms of international specializa-
tion, i.e., in the structure of world trade; and the way the economy
of the periphery is transformed from a subsistence agricultural

economy into one of corrmodity production (201-204). What is of

26

interest however is the impact of peripheral capitalism on the rural

social and economic structure.

Disarticulation of Production Structures

The advance of capitalism into peripheral countries is
accompanied by a series of structural changes in production. Viewed
historically, capitalism in the periphery established specific
functional economic relationships for the express purpose of accumu-
lation, investment and constant expansion of capital. The consequences
of these structural changes include the transformation of traditional
social structures, the establishment of enclave economies for the
extraction of natural resources and repatriation of surplus
(Stavenhagen, 1975). "Enclave economy" denotes a settlement or
production zone with high investment concentration and advanced
technologies. Beyond the confines of the enclave structures tech-
niques of production and levels of living remain primitive and
stunted. The enclave production structure is export oriented, but
the concentration of capital and technology in that sector imply
increased imports. Where the periphery country cannot support such
imports an attempt is made to acquire foreign aid. The enclave
economy therefore increases the integration of the periphery with
the world economy through primary exports, capital and machinery
imports and foreign aid.

At the same time, the enclave economy exploits local labour
in order to increase surplus extraction. But more significantly,

with the polarization of the production structures, the fundamental

27

conditions of capitalist production are enhanced, and as a result
the process denies the indigenous population the ownership of the
means of production while transforming them into wage labourers
(Marx, 1977: 713-716). But the 'primitive accumulation' that induces
the disarticulation of the peripheral structures forcibly separates
the population from their subsistence activities and turns them
into proletarians.
In the agricultural development sphere the disarticulation
is manifested by an imbalance in the production, supply and demand
of agricultural crops. As Johnson (1972) noted:
The modernization that has occurred in agriculture con-
sists mainly in a shift from production for the national
market to production for export, departures from "precapi-
talist" forms of labour servitude toward wage labour, and
increasing adoption Of farm technology. The effect of
this modernization is to create a highly exploited rural
proletariat and to force large numbers of peasants off
the land into urban slums where they are relegated to
marginal status in growing underclasses of Latin American
societies (79; see also Frank, 1972: 365-367).

Capitalist development therefore encourages the development of

production structures that orient the economies outward.

Frank (1969) discusses this process in greater depth in
his analysis of underdevelopment in Latin America. He argued that
capitalist agriculture operates under three basic principles:
subordinate determination, commercial or market determination and
monopoly. Subordinate determination is here understood in terms of

the expansion of the metropolis into the rural sector such that the

entire rural economy becomes an integral part of the world system.

28

Therefore
within the agricultural sector itself, the same principle
of subordinate determination obtains. Cash crops and
commercial, expecially export agriculture completely
dominate and determine the activities in the essentially
residual subsistence sector (248).

To Frank the commercial or market determination is the most
crucial since all initiative and capital for large-scale commercial
production come from foreign commercial interests. These interests
remain dominant and continue to play a role in the determination
of agricultural production (254). Commercial interests serve not
only as sources of capital and credit to rural and agricultural
sectors but also structure international trade in primary products.
Amin shares this view point contending that

unequal international specialization is manifested in

three kinds of distortion in the direction taken by

the development of the periphery. The distortion toward

export activities (extraversion) which is the decisive one,

does not result from inadequacy (Tf the home market, but

from the superior productivity of the centre in all fields,

which compels the periphery to confine itself to the role

of complementary supplier of products for agricultural

produce and minerals . . . . (200; see also Stavenhagen,

224-231).
On the other hand, Amin maintains that "the extraverted orientation
of the economy dooms agriculture to stagnation, sometimes retrogres-
sion" (l969a: 206).

The final principle of organization is what Frank calls
monopoly. By this is meant the increasing degree of concentration
of factors of production, i.e., capital/technology which lead
ultimately to marginalization and high degree of unemployment of a

large segment of the rural population (see also de Janvry, 1975).

29

Since the three principles are interwoven they simultaneously
influence the rural sector. In short "through commercial and other
relationships monopoly determines subordinacy and permits exploita-
tion which in turn produces development/underdevelopment . . ."
(Frank, 1969a: 254).

The Role of the State and
Changing Class RelatTOns

 

 

Underdevelopment can be examined in terms of the ways in
which capitalist enterprise alters class relations in the periphery.
The advance of capitalism into pre—colonial societies does not
result in the destruction of existing class relations. 0n the other
hand these relations are transformed in such a way as to facilitate
surplus extraction and capital accumulation. In this process the
state during both the colonial and nationalist phases tend to func-
tion to reproduce the capitalist system (i.e., creating or maintain-
ing conditions in which private accumulation, investment and
constant expansion could take place). The state therefore becomes
the instrument by which the dominant classes--those who own the
means of production--establish a set of productions relations that
are in their class interests (Sweezy, 1968: 242-248). The Marxian
view of Sweezy suggests that the state is an epi-phenomenon of class
conflict and the state apparatus is used by the owing classes for
the suppression of the interests of the producing class. More
significantly, through the instrumentality of the state, peripheral
capitalism develops a working class whereby surplus is constantly

generated and appropriated. In this respect Marx (1977) notes that:

30

The great beauty of capitalist production consists in

this--that it not only constantly reproduces the wage-

worker as wage worker, but produces always, in proportion

to the accumulation of capital, a relative surplus popula-

tion of wage workers. Thus the law of supply and demand

of labour is kept in the right rut; the oscillation of

wages is penned within limits satisfactory to capitalist

exploitation, and lastly, the social dependence of the

labourer on the capitalist, that indispensable requisite,

is secured; an unmistakable relation of dependence, which

the smug political economist, at home, in the mother

country can transmogrify into one of free contract between

buyer and seller, between equally independent owners of

commodities, the owner of the commodity capital and the

owner of the commodity labour (769).
Marx further maintains that in the colonies this situation is also
further reinforced since the absolute population increases much more
quickly than in metropolitan countries. The law of the supply and
demand of labour is thrown overboard as capital is then invested in
the periphery for the express purpose of exploitation. Under
colonialism the state power is used to break down all resistances of
labour; to regulate wages and thereby force labour into limits
suitable for surplus value making. This, according to Marx, is the
essential element of so-called primitive accumulation. In this
respect Shivji (1976) argues that colonialism mutes the class struggle
and creates different phases through which it passes in the course
Of its own development. The state under colonialism subordinates
pre-existing class relations in such a way as to guarantee the inte-
gration of the peripheral economy into the world economic system even
after the demise of colonialism. Not only do the dominant local
classes assume extensive ownership of capital, including large-scale

capital intensive farms, but they also become the instruments through

31

which farm workers and peasants are exploited. The surplus they
accumulate does not lead to internal capital accumulation. The
surplus is spent on imported manufactures and luxury goods that in
turn encourage repatriation of profits abroad.

During the nationalist phase the state assumes a new potential
for changing the nature of colonial, capitalist relations.
Firstly, the state becomes the medium through which the revolutionary
new class undermines the old class structures and attempts to
establish a new society. But until those relations of production
established during the colonial phase are changed, the contradictions
between social classes remain. Shivji (1976) argues that ownership
of the means of production, which is essentially a property-relation,
does not in its entirety suggest that class struggles are minimized,
let alone eliminated. In essence the problem during the nationalist
phase is not so much how the economy is regulated, but more so the
nature of production and class relations that remain critical.
Secondly, the state assumes a dominant role in economic planning
while setting the conditions for development. However under condi-
tions of underdevelopment, dominant classes and owners of capital
in the metropolitan countries continue to apply pressure through
dominant local classes in order to maintain the colonial and
capitalist relations. The state is therefore not free to negate
the existing class relations. In other respects, it compounds the
class situation since the possibility exists for the development

of a class of state bureaucrats who use the state apparatus to

32

accumulate private wealth. The point here is that class relations
and the resulting rural differentiation must be viewed as a cause
and consequence of dependency and underdevelopment. Baran (1957)
makes this point more explicit when he notes that underdevelopment
has its source largely in the nature of the wealthy classes that
survive from pre-colonial times. These dominant classes under
peripheral capitalism are not permitted to develop an independent
economic base. Instead they have become closely linked to dominant
metropolitan classes whose interests they largely serve through
surplus extraction. In this respect Leys (1975) notes that

a primitive accumulation gave way to capitalist accumula-

tion (in which the apparently 'natural' forces of the

market for labour are sufficient to ensure that the sur-

plus is appropriated by the capitalist) the need for the

continuous and overt use of force by the government to

back up the process of accumulation declined. This

facilitated the replacement of direct colonial administra-

tion by 'independent' governments representing local

strata and classes with an interest in sustaining the

colonial economic relationship (9).

The shift of power to nationalist governments during the post-
colonial period has not in itself lessened the degree of exploitation.
In addition, the nationalist control of the state and economic
apparatus does not also reduce the class differences. Instead the
political domain becomes the arena for class conflicts. The model
used for analyzing changing class relations derives from the notion
that from the pre-colonial period there have been three broadly
based social groups whose relations undergo change during the
colonial and post-colonial periods. The first group is the upper

class or Nananom whose class origin derives from tradition and custom

33

and the fact that they constitute the link between the ancestors
and the living members of their societies. During the colonial
and post-colonial periods their class position undergoes change as
a result of several administrative policies. The second group is

the middle class or Asikafo. In pre-colonial societies they

 

represented the interests of the traditional upper class and formed
the elite bureaucrats irI pre-colonial state bureaucracy. They
engaged in trade, and in essence were the emerging entrepreneurial
class. During the colonial and post-colonial periods when capitalist
enterprise began in rural areas their relations with the traditional
upper class is significantly altered. The third category is the

lower class or Ahiafo. They constitute in the modern sense the

 

marginal class. However as new economic and political opportunities
emerge during the colonial and post-colonial periods some of them
are transformed into revoluntionary classes supporting mass movements.
Others remain impoverished and landless. They have only their labour
to sell.

The reason for these distinctions derives from the fact that
the notion of a classless rural society or an amorphous rural
peasantry cannot be sustained empirically. Briefly, if the concept
of institutionalized inequality (i.e., differences in wealth and
power) is to be conceived in terms of individuals' relationship to
the means of production,then in pre-colonial societies class forma-
tion took place. Moreover the structural changes--state formation,

changes in the form of production, distribution and exchange--that

34

took place during the pre-colonial period gave rise to a more
differentiated class structure. As the historical evidence will
show, this differentiation was expressed by the changing relations
between the traditional upper class and traditional middle class.
Moreover, the basis for the differentiatons was mainly the control
and ownership of property. On that score the term 'classless rural
society' appears misleading.

0n the other hand, the notion of an amorphous peasantry
ignores the laws of capitalist accumulation. Under peripheral
capitalism there has occurred differential access to resources,
wealth and property, which has affected new types of capitalist
social relations. The dominant classes have come to accept an
ethos deeply rooted in exploitation and surplus accumulation.
Capitalist enterprise has also encouraged the formation of an
agricultural labouring class or proletariat whose labour is exploited.
Structurally, the rural sector exhibits three broadly based social
classes: the exploiting class, the entrepreneurial class and the
exploited class.

The achievement of political independence has not resolved
the class contradictions within peripheral capitalist development;
it has tended to aggravate it. In fact, under the nationalist
governments the class structure was given added dimension through
the involvement of the "parasitic" urban classes working in alliance
with the dominant social groups in the rural sector. The issues at

this point related to the interrelationship of the major variables

35

disarticulation of rural production structures and state and class
relations. The process of disarticulation implies that the dominant
metropolitan groups, through their control of the world market,
capital and investment resources, indirectly determine what is
produced in the rural areas and how the surplus accumulated from
these activities should be distributed. To maintain a production
structure that emphasizes cash crop production (for example, cocoa
in the case of Ghana) the colonial and post-colonial state become a
necessary mechanism for that purpose. In essence the state legiti—
mizes inequalities based on differential control of economic and
political resources between various social groups. The question
then is: how are rural inequalities sustained? The pattern of
rural economic exploitation which this disarticulation process
unleashes is associated with sharply differentiated class structures.
The internal dominant classes that operate the state institutions

only serve as 'bridgeheads' for metropolitan classes.

Working Propositions

In this study the assumptions made are (1) rural poverty can
fully be explained in terms of the expansion of capitalism and the
resultant inequalities this expansion entailed, (2) the process of
disarticulating rural production structures constituted a basis for
underdevelopment and (3) rural class relations serve as the internal
manifestations of dependency and underdevelopment. Given these
assumptions, the following working propOsitions will guide the

analyses undertaken in this study.

36

1. Rural poverty is a consequence of the expansion of
capitalism.

2. The persistence of rural poverty must be explained in
terms of the role of the colonial and post-colonial state.

3. The expansion of capitalist enterprise in the rural
sector, and the disarticulation of production structures, constitute
the core of unequal exchange and inequality in resource distribution
in Ghana.

4. The pattern of capitalist exploitation and surplus
extraction is associated with sharply differentiated class
structures.

5. The nature of rural class relations is a manifestation

of the general process of underdevelopment.

Methodology and Data Analysis

Some Research Problems in Using
The Dependency Model

A number of criticisms leveled against the dependency frame-
work have to do with what the critics consider as a lack of
empirical indicators of dependency. For example, it is contended
that the framework does not provide conceptual concreteness and
further that the analysis of dependency is seen to be carried out
at varying levels depending on the interests of the theorists.
Consequently, the model is said to fail when subjected to the
rigor of statistical analysis (Hirschman, 1970).

Based on the assumption that structural dependence has an

effect on levels of economic performance, the advocates of the

37

dependency framework have used some social and economic indicators
as measures for dependency (Brewster, 1978; Rubinson, 1976;

Wlaton, 1975; Stallings, 1972). Proceeding from conventional
economic theory, Brewster assumes that countries with high levels
of economic dependency tend to exhibit low rates of economic
growth, i.e., unfavorable balance of trade, fluctuating growth
patterns, and a growing disparity between the structure of domestic

demand and the structure of domestic resource use.

International Trade

 

Some social scientists working from the dependency perspec-
tive have emphasized international trade as a critical index in
establishing the degree of economic dependency. In this case the
emphasis has been on what a country exports, the degree of commodity
concentration, reliance on traditional export partners, the value
of export over time and the import-export balance.

But the basic assumption in the use of international trade
as an index is that trade between metropolitan countries and Third
World nations is essentially unequal. To demonstrate this inequal-
ity, the focus has been to show how international trade operates
to the disadvantage of these countries and not to the advanced
nations. For example, in 1975 it was noted that developing
countries showed marginal increases in the value of their exports.
In more specific terms, the 'developed' market economies increased
their export receipts from 47.6 percent to 57.9 percent between

1961 and 1974. Within the same period the 'developing' market

38

economies registered a 9 percent decrease in export value (F.A.0
Report, 1975). Taking developed countries, including the U.S.S.R.
and Eastern Europe, as a group, the industrial nations increased
the value of their exports by 26 percent. The explanation given by
methodologists in this respect is the inadequacy of the theory of
comparative advantage that underlies most trade relations. By
comparative advantage is meant that international trade is advanta-
geous for all participants in trade relations if each country,
depending on factor endowments such as land and natural resources,
capital, labour and technology, specializes in the production of
those goods for whose manufacture it could best employ the available
production factors. This thesis asserts that international trade,
if it is so organized, would promote the interests of all.

Another explanation for this pattern of world trade is
based on the theory of demand for agricultural products. Most
developing countries have agriculturally-based economies, and
economic development is largely influenced by export receipts. But
over the years demand for agriculture products have tended to
fluctuate partly because the advanced nations have developed
synthetic fibers to replace primary exports from these countries.
In addition, the advanced nations have increased trade among them-
selves and have imposed severe tariff restrictions on products
entering their markets. Thus comparatively, the industrial nations
have tended to increase their own agricultural exports much faster

than the developing countries. Consequently, between 1961 and 1971

39

the rate of increase in their export earnings had doubled. What
is of interest is the structure of demand, as well as international
price movements and income receipts. Another parameter within the
international trade index has to do with the extent of commodity
concentration and dependence on traditional trade partners.
Researchers are interested in establishing a relationship
between export instability and commodity concentration. It is
assumed that commodity concentration occurs when major portions of
export earnings come from a few commodities; while export instability
represents the extent to which export earnings fluctuate around the
trend values (Leith, 1971). These indicies are important since
most African countries depend on a few export crops for international
economic transactions. For example, out of the twenty leading
African exports accounting for about 80 percent of export earning,
twelve are agricultural exports (UN/ECA REport, 1973: 147). Further-
more, the bulk of Africa's export trade is destined for industrial
European markets (Stallings, 30). Another international trade
index has been developed by Galtung. His point of departure is the
nature of interaction between nations. The concern was to determine
how center nation's are related to those of the periphery. Galtung
maintained that if the inter-actor flows, in flows of raw materials,
capital and finance goods and services are examined, it is possible
to determine who benefits most. 0n the basis of this, he discusses
a theory of imperialism that seeks to determine differences among

nations in terms of interaction relations, i.e., vertical

40

integration is shown not only in what is exchanged, but more in
the difference in the spatial location of the most complex and
stimulating Operations. Because of this difference in spatial
location, one nation (the center nation) is able to dicate the
terms of trade and dominate international exchanges (for example,
the periphery nation exchanges agricultural exports for tractors).
The feudal interaction system is shown by networks that facilitate
the flow of goods and services in a particular direction, and
these interaction structures affect the distribution of resources
in the world.

From the point of view of this theory, four major variables
emerge for empirically exploring economic imperialism. The first
of these variables is the development variables represented by the
Gross National Product (GNP). The second is the inequality variable
represented by income distribution index and systems of land owner-
ship. The third variable is determined by trade composition, and
it is the means of establishing vertical integration. The fourth
focuses upon partner and commodity concentration. This represents
what Galtung calls feudal relations (Galtung, 1971: 101). The
trade composition, partner and commodity concentration variables
represent the ratios between the proportion of exports going to one
important partner, or these variables may consist of the three
most important commodities relative to total exports. It is
through these types of relatiOns, vertical and feudal, that
dominance and power relations are determined within the world

system.

41
foreign Capital and Technology
Transfer

Foreign capital and investment constitute a major aspect of
international development assistance. Conventional economic theory
argues that such investments are necessary if 'development' is to
take place in the periphery. However, dependency theorists reject
this argument while maintaining that such transfers do not aid
development. Instead, the development assistance tends to
encourage both international specialization and further separation
of surplus from these nations.

To determine the consequences of development assistance, an
attempt is made to isolate the conditions under which assistance is
given and the consequences for the peripheral economies. Most
empirical research tends to use the foreign aid index which includes
the sources of foreign aid and the percentage of aid (from the
source) to a particular country (Stalling, 1972). The index is
constructed on the assumption that certain external aids and
capital tend to reinforce economic dependency. It is argued for
example that multilateral aid, i.e., grants from the United
Nations and other affiliated agencies have better positive effects
on development in the periphery than bilateral aid, i.e., govern-
ment-to-government or multinational private investments. Bilateral
aids, it is often argued, have high interest rates. But in addition,
it tends to tie the recipient country to imports donors are anxious
to sell. Under these conditions, a recipient country if forced

into a pattern of development that is dictated from external factors.

42

Another indicator has to do with rate of capital outflow
from the periphery as a result of the type of foreign aid granted.
In this case, empirical research focuses on establishing a relation-
ship between inflow and outflow of capital (both long-term and
short-term). It is assumed here that when there exists a greater
outflow of resources compared to the rate of investment and capital
aid the country concerned tends to be economically dependent.

Technology transfer constitutes a major element in the
empirical evaluation of economic dependency. This is because of
its effect on national debt, and labour displacement in the
periphery. What is the justification for technology transfers and
what are its consequences particularly for the rural sector? The
view has been expressed that if peripheral countries are to
achieve rapid rates of economic growth, a viable strategy is the
utilization of mechanical power. Agriculture in periphery nations,
it is maintained, remains inefficient because of a poor technological
base. By implication, it is assumed that technology transfer leads
to increased efficiency and productivity (Cervika, 1972: 309).

From neo-classical perspective technology transfer is justified on

a number of grounds. Transfer of technology is seen as an opportun-
ity to effect a change in the economy by shifting labour to other
activities without necessarily reducing agricultural output

(Hayami and Ruttan, 1971). On the other hand, it is maintained

that even if labour is displaced, other sectors would have the

capacity to absorb this displaced labour. On methodological

43

grounds, the impact of technology transfer is measured in terms
of labour displacement (Yudelman, et al., 1971: 46; Abercombie,
1972: 22; Gorsch, 1972; Human 1974).

Technology transfer is a costly investment for a recipient
country as the current and recurrent costs tend to be high. But
more importantly, a considerable foreign exchange is involves in
the importation of technical equipments.' The maintenance and
repair costs are also high. Since currencies of peripheral nations
are often over-valued, the full cost of technology tends to be
much beyond the means of the periphery. In the absence of enough
domestic and foreign exchange resources, these countries are
forced to seek aid which consequently reinforces their dependency.
In this case McFargihan and Hall (1970) argue that

The substitution of mechanized for labour intensive

methods may increase employment in tractor manufactur-

ing complexes of the western world, but to the extent

that the introduction of mechanization is successful,

it aggravates under-employment problems in poor

countries (3).
As an index, therefore, it is measured in relation to its effects
on unemployment; the dependence on foreign capital as reflected
by percentages of total foreign loans allocted to technology
imports, and its contribution to the external debts and balance
of payments.

These issues related to international trade, foreign aid
and technology transfer indicate the critical points in the metro-

polis-satellite relations. International trade tends to ensure

the disarticulation of the production structure in such a way as to

44

satisfy the market demands of the dominant economies. Internally
however, the social and economic processes that result from the
disarticulation imply inequalities in distribution of resources.
Foreign aid permits the metropolis to influence domestic policies

in order to increase the satellite's integration through further
resource transfers. The process of techology transfers does not
only reinforce technological dependency but internally, it increases
unemployment and inequality in the periphery. Thus the economic

and social costs tend to be high and the periphery tends to be

more dependent.

The significance is that the international structures and
processes remain critical starting points in understanding the
problems of development in the periphery. In this case an analysis
of these structures and processes opens the possibilities for
appreciating underdevelopment in Ghana.

Procedures and Methodology
Used in The Study

A major problem faced by researchers in the area of
dependency relations has been preciselytyfa methodological character.
However, the issue here relates more to how the inter-relationships
between the key variables in this study, i.e., disarticulation of
rural production, the role of the colonial and post-colonial state
and class relations, could be demonstrated in order to comprehend
the complexities of the world capitalist system as well as the

nature of the development problems of Ghana. More specifically,

45

providing new dimensions and perspectives on rural development
within the context of the world capitalist economy calls for an
interdisciplinary approach. This procedure referred to as the
extensive approach draws on the other social sciences with a view
to providing a comprehensive picture of the dynamics of rural
underdevelopment. In essence, "what one loses in depth by this

procedure, one gains in scope" (Hill, 1963: 7).

Historiography

 

In dealing with the contemporary problems of development in
Ghana it is necessary to start with a solid base of source material
that would allow an explanationIrfunderdevelopment as an historical
process. The historical analysis becomes more evident when under-
development is to be explained in terms of the development of world
capitalism. For as Marx noted comtemporary events particularly as
they relate to the growth, expansion and transformation of capital-
ism, can be interpreted within a world historical context. Conse-
quently, the events of the present can be fully comprehended if they
are treated as integral parts of world historical phenomenon.

Two approaches were therefore adopted in order to establish
the trend in Africa and especially in Ghanaian underdevelopment.

(1) An extensive survey of available literature on Western
European connections with Africa and Ghana in particular was
undertaken. This was to provide bench-mark information for a
critical assessment of the interconnections between changes in

European economic and political interests and the patterns of

46

development in Ghana at each historical stage in the transformation
of capitalism.

(2) A survey of the literature including books, articles,
documents, and archival sources related to British colonialism in
both its political and economic dimensions, was perused in order
to determine the connection between colonialism and underdevelopment

in Ghana.

Documentary,Analysis

Adequate assessment of development problems during colonial
and post-colonial periods requires detailed examination of govern-
ment documents to produce an adequate picture of the development
process. This analysis was undertaken as a two-stage process:

(1) The first dealt with census reports; economic surveys,
including reports of various departments of Government, the Annual
Budgets and manpower reports. The analysis here was carried out
in order to determine what changes have occurred in the Ghanaian
economy and the overall economic conditions of the country.

(2) The second analysis focused attention on parlimentary
debates, newspaper commentaries related to the issues of rural
development and development generally. Since most of the issues
dealing with development were extensively discussed in such forums
and media, they provided additional and particularly useful sources
of ideas about Ghana's problems. More significantly, this aspect
of the analysis allowed an insight on how diverse interests operate

within the political arena to shape development policy. In short,

47

the parliamentary records provided information on why some policy
was formulated; what the objectives were, and what class interests

and relations shaped the process of development

Evaluation and Policy Analysis

 

The importance of policy analysis cannot be overlooked.
Lenin maintained that at each historical stage in capitalist
development specific policies are pursued. For example, Lenin
noted that during the imperialist phase the major feature of
capitalsim, finance capital, called forth an annexationist
(colonial) policy. The purpose of this policy was to increase the
"joint-exploitation of the world by internationally uniting finance
capital" (Lenin, 1974: 94). Consequently, policy evaluation implies
explaining why the policy has been made and the way it has been
formulated; and providing interpretations which are relevant to
the problems of development at a given time. To do so meaningfully,
one must understand policy in terms of a design by governments to
shape the future. Underdevelopment is affected by internal problems
specific to a country as well as by world developments. Therefore
to establish connections between policies and conditions of under-
development, the analysis must take into account the concrete
economic realities of the world economy.

The analysis undertaken here was threefold:

(1) Analysis of specific selected aspects of agricultural
development policy was undertaken with a view to establishing

interconnections between the world situation for agricultural

48

products and the kind of policies proposed by the Ministry of
Agriculture. 0n the other hand, the selected policies were
examined in relation to the conditions of rural development as
well as the internal requirements for agricultural products. In
this connection, the writer spent four months in the Ministry of
Agriculture and worked closely with the then Deputy Director of
Agriculture, Mi Williams Baffoe. During the period documents and
files of the Ministry of Agriculture were studied in order to
isolate the factors involved in policy formulation. In addition
interviews were held with senior officers of the Ministry with a
view of getting an insight into the 'politics' of policy formulation.

(2) An extensive survey of the literature on agricultural
development including economic surveys of Ghana, reports of inter-
national agencies (United Nations, notably the Food and Argiculture
Organization and the Economic Commission For Africa) was conducted
in order to see the extent to which international concerns about
agricultural development tended to affect policy formulation in
Ghana.

For many years, the writer has participated in policy
evaluation research on behalf of the Ministry of Agriculture. Some
of the results have been used in order to establish a relationship
between government policy and the persistence of rural inequalities

in Ghana.

49

Contribution of Study

For a country whose economy is largely dependent on agricul-
ture and whose peoples are mainly rural residents, a study of this
nature is not an 'ivory-tower' exercise but a matter of pragmatic
import. The agricultural sector of the economy contributes about
51% of the G.D.P. Yet agricultural imports, particularly food
imports, continue to take an alarming proportion of the import
bill. In 1962 for example, Ghana imported about five times the
West African average of imported food (Regional Food and Nutrition
Report, 1967: 19). In 1970 the Bank of Ghana reported that the
all-item consumer price went up because of a rise in agricultural
and food prices (Quarterly Economic Bulletin). Agricultural
development and rural social and economic problems have remained
thorny issues in Ghana's development. Except in the export sector,
the rest of the agricultural sector is near stagnation. Yet a
large proportion of the Ghanaian population is in agricultural
production. The overall economy of Ghana continues to be stimulated
by external factors; the country is faced with serious balance of
payments problems, inflation and an incapacity to meet obligations
imposed by the general population.

This study therefore is an inquiry into the causes and
factors associated with underdevelopment. It specifically examines
the problems of rural development as a consequence of capitalist
development on a world scale. In doing so this study departs from

the dualistic intepretation of rural poverty in Third World nations.

50

Instead, the study uses the dependency framework which is largely
rooted in the conflict tradition. In this respect, the problems

of rural development are viewed as a consequence of the external
and external forms of domination, exploitation and unequal exchange
that constitute the core of capitalist development. In a more
specific way the dependency framework focuses attention on the
patterns of inequality that result in rural areas as production
structures become essentially responsive to external market forces.
In essence this study seeks to establish empirically that rural
areas are poor not because they are poor, but because they have
remained responsive to national and international market influences

which are essentially exploitative.

CHAPTER II

THE HISTORICAL AND SITUATIONAL CONTEXT OF
UNDERDEVELOPMENT IN GHANA

The view is often expressed that up to the 19th century the
main features of the Ghanaian economy were essentially static. This
point of view is succinctly articulated by Szereszewski (1965) who
argued that

In 1891, the Gold Coast (Ghana) was primarily an economy

dominated by indigenous activities--traditional agri-

culture and collection of forest produce, traditional

crafts--and trade flows whose nature in terms of organiza-

tion, conveyance and spatial incidence and type of

commodities had not changed significantly over centuries.

It was an economy based on the most simple techniques of

production spanned by a network of narrow bush roads and

practically fragmented politically as well as economically

1 .

Historical evidence does not support this view. Moreover, recent
economic history of pre-colonial Ghana, notably the works of Daaku
(1970) and Reynolds (1974), as well as early colonial records have
established that advances were made in economic organization during
the pre-colonial phase in Ghana's development. There is also
general agreement among scholars that whatever developments took
place in the pre-colonial economy were undermined by colonialism.
In other words, under colonialism the structure of the pre-colonial
economy was fundamentally altered. Colonialism, therefore, was a
critical moment in the economic history of Ghana.

51

52

The area presently referred to as Ghana is itself a creation
of British colonialism. But the indigenous ethnic groups that con-
stitute it are said to have migrated from the ancient empire of
Ghana in the Western Sudan (Boahen, 1975). Linguistically these
ethnic groups belong to two principal families--the Kwa group of
languages composed of Akan, Ga, Adangbe and Ewe spoken by ethnic
groups in the south; the Gur group of languages consisting of Grusi,
Mole-Dagbani and Gurma to the north. Culturally there are discernible
differences and similarities. The Akan follow the system of matri-
lineal descent (Rattray, 1927). Thus their mode of social and
political organization derives largely from the matrilineal principle.
The Ewe and Ga-Adangbe and the groups to the north follow the patri-
lineal principle. The cultural differences are reinforced by the
fact that the ethnic groups are also located in different ecologic
zones such that economic organizations in particular have reflected
these variations. To a large extent political organizations remain
similar although distribution of power and influence tend to follow
the principles of matrilineal or patrilineal descent as applicable.

At the head of each group is a paramount chief or someone of
similar status. The head of government in each group exercises
power only within limits set by a council of chiefs and elders who
also had power to remove him from office should he fail to protect
the interests of the citizenry. Generally the system of political
organization among the Akan at one end of the spectrum approximates

a monarchical system. At the other end is the system among the

53

Ewe of independent units very loosely connected. However, each group
has a government operated along the same lines as the Akan. Thus,
chiefship is an old institution in all ethnic groups although through
cultural contact and sporadic warfare some aspects of Akan chiefship
have been borrowed by others (Agbodeka, 1976).

The institution of chiefship remained the center of social
and economic life in pre-colonial times. Power, wealth and status
were closely intertwined with this institution. Political power
relations were considered an extension of economic relations (Owusu,
1970). In terms of agriculture, the chief exercised economic rights
over land, but this right was only custodial since communal land
allegedly belonged to the ancestors. Secondly, his rights over any
parcel of land coexisted with a bundle of other rights held by
lineages (Busia, 1951; Bentsi-Enchill, 1964). The chiefs' economic
rights extended into areas of trade. Most of the long distance trade
that developed between the coastal states and those in the hinterland
and beyond were carried out through the machinery of government.
Trading privileges were granted to indegenous entrepreneurs and the
chief appointed local businessmen as trading representatives in other
areas. Through these activities a considerable part of the pre-
colonial economy was under state protection. These developments
are best illustrated by changes in pre-colonial social class relations

as well as the general transformation of the pre-colonial economy.

54

Pre-Colonial Class Relations

 

A number of social scientists with neo-classical orientations
deny the existence of institutionalized inequalities based on wealth
and property ownership in pre-colonial societies in Africa. The
assumption here stems from the notion that African societies are
dominated by the communal mode of production.

It is also maintained that in such societies the most
critical factor in production relations, land, is available to all
members of the society. Its availability and communal ownership
ensures that each member of the owning group has at least a minimal
share of it. Furthermore, the factors of production, land and
labour, are employed expressly in the interest of the community.

Thus the principles for surplus accumulation and its circulation tend
to reduce to a minimum sharp institutional inequalities.

This perspective essentially reflects from the view that
African societies prior to colonialism remained in a state of rela-
tive equilibrium, and that it is the communal mode of production
which eliminated the unequal relations between producers and those
who controlled the means of production. Certainly there existed
collective forms of ownership of the means of production and there
was a preponderance of equalitarian principles in the distribution
of surplus from the land. However, this did not foreclose individual
initiative and advancement. This notion of a classless society does
not take account of the social and economic realities in pre-

colonial societies. And as Nkrumah (1966) pointed out: "African

55

classless society (in which there were no rich and no poor) enjoying
a drugged serenity is certainly a facile simplification" (5).

There were socioeconomic and political hierarchies and the
relations that existed among the various hierarchies were to some
extent based on ownership of landed property as a means of production
or non-ownership of such means except labour. As Rodney (1972)
states:

In the period of transition, while African societies

retained many features that were indisputably communal, it
also accepted the principle that some families or clans
or lineages were destined to rule and others were not.
This was not only true with cultivators but pastoralists
as well. In fact, livestock became unevenly distributed
much more than land (53).

Although these hierarchies existed, in the case of the
Ashanti of Ghana, Busia (1968) maintains that the dominant clans or
families as represented by chiefs were wealthy only in terms of the
services provided by the citizenry. These chiefs could not accumu-
late capital for personal use. Moreover, whatever wealth and income
they acquired circulated back to the people. In terms of land
ownership Busia argues that since the chiefs' rights over lands
coexisted with a cluster of other rights, i.e., rights of lineages
and families, the appropriation of any surplus from the land was
severely limited (36).

Customary law required that the subjects of a chief provide
a variety of services including military services, varieties of

levies and communal labour. In the case of labour the subjects were

required to work on the chiefs' farms for several days each year.

56

The number of days on which this service was given
varied from place to place from two to eight days in a
year with twenty to two-hundred or more men working on
any one day (Busia, 49).
This position indicates that free labour was utilized by the
chiefs for purposes other than conmunity interests. Hailey (1938),
writing on this practice by chiefs of demanding free labour, main-
tained that although these services were rendered for the upkeep of
the institution, it was not uncommon for these services to be used
to secure resources of a personal nature by incumbents. Hailey's
contention is buttressed by Dickson (1969). However, the initial
point made by Busia in relation to land ownership and rights of use
is correct in principle. But, in the operation of the system, devia-
tions occurred. Dickson argues that
The chiefs' consent was required before farmers could
clear a plot of land for agriculture. All farmers were by
custom obligated to cultivate communally the chiefs' land
before they could work their own and part of their income
from sale of farm produce from individual farms was com-
pulsorily paid to the chief as farm rent. Land was a major
source of wealth; and political power derived largely from
control of wealth and scarce resources. The stratification
system of society to a great extent followed wealth dif-
ferences (76).
No doubt pre-colonial states like Akwamu, Anlo, Denkyera
Asante, Gonja and Dagbon developed stratification systems based on
economic and political power. Political stratification was not
based on kinship relations alone, but took account of property
ownership and individual enterprise as well.
In the pre-colonial times then, class distinctions emerged

in most of the societies. But, for the purposes of this study these

57

structural changes that occurred in Asante society will be used to
illustrate this viewpoint.

The emergence of Asante as a powerful state with 'imperial-
istic' designs has been attributed to several factors, the most
important of which were the formation of the Asante Confederacy; the
Atlantic and slave trade and the military superiority of Asante in
the hinterland (Boahen, 1975: 15). A third important factor is what
Wilks (1961) referred to as 'the northern factor' or economic
influences that permeated Asante from the north. In this case it
would appear that the extension of the northern trade route into the
gold-bearing areas in Asante stimulated the quest for an economic
and a loose political union. What is clear from this perspective is
that the emergence of Asante was effected by the desire to control
the gold and cola resources of the forest region and the trade to
Housaland to the north (Fage, 1966). Wilks (1961) further noted that
this perspective can only be meaningful if it is understood in rela-
tion to other forces, particularly the trans-Atlantic trade. The
Atlantic trade, according to Boahen, affected Asante in two ways.
Firstly, the trade in gold and ivory which had higherto been carried
out with the northern states of Africa was shifted southward with a
new dimension, the slave trade. Initially, the European merchants
in their trade relations operated through intermediaries. The
Asante producers wanted direct dealings with the Europeans and
therefore nursed the desire to eliminate such intermediaries.
Secondly, throughout their trade contacts with Europeans the Asante

had built a superior military power base which they felt they could

58

use to buttress their ‘economic imperialism.‘ These two factors
facilitated the political and economic expansion of Asante (see also
Eynn, 1971).

By the early 19th century Asante had extended its political
influence beyond the forest areas to the south and north. But, with
this imperial drive went changes both in the political and socio-
economic structures (Hagan, 1971). There was the establishment of
the military controlled by "captains" who, together with the
hereditary upper class, operated in the state councils and made
decisions about warfare. The army itself was composed of the
commoners and slaves who were conscripted. There were also Hausa
and Malinke mercenaries who were paid for their services (Ajayi,
1977).

In spite of a low level of consciousness, the commoners and
slaves who were conscripted showed some resentment (Wilks, 1975).

It was the military captains who articulated the misgivings of the
lower military classes, but they were ineffective because they
served as part of the establishment. As will be seen later, however,
under the colonial period these military men became a source of pro-
tests (both against the hereditary upper class as well as the
colonial administrations) against what they had seen as exploitation.

Another change in the social structure of Asante had to do
with the development and separation of a bureaucracy from hereditary
title holders. Wilks (1975) noted that this bureaucracy was a wide

organization. Apart from the executive branch in which the decisions

59

relating to diplomacy, trade and warfare were formulated, there was
the central administration. This included at least two hundred and
fifty members of the chiefly establishment and military commanders.
But the core of the central administration was composed of the pgbljc_
or household servants, Asomfo. They held office by appointment,
were career men, and were rewarded in several ways, most common of
which was remuneration based on a fixed scale of fees and commissions
(Wilks, 1975: 468). They were servants of the state par excellence.

With this imperial expansion went increased trade and extrac-
tion of tribute from conquered states. It became necessary then to
develop a system of controlling the new resources and within the
central administration an exchequer was established. This organiza-
tion was responsible for supervising finances, imposing taxes,
collecting tribute and tolls of all kinds. It also supervised the
state trading enterprise, i.e., mining and the collection of ivory.
But the public servants who controlled the exchequer were beginning
then to become a class based on wealth. These persons were permitted
to establish personal fortunes and in fact accumulated wealth
(Wilks, 1975: 468). Such personal wealth as was accumulated was not
considered lineage property. The only restrictions were in the area
of succession to the property. For example, they could not transmit
their property to their heirs. It did not only carry heavy taxes
but at death was taken over by the state.

Related to the exchequer was the establishment of the state

enterprise system through which the state controlled external trade

60

and gave protection to those who operated on behalf of the state.
During the same period, a similar development took place in the
European mercantile system. For example, in the 18th century the
British merchants along the West Coast operated under the aegis of
the company of merchants. This company, although regulated by the
Crown in Britain, served as a protection for the British merchants
against other European rivals. It permitted individual initiative
and served to finance enterpreneurs. The Asante organization was no
different. Wilks (1975) noted that their operations tended to
approximate more and more closely the capitalist model. The members
of this company borrowed money from the exchequer to finance their
business operations and their commercial dealings no doubt yielded
them substantial profits (469).

The leadership of this state business enterprise fought with
the hereditary upper class over what they felt was the exploitation
of their labour and entrepreneurial skills. They sought to operate
a free enterprise system using state capital and protection to
generate private resources. Their resentment to the kind of produc-
tion relations they had established with the traditional upper class
took a decidedly political form, and most of the political unrest
was clearly identified as emanating from excessive appropriation of
their profits by the aristocracy. Wilks (1975) further notes that

By 1880, then, the level of consciousness of the

asikafo was such that they should probably be regarded as
constituting a small but growing bourgeois middle class

with distinct interests and aspirations transcending
loyalties and allegiances of a traditional kind (705).

61

Despite these 'class struggles' between the chiefly group,
the bureaucrats, the military establishment and the entrepreneurial
class, conceptually, theywere classed as asikafO-—i.e., the persons
who were hipossession of large quantities of gold and property. Thus
it was the possession of wealth, counted in gold, that gave recogni-
tion in society.

The chiefly group remained dominant and as Bowdich (1918)
claimed:

The chiefs are fed bountifully by the labours of the

slaves; and sharing large sums of the revenue (the fines
their Oppression imposed on other governments) with incal-
culable fees for corruption or intereference, refine upon
the splendor of equipage even to satiety and still possess
a large surplus of income daily accumulating (335-336).

In essence, the dominance of the aristocracy, the bureaucrats
and the merchants was predicated upon the labours of the commoners
and the slaves in the mining and production areas. In contrast to
the rich, the poor and underprivileged generally reffered to as
Ahiafg_carried the burden of production while the upper groups
appropriated and accumulated surplus. Prior to colonialism, there-
fore, Asante society showed differentiated social class structure
composed Of a traditional upper class of chiefs, clan heads and
elders. There was the traditional middle class composed of state
bureaucrats, state traders, military captains, diplomats and tax
collectors, and at the bottom was the lower class consisting of
commoners, slaves and laborers.

It is important to note that these structural changes were

essentially a reflection of developments in the pre-colonial economy.

62

Developments in the Pre-Colonial Economy

Some earlier and recent economic historians have argued that
the pre-colonial economy, particularly agriculture and trade, were
diversified and specialized. Agriculture, according to Rodney (1972),
was based on a correct assessment of the environmental potential of
the areas. Furthermore, in the areas of crop rotation, green
manuring, mixed farming and regulated swamp farming advances were
particularly noteworthy. In this case

The single most important technological change underlying
African agricultural development was the introduction of

iron tools notably the axe and the hoe, replacing wooden

and stone tools. It was on the basis of iron tools that

the new skills were elaborated in agriculture as well as

other spheres of economic activity (48).

Ghanaian agriculture showed remarkable progress. The soils
in the forest regions were fertile and supported crops like oil palms,
cow peas, millet and other staple foods. There were also commercial
plants like cola, coffee, rubber and pepper, a spice of which the
' Moors to the north were extremely fond. It was this spice, according
to La Anyane (1963), and its demand that gave the initial impetus to
European trade with Ghana. Iron implements were also introduced into
Ghanaian pre-colonial agriculture and in areas to the north where the
metal industry had begun to serve agricultural development. Another
factor in agricultural development was the indirect influence of the
gold trade in Ghana. 0n the whole the contact with other peoples
brought about by trade indirectly influenced agriculture since new

crops like cola from the north were introduced into the repertoire

of agricultural products.

63

Pre-colonial Ghanaian agriculture was not primitive, and
neither was it unscientific. La Anyane suggested that in the absence
of the 'so-called' modern scientific knowledge, the importance given
to the 'sacred' place associated with gods and dieties served as a
basis for forest reserves. "The sacred forests kept as suburbs of
the principal towns or in the vicinity of the kings' village for the
purpose of housing the gods or the spirits of the ancestors were in
reality forest reserves" (5).

The application of gring_in cassava, i.e., manioc, con-
tributed physiologically to reducing the poisonous acid (prussic
acid) from the crop. It was believed that urine has a sulphurous
element which countereacted the ill-effects caused by the acid. La
Anyane holds that more importantly the application of urine to
plants demonstrated an inherent understanding of the benefits of
the use of fertilizers or manure.

Apart from advances in agriculture, internal and external
trade in both agricultural products and manufactured goods was
highly developed. It has been noted that as far back as the 10th
century both intra-regional and intra-continental trade had developed.
Trading was not limited to manufactured items but also included were
food crops and some cash crops like cola, cotton, pepper and rubber.
Daaku (1970) and Reynolds (1976) noted that in pre-colonial Ghana
the economies were not static. Salt mining was a higly prized
industry, and it was a commodity which was in great demand throughout

Western Sudan. Trade in beads was carried out and by the 17th

64

century it had become one of the items exchanged in its own weight
for gold.

The growing of cotton and the textile industry in West
Africa remained advanced in techniques and design. Cotton prints
were important items of exchange, and during the initial contact
with Europeans this industry spread to other parts further north.
According to Johnson (1974), during the early trade with Europeans
in the 16th century, West African textiles were bought and sold by
European traders in the Far East. Further historical evidence suggest
that one of the consequences of Dutch and Ghana trade connection was
that soldiers and craftsmen who were recruited from the coastal
states and Ashanti, introduced and taught African designs which the
Dutch later introduced into the Java textile industry in Indonesia.

Gold trade remained at the core of the pre-colonial economy.
Reindorf (1966) gives credence to this fact by nothing that
profitable gold washing and mining activities were carried out in
Akyem, Denkyera, Wassaw, Assin and Asante, areas located in the
heart of present day Ghana. These areas still serve as the base for
extractive industries including gold, diamond and manganese. Kimble
(1963) noted that the people of pre-colonial Ghana were engaged in
mining and selling a commodity which had become a universally
accepted basis for monetary exchange. To Goody (1971) therefore
the concept of non-monetary economics is hardly applicable in this
case.

From the foregoing, it is difficult to sustain any notion

that prior to contact with Western Europe the pre-colonial economies

65

were static and underdeveloped. In the long-run of history pre-
colonial Africa was far from static. From the point of view of
mercantile economy, Goody (1971) argued that parts of Africa were
not dissimilar to Western Europe of the same period. Thus

Most of the kinds of economic operations that were found

in pre-industrial Europe were also to be found in Africa;

7 even in stateless societies of the interior barter had

been superceded by more complex forms of exchange and

production was rarely limited to subsistence alone (24).
In view of the above contention, it is clear that African societies
were not any less developed than the rest of the world at this
historical point in time. But by a series of sequential developments
in the world economy, African societies began to suffer reverses in
their development. For purposes of the analysis undertaken in this
study only a few major developments are discussed, with a view to
illustrating how critical changes in the emerging world economy are
related to Africa's underdevelOpment.

Slave Tradin and the Process of
Underdéve opment (1500-1880)

Historians (including African and Africanist scholars) have
written on the question of the African slave trade. The concern here
is not to traverse an already documented field, but to demonstrate
briefly how the slave trade set in motion the process of underdevelop-
ment. Daaku (1970) and Reynolds (1975) maintain that it was the
quest for gold that initially stimulated mercantile interests along
the Guinea Coast in about 1485. The exploitation of gold sources

particularly in the forest regions of Ghana was what led consequently

to the integration of the indigenous economies with European financial

66

interests. However, toward the end of the 15th and 16th centuries
this interest was shifted to trade in slaves. This shift was
caused mainly by the development of agricultural plantations in the
New World--the Americas and the Caribbean islands. By the 17th
century demand for African labour in the plantations became a
dominant feature of economic activity along the Guinea coast.
Rodney (1969) notes that

by the third decade of the 18th century the pattern of

Afro-European trade on the Gold Coast was almost completely

reversed in some sections. Instead of bringing in captives

and exporting gold, they were selling Africans and receiving

gold in return (17-18).
He further adds that

although gold remained important the shift meant that

within the overall process of capitalist accumulation

slaves had become Africa's most valuable contribution

to Europe and the Americas (18-19).
This trade in human beings was not without severe consequences for
the African societies and overall developments in the continent.
Although there are no reliable statistics to indicate how much
African labour was transported, it has been roughly estimated that
at least 15 to 20 million active labourers were sold into slavery.
A potential productive labour necessary for Africa's own development
was thereby denied and instead this labour was used to support
expanding western capitalism. Therefore, it was African labour
which provided the basis for agricultural capital formation. This
agricultural capital was later on to be used in support of the

industrial revolution that was to tilt the strategic balance much

further in favour of European imperial designs.

67

This development had adverse effects on African agriculture
since agricultural labour became severely curtailed. The Trans-
Saharan trade which stimulated agricultural production was under-
mined and in consequence, the population in agriculture stopped pro-
ducing crops and goods in which they formerly traded. Local industries
including iron works, and textile manufacturers were destroyed, and
were replaced by imported goods (Fyfe, 248).

The slave trade also led to the disintegration of emerging
nation-states as well. European slave traders and later mercantile
organizations exploited local rivalries to further their economic
interests (Webster and Boahen, l967). Daaku (1965) maintains that
between 1630 and 1720 European trading agents became involved in
local politics as the balance of power in Europe began to change.
Thus from the 1630's European attitudes towards local politics
gradually changed from non-involvement into active participation
in local affairs. Daaku further argued that

this change was mainly due to the efforts of the trading
companies to secure all the coastal trade for themselves.
In this they became overprepared not only to bend the
governments of these states by diplomacy but by force if
necessary (22).
Wars were therefore encouraged in the name of trade. The conse-
quences of these wars were many but the notable ones include popula-
tion decline and the inabilities of these states to pursue
independent political actions (Uzoiwe, 1973).

In summary, the slave trade marked a significant turning

point in African development, i.e., the beginning of African

68

incorporation into the world captalist system and the inducement of
underdevelopment.

"Legitimate" Trade and the Process
of Underdevelopment (1800-1957)

The replacement of slave trading with what was called
'legitimate' trade is largely attributed to the prevalence of a
humanitarian ethos in the 18th century. Although humanitarianism
may have been a significant factor, economic considerations were
perhaps more critical in the shift of commodity trade. 0n the
other hand, even with the shift to legitimate trade the process of
underdevelopment was not lessened, but took on added dimensions.

During the 18th century most European nations, including
Britain, France, Germany, Portugal, Holland and Denmark, became
involved in competition not simply for military and strategic
superiority, but more significantly competition over control and
monopoly of world trade. In this the European nations were propped
up by emerging finance capital whose interest was to monopolize the
natural resources that were believed to exist in vast amounts in
the African continent. This competition was translated into
colonial expansion. European imperalist interests therefore
reflected a struggle between monopolistic groups and finance capital
to control the world markets (Betts, 1966). Thus, as the European
nations developed, the power of the state became synonymous with
finance capital and the penetration of Africa by the European states

was to provide a framework for capital accumulation on a world scale.

69

In the case of Britain the support for abolition of slavery
and its replacement by 'legitimate trade' was motivated by a number
of factors. Ward (1977) claims that Britain was a commercial country
and for several centuries had been trying to sell its products all
over the world. Britain believed that 'legitimate trade' was a good
thing for both producer and purchaser. Coupled with this desire
another important element was declining return on capital in Europe.
Wrigley (1977) noted in this respect that the prevailing low return
on capital in Britain made owners of capital eager to branch out
into new areas of investment. The attraction of West Africa as a
potential area of investment and a market for manufactured goods
was critical in the shift in world trade. Furthermore, during this
period there was an increasing desire in Europe, particularly
Britain, to develOp African agriculture on an extensive scale in
order to support the emerging industrial capitalist complex.

At this time Britain was experiencing an industrial revolu-
tion in science and technology. It was thought that there was a
substantial avenue for increasing production by depending on
African raw materials and market for this purpose. Thus the
Industrial Revolution brought about new economic relationships
which consequently European financial interests carried out in West
Africa. This emerging industrial revolution influenced the type of
commodities that were of of great concern at the beginning of this
legitimate trade along the Guinea coast. There was an increasing
demand by British chemical industries for palm Oil which was con-

sidered to have ingredients for producing the best lather. At the

70

same time Lancashire cotton industries were not only concerned with
cotton but also vegetable oils for lubricating the industrial
equipment (Flint, 1977). Thus it was a combination of factors,
particularly economic, that pushed British merchants into the
coastal trade in Ghana.

Following closely the dominant economic trade theory of Adam
Smith, i.e., free enterprise and non-governmental interference in or
control of trade, the British government in close association with
monopoloy capital began a systematic attempt to control the trade
with the peoples of Ghana. Through the Company of Merchants the
British government helped individual foreign entrepreneurs to carry
out trade uninhibited by competition from other European firms and
traders. Through this organization Britain regulated the trade
and at the same time made London the focal point of financial and
commercial activity. In addition, this company provided an avenue
for West African trading combines and partnerships which were
extensions of major firms in London. Through the operations of
this company other rival foreign firms were bought and British
interests gained an unquestioned foot-hold in Ghana (Swanzy, 1956;
Prestley, 1956; Daaku, 1965).

At the initial stages of the legitimate trade the British
government gave merchants encouragement to enter into plantation
agriculture. Some organizations like F. and A. Swanzy and British
Cotton Association engaged in agricultural pursuits including
cotton, coconut, timber and rubber plantations. They were not

successful because they wanted quick returns on their capital; and

71

they were not really interested in placing capital into new ventures
without security (Agbodeka, 1972). Moreover, their interests had
been in timber and mineral concessions and collection of already
established agricultural produce needed in Europe. Foreign and
government controlled agriculture collapsed, leaving the field to
peasant farmers to dominate.

The entry into extractive industries, mining of gold,
diamond and manganese, created new dimensions to the problem of
underdevelopment. In order to facilitate trade the British Crown
sought to establish political and economic jurisdiction over the
peoples of Ghana. The Bond of 1844 which marked the beginning of
political domination was essentially a trade accord between Britain
and the coastal states in exchange for protection against the
onslaught of states in the hinterland, particularly Asante. The
accord did not cede territory nor did it relinquish the political
rights to Britain, but by a series of proclamations and ordinances
Britain assumed the right of superior political dominion over the
indigenous peoples. Through their representatives they began
economic transactions relating to trade concessions with other
foreign governments as well as providing security for British
commercial interests.

In 1876 a Bill whose intent was to vest waste and unoccupied
forest lands in the British Crown was introduced. This gave the
Colonial Administration in Ghana the right to control the exploita-

tion Of mineral resources. This was clearly an attempt to

72

facilitate economic exploitation without regard to the owners of
these resources. As Kimble (1963) notes: "In the past, no
encouragement had been given for development; now, when private
enterprise had proved the value of their lands an ordinance was to
deprive them of their property" (337). This situation was not
without opposition and no doubt it provided the first major basis
for nationalist reaction on the Gold Coast (Ghana).

With the development of mining and agriculture went a
systematic exploitation of indigenous labour both from within and
outside Ghana. Kimble noted that the ever growing demand for
workers soon brought the wage earning system within the experience
of people in all parts of Ghana including the most remote villages
(41). This was an age of "labour capital." Through the Native
Administration Ordinance of 1883 and the Compulsory Labour
Ordinance of 1895, chiefs were forced under the indigenous communal
labour system to provide labour for the mines as well as public
works including railway and port construction, road building and
other projects that the government was to carry out from time to
time (see Chapter XII). The Provincial Commissioners pressured the
chiefs for labour in the mines by pointing to the financial advan-
tages and conditions for 'progress.' By 1909 the demand for labour
in the mines exceeded 5,000 men a year.

Despite the overtures of creating conditions for 'progress,‘
the conditions in the mines were far from satisfactory. The death
rate in the mines was alarming. Following an inquiry in 1924 it

was revealed that most miners suffered debilitating occupational

73

diseases including pneumonia and silicotic tuberculosis. In addi-
tion, a significant number of the rural population migrated to the
urban areas. In addition to these developments was the emergence
of an indigenous trading class. They, in competition and sometimes
in cooperation with European capital, acquired wealth and property
by exploiting local labour in the interest of private accumulation.
Boahen (1976) notes that the Cape Coast 'merchant princes'
attempted to organize monopolies in competition with European
companies. For example, the formation of the Gold Coast Native
Concessions Company, engaged in mining, employed about 200 men.
Others who did not have enough resources became agents of foreign
capital through whom mass markets for imported goods were channeled.
This alliance became the apparatus for exploitation and domination
of the indigenous economy. However, in the share of profits the
local agents received an insignificant proportion compared to the
European business interests (Rodney, 1972: 169). The extent of
this accumulation and its implications for underdevelopment has
been summarized by Kay (1975: 120). He suggested that merchant
capital through its agents and institutions bought raw materials
below the actual value of the product. These raw materials were
sold far above the actual value of the product in the metropolitan
countries. "The profit on this transaction is a direct deduction
of surplus value from productive capital (104).

At another level, merchant capital profits through charging
consumers in the underdeveloped countries prices above the actual

value of the manufactured products. This is referred to as indirect

74

exploitation. All in all this exploitation is mediated by the
merchant class and middlemen. In the operations of merchant capital
therefore, the traditional rulers, chiefs and the new trading class,
became transformed into a 'comprador' class of European capitalism
consequently draining resources out of the periphery.

What were the consequences of these developments? Without
doubt these economic activities brought the local economies force-
fully into the world capitalist system, but within the framework of
peripheral capitalism there were a number of emerging contradictory
tendencies. There came into existence externally oriented produc-
tion zones in which there were high investments in capital and
advanced technologies. Beyond the confines of these production
areas, levels of living remained stunted. Local labour was
extensively exploited for capitalist accumulation while a signifi-
cant proportion of the population became marginalized. In essence
the production structures were shifted to conform to those of
industrial Europe.

What was more significant was that the changes that occurred
in commercial activity inevitably led to changes in patterns of pro-
duction, distribution and consumption. The successful competition
of European goods led to a decline, and in some cases, a cessation
of traditional production. The dominance of Manchester textiles
and other products reduced the interests in indigenous cotton pro-
duction and cloth making. The tools and weapons produced in the
hinterland could not compete with equivalent articles imported

from Birmingham (Hodder, 1969: 42). In addition, new demands were

75

established among the people in order to make it possible to
purchase from Europe all kinds of formerly unknown manufacture. As
Burns (1927) notes:

It was the business of British interests to stimulate these

demands to encourage the natives to adopt new standards

and to increase their mateial needs and thus develop the

exchange of raw materials for manufactured goods out of

which the British merchant made his profits (23-35).
Consequently, mere luxuries like spirits, tobacco and chocolates
were converted into necessities and through them these societies
were made to depend more and more on overseas trade which they could
not control. In structural terms this era of legitimate trading
changed not only the character of the economy but it produced greater
social and economic differentiations based on wealth and property.
It altered social class relations to the extent that some classes
could exploit the others for private accumulation purposes.

The period of 'legitimate trade' was significant because of
local reactions to trading practices and against political domina-
tion. Resistance to British rule grew with intensity particularly
as regards the exercise of powers not ceded under the Bond of 1844
and the exercise of powers that amounted to 'absolute' ownership
over Ghanaian lands by the Crown of Britain. The Fanti Confederacy
Council which was originally formed as an alliance among the coastal
states to protect their interests and provide a basis for orderly
development, became the framework for initial reaction to foreign
rule and trading practices (Agbodeka, 1976). The Confederacy

Council contended that the British and other European nations

operating along the West African Coast did not have rights conferred

76

on them to engage in transactions involving transfer of property
and concessions, without reference to the law operating under
indigenous constitutions. Any such transactions amounted to
assuming preeminence under customary law over and above the
absolute title vested in the Chief as trustee of community lands.
Several petitions were sent to the British Government in London,

but the Colonial Administrator responded by arresting the leader-
ship and charging them with a "conspirational move to subvert the
rule of the Majesty the Queen of Gold Coast" (Sampson, 1969). From
then on it became clear what the British intentions in the Gold
Coast (Ghana) were. This raised in the minds of the citizenry
particularly the Chiefs' and the emerging educated class of lawyers,
teachers and traders, the questions of the legality of foreign rule.
Secondly, it reinforced the concern that had grown in the past
about the rights of the people to their own self-determination.

As a result the colonial administrator peremptorily destroyed the
organization's effectiveness.

The educated elements however began to carry forward this
initial protest movement by invoking British judicial principles in
support of their course for self-determination. What gave impetus
to their protest was the Lands Bill of 1896. Through the Aborigines
(Rights) Protection Society, the educated men sought to assert the
'natural rights of their people and their nationality.‘ The leader-
ship maintained that the initial trade arrangements between the
coastal states did not include any clauses relating to cessation

nor a treaty which would allow Britain to exercise rights of

77

deprivation, domination and exploitation of natural resources at
the expense of the people of Ghana. Under these circumstances, it
was argued that, the Lands Bill was of no legal consequence. The
leadership with the support of chiefs sent deputations to London,
and by force of legal reasoning the Lands Bill failed to become law.
The Aborigines Rights Protection Society was followed by

the National Congress of West Africa following a schism in the ranks
of the leadership and its overall ineffectiveness. The new organ-
ization dominated mainly by local lawyers like J. Casley Hayford
and J. P. Brown decided to pursue the goals of self-determination
in concert with other West African peoples subjected to this system
of colonialism (Kimble, 1963; Langley, 1973). To the leadership
the Ghanaian desire for self-determination was inextricably woven with
those other peoples in the region.* The Congress rejected the notion
that Ghana was a Dependency or a Protectorate. It stated rather
clearly that:

As to our relation with you, it is not denied by your

best constitutional lawyers that your claim on us and

ours on you is no greater than that of friends, allies

to carry on the ideals inherent in the Maclean foundation--

we are friends and not conquered tribes: we do not live

on Crown lands. For we own lands; we are free because we

have never alienated our right to be free. We are free

because the annexation of our country as a colony of the

Crown cannot give greater rights than our original con-

nection with you could justify in the eyes of inter-

national law. We were not a people without a government

when the Crown annexed our country to Great Britain, and
the annexation cannot embrace rights and privileges

 

*

This principle was to be re-echoed by Kwame Nkrumah, First
Prime Minister of Ghana on Independence Eve. He proclaimed that
the independence of Ghana is meaningless unless it is linked up
with the total liberation of Africa.

78

greater than we could ourselves have given. We have been
a free people and we desire to remain free. Let us then
become free by giving us a share in the government of our
own country (Sampson, 1969: 28).

The problem, however, was that this organization did not
carry its demands to the logical conclusion. It was willing to have
a share in the administration of the country; and in an event of
independence maintain a connection with the British Empire. Despite
the fact that it fought for constitutional reforms, and social and
economic development, it failed largely because it did not have a
mass base support. It appealed mainly to the middle class which
was imbued with western liberal philosophies. At this point it
needed a new force in the nationalist movement to make explicit the
relationship between moral and political issues and the facts of
economic exploitation.

Colonial Consolidation and the
National Strgggle 1900-1957

 

 

This phase marked the beginning of a systematic implementa-
tion of the colonial idea, i.e., the colonies as sources of raw
agricultural and mineral resources and a market for finished manu-
facturers from Britain.

Within the framework of the colonial plan a major concern
was to open up the country for foreign investment. In this respect
emphasis was placed on improving the existing communication networks.
The colonial administration did not pay attention to road construc-
tion except where there was a thriving industry in existence. For

example, roads were constructed into the East Region because palm

79

oil was in demand in Europe. In the period of legitimate trade,

the roads that existed were military routes from South to the Ashanti
hinterlands. These were roads made during the military expedition
against the Ashanti.

The growing importance of mining, cash crop production,
and timber extraction stimulated the desire for an effective trans-
portation system. The British Chamber of Commerce sought to lobby
the Colonial Office to make provisions in Colonial development
budgets for building railways into the areas of active economic
activities because of the advantages that could be brought to
British trading interests (Kimble, 1963: 28). In 1895 the merchants,
shippers and owners met with the Secretary to the Colonies on the
subject of infrastructure. The Colonial Office was unwilling to
make a public investment in what was going essentially to benefit
private business interests. Kimble reports that Chamberlain, then
Secretary of State for the Colonies, noted that if merchants were
unwilling to "invest some of their superfluous wealth in the
development of their great estate" then there was no future for
such territories (47).

By force of circumstance, however, the Colonial Government
on the Gold Coast (Ghana) was empowered by an Ordinance of 1896 to
acquire land for railway tracts and to raise loans from Britain
for the purpose of building the railway. By 1901 a railway was
built from Sekondi, a major seaport in the Western region, to the
gold mining areas at Tarkwa. In 1902, through the Ashanti Railway

Ordinance, the railway was extended to the Ashanti gold mining areas.

80

The construction pattern of the railways clearly indicated that the
main concern was with the economic future of the minerals and the
interests of British entrepreneurs (Haydon, 1970). Without doubt
the construction of the railway lowered the cost of gold production
and increased the mining of other minerals. At the same time it
encouraged considerable flow of foreign capital and increase in
imports. The period 1914 to 1936 constituted a critical period in
the development of transportation (Dickson, 1961). With additional
capital assistance from abroad and excessive domestic taxation, the
Colonial Administration expanded railway facilities by building a
link from Accra to Kumasi. A harbour built at Takoradi in 1928 and
approximately some 3,000 miles of roads built during the period
facilitated external trade and the exploitation of the resources of
the territory (see Figure 2).

In the agricultural development sphere the improvement in
transportation facilitated the production of cocoa as the major
export crop. Cocoa, first introduced in 1879, was soon to become
the major link with the external economy. Production grew from 13
tons in 1895 to 40,000 tons in 1911 (Webster and Boahen, 1972;
Kimble, 1963). This agricultural development brought significant
structural changes with the Ghanaian economy. Consequently, the
economy exhibited features of capitalist development (Kay, 1972, 10).
In conformity with the colonial idea, the economy became export-
oriented and essentially stimulated by external demand and supply
factors. In particular, it showed features of an open economy whose
production and consumption patterns were integral parts of the world

economy.

 

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82

One important development during this phase was the concern
for a constitutional framework within which the system of domination
could be carried out. This concern was complicated by the demands
of nationalist leaders at the time. They felt that it was wrong
for the Ghanaian populace to be taxed without having a voice in the
affairs of state (Kimble, Chapter XI). Both the emergent educated
men, chiefs, the citizenry at large and the press, actively cam-
paigned through delegations to London and through the mass media for
greater participation in government. These demands were no doubt
legitimate. The prevalent notion, however, was "to guide the
colonial territories to responsible self-government within the
Commonwealth" (Kimble, 1960). Whatever efforts were made in consti-
tutional development were clearly to establish a political linkage
with British Parliamentary institutions, but more importantly, to
provide a political framework for economic exploitation.

Although constitutional proposals ante-dated this period,
it was during this phase that a systematic program for elective
government began. In 1925 a constitution was introduced in which
fourteen "unofficial members including chiefs were elected to the
Legislative Council." It is important to note here also that this
constitution did not apply to Ashanti and Northern Ghana, since
these areas were administered by the Governor thorugh Provincial
Commissioners. It was under the 1946 Constitution that these terri-
tories became part of a unified colonial dominion with common
legislative and executive institutions. The 1946 Constitution,

however, went further by permitting the membership of the Legislature

83

to be dominated by locally elected members. But these constitutions
showed some weaknesses: First, chiefs continued to play a leading
role in the affairs of the colony. This was very much resented by
the educated persons as well as the 'commoner' class. Second, the
constitution gave the Governor veto powers over decisions of the
legislative process "if he thought it was in the public interest to
do so." Thus the African representatives had no control over the
executive council nor could they control policy.

The participation of the chiefs in government to the exclu-
sion of the populace had been predicated upon the concept of
indirect rule, i.e., shifting the source of power to the British
while retaining traditional social institutions with a view to using
them to penetrate the country politically. Apter (1955) sees the
concept of indirect rule in terms of political prescriptions which
it involved, prescriptions which include a belief in colonial
government through the principal Chiefs as agents; with residual
and plenary powers reserved for the colonial authorities (121-122).
The principle of indirect rule was translated into several ordinances
beginning in 1883. Under these Ordinances, Native Administration
Ordinances 1927 and Joint Provincial Council of Chiefs were
establshed. These Councils in terms of political ranking were next
to the Executive Council in importance. Nearly every major decision
relating to economic development passed through them for comments to
the Governor. Furthermore, they were used as electoral colleges to
nominate the Chiefs into the Colonial Legislature and other conciliar

bodies (Kimble, 1963; Apter, 1955; Frimpong, 1974).

84

Within this constitutional framework it was feasible to
carry out the policies Of planning and consolidation. This was
clearly reflected by the way the institutions were used to impose
taxes, legislate and appropriate public resources and labour for
public and private commercial uses. This institutional framework
did not only facilitate 'orderly development' but more significantly
it converted the chiefly group into a comprador class whose interests
largely coincided with those of the British. The trend in colonial
planning and consolidation in its political dimension was not with-
out nationalist opposition since the problem became much more
complicated by the world situation at that time.

By the middle of the twentieth century the economy of Ghana
had become heavily dependent on external factors. Internally
economic change had induced large scale migration, increasing urban
expansion, problems of unemployment and staructural inequalities.
The Colonial Administration did not act with circumspection in
dealing with the problems of price increases in urban areas, and its
wage policies were inadequate for the lower salaried skilled and
semi-skilled persons. The urban centers which became 'the melting
pot' for diverse groups were the places where the changing fortunes
of the world economy were deeply felt. With this situation a large
proportion of the population nursed deep seated grievances against
the Colonial Government which they saw to be in collusion with
foreign capital to dominate the economy and exploit the people of
their natural endowments. No doubt the control of the resources of

the country was firmly in the hands of foreign firms, and by reason

85

of the dominant economic ethic of free enterprise the Colonial
Government did little to regulate monopolies and international com-
bines operating in Ghana. The United Africa Company in alliance
with five other British firms controlled the export and import trade.
The ownership of banking and insurance institutions was in their
hands, and used these institutions to support foreign enterprise to
the exclusion of indigenous economic activities. For these and
other reasons Coleman (1965) notes that "this near-totality of
economic power exercised by a small group of European firms,
together with apparent governmental support or toleration of that
power, gave rise to a popular image of alien collusion" (81). The
concentration of both economic and political power in alien hands
reinforced the growing apprehension which earlier developments had
encouraged.

There were three classes of Ghanaians who articulated these
grievances: the intellectuals and educated men (including lawyers,
teachers and journalists) who were imbued with nationalist concerns
and were equally concerned about the adequacy of the institution of
chiefship as a modern political leadership; the group of aspiring
local entrepreneurs who felt they were denied economic opportunities
by reason of severe business regulatory measures by the Colonial
Government and the firms, and disenchanted because they were gradually
replaced or recuced in economic power by European merchant activities
in the hinterland. The broadly based group of rural migrants, school
leaves, drivers, small traders who lived mainly in the urban areas

without employment and economic opportunities for advancement.

86

Together the resentments of all these groups coincided and became
subsumed under the term economic and political nationalism.

The World Wars contributed significantly to this nationalism
since it brought to the surface all the emotional and cultural forces
generated by the colonial system. In the 19205 the cconomies of
the western industrial countries stagnated and in the 19305 their
economies had become depressed as international trade was disrupted.
During this period European nations imposed economic controls. In
addition, export duties and tariffs were imposed on goods from
primary producing colonial territories; shipping costs sky-rocketed
while large monopoly combines attempted to increase their spheres
of economic influence. Worst of all the World Wars had unleashed
inflationary pressures throughout the world.

During the period of the War the Colonial Government had
assumed direct control over most of the economic activities--
regulating transport, price controls, wage ceilings and the marketing
of export crops, like palm oil, cocoa, copra and rubber. The market-
ing boards established for these crops prices far lower than could
be met by the farmers themselves. The regulation of imports
affected domestic prices as well and thus during this period the
cloud of stagnation and depression weighed heavily on the Ghanaian
economy. As a consequence, the local population felt the situation
was a design by the foreign business community and the government to
subdue them. Following all these developments, the political and
economic structures were in turmoil, and as the dust settled, a new

dimension to nationalism appeared.

87

This nationalism, however, was given impetus by other develop-
ments including the return of Ghanian soldiers from service abroad,
the political and intellectual cross-fertilization that took place
between African leaders, Black Americans and West Indian nationalists.
Briefly, a large number of West Africans were recruited through con-
scription for military service abroad. Through this service they
became exposed to the "myth of white superiority built up by the
segregation of Europeans on their researvations where their facilities
were concealed from African view" (Webster and Boahen, 1972: 302).
These authors conclude that those European soliders who were sta-
tioned in Africa indulged in habits that Africans considered immoral,
and that "the outcome was that Africans developed a more realistic
picture of European life, of both its frailty and even debauchery
and of its highest instincts” (302). African soldiers provided an
important thrust for the nationalist cause, and they led marches and
sent petitions and were involved in organizational activities that
propelled and galvanized demands for self-determination.

Another external force that provided an added dimension to
the intellectual foundation of Ghanaian reaction to foreign domina-
tion came via Black American and West Indian and Caribbean political
thinkers and ideologies. Toward the end of the 19th century there
was a strong movement to raise the consciousness of all black people
on questions of race, political domination and the importance of
self determination. The dominant theme was that a black man could
not achieve dignity and freedom as long as others of the race

remained racially and politically dominated. As Wilmot Blyden

88

noted, "the regeneration of Africa will doubtless be the final
transforming power of her down-trodden descendants." He maintained
that

The great problem which human advancement requires to be

solved, is the formation of a civilized state within the

tropics. Until this is accomplished, it seems to be

utterly absurd to talk as we do about the progress of

mankind and the civilization of the human race (quoted

by Wilson, 1969).
These views were equally and forcefully advocated by Marchs Garvey
who had an indomitable influence on West African nationalist leaders
including Nkrumah. Garvey, for example, argued that all black
people had to unite to establish a government of their own. He
believed that there was no way to cultural, economic and political
salvation other than free and independent Africa. The primacy of
political independence was unquestioned since it was to him the only
means by which any civilization could protect itself. All these
influences could be summed up in Nkrumah's dictum: "Seek ye first
the political kingdom and all other things shall be added."

William Du Bois, who helped form the National Association
for the Advancement of Colored People (NAACP), carried cross-
fertilization forward through the Pan-African Congresses between
1919 and 1945. Throughout, these congresses called for a charter
of Human Rights for people of African descent. They provided a
framework within which the demands of the Black World were actively

kept in the international public arena (Langley, 1973; Wilson,

1969).

89

In summary these world forces in combination with internal
developments--continuing exploitation of natural resources by foreign
monopolies; absence of a systematic development programme that would
benefit the population; the haphazard nature of colonial agricultural
policies; the increasing rate Of unemployment; the elimination of
Ghanaian traders by European, Lebanese and Syrian firms and the
limitations on political participation--encouraged radical national-
ism to emerge. Before then a number of 'youth' organizations
mushroomed. The most notable was the Gold Coast Youth Conference
organized by urban educated men including Dr. J. B. Danquah.

This organization was established in response to the failure
of the previous Constitutions and the general political and economic
conditions in the country. It attempted to involve people in
general national problems. The philosophy was that the public
needed general education in civil government. The organization was
to provide that forum and prepare the populace toward self-
government.

By 1947 an attempt was made to organize political movements
in preparation for ”political self government" The United Gold
Coast Convention whose members included Danquah, Akuffo Addo, A. G.
Grant, R. S. Blay and prominent local chiefs including Nana Ofori
Atta, sought to achieve political independence "by all legitimate
and constitutional means." Their ultimate purpose was to have the
British hand over control of government to 'Chiefs and People' of
Ghana. The problem of this organization was that its leadership

consisted of lawyers, big local traders, and chiefs who entertained

90

'bourgeois' western political ideas. In this respect, Langley
(1973) noted that

they opposed liberal capitalism only insofar as it failed

to accommodate the interests of their social class;

analysis of its contradictions and the political capacity

to resolve them were either beyond them or incompatible

with their interests. They only wanted a share of the

benefits of monopoly capital (229).
The organization was concerned with economic self-help and coopera—
tion with Europe and emphasized the need for economic and industrial
independence as a necessary step to political independence. More-
over, their activities were limited to the larger urban areas. The
U.G.C.C. was not an organization of farmers, workers, petty traders
and the underprivileged (Padmore, 1954). The leadership therefore
did not appeal to the mass of the people who no doubt were
politically conscious as a result of events in the 19305. It needed
a new generation of nationalists to make explicit the real opposition
to alien rule in its exploitative political and economic dimensions.

It was at this point that Kwame Nkrumah appeared on the

political scene in Ghana. He was invited by the United Gold Coast
Convention (UGCC) to be its general secretary. Within a year he
increased the branches of this organization from two to two hundred
and nine. However, Nkrumah's political style and strategy were
clearly at variance with those of others in the organization. The
bourgeois leadership insisted on carrying out their nationalist aims
within the confines of constitutions. Nkrumah, on the other hand,

felt that other means more positive and non-violent were equally

viable (Nkrumah, 1956; Austin, 1964). Following the Anti-Inflation

91

Campaign* and the riots of 1948 in which ex-servicemen on a march
to the Governor's Castle to present petitions were killed, the
bourgeois leadership blamed Nkrumah for indirectly involving the
organization in the campaigns (Watson Commission Report, 1948).
Under the conditions, Nkrumah broke away from this group to form
his own party, the Convention Peoples Party (CPP). Its aim was to
fight economic domination and thereby establish an independent and
viable political and economic system (Austin: 130).

In 1951 the Colonial Administration introduced a new consti-
tution and laid the framework for African elective Government.
Nkrumah and the CPP won decisively and by 1957 led Ghana to political
independence. From then on until 1966 when his government was over-
thrown by a military coup d'etat, Nkrumah's political and economic
philosophies dominated economic and development planning. During
the years immediately before and immediately after independence, the
Ghanaian economy was a typical colonial economy. The British con-
tinued to dominate the key sectors of finance, economic planning and
defense. Consequently, there were severe limitations imposed on the
Nkrumah government as to what it could do. It was not until 1960
that the Nkrumah government began to pursue a somewhat 'independent'
economic strategy. The years before independence were also periods

when the Nkrumah government experienced serious political challenge.

 

*

The Anti-Inflation Campaign was organized in 1947 as a
protest by Ghanaians against foreign firms--Association of West
African Merchant5--for deliberately keeping up prices of essential
goods.

92

There were a number of regional parties offering alternative
development approaches to what Nkrumah had proposed.

The most significant of these was the National Liberation
Movement led by Dr. Busia, later to become Prime Minister in 1969.
This party was predominantly Ashanti-based, advocating a federal
system of government with increased powers for the regions.
Although the organization was based in the Ashanti Region it was
not in scope and philosophy a purely ethnic reaction to Nkrumah's
government. It was in essence a class and ideological opposition.
For the leadership of this organization apart from their ethnic
background represented 'bourgeois' and anti-Marxist-Leninist
orientations to political and economic development in Ghana. They
proposed a "democratic welfare system" as an alternative approach
to those represented by the Convention PeOples Party. The National
Liberation Movement (NLM) used the current economic situation and
ethnic rivalries to buttress essentially ideological and class con-
cerns. What might be described as "ethnic politics" in Ashanti as
well as other regions including the Volta Region in Gnana were of
much deeper ideological and class significance than most commenta-
tors on politics in Ghana would have us believe (Dowse, 1969: 25).
Prior to 1960, therefore, there were at least to competing philoso-
phies and ideologies of 'development' articulated by nationalist
leaders: Nkrumah advocated the eradication of poverty and under-
development through an overthrow of colonialism and the establish-
ment of political and economic nationalism. This may be labelled as

the "transformationist strategy." Busia and a number of Ghanaian

93

intellectuals, bureaucrats, businessmen, on the other hand,
advocated economic development within a broader world economic
system. At the same time economic development was to take account
of the limits imposed by the endowments of the country. A liberal
approach based on foreign assistance became a major part of
development strategy. This may be labelled the "gradualist
strategy." These competing ideas became quite manifest in develop-
ment strategies during the period under consideration in this
study.

In summary, this study begins with the impact of peripheral
capitalism on rural development, and then an attempt is made to
examine the political and economic strategies of nationalist govern-
ments and how these have affected the process of underdevelopment.
In short, the emphasis is to examine the differential consequences
of development policies under colonialism and nationalist govern-
ments with a view of establishing a relationship between under-
development in the rural sector and the persistence of the structural
dependency of the Ghanaian economy.

This chapter critically examined the view that African
societies experienced very little advances in their economies prior
to colonialism. The data suggest that pre-colonial societies in
Africa and in Ghana specifically made political and economic I
acvances and developed internal social differentiations based on
wealth and property. In the political domain, many of these
societies, particularly Asante Akwamu, Gonja and Anlo, had

developed state systems and state bureaucracies. In the case of

94

Asante, there were systematic designs at empire building. In the
area of trade and commerce there had developed intra-continental
trade in agricutural and mineral products like cola, pepper and
cottom, gold, beads and salt. But as the historical evidence
showed, the series of sequential changes in Western Europe affected
these developments in Africa. It was demonstrated historically
that European colonialism and commercial interests were critical
factors in Africa's underdevelopment. Moreover, the internal social
and economic processes also contributed largely to the structures
of dependency. In summary, this chapter lay the historical
foundation for the analysis of the uneven process of capitalist
development in Ghana. It also examined the ways in which the
colonial administrative processes buttressed this development and
created the conditions for nationalist reassertions that were to

lead to attempts at overcoming underdevelopment.

CHAPTER III

COLONIALISM--THE STRATEGY OF UNDERDEVELOPMENT

Underdevelopment is generally explained in terms of the
expansion of capitalism and the internal social processes that it
induces in peripheral countries. Thus process of underdevelopment
is maintained not only by colonial administrative policies but it
is also sustained by the nature of internal social class relations.
Political and economic domination is as much a manifestation of
external factors, as of internal. In a general way, therefore,
this chapter analyses some selected colonial administrative policies
as well as rural class relations particularly as these policies and
classes help to integrate the Ghanaian economy into the world
capitalist system. For this analysis the significance lies in how
these administrative policies and class relations sustain rural
underdevelopment.

In Chapter II a historical and structural overview of the
expansion of capitalism in Ghana was presented. It was also noted
that pre-colonial social classes survived into the colonial phase.
The question that remains to be addressed is how these pre-colonial
classes were used to facilitate economic exploitation of the rural

areas.

95

96

Colonial State and Rural Development

The establishment of the colonial state implied the develop-
ment of an increasing administrative capacity to regulate both
internal and external economic relationships. The colonial state
was to be an instrument for capitalist development in the dominated
area with a view to satisfying the requirements of industrial
development in Britain. Within this perspective, therefore, the
stoppage of slavery, for example, was not merely an act of humanity.
It was essentially informed by mercantile interests. The dominant
colonial idea in the late 18th and early 19th centuries in Britain
was to keep African labour in tropical areas in order to develop
agriculture on an extensive scale. Because of excessive competition
by other European nations in the field of commerce, it was felt
that tropical agricultural and rural development was the key to
British strategic dominance in Africa. This concern to develop
tropical agriculture was not to preclude the entrenched interest in
commerce since Britain had over the centuries developed its mari-
time capabilities. Consequently, the colonial state was to manifest
these interests as well as represent British administrative power.
Through the colonial state, an organized system of capitalist
development, i.e., expansion, investment and accumulation could
take place in the periphery.

Through the colonial state, economic policies which gave
the market forces freedom were pursued. But with this develop-

ment, went sharp institutionalized inequalities. Consequently,

97

the accumulation process undertaken by British interests had very
little spread effects (Myrdal, 1957). By the natural logic of
capitalist accumulation, the colonial state in Ghana also favored
groups that were by and large interested in preserving and main-
taining the social and economic systems that are the bedrocks of
colonialism.

The colonial state put into operation aspects of the
colonial idea: regarding dominated areas as a source of income,
wealth and estate. In other words, it was through the colonial
state that an entrenched institutionalized system of economic and
social connections, enforced bilateralism, was established between
Ghana and Britain. In its desire to sustain merchant capital "it
broke down the coherence of the old economic order, subjecting
production to the rationality of the market" (Kimble, 1960: 233).
This process implied a reorganization of local production to conform
with the requirements of capitalist accumulation.

The colonial state with its implementation of the colonial
idea has significant implications for rural development in Ghana.
Firstly, in a general sense it meant opening the rural sector to
outside market forces in the form of concessions trade, investment
and production. Kay's summary of the colonial model in Ghana is
particularly useful. He points out that the model peripheral
economy which the British sought to establish had the fOllowing
features: it would have an export sector firmly under the control

of British commercial and financial interests; the surplus

98

extracted from the export sector would be taxed for purposes of
supporting the colonial administrative machinery; an infrastructure
would be provided through loans floated in London. In short, these
would be a small, advanced, highly productive sector, yielding
profits which would be repatriated abroad. On the other hand,
the majority of the population would operate outside this modern
sector except in the use of their labour or their involvement in
limited economic and social transactions in the capacity of petty
commodity producers. Kay noted further that the British model
implied that

some of the people would be encouraged to produce cash

crops for export, but this would be very much a subsidi-

ary activity firmly located within the framework of

existing, pre-capitalist social and political arrange-

ments over which and through which the colonial state

would exercise power. Any surplus balances accruing to

the Colonial Government after the costs of administra-

tion, debt payments and interest charges had been met

would be spent on social welfare programs--hea1th and

education--to raise the level Of civilization (35-36).

These are clear reflections of the colonial idea that
entailed the ownership of an estate, the Chamberlain Doctrine; or
the use of native labour to secure the production of agricultural
products needed in Western Europe, the Luggard Doctrine (Burns,
1927: 16). The interest in procuring primary goods through invest-
ments and the exploitation of local resources is both historically
and sociologically important. Historically, it sets in motion the

conditioning factors in Ghana's economic development. Sociologi-

cally, it establishes the conditions of structural dependence. In

99

short it creates a pattern of development that takes place at the
inducement of foreign market forces. It also expresses particular
relations of exploitation in that while there occurs increasing
export surplus for foreign investors, the local people are deprived
of their natural resources and any significant returns on their

labour which is exploited for the purpose.

Disarticulation of Rural Production

 

At the initial stages of capitalist advance into the
Ghanaian economy the colonial state was very minimally involved
in organizing rural production. This was because of the operation
of the dominant economic ideology of the time (the idea of no
interference of the state in economic organization and competition).
Over the decades however the colonial state progressively assumed
a critical role particularly as it related to the task of making
the periphery part of the world capitalist structure. The process
of disarticulation of rural production can be broadly put into
phases. These phases are not mutually exclusive. In historical
terms these processes clearly overlapped and significantly inter-
twined.

The first phase to be discussed has to do with opening
up the country for the exploitation of the natural resources by
foreign capital. In this case the state was to play the role of
buttressing and protecting specific industrial agricultural
enclaves which were of interest to British capital. The desire

for infrastructures was paramount in the initial phase of the

100

colonial process of altering the existing rural production struc-
tures. In 1898 the Chairman of the Ashanti Goldfields Corporation
in a dispatch to the Colonial Office stated:

Our evidence assures us that the field is not only

of great richness, but that such riches exist over

a large area. . . . If the railway extension is

made so that we are able to get heavy machinery up

to our mines, and develop our property, we have

every reason to believe that the royalty we should

be enabled to earn for Government would give a hand-

some return on the mines alone, to say nothing of the

traffic we should place upon the line (Newsbury, 1971:

496).

This desire of mercantile interests was put into operation
not only through Ordinances which required the use of indigenous
labour in construction and in the mines, but it was also expressed
through taxations imposed on the local population (Kimble, 1963,
Chapter IV). In this case an administrative machinery was
established to collect taxes for raising revenue without which
'no higher degree of civilization could be attained. There was a
natural resistance by the local people to pay such taxes. This
resentment reached fever-pitch when British forces led expeditions
against the local people to enforce the rules governing taxation
in the colony.

The critical position of infrastructure in the colonial
development effort received a systematic boost in the middle of
the twentieth century. During this period, the colonial state
exercised its most direct influence on the pattern of development

through its transport policy. The expansion of railways, harbors,

and roads coincided also with the consolidation of capitalist

101

development in the rural sector. In every respect therefore the
development of railways and harbors received priority attention, and
as Governor Guggisburg noted:

Without the harbour and without the railway extension we

cannot appreciably increase our trade and without an

increase in trade we cannot hope to support the recur-

1811 cost of a better system of eduction (Wraith, 1967:

As can be seen in the transport map of Ghana (see figure 2, p.

81), the railways and later some road built by the colonial administra-
tion were directed to the areas of 'high economic return, i.e., mining
and areas of export primary production. Indeed the investment in
infrastructure was to stimulate production of the exporting kind
(Kay: 135-138).

The second phase--the agricultural development phase began
with very little colonial state involvement. But the colonial state
gradually assumed the responsibility of providing a framework for
peasant production and where necessary, it gave encouragement of
European trading interest and the use of Africans as wage labourers.
The initial impetus to any form of colonial state involvement came
about as a result of the extensive exploration of the country's
agricultural resources. It was the view then to discover economic
plants suitable for European markets. Secondly, the colonial
state sought to create a basis for agricultural experiments to be
carried out on both economic and decorative plants within tropical

and subtropical regions and thereby determine which ones would

thrive under Ghanaian conditions (CISR Handbook, 1970/71).

102

However, by 1960 a marked change from non-involvement to one of
gradual participation in the organization of agricultural production
occurred in colonial state policy. The colonial state became the
recognized instrument for agricultural policy, and through the
implementation of such a policy export agriculture emerged in the
middle of the 20th century as the basis of the Ghanaian economy.

A number of crop production policies were pursued and
efforts were directed at crops like cotton, coffee, rubber, oil
palm and later on cocoa. In the case of rubber, small experimental
units were established with the primary object of distributing
seedlings to local farmers, and by 1885 rubber became the second
export after palm oil. However, by 1910-1914 the production fell
largely because of low prices. Although production was stimulated
again in the war years, rubber as a major export crop declined
rapidly (Dickson, 153; Cox-George, 1973: 69). In the case of
coffee, export based on peasant production began in 1860 but its
success fluctuated because of prices paid. But in the middle of
the twentieth century coffee cultivation was revived with cash
inducement from the colonial administration and foreign intereSts.
At the same time a few expatriate plantations continued.

The crop that received major attention prior to the
growth and expansion of the cocoa industry was oil palm. This crop
was not only important in the diets of the local population, it was
in great demand in Europe particularly for soap making and lubricat-

ing industrial complexes. In this respect the people in the areas

103

of maximum production, Akwapim and Krobo areas, were encouraged to
cultivate and invest in the production of the crop (Metcalfe, 1962).
By 1940 palm oil export became the third leading export of the
colony. It has been noted, in this respect that between 1880 and
1900 palm Oil and palm kernel accounted for between 73 and 92
percent of total exports in value (Bervin, 1956: 73; Boahen, 1976:
91). The production of palm oil and kernel was not without its
misfortunes.

Between 1853 and 1860 production began to decline partly
because of world prices and partly because of the implementation of
the P011 Tax Ordinance of 1853. The first major setback for this
industry occurred following a collective hold-up of supplies by
people of the Krobo area in the Eastern Region. The people of
Krobo had resisted the P011 Tax and consequently had rebelled
against the colonial government. After the British force quelled
the rebellion the farmers and rural residents were heavily fined.
However, Swanzy (1956) notes that the collection of the fine was
farmed out to Swanzy's who undertook to pay the Government in cash
and to recover the fine in palm oil from the Krobos; the quantity of
oil due was fixed by contract at a total of 195,000 gallons, or
one-third of the total exports for 1857. The point here is that it
gave virtual monopoly for British foreign interests. During this
period prices fell drastically and with the hold-up which lasted
for many years, the changing production relations became character-
ized by protests against economic exploitation and distortion of the

production structures.

104

By 1902 a dispatch from the then Governor Nathan to
Chamberlain the Secretary of State for the Colonies, expressed
concern about the decline in oil palm production (Newsbury, 1971:
566-585). As a result, the Colonial Government proposed that farmers
who owned oil palm farms should form themselves into cooperatives,
and through these organizations, they could invest in machinery and
buildings for a cooperative oil processing factory. It was felt
that a factory would stimulate local production and thereby revive
the industry (Kay, 215). The factory was to have a European manager
and engineer to ensure the maintenance of equipment and to regulate
supplies and sale of fruit in order to ensure all cooperators
received fair treatment. To buttress this approach the chiefs of
the areas of palm production, particularly the Krobo, passed local
by-laws in order to support an active export production. The by-
laws stipulated amOng other things that the destruction of palm
trees for the purpose of growing some other crop was unlawful, the
only exception being cases where the climatic conditions were
unfavorable. It became Obligatory for producers to trim their trees
and at any time a palm tree was felled, it had to be replaced by an
improved one from the Government's nursery (Gold Coast Annual Report,
1912).

An alternative solution was proposed where local farmers
could not put into operation the colonial policy because of financial
problems. Government was to encourage private foreign firms to

establish such factories. As a consequence, the Forest Ordinance

105

Bill of 1913 included a section that provided Opportunities for
expatriate firms to have concessiOns in areas of palm production
over 21 years. A number of foreign firms, including Lever Brothers,
showedauiinterest. This firm proposed to establish a central factory
and also invest in transporting the crop from production zones to
the factory. In view of the heavy capital outlay involved Lever
Brothers asked for monopoly, which meant the exclusion of other
competitors for 21 years. Although the Colonial Government was
willing to support this industry, particularly as it was considered
"the next best product--if not better than cocoa," the price to
be paid was too heavy (Metcalfe, 1964: 200). By the middle of the
century cocoa production had pushed out oil palm production and
other potential exports crops to secondary positions.
The efforts to protect the cocoa industry marked the

third phase in the disarticulation process. The colonial policy
was best summed up by Guggisburg (1927) who maintained that

it is practically impossible to foresee the day when the

Gold Coast will not be at the head of the list of cocoa

producing countries of the world . . . it is our duty to

safeguard our staple industry in every way possible (8).
But the real concern was to maximize trade by encouraging local
production. The Colonial Government was aware that, on the world
market, cocoa had a comparative advantage--a theory that had provided
the initial justification for capitalist trade. The efforts to
encourage production began at the beginning of the twentieth century

when the Colonial Government established a marketing scheme for

both cocoa and coffee. The producers were given cash inducements

106

to produce or were given favorable prices. In the first decade of
the century European merchants seized the initiative for purchasing
the crop. At that time, their marketing practices which put farmers
at a disadvantage had begun (Kimble, 1963: 34).

The Colonial Administration through its Department of
Agriculture attempted to introduce improved techniques of production
and disease control. A Produce Inspection Unit within the department
focused on quality produce and price bonuses. But these efforts were
essentially limited. It was the Ghanaian peasant farmers who carried
out most of the economic activities related to the industry, and who
took "the risks and made substantial investments of time and money"
to make cocoa a thriving industry (Hill, 1963). The revolution in
agriculture was therefore achieved through a spirit of capitalization
of indigenous resources both natural and human. Agriculture became
the largest absorber of labour services of the economy. Szeresaewski
(1965) estimated that in 1911 cocoa cropping and investment alone
absorbed something like 37 million labour days (57). In essence new
levels of production were achieved not through the efforts of the
colonial administration but through an increase in the flow of
labour services. Again Szereszewski further maintains that

cocoa production (cropping) was a relatively capital-
intensive and natural resources intensive activity, but
the formation of cocoa capital was simply the capitali-
zation of current local labour (75).
The result of this capitalization is reflected in the table below.

Cocao production in 1920 accounted for 83 percent of total exports

and in 1927 and 1928 export production was in the region of the

107

1920 level. Table 3.1 shows that throughout the 19205 and 19305
export cocoa constituted more than half of the export receipts.

The increases in cocoa production were in part effected by
world demand and increases in cocoa incomes for farmers. Consequently,
during this period external trade became the most important factor
inducing economic growth in Ghana. There was visible balance of
trade and high level capital formation (Szereszewski, 66).

Despite this development the Ghanaian economy achieved
within the world economy an integrated status based on the relation-
ship between rural economic production, foreign trade and investments,
and colonial government support. Indeed this dependence on one
export crop was of great concern to the Colonial Administration.

The fear was entertained that any disruptions in the world economy
were likely to create economic problems for the country. Moreover

an economy limited to sepcializing in the production

of a few primary products for export is, by definition

of economic independence here used, highly dependent.

Loss of markets can be catastrophic and sharp falls in

the price of exports only a little less so. The national

rate of grwoth will be no higher than the rate of growth

in export receipts (Green and Siedman, 1968: 79).

Unless there existed a favorable price for the product
(a situation which was beyond the control of government) there was
no real guarantee for stable and orderly “colonial development."

In very simplistic terms, if cocoa prices were high there was
prosperity; if they were low, depression; and the prices of the

other items responded accordingly (Poleman, 1961: 123). It was

within this purview that the report of the Government statistician

108

TABLE 3.l.--Cocoa Exports.

 

 

Volume Value As % of Total
(000 tons beans) (E0005) Value Of Exports
1900 0.5 27 4
1905 5.1 187 16
1910 23.0 866 35
1915 77.3 3,657 64
1920 124.8 10,056 83
1925 218.1 8,222 80
1927 210.0 11,727 84
1928 225.1 11,229 83
1930 190.6 6,970 71
1935 268.9 5,204 56
1937 236.2 9,989 63
1940 223.9 4,495 33
1945 232.2 7,144 50
1948 214.3 42,166 78
1949 263.6 34,019 71
1950 267.4 54,604 72
1954 214.1 84,599 76
1955 204.9 65,559 60
1956 234.4 51,062 61
1957 260.2 50,873 57
1958 197.3 62,318 61
1959 250.2 68,779 63
1960 302.8 66,434 60

 

SOURCE: Kay, 1972: 334-367.

109

pointed out that an economy so dependent on one major crop risked
dangers in terms of foreign exchange earnings and internal capital
formation for financing development (Report: Government Statisti-
cian, Accra, 1952). Put differently, the growth rate of the economy
is largely predicated upon exports as well as local demand for
imports.

This situation was serious enough to warrant Government
attention to diversifying agricultural production. In a sessional
address Guggisburg stated:

We have nearly all our eggs in one basket. The cocoa

baskets are full--what about the other baskets. Where

are the other products to fill those baskets--if anything

goes wrong with the cocoa crop or cocoa market

(Legislative Council Debates, 1927-1928: 7).
Between 1919 and 1927 considerable effort was therefore made to
diversify agriculture. This included the development of other
cash and food crops that could be as equally renumerative as cocoa
in the future. Attempts were made to revive oil palm production
(Kay, 200-202). In addition sisal production was started in the
Accra Plains and groundnut production was begun in the Northern
regions. Considerable attention was also to be given to cotton,
cola and shea nut, coconuts, lime and rice production. All these
agricultural developments were to be financed by a special expendi-
ture from the colonial treasury. This program was further
faciliated by the passing of the Colonial development and Welfare

Act of 1929. This act made it possible for the colonies including

Ghana to receive grants and loans for economic, essentially

110

agricultural, development. In 1945 a similar grant was made
available and for her development, Ghana received loans totalling
3 million pounds (Ayadele et. al., 1971: 162).

The efforts at agricultural diversification were frustrated
by the preference shown for the cocoa crop by local producers. It
was therefore a predominant view among agricultural officers that
the diversification program was not fully realized because the
average farmer, instead of being as formerly a labourer himself,
had now become an employer of labour (Sessional Paper, No. IV,
1924-1925, para. 8). The efforts were further frustrated by the
Swollen Shoot disease which had attacked the cocoa trees. Out of
fear that the industry might be destroyed, and cause a collapse of
the colonial economy, the colonial agricultural officers naturally
focused their attention on its preservation. First an attempt was
made to control the spread of the disease by discouraging further
extensions of cocoa farms while sanitary measures were taken to
maintain existing farms. The colonial administration proposed
to institute punitive measures against those who would ignore
government regulations (Legislative Council Debates, 1916-1917:
82-91). The Law concerning this issue was moribund at birth
because the nature of indigenous cocoa production could not lend
itself to full supervision by the colonial agricultural staff.

The second approach to the problems of the cocoa industry was in
the policy of cutting out diseased cocoa trees. This policy was

based on the evidence then available which maintained:

111

There are some 400 million cocoa trees in the Gold Coast

and it is estimated that nearly 50 million of them are

at present infested. Competent authorities estimate that

the present rate of spread is about 15 million trees a year

and that, if unchecked, the cocoa industry will have

practically disappeared in 20 years (Report: Commission

of Enquiry, 1948, para. 263).
The solution available to the Government was one of eliminating
diseased trees. Accordingly, the Colonial Department of Agriculture
was authorized to cut out diseased trees and, where owners refused
to cooperate, the officers had the authorityixicarry out the policy
without their consent. The approach effected great resentment
among producers. But the cutting out policy did not stop the
spread of the disease. Moreover, there were a number of allegations
prevalent among farmers and the general population as to the inten-
tions of the Colonial Government. It was alleged that Britain
intended to sell the country to the United States but wished to
destroy the economic viability of the country in order to avoid
subsequent competition. Furthermore, it was alleged that the
foreign monopolies including the United Africa Company (UAC), had
begun large plantations in the Far East or in East Africa and
therefore were anxious to reduce the West African production
(Watson Commission, 1948: para. 268). These allegations added
more weight to the already heightened concern of exploitation and
domination by foreigners. This situation, in combination with

other factors, had created a politically explosive atmosphere for

nationalists to exploit to advantage.

112

While the policy of cutting out diseased cocoa trees was
being pursued the Colonial Government established a West African
Cocoa Research Institute to carry out investigations into diseases
of cocoa and soil fertility; and surveys of cocoa farms and
agricultural practices with a view of increasing the yield and life
of cocoa trees. In addition, the research facility was expected
to carry out experiments in order to develop new crop varieties.
Although its scientific research did not result in the elimination
of the disease, it did provide a basis for increases in production
recorded in later years. For example, production increased from
250,000 tons in 1956 to 500,000 tons in 1965. Consequently, cocoa
production and income remained the basis of economic prosperity
during the colonial and post-colonial periods.

Colonial Agricultural Extension: A Continuation
of the Disarticulation Process

Agricultural extension and farmer education started with
the work of Danish, mainly Basel Missionaries, in the Akwapim and
and Krobo areas of the Eastern Region. In 1843, the Basel
Missionaries in addition to "converting" the local people to the
Christian faith began experiments not only with cash crOps but
they also started farmer oriented extension education. This they
did through demonstrations and the involvement of local people in
their experiments. In this respect La Anyane (1964) notes that

in 1843 the Basel Mission began its second invasion of
the Gold Coast and were sponsored by the Danish Govern-

ment. This association brought them into close contact
with efforts by the Danes to introduce agriculture of an

113

exporting character in the Gold Coast. It was they who
inherited the plantations started by the Danes at the
foothills in the neighborhood of Dedowa. They inherited
something more which became of immediate benefit to
Akwapian and Krobo, and later the whole country. They
inherited the spirit to encourage local agricultural
development by example and demonstration and by experi-
menting with new crops (30-63).
Their efforts could therefore be said to have laid the basis for
plantation agriculture as well as a framework for an agricultural
extension service in Ghana.

In 1890, however, the British Colonial Government established
the Aburi Botanical Garden with the main object of exploring agri-
cultural resources of the country as well as teaching scientific
agriculture. This establishment up to 1955 served as the center
for agricultural policy-making and implementation. In the area
of farmer education, this Garden established demonstration farms
in order to introduce new agricultural practices to farmers willing
to adopt "new ideas." Following this, it was the Colonial Govern—
ment's policy to incorporate agricultural education with the local
adminsitrative structure. In response to this policy a number of
local authorities awarded scholarships to a number of young men
to go to agricultural schools to train as so-called "Native
Travelling Instructors." These instructors worked with the local
farmers in both production marketing and distribution of crops.

In addition they focused on cooperative questions because the

dominant view was that Ghanaian agriculture could only be sustained

by organizing the peasants into cooperatives.

114

Another strategy of farmer oriented education was based on
ideas of vocational agriculture. Consequently, it became almost
obligatory for all schools and local administrations to undertake
specific programs related to agricultural education. For example,
under the general direction of the Department of Agriculture, all
boarding schools in the country, whether Government owned for
Mission controlled, had to establish a unit deomonstration farm
from which techniques of modern agriculture were to be taught.
Along with this policy the Colonial Government regularly organized
agricultural shows and campaigns in order to draw attention to the
problems of the rural sector and also to the ways by which these

problems could be tackled.

Cash Crop Extension
The teaching of scientific agriculture focused in its

essentials on production of cash crops including cotton, oil palm
and cocoa. In 1914, for example, the increases recorded in develop-
ment expenditure were meant to provide special instruction in cocoa
cultivation (LaAnyane, 1963: 27-29). The Department of Agriculture
emphasized cooperative organizational questions especially related
to marketing and the quality of produce. As a result, most of the
activities of the Native Travelling Instructors were centered on
organizing cooperative marketing schemes for cocoa farmers. One of
the Travelling Instructors described the nature of the work in the

following terms:

115

We travelled several miles on foot to the villages in

the cocoa belt only to find them deserted. We lacked

equipments for demonstrating and introducing new farm-

ing practices. The only few reliable farmers we had

to work with were anxious for results. We did what we

could under the circumstances (Interview with Mate

Kole, 1973).
In addition to cooperative question, extension activity focused
on quality produce. In this case, the Department of Agriculture
established a produce inspection unit whose functions dealt with
the quality of all export crops. Later on, a Cocoa Division was
established to undertake the distribution of new cocoa seedlings
from the Government's experiment stations, and this unit also
carried out demonstration spraying of cocoa farms. When the policy
of seeding diseased cocoa trees was put into effect, its staff was

responsible for implementing the program.

Food Crop Extension

In the case of food crop development, extension work was an
incidental activity especially as cocoa farms were expanded at the
expense of food production. The efforts were started by the
Department of Agriculture which became frustrated by food imports
and constant dumping of cheap food, including rice from the Far
East (Dickson, 1969). Despite the increases in food imports during
the colonial years, domestic demand was not fully satisfied. In
1911, for example, it was noted in the annual report on agriculture
that there was severe famine in some parts of the country because
of the apparent neglect of domestic food production (Annual Report,

1911). In 1912 the Native Travelling Instructor for the Mid-Volta

116

Agricultural area reported in a dispatch to the Provincial
Commissioner in the Eastern Region that the corn and cassaca which
formed the principal article of food were already scarce, and, had
it not been for the supplies from the 'Krobo Plantations' and
markets, these people could not live (Gold Coast Annual Report,
1912: 3). As a result the Director exhorted farmers to pay attention
to food crop cultivation so as to reduce food imports and rapid
increases in food prices. At this point there was no organized
extension program within the Department of Agriculture for the
express purpose of encouraging food production.

The food situation did not change in any significant way.
Between the 19205 and the 19305, imports, particularly food items,
rose sharply without reducing the inflation in urban food markets.
By 1948 and 1949 food prices contributed a 45 percent increase in
the overall consumer price index. Between 1950 and 1951 there was
a further 25 percent increase in the index (Johnston, 1963: 5-6).
A report of the Department of Agriculture indicated that within
four years, imports of wheat flour, which provided a quarter of
urban supplies, rose from 5,053 tons valued in pounds at tGl73,000
in 1946 to 21,387 tons valued at tGl72,4OO in 1950. In the case
of rice and maize 10,000 tons and 23,000 tons respectively were
imported, and that excluded 1,170 tons which crossed the Aflao
border from Togo. Even then, the report argued it was felt that
some 70,000 tons of cereal equivalents were still needed to feed

the population (Annual Report, 1949-1950).

117

This situation worsened in 1950 and 1951 when maize crop
production fell by about 50 percent as a result of an attack by a
virulent epidemic maize rust. It was clear then that if nothing was
done to solve the food problem, the country was going to face food
shortages and greatly inflated prices (Annual Report, 1949-1950).

Clearly the Colonial Department of Agriculture was concerned
with "ensuring with the existing systems of agriculture efficient
distribution, processing and maximum production of food crops."

In response to the situation, the Department appointed in 1949 a
food production Connfissioner whose function was mainly to coordinate
an extension campaign in order to ensure the country's self-suffi-
ciency in food stuffs. In addition, twenty-five Agricultural
Committees were formed with local farmer representatives and chiefs.
It was the duty of these committees to appoint and direct "Food
Advisors" who were to maintain liaison with farmers through organiz—
ing demonstrations and extension education. To accelerate food
production, there was to be mass propaganda in the villages and
towns as well as subsidies from Government.

From 1949 to 1957 food crop extension was based on these
food advisors. However, attempts were made to develop extension
programs related to production of maize. In 1956, for example,
improved varieties of maize-~Mexican varieties--were distributed
to farmers in Ashanti as well as in the coastal savannah. The
Kpong Agricultural Research Station was also experimenting with

upland rice cultivation and holding farmer demonstration programs.

118

Although 70 percent of all those in the agriculture sector were
food farmers, the Department of Agriculture did very little by way
of a systematic approach to food crop extension work. Since the
emphasis was on cash crop production, the imbalance in rural

production reflected the disarticulation process.

Fertilizer Extension

Fertilizer was first imported into Ghana in the 19405, but
up to 1961 most of the fertilizers went to experiment stations.

The reason for this was that at the early stages of introducing new
inputs, it was wise to remain cautious when making recommendations
to farmers. Moreover it was difficult to estimate the true value

of fertilizers, and it was not feasible to lay down general rates

of application because of wide variations in responses from the
experiment sites (Nye, 1953: 266). Between 1955 and 1957 organized
distribution to farmers began in Ejura in Ashanti, Navrongo,
Zuarengu and Bawku in Northern Ghana. The scheme was only explora-
tory.

One reason why fertilizer extension did not become a crucial
part of agricultural development during the colonial period was to
be seen in the existing cultural practices of local farmers. The
use of organic manure is a widespread technique among local farmers
for increasing agricultural output. Based on experimental work in
Northern Ghana, it was estimated that the average yields of manured
farms were fifty percent greater than unmanured ones (Lynn, 1937: 4).

Consequently, it was only in 1961 that the successor nationalist

119

government proceeded with fertilizer application on any large scale.
In that year imports reached 2,000 tons (Haensel, 1967). And with
the assistance of F.A.O., a systematic distribution and use of
fertilizer was begun.
Mechanical and Animal
Cultivation Extension

The introduction of tractor power into Ghanaian agriculture
did not begin until the 19405. It was initially limited to the
savannah areas in the Eastern Region. But most of the mechanical
cultivation during this period was at the Kpong Research Station.
The Department of Agriculture felt that this research facility could
carry out investigations into the use of tractors to transform the
Accra Plains into a vast agricultural area. The Colonial Government
did not introduce mechanical power on a large scale for one main
reason: the alternative Offered by bullock plowing. The phenomenal
success of they system of cultivation was not lost on the Officials
Of the Deparmtent of Agriculture. Its introduction in the 19305
in Northern Ghana particularly in the South Mamprussi area showed
significant results. It was discovered that a man and his wife
using the bullock plow could cultivate twelve acres. In every
respect that amounted to six times what an average farmer and his
wife could do if they used the hoe (Amin, 1974: 4). On the basis
of this success a Kusasi Agricultural Development Cooperation

Society was formed, which granted loans for the purchase of bullocks

and plows.

120

It was therefore not until the 19605 that a rapid mechaniza-
tion of agriculture began. In this process agricultural development
based on animal power was shifted to secondary position if not

altogether eliminated in most areas.

Financing Colonial Agricultural Development

 

The analysis in this section focuses on public investment
in the productive sector, particularly agricultural development,
during the colonial period. The concern is to determine the extent
to which such public investments have sustained the disarticulation.

The second decade of the twentieth century saw within the
Colonial Office in Britain, a growing interest in the establishment
of a central coordinating unit to direct development in the colonies.
Consequently, in the 19205 a committee was set up to advise the
British Crown on matters related to colonial planning. This com-
mittee also acted as the instrument through which a balance was
sought between British commercial interests and the demands of
colonized peoples. It was within this context that economic plan-
ning began in Ghana.

The first development plan was introduced in 1920 under the
governorship of Frederick Guggisburg. The Plan sought to increase
trade and to improve the standard of living of the people.
Basically, it was to start what Guggisburg referred to as "our
great vision of those things which are directly essential to the

progress ofour people" (Legislative Council Debates, 1919-1920: 5).

121

Writing on the Guggisburg Plan, Greenstreet (1964) accepts this
line of reasoning. He maintains that

The plan was drawn up at a time of growing economic

prosperity--a prosperity that the commercial organiza-

tions and cocoa farmers had not witnessed to such an

extent before--when demands were vocal for the initia-

tion of much needed public works. Further, with the

cessation of hostilities, optimism prevailed.

Guggisburg, it appears, was influenced by the post-

war mood: he returned from Europe as Governor with

considerable zeal not only to develop trade but also

to improve the standard of living of the people (21).
Greenstreet concedes that the most dominant factor was the changing
needs of the British economic system. In any case Guggisburg could
hardly ignore the interests of British Merchants since a substantial
part of the investment was to come from that source. In fact
seventeen percent of planned expenditure was provided by British
Merchants (Ewusie, 1973: 19). Table 3.2 shows the distribution of
public expenditure by sectors in the Guggisburg plan. No doubt
there was a clear preference for transportation and infrastructures
generally. The real justification was that the rate of return on
such an investment would be quite great if viewed in terms of
increased export production, mainly cocoa exports and mineral
extraction. In any case, Guggisburg was responding to demands of
British interests in enclaves in the heartland of Ghana. In this
respect Wraith maintains that there were several motives that
activated Guggisburg's interest in colonial planning, the most
dominant being a belief in the British Empire and a pride of being

an imperialist (2). The plan therefore was meant to preserve a

framework in which the local people "could develop at their own

122

TABLE 3.2.--Guggisburg Ten-Year Development Plan 1920-1930.

 

Total Expenditure for

 

1920-1930

Harbour 2,000
Railways 14,581
Roads 1,000
Water Supplies 1,790
Drainage 1,350
Hydroelectric Works 2,000
Public Buildings 1,100
Town Improvments 500
Telegraph and Telephone 90
Maps, Political and Industrial 200
TOTAL 24,611

 

Source: Ten Year Development Plan, Government Printer Accra.

pace, in which expatriate commercial enterprise could work in
conditions of security" (99: see also Greenstreet, 26). Table 3.3
shows in a specific way, however, that allocations in agriculture
reflected the same basic interests. The preservation of cocoa
production through plant sanitation remained a major concern, and
there were also attempts to give impetus to sisal and copra produc-
tion as an alternative crop in the savannah. Rice production was

to be started in Northern Ghana and the Accra Plains in order to

123

TABLE 3.3.--Anticipated and Actual Expenditure on Agriculture
and Forestry tOOO.

 

 

Anticipated Actual

Sisal Plantation 47.8 47.8
Copra Development 31.6 16.3
Firewood Reserve (Achimota) 17.0 5.6
Rice Development 5.3 5.3
Plant Sanitation 100.0 51.5
Forest Reserve Survey 20.0 9.1
Cotton Development ‘_§QLQ légg
TOTAL 251.7 150.6

 

Source: Kay, 200.

provide an economic base for these areas. On the whole however,
agricultural investment was fundamentally to make Ghana an efficient
producer of primary products needed by British industrial complexes.
After the Guggisburg Plan, no systematic development plan
was introduced until 1946, mainly becase of the disruptions brought
about by the Second World War. The 1946 Plan did not alter the
priorities in any significant way, and as Table 3.4 indicates, the
pattern set in the previous development plan was closely followed.
Table 3.4 clearly indicates that agricultural development was given
some attention: 5.28 percent of the proposed expenditure. In this

agricultural effort, however, attention was directed at research

124

TABLE 3.4.--The Ten-Year Plans: 1945-1946 Proposed Expenditure.

 

 

 

Gold Coast
Developmental Categoriés
E000 %

1. Rural and Urban Water Supplies 1,721 15.13

2. Agriculture 600 5.28

3. Forestry 28 0.25

4. Veterinary

5. Fisheries 120 1.07

6. Medical 1,907 16.77

7. Education, including 2,086 18.34

training schemes

8. Roads 800 7.03
9. Harbours and Marine 150 1.32
10. Telecommunications 450 3.96
11. Electricity 528 4.64
12. Building Construction 1,725 15.17
13. Social Welfare 50 0.44
14. CO-operation
15. Surveys including geographical 5 0.04
16. Broadcasting 100 0.88
17. Development officers:

Additional staff

18. Secondary Industries
19. Local Development 1,000 8.79
20. Loan Charges (interests, etc.) 102 0.89
21. Miscellaneous ______ ______

TOTAL 11,372 100.0

 

Source: Ghana National Archives Adm. 5/4/56.

125

and control of the Swollen Shoot disease that was affecting the
cocoa industry. Furthermore, government continued efforts at
developing alternative crops and livestock and large-scale cattle
raising. Agricultural activities were in general extensions of
previous colonial interests of the British economy (Greenstreet,
1967: 19).

In 1951 a new development plan was introduced. This plan
sought to emphasize the critical role of agriculture in the develop-
ment process. Accordingly it noted that

the Gold Coast (Ghana) is predominantly an agricultural
country and it is on its agricultural industry that its
economy is mainly based. The importance of fostering
and improving all branches cannot be over-estimated

and agriculture, therefore, commands a prominent place
in the Development Plan (Development Plan, 1951: 4).

Despite these intentions Table 3.5 shows that the sectors

that benefited most were communications and social services.

TABLE 3.5.--Development Plan, 1951.

 

 

Sectors %
Economic and Productive Services 16.9
Communications 35.3
Social Services 33.1
Common Services 1§;1_
TOTAL 100.0

 

Source: Development Plan Government Printer Accra, 1951.

126

A more specific breakdown, as shown in Table 3.6 indicates that
agriculture received about five percent of development expenditure
allocated to economic and productive services. Overall it ranked
seventh in the order or priorities in the Plan. When the allocations
are broken down to sub-sectors within agriculture, as shown in Table
3.7, it becomes clear that the interest remained concentrated on
export production. Thus the past development trend continued in the
agricultural sector during the period of 'terminal colonialism'
(Kay). During the second phase of plan implementation, attention
began to be focused on other aspects of agricultural development.
As Table 3.8 indicates, agriculture extension, accommodation for
extension staff, fertilizer extension and crop processing began to
assume significance. It was during this phase that an embryonic
extension service organization was begun.

It has to be recognized however, that the emphasis on
extension activity did not mean a structural shift in existing
production patterns. In short, the colonial economic structure

continued to influence development planning and implementation.

Colonialism and Class Relations
The inequalities that were inherent in colonial development
planning were forcefully reflected in the nature of rural social
class relations. The discussion in this section focuses mainly on
the ways in which the pre-colonial social classes which survived

into the colonial phase were used in the interest of external

127

TABLE 3.6.--The 1951 Plan: Financial Allocations.

 

 

 

Plan Sections and Items Plan $023]
Section A

Economic and Productivity Services 12,444 16.82

1. Agriculture 3,650 4.93

2. Veterinary 167 0.22

3 Forestry 179 0.24

4. Fisheries 57 0.08

5. Commerce and Industry 3,410 4.61

6. Mines 65 0.09

7. Geological Survey 41 0.06

8. CO-Operative 70 1.00

9. Electricity 743 1.00

10. Water Supplies 3,500 4.73

11. Survey 53 0.07

12. Meterology 9 0.01

13. Local Development Committee 500 0.69

 

Source: The 1951 Development Plan Government Printer Accra.

128

._N .Q .mmmp .xm>e:m Orsocoom ammou upou ”mueaom

Ill

 

oo~.~mo.m ooo.~mp.m 4<HOH
“cosmopm>mo Pecaupzuwem< ewspo
ooo.mw ooo.mm¢ new xgocwcumz .mumom acumen
ooo.omp coo.pmw cowumpm—mamgmm mouou
cowuoauoem mpmom
ooo.eao.P ooo.oam.p seems at acasamasefi Lac aseamam
newccmpa
oom.mo¢ ooo.~mw camp use comum>emmcoo Pwom
ooo.wpm ooo.mmm acumznca mouoo
oo~._oo ooo.mom meaeuaem PaL=BP=u_Lm<
mmm_ .omo um_m page»
ou wcauwucmaxm pumnocm

 

.mesupauwem< co meapwucmaxm acmeaopm>moii.m.m m4m<p

129

TABLE 3.8.--Extension Projects.

 

 

Project Estimated %

Mechanical Cultivation Extension EG150,000 21%
CrOp Processing Extension 75,000 10%
Mixed Farming Extension 45,000 %
Fertilizer Extension 100,000 14%
Disease and Pest Control Extension 25,000 4%
Oil Palm Control Extension 35,000 %
Coconut Control Extension 15,000 %
Coffee Control Extension 40,000 6%
Banana Control Extension 15,000 2%
Small Livestock Control Extension 35,000 5%
General Control Extension 75,000 10%
Accommodation Extension Staff 106,000 15%
TOTAL G716,000 100%

 

Source: Department of Agriculture, Ghana Development Plan, Second
Phase, 1956-1961.

capital. In addition an attempt is made to show how this internal

class structure is linked to rural inequalities and poverty.

130

Hereditary Upper Class and
Changing Class Relations

There is a fundamental assumption to be made: the pre-
colonial classes were not totally destroyed by the dominant mode-
capitalism during the colonial phase of Ghana's development.
Rather, these classes which survived were used by the colonial
administrations to increase surplus extraction and the hereditary
upper class constituted the most convenient instrument for that
process.

The attitude among colonial officers was that to achieve
"orderly progress" and economic development the chiefly class
needed to be recognized and given part of the responsibility of
maintaining law and order. Through the system of indirect rule
the chiefs became part of the colonial structure.

As a consequence of this involvement and the interference
of the colonial administration in local affairs, the basis of
chiefly legitimacy was eroded. The chiefs became more and more
dependent on the colonial authorities for survival, and at the same
time grew scornful of the basis of their power and authority
(Busia, 1968: 105). The chiefs also enforced laws which were not
in the general interests of their subjects, and in fact, became
instruments of domination and exploitation. This situation created
a source of irritation among the citizenry who Often times insti-
tuted actions to remove them from office. A significant number of

these actions on the part of the citizenry stemmed from the ways

131

in which the traditional upper class alienated community property,
especially land.

With the opportunities created by capitalist enterprise
and under pressure from both colonial and foreign monopoly
interests, large tracts of valuable land were alienated or given
away by the chiefs as concessions. In their dealings with agents
of foreign monopoly interests, who were seeking concessions in
land, mineral and natural resources the chiefs were not often
guided by the principles of customary tenure, and did not act in
accordance with the traditional principle of trusteeship of
community property. Overwhelmed by their desire to accumulate
wealth they granted concessions which amounted to nothing compared
to the resources that were appropriated by the foreign companies.
An example of this is seen in the concession given to the Ashante
Goldfield's Corporation in 1897. In the concession agreement the
land was leased for ninety years starting from 1899. A commuted
royalty of five hundred pounds was to be paid in the first five
years after which a royalty of five percent was to be paid on
the gross value of all gold, other metals and precious stones
mined in the area. But such royalty may be, from time to
time, commuted for any one or more years from such annual sum as
may be agreed upon between the governor and the company.

Apart from this limitation all royalties were paid to the
colonial treasurer on behalf of the person recognized by the

governor to be head chief or king of Bekwai at the time

132

(Ofosu-Appiah, 1977). It is evident from the foregoing that both
the colonial administration and the company acted to conceal the
worth of gold and other resources taken out of the country.
Moreover, the monies that chiefs received from these concessions
were spent for purposes from which the population derived very
little benefit (Colonial Report, 1912). These circumstances
generated considerable conflict between the chiefs, particularly
those who took seats in the legislative councils and other
conciliar bodies established by the colonial government and the
citizenry. Between the four decades of 1890 to 1929, of all
recorded conflicts, between 23 percent and 33.3 percent were land
disputes (Johnson, 1972: 179). The concentration of the disputes
was in the first and fourth decades, both of which accounted for
33.3 percent. The first decade was clearly a period in which the
creation and exploitation of Goldfield's rush for concessions
took place.

During this period there was the need to open up the
hinterland where these concessions and extractive activities were
being carried out. In this respect the colonial administration
sought to recruit cheap labour to the chief, into one that
functioned to facilitate private industrial and agricultural
enterprise. Under the Labour Acts of 1935, provincial commissioners
were given the power to require native authorities to provide
labour for community purposes. In this case all able-bodied men

had to provide twenty-four days of free labour a year, and since

133

the prevalent notion was that African labour was 'a crude manpower'
which could be suitably remunerated by low wages in the interest
of 'useful' economic development, a program of recruitment of
labour from all areas of the country, particularly the northern
regions, became the common practice. The chiefs played a major
role in this labour recruitment and they were said to have used
coercion in the process (Kimble, 1963). What was significant
however, was that the system of labour recruitment for the first
time gave the local labourer the taste of wage labour in capitalist
enterprise. What this reflected was a change in the "feudal type
of relation" that existed in pre-colonial times and the emergence
of a "rural proletariat." It also reflected the fact that capital-
ist commercialization of land was to bring about a change in the
rural class structure. Furthermore, the process is a way of
furthering the alienation of the rural people from the major source
of production, land. This was obviously at variance with what
the situation was in the pre-colonial era. During that period
there was at least some access to the land for personal use
although the traditional upper class continued to exercise control.
What was important during this period, however, was the
fact that the chiefs' position in society had become anomalous.
They had become instruments of colonial domination and exploitation
both in their political and economic dimensions. As a result a
gulf emerged that was to cause severe conflicts between chiefs and

the citizenry, particularly the young men and commoners who sought

134

from then on to challenge both chiefly authority and alien
political power.
Capitalist Agricultural Enterprise
and Class Relations

The single capitalist agricultural enterprise that
affected class relations was the cocoa industry. Despite the
rapid expansion of this enterprise and the increasing income and
wealth it brought to some classes and not others, most economists
dealing with West African economies have agreed that class
differences have not occurred. The prevalent notion was that the
peasantry' irI West Africa is amorphous. However, recent analyses,
particularly Hill (1963) and Post (1973), have rejected such a
notion. They have in their studies pointed to the emerging patterns
of economic and social relationships in the rural economies of
West Africa. Hill's work on Southern cocoa farmers of Ghana is an
instructive and useful presentation of these emerging relationships
among producers.

In her studies (1963; 1970) on cocoa farmers in Southern
Ghana, she focuses on the processes of 'capitalist' accumulation
on the part of a small group of farmers--rural capitalists.
The thrust of her work is that contrary to the notion of an
amorphous peasantry, the process of accumulation (under peripheral
capitalism) had been accompanied by the emergence of these cocoa
farmers who personally owned and managed large and sometimes

scattered cocoa farms. She maintains that a large proportion of

135

Ghana's cocoa production remained with this small group surrounded
by 'peasants' who owned a relatively small share of the overall
output. Generally the distribution of ownership as well as income
had become highly asymmetrical. These rural capitalists acquired
land over which they had proprietary interests and they had farms
of about 1,000 acres or more (1960: 3; 1970: 25). They maximized
profit by plowing back into the existing cocoa farms or acquired
new ones.

Despite this development Hill argues against the existence
of an agricultural 'proletariat' whose labour is exploited for
purposes of capital accumulation. Hill suggests therefore, that

in West Africa the indigenous relationship between
employers and employees is not such as would lead to
the creation of a class of impoverished and exploit-
able men and women always on the brink of unemploy-
ment. There is much poverty and much idleness, but
not because of the nature of the indigenous employ-
ment system (1962: 8).

This is a mistaken notion. First, the capitalist farmers
Hill discovered in her analysis were not simply products of capital-
ist enterprise during the colonial phase. This class of farmers
have been drawn from both the traditional upper and middle classes,
and includes clan heads and chiefs who took advantage of the new
opportunities to establish themselves as landlords. It also
includes the middle class traders and state bureaucrats who
accumulated wealth during the pre-colonial period. Those who now

constitute the labourers on cocoa farms were drawn mainly from the

traditional lower class. The kind of feudal relations that

136

existed between the lower and upper classes in the form of tribute
paying was therefore transformed into a wage relation.

In the early years of the industry the major investments
were made by southern migrant cocoa farmers from the Akwapin, Krobo
and Akin districts of the eastern region of Ghana. In this
migratory process these groups devised a system, the company
through which they made significant investments in cocoa production
(Hill, 1963; Hunter, 1967; Dumor, 1976). The company was a
cooperative organization through which a group Of persons not
necessarily of the same kinship group purchased and organized land
resources for purposes of expanding their agricultural enterprise.
At the same time this expansionary process was further stimulated
by leapfrog migration (Hunger, 1967). This is a process operating
within the company system whereby the proceeds from one farm
operation were invested in the purchase of another land. This
process of reinvestment enabled the migrant groups to move steadily
into the forest belt.

The second wave of rural capitalist enterprise in agricul-
ture began in about 1911. During that period Ashante and Brong
Ahafo regions began to assume a critical role in cocoa production.
In this case the farmers who engaged in this industry found the
kinship network relevant to the accumulation process. The system
of land acquisition was through the family and in this system
investment in farm land was undertaken by members of a family or

the investment was done by the leader or head of family using

137

family resources for the purpose. In other cases investment is

an individual effort, although the farming enterprise is undertaken
by the family. A farmer who through personal initiative acquired
farm land could grant portions to members of his kin group. These
kin members in turn provide labour during critical periods like
harvesting. This system of land acquisition and capitalist invest-
ments has induced the growth of settlements whereby members of the
family settle in the areas of operation. Over the years these
settlements have expanded to include migrant labourers from other
regions and neighboring countries, particularly upper Volta and
Togo.

A major concern, with regard to the expansion of capitalist
enterprise and the migration of labour into those areas where the
enterprise was located, had to do with the production relations
that were established by producers. The production relations
stimulated by the capitalist enterprise can be examined at four
levels: the production relations between the capitalist farmer,

a member of the traditional upper classes and his kinsfolk; the
relationship between the capitalist farmers and the relatively
small farmers who historically have been members of the lower
class and the lower rungs of the middle class. Among the category
of small farmers are caretaker-farmers; the relationship between
the capitalist farmer and labourer including migrants who are
historically members of the traditional lower class proper, and

the relationships between the capitalist farmers as well as the

138

small farmers on the one hand and cocoa buyers or brokers and
foreign firms. The cocoa buyers and brokers can be grouped with
the traditional middle class although some of them belong to the
traditional upper class. It is through them that the internal
system of exploitation is linked to the external system.

In dealing with the first relationship, the relationship
between the capitalist farmer and his kinsfolk, Hill (1963)
maintains that the expansionary process undertaken by the capitalist
farmers involved a constant balancing of forces between capital
accumulation and demands of kinship loyalties. In the early stages
of the industry, these farmers were actively encouraged by lineage
members and the farmer was often prepared to help less fortunate
kinsmen establish farms through lending them money, sometimes on
the security of pawns (Hill, 1963: 182). The cultivation of cocoa
in the early stages depended on the labour provided by family
members and relatives. A capitalist farmer who owned several
farms usually had a relative or wife as a supervisor. These
relatives carried the burden of producing the crops and oftentimes
marketing the produce as well. Some relatives who were 'employed'
as cocoa carriers, for example, were rewarded from the proceeds of
the sale, and those who acted as caretakers received one-third
of the proceeds from farm sales. What is of significance, however,
is not that the relationship was based essentially on a cash nexus;
but that in the process of individual capital accumulation, tradi-

tional social relations were bent in support of that process.

139

The second level focuses on the relationship between the
rural capitalist and the small farmers. This relationship is
essentially predicated upon the relative access to resources, i.e.,
land and credit in the production organization of the cocoa and
agricultural industry as a whole.

In the accumulation process the capitalist farmer was able
to reinvest part of his capital in land. During the period of
rapid cocoa expansion the rural capitalist took advantage by charg-
ing excessive ground rents. Under these circumstances the small
farmers had to give the owner of lands on which they farmed two-
thirds of produce after harvests. Where it was impossible to
enter into such a relationship the small farmer became a caretaker
and the owner was given one-third of produce after harvest. It
was also common practice for the rural capitalist to give credit
to the small farmer who needed money to pay for labour and other
expenses related to the agricultural business. As security for
these monies the system of pledging farms was commonly practiced.

As security, the farmers pledged their cocoa crop or their
possessions for a period of time, after which these were redeemed.
If the farmer failed to honor the credit contract, repayment was
made in cash (Hill, 1963; Kimble, 1963). This development in
property relations led to a high degree of indebtedness among
small farmers, for no account was taken of the fluctuations
inherent in the cocoa business, but more significantly it resulted
in the redistribution of wealth in such a way as to increase

capital accumulation by rural capitalists.

140

The third production relation is between the rural capital-
ist and the labourer. Hill, in her analysis, denies the existence
of a production relationship between the rural capitalist and
labourer, that could approximate employer-employee relationships.

Hill provides three major reasons for the absence of a
rural preletariat. First is the conclusion that people who are
'employees' are not such at all; since the 'symbiotic relationship'
between the cocoa farmer and the labourer (who takes one-third of
the produce) is not denoted by the employer-employee terminology.
Second, there is a high degree of ethnic heterogeneity of the
labour force and ethnic occupational specialization. Third, those
employees--1abourers who 'actively' aspire to become 'employers'
can and do achieve this transformation (9).

This analysis does not take into account of historical
connections between the present agricultural "labouring class" and
the pre-colonial traditional lower class. It assumes also that
the subordinate position of the members of the lower class vis-a-vis
the rural upper class has been eliminated as a result of new
economic opportunities. This cannot be sustained empirically.
There are in the rural areas persons irrespective of their ethnic
origins who constituted full-time labourers or are committed to
wage labour as an alternative to subsistence farming. A survey
by the Department of Agriculture indicated that a large proportion
of labour used in Ashante was hired wage labour (Report: Department

of Agriculture, 1956). In his study of the cocoa industry,

141

Killick (1966: 239) notes that out of 522,350 persons in the cocoa
sector 68,920, i.e., 12.5 percent were agricultural labourers.

This excludes family workers who constituted about 9 percent of
total labour employed in this sector. What needs to be noted

here, however, is that the labour conditions for family workers

did not differ in any measurable quantitative terms when compared
with those of the agricultural labourers. Moreover, those agricul-
tural workers who did not wish to continue a peripheral existence
sought alternative employment “hi the farms and cities. A signifi-
cant number migrated into the towns and urban areas and found
employment in the labour-intensive manufacturing industries and

in the state agricultural enterprises (Peil, 1978). In essence
what is important in isolating them as an identifiable social
category is the long-term commitment most of these agricultural
workers made to wage-labour either in industry or agriculture as

a means of survival (Sandbrook, 1975: 10).

Another major distinguishing aspect of this class and
production relation concerns the conditions under which they sold
their labour. Dickson notes that in the development and expansion
of the capitalist agricultural enterprise, the traditional system
of communal labour was essentially superceded by varied forms of
paid labour. However, the payment of the various categories of
labourers was based on traditional production and exchange
relations that approximated wages (56). It has already been

indicated that the caretaker was a type of labourer whose labour

142

was contracted for both supervising production and marketing for
which he receives a third of the farm produce or income. Hill
(1963) notes that some of these caretakers, particularly Anum-Boso
and some Ewe migrant farmers, used their income to acquire cocoa
farms, and over time became independent producers themselves.

This development was an exception rather 'than 'the rule. Another
method of payment referred to as Nkontokwano, operates when the
labourer has not had any previous association with the farm opera-
tions. In this case the labourer is employed for a specific job
either harvesting or maintaining the farms. The farmer pays in
cash daily or at the end of employment, but under this system
labourers may ask for cash advances. However, the payment of lump-
sum at the end of the contract is nothing less than a wage-labour
employment (see Chapters I and II).

In summary, changes in the social organization of production
consequent upon the establishment of commercial agriculture altered
existing social relations as well as reinforced social and economic
inequalities in the rural sector of Ghana. In addition to these
developments there was the production relaton between producers in
the rural areas, the cocoa buyers or brokers and the foreign firms.
These relations are important because they also provide a structural

linkage between the domestic economy and the world system.

Farmers, Brokers and Monopoly Capitalism
The discussion in this section focuses on exchange economic

relations between the broad category, farmers, including the

143

capitalist farmer and peasants on the one hand, and brokers and
foreign firms on the other. At this point, it is necessary to

give a brief historical account of the emergencecflithe broker class
and their structural connections to the pre-colonial middle class.

During the pre-colonial period there was competition among
various societies to monopolize the continental trade in gold,
ivory, cola and spice. For this reason the chiefs of the states
in the hinterland of Ghana, particularly Asante, organized a state
trading system through which traders were given the responsibility
of carrying out brokerage activities on behalf of the state. By
virtue of this system the state regulated and monpolized external
trade. As the center of economy gravity was shifted to the
Atlantic Coast, this system was extensively used and was further
expanded during Asante imperial invasion of the coastal states.
Simultaneously, as trade in slave, gold and imported manufactures
increased along the Guinea coast, European firms sought not only to
monopolize trade with the interior states, but did so through a
class of indigenous traders who performed essentially a brokerage
economic function (Daaku, 1970: 96-114; Reynolds, 1974).

This class of traders according to Daaku was both a response
and a by-product of European trade (Daaku, 104). Although their
major concern was to advertise and distribute European manufactures,
they also took advantage of the new commercial and profit-making
opportunities offered by commercial agriculture. A significant

number of these traders did not enter primary production, but

144

entered the exchange relations as intermediaries between primary
producers and the monopoly firms (Priestley, 1966; Swanzy, 1956;
Amenumey, 1968). Thus it was through them that the rural economy
became effectively penetrated and exploited by foreign monopoly
interests. There was a 'symbiotic relationship' between the
brokers, the foreign firms and the farmers. First, the brokers
depended on capital and commissions from the foreign firms in order
to carry out their intermediary role. The capital which they
acquired was used to create farmer dependence as manifested by a
high degree of indebtedness among farmers (Beckett, 1944). For
example, at the beginning of the growing season the brokers entered
into contracts with as many farmers as they could to ensure that
they would have a monopoly in purchasing the crop. Consequently
the brokers clinched deals with farmers by providing sufficient
financial credit to cover labour, harvesting and transportation
costs. In other cases brokers paid for the whole farm produce at
an agreed price before it was harvested, and did not take into
account the changing fortunes of the crop in the world market.
Through this system of purchasing, not only did the farmers
become dependent upon external market forces but more specifically
a larger proportion of the cocoa income came to be appropriated by
the brokers and foreign firms. The Tudhope Report (1938) notes
that the brokers received substantial incomes from this operation
although some of them owned farms. Southall (1978), however

indicates that after the second World War, the purchases made by

145

Cadbury, the largest of the foreign firms, were from brokers who
had little involvement with farming.

The dominationirfthe cocoa sector by the foreign firms and
the brokers was not without strain. The Ghanaian cocoa farmers saw
the relationship between the monopoly firms and the brokers as a
form of collusion devised to exploit them. However, the slump in
cocoa prices after the war contributed a great deal to heightening
the concerns of the farmers. During this period there was consider-
able uncertainty over world prices and under these circumstances the
monopoly firms delayed their purchases causing a dramatic fall in
prices. Despite several farmer protests in the earlier years, i.e.,
after the slumps which occurred following the first World War, the
colonial administration did nothing to insultate the farmers
against exploitation. The fact of the matter was that the large
export firms were also the main importers of manufactures. Thus
the rise in consumer prices did not eliminate the farmers' suspicions
of exploitation.

Following this slump in prices and a reduction in farmers'
incomes, the cocoa industry and, in a general sense, the Ghanaian
economy, became heavily dominated by metropolitan capital and
interests at all levels. To increase their hold on the economy
thirteen of the leading exporters formed themselves into a monopoly
combine to purchase the cocoa crop. In 1937, for example, this
combine which became the United Africa Company and a subsidiary of

Lever Brothers Limited of Britain, purchased 94 percent of the

146

1936-1937 crop. It was this combine that determined the price to
be paid; and in doing so the main concerns were to reduce their cost
of buying to the minimum and to protect their financial interests.
The formation of the combine also meant the elimination of competi-
tion from other firms as well as a reduction of the number of
brokers in the trade. These processes put a strain between some
small-scale brokers and the firms and this was to begin a series of
class alliances symptomatic of the political and economic climate
of the time.

To avert what appeared a potentially dangerous political
situation, the colonial administration appointed a commission, the
Nowell Commission, to investiage the economic problems of the
industry. This commission denounced the monopoly of this combine
and consequently recommended the formation of farmer cooperative
credit and marketing societies as a way of protecting producer
interests. Furthermore, it recommended the establishment of the
West African Produce Control Board which consequently gave the
government the monopoly of marketing of the cocoa crop. This was
done, however, in alliance with the private firms, particularly the
dominant factor in the fonmation of the foreign combine, Cadbury
Brothers Limited. The Produce Control Board was then headed by
John Cadbury, a shareholder in Cadbury Brothers.

The alliance between the Administration and the foreign
finms in this regard increased the urge on the part of farmers to

form production and marketing alliances. Several associations

147

emerged, including Aburi—Nsawam Growers Association, Akwapim Farmers
Association and Planters Union, all concerned about marketing their
own crops (Kimble, 1963: 48-55; Brokensha, 1966: 39). By 1922 there
was in existence the Gold Coast Farmers Association constituting the
framework for farmers' efforts to affect cocoa policy, both in

terms of price and the distribution of cocoa income. The formation
of farmer-associations was not limited to the southern areas of Ghana
but was extended to Ashanti, and it was an alliance of the Gold
Coast (Ghana) and Ashanti Cocoa Federations that made the cocoa hold
up in the 19305 an effective political action against the colonial
government and the foreign firms.

These cocoa hold-ups, particularly that of 1937-38, had two
basic implications for class relations. During the organization of
this hold-up the broker-foreign firm alliance came under severe
strain. The large cocoa-brokers who depended upon foreign capital
were under severe pressure from the expatriate firms to break up
the producer resistance. Concerned about their own economic
fortunes, these brokers remained in alliance with the foreign firms.
Some brokers who had become the casualties during the slump thought
that they could survive if they worked in alliance with the cocoa
farmers themselves. Through a series of arrangements this alliance
became the nucleus of the Ghana Farmers Congress and it was the
majority of the membership of this Congress that provided the rural

political base for the Convention Peoples Party in the 19505.

148

By the end of the colonial period the pre-colonial class
structure had become more differentiated. The traditional upper
class including chiefs and clan heads and elders remained, but
their class base had been altered in several ways as a result of
new economic opportunties. Some of them became land owners, absentee
capitalist farmers, whose class origin was based not only on tradi-
tion and the authority of the colonial administration, but was
sustained by economic power as well. The traditional middle class
became divided into two broad categories: the first category con-
sisted of land owners and capitalist farmers; the second category
consisted of traders and brokers. The class base for this enlarged
middle class was in production, marketing and property ownership.

The traditional lower class remained a subordinate class,
consisting of peasants, some of whom were often in debt to the upper
class and middle class landlords; agricultural labourers and rural
artisans. Their class base was largely rooted in wage labour.

The administrative policies and the role of the dominant
social classes in the rural sector suggest a number of implications
for the rural development process and the Ghanaian economy as a
whole. First the rural sector became integrated into the world
economy and highly dependent on external market forces. In this
process of integration the dominant rural classes provided the
internal buttressing through their involvements in export produc-

tion and marketing as well as through the exploitation of other

149

classes. The consequences of this integration into the world
economy constitute the core of the next area of discussion.
Structural Dependence: A Characteristic
of'Underdevelopment
A number of writers including the Ghanaian economist,

Ofori Atta, argue that the economic policies pursued under colonial-
ism were essentially correct to the extent that there was continuous
economic growth. Ofori-Atta (1967) maintains that during this
period, growth and stability were achieved because imports were
freely allowed with almost no restrictions. There was low tariff,
and trade policies remained non-discriminatory (36-41). Cox-George
also follows the same line of reasoning when he argued that develop-
ments in the social and economic fields during this period were
all consolidated so that

a money economy had been established, an educational

system had been set up perhaps better than anywhere else

in British West Africa; considerable improvement in health

and sanitary conditions of the people and the provision of

civil amenities had been effected so that the earlier

pestilences of plagues and epidemics had been eliminated.

Thus, within the limits of overall colonial development

policy, steps were taken for sound and systematic agricul-

tural progress for the future (72). .
Consequently, the economy became "consolidated precedent to the
take-off period in the economic development of modern Ghana" (33).
Furthermore such analyses tend to be buttressed by reference to
expanding export trade,absence of a visible deficit in the balance

of trade and expanding government revenues. In addition, the

fringe traditional sector, is said to have spatially expanded

150

while inducing further accumulation of capital and the employment

of mutilized labour resources (Szereszewski, 65). Such interpreta-
tions however ignore the basic laws of capitalist accumulation and
almost totally reject historical analysis of the development of
capitalism. Genoud (1969) argues that British colonial policies
were not entirely beneficial to Ghana. He maintains that while
Ghana in 1950 was certainly more prosperous when compared with other
colonized areas, this prosperity was only a colonial type prosperity.
The economic structures remained primary export-oriented with a

large underdeveloped sector in which the mass of the population
participated (23). An assessment of the economy in 1952 also
indicated that up to the period of political decolonization, the
economy had no institutional framework to check the inflationary
pressures induced into the world economy. Moreover, the heavy
dependence on one export crop, cocoa, was dangerous in terms of
future economic viability of Ghana (Report: Government Statistician,
1952: 4).

The above conditions, as assessed, were sustained by a
number of developments both internal and external to Ghana. During
the colonial period the volume of cocoa exports continued to expand
rapidly, but in the 19205 although cocoa exports were much higher
than in previous decades, earnings declined. There were a number
of reasons for this, the first major cause being the decline in
world demand. The second was that the overall effect of the world

wars on the export sector was depressive. Thus, what appeared to

151

be an apparent prosperity of the economy, was in real terms
illusory (Cox-George, 31).

With the depression went restricted supplies; and while the
value of imports rose, the volume showed considerable decline
throughout the war years. One clear inference noted by Cox-George
is that "the appreciation of values of imports was an indication of
cost inflation and that inflation was imported into the economy
via imports" (34).

Using the economic indicators for the years 1923 to 1932,
it has been shown that the value of trade dropped by 60 percent,
causing a fall in Government revenue. The consequence of this was
that the development expenditure was cut by 45 percent. In short,
this meant a cessation of a large proportion of Government invest-
ment in the internal economy, but this situation was further com-
pounded by the fact that whatever reserves were built up were
invested abroad, and chiefly in the United Kingdom. This was
clearly in consonance with a 1922 United Kingdom Ordinance which
stipulated that accumulated reserves from colonial dependencies
had to be invested in London. This requirement entailed the invest-
ment of cocoa income in British Treasury bonds (Card, 1975), but
more importantly, an investment fund accumulated by Ghana went to
aid Britain's development. Omaboe (1966) summarizes the situation
thus:

Capital outflow on Government account from Britain into
Ghana has been minor in her economic advancement. It is

rather that Ghana has made substantial investment in
Britain through the holding there of almost all her

152

reserve (see also Britain Official Handbook, 1955: 272;

Finch and Oppenheimer, 1966: 44-45).
The overall effect of this situation was the denial to Ghana of
access to surplus extracted from her natural resources and labour.
The world economic situation was of little help since world inflation
induced by the depression was transmitted into the internal economy.
Fluctuations in export price were detrimental to economic stability
and economic growth. The consequences are lucidly summed up by
Hymer (1971)

Exports failed to rise and indeed fell in real, value

as a result of falling prices in the 19305 and rising

import prices in the 19405 . . . In the 19305 even

current expenditure had to be retrenched, and during

World War II imports fell to unprecedented low.

There is a certain irony in the events of this period.

The plan (Guggisburg's Plan) was conceived and

executed by foreigners who assumed that the best

interests of Ghana required it to become integrated

into the world economy and more and more one cog in

the world economic machine. Their efforts were

directed at turning the economy outward; but as they

did so, the world economy collapsed and the Ghanaian

economy faltered with it (150).
Related to the world crisis were other internal developments in the
cocoa industry. The dominance of foreign monopoly interests was
beginning to be felt by producers particularly as cocoa prices
plumetted. During the war years a number of foreign firms formed
an association, the Association of West African Merchants, through
which they organized purchases of produce and established the price
to be paid to farmers. In fact this organization was responsible
for exporting 89 percent of the crop between 1915-1916 and by 1936

controlled 98 percent of the shipment of produce.

153

The system of buying cocoa obviously led to resentments and
fears of exploitation by farmers. Between 1918 and 1930, for
example, Cadbury, the major buying company had a rate of return on
capital around 14.2 percent. This declined however to 7.5% between
1930 and 1936, owing to competition from other firms, particularly
America. In order to increase the cocoa price, producers organized
several cocoa hold ups during and after the war years, the most
notable being that of 1937 against monopolistic buying agreements
(Howard, 1976). This was "a sweeping mass emotional upheaval,"
remarkable not only for its organizational success but also because
it brought into the open the forms of exploitation and domination
of the economy by external factors and forces.

Another internal development has to do with the control
exercised by the foreign monopolies over import trade. In the
immediate post-war period, Ghanaians had had to pay prices for
imported goods that had increased far more than their incomes.

The restrictions imposed by higher costs of production, shipping
bottlenecks and disequilibrating forces in the world economy
encouraged the Association of West African Merchants to introduce
regulatory measures into the import trade. The local population
saw this as a deliberate attempt to keep prices of consumer goods
up in order to reap massive profits. This resentment was strong
enough to lead to an anti-inflation compaign meant to boycott
imported goods handled by these firms. Apart from its political

implications (laying a basis for greater nationalist demands), the

154

near totality of economic control exercised by European firms over
export and import trade, had left the economy and the citizenry
generally at the mercy of foreign monopolies.

A third internal concern has to do with the consequences
of the emphasis placed on export crop production. As a result of
this emphasis on cocoa export the food sector had remained largely
underdeveloped. In Ghana, the forest belt in which extensive
cocoa production is carried out serves also as a food crop belt
(Dickson and Benneh, 1970), and to a large extent, food production
is therefore closely dependent on cocoa production. The expansion
of cocoa farms simultaneously means a reduction in food production.
Dickson (1969) therefore argues that if cocoa prices showed
favorable trends, the tendency was for farmers to substitute more
cocoa trees for food crops (see Appendix 1 and 2). From this general
tendency, a situation emerged where Ghana became progressively an
importer of food. During those years that cocoa incomes increased
it was expected that the increases would stimulate domestic capital
formation, but instead these increases in incomes were translated
into demands for imported consumer goods, particularly food.

Thus during the colonial period, demand for imports increased
sharply in response to changes in income, since, cocoa income
increased by 60 percent during those years. Consequently, as
Table 3.9 shows, the structural dependence of the Ghanaian economy
came to be reflected more forcefully by increasing import demands.

These developments had consequences for the economy. The domestic

155

TABLE 3.9.--Imports of Selected Items as Percent of Total Import

 

 

Bill.

Food, Drinks Clothing, Leather Other Consumer

and Tobacco Textiles Goods
1900 37 21 22
1905 35 16 16
1910 29 15 20
1915 38 11 17
1920 29 21 15
1925 27 28 12
1930 26 28 13
1935 30 20 15
1940 26 19 14
1945 21 25 24
1950 21 24 13
1955 21 16 14
1960 23 18 16

 

Source: Kay, 1965: 327-329.

economy was growing rather sluggishly, but with increases in cocoa
incomes in the face of lagging domestic production, prices skyrocket-
ted (Krassowski, 1974: 11).

Under these conditions whatever upsurge occurred in the

economy was short-lived. Prior to the period of decolonization it

156

could be seen that the economy had become heavily dependent on
exogeneous factors, a situation largely caused by the disarticula-
tion of rural production. On balance, colonial economic policy
offered little by way of an all-round, balanced agricultural develop-
ment. Under Guggisburg the argicultural policy did not achieve the
desired goals, and as Agbodeka (1976) notes:

It is no exaggeration to say that Guggisburg's agricul-

tural policy was a failure. Achievements in the field

belong largely to the people of the Gold Coast. And

it is worth emphasizing that it was the agricultural

revolution alone (based on the exports of the peasant

farmer) which made it possible for the Gold Coast

Government to undertake those development projects

of the twenties for which Guggisburg now takes the

credit (56).

With regard to the cocoa industry on which a greater
effort was concentrated, there were doubts as to whether the
problems of that sector were tackled with realism. The Colonial
Advisor expressed similar doubts when he summed up the agricultural
situation of the country:

So far as agriculture in the Colony and Ashanti is
concerned, the Gold Coast Government has got to accept

the position that they really know very little concern-
ing the inherent circumstances attendant upon agriculture,
and have so far little to offer in the way of dependable
advice for agricultural improvement (Gold Coast Farmer,
1932: 3).

It was stated further in the Ministry's agricultural journal
that agriculture during the colonial period was not organized along
sound principles. Consequently, the quality of produce was not
good, the system of marketing was bad and the soil was neglected.

No doubt Colonial objectives were clear: there was concern for

157

export production to the exclusion of food production and agricul-
tural education that would stimulate rural develOpment.

The analysis in this chapter underscores the critical role
of the colonial state in relation to the consolidation of alien
control and exploitation of the Ghanaian economy. The data
indicates the ways in which the colonial state was used as an
instrument for political domination and for securing the core
pattern of capitalist development, i.e., the establishment of an
interactional matrix in which natural resources, exploitation of
labour and external trade were organically linked. In a more
specific way, the administrative policies pursued by the colonial
state in relation to rural and agricultural development were
examined. It was demonstrated that rural poverty was in part the
result of the disarticulation of existing rural production struc-
tures and the altering of existing production relations. On the
other hand, the attention was focused on external trade and its
influences on the rural social and economic structure. It was
concluded, based on the available data, that the conditions of
inequality, poverty and the marginalization of the majority of
rural peoples stemmed from the dependence of the Ghanaian economy
on exogenous economic and social forces. Moreover the internal
social and economic processes sustained and buttressed by the
colonial state remained at the core of rural underdevelopment.

It was this pattern of historical conditioning that called

forth a major strategy--the transformationist strategy. This

158

strategy implies that Ghanaian underdevelopment was linked
structurally to the expansion of capitalism in Ghana and internal
relations of exploitation between the 'comprador' classes and
colonialism. Consequently it was necessary to 'eliminate' both
colonialism and the dominant local classes and then proceed on a
non-capitalist path. It is this non-capitalist path to national

development that will be analyzed in the next chapter.

CHAPTER IV

THE NKRUMAH ERA: THE STRUCTURAL TRANSFORMATIONIST
STRATEGY 1957-1966

This chapter discusses "the transformationist strategy"
which was essentially a non-capitalist path to national development
pursued by the Nkrumah Administration. This path involved the
reduction of external dependence as well as internal exploitation
by dominant social classes. This stemmed from the ideological
position of the Nkrumah Administration which held that the internal
dominant classes had served, in the past, essentially as a bridge
for capitalist exploitation of the economy. Thus the way to achieve
economic independence was through the elimination of these dominant
classes.

The discussion in this chapter therefore focuses on the major
development plan, the Seven Year Development Plan, of the Nkrumah
Administration. It analyzes the assumptions and economic philosophy
underlying the plan; the organization of rural and agricultural pro-
duction as a strategy for rural development, and the roles of the
state and classes in the development process. But germaine to this
analysis is the relationship between the state and rural social
class, as this relationship is reflected in either the reduction or

maintenance of rural underdevelopment.

159

160

Following political independence in 1957 nationalist
leaders were faced with a series of questions as to what economic
and political strategies should be pursued in order to achieve
economic independence. There was the question of the role of the
state in economic planning and organization; there was the question
of economic priorities, allocation of develOpment expenditures, and
the role of economic sectors in the overall development program.

In providing answers to these questions the Nkrumah
Administration was not unmindful of the prevailing historical and
contemporary circumstances. Moreover, the Administration's percep-
tion and explanation of colonialism or underdevelopment served as a
basis for policy alternatives and political strategies.

What then is a transformationist strategy? In what way did
it become a dominant characteristic of the Nkrumah era? In a compara-
tive analysis of Ghana and Ivory Coast, Berg (1971) labelled
Ghana under Nkrumah as pursuing a development policy that approxi-
mated the structural transformationist approach. He argues that

Structural transformation emphasizes industrial development
more than agriculture. Within agriculture transformationists
emphasize capital intensive often large-scale schemes aimed
at fundamentally changing the technology and organization
of peasant life. They see little hope in the export sector
as an engine of growth and emphasize reduction of dependence
on the outside world. Distrust of the market mechanism,
the large role of the state in mobilizing and managing
resources, and a low tolerance for inequalities in income
distribution tend to be typical of their world view (187).
In essence this strategy views economic development as

essentially based on expansion in industry and agriculture through

large-scale organizations and state involvement.

161

However, the adoption of this strategy was also influenced
largely by Kwame Nkrumah's ideas about decolonization and his
conceptualization of underdevelopment. In this case, his views are

rooted in Marxist-Leninist political and economic thought.

Nkrumah and Underdevelopment

Nkrumah argued that European colonial rule has remained at
the core of underdevelopment of the African continent. Most of his
views on the subject have been expressed in his early writings and
later on, elaborated in his ideas on imperialism in Africa. First,
Nkrumah accepted the Marxist-Leninist thesis that colonialism is a
structural product of expanding world capitalism. Thus he viewed
the problem of underdevelopment in terms of the political economy of
capitalism.

Underdevelopment, as conceived by Nkrumah (1962), was the
result of economic and political exploitation of colonial peoples.
He argues that the imperialist powers, because of their desire for
expanding markets, raw materials, cheap labour for capitalist
industries, established political and economic controls through a
series of economic measures that set in motion the process of under-
development. Thus colonial economic policy has been geared towards
making colonized territories into producers of raw materials and a
dumping ground for manufactured goods for industrial Europe (9).

He maintains further that
the whole policy of the colonizer is to keep the native in

his primitive state and make him economically dependent.
To ensure increased efficiency in the local handling of

162

the colonies' resources, the colonizer grants loans and

invests capital in improving internal communication,

social and welfare services, ostensibly to better the

native. The big trade combines exert a rigid monopolist

control which effectively prevents the native from sharing

in the capitalist profits, but without native labour such

profits would never be made (29).
Nkrumah points out further that the imperialist plan was to perpetuate
economic exploitation and in the process the colonies gained no
advantages from being dependent. In short, colonialism is the
establishment and maintenance of foreign political domination by
aliens over the territories of indigenous populations.

But colonialism is only a stage in capitalist development.
The highest stage of capitalism is imperialism or neo-colonialism,
here conceived in terms of preferred policy choices by imperialist
powers. However, it also implies an alliance between external
forces and the dominant domestic classes (Woodis, 1967), and by
implication is as much an external phenomenon as it is internal.
The relationship between the dominant domestic classes and the rest
of the population is based essentially on exploitation and inquality.
Nkrumah, though not unmindful of the internal aspects of neo-

colonialism, emphasizes the macro-aspects which in his view gave rise
to the internal exploitation of the population by the imperialist
nations in alliance with the dominant domestic classes. Neo-
colonialism presupposes that the state which is subject to
imperialist control is independent only by the outward manifestations

of national sovereignty. But in reality its economic system and its

political strategies are manipulated from outside (Nkrumah, 1965).

163

By definition neo-colonialism is a form of domination which is both
direct and indirect, thorugh which dominant economic powers and
multinational groups control the development of emergent nations.
The instruments of neo-colonialism are varied; but some of the major
indices include the integration of emergent nations into international
economic zones, the development of interlocking monopoly cartels
including banks, consortiums and condominiums. Neo-colonialism
involves the control of finance capital, technology and the control
of advanced sectors of the economies of peripheral nations (Nkrumah,
1965: 31); Lenin, 1974; Seidman, 1964). In essence neo-colonialism
is a policy designed to prevent newly independent nations from con-
solidating their political independence and what is important is the
absence of the relevant socio-economic conditions for a self-
generating national development at the time of political independence.
The neo-colony, therefore, exhibits structureal character-
istics of dependence and underdevelopment. In the first place the
economy, particularly the advanced sectors, are dominated and con-
trolled by aliens. The rate of growth of the economy is dictated by
external demand and financing, and the structure of production is
oriented toward export production. In most cases the economy owes
its stability to exports, particularly a monocrop, and the economy
shows an increasing inequality in the distribution of growth between
the various sectors (Amin, 1973). In other words, the export
oriented sector experiences a high rate of growth and productivity
while the larger sector is degraded to a level of subsistence and

the provision of cheap labour.

164

To Amin, the outward-directed nature of these nations is
manifested further by a permanent crisis:

The permanent crisis of public finances, the foreign
dependence which this entails, visible even before inde-
pendence, was aggravated by the balkanization of the area,
itself also a result of outward-directed colonial develop-
ment (xviii).

The theory of neo-colonialism, therefore, is a theory of
economic imperialism, and the economic strategy that characterized
the Nkrumah era must be seen in terms of an effort to escape neo-
colonialism. For the dominant views were that colonialism, neo-
colonialism and imperialism breed economic and political dependence,
and where these existed freedom was nonexistent.

Nkrumah's opposition to imperialism was unequivocal. In his
autobiography he wrote:

Independence for the Gold Coast (Ghana) was my aim. It

was a colony and I have always regarded colonialism as the

policy by which a foreign power binds territories to her-

self by political ties with the primary object of promoting

her own economic advantage (Nkrumah, 1957: i).
Under imperialism, political domination and economic exploitation
have been meshed and thus the solution to imperialism is both politi-
cal and economic. However, to foster development, colonialism and
neo-colonialism had to be terminated first through political action,
for "the core of colonial territorial independence is economic but
the strategy is a political one. Hence, political independence is

an indispensable step toward securing economic emancipation"

(Nkrumah, 1962: xv).

165

Nkrumah's views were shared by a number of political com-
mentators including George Padmore (1956), his political adviser
and an advocate of pan-Africanism. The latter, for example, main-
tained that political self-determination was an essential precondi-
tion for realizing social, economic and cultural potentials for sub-
jugated peoples. Thus, political independence is but an empty facade
if economic freedom is not possible also (Nkrumah, 1962). In
essence, the possibilities for development were possible if Ghana
became first and foremost politically independent. By implication
the control of the government and other institutional structures
appeared to be the most viable way to economic progress. Second,
capitalist development is totally unsuitable for economic development
in the former colonized areas. In this case Nkrumah stated quite
clearly that "capitalism is too complicated a system for a newly
independent nation. Hence, the need for a socialist society"

(1957: xvi).

Capitalism was not only complicated but it also ignored the
concerns and needs of the majority of the population. The alterna-
tive strategy then was socialism in which the state assumed the
public ownership of the means of production, distribution and
exchange. The socialist strategy would provide the avenue for the
satisfaction of the peoples' needs and since it was the opinion that
imperialism in Ghana did not provide the forms of capital accumula-
tion, i.e., private capital accumulation that propelled Western

European Nations into the industrial age, it was considered that only

166

the Government could promote the basic services and industries that
would lead to intensive diversified agriculture, rapid industrial
expansion and increased economic productivity (Work and Happiness,
1962, para. 6-8).
To achieve these goals it was felt that the state should
increasingly participate in the critical sectors. This was because
the state would protect
Our people from unbridled exploitation by alien monopoly
interests. . . . the planning of our national economy can
only be effective when the major means of production,
distribution and exchange have been brought under the
capital and ownership of the state (Work and Happiness
Programme 1962, para. 55).

In short, a socialist state is the means of securing economic inde-

pendence and establishing national control over the economy.

Socialism and Economic Development

 

In the develOpment of a socialist system, the state assumes
pre-eminence in productive activities. The question that remained
then, was how the objectives of a socialist state could be financed
without foreign investment capital, especially in the case of Ghana
where the foreign exchange capacity had diminished over the years.
As the Seven Year Plan notes, until then Ghana had been able to

draw on large reserves of foreign savings which were built
up in the years of good cocoa prices until 1956. These
reserves have now reached a level where they cannot give
much support to the development programme (56).
Despite the socialist orientation of the Nkrumah Administra-

tion, foreign investment, particularly from the West, was sought.

In this case, Nkrumah was faced with the problem of reconciling

167

socialist principles with the facts of economic life in Ghana. In
principle, it was considered that the socialist objectives were not
incompatible with the growth and expansion of a private sector.
However, these foreign investments were allowed in within the spirit
of partnership and cooperation with the socialist framework.
Nkrumah made this point clear in an interview with the American
press:

Let me emphasize one point. I have not come to the United

States asking for direct financial aid. What we want is for

you to cooperate in the economic and profitable development

of our resources. This means that if either your govern-

ment or your investors put money into our country we want

it to go into sound projects and schemes which will

ultimately lead to the repayment of the initial investment

(Nkrumah, 1961: 139).

Unlike the colonial period when profits were invested abroad,
the expectation was that new investments would lead to economic
expansion at home. While private investment was permitted and
investment laws were passed to secure a climate conducive to foreign
enterprise, it was Government's aim to create a large public sector
in the hope of providing an adequate measure of control over the
economic destiny of the country. By implication, it was the desire
that the nationalist government would dictate the terms on which
investments were made; and by a combination of legislative action
and state involvement, the deviations from the socialist objectives
would be contained.

The interests of external finance capital, however, were not

without some curtailment. For example, in 1958 the United States

signed an investment agreement with twenty-three African countries

168

in which the former guaranteed private American investments provided
the latter made a number of concessions. The guarantee given by

these countries, including Ghana, covered risks against convert-
ability, expropriation, and losses due to war and revolution. In
return the United States offered the opportunities for stock purchase,
loans or royalties for which a fee of half of one percent was to be
charged. By the 19605 the United Nations, from whom most Of these
African States prefer to seek loans, recommended a number of invest-
ment regulations which it thought would facilitate investment flows

to these nations (United Nations Report, 1965).

In the case of Ghana under Nkrumah, a series of legal instru-
ments were introduced in which conditions for investments were laid.
The Capital Investment Act of 1963 stipulated that in cases where a
foreign private project is taken over by the Government, a fair
compensation would be paid in original currency to the owners. In
the case of disputes over amount of compensation, an arbitrator
could be appointed by both parties or the International Bank for
Reconstruction and Development would settle the dispute. Under the
Act there were no restrictions on capital and profit outflow except
in the event of sale or liquidation. There was tax exemption for
projects in their first five years of production, and those firms
engaged in the production of export goods and import substitution
were exempted from import and customs duties, and purchase tax for

those materials needed for expansion.

169

Within the confines of the Act it became possible for the
State, as a participant, and foreign and private capital to operate
within the socialist system.

Economic Policies and the
Transition to Socialism

 

In devising an economic strategy based on socialist
principles of organization, a number of issues had to be considered:
(1) the ways in which the economy had to be managed; the sector which
was to be given priority; economic development's aiming at self-
sufficiency in industrial output or its integration into an inter-

national system of specialization; and (2) what form of agricultural

 

organization would be most condusive to rapid economic progress; and
how could development be financed?

In dealing with these questions it was the view that there
should be a thorough economic reoganization, for socialism requires
a different kind of planning and economic structure. As was stated
in 1962, "The basic aim of our economic development is to free our

economy from alien control and domination" (Work and Happiness

 

Programme, 1962: para 8). In doing so, however, the economy had to
be "balanced between industry and agriculture, providing a self-
sufficiency of food and supporting secondary industries (Nkrumah,
1964).

The priority in economic policy was to be found in the total
industrialization of the country and the complete diversification

and mechanization of agriculture. It meant that "creation of heavy

170

industry with the simultaneous growth in light industry and agri-
culture" would be given priority. This would "create the backbone"
of the national economy and lay solidly the foundation of the
socialist industrialization" (Nkrumah, 1965, Sessional Address,
Col. 10).

Briefly the policy of industrialization was meant to create
avenues for increased employment for labour in rural areas; it was
geared towards increasing incomes and redressing imbalances in foreign
trade. Industrial growth was to permit Ghana to satisfy her consumer
needs as well as to increase Ghana's processing capacities of raw
exportneterials. Agro-based industries were to stimulate agri-
cultural expansion. In addition, industrial expansion would enable
the country to produce its technological equipments, building
materials and inputs for agriculture as well as industry itself
(Seven Year Plan, 1964: 92). ,Despite the emphasis on industrializa-
tion, agriculture, at least in theory, was given a fundamental and
critical role. In 1955 Nkrumah stated that

democracy, as against imperialism, nepotism and autocracy in
the Gold Coast (Ghana), must have its roOts in rural recon-
struction. It is in the rural areas that the forces of
feudalism are entrenched. There can be no social advancement
' or complete overthrow of imperialism as long as the vestiges
2;)feudalism still remain in this country (Nkrumah, 1961:
This position was elaborated more clearly in relation to agricultural
development. The argument for the critical position of agriculture

was that it was the basic starting point in the of industrialiZation

(Nkrumah, 1965: Col. 14). This position was clearly stated in the

171

Seven Year Plan where it was argued that however much progress was
made in the non-agricultural sectors of the economy, the general
level of prosperity could not increase unless agriculture . . . also
underwent a revolutionary change. Moreover

the money to finance all the revolutionary advances that

have been made in the modernization of Ghana has come almost
exclusively from agriculture . . . . In addition to providing
funds for almost all the development expenditures and savings
of governments, agriculture has also provided most of the
money that has gone into local and private investment in
Ghana in recent years (Seven Year Plan, 1964: 53).

 

It was also obvious to economic planners that the rate at which the
economy expanded was inadequate and therefore incapable of coping
with demands made on it through imports, particularly of food items.
The government therefore stated that

in the light of this, the main task which Ghana's agri-
culture must face and solve . . . is to produce enough
food locally to meet all our requirements of food. We
must produce so much maize, rice, fruits, meat and fish
so that every Ghanaian will get all he needs for himself
and his family and our Government will not be called upon
to import these things from outside Ghana (Steps Towards
a Socialist State, 1962: 19).

 

The fact of the matter was that agricultural production in Ghana had
shown a tendency to lag behind domestic demand and rate of population
growth.

. . . local food prices have risen while part of the demand

for food has been met by increased imports. By 1962 the

burden of food imports had become a major factor in the

balance of payments situation. Of all the major items in

the food bill only wheat and dairy products could not be

produced cheaply in Ghana (Seven Year Plan, 1964: 55).
As Table 4.1 indicates, there were significant increases in the

imports of selected food items.

172

TABLE 4.1.--Development of Selected Food Imports, l951-61

 

 

(Imports in G'OOO).
% Change in 10

Item 1951 1961 (+ ixgfiggse’

- decrease)
Meat 1,195 1,935 + 62
Fish 1,422 4,814 + 239
Dairy Products 633 1,901 + 200
Rice 313 2,514 + 706
Maize 207 35 - 89
Wheat 1,539 3,145 + 104
Sugar 1,139 2,690 + 136
Fruits and Vegetables __jjfl_ _2JQ§§_ .11,1gg
TOTAL Selected Items 6,618 19,102 + 189

 

Source:

Seven Year Plan, 1964: 55.

Economic Survey of 1962 sums of up the situation thus:

Another inflationary force was in respect to local food
production, particularly food, which was unable to keep
pace with demand generated by higher government expendi-

ture and increased earnings.

With additional distribution

problems in respect of perishables and other foodstuffs,

prices were driven up.

The solution to the problem of

rising prices lies in increased production at home of food
and manufactured goods intended as substitutes for imported
goods whose importation is now restricted; as well as the
introduction of an efficient distributive network for the
whole country (Economic Survey, 1962: 30).

 

173

This was then a rational policy to pursue since the rate of inflation
was becoming a threat to the standard of living and was creating a
great deal of social tension in the country.
The second major element in the agricultural policy had to

do with the notion that agricultural development is a pre-condition
to industrial expansion. Thus the task for agriculture was to pro-
duce raw materials for existing industries and for new ones which
had to be created under the Seven Year Plan. It meant the production
of cotton for textile factories, sugarcane for sugar factories,
ground nuts for vegetable oil mills, etc. Thus it was concluded:

If we can do this, then the Government will not have to

spend money overseas to buy raw materials which our

factories need. To the extent that we do this to that

extent will we free more foreign currency for purchases

of machinery and plants for our industries; to that extent

will we create jobs for our own people instead of creating

[them] for people elsewhere: to that extent will we find

money for our industrialization from our own resources
(Steps Towards a Socialist State: 19).

 

To achieve these goals it was necessary in the Government's view to
apply mechanical power whenever it was possible and economical to do

so (Seven Year Plan: 57). Since internal resources were inadequate

 

it was considered necessary

to concentrate on a limited number of commodities and apply
to them all the available technology and agricultural
knowledge. These are the ones to satisfy basic nutritional
requirements like cereals and fish or that will contribute
to amerlioration of the balance of payments position,
sugar, cocoa and rice (Seven Year Plan: 73).

 

The main task for the Nkrumah Government was therefore focused on
increasing the rate of growth of the national economy; transforming

the economy along socialist lines and thereby eliminating the

174

colonial structure of the economy. But in the agricultural develop-
ment sphere, the empahsis was on improving the nutritional level by
eliminating food deficits, increasing rural incomes and stepping up
the production of agricultural raw materials for export and
industrial purposes. To achieve these objectives production targets
were set for both the public and private sectors; and even though the
State was to play an active role in agricultural production, the bulk
of the increases were to come from the private, small farmer sector.
In addition, production targets were set for various agri-
cultural products. The main feature of the targets was the increases
expected in cereals, roots, legumes and oils. Production increases
were nonetheless expected from rubber, sugar cane and cocoa produc-
tion. Although the intention of Government was to diversify agri-
cultural production, the interest in maintaining Ghana's position as

leading export crop producer remained dominant (Seven Year Plan: 63).

 

Organizinnggricultural Production

 

The issue that remained a major concern for planners was how
agricultural development could best be organized. Since the transi-
tion to socialism called for a structural reorganization of society
and economy, it was felt that the institutions responsible for
agricultural development, including the Ministry of Agriculture and
other farm related institutions, should be reorganized or replaced
by new institutions. At the ministerial level a number of changes
were made in the hope of improving efficiency in the administration

of agriculture. Prior to the introduction of the comprehensive Seven

175

Year Development Plan in 1964, the Ministry of Agriculture, which had
previously undergone several changes, had four divisions: (1) The
division of General Agriculture was responsible for all extension
activities connected with the development of all crops other than
cocoa, and undertook the program of crop diversification. (2) The
Cocoa Division was responsible for all aspects connected with produc-
tion and maintenance of the cocoa industry. (3) The Scientific
Services undertook soil and land use surveys with a view to ultimately
producing a soil map which would indicate areas suitable for produc-
tion of crops. It also undertook research in entomology, plant
genetics, and coordinated activities related to agriculture.
(4) The Agricultural Economics division undertook economic surveys,
market price statistics, crop production forecasts and trends in both
domestic and international markets. The most significant change that
occurred in relation to the structure of the Ministry had to do with
Government's desire to participate directly in organizing agri-
cultural production. In the first place the Extension Unit of the
Ministry was more or less disbanded and the technical Officials of
that unit were transferred to new state agricultural organizations,
the most important being the United Ghana Farmers Cooperatives
Council (U.G.F.C.C.); The Workers' Brigade, and the State Farms
Corporation.

The "Production Fronts," as these state agricultural
organizations were called, assumed a pivotal position. First they

were to implement large extensions to acreage through mechanization

176

and were expected to increase food production and expand agricultural
exports. They were, however, entirely new forms of economic activity
in Ghana and were most likely to run into difficulties because of
inadequate resources and mismanagement, but the government felt their
contribution was not in doubt.

The State Farms Corporation which was established in 1963 was
expected to concentrate on the production of cereals and basic crops
whose demands in the urban centers had expanded phenomenally. The
Seven Year Plan added: "In addition, state farms will play a leading
part in the production of sugar cane, cotton, rubber, non-apparel
fibres and meat where large-scale organization has decided advantages
in production" (79). In short, the State Farms Corporation was to
demonstrate the advantages of large-scale farming in the production
of food and other crops. Thus, apart from being responsible for
profitable state agricultural organization, the corporation was also
to show the advantages of large scale socialist farming over small-

scale individual peasant farming (Ghana Trade Journal, 1963: 48-49).

 

The United Ghana Farmers Cooperative Council was established
to organize the bulk of the country's agricultural population into
cooperatives and individual farm units. It engaged in large-scale
farming as well as agricultural extension work. It had a monopoly
over cocoa buying; and spearheaded the introduction of mechanized
agriculture. However, like all other state organizations it was
expected to carry out political education of the farmers (Report,

Committee of Enquiry on the Local Purchasing of Cocoa).

177

The Workers Brigade established by an Act of Parliament in
1957 was in part meant to solve unemployment and at the same time
boost food production. It was therefore meant “to help inculcate a
healthy respect for the dignity of manual labour and given an oppor-
tunity which is at present lacking for national and patriotic
service" (Parliamentary Debates, 1957: Vol. 6, Col. 526). The
agricultural wing was essentially seen as an agricultural army managed
on para-military lines. Its purpose was to provide adequate machinery
for agricultural mechanization; provide raw materials and operate
production enterprises, but its key function remained one of educating
and training the young in various rural trades like carpentry, motor

mechanics and repair, tractor operation and animal husbandry.

Agricultural Extension

The country felt that the most effective way its policies
could be implemented was through an agricultural extension service.
The function of this service was not limited to providing a link
between policy formulation, research and programme implementation,
but included farm data-gathering, and organizing 'popular' participa-
tion in agricultural production as well.

Several analysts of the rural sector in Third World nations
point to the fact that the poor performance of agriculture should be
attributed in part to the absence of an effective agricultural
extension service and well thought out strategies that had facilitated
increased production in the West. It follows from this viewpoint,

therefore, that to raise agricultural production and thereby increase

178

rural income, agricultural extension service organization should
constitute the fundamental focus of any approach to agricultural
development. In essence, therefore,it is argued that investments in
agricultural inputs must be sustained by investments in general educa-
tion and in production education for farmers. The critical element

in this approach to agricultural development is to have an effective
information linkage, the proper functioning of which is considered

the key to expansion in the agricultural economy.

This view of extension in agricultural development is further
sustained by some of the successes recorded in what is now known as
the "Green Revolution." In this regard the Seven Year Development
Plan states:

A considerable body of existing knowledge on how to improve
agricultural productivity in Ghana has up till now failed
to find its way to the field practice of the farmer. This
gap between agricultural science and agricultural practice
is due largely to the absence of an effective extension
organization. As has been demonstrated in the case of the
recent advances in the cocoa industry, the small farmer

is very willing to adopt advances in farming methods and
practice which are convincingly demonstrated as being
capable of raising his productivity and income. The
knowledge about new methods in cocoa production which

has been conveyed to other farmers through extension work
must now be used in the campaign to raise productivity in
the other sectors of agriculture (77).

The intention of Government, therefore, was to create an
extension and development service that would help organize production
and achieve the targets set for the period of the plan. At the same
time the service was expected to achieve a level of participation in
the development process; it had to organize an agricultural extension

service against the background of the objectives of Government, the

179

manpower requirements and financial resources. These questions were
critical mainly because a Government may desire to carry out tasks

but be constrained by manpower and financial needs.

Manpower and Agricultural Extension
In organizing the extension service a number of issues
emerged. Among these was the agricultural manpower required to carry
out extension work. In 1960, the total number of persons employed
for wages and salaries in the Ministry and its related agencies was
approximately 30,000. But as Table 4.2 shows, by 1964 this number
increased to 55,000. In terms of the distribution of professional,
managerial and technical personnel, Table 4.3 shows that the Ministry
of Agriculture appeared to have had a high proportion of these. How-
ever, almost two thirds of the number were working on cocoa extension

and related activities rather than on food.

TABLE 4.2.--Overall Employment in Agriculture 1964-1970.

 

 

1964 1970

Ministry of Agriculture 15,781 32,360
U.G.F.C. 15,079 20,371
State Farms 17,599 22,625
Workers Brigade (Agricultural Division) 1,500 7,531
Logging (Private and Public) _§JQQQ_ :Ulélfll
TOTAL 54,959 93,287

 

Source: Manpower Estimated 1964-1970
Manpower Division, Ministry of Agriculture, Accra.

180

TABLE 4.3.--Establishment of the Ministry of Agriculture and
Related Agencies.

 

 

 

1964
Professional Manager Technical
Ministry of Agriculture 115 92 5,063
Farmers Council 125 294 906
State Farms 4 138 1,033
Workers Brigade 0 20 30
Other __5_ __£1 5
TOTAL 249 544 7,037

 

Source: Ministry of Agriculture, Manpower Division, Accra.

The manpower situation of the extension service is a crucial
determinant of the strategy adopted. Table 4.4 indicates that the
1963-65 establishment schedule for the Extension Service was 406, but
that the number of personnel at the post was 227 with 179 vacancies.
Taking, for example, the 1963 staffing situation of the
United Ghana Farmers Council which later became the main instrument
of extension work, the problems of manpower regarding general
extension becomes clearer. 0f the 15,079 employees in the U.G.F.C.C.
only 1,540 worked as extension officers. This, of course, excludes
1,396 who were at that time labelled as employees in the Mechaniza-
tion Unit of the Ministry of Agriculture. However, if all categories

of personnel labelled as extension workers are put together, the

181

TABLE 4.4.--Establishment of the Agricultural Extension Service

 

 

1963-1965.
Establish At Post Vacancies

Professional Agricultural
Officers, S.A.O.'s, etc. 40 10 30

Technical Senior Technical
Officers 319 181 138
Other (Field Assistants) _42_ _36_ _jj_
TOTAL 406 227 179

 

Source: N.L.C. Agricultural Committee Ministry of Agriculture, 1966.

extension category had only 19 percent of total employees in
Agriculture (Manpower Estimates M.O.A., 1964-70). The implication
of these figures is that given the population of active farmers in
Ghana, the extension farmer ratio was about one extension officer to
about 20,000 farmers. Although there was improvement in staffing,
the situation did not change. Yet in this situation the agricultural
establishments were expected to be production oriented and at the
same time promote mass participation in agricultural development.
Thus it appeared at the time that special strategies were required
to encourage the small-scale agricultural producer. From the
personnel point of view the agricultural organization was not suffi-
ciently equipped to carry out the role assigned to it.

In 1967, it was estimated that an extension worker covered

as many as 6,500 farm families. This figure probably included even

182

those who could not by any imagination be called extension officers.
The ratio in 1967 was equally high and so one area of concern was

the inadequacy of technical staff, the Officers who had to carry out
the day-to-day extension function. A rough estimate would be that
each of the 40 agricultural districts had approximately seven officers
and these were supported by specialists in nutrition and animal
breeding who were concentrated in the national and regional capitals

rather than at the district levels.

Financing Agricultural Development

For the agricultural development program envisaged, over one
million pounds sterling, half of which was to come from the foreign
private sector, were allocated. The total government investment was
estimated at 476 million pounds, loans and grants from Western
industrial nations accounted for 240 million pounds or about 50
percent of the total Government expenditure (Ewusi, 1973: 41). What
is significant is not the amount of total foreign investment input
but rather the forms of these investments and aid and the patterns
they took. In other words, into which areas did these investments
essentially go? Secondly, what were the social and economic
consequences?

First of all, it was the intention to mobilize local savings,
budget surpluses, profits from state corporations, deficit financing
and foreign loans which turned up mostly in the form of tied aid and
supplier credits. On the whole the aggregate of new private invest-

ment under that plan was to be distributed in the following way:

183

one-third each to agriculture and industry and one-sixth to housing
(Seven Year Plan: 279). Table 4.5 indicates the proposed structure

of investment.

TABLE 4.5.--Structure of Investment (in 1960-1962 Average Prices).

 

 

Field of Cevelopment Total % Share
Agriculture 176.6 17.4
Mining 41.7 4.1
Industry 29§;4_ _2Q;§_
Sub-Total l_1_2_4_._7_ _4_1_.§
Transport 62.9 6.2
Housing 76.2 7.5
Supra-Structure 109.4 10.7
Education 64.0 6.3
Health 31.1 3.0
Other Social Services 32.8 3.3
Other l_fl§£; _7:4_
Sub-Total flél;§_ 44;4__
Depreciation 140.]; l_3;8_
TOTAL 1,016.5 100.0

 

Source: Seven Year Plan, 1964.

184

In terms of sectoral investments in agriculture Table 4.6 shows
that the private sector remained dominant, contributing about 50
percent of the agricultural investment.

Table 4.6 would suggest, then, that there was major interest
in supporting agricultural services, particularly extension service
organization. The allocation given to the Central Services, the
establishment of Extension and Development services, seed production
and distribution, the setting up of machine stations and farm
settlements, agricultural credits and subsidies, services directly
related to production, together were tranted about 50 percent. On
the other hand, the state agricultural organizations that were to
carry out some of these services were allocated nearly 17 million
pounds. The question is whether the concern expressed by Government
matched the investments in agriculture? After the initial period of
political decolonization, investment in direct productive sectors
began to increase. In real terms, however, economic services,
including agriculture, ranked third in order of priorities while a
larger proportion went to capital investment. A closer examination
of actual budgetary allocations, as shown in Table 4.7, makes it
clear that the non-productive, purely service sectors (defense and
education), increased their share of budget allocations while that of
agriculture declined.

During 1965, Government expenditures increased by 16.6
percent compared to the previous year. A similar picture could be

noticed in capital expenditures which stood at 39.2 percent compared

185

TABLE 4.6.--Summary of Financial Allocations in Agriculture.

 

 

GM GM
1. Central Services
a. Establishment of Extension and
Development Services 2.8 32.3
b. Establishment of Seed Production
and Distribution Units 2.7
c. Live-stock Improvement in the
Savannah Areas 1.3
d. Setting Up Machine Stations and
Farm Settlements 3.5
e. Credits and Subsidies 4.5
f. Agricultural Research 4.4
9. Agricultural Education 2.0
h. Irrigation 11.1
2. State Farms Corporation 9.2
3. Workers Brigade 4.5
4. United Ghana Farmers' Cooperatives 2.9
5. Fishery Development
a. Ghana Fishing Corporation 3.55
b. Credit Fund for Purchase of
Fishing Vessels 5.2
c. Fish Processing and Marketing 3.0
6. Forestry 2.6
7. Reserve for Miscellaneous Developments _g;g§
TOTAL 67.5

 

Source: Seven Year Plan, 1964.

186

 

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mm.m mm.m mm.m m¢.m mo.¢ mm.m :ppmm:
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187

to 34.3 percent in 1963-64. Within the economic services group,

33.0 percent of total investment was devoted to agriculture and
non-mineral resources (Economic Survey, 1965: 23-25). This reflected
the desire to concentrate on the priority sectors of agriculture and
industry. In that year, for example, more funds were allocated to
the State Farms Corporation. But prior to that year the Public
Accounts Committee of Parliament noted that there was a heavy invest-
ment into agricultural machinery that was of no use to food produc-
tion (Report, Public Accounts Committee, 1965). But the structure
of investment shown in Table 4.8 is indicative of the direction in

which the economy was expected to go.

TABLE 4.8.--Allocation of Resources

 

 

G Million
Health Services 3.4
Mining 4.0
Timber 1.7
Agriculture 2.0
Manufacturing Industries for machinery, 56.8
equipment and raw materials
Consumer Goods 62.6

 

Source: Government Financial Policy, Parliamentary Debates,
January 1965, C01. 186.

188

It is obvious that in the allocation of resources the emphasis was on
industrialization, particularly manufacturing and raw material pro-
duction. This point is further buttressed by the fact that thirty-
two of state owned enterprises had about 39.7 million cedis although
this represented an under-estimation (Government Financial Policy:
Parliamentary Debates, January 1965, C01. 187).

A report on the State Farms Corporation in 1966-67 stated
that the corporation was one of the largest net spending organiza-
tions within the state sector. Its expenditure was far in excess of
its incomes and large sums continued to be spent on land clearing
equipment. There was clearly an imbalance in the Corporation's
investment structure. Up to 1965, investment in machinery and
equipment was estimated at 3.5 million cedis and in 1966 alone it
spent ¢2.3 million cedis (Report, State Enterprises, Accountant
General's Department). Thus it would seem that while investment
resources were being increased yearly for the high priority sectors,
agriculture, particularly the peasant and food producing sector, was

progressively receiving less investment funds.

The Politics of Extension Organization
The factors were further complicated by internal organiza-
tional 'politics' within the Ministry of Agriculture itself.
In 1961 the then Principal Secretary of the Ministry of
Agriculture spearheaded an effort to establish an extension service
organization which would geographically be broadly based and

emphasize food production. First of all, it was proposed that the

189

post of an Extension Commissioner was necessary, for several
reasons. Up to that point agricultural activities lacked coordina-
tion; there was no effective link between the planners at the
Ministerial level, the field and technical officers and the farmers;
there was no coordinated in-service training for field workers;
furthermore, there were no interlinkages in policy and project
proposals from various divisions of the Ministry of Agriculture.
The Extension Commissioner was therefore seen as the linking-pin in
the program of agricultural development. In addition to the creation
of this position it was believed that full establishment of an
extension unit in the future would be the ultimate goal (Asem, 1961).
The proposal for this new unit was very much resented by the
heads of the major divisions of the Ministry. The minutes of the
meetings held by divisional heads to discuss this proposal are
indicative of the resentment. First, it was felt that there was no
pressing need for an Extension Commissioner in the first place, and
although they eventually accepted the proposal that the Commissioner
should act as coordinator of agricultural programmes in the field and
also act as 'a sort of deputy to other heads of division,‘ the
ultimate establishment of a separate extension unit was an anathema.
It was argued that since the duties of the Chief Agricultural Officer
covered general agricultural services including the bulk of extension
work, there was no need to give the new Extension Commissioner a full
establishment. Thus, "it was unnecessary to transfer Technical

Officers to work permanently under the Extension Commissioner both

190

at the Ministry or in the field. But the Commissioner could use any
of the Head Office staff and field staff as required (Ministry of
Agriculture, November 1971). This situation is reflected in the
organizational chart, Figure 3, which clearly indicates that the
Extension Commissioner had neither staff, clearcut authority base nor
a proper procedural policy to follow. Furthermore, he had no
administrative directive to give to divisional heads through which
channel he could be effective. Since there was no supporting staff,
the Commissioner was given no financial allocation except those
granted to other divisions. In short, each division managed its own
organization, implemented its own program and carried out extension
work without reference to the Extension Commissioner. By 1962,
however, the coordinating functions of the Extension Commissioner
became an acknowledged fact. This was a product of the desire of
government at the time to proceed with a crash modernization program
in agriculture. As part of the approach to extension development,
the country was divided into forty agricultural districts. In addi-
tion, agricultural councils were established at national, regional
and district levels (see Figure 4). The function of these councils
was to insure the effective coordination of the activities and
requirements of various bodies whose activities directly or
indirectly had an impact on agricultural development. These bodies
were also to serve as advisors to extension workers at each level
and bring to their attention the requirements for effective produc-

tion.

191

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Figure 4.--Agricultural Extension Districts of Ghana

193

However, as the requirements for agricultural development
increased government decided to make the extension unit a significant
part of the organizational structure of the Ministry. The country
was divided into forty agricultural districts with district extension
officers who worked with the relevant agricultural council and at the
district level were extension field officers who worked at the farm
level. In its structural form there was a chief agricultural exten-
sion officer assisted by a deputy. At the regional level were senior
agricultural officers responsible for extension work and assisted by
subject matter specialists. At the district level were the District

Officers and their assistants.

Agricultural Extension Strategy

The development of an extension service with the basic
objectives of encouraging production through popular rural participa-
tion had these major obstacles to grapple with. It was against the
background of these constraints that extension strategies were
proposed. The first extension strategy was concerned with integrating
peasant agriculture with large scale farms or estate agriculture. It
was felt that such an approach would facilitate extension work since
the goal was a crash modernization of agriculture. In other words, a
departure was to be made from the "fragmentary haphazard" crop produc-
tion methods without necessarily destroying the peasant mode of
production. This strategy hinged on the principle that

Peasant agriculture, however well directed, cannot by

itself suffice. Small holdings can never reap the full
benefits of the technical developments of scientific

194

agriculture. Economic sufficiency demands the use of

estate methods at least in some parts, to broaden the

whole economic basis but there is room for the combina-

tion of these two systems (Macmillan, l949: 4).
It was the view that such a strategy would not only facilitate
research and its application and help commercialize production
suitable for small farmers, but also demonstrate to small scale
farmers efficient techniques in crop production. This type of inte-
gration, it was assumed, would involve four levels: food and cash
crop production; irrigation schemes that satisfied the requirements
of both large and small farms; ranching; and mixed farming. Although
there were to be estates focusing on cash crops, most of them would
address thefbod problems. These estates, however, were to be coopera-
tively organized so as to facilitate the diffusion of new agricultural
practices.

But as part of this integrated strategy an agricultural
extension program was to be devised to foster the development of
sizeable individually run and owned farms which should operate as a
corporate group (Charter, l955: 3). In this respect extension work
was to begin from such group farms and progressively spread its
activities thorughout the hinterland. The main idea was to approach
food production through two forms of group action. First, it was
intended that farmers would own their plots collectively, work
together on the land and share the proceeds equally among themselves
after production costs had been deducted. Second, it was the view

that farmers would own their plots individually and yet work

cooperatively in order to avail themselves of extension services

195

including such inputs as fertilizers, pesticides, and improved
varieties which they could not as individuals afford to purchase.

In view of the limitations imposed by finance and manpower
requirements the Nkrumah Government opted for this strategy, but
with significant modifications. These modifications were in line
with the policy of Government to give state organizations a critical
role in economic development. The generally held view of the
Ministry of Agriculture reinforced the quest for modification. The
view was that the failure of the agricultural sector was “Created by
over a hundred years of colonialism, fortified by seventy years of a
paper agricultural department, which was full of specialists cut off
from the farmers who they were meant to educate" (Report U.G.F.C.C.,
1963). The State institutions were expected to act as production
fronts and were assigned the responsibility of offering guidance and
leadership to individual farmers as well as cooperative farmers,
therefore it became necessary to transfer the extension service
started in the Ministry to the United Ghana Farmers Cooperatives
Council (U.G.F.C.C.), an organization whose role was "the fulfillment
of the noble aim of the agricultural revolution" (General Secretary,
U.G.F.C.C. Report, l962-63: 6).

But the most sustaining view was that there were far too many
farmers scattered all over the country. Such a situation could not
allow for 'effective' extension work unless the activities were

carried out cooperatively. It was to be a cooperative extension

system in which the agricultural officer offered advice to cooperators

who in turn worked with larger rural groups.

196

What, however, remained the most critical consideration in
extension strategy had to do with food crop production. It should be
noted at this point that over the years the urban population had
increased phenomenally. Non-agricultural employment had also
expanded rapidly because of the program of industrialization, and
with increases in the income portfolios of urban workers went a
corresponding increase in demand for food. From the point of view of
domestic production, the gap between supply and demand for food had
become overly conspicuous. This was manifested by the sharp
increases in price. Stoces (l966) suggested in his estimates that
to close the gap between supply and demand of food in Ghana in about
five years would require an average yearly increase of between 6.1
and 7.7 percent.

By all accounts, therefore, agricultural production, particu-
larly food, constituted a thorny development problem. Against this
background the approach to food production under the Nkrumah regime
was through centralization of effort within State agricultural
organizations. Although the Workers Brigade, the Young Farmers
League and the Settlement Farms were concerned with food production
as well as other crops, the major institutions remained the State
Farms Corporations and the United Ghana Farmers Council. Both of
them were charged with extension work but the United Ghana Farmers
Cooperative Council, more than any other organization, had to focus
on cooperative questions as the means to effective farmer education.

The para-statal agricultural organizations were to introduce modern

197

techniques including fertilizer use and mechanization as a means of
achieving productivity in agriculture. In the case of fertilizer use
the State Farms Corporation took over the agricultural experiment
stations of the defunct Agricultural Corporation and converted them
into production units. These units were farms for experiments with
fertilizer, and improved seeds as well as the bases for acreage
expansion of food and other crops. In 1964 the corporation had l05
farms employing some 20,000 persons and in that year the acreage
acquired was 250,000 although only 40,000 acres were actually culti-
vated. In 1965, the acreage stood at 345,000. This means that the
average farm size was 2,760 acres with an average labour size of

T60 persons.

As to the crops and acreages planted, Table 4.9 indicates
that oil palm production received the greatest emphasis and was
followed by cereals--maize and rice. In the cooperative crop produc-
tion and marketing fields the United Ghana Farmers Council Cooperative
(U.G.F.C.C.) was expected to carry out fertilizer extension work.
Through a technical assistance agreement between Ghana, the United
States and the United Nations, the F.A.0. and USAID began a program of
fertilizer use and distribution among state farming agencies and
private farmers. Figure 5 shows that from 1962 when the program
started, fertilizer imports increased from 2,394 tons to 29,736 tons
in 1973.

The purpose of this program was to encourage the use of

fertilizer to increase food production as well as cash crops. In

.Pme .Fou ”mom” .mwpmnmo agmcmewpmga .wgaupzowgm< mo swumwcwz "mogaom

 

198

 

oom omp mwoumuoa

-- com acmcmm

nu com nguwu

-- NQN.~ emanam

u: . mmm.P— spam pwo

omm.~ 0mm mmpaepmmm>

Amowscc ooo.~mm ozone m: m>wm u_=oz ;o_;zv oom.~ com mm_aam-m=_a
ow mwm ouownop

omm mew moaaoF acme:

omm._ omm m>mmmmo

mm? mmv muscuczogo

mmm.F moo.m mowm

Antanap ooo.mme ozone m: mswm c_=oz ;u_;zv om¢._ mmm Em»
mmm.~ omm.m muwmz

upmmwcwwuuwwxm mmmmmcu< maogo

 

.vmucmFa mommmgu< use maocu "cowumgoagoo magma mumpmun.m.v m4m<h

Quantity (in 000 tons) of Fertilizer Imported

30
27
24
2|
l8
l5

T

T

I

I

 

I962 '63 '64 '65 '66

l99

ANNUAL FERTILIZER IMPORTS - I962-l973
QUANTITY lN TONS

Y J l 1 l
‘67 '68 '69 '70 '7:
Year Imported

'72 '73

Figure 5.--Annual Fertilizer Imports--1962-l973

200

the early part of the decade the scheme was started in the savannah
region and by 1965 had been extended to the Northern and upper
regions where rice production had shown promise. The interesting
picture portrayed in Table 4.10 is that between 1965-66 about 50

percent of fertilizer supplied went to the peasant farmer.

TABLE 4.10.--Ferti1izers Sold by Pilot Scheme to Peasant, Large
Scale and Institutional Farming Sector l965-66 in cwt.

 

 

1965 1966
State Seed Multiplication Farms 2,315 3,857
Workers Brigade 100 457
Young Farmers League 24 2,014
Other Institutions 6,433 5,288
Peasant Sector Upper/Northern 1,015 1,102
Rest of Regions 7,147 9,192

 

Source: Ministry of Agriculture:

1965.

But this situation needs to be treated with caution.

Sales Report, Fertilizer Stores,

The program

was geared toward demonstration but was also meant to provide informa-
tion about the "fertilizer ratios for different crops under different
natural conditions" (FAO Report, 1961). Under FAO supervision the
U.G.F.C.C. established twenty-five supply and marketing centers

throughout the country. The fertilizer was sold only to members of

201

of cooperative farms (FAO Report, 1965: 2). The cost of fertilizer,
however, was so high that it was impossible for those who were not
members of the U.G.F.C.C. to purchase such inputs. The system of
distribution was in many cases disrupted and largely inefficient

(Haensel, 1967; Tweneboah, 1970).

Agricultural Mechanization

In recommending a program of agricultural mechanization as
part of the extension strategy, development planners were faced with
a number of contradictory tendencies in such an approach. The
problems were (1) how to reconcile technology transfer which would
depend on foreign capital investment and a reduction of underdevelop-
ment, (2) how mass participation would be achieved in the face of
capital intensive, labour-saving inputs, and (3) what would be the
social structural consequences. Despite the adverse implications of
such a program, Government decided to invest in mechanization because
of the desire to maximize national production. For example, in the
case of Ghana, it has been demonstrated that without mechanical
input, production could only be raised by 10 percent if farms were
better organized, and if fertilizers were used, productivity would
increase by 14 percent. Thus, the Ghanaian farmer could raise
production by only 24 percent (Roth and Brenner, 1966: 152-154).
It follows from this that notwithstanding the cost, mechanization
remained a viable strategy. The second justification was political.
To understand the dynamics of mechanizing agriculture one has to go

beyond the social and economic accounting and put it in the political

202

perspective. In short it is a part of an overall strategy to reduce
dependence on agricultural imports (food, raw materials for industry)
as well as to provide the requirements for an increasing urban popu-
lation. 0n the other hand (and this is paradoxical) mechanization

is seen as a means of solving the perennial problem of unemployment
and under-employment among the youth. This is shown by the way
state agricultural institutions were organized.

The point here is that within the context of traditional
agriculture, it is difficult to see how the younger generation could
be drawn back into agriculture without reducing the 'drudgery' of
farm work. The general thrust of the mechanization program is to
reconcile the opposing economic and social tendencies in such a way
as to reduce poverty, increase production, redistribute income through
public works programs and reduce social inequalities and ultimately
overcome dependence. But simply, it is a theory of 'walking on two
legs' on a lumpy and slippery road. As Clayton (1974) points out,
the role of agriculture in developing countries must not be that of
a supplier of labour for industry, but rather at current levels of
population growth, it must serve as a retainer of the rural population
and act as a major employer. The critical questions then are: how
far and how fast should such a program proceed and what form should
it take? In other words, how should it be introduced? Should it
start on a limited scale while taking account of the existing rural
social structure and technological base? How should the program be

financed? What economic and social benefits are intended? What type

203

of personnel does the program require? These and other equally
fundamental questions must inform any policy of agricultural
mechanization. The concern here then is to produce evidence from
Ghana in terms of the wider socio-economic and political dimensions.

Until the early 19605 Ghana's experience with agricultural
mechanization was very limited. Tractor power in peasant agriculture
was introduced in the late 19405 in the Kpong Agricultural Research
Station with the focus on investigating the advantages that would
result from farm mechanization. These efforts were also carried out
on an experimental basis in Northern Ghana. With the great success
registered with bullock plowing the experiment was extended in the
19505 through the establishment of the Gonja Development Company in
Northern Ghana. Briefly, the purpose of the scheme was to settle
people from overpopulated districts, on uninhabited areas in village
groups. The approach there was to be that of mechanized services on
a crop sharing basis (Colonial Office Report, 1951: 31). This attempt
at organizing farm mechanization through cooperative settlement
failed and the settlement scheme was therefore liquidated.

In early 1960 the Government had taken a decision to begin
a crash mechanization program despite thelimitation of sufficient
knowledge on what technical equipment would be suitable for Ghanaian
conditions. At the time of the crash program it was estimated that
there were about 140 tractors of six makes in use in the country.
But by 1964 the Government had invested almost ¢26 million in agri-

cultural machinery import. In 1967 when an inventory was taken of

204

agricultural machinery there was a total of 3.941 wheel and crawler
tractors in Ghana. What is interesting is that with increasing
importation of tractors, the brands multiplied. There were in 1969
sixteen different models from thirteen companies (Report: National
Advisory Committee, 1970). With increases in machinery imports
Ghana, in the 19605, became the largest African importer of advanced
technology. What is important to note here is that in the import
program, the Nkrumah Government attempted to diversify sources and
break the traditional concentration on trade partners. But Table
4.12 clearly shows that taken as an economic region western nations
continued to supply the bulk of agricultural and other capital
intensive inputs. Moreover, this meant that these imports were
heavily financed from western sources since Ghana was experiencing

economic difficulties at that time.

TABLE 4.ll.--Major Suppliers and Value of Machinery, 1961-1967.

 

 

Suppliers ¢ Million
Yugoslavia . 7,045,621
United Kingdom 5,431,805
U.S.A. 4,149,239
Czechoslavakia 3,249,617
West Germany '2,160,152
U.S.S.R. 2,159,218
Japan 968,930

 

Source: Ghana Economic Review, Accra.

205

The issue then was how the program under the portfolio of
the state agricultural institutions would be introduced. In 1963,
as pointed out earlier, the U.G.F.C.C. had a staff of 15,079; the
State Farms had a total manpower of 16,759, and the agricultural wing
of the Workers Brigade had 1,588 (Draft Report, Manpower Estimates).
The establishment for operating the mechanical services constituted
a negligible percentage of the labour force. For example, in the
case of the U.G.F.C.C. there were 1,396 employees in 1963 working in
the mechanical unit with only two agricultural engineers. In fact,
in 1962 there were only four persons in Ghana qualified as agricul-
tural engineers and in 1964 three of them left the service of the
government. In terms of skilled manpower needed for the crash pro-
gram of agricultural mechanization, there was very little human
resource to fall on.

Apart from Government's own imports, each agricultural
organization was allowed some freedom to import machinery. Between
1962 and 1964, therefore, the U.G.F.C.C. imported 1,090 agricultural
tractors and equipment. It signed a contract with a Czechoslovakian
company to supply implements and components of tractors to be
assembled in Ghana. The U.G.F.C.C. signed further contracts with a
Yugoslav firm to supply 1,400 crawler tractors to be assembled in
Ghana (Dadson, 1970: 182). In addition to monies received from the
Cocoa Marketing Board, the U.G.F.C.C. borrowed additional funds or
had the funds guaranteed by the Commercial Bank and the Ministry of

Finance and also received subventions from Government. It was

206

therefore estimated that in carrying out its activities the U.G.F.C.C.
had a total amount of 123 million cedis, excluding about 24 million
cedis already spent on a tractor assembly plant (Due, 1969: 28).

The State Farms Corporation acquired its machinery from the
government. In 1961 the government signed a contract worth ten
million pounds sterling with the U.S.S.R. for the supply of machinery.
A second contract involved setting up mechanized farms to produce
maize and rice on behalf of the Corporation. A third dealt with the
setting up of a training center for agricultural mechanics including
technical support to such farmers. In 1965 the center received a
government subvention ofL£50,000, but all of it went into wages and
salaries of workers. 0n the whole it was estimated that the Ghana
Government cash grants and support from U.S.S.R. credits to the State
Farms Corporation was in the region of $25 million by 1968 (Due:

32).

The issue to consider presently is not that so much invest-
ment had been made in agricultural mechanization but rather that the
sources of such investments had implications for overcoming dependency.
Most of the financing has been through supplier credits but the
suitability of this form of external financing has been a thorny
issue in development economics. In the face of declining export
earnings, dwindling external reserves and persistent balance of pay-
ments deficits, government borrowing increased about ten times during
1963/65. Between 1950 and 1965 about 80 percent of Ghana's foreign

indebtedness was in the form of supplier credits (Grayson, 1973).

207

This form of credit was a short term debt which had to be serviced
within six years on the average. In such a situation the economy
was subjected to considerable pressure since Ghana did not have the
means to service these debts (Economic Survey, 1967). The point
about suppliers' credits is that the decision as to projects to sup-
port, finance and operate remained with the lenders. In the final
analysis, the national government was unable to control the influences
of equipment peddlers and industrial export promotion organizations
in the western countries.

Thus, in the agricultural development sphere, while
suppliers were extremely eager to sell their products, Ghana, in the
absence of any other alternative, was willing to accept them almost
on any terms. In a number of cases agricultural machines were
imported without taking account of the chemistry of the agricultural
lands, so much so that an unconfirmed story has it that included in
the imports were a number of snow ploughs. 0n the whole, financing
the program of agricultural mechanization through suppliers credits
contributed in no small measure to the inflationary spiral and the
balance of payment problems. Despite the investments made in these
agricultural organizations the desired level of performance was not
achieved, i.e., organizing farmers to take advantage of inputs and to
increase food production.

In the case of the State Farms Corporation, about 50 percent
of its activities were focused on food production, but at the peak

of production between 1962 and 1965, the farms supplied less than

208

0.5% of total food supply of the country (La Anyane, 1974: 394;
Agble, 1966: 7). Moreover their activities did not reach the small
holder who in 1965 showed an average long ton yield much higher than
the state organization's performance of an average of 0.21. In terms
of output per worker the State Farms produced 0.59 tons per acre per
year compared to the small farmer whose output stood at almost twice
that figure. The apprehension and concern for the performance of the
State Farmers Corporation was stated thus:

The behavior of our state farms today will kill the revolu-

tionary national feelings in the hearts of our farmers.

Why? It is because the farmer who toils has noticed that

instead of enjoying the fruits of his labour, he is rather

putting money into the coffers of the government and then

the Government in turn are taking that money and paying it

out to private individuals who are on the State Farms and

doing practically nothing (Parliamentary Debates, 1965:

Col. 566).
From available indications the turnover of the corporation showed no
marked increases, but the yearly deficits on production showed a con-
siderable downward trend, and accumulated loss continued to mount
(Public Accounts Committee of National Assembly, 1965: 8). Though
the workers were given targets individually to complete, and despite
the excessive technical inputs, the output for this corporation was
very little.

In the face of inflation, the production cost for the State

Farms steadily increased. This problem was further complicated by
the system of food distribution, and so in 1963 several members of

Parliament expressed concern over the organizations' performance.

The Minister of Agriculture also reinforced those concerns when he

209

pointed out that even if the target for the Corporation in 1965 were
implemented the farms would have an average area under crops not
exceeding 500 acres. Thus "the cost of all farm output that is pro-
duced by many of these small state farms, forms the sum which is not
enough even for paying the salary to their personnel" (Parliamentary
Debates, 1965). In a number of cases the farm managers operated
without enforcing the required targets. In this respect another
member of Parliament noted that

the Minister must stop giving the nation and the poor

farmers fraudulent promises--promises which are never ful-

filled . . . yet all that the state farms can do is to put

up show case activities making promises which are not ful-

filled and thereby wasting public funds (Parliamentary

Debates, 29th January 1965: C01. 518).
In 1965 the State Farms Corporation was stripped of its food producing
functions, and was now to concentrate on the production of industrial
crops (Parliamentary Debates, 24th August 1965: Col. 25).

The United Ghana Farmers Council Cooperative (U.G.F.C.C.) was
given the responsibility of organizing small producers into production
and marketing cooperatives and carrying out extension work. But its
interest in cocoa production and marketing overshadowed other critical
functions. Table 4.13 shows that in the cooperative development the
U.G.F.C.C. established 1,456 cooperatives with a membership of about
400,000 in 1965 alone. In terms of expansion outside cocoa production,
992 cooperatives were established with a membership of 26,098, and
had acquired almost 500,000 acres of land. According to estimates,

however, only 23,771 (4.9%) were reported to have been put under crop

production in 1964 (Ministry of Agriculture, 1964: Phase II, Vol. II).

210

It is suggested that each producer cooperative cultivated only 23.9
acres. The individual cooperator cultivated therefore only 0.9 acres
which was far less than what the small farmer cultivated. What is
important to note, however, is that two thirds of the acreage culti-
vated by the non-cocoa cooperatives was planted with food crops
(Miracle, 1970). Even where food crop cooperatives were organized
(i.e., 1,129 food cooperatives with 24,336 acres employing 31,868
members), the cultivated area per person on average stood at 0.76
acres. This figure was far below the average for the peasant food
farmer. It is clear that the cultivated area was small; the quality
of crops poor. The planning and organizing of the agricultural pro-
grams were poorly and ineffectively handled. Thus, it was stated:

The supreme councillors of the UFGCC who represent food pro-

ducers of the country have critically examined the food

situation in Ghana and have come to the conclusion that

unless a more realistic and positive approach is made

towards food production programs by both farmers and the

government, Ghana's food situation in the nearest future

will be precarious (General Secretary's Annual Report,

1964-65: 10, para. 27).
Despite the increases in acreage of land acquired for large scale
farming, the outputs of the organizations engaged in agriculture did
not make a noteworthy impact on total agricultural production
(Economic Survey, 1965: 53).

There are a number of explanations that have been offered for

this failure on the part of these state agricultural organizations.
But a major explanation must be sought in terms of the extent to which

these organizations provided a framework for the old and emergent

dominant classes to extract surplus and exploit the rural sector.

211

This situation is clearly reflected by class formation and class

relations during this period.

Socialism and Class Formation

The experience with decolonization under the Nkrumah Govern-
ment was not limited to the reduction of external dependence but also
involved the reduction of internal exploitation of one class by
another. In the Marxist jargon, the process of decolonization
involved the elimination of "the exploitation of man by man." With
regard to rural inequalities the Nkrumah Government sought to
establish the dominance of the state in production by controlling
farmer organizations. The Ghana Farmers Congress, later to be named
the United Ghana Farmers Council, together with a state purchasing
company, Cocoa Purchasing Company, was given the monopoly to purchase
the bulk of the cocoa crop. This state intervention was at variance
with the free enterprise system the capitalist farmers, traders and
brokers had hoped the government would support. They distrusted the
Nkrumah Government's strategy since it also involved political control.

There were a number of reasons for this distrust on the part
of the capitalist farmers, traders and brokers. Without doubt they
saw the government's approach as undermining the system of capital
accumulation that the cocoa economy brought with it. They were also
concerned about the domination of farmer organizations by persons who
did not have as great a share of investments in production as they
did. These persons included peasants, local teachers and clergymen

who engaged in cocoa production as part-time activity. In addition

212

there were the rural unemployed and agricultural labourers who
migrated into the cities and participated in nationalist politics.
This resentment was further buttressed by a series of policy measures
which was meant to reduce what was seen as 'excessive exploitation'
of the farmers.

The first policy had to do with the control of a virulent
cocoa disease called Swollen Shoot Disease. The attack of this
disease was widespread and within a decade had reduced the productivity
of farms significantly. The only solution to this problem was to cut
out the diseased trees. This approach, which was begun under the
colonial administration, led to further distrust among producers
(Austin, 1964: 58). In the densely populated cocoa areas the mounting
distrust had become politically explosive since the economic loss was
heavy (Austin, 1964: 59-66). This situation was exploited to
advantage by nationalist groups, not excluding Nkrumah's Convention
Peoples Party. In view of the CPP's involvement in the anti-Colonial
Government Swollen Shoot Policy, the Nkrumah Government was faced
with adopting an alternative policy (if that could be found). The
government suspended the colonial policy in this regard, but following
a report by a commission investigating the methods used in carrying
out the policy, the government proceeded to encourage cooperation of
farmers in cutting out diseased trees. Although a large number of
the membership of the Farmers Association was willing to support the -
new approach, one faction was unwilling to support the continuation of
this policy (Austin: 159-160). Some of these farmers expressed the

fear that the CPP "wanted to wipe out the cocoa industry and take

213

over the farmers' lands.” The CPP would have succeeded in this
regard if the Cocoa Duty and Development Funds (Amendment) Act had
not been passed by Parliament. In this Act the government sought to
fix the price to be paid to cocoa farmers. The intent of the Act was
to check the inflationary situation which fluctuations in world
cocoa price entailed for the Ghanaian economy. The then Minister of
Finance, K. A. Gbedemah, argued in defense of the policy that:

all the other export crops put together cannot form the

basis of any major fiscal policy apart from cocoa and

therefore the government is justified and is right in basing

its policy on the major crop which this country produces in

order to stabilize its economy, and in doing so to use the

accululated funds to the benefit of every section of the

community (Gold Coast L.A. Debates, 13th August 1954).

The impact of this policy was felt more in Ashanti and Brong

Ahafo regions but more specifically among those traditional upper and
middle class members whose incomes derived largely from cocoa pro-
duction. Thus, a potentially explosive economic grievance became
overshadowed by ethnic particularism. What is often referred to
simply in terms of ethnic politics was essentially a political-
economic struggle between two broadly based social classes. The
composition of the Ashanti-based National Liberation Movement leader-
ship lends strong support to this interpretation. There was an
alliance between the intellectual and the business groups who were
urban-based and the traditional upper class and capitalist farmers
seeking to articulate their class interests under the guise of
ethnicity. The call for federal government was not based on a

desire to reaffirm 'Ashante hegemony.‘ It was force of circumstance

and the inability of this party to penetrate regions beyond the major

214

cocoa growing areas that constitute a major explanation of political
relations during the Nkrumah period.

Another policy aimed at reducing inequalities was the Rent
(Cocoa Farms) Regulations, 1962, and Rent (Cocoa Farms) Amendment
Regulations, 1965. Under these acts the rural upper class consisting
of land owners and capitalist farmers was required to pay 'five
shillings' an acre as a confiscatory measure by the government. The
real intention of government was to protect farmers from paying
exhorbitant rents to landlords. Moreover, it was considered that the
'Abusa system' which provided for one-third of the product to be
taken as a rent, was more unfair and harmful to the expansion of the
agricultural enterprise envisaged under the socialist strategy.
Coupled with these measures were specific acts of parliament regarding
lands which chiefs held in trust for their communities.

The Stool Lands Act of 1960 vested all stool lands in the
President who was to act as trustee if the public interest demanded
it. The Act further stipulated that monies accruing as a result of
any deed entered into by the President was to be paid into the relevant
stool lands treasury. Following this, another legislative instrument,
The Administration of Lands Act, was passed. This Act gave the
President the power to manage the stool lands, and he in turn delegated
this power to the Minister of Local Government and Justice. However,
any lands not vested in the President could only be disposed of with
the concurrence of the Minister (Bentsi-Enchill, 1964: 71). By this

Act the government took away the customary rights of chiefs who in

215

the process of economic expansion in the rural areas, sought to
build an independent economic base for themselves.

The Act further stipulated that monies collected as stool
lands revenue were to be paid to the Local Councils rather than the
Stool Treasuries. Moreover, all past and existing transactions
prior to the passing of the Act were to be placed at the disposal of
the Minister in order for him to make a determination as to how
revenue was spent and on what the remaining income could be used
(Bentsi-Enchill, 1964: 73; see also Harvey, 1959).

In essence, theses policies and acts of parliament were
motivated by a kind of class inequalities in the rural sector, and
it was felt that such approaches would eliminate the initial class
contradictions inherent in the peripheral capitalist economy. The
next step in reducing the class contradictions was to be seen in the
efforts to eliminate the monopoly of foreign firms as well as those
traders and brokers who served the interests of these firms.

When the United Ghana Farmers Council, which became the instru-
ment for breaking foreign monopoly was established, it merely provided
an opportunity for the traders and brokers, who were eliminated by
foreign monopolies and the slump caused by the depression, to make up
for their loss. There were also those farmers who formed an alliance
with nationalists and provided the initial rural support for the CPP.
They saw this organization as a means to economic advancement. These
were the urban based construction and building contractors, clerks,

and teachers who constituted the cadre of CPP organization and who

216

were looking for opportunities for a better life. The United Ghana
Farmers Council was simply a melting pot for those who felt dis-
advantaged regardless of their initial class origins. They entered
the organization as farm managers, secretary receivers, chief
farmers, auditors and clerks. All of these people were held together
by one goal--economic advancement--and could have been labeled 'the
new entrepreneurial class.‘ It was this class that dominated
decision-making as it related to the cocoa sector. In addition to
this class was the group composed mainly of rural migrants to the
towns and cities, who had left agriculture because of lack of economic
opportunities. As a social category they included unskilled agri-
cultural labourers, artisans, masons, drivers, shop assistants, and
messengers who had been frustrated by lack of employment. These
ranks were also swelled by the middle school leavers who constituted
a significant proportion of the unemployed. They ultimately found
employment in the United Ghana Farmers Council and other state agri-
cultural organizations, and were to become the agricultural prole-
tariat.

Through the United Ghana Farmers Council, the foreign firms
were eliminated on the grounds that exploitation of farmers through
price rings established by these firms had increased. By 1959 a
significant number of these firms had withdrawn their Operations in
the cocoa sector and were reinvesting in timber and manufacturing.
The traders and brokers who worked with foreign monopolies were

eliminated on the grounds that they served as a conduit for the

217

perpetuation of foreign domination of the economy. They were accused
of trade malpractices including manipulating prices, demanding
excessive interests on loans to farmers and lowering the quality of
produce by mixing the beans which were of poor quality with good ones.
By 1960 the United Ghana Farmers Council had become a monopoly
organization concerned with cocoa production and marketing, and as it
turned out this monopoly offered opportunities for the new entre-
preneurial class. It became a framwork for private accumulation.
The resources of the organization were used in supporting private
investments, i.e., cocoa transportation and shed constructions. In
this case Beckman (1976) noted that

large lorries and trucks were the most conspicuous element

in the picture of the private investments of the Farmers'

Council Officials. They demonstrated most visibly the

strong entrepreneurial side of the new trader-clerks (131).
In addition, the new trader-clerks monopolized the distribution of
agricultural inputs--implements like machetes as well as insecticides.
The Secretary-Receivers (officers in charge of local farmer organiza-
tions) too did not overlook the political and economic power their
positions entailed in the local areas. They manipulated the weighing
scales, took commissions from the farmers when purchases were made;
or gave promisory notes which were not honoured by the Farmers
Councils. They further misappropriated the monies meant for farmers
and invested them in private enterprises themselves (de Graft-
Johnson Report, 1966).

The most extensive aspect of this development was the invest-

ment these officials made in cocoa production either as private

218

individual effort or as a family enterprise. They used their posi-
tions to obtain fertile land under favourable rental conditions, and
thus the situation became the subject of extensive debate in parlia-
ment in 1965. While the leadership of the Farmers Council advised
the farmers to diversify production and reduce their cocoa production,
they were themselves engaged in extensive production (Parliamentary
Debates, January 1965). A typical and perhaps an extreme case of
this phenomenon was touched upon by the Jiagge Assets Commission that
probed the assets of CPP politicians after the coup of 1966. In
assessing the income of the General Secretary of the United Ghana
Farmers Council, it was estimated that the gross receipts of the
Secretary from his farms (both inherited and personally owned from
1954-1966) was in the region of 20 thousand pounds sterling and
excluded his yearly salary as General Secretary during that period.
This development was common practice and in this respect a member of
parliament, Mr. Kofi Badu, noted:
We must, however, recognize one danger. We are aiming

at socialism and this must of necessity do away with the

rural bourgeousie. We already have our small share of

absentee farm owners employing a large army of peasant

farmers who in this sense hold a common alliance with the

industrial worker. We must not try to perpetuate this

situation or else we shall be creating the seed of conflict

between expanding farming capital and peasant labour

(Parliamentary Debates, 1965: C01. 131).
The minor officials of the state organizations also demonstrated their

newly acquired social and economic status through conspicuous consump-

tion. The Ghanaian Times editorials pointed to these indicators of

 

new wealth. Referring to the case of the State Farms Corporation,

the paper noted that

219

one weakness of the Council has been the ostentation of
some of its officials, their disrespect, insolence and
over-bearing attitude in the midst of the very farmers
they are to serve (October 9, 1964).

Furthermore,
These traits, the flashy cars, and high tastes, have not
united them with the poor farmers in the village. They
have, in fact, set themselves apart and imposed a false
picture of a gulf between a so—called bureaucratic
officialdom and an impoverished masses (October 9, 1964).

In essence the state enterprises simply provided additional
avenues for political and economic advancement for social groups from
which the CPP recruited its support. What therefore took place under
the Nkrumah Government was a further differentiation of the rural
class structure. These differentiations were more noticeable in the
middle and lower classes. The economic and political power base of
the traditional upper class was reduced through a series of administra-
tive measures, and the middle class became further broadened by the
addition of the new entrepreneurial class. In consequence, during
this period the middle class consisted of three sub-groups: the
landowners and capitalist farmers; the traders and brokers; and the
new entrepreneurial group composed of political cadres, farm
managers, secretary receivers, chief farmers, auditors, and clerks.
Similarly, the lower class became broadened as a new group, the
agricultural proletariat, was added. This class was now composed of
peasants, the agricultural proletariat working in state agricultural
institutions, and agricultural labourers working in the rural farms.

In summary, the increasing role of the state in economic

planning did not only suffer because of external financial constraints

220

but became complicated and exacerbated by the nature of internal

class relations. It is clear that the rural economic differentiations
were sharpened as the dominant classes used state apparatus to
increase the exploitation of the mass of rural people and further
integrate the economy into the world system. These structural
developments reflect rather forcefully the general economic conditions
in Ghana at this time. Thus an examination of these economic condi-
tions would indicate the consequences of these structural developments
for the economy generally, and for rural development in particular.
Consequently, it would further elaborate on the problems of

dependency structures which are called forth by a neo-colonial state.

Review of Economic Conditions

 

According to the economic survey of 1965 the economy had
become almost stagnant since it registered an apparent growth rate of
0.5 percent (Economic Survey, 1965). It was further stated that
between 1960 and 1964 the growth pattern could best be described in
terms of a 'stop-go-stop' phenomenon. Under the transformationist
strategy the growth rate was expected to be in the region of 5.5
percent but the actual recorded rate was 0.2 percent (Economic Survey,
1965). During the Nkrumah period the economy faced an acute balance
of payments and deficits as evidenced by the extent of both the
external and internal debts. As shown in Table 4.14, the rate of
expansion in the structure of external debt had been much faster than
the internal. At the same time the external reserves became

exhausted. In a broadcast after the overthrow of the Nkrumah

221

TABLE 4.14.--The Debt Structure.

 

 

Year Debts Internal External
1959 73.4% 26.6%
1962 53.6% 46. %
1965 47.9% 52.1%

 

Source: Parliamentary Debates, 1965.

Government, the Military Government (The National Liberation Council)
claimed that

the country's reserves had dwindled to a level of £40,000

but this has been pledged against funds borrowed which

were overdue. In practice, therefore, Ghana had virtually

no reserves. The country was consequently threatened with

a breakdown of the commercial system (N.L.C. First One

Hundred Days, 1966: 2).
Ghana faced serious balance of payment problems, and excessive
government spending financed by inflationary borrowing had introduced
serious imbalances in the economy. Despite these problems, the
structure of consumption expenditure remained unchanged. As Table
4.15 indicates, consumption expenditures for food and manufactured
goods continued to increase. The distribution of imports showed that
34 percent went to consumer goods and 62 percent went to raw, semi—
finished materials and capital equipment. From 1962 until 1965 the
share of capital equipments in total imports rose sharply from 18.2

percent in 1962 to 30.3 percent in 1965 (Economic Survey, 1965: 33).

Most of the imports of capital equipment were financed through

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223

supplier credits. Moreover, most of these investments went to
capital-intensive productive units which tended to have long gesta-
tion periods. Even then most of the economic units in the state
sector which benefited from these investments showed unsatisfactory
results. Nkrumah himself expressed concern about this situation:

The state enterprises--including the State Farms and the
agricultural wing of the Workers Brigade--were not set up
to lose money . . . . The State enterprises like any other
enterprise have a duty to operate on a profitable basis
and thereby earn sufficient returns on the initial capital
invested by government . . . . The management and the
workers of our State Farms and State enterprises must
realize that they have been entrusted with the management
of vital economic units on behalf of the people, in the
Party and the Government expect reasonable returns on
these investments (Parliamentary Debates, January 1965:
Col. 10 .

The State enterprises were considered the main pillars on which the
transition to socialism was to be achieved. Yet it was claimed:
a basic problem now facing us is to improve the efficiency
of our economic adminiatration. If we can solve this
problem all will be well with us. The policies of the
Government are clear and sound and well conceived and
formulated. And our people have pledged their support
for these policies. It is but for us to achieve and
maintain a high level of efficiency in giving a practical
effect to these policies (Parliamentary Debates,
February 1966: Col. 16).

One of the criticisms levelled against the previous strategy
therefore was that investments in the state sector were not properly
thought out. Moreover, most of the economic units operated at less
than half their capacity. In some cases factories were established
without the raw materials to feed them (Economic Survey, 1966: 99).
The present picture would seem to suggest that nothing was achieved

in the process of crash industrialization.

224

The expansion of the domestic industry was a major point in
the structural transformationist strategy. In the area of manu-
facturing the effort was significant, but agricultural development
remained an area where the results did not match investments.
Nkrumah himself concluded:

We must face the position that there is at present a

scarcity of locally grown food in certain urban areas in

Ghana, and a rising cost of food associated with that

scarcity, resulting in considerable hardship to the

people in those areas (Sessional Address, Parliamentary

Debates, August, 1965: Col. 25).
Why was food production unable to keep pace with demand and popula-
tion growth? Several explanations have been given and these will be
reviewed briefly. Conventional economic analyses maintain that
resources in agriculture in Third World nations are under-utilized
and productivity is generally low. However, studies undertaken by
Mellor (l969), Helleiner (1975), Lawson (1972), all point to the
increasing efficiency in resource use in 'traditional' agriculture.
As Mellor noted: "In contrast efficiency is high in most peasant
agriculture as measured by the technical economic measure of equating
marginal returns to resources in alternative uses" (135).

In his analysis of Ghanaian agriculture and some of the con-
straints on its development, La Anyane points to a number of factors:
environmental factors including the relative poverty of soils,
climate, diseases and pests; management practices associated with
small scale peasant farming; economic factors which include labour

and employment, i.e., scarcity of labour, rural-urban migration as a

result of displacement of labour, as well as institutional constraints

225

(La Anyane, 1974). His explanation of the agricultural development
problem, however, was hinged on inefficiency in the marketing and
transportation systems. In his view, an adequate network of feeder
roads was necessary to induce increases in the supplies of food-
stuffs. Furthermore, if marketing costs could be reduced, it would
be possible to lower retail prices and thereby enhance consumption
(La Anyane, 1969; La Anyane, 1974). By implication, what is sug-
gested is that the marketing bottleneck was the major factor in the
inflation that food prices have engendered. La Anyane, therefore,
argues that

An effective marketing system should induce additional

production from the farm, with no change in its costs of

production and facilitate the reduction of prices of

agricultural products to the consumer (1974: 390).
This viewpoint was also expressed by other researchers. For example,
in a study of the farmer and the marketing of food stuffs in Ghana,
Nyanteng and Apeldorn (l97l) arrive at the same conclusions. They
maintain that the rise in food prices was not caused by inadequate
production and supply per se but largely by marketing and transporta—
tion problems (Nyanteng, 1978: 16; Nyanteng and Van Apeldorn, 1971).
On the basis of these studies and those carried out by Rourke (1971)
on food price change, La Anyane concluded that the changes in price
levels between 1960-1970 were largely determined by demand conditions,
rather than supply changes. He did not discount consequent increases
in food supplies which were responsible for low price levels in 1966

to 1968. But the point is that insufficient production as a major

factor in the rise of food prices has been discounted (1974: 398;

226

Rourke, 1971). In essence, the argument is that surpluses of food
stuffs such as maize, plantain and cassava were abundant in remote
rural areas and that relatively easy solution to shortages, particu-
larly in urban areas, can be found in the improvement of marketing
facilities.

Although marketing and distribution factors are important in
explaining food shortages and price increases, they do not provide
for Ghana a holistic explanation of inflation to which food prices
contribute greatly. This position does not provide an adequate
explanation for the steep rises in prices. It does not take into
account income changes that affect demand for food (Omaboe, 1966).
It clearly assumes that marketing and distributing factors are the
most critical variables in determining the levels of food supply.
Toward the end of 1965, for example, both urban and rural sectors of
the economy were subjected to inflationary pressures. The urban
index rose from 135.1 in January to 179.9 in December. The rural
index increased from 142.2 to 192.3 during the same period
(Economic Survey, 1965: 101). This was not the case in 1966, however,
mainly because agriculture was beginning to experience some growth.
But this revival became extinct as reflected in the upward movement
of prices toward the end of 1967 and throughout 1968. Both the urban
and rural index showed an upward trend. The annual rural index for
local food was 189.2 which represented an increase of 15.5 points
(Economic Survey, 1968: 110). In fact, the national urban and rural

indicies for local food reached their highest levels in that year.

227

If the price index is at all reliable in its prediction of

the level and adequacy of food production in Ghana, then it is
untenable to maintain the conventional economic interpretation.
Thus Amoafo (1965) stated:
It may be noted that the food situation facing the country
today has its roots in the problems of increasing produc-
tion rather than distribution. Rising prices of production
(supply) relative to the upward trend in consumption
(demand); the deficiencies in the distribution have only
aggravated the unpleasant situation and bear no direct
causal relationship with the soaring prices of locally
produced foodstuffs (4).
The position of Amoafo is further supported by Rimmer (1966). He
argued that a possible source of pressure on prices came in part
from a decline in local food production. Rimmer concluded:
Local food production has certainly fallen behind growth
of money demand. The first progress report of the Seven
Years Plan states that food prices have been under
pressure for this reason ever since 1961 (29).

Undoubtedly the production of food for the market had not
increased fast enough to meet the enormous increases in demand,
particularly in the face of population growth and rapid urban
development (de Graft Johnson, 1974; Caldwell, 1968). From the
above discussion, it should be evident that the inadequacy of food
supply was caused only in part by lack of price incentives, poor
marketing, storage, transportation bottlenecks, rate of population
growth and income increases. Part of the problem lay in the failure
of Government policy, particularly because of the kind of emphasis

placed on commercial agricultural production as a means to economic

recovery. It was assumed for example, that the propsects for the

228

balance of payments and the reduction in deficit financing would be
favourable if Ghana pursued a vigorous cocoa policy as well as other
cash crops, i.e., palm kernels, rubber and cotton. In pursuing this
policy of increased agricultural export trade, farmers were
encouraged to emphasize these crops, particularly cocoa, through
price support and subsidized input policies.

The emphasis on cocoa production had serious implications
for the economy in terms of its impact on food production and the
general stability and expansion of economic activity. To begin with,
the closed forest belt which provided the ecological and agronomic
support for cocoa production also served as a granary for most
staples in Ghana. But as noted earlier, the cultivation of cocoa and
the expansion of farmland for cocoa production had direct consequences
for food production. Thus, what was true of the relationship between
expansion in cocoa production and food supplies in the middle of the
twentieth century was true of Ghana in the 19605. It suffices to
cite an example to illustrate the point here. It is a fact that
when cocoa trees are young plantain provides shade. But as the cocoa
trees mature the plantains die out almost as a natural consequence.
In addition, other food crops are removed in order to provide oppor-
tunities for the cocoa to grow (Annual Report, U.G.F.C.C., 1964-1965).
Moreover, a cocoa farm can produce food along side cocoa for the first
five years only. After that a farmer who puts all his lands to cocoa
production must of necessity become a buyer of food. This situation
provides some explanation for increases in food prices in rural

areas. Jantuah, Minister of Agriculture in 1965, sums up thus:

229

When we talk about food supply, we must consider whether

there is a permanently organized sort of food production

where we can have, say, seven to ten years of plantain

farm. But there is nothing like that at all. We depend

upon cocoa for our food production. In the absence of

any organized system of food production, there will be

famine (Parliamentary Debates, August 30, 1965: C01. 194).
In spite of this emphasis on cocoa production the prospect for the
crop at the world market was not favourable (Gately, 1973). The
International Cocoa Agreement did very little to reduce Ghana's
foreign exchange problems. There was international pressure on
Ghana to service the debts incurred during the transformationist
period. Government attempted to reduce the instability in the
economy through higher taxation and import controls, but these
measures failed to achieve the desired goals of a socialist society.
The question here should be why this strategy failed.

This chapter did not address this question in a specific
sense. By examining the mechanics of the transformationist strategy
in terms of the historical conditions of the Ghanaian economy,
the contemporary social and economic forces that influenced and
consequently undermined it, an implicit explanation was provided.
The focus in the chapter was centered around the political and
economic philosophies underlying the transformationist strategy.
Based on the historical and sociological data, it was shown that
this strategy was essentially the nationalist reaction to uneven
development. It was an instrument for replacing capitalist develop-

ment with a society based on socialism. But this transition

implied contradictory tendencies, especially because the economy

230

that the nationalist government inherited was weak. Moreover, it was
dependent on a primary export crop whose fortunes were largely
determined by the external market forces. In addition, the local
dominant classes continued to serve as a bridge for external exploita-
tion and surplus extraction by foreign interests. These contradic-
tions became forcefully evident in the attempts made in the area of
rural development. In this respect, the post-colonial state was

to be used to increase the productive capacity of the rural sector.
The state's assumption of the ownership of the means of production,
i.e., the establishment of agricultural organizations, did not
achieve the socialist objectives. Instead, some of them became the
means by which some members of the domestic social classes trans-
formed their positions, thereby increasing rural inequalities.

These problems were in no small measure complicated by external
economic pressures. Consequently, at the close of the reign of the
first nationalist government, rural underdevelopment was only
marginally reduced.

It was within this climate that a 'new' strategy, the
gradualist strategy, was introduced following the military take-over
of the government in 1966. This strategy which was shared by the
successor nationalist governments saw the problem of underdevelopment
differently. These governments sought to address the problems of
development through the establishment of a welfare system which was
essentially a capitalist road. It involved a redefinition of the

role of the post-colonial state, the involvement of external private

231

capital as well as the position of the dominant classes in the
development process.

It is the problem of seeking new development perspectives
under the gradualist strategy that lies at the core of the analysis

in the next chapter.

CHAPTER V

THE GRADUALIST STRATEGY: THE NATIONAL LIBERATION
COUNCIL AND THE BUSIA ERA: 1966-1972

The Military Government, or the National Liberation Council
and the Busia Administration shared similar economic and political
philosophies. In a broad sense both governments pursued a gradualist
strategy which was essentially a capitalist path to national develop-
ment. In their approach to the problems of underdevelopment, these
governments made explicit their preference for a reduced role of the
state and increased involvement by private entrepreneurs in produc-
tion activities. In the case of rural poverty there was an assump-
tion that a symbiotic relationship between the state and the dominant
social classes was a viable means to its solution. In short, the
state provided security and the infrastructure and the environment
within which the capital and investments were made by the dominant
classes in the rural areas.

In this chapter the concern is to evaluate the gradualist
strategy in terms of the role of the state and the involvement of
dominant social classes in national and rural development in Ghana.
But more importantly, an attempt is made to assess this strategy in
terms of the extent to which external dependence or incorporation
into the world economy has been further strengthened or reduced.

232

233

Here the analysis of the role of the state and the nature of class
relations became critical. This chapter also is concerned with
examining this strategy as its consequences affect rural under-
development.

The similarity that exists in economic and political philoso-
phies of the two governments was not the result of historical
accident. Dr. Busia had been a consistent political opponent of Dr.
Nkrumah and his government and had always advocated a capitalist
economic path to national development. He had fought both in the
political and academic arena for 'a welfare democratic system' for
Ghana, a system which the N.L.C. proclaimed in 1966 as their political
and economic goal.

After his return from political exile of over a decade, Dr.
Busia became closely identified with the N.L.C. gorvernment. Not only
did members of the N.L.C., particularly General Afrifa, its Chairman,
maintain an open support for Dr. Busia, but during this period they
engendered the constitutional process geared toward reducing political
opposition to him. This initiated the Political Disqualification
Decree which disqualified most of the members of the Nkrumah
Government from participating in national politics--N.L.C.D. 332
and Article 71 of the 1969 Constitution.

The Chairman of the N.L.C. further maintained that it was Dr.
Busia's views on the development of Ghana which inspired him to
participate in the coup d'etat to overthrow the Nkrumah Government.
Although the N.L.C. set in motion political processes that would

lead to a civilian administration, it could barely be argued that it

234

was essentially meant to put Busia and his associates into power
(Austin, 1970: 9). He was made Chairman of the influential Political
Committee and through this institution he received reports on the
current internal political and economic situation in Ghana. This
Committee advised government on foreign policy and general inter-
national relations. Busia's position was further enhanced by the
establishment of the Centre for Civic Education which was to provide
mass political education. This institution, comprised heavily of the
political supporters of Dr. Busia, served as a framework for public
exposure as well as a camouflage for an organized political party.

Apart from Dr. Busia, a number of persons who served as
civilian commissioners under the N.L.C. became Ministers of State
under the Busia Administration. The most notable among these persons
were J. H. Mensah (Minister of Finance under both N.L.C. and Busia;
R. A. Quarshie (Minister of Trade under both governments); N. Y.
Adade (Attorney General under both governments); William Ofori Atta
(Minister of Education, later Foreign Minister under both governments)
and S. D. Dombo, Minister of Internal Affairs). In essence, what
happened under Busia in 1969 was a continuation of policy from 1966
when the N.L.C. came into power.

The Gradualist Strategy:
Its Background

 

 

The gradualist strategy can be traced back to the liberal
political and economic values expressed by nationalist leaders who
formed the National COngress of West Africa as well as the petty-

bourgeois leaders of the United Gold Coast Convention (U.G.C.C.).

235

In its contemporary form, however, Dr. Busia became its exponent. In
its contemporary economic dimension, it is represented by a variety

of economists including Sir Arthur Lewis (economic advisor to the
Nkrumah Government in the 19505 and a U.N. Commissioner of Inter-
national Development). His views on economic planning and development
were in a large measure at variance with the radical Marxist-Leninist
strategy the Nkrumah Government proposed. In addition to Lewis, there
were some Ghanaian economists, including Nii Omaboe (one time
Government Statistician and Commissioner of Economic Planning), and

J. H. Mensah (a former principal Secretary in the Ministry of Finance;
Executive Secretary Economic Planning Commission under the Nkrumah
Government and Minister of Finance under the N.L.C./Busia Administra-
tions). But these economists were not without the support of inter-
national organizations who also shared in the gradualist-liberal
economic tradition.

For the purposes of this analysis, the summary of the
gradualist strategy in its economic division provided by Berg (1971)
becomes useful. Berg argues that

the gradualists emphasize outward looking growth and the
potential for the export sector, focus on peasant agri-
culture, the importance of individual incentives and the
use of the market. They are more kindly disposed toward
private capital, both foreign and domestic and give smaller
role to the state in the development process. They are
rather concerned with efficiency and growth than with
equity in income distribution (187).

This strategy in its essentials is a laissez faire approach

in which private initiative and capital plays a critical role in

economic development. The excessive intervention by the state in

236

economic processes is thereby reduced to the minimum. This approach
is quite clearly reflected in the ideology of underdevelopment and
the resultant development policies pursued by the political leadership
at the time.
The N.L.C./Busia Administrations
and Underdevelopment
The Military Government (N.L.C.) did not state explicitly its

concerns about underdevelopment in Ghana. Its concern was that the
economic opportunities that Ghana had at independence were frustrated
by the economic policies of the Nkrumah Government. To them, 'stagna-
tion' in the economy was due to an absence of a constitutional
democracy and the failureirfthe previous government to take the
advantages offered by the 'world economic community.’ In essence,
the first step in eliminating 'poverty' or underdevelopment was to
"eliminate incompetency, tyranny and thereby enthrone democracy"
(Ankrah, 1966: 2). It is democracy, according to this notion that
provides a basis for orderly development. But what kind of
democracy was their concern? It was democracy that takes its root
from the Britich constitutional tradition. General Afrifa, a member
of the military junta and later its Chairman, expressed their
admiration in the following way:

I am a great admirer of the British way of life, its legal

system, the Magna Carta, the Petition of Rights and the

Bill of Rights. These are institutions on which the civil

liberties of the people are founded. The British Constitu-

tion safeguards not only the rule of law, but also the

freedom of the press, of thought, of action within the law

and of the individual. It is these things that make
Britain the home of democracy (Afrifa, 1966: 107-108).

237

In essence, it is these claims that make the British way of

life worth evaluating, and within this context Ghana's development
was to take place within the Commonwealth. In a speech marking the
100th day in office, the N.L.C. said:

As Ghana was the first African state to attain independence

and also by that very fact the first African state to become

a member of the Commonwealth, the N.L.C. believes that the

people of Ghana set considerable store by their membership

in the Commonwealth. We believe that the Commonwealth

with its vast membership representing peoples of all races,

has a vital role to play in the promotion and maintenance

of world peace and security (Ghana Reborn, 1971: 31).
On the issue of the Commonwealth, the leadership of the N.L.C. felt
that "Ghana should not be different from Canada, Australia or New
Zealand (Afrifa, 1971: 108), but it was Busia who expressed the ideas
of development and underdevelopment more forcefully. Busia (1967)
argues that colonialism was not established for the benefit of
Africans, rather, it was the desire for material possessions and the
establishment of trade monopolities that stimulated the colonial idea.
Unlike the Marxist-Leninist conception that viewed underdevelopment as
a product of colonialism, Busia contends that colonialism was negative
in only one area, i.e., race relations and human resource development
(39-40). Moreover, it was not colonialism per se that Balkanized
Africa. On the contrary, many of the present states which consisted
of different tribal territories and which were involved in intercine
warfare, were brought together under one administration by colonialism
(Busia, 1967: 37).

The question of poverty and underdevelopment must be examined

within a wider historical context. In this respect, Busia (1967)

238

argues that although during political decolonization, agricultural
and industrial developments were not much above subsistence level,
it could not be tenable to hold colonialism responsible. Poverty
and underdevelopment, therefore, should include the existing human
and physical conditions such as 'disease, ignorance, lack of training
and education'--conditions that existed before colonialism. These
ideas were expressed by other African leaders including Senghor
(1962) who asserts:

[We] should stop denouncing colonialism and Europe and

attributing all our ills to them. Besides being not

enitrely fair, this is a negative approach, revealing

our inferiority complex, the very complex the colonizer

inoculated in us and whose accomplices we thereby are

secretely becoming (36).
To Senghor and others of this ideological persuasion, colonialism
was in the long run beneficial to Africa, although it may have in the
short run brought about exploitation and political subjugation
(Senghor, 1962). On the basis of this assertion, Busia contends
that it is easy in the present predicament of African nations to
point to contributions wich colonialism could have made to African
development which it did not make. But "colonialism opened schools,
administrative framework, law and order necessary for trade and
commerce, urban areas and cities which remain symbols of develop-
ment." The most important contribution, however, “was the provision
of a stable political framework within which development could take
place (1967: 49).

Busia continues that the solution to Africa's development

problems should not, therefore, be in the overthrow of colonialism

239

or neo-colonialism. It should be in the establishment of 'world
brotherhood.‘ World brotherhood implies taking advantage of the
opportunities provided by this world brotherhood. Busia was of the
view that Ghana needed a 'democratic welfare society' and not a
socialist one. The democratic welfare society is one in which "no
one would have any anxieties about basic needs of life, about work,
food, health and shelter; a society in which the individual Ghanaian
would be able to enjoy a modern standard of living based on gainful
employment (Chairman, N.L.C., March 1966). But more importantly,
Busia notes that society is based on "a moral language which
peoples of different cultures and races can understand" (82).

The question still remains as to what role the state should
play in securing the basic principles of a welfare society? The
desire for rapid economic development in Africa encouraged economic
planning as a central responsibility of governments. But under the
welfare democratic system, it was conceived that government's involve-
ment in the economic process would be limited, and individual private
initiatives would become critical. Thus, the view that only the
state could mobilize resources for development in a meaningful and
effective way was untenable, for it was contended that centrally
planned economies could become instruments of oppression and thus
be the means of destroying "social justice and freedom." Busia
therefore notes that "state ownership and control of economic enter-
prises leads to the concentration of both political and economic
power in the hands of those who are governing . . ." (1967: 89). In

essence, state socialism would approximate the democratic welfare

240

system if and only if the power of the state were widely distributed
and checks were instituted against abuse. Furthermore, individual
private enterprise had to be encouraged in order not to make the state
the sole employer. However, the state remained the coordinating
institution that ensured equitable distribution of resources.
The Welfare 'Democratic' System and
Economic Theory
A major influence on economic planning in Ghana during this

period was Sir Arthur Lewis and a number of Ghanaian economists like
Omaboe, Commissioner for Economic Planning under the N.L.C. Govern-
ment, J. H. Mensah, Minister of Finance under the Busia Administration
and Frimpong-Ansah, Governor of the Bank of Ghana. Arthur Lewis
(1964), drawing on neo-classical economic thought, argues that since
the scope for industrial expansion in Third World countried remained
limited by technical factors and markets, it was reasonable to
establish a balance between industry and agriculture. However,
development plans as they sought to strike this balance should
emphasize export promotion. The point where was that there is a
connection between economic growth and export trade, particularly as
trade tends to stimulate growth by permitting increasing investments.
According to this view of development

one of the important objectives of development planning is

therefore to ensure that the rate of growth of output, the

propensity to import and the rate of growth of exports,

are mutually consistent (Lewis, 1964: 38).

A second point was that capital intensive industries, unless

they had a comparative advantage, should not be encouraged. This

241

means, of course, that the preference was for labour-intensive
economic activities. There was also an emphasis on agricultural
develoment. Agricultural development was seen as the key to rapid
economic progress. In short, agricultural growth was indispensable
in raising levels of living for the large majority of the populations
and in providing a basis for industrial expansion.
This approach to economic development was emphasized by the
Pearson Commission appointed by the United Nations to examine the
problems of development in the United Nations First Development
decade. The result of this commission's work was embodied in the
Pearson Report of 1971.
For the purposes of this study only a few critical issues
from the report will be raised. The Report noted that (1) a major
requirement for rapid economic growth is a vigorous expansion of
world trade; (2) most economic controls should be relaxed and much
more attention paid to the mobilization and allocation of resources;
and (3) governments must promote mutually beneficial flows of foreign
private investment. This is mainly because
the role of foreign aid then has not been merely to supple-
ment domestic resources. It is the essence of the dilemma
of developing countries that even when they possess
considerably potential economic resources . . . they are
often not in a position to mobilize them, combine them
and transform them into the goods and services which they
themselves or the world market requires. In this area,
aid has to a large extent been a catalyst (Pearson, 1971:
51 .

Arthur Lewis (1969) extends the argument a little further. He

points out that

242

if an African or Asian country is to grow adequately
without foreign aid, its government must raise about 20
percent of the national income in taxes and other revenues
out of which it must save 8 percent of national income,
keeping its current expenditures restricted to about 60
percent of its revenues. No African government comes
anywhere near these targets (48)

The reality of the African development problem requires that
there is 'international cooperation' in which financial and technical
assistance is given. Within this interdependence, the rich industrial
countries are seen to have "a moral obligation to help the poor."
Foreign aid and technical assistance from the industrialized countries
to the developing states of Africa is therefore "a symbol of the
embryonic world community" (155). Brotherhood needs to be expressed
in mutual aid in the fight against poverty, ignorance and disease;
in tackling together the common problems of development. The
improvement of living standards is a major task in which all can
cooperate. It will help create the framework within which freedom
can have a real meaning and union a sound foundation (Busia, 1967).

In 1969 the International Bank for Reconstruction and
Development (I.B.R.D.) sent an economic mission to Ghana. In 1970
the Economic Mission issued a report which emphasized similar economic
approaches as recommended by Arthur Lewis and the Pearson Report.

This report recommended that emphasis should be place on the produc-
tive sectors, particularly agricultural development, but that to

finance development outlays Ghana had to increase her savings as well

as obtain external resources. The Report stated:

243

Thus, a more positive and direct contribution to Ghanaian
growth is required through encouraging the external sector.
This means encouraging exports more than in the past,
especially in the agricultural sector (I.B.R.D. Report,
1978: 5).
It was considered that appropriate policy should carry forward the
import-substituting and export promoting activities and thereby
induce structural changes in the economy.

0n the one hand, the recommendations on agricultural develop-
ment constituted the core of the report, where it was recommended
that attention should be given to small-holder farming with relatively
unmechanized but improved cultural practices. This approach was to be
supported by marketing and price incentives to farmers. It was
further suggested that plantation agriculture be encouraged, especially
in the growth of cotton, sugar, and rubber. The rationale for this
included the possibilities for reducing unemployment and income dif-
ferentials between the rural and urban sectors as well as increasing
the foreign exchange earning capacity of Ghana (I.B.R.D. Report,

1970, Volume 1: 16)

Bruce Johnston, who was in charge of the I.B.R.D. Report on
Agriculture, carries the argument a step further. He argues That a
critical dimension of an efficient strategy of agricultural develop-
ment was to generate new production possibilities which were
unobtainable with existing technologies (1967: 34). The relevant
strategy in essence should include agricultural research, extension,
technical education, irrigation, settlement and plantation projects.

In addition, it was necessary to create facilities for production

and distribution of new inputs, credit or subsidies.

244

Johnston argues that to achieve the desired goal of increased
productivity, however, there was a need for a strategy for technologi-
cal progress (36). The reasons for this strategy are that (1) this
would have premitted the rapid expansion of food production and
thereby have alleviated the foreign exchange difficulty, and created
the basis for import substitution, not necessarily at any cost;

(2) it would have permitted export expansion; and (3) it would have
limited the conventional competition between agriculture and industry
for capital resources. Although technical progress in agriculture
tended to lead to displacement of labour, a careful approach, it was
contended, would lead to labour-using, yield increasing and capital
saving at the same time.

It was the view that

the historical process of increasing agricultural produc-

tivity associated with use of improved varieties of

fertilizers and other current inputs--an advance of

technology based on new inputs of a biological and

chemical nature--represents an even more important

possibility to be exploited by contemporary under-

developed countries . . . (Johnston, 1967: 36-37).
Concentrating on strengthening the supporting services according to
this perspective was a rational policy to pursue. The strategy of
technological progress should emphasize modern but apprOpriate inputs
which were consistent with small-scale farm units and were labour
complementing. The dominant view was that African countries could
then develop rapidly with foreign aid (both capital and managerial)
that was tailored to suit their conditions.

Another aspect to this approach to economic development was

the role of the private sector. In this respect, planning had to

245

focus on removing the obstacles in the way of private initiative
(Lewis, 1964: 270-271). The point, according to this development
perspective, was that a strong domestic private sector also served
to attract direct foreign investment from abroad, and consequently,
stimulated the development process (Pearson Report, 1970: 64).

In essence, developing countries should become more outward-
looking by expanding international trade, should relax restrictive
economic measures, and encourage private enterprise both in agri-
culture and industry.

Economic Policies and the Transition
to the Welfare State

Based on the recommendations discussed above, a number of
issues were taken into account in orienting economic policy and
strategies. First, the Government of the N.L.C. and the Busia
Administration decided that its decisions in regard to resource
allocations should be based on rational economic criteria. Second,

the government would pursue an open-economy unburdened by excessive

 

restrictions and receptive to foreign capital and know-how; and
third, the government decided to shift the emphasis of policy that
focused on new investment to improved management of existing assets
(Omaboe, 1967: 2).

In adopting these principles it was the concern of government
to "reconstruct the economy in order to establish a democratic
welfare state." Economic policy was to be focused on "reactivating
the economy; increasing production and employment and setting the

stage for an accelerated development in the the future" (Afrifa,

246

1967:1967: 2). Government policy was to be focused essentially on
stabilizing the economy. The basic rationale for this economic
policy was eliminating the inflationary forces within the economy
and restoring internal and external financial balance (Fri ong-
Ansah, 1971). Implicitly, it was speculated that such an approach
would lead to "a balanced orderly growth of the economy." It should
be recalled that prior to 1966, Ghana had experienced sharp increases
in the balance of payments, necessitating economic controls, i.e.,
import and exchange restrictions. The stabilization program was
therefore to reduce government deficits through a cut in appropria-
tions for government institutions. It further implied a reduction
in taxation thereby encouraging incentives to the private sector to
invest in the economy. Frimpong-Ansah suggests that under the circum-
stances there was a gradual liberalization of import and exchange
controls. Under the Busia Administration, this policy was pursued
vigorously. In this respect, it was policy to provide incentives
for export as a means of stimulating domestic production, and so a
major thrust of economic strategy was export-promotion. It was hoped
that this approach would increase the availability of foreign exchange
and diversify the commodity structure of exports and the economy
iteself (One Year Plan: 37; Budget Statement, 1969).

There was also the question of the utilization of public and
private investments in order to stimulate domestic production both
in industry and agricultures, and as the One Year Develop Plan

noted:

247

It is essential that investment levels and development
imports be stepped up if the economy is to achieve the
structural transformation required to reduce its long-term
reliance on external assistance. The foreign assistance
sought is to permit the economy to increase its rate of
growth and undertake investments that offer scope for
increasing exports and the economy's capacity to expand
in the face of a foreing exchange constraint (1970: 35).

One of the major shifts in economic policy was the diminishing
role of the state in public investment expenditures. In its place,
private capital was to become a dominant factor in the development
process. Investment was allowed with the idea of ensuring an effi-
cient use of capital and stimulating the most profitable areas of
economic activity. In view of this the private sector was opened to
both Ghanaians as well as foreigners, and the joint private and
Government sector which had been in operation under Nkrumah was
relaxed. In this case, the establishment of such joint ventures was
purely on a voluntary basis. No private enterprise was to be forced
to accept government participation. In short, the private sector was
to remain the largest sector (N.L.C., March 1966: 1). As stated in
Ghana, 1967, private foreign investment was also to be allowed to
make the maximum possible contribution to the economic development
of the country: "We value such investment not only for the capital,
but also for the technical know how and managerial skill which it
brings and of which we are in great need" (Omaboe, 1967: 17). Thus,
it is clear that a significant shift in economic development had been
made. The basic objective under the N.L.C. was to encourage private

enterprise by giving inducements for further expansion. Under

Nkrumah, it was the hope that the state sector would eventually

248

bypass the private sector. Related to the problem of external
investment was the concern to increase export trade. Export promotion
as a means of improving the balance of payments position as well as
helping to finance Ghana's import requirements became a major economic
policy. Addressing the members of the Ghanaian Chamber of Commerce,
the Minister of Finance in the Busia Administration, J. H. Mensah,
asserted the view that export trade would serve as a means of solving
a major part of the economic problem and thereby sustain the economy.
He hoped that he "could have the power to force people to export or
perish;" for him it would have been a "delightful job" (Editorial,

Dailinraphic, September 11, 1975).

 

The Minister clearly discounted the dependency on foreign
aid and investment as a means to economic recovery, but in the face
of declining export receipts for cocoa and uncertainties in prices
for other exports, Government had to continue to seek foreign
assistance.

In the agricultural development sphere similar objectives
seemed to have predominated. The N.L.C. itself noted that the diffi-
culties of the country had underlined an inescapable fact that agri-
culture constituted a key to economic stability. The press in Ghana
shared the same views with the government as illustrated in the

editorial of the Ghanaian Times: "Although we need to industrialize,

 

the experience in certain European countries has shown that a nation
which industrializes at the expense of its stomach does so at its own
risk" (February 26, 1969). "Thus, the basic objectives in the N.L.C.

agricultural policy were to meet an increased proportion of Ghana's

249

food supplies; provide raw materials for existing and prospective
factories including rubber and sugar cane for which foreign assist-
ance was actively sought (Two Year Development Plan, 1968-1970). The
same concerns were expressed by the Busia Administration, particu-
larly in relation to rural development generally. The approach
entailed the general modernization of rural areas; the bridging of
the gap between rural and urban areas; and the bridging of regional
disparities. But underlying these broad aims was the emphasis placed
on agricultural development (Parliamentary Debates, 1969: Col. 1).
The One Year Plan (1970) added:
Government accords the highest priority to increasing

agricultural productivity, including the improvement of

Ghana's competitive position among world cocoa producers

and the application of well known technologies to achieve

increases in the production of food and other agricultural

crops (11).

The objective of the agricultural program was the transformation of

a_predominantly traditional lowgproductivity agriculture into a

 

market oriented industry (One Year Plan, 1970: 51). It was the view

 

that traditional agriculture did not yield optimum results even

with the introduction of new high yielding seed varieties, nor could
fertilizers and other chemical inputs be usefully applied under such
farm conditions. In addition, emphasis was to be placed on labour
productivity through simple mechanical equipment and animal power

as well as price incentives and extension work (Two Year Plan, 1968-
1970: 24-29). This meant that the program of extensive farm
mechanization had been abandoned except where private entrepreneurs
had shown a willingness to participate. On the whole, agricultural

development constituted the core of the 'gradualist' strategy.

250

Organizing for Agricultural Development

 

During the Nkrumah era, several agencies were established in
order to facilitate the production process in agriculture. The
Ministry of Agriculture (M.O.A.) had a number of critical functions,
particularly extension work, taken away. In spite of this, the N.L.C.
and Busia Governments felt that the problems of agricultural develop-
ment were in part a problem of administration, or more sepcifically,
over-centralization. It was felt that this constituted obstacles to
policy implementation and to the effectiveness of agricultural pro-
grams.

Following this line of thought, the N.L.C. Government set up
a commission of enquiries into the administrative structure of the
public service. It was established that "in order to improve effi-
ciency and economize and to provide machinery of Government better
designed to accomplish programmes for rapid social and economic
development, there needs to be a radical decentralization" (Mills
Report). By decentralization was meant "the creation of institutions
outside the ministries which are legally vested with responsibility
for defined functions within the totality of Government" (Mills Report:
4).

0n the basis of these recommendations, the N.L.C. Government
proceeded to decentralize the administration of a number of government
departments, including the Ministry of Agriculture. The most
effective unit in the administration of agriculture became the
Regional Agricultural Office. As it turned out in actual functioning

of the Regional Agricultural Office, the regional head and his staff

251

became subject to dual supervision, that of the regional political
boss as well as the Central Ministry in Accra. The regional political
boss provided management and administrative directions while the
functional and technical guidance came from the Ministry of Agri-
culture in Accra.

Communications from the Regional Head to the Ministry in Accra
was to be passed either through the Regional Chief Executive or passed
directly with a copy to the Regional Chief Executive. Communications
from the Ministries in Accra which dealt with policy, planning, pro—
gram implementation and reports were to be addressed to the Regional
Chief Executive. This procedure was to ensure that the political
boss of the region was aware of what was taking place in order to
exercise control. The decentralization was aimed at a more effective
performance at the district and local levels. The country itself was
divided into 40 agricultural districts with crop production officers
and staff stationed in the areas to encourage increased production at
the farm levels.

The second approach to organizing agricultural development
followed the critical views expressed by the Agricultural Committees
appointed by the N.L.C. Government to investigate the operations of
the State Agricultural Agencies, established under the Nkrumah
Government. The Agricultural Committee of the N.L.C. made the
following recommendations:

In general, state participation in production was to

be limited to those large-scale enterprises which have
decided operational advantages over peasant farming or

fishing. The state should in particular, invest in projects
with large payoff periods which the private entrepreneur may

252

not be inclined to undertake on an equal commercial scale.

The rubber oil palm industries are examples. It should

also invest in the cultivation of certain raw materials

like cotton, kenaf and sugar cane whose production must

always be dependable and geared to the requirements of the

factories already established to process them. To effect

economies in the transport and management of raw materials,

factories should be located near the site of the farm

enterprises (Agricultural Committee of N.L.C. Report: 43).
It was recommended too that the responsibility for increasing raw
materials production should be kept to such state organizations. In
addition, these organizations were to be discouraged from entering
food production on any measurable scale (Agricultural Committee of
N.L.C. Report: 44).

The State Farm Corporation was therefore streamlined with
47 farms retained producing oil palm, rubber,cotton and other non-
apparel fibres. The U.G.F.C.C. went through a more drastic
reorganization. Technically it was eliminated, but its cocoa
cooperatives were absorbed by the Cocoa Marketing Board and re-named
Produce Buying Agency. A number of farms which both the State Farms
and U.G.F.C.C. took over were returned to their owners and others
sold to private entrepreneurs. The mechanization aspect which was a
dominant feature of their operations was brought under the Ministry
of Agriculture and renamed Mechanizaiton Unit. This unit was to
serve as a supporting unit for a Unified Extension Service directed
at the private food farmer.
Based on the report of a subcommittee of the N.L.C's Agri-

cultural Committee, the production unit of the U.G.F.C.C. was

transferred, however, to the Ministry and later became the Crop

Production division. With the aid of USAID, the Government provided

253

grants totalling more than ¢12 million to enable the building up of
existing facilities and strengthening the crop production programs
(Ministry of Agriculture, Minutes of Meeting, Existing Facilities of
Extension Services Division, 1966). The Crop Production Division
concentrated on food crop production with some concern for non-food
crops as well, but it continued to function as a service institution
rather than a direct production-oriented one. In the area of food
production, the effort was toward rice and maize production with a
view of satisfying domestic requirements and thereby reducing

excessive cereal imports.

Agricultural Extension Service
The National Liberation Council and the Busia Administration

gave similar attention to the question of extension and development
service in the agricultural development program. The development
plan under the Busia Administration stated among other things:

Given these opportunities for using capital and faced with

restrictions on the availability of capital, the Government

will concentrate upon improving the effectiveness of its

extension services to private farmers in crop production,

animal production and animal health (One Year Plan, 1970:

52 .
But the underlying principle of extension development was that efforts
should be limited geographically as well as in the types of crops to
be supported. By this procedure, experience could be accumulated and
this would lessen mistakes when the service was finally expanded to

cover a larger area. It was recognized that certain areas of the

country, by virtue of their ecological, social and economic

254

characteristics, could provide a foundation for the increased
production of particular crops.

But how was extension service to be organized to achieve
increases in those particular crops? The dominant view was that to
improve the standards and techniques and diversify agriculture, a new
farmer was required. This type of farmer, according to this view,
was one who could appreciate the relevance of science. It was not
to be the illiterate farmer, but farmers who were graduates of
,agricultural traininggcenters of universities (Asem, 1958: 3).

Unless such men of higher calibre enter farming, our agri-

culture cannot adapt itself to changing world standards.

To attract such men into farming, capital should be made

available to them at a modest level. The value of land,

houses, life insurance policies and other securities

should be accepted for the purpose of agricultural loans

(Asem, 1958: 8).
Thus, it is with this type of farmer that extension work was to be
started. To make the activities of the extension service effective,
the Government was to start a pilot scheme by which a farm operator
would be assisted with a loan equal to five times his pay, and be
provided with ten labourers and equipment. The total loan given was
to be refunded in fifteen years. There were to be six of such farms
based in the regions and in addition, there were to be proto-types of
such farms at the district levels to serve as demonstration farms for
the illiterate farmers. Thus, the work of these educated pioneer
farmers was to serve as the basis for extension service demonstration
and education for the rest of Ghanaian farmers. This was thought to

be the quickest way to develop agriculture. This strategy, it was

also believed, was an ideal organization which could

255

absorb the young unemployed youth particularly middle
school leavers. The educated modern farmer would start
the bigger farms on Government assistance and the younger
people would find employment in these farms, as tractor
drivers, livestock men, poultry keepers and headmen

until such time as they felt mature, and desired to
establish on theor own (Asem, 1958: 9).

The most interesting part of this strategy had to do with
financing. It was proposed that the large pilot farms cost up to
£624,000 each. This means the six would cost LGl44,000. Allowing
for Government developments of water, roads and other amenities,
nearly LG200,000 of public money was to be invested in them. The
district level pilot farms were to cost LG3,600 each. The cost of
33 such farms was to be EG118,800. These farms, which essentially
were to be privately operated, would cost the public approximately
LG318,000, and the sums invested in these projects were to be
recovered in twenty years. After the coup of 1966, a Ministerial
Committee was appointed by the N.L.C. and on their recommendation
the former extension service which was with the U.G.F.C.C. was
transferred back to the Ministry of Agricultue (Ministry of Agri—
culture Report, 1966). This committee addressed, among other things,
the problems of finance and manpower questions as they affected
effective extension work. The report also considered what strategy
would be useful to coordinate small holder agriculture.

It was thus within this climate that the proposal for model
farmers as extension workers was examined, and the principle of con-
centrating on limited geographical areas and crops with a view to

increasing production was accepted. This principle remained

dominant in extension Work throughout the rest of the decade.

256

The limitations of manpower and financial resources which
were and continued to be in evidence over the years led to the
acceptance of the strategy of "Focus and Concentrate." The World
Bank Report stated: "If the national output is to be raised quickly
and significantly, it is manifestly best to concentrate on the areas
with the greatest development potential in terms of both human and
natural resources." It was thought reasonable, then, to focus on a
very limited number of crops--crops with which local farmers were
familiar. This approach limited the need for completely revolution-
izing the entire farmer production process in the agricultural
development sphere. It is argued that this approach had a number of

district advantages:

It places a limited total supply of resources into an
operational pattern density which is easy to manage.
Skilled experienced manpower is better able to train and
stimulate theless skilled and also the new employees.
Their efforts can be better backstopped and evaluated.
The entire operation serves as a pilot operation wherein
weaknesses--and strengths--can be quickly pinpointed for
elimination or for expansion. The problem of logistics
is materially simplified. The absolutely essential
regular movement of administrator, trainer, and technical
supporter between areas, groups, field level workers and
farmer committees is facilitated and costs minimized.
Physical supply problems diminish with focus and concen-
trate (Johnson, 1966: 10).

 

In developing an extension program based on this principle, the
intension was to select a number of farmers willing to cooperate with
extension officers and adopt new production techniques. Such pioneer
cooperators were to serve as demonstrators and innovators whose
improved techniques--use of fertilizers, improved seeds, mechanical

services--wou1d be passed on to other farmers. The aim was to

257

initiate a local leadership training program using these cooperators
as a nucleus of a developing corps of extension leaders (Ministry of
Agriculture Handbook, 1969: 4). These leaders were also to serve as
the nucleus of sub-district farmer committees who would assist local
extension officers in formulating an extension program based upon the
needs of the area (Asiedu-Saforo and Marti, 1971).

The major concern in these strategies of extension development
had to do, however, with organizational framework. During the
Nkrumah period, it was felt that State organizations were better
suited for extension work. The strategy under the N.L.C. and Busia
administration is best described as a laissez faire Strategy in which
the Ministry of Agriculture coordinated extension work, but in
addition, private organizations and persons were permitted to con-
tribute either through fertilizer and seed distribution or through
production.

Along with the Focus and Concentrate program, other extension
activities were being carried out. There was a similar attempt at
maize production supported by the U.N. Development Program in the
same districts (Ministry of Agriculture, Ghana Maize Project, 1966).
The program was designed to increase maize and rice production
through fertilizer application. A third program which was supposed
to be an integrated approach to small-holder agricultural production
was supported by the International Development Association. A fourth
one focusing on rice production in Northern Ghana was being funded

by the World Bank and F.A.O.

258

In 1969 the Agricultural Development Bank in cooperation with
the Extension Unit started another maize production scheme for small
scale growers. This project aimed at increased production of maize
through small holder credit and production cooperatives was limited
to progressive farmers, and for this project the Bank was willing to
provide ¢230,000.00. On examination, it became evident also that the
districts in which the projects were being carried out were within
the Focus and Concentrate concentration areas. By 1971, an integrated
crop improvement project for maize was in the offing. This project
was a joint venture between the Grains Development Board, the Agri-
cultural Development Bank and the Ministry of Agriculture and was to
represent a joint effort for maize development involving a number of
agencies. The extension work was thus left to the Crop Production
Division. The difference between these programs and the Focus and
Concentrate was that a specific organizational framework, the project
development unit, was provided with managers to coordinate activities.
There were project area steering committees and development officers
at the project areas.

As these various programs were being carried out, the Ministry
of Agriculture itself was constantly undergoing reorganization in
order to reduce overhead costs and to solve staff shortage problems.
Despite these reorganizations, there was a marked absence in
coordination of extension efforts. Evidence indicates that this
lack of coordination was caused by the fact that the Divisional
Agricultural Officers preferred to refer matters concerning their

divisions directly to their heads in Accra rather than to take

259

instructions from the regional officers. The Regional Officer had
very little control and knowledge of what others were doing. In fact,
it was only administrative matters that received the officer's atten-
tion, he had no control over the preparation of financial estimates
required for the service since each head of unit in Accra controlled
votes for dividions at the regional level and furthermore, the
regional officer did not really have an establishment of his own and
invariably had to depend on the District Officers for the provision
of certain services.

If any major development occurred in extension work, it was
more of a proliferation of a series of programs. Considering the
financial and manpower opportunities of the Ministry of Agriculture
and its extension system, it is difficult to see how effective it
could have been. Extension policies and programs during this period
were so fragmented that it was extremely difficult for the Extension
Service to monitor the areas in which progress was being made. In
any case, the compound effect of these programs seems to suggest a
neglect of the small scale holders whom they were meant to help.

This neglect was built into the programs themselves. In the case of
the Focus and Concentrate program, the cooperators were selected
based on the following criteria: (a) a cooperator should be a stable
(farmer, (b) he should be influential, respectable and exhibit
qualities of leadership, (c) he should be willing to adopt new
farming techniques, (d) he should be reasonably capable financially

(Ministry of Agriculture Handbook, 1969: 3-7; Afful, 1965: 45-65).

260

Agricultural Mechanization

In discussing the N.L.C./Busia approach, it is important to
put the issues in historical perspective. In the second half of the
19605, it was estimated that 1,000 tractors plus implements worth
about two million pounds sterling were at the point of shipment
(Cervika, 1967: 16-17). Considering the inflationary situation, the
cost almost doubled at the point of delivery in Ghana. This was a
heavy financial burden to carry notwithstanding the lack of standard-
ization, and non-availability of technical personnel to repair broken
down farm machinery. It was a common scene to find tractors and other
heavy duty machinery standing idle and unserviceable.

Thus, the N.L.C. felt that taking an inventory of agricultural
machinery was a rational approach to introducing order into a rather
burdensome invesment. The inventory of agricultural machinery showed
a total of 420 crawler tractors and 1,129 wheel tractors in 1967-1968.
Of this number, 145 crawlers were unserviceable and 333 wheel tractors
were also declared unserviceable. In spite of heavy investments
made in farm machinery, the operations were subsidized up to 42
percent of cost for clearing by wheel tractors while that by crawlers
was 62 percent of the estimated cost (Kline, et al., 1969: 2-16).

This situation did not change during the N.L.C./Busia period.
Out of 2,239 wheel tractors, only 385 were operating; out of 808
crawler tractors only 200 were operating. This means that 83 percent
and 75 percent of total wheel and crawler tractors, respectively,

were out of service (Ampratwum, 1973). This in part provided the

261

rationale for the dismissal of workers in the state agricultural
organizations.

The policy of agricultural mechanization under the N.L.C.
and Busia Governments was therefore based on two major orientations.
The first which underlay the policy of tractor-hire service concerned
the reduction of the financial and technological burden that govern-
ment had to carry. This was to be done through encouraging individual
farmers and groups to hire tractors and other mechanical inputs which
the Ministry of Agriculture operated. It was thought that this
approach to agricultural mechanization would enable a larger number
of farmers to avail themselves of new technology.

The second orientation was the belief that commercialization
of the service through private ownership would (a) reduce the financial
burden of government and (b) encourage private investment in agri-
cultural production. Fundamentally, this orientation was a by-
product of the N.L.C. and Busia Governments' concern about limited
state participation in economic development. In view of this
orientation, it became a preferred policy to commercialize the

mechanical services through the sale of tractors to individuals and

 

through the establishment of an agricultural company with initial
government subsidy to import and operate a commercial firm.

What was the nature of the various policies? To begin with
the tractor-hire service was a government-sponsored scheme to assist
farmers and to increase production and in its operation, it was
greatly subsidized by Government. The evidence as pointed out shows

that in the 19605, wheel tractors and crawler tractor operations were

262

heavily subsidized. In the 19705, when the mechanization unit focused
its attention on land clearing and charged farmers for fuel and
lubricant, only the government subsidy was in the region of 83 percent
(Ampraturum: 94; Ministry of Agriculture File DESFE.7/Tj.l/6). The
important issue here is not so much how much government invested in
this strategy, but its social-cost benefit. One aspect of this
policy had to do with which farms and farmers could benefit from this
policy. In the first place, for purely economic reasons, tractors
were not to be permitted to work on fields less than two hectares.
In addition, the farm lands to be ploughed had to be rectangular and
located in one area. Furthermore, it was stipulated that only those
farmers within 15 miles radius of the operating base of the Mechaniza-
tion unit'sworkshops could apply to hire these inputs (Dame: File
DES/FA 3/78a, Ministry of Agriculture). By implication, more than
70 percent of the farmers were being excluded, not to mention the
fact that the size of their holdings was about 2.3 acres on average
and were widely scattered (Ghana Sample Census of Agriculture Report:
Vol. 1, 1972).

In the early 19605, the state agricultural organizations
charged ¢30.00 per acre for felling trees, winnowing and ripping and
¢5.00 per acre for ploughing. As Table 5.1 shows, in 1969-1970, the

Mechanization service charged the following rates:

263

TABLE 5.1.--Charge5 for Tractor Services.

 

Cost (C) per Acre

 

Crawler Tractors

Clearing of Virgin Forest 7 174.
Clearing Secondary Forest 112.
Clearing Coastal Thicket 80.
Clearing Savanna Woodland 40.
Clearing Bush 26

Earth Work per 8 hour day 60.

Movement per mile 1

Wheel Tractors

 

00
00
00
00

.00

00

.20

Ploughing 4.00
Harrowing 2.00
Ridging 4.00
Inter-cultivation 4.00
Planting or drilling (with or without 5.00
fertilizer)
Slashing 4.00
Harvesting of rice per 8 hour—day 20.00
Carting per mile to and from 0.20
Rice hulling per bag of 240 lbs. 3.50
Movement per mile 0.20

(65.00)*
(42.00)
(34.50)
(16.00)
(12.00)

 

Source: Ministry of Agricultural Mechanization Division.

*New clearing charges since 1970.

264

In terms of cost, it was hardly possible for the majority of
farmers to benefit from the scheme. Rourke and Hiadzi note that most
farmers in the Accra Agricultural District complained about the cost
of hiring services, especially because of the stipulation that payment
for services had to be made prior to provision of services (Rourke and
Hiadzi, 1970). Similar studies carried out in Northern Ghana confirmed
the viewpoint (see Dalton and Erikwaw, 1971). Thus, in a letter to
the Regional Administrative Officer, the Administrative Officer for
Yendi noted the following:

It looks as if the Ministry's policy with regard to mechani-

zation defeats its aim to encourage farmers and makes Don

Quixotes out of Government representatives whose daily

appeal to farmers is to grow more food to feed the nation

(Files, Ministry of Agriculture, DES/BC, 16/38, 1967).
The situation described above was further sustained by a letter to the
Principal Secretary of the Ministry of Agriculture. In this letter,
the Chief Agricultural Extension Officer wrote:

Reports reaching me from the Districts in this Region

confirm the observations of the District Administrative

Officer at Yenchi. The farmers are very much concerned

about the new policy governing mechanization services

(Files, Ministry of Agriculture, DEX/l6/33, 1967).
In both the southern and northern regions, the program reached only
a small number of farmers. Kline et a1. (1969) argue that in the
operation of tractor hire-service, evidence suggested that it was the
progressive farmers who benefited (1-18).

As the policy of tractor-hire-service was being pursued,
Government was simultaneously pursuing a policy of "outright sale of

tractors and ownership to private individuals and farmers." This

policy was in a large measure shaped by the prevailing view that

265

ideally, the mechanization program would be much more effective if
it were commercialized. It was assumed that by commercialization,
at least among senior agricultural officers, private ownership would
result in increased profits and efficiency. The most pervasive and
dominant argument, however, was that if the operation of the mechanical
services were left to farmers cultivating large acreages, albeit
better-educated,better paid urban dwellers, the services could be
used effectively on the large farms as well as be loaned to small
farmers upon request. Following this thinking in official circles,
the Government of Dr. Busia pursued a policy of encouraging indi-
viduals, particularly Civil Servants and some private citizens, to
invest in mechanical farm operation services. In this respect, a
number of regulations were formulated with regard to sale of govern-
ment tractors. It was important to state them in detail since they
are crucial for their implications for the rural social structure.
Dealing with the method of disposal, it was stipulated that,
the sale should be by public tender and purchase negotiated through
the Agricultural Development Bank. However, preference was to be
given to "any graduate civil servant employee within the Mechanization
Unit wishing to retire prematurely" to purchase some tractors up to a
maximum of twenty (File, Ministry of Agriculture, 1968, DES/T.3/189).
But the anomaly inherent in the regulations was more manifest when
it was further proposed that these civil servants could receive loans
equal to five times their retiring annual salaries or three times the
gratuities due to them, which was invariably higher than the former.

This was to be in addition to loans which the Banks would make based

266

on their own collateral. Such loans thus provided, could be used as
working capital and repayment periods were made flexible with
amortization of loans granted for land improvement.

Additional incentives to be given to these civil servants
included (a) preference as to grade and locality of tractor, (b)
allocation of tractors based on farm size, crops grown, locality and
service facilities available, and (c) the civil servants could obtain
tractors on no deposit with no repayment terms for the first year.
Such loans were to be extended for a period of five years according
to crops grown, locality and size of farm. In certain cases, the
annual repayment was to be made over four years or five years after
delivery of tractors. For the public, including the small holders,
it was recommended that 10 percent of the tender price accompany
each tender. If final payment was not received within a given period
and the machine not collected within 21 days, the 10 percent deposit
stood forfeited to the Government (File, Ministry of Agriculture
DES/T.3/189). These arrangements, no doubt, were attractive enough
to induce some public servants to resign their positions and thereby
establish private companies for that purpose. A case in point was
the resignation of the Deputy Chief Engineer of the Mechanical
Services Unit, M. K. Dame. He was allocated ten tractors out of an
initial 150 put up for sale by the Government. The M. K. Dame and
Company, then provided services in the Ashanti, Brong Ahafo and
Northern and Upper Regions, and in 1970, another 353 wheel tractors

were sold.

267

The question to be asked is who benefited from these sales
and the new policies dealing with mechanization of agriculture. In
1970, for example, Government in its fiscal policy introduced a sur-
charge of between 25 and 40 percent on agricultural machinery. This
was an indirect import taxation by which revenue could be increased.
However, the impact of this policy resulted in further increases in
the price of agricultural machinery (Financial Policy, 1969-1970).
Thus, the annual owning cost of a tractor was in the region of
¢3,205. By implication, therefore, only those with financial backing
and political influence, and operating large farms were able to
utilize these resources. The evidence from Northern Ghana is
indicative of who benefited from these policies.

In 1970-1972, about fifty farmers in the rice growing areas
of Northern Ghana applied to Government to buy mechanical inputs.
The average size of holding for these applicants was 150 acres.
Included among these applicants was a senior member of the ruling
party who indicated he had 7,300 acres under cultivation. In more
than half the cases, applicants made deposits of between ¢600.00 to
¢l,000. In a few cases, cash payments were made outright. In the
recommendations attached to applications (ostensibly written by a
Ministry Official), some individuals were guaranteed in terms of
their abilities to abide by terms of sale or, as it was put, they

deserved priority consideration. In essence, therefore, the policies

 

pursued under the N.L.C./Busia Governments tended to favour a class
of farmers who operated large-scale units. As the years wore on,

the Governmentrurtonly subsidized land preparation services, and

268

encouraged private farmers to commercialize this factor of production,
but in addition, subsidized mechanical harvesting. In short, the
structure of rural production had become polarized into capital
intensive, labour-saving production units as opposed to labour using
production units.

Winch (1976) shows that the subsidy policy resulted in arti-
ficially high incomes, the most significant being the income distribu-
tion impact on the rural socio-economic structure. Out of the 6,100
rice producers in the Northern Region, only 100 were receiving any
appreciable income transfers through subsidies. In terms of the
production systems, the larger farm units, despite heavy subsidized
capital inputs were less efficient compared to the labour intensive
ones. The large capital intensive farms were producing at a higher
economic and social costs to society. Moreover, they had induced new

production relations in the rural sector.

Financing Agricultural Development

The distribution of investments among the economic sectors
was a thorny problem under the Nkrumah Government, but the investments
in the industrial and manufacturing sectors increased phenomenally.
Under the N.L.C. Government, military expenditures rose much faster
than the economic services. The Economic Survey was quite explicit
on the direction of government expenditure over the years and its
impact on allocation of investible resources. It stated among other
things that social services continued to claim the largest proportion

of Central Government expenditure. In 1968 and 1969, for example,

269

social services took 36.6 percent and 35.4 percent, respectively.
These were increases for general administration, i.e., 4.1 million
cedis, and for defense, Justice and Police, there were 7.8 million
cedis and 2.9 million cedis increases, respectively (Economic Survey,
1969: 28). On the other hand,

expenditure on Economic Services in 1969 at ¢49.7 million
was 11.3 percent below the level of 1968. Although there
was a 9.4 percent rise in current expenditures, capital
expenditure was drastically reduced by about 50 percent.
Government capital expenditure on agriculture was reduced
from ¢6.5 million in 1968 to ¢4.5 million in 1969; and
there was a sharp decline in government investment in
mining, manufacturing and construction (Economic Survey,
1969: 28).

 

In defending military expenditure, General Afrifa, then
Commissioner for Finance under the N.L.C. argued: "owing to the
neglect of our armed forces in the past, it has become imperative to
re-equip the entire army to make it justify its existence" (Budget
Statement, 1968-69: 11). In view of this situation, Government's
current expenditures rose faster than its revenue. The composition
of recurrent expenditures tended to be in favor of non-productive

sectors such as defense administration and social services. The then

 

 

Economic Advisor to the Government noted in a memorandum that defense
expenditures increased by 100 percent betweeen 1965 and 1968. The
greater part of this rise was attributable to items of equipment and
other supplies; and remuneration also went up by nearly 90 percent in
that period. This viewpoint was confirmed by other memorandum
circulated within the planning Ministry (Killick, 1969; Ministry of
Economic Planning Report, 1969/79: 3).

270

In terms of specific allocations in agriculture, the indica-
tions in Table 5.2 below are that cocoa rehabilitation, mechanization
and irrigation received major attention, i.e., 62 percent of the grants.
Fertilizer and seed distribution took 11 percent, while extension

programs received only 5 percent.

TABLE 5.2.--Se1ected List of Continuing Projects and Programs--Fiscal
Year 1968-1969.

 

 

Agriculture N¢'000
1. Cocoa rehabilitation and pest control 1,208
2. Completion of rice and palm-oil mills 406
3. State Farms 793
4. Mechanization program: plant rehabilitation 1,166

and replacement
5. Minor irrigation schemes 2,556
6. Distribution of fertilizers, seeds, and 879
planting materials
7. Livestock development and animal health 309
8. Extension programs 437
9. Fish ponds 37
10. Training and Manpower schemes 186

 

Source: Two Year Plan, 1968-1970.

271

Agricultural development remained the key to economic
development under the Busia Administration. This sector was to grow
at the rate of three percent and therefore, the Government decided
to increase investment for the economic sectors and drastically
reduce military expenditures.

Table 5.3 indicates that the economic sector including agri-
culture and industry received more than 50 percent of the capital
budgets for 1969/1970 and 1970/1971. In terms of specific alloca-
tions, investment in agriculture, including the Agricultural
Development Bank and Forestry, was in the region of 22 percent,

compared to 38 percent allocated to public works and communication.

TABLE 5.3.--Capita1 Budget 1969/70 and 1970/71

 

Percent Share

 

 

 

Sectors
1969/70 1970/71
Economic 53.8 54.8
Social 25.3 27.7
Administrative 15.8 16.3
Unallocated 2.1 .__l;Z
TOTAL 100.0 100.0

 

Source: One Year Plan, 1970: 19.

272

In summary, Table 5.4 shows that between 1966 and 1969, the
Central Government's current expenditures in agriculture declined in

real terms.

TABLE 5.4.--Central Government Current Expenditures.

 

 

Year Million Percent of Total Expenditures
1966 19.8 9.7
1967 19.3 7.8
1968 19.7 6.6
1969 21.1 6.7

 

Source: Economic Survey, 1969: 29.

Despite these financial limitations and economic problems
faced by the N.L.C. and Busia Governments, the gradualist strategy,
had implications for rural class relations in Ghana. An examination
of the nature of these class relations does throw further light on
rural social inequalities and the extent to which rural under-
development has been reduced or maintained.

The Welfare Democratic System and
Class Relations

 

 

After the overthrow of the Nkrumah Government the N.L.C.
Government began a program of re-alignment by which state organiza-
tions in both industry and agriculture could be put on 'sound'

economic and financial foundation. This program essentially was a

273

way of reducing N.L.C. Government expenditures. In pursuing this
strategy, however, the N.L.C. rejected extensive state participation
in production. The government was unwilling to use these state
organizations as merely 'a stop gap' solution to the unemployment
problem. In official statements the state agricultrual organizations
were considered to be "eloquent monuments of folly and waste" to the
extent that thousands of persons were kept on state funds for doing
very little (Afrifa, 1966). Thus, in the program of reorganization,
the Agricultural Committee of the N.L.C. recommended that the State
Farms Corporation was to close down 58 of its 128 farms, but in
calculating the labour required for the operation of the remaining
70 farms it recommended that about 50 percent of existing labour
force be retained. As a result, 9,188 employees were laid off, most
of them without termination payments (Ministry of Agriculture
Report: State Farms Realignment Committee 1966: 3). By 1967,
12,600 workers were laid off and 61 farms were closed down (Ministry
of Agriculture, 1967: File X.6238/SF.1/v.2/66). But the significant
aspect was the fact that the rubber plantation which this organiza—
tion nursed was turned over to Firestone USA which in turn dismissed
a number of agricultural workers. Although this program of realign-
ment reduced government's financial burden from eight million cedis
to two million cedis, it turned these farm workers into a class of
unemployed.

This situation was the same for both the Workers Brigade and
the U.G.F.C.C. The commission set up by the N.L.C. to investigate

the affairs of the Workers Brigade stated:

274

While the Brigade should continue to provide an

avenue for employment we do not think it is proper or fair

to the taxpayer for more people to be employed in the

Brigade merely to reduce unemployment (Kom Commission

Report on Workers Brigade, 1967: 60).
On the basis of the Kom Commission Report the staff of the Workers
Brigade was reduced by 50 percent. In the case of the U.F.G.C.C.
the organization was disbanded, except for its cocoa division which
was absorbed by the Cocoa Marketing Board. On the whole about 70
percent of its employees were thrown out of the active and partici-
pating labour force. By 1967 it was estimated that between 20 and
25 thousand workers from the agricultural organizations became
unemployed (Peil, 1978: 84).

Although the program of rapid agricultural mechanization
pursued under the Nkrumah Government was considerably reduced under
the N.L.C./Busia Administrations, the strategy of agricultrual
development did not slow down labour displacement and inequalities
in the rural sector. It was shown earlier that the sale of agri-
culture machinery benefited large-scale farmers and civil servants
who had financial backing and political influence to acquire these
resources. The program of subsidizing agricultural inputs did not
lead to equitable distribution of income, rather it tended to rein-
force economic inequalities (Ewusi, 1971; Greenhalgh, 1972). The
Government's agricultural policies therefore increased income
transfers to members of the dominant class in the rural sector.

This point is further elucidated by the implications of the

development program pursued in Northern Ghana. In years prior to

the mechanization program in northern Ghana, labour provided by

275

indigenous populations--men, women and children--constituted the
basis for agricultural production, but with tractorization and the
use of combined harvesting, the seasonality of labour recruitment
increased. In a number of cases the process of mechanization
resulted in the displacement of women and children who provided a
significant proportion of labour in rice production. Based on survey
data, Winch notes that for every 1,000 acres harvested by combined,
22,000 man-days of labour were potentially displaced (122).

Winch further argues that given a harvesting period of 60
days, the labour of 367 man equivalents per day for 60 days was dis-
placed. Thus, if the goal was to achieve 35,000 combined acres, then
it followed that 770,000 man-days of labour were potentially displaced
as a result of a shift from manual techniques to mechanical-combined
harvesting (123). On the other hand, Winch concludes:

The loss in income by casual workers would be ¢356,750 if

50 percent of labour requirement were hired and ¢549,000

if 75 percent of the labour requirement were hired.

Given a 60-day harvesting period 577,500 man-days . . .

would provide for 9,625 workers working six hours per

day for 60 days (123).
This analysis is supported by comparative studies elsewhere.
Clayton (1972), for example, notes that in the East African case
mechanizing agriculture had destroyed the avenues for generating
employment (392). In short, the process resulted in the replacement
of increasingly abundant workers by increasingly costly machines.
Timmer's study on Java is equally instructive. In his study on

choice of techniques in rice milling, Timmer (1974) found that with

the introduction of mechanical devices in the production process,

276

about 160,000 jobs were eliminated. This, of course, did not include
the potential job opportunities that had been closed (10).

The problem of labour displacement was further complicated by
the process of acreage expansion engendered by the program of mechaniza-
tion. Under the N.L.C. and Busia Administrations there was a phenomenal
increase in acreage effected by the encouragement given to private
entrepreneurs. In 1968 the acreage in northern Ghana was 28,000, but
by 1974 it was 90,000 (220 percentage increase over six years), and
the evidence indicates that the bulk of these increases came from
large-scale farmers. In 1971 there were an estimated 6,100 holders
producing rice in northern Ghana. Fifty-three percent of rice farmers
in 1971 were cultivating less than 75 acres (Ghana: Sample Census
of Agriculture, 1970). Those cultivating 15 acres or less constituted
90 percent of the farmers in rice production. But approximately 10
percent of the farmers cultivating more than 15 acres taken as a
group, controlled more than 50 percent of the total rice acreage.

This development in northern Ghana complicated the land
question and in addition, induced further migrations of the labour
force because of land shortages. It was noted earlier that the
Nkrumah Government severely limited the chiefs' power to alienate
land or enter into any concessions over land without approval by the
Minister of Justice and Local Government, but by subsequent amendments
(N.L.C. Decree 233 and 234) the chiefs were able to receive revenue
from stool lands, in addition to the clandestine transfers which they
made. The 1969 Constitution, although it reinforced the essential

principles of the Lands Act of 1962, provided a new opportunity for

277

chiefs to assert their traditional authority over landed property.
The Constitution maintained in principle that 'stool lands' were
national assets and the President could authorize its appropriation.
But the trappings of ownership were still vested in the chiefs as
trustees. This position was spelled out in Article 164, Section 1,
of the Constitution which stated: "All stool lands in Ghana shall be
vested in the appropriate stool on behalf of and in trust for the
subjects of the stool." As a result of changes in the law the
chiefly artistocracy in the northern regions as well as in other parts
of Ghana began to assert proprietary interests over communcal lands.
The opportunities offered by rice production increased the desire for
enforcing a principle which did not have a standing in the customary
laws relating to land ownership. In this 'rush' for accumulation
through control of lands, the institution within which political and
economic interests of various groups were expressed, became a prize
to be won. What illustrates this development is the politics of

1969 in the north--an election held to return civilians to public
office after three years of military administration.

The major political parties that competed for public office
in Ghana had the manifestations of class conflicts. The Progress
Party led by Dr. Busia was to some extent a reincarnation of the
National Liberation Movement and the smaller opposition parties. The
National Alliance of Liberals, led by K. A. Gbedemah, represented
somewhat the CPP. In the northern regions the Progress Party main-
tained the old colour of the opposition parties during the Nkrumah

period. The National Alliance of Liberals was composed of radical

278

young men who essentially benefited from the CPP accelerated educa-
tional program, but their claim to leadership was based on education
and radicalism. The rivalries between the parties were based on
ideological outlook. The Progress Party took on a liberal outlook
while the National Alliance of Liberals appeared somewhat more radical
although not different from the other party. What mattered was what
economic opportunities existed for the people of the northern region.
Politics came to symbolize a means to economic power and to a large
extent influenced that could be used to affect the redistribution of
resources.

The political competition that was generated during this
period also increased local political ambitions. Consequently, con-
tenders to chiefly power began to unearth old disagreements about
succession and inheritance. At this point national political con-
flicts became interwoven with primarily local concerns (Staniland,
1975; Ferguson, 1972). Politics and politicians were actively engaged
in political maneuvering in relation to the chieftaincy, and chief-
tainy seriously became the focus of political class conflicts. But
more importantly it was confict over wealth.

One of the economic prizes which was won in these chiefly
undisputes was land. It was common practice to see large tracts of
I farm lands under the direct control of chiefs who received support
from both the N.L.C. and Busia Administrations. Shepherd (1978) holds
that the politicians, public servants and other professionals in
response to Government's agricultural policies, took advantage of

this land monopoly of chiefs to acquire large farm areas for rice

279

production. Consequently, the chiefs have been bought off by
stranger-farmers who have helped them to acquire bank loans, tractors,
or at least have offered them free tractor services (3). What had
therefore occurred in structural terms was an alliance between the
hereditary class and urban centered politicians, civil servants and
professionals who could broadly be labeled as “the new agricultural
capitalists" in northern Ghana. This development is not limited to
the northern rice growing areas. A similar structural process had
occurred in the sugar cane line and cotton-growing areas in the
coastal savannah areas (Van der Wel, 1973; Brenner and Wagenbuur,
1969).

The implications of these economic activities were that the
land situation in the northern regions became more complicated,
particularly as it was reflected in further migrations out of these
regions. It has been noted that in a significant number of areas
within the northern regions population concentrations had been high.
Hilton (1968) states that in some localities the degree of concentra-
tion had been much higher than the regional average. In the areas
around Bolgatanga (one of the major urban areas in the north) the
population density exceeded 512 persons per square mile. In their
studies on the Frafra, both Nabila (1974) and Hart (1974) indicate
that the population pressure had been in part responsible for the
phenomenal migrations of adult males from the area. In another
study, Hunter (1967) showed that the population-carrying capacities

of the Nangodi traditional area had diminished drastically, and in

280

fact, the problem of overcrowding was found to be very acute (the
population densities ranged from 1,000 persons to 1,240 persons per
square mile).

The general problem of population pressure imposed severe
limitations on land and other resources. The only alternative was
migration to areas where alternative avenues existed. Thus, Caldwell
(1968) points out that in terms of inter-regional flows, the north
showed a high rate of out-migration. With recent economic development
the land situation became worse. As a result the migration rate
became an endemic phenomenon within the social structures of these
areas. Those who remained within the areas, particularly women,
sought wage employment on the large-scale farm or the rice mills
established by the Government. This reflected the process of rural
labour proletariazation.

The problem caused by inefficiency in agriculture production
and the administrative measures taken by the Government was to add
new dimensions to the rural class structure, shifting alliances among
the urban elite including the military businessmen, civil servants on
the one hand and the rural upper and middle classes on the other hand.
The basis for these alliances derived from an interest in capital
accumulation.

The nature of rural class relations under the N.L.C. and Busia
Administrations clearly reflected the increasing rural inequalities
in resource allocation and use. The dominant rural social classes,
in alliance with the urban political and economic elites, manipulated

the institutions of Ghanian society to their advantage while the

281

majority of the rural population continues to be marginalized. The
question that needs to be addressed, therefore, is whether the involve-
ment of the dominant classes in production was translated into any
measurable improvement in living conditions of Ghanaians. In short,
were there any improvements in the overall economy of Ghana as a

result of the adoption and implementation of the gradualist strategy?

This is what the next section seeks to address.

Review of Economic Conditions

 

During the period under review, economic conditions did not
improve. Economic activity was slow, the real growth of the economy
was in the region of 1.6 percent, and the structure of domestic con-
sumption remained unaltered. There were deficits on Government
account since expenditures were far in excess of revenue (Economic
Survey, 1967; 1968). The country was also experiencing balance of
payment problems since export remained relatively stagnant while
demand for imports continued to increase.

The N.L.C. Government pursued a number of policies in order
to reduce the pressures on the economy. The most notable was the de-
evaluation of the Ghanaian currency by 30 percent in 1967. The
reason for this was that through the exercise of devaluing the
currency, it would be possible to boost export trade by making exports
more competitive in foreign markets, but the world market conditions
remained unfavourable. This situation is best explained by examining

the position of cocoa, the main export crop, in the economy.

282

Throughout the decade, Ghana continued to produce between,30
to 32 percent of world cocoa. In terms of the structure of exports,
Table 5.5 shows that cocoa products provided more than 50 percent of

the total exports.

TABLE 5.5.--Ghana: Percent of Total Exports, 1960-l969.

 

 

1960 1967 1969

Cocoa bean and products 59 65 54
Timber and logs l4 9 10
Gold 10 9 8
Diamonds 9 5 4
Manganese 6 5 2
Other* __g __7 _g
TOTAL 100 100 100

 

Source: IBRO Report, 1970.

*Exports of aluminum began in 1967 and amounted to 11 percent
of exports in 1969.

In spite of the phenomenal increases in production during the
early part of the 19605, the value in foreign exchange showed only
marginal increases, and in fact, the annual earnings were in the
region of $190,000,000 in the early 19605 compared to $180,000,000 on
the average during 1954-1959. This increase was insignificant if
viewed in terms of production increases which stood at 79 percent

(IBRD Report: 47). Even more disappointing, however, was the value

283

received during the 1964-1965 crop season. Production increased '5
40 percent, but earnings did not increase. At the beginning of the
19605, the price per ton was about L180 sterling; but by 1965 it fell
to 87.5 percent per ton. This represented a decline of nearly 100
pounds from the end of 1964, which was partly effected by the bumper
crop which flooded the market, causing prices to take a sharp plunge.
This was a severe blow to Ghana in terms of foreign exchange lost
(Economic Survey, 1965: 35). While export performance remained dis-
appointing the import bill over the years continued to increase
despite measures to curb imports and actually imports exceeded exports
to the extent that large trade deficits were registered throughout
the decade.

This trend continued in the second half of the decade and
between 1966 and 1970, cocoa production declined by about 13.9 percent.
At the same time, world prices also showed a decline. For example, the
average monthly spot prices in London during 1960 through 1974
clearly reflected the situation. The Economic Survey noted that

in 1969, the price which remained stable at a fairly high

level averaged ¢1,034 per ton. But at the close of 1969,

when indications were that l969/7O would be a bumper crop-

year, the price began to move downwards continuously until

the end of 1971. The average annual price per ton declined

from ¢1,034 in 1969 to 761 in 1970 and %579 in 1971

(Economic Survey, 1972, 1974: 83).
In the face of these declines, imports, particularly food imports,
increased rapidly. In Table 5.6 this situation is amply illustrated
by the import requirements in 1967. The projected imports for the

year 1967 also constituted about 10 percent more than the annual

average for 1961-1965. In 1969 about 18 percent of the Government's

284

TABLE 5.6.--Import Requirements by Sectors, 1967.

 

 

For Current Production and Consumption N¢ million
1. Food 39.6
2. Pharmaceutical Products 5.8
3. Other Consumer Goods 27.6
4. Manufacturing 78.0
5. Construction 31.2
6. Transportation 15.2
7. Fuel and Lubricants 12.6
8. Mining and Quarrying 5.0
9. Agriculture, Fisheries and Timber 9.0

10. Government Imports, n.i.e. 10.0

For Investment

 

 

11. Publid Sector 45.8
12. Private Sector 8.2
TOTAL N¢288.0

 

Source: Ghana Import Requirements, 1967.

import program was devoted to food imports and yet, most of the com-
modities shown in the table below could be produced internally.

In terms of imports, it is evident from Table 5.7 that com-
modities and food stuffs which could be produced in the country if
suitable policies and programs were adopted amounted to about thirty

million cedis. This situation was in part caused by inadequate

285

TABLE 5.7.--Ghana--Value of Imports in 1969 of Commodities that
Could be Produced Locally.

 

Value N¢ Millions

 

 

Sugar 8.5
Rice 6.0
Vegetable Oils and Tallow 5.6
Livestock Products 10.0
Cotton (fibre) 1.9
Jute (fibre) 0.8
Tobacco 3.8

TOTAL 36.6

 

Source: IBRD Report: 197.

domestic production. In the 1967-1968 crop year, for example, maize
production fell by 12 percent and other staple crops including
cassava and rice showed significant decreases in total yield
(Economic Survey, 1968: 70). In 1969, rice production again fell,
this time by 17 percent. This situation generated inflationary
pressure in the economy. The food price index between 1963 and 1972.
rose very rapidly. Locally produced food in particular, accounted
for about 65 percent of the 127 percentage increase in the overall
national index (Economic Survey, 1972-1974: 127).

In summary, the economic activity slackened and it became
necessary to pursue alternative policies in order to contain the

economic malaise. The foreign exchange position had been reduced

286

as a result of decreases in the cocoa price; the debt situation had
not changed and this was worsened by the policy of liberalizing imports.
These developments compelled the Busia Administration to devalue again
the currency by 48 percent. The immediate impact was again reflected
in price movements, and consequently, prices of food rose about three
times and other imported materials, i.e., machinery and equipment

rose about 100 percent (Economic Survey, 1972-1974: 1). Both the
N.L.C. and Busia Governments resorted to food and commodity aid in
order to control the declining rate of economic performance. Imports
of food in the early 19505 were valued at about L11,000,000 sterling,
but in the early 19605 they increased to L14,000,000, in spite of

the economic controls in operation during the Nkrumah period.

The N.L.C. and Busia Government's policy of liberalizing
imports increased the food import bill sharply. After the overthrow
of the Nkrumah Government (exactly a month after), Canada, the United
States and West Germany provided food aid amounting to £4,500,000
(Krassowski, 1974: 134). By the beginning of 1968, $58,000,000 of
food aid had been added to the national debt.

An examination of the specific trade relationship between
Ghana and the United States in this respect is worth noting. In
1967, a loan agreement between the two countries provided that the
United States would ship approximately 25,000 metric tons of wheat
flour, 20,000 tons of rice, 5,000 tons of yellow corn, 5,000 tons of
guinea corn, 9,200 bales of cotton, 500 tons of vegetable oils and
400 tons of leaf tobacco. Payment of the loan was to be in local

currency, but it was stipulated, however, that 75 percent (5 million

287

cedis) of this repayment would be loaned back to Ghana for use on
social and economic development. The remaining 25 percent was to be
used by the United States Information Agency (USAID) to pay local
expenses and for cultural exchange (Ghana Reborn, 1967: 33). It was
maintained that this approach to aid giving would allow Ghana to save
foreign exchange. Contrary to this notion, commodity loans of this
nature did not help achieve any measurable stability in foreign
exchange positions. In the first place, it permitted the United
States to accumulate substantial 'counterpart funds" in Ghana. The
United States and other commodity and food aid donors over the decade
controlled large funds in domestic Ghanaian currency. This rose from
about 5 million cedis in 1964 to about 50 million cedis in 1969.

This situation no doubt created further complications to the debt
obligations of Ghana.

These external trade relations also encouraged the continua-
tion of the former colonial economic relations, i.e., relations of
exploitation and domination of the economy by foreign interests.
Since 1966, in its desire to dismantle the state agricultural and
industrial complexes established under the Nkrumah Government, the
N.L.C. sold out to foreign companies enterprises including the rubber
plantations in which progress had been made. The N.L.C. and later,
the Busia Administrations encouraged large-scale private production
units or joint state and private agricultural companies. These
production units depended on external management and capital; they
engaged in cash crop production of rubber, sugar cane, oil palm,

'tobacco; they organized their own agricultural services, processing

288

and marketing facilities. In short, they were economic enclaves in
the rural sector to the extent that they were 'high production zones'
with advanced technologies, exploiting local labour to increase
foregin accumulation of surplus which invariably was repatriated
abroad. An illustration of this point is necessary here. It has
been estimated that foreign investors profits taken abroad annually
from Ghana averaged £3,000,000 between 1955 and 1959. Between 1960
and 1964, the average annual exported income on direct investment
grew to two and a half times over the 1955-1959 period reaching
£8,000,000. This was four and a half times the annual inflow of new
direct investment (Goncharov, 1977: 178). In 1965, the net inflow of
direct investment was £8,000,000. This increased sharply to
£21,000,000 in 1966 (Economic Survey, 1967: 44). This situation
continued in 1969 when the net inflow reached £39,000,000. The
increase in investments must be explained in terms of the guarantees
offered to private foreign investors and the utilization of official
and commercial credit. These increases imply a corresponding
increase in outflow of profits on investments.

A large proportion of the transfers on capital investment,
however, went to pay fOreign workers in Ghana. In 1962, about 45
percenttyftotal payment accrued to foreign workers in Ghana (Economic
Survey, 1965; Daily Graphic, April 5-6, 1965). Throughout the decade
foreign workers' remittances continued to dominate private transfers
and in 1968, the total payment amounted to ¢l6,000,000, compared to
$14,000,000 in 1967 (Economic Survey, 1968: 54). This outflow of

resources was of such serious concern as to warrant a new policy on

289

repatriation of profits. The N.L.C. introduced a policy under which
remittance quotas were reduced to 40 percent. By this policy, foreign
workers remittances fell from ¢16,000,000 to ¢11,300,000 in 1969
(Economic Survey, 1969). On the other hand, it increased reinvested
profits and credit to Ghana which allowed for economic expansion, but
at the same time, increased foreign control of the domestic currency 1
as well.

Some agricultural projects were retained as state enterprises
by the N.L.C. and the Busia Governments but the organizations did not
show any significant progress. The Auditor General's review of the
performances of a selected number of these state organizations clearly
indicated that no large returns, if any at all, had been made on
investment. More revealing in Table 5.8 is the loss that continued
in enterprises like the State Farms and the Food Marketing Corporations
under the N.L.C. and Busia Governments.

Despite what may appear as a reduction in the loss-making
spree of the State organization during the N.L.C. and Busia periods,
the problems came nowhere near to being solved. In the case of the
State Farms Corporation, it was evident in 1971 that only a quarter
of the total available acreage was under cultivation, and moreover,
peasant farmers productivities and yield continued to be much better
than those of the State organizations (Ghana, Sample Census of
Agriculture, Vol. II, 1970). On the other hand, evidence on indi-
vidual projects did show that increase in capital intensity did not
increase productivity and yield. A case in point is the sugar

factories in Asutuare and Komenda. The two sugar factories produced

290

TABLE 5.8.--Profit and Loss Record of Selected Agricultural
Enterprises 1964-1965 and 1969-1970.

 

¢ Thousands

 

 

 

 

1964-1965 1969-1970
Ghihoc Enterprises
Fibre Bag Factory - 318.8 + 109.5
State Cannery - 15.3 _ 548.2
Sugar Products
Asutrase - 983.3 -1526.8
Komenda - 208.5 -1212.5
Cocoa Products (Takoradi) - 506.6 +1039.4
Vegetable Oil Mills - 328.8 - 308.5
State Distilleries - 953.4 - 857.5
Public Corporation
State Farms Corporation -12,732.5 -1361.0
State Fishing Corporation - 239.5 - 338.3
Ford Marketing Corporation - 133.6 - 237.9

 

Source: Killick, 1978.

less than 10 percent of their rated capacity of 36,000 tons in 1968
and 1969. The situation was not better in 1970, nor in the succeeding
years (Van Der Wel, 1973), and consequently, through an agreement

with the World Bank, Ghana received a loan of 20 million cedis for
improving the factories. Subsequently, the factories were given to

foreign capital interests under a Dutch technical assistance program.

291

The overall agricultural situation in Ghana would have improved
if the extension service had been effective. A number of social and
economic studies undertaken between 1970 and 1975 show that most
farmers received no help from the Ministry of Agriculture. In more
specific terms, these studies conclude that in concentrating efforts
,in specific districts in the country, the imbalance in resource
allocation to farmers was not eliminated. Extension officers continued
to concentrate on large scale farmers or innovators who could purchase
inputs and invest in production (Dumor and Amonoo, 1973; Atsu, 1974).
Brown (1972), in his survey of two farming districts known to have had
the Ministry of Agriculture's support, concluded that 62 percent of
the farmers never received any help. Most of the farmers surveyed in
these studies also indicated that they were not aware of any programs
of the Ministry in the selected districts. For one thing, a large
proportion of food producers received no real support. This situation
is in part explained by the continuing interest of the officials of
the Ministry in cash crops in order to help earn the 'mythical'
foreign exchange which Ghana needed. On the other hand, the political
leadership of the Ministry was not well organized to deal with the
pressing problems posed by Ghanaian agriculture. There were several
uncoordinated agricultural programs which did very little to bridge
the gap between rich and poor farmers (Gordon, 1969: 215-216). Thus
the efforts made under the graudalist strategy remained ineffectual.

The question again arises as to why this strategy also failed.

292

This chapter was not intended to provide an explanation for
this failure, but in dealing with the underlying principles of the
gradualist strategy, the historical conditions that called forth the
strategy, the social political and economic forces that affected it,
the chapter provided some explanations. In a specific way, however,
the chapter critically examined the utility of the capitalist path
proposed by this strategy. It is concluded that this capitalist
path viewed in an historical context further strengthened the
dependent nature of the Ghanaian economy. The emphasis on export
trade entailed by this strategy maintained a rural production
structure which encouraged rural exploitation and poverty. The desire
to reduce state prarticipation in productive activities and the
encouragement of external and domestic entrepreneurial classes
further tended to compound the problems of rural inequalities and
underdevelopment. In short, the gradualist strategy which was
essentially a capitalist strategy, encouraged the concentration of
productive resources in the hands of a few dominant persons and thus
increased the poverty and marginality for many rural residents. 0n the
whole the Ghanaian economy continued to exhibit the features of an
underdeveloped economy, the structural features of an economy

essentially shaped by colonialism.

CHAPTER VI

SUMMARY OF FINDINGS

This study aimed at providing an explanation for under-
development in Ghana. More specifically it inquired into problems
of rural development viewed as a part of the general process of
underdevelopment. The central issues addressed were the conse-
quences of colonial and post-colonial policies for rural develop-
ment.

Dealing with this central issue in a comprehensive way
required an analysis that would permit treating underdevelopment
as a historical process. Since the neo-classical, sociological
tradition denies the possibilities of dealing with the most compel-
ling questions about the development process in non-Western
societies, this study derived its theoretical perspective from
the conflict and change tradition. Thus the dependency framework
was used with the view to taking account of questions related
to external and internal domination and exploitation which remain
critical in the development of underdevelopment. In general terms,
therefore, the conflict tradition and specifically the dependency
framework provided the theoretical thrust for this study in its
maintaining that 'development' is essentially a historical process.

In addition it is argued that the expansion of capitalism was

293

294

critical in the development of underdevelopment. This viewpoint

is sustained by the notion that capitalist development is based on
a system of control, accumulation and unequal exchange. What it
implies in the case of Ghana is that the resources of the country
were exploited and transferred abroad to serve British interests.
But the development of capitalist enterprise according to this
perspective can only be successful if and only if it is accompanied
by internal domination and exploitation of dominant local classes.
These local classes therefore serve as the channel through which
underdevelopment is sustained.

In relation to rural development this sociological frame-
work postulates that rural underdevelopment is a consequence of the
subjection of the rural economy to the requirements of capitalist
market forces. Thus rural poverty is related in a complex way to
the world capitalist system. This capitalist system is a vertically
integrated structure of control and exploitation of some parts for
the benefit of others. To that extent, capitalist enterprise in
the rural sector does imply appropriation of productive resources:
land for export production, the exploitation of local labour through
the payment of low wages and consequently the stagnation of a
greater proportion of the rural sector.

Given these theoretical underpinnings this study proceeded
on five propositions: (1) rural poverty or underdevelopment is a
consequence of the expansion of capitalism, (2) the persistence of

rural poverty is to be understood in terms of the role of the

295

colonial and post-colonial state, (3) the expansion of capitalist
enterprise in the rural sector and the disarticulation of produc-
tion structures, constitute the core of unequal exchange and
inequality in resource distribution in Ghana, (4) the pattern of
capitalist exploitation and surplus extraction is associated with
sharply differentiated class structures and (5) the nature of

rural class relations is a manifestation of the general process of
underdevelopment. In short, these propositions direct attention to
the fundamental issues: why has Ghana been unable to make any
significant strides in her development effort?

Based on the historical and sociological data this study
arrives at a number of conclusions. First the notion that African
societies are underdeveloped because of the static nature of their
economies cannot be sustained empirically. The data clearly
suggests that pre-colonial societies in Ghana made political,
and economic advances, as well as developing internal social dif-
ferentiations based on wealth and prosperity. In the area of
political development a significant number of these states particu-
larly the Asante developed, highly differentiated state institutions
and bureaucracies and over the centuries advanced towards empire
building. In commerce and trade, there were highly organized state
trading systems and intracontinental trade involving the exchange
of gold, diamonds, salt, beads, kola,cotton and wax prints. But
these advances were altered following a series of changes in

Western European economies.

296 I,

The second conclusion is that slavery, which was a major
part of European trade, constituted a critical factor in the
(process of underdevelopment, as the highly developed Trans-Saharan
trade collapsed, and lucrative and promising African industries
including textile, gold mining and iron works were undermined. African
societies were also denied the active potential labour force which
could have been in the service of African development. Instead,
this labour was used in support of an expanding industrial capital-
ism in Europe. The system of slave trading also had consequences
for political systems. Several African societies disintegrated
and this made it easier for formal domination to be established.
This in turn facilitated the exploitation of the resources of the
continent.

The third consideration is that the period of legitimate
trade was equally significant in severl respects. British interest
in Ghana during this period was dictated by the demands of the
emerging industrial system. In essence, the production structures
and production relations that emerged in the Ghanaian societies
along the coast as well as the hinterland were therefore largely a
product of these developments in Europe. Consequently, the struc-
ture of production in Ghana became progressively an extension of
external economic interests. Enclave economic structures such as
mining, plantation and export crop agriculture which were heavily
capitalized constituted the leading sectors.

The fourth conclusion of this study is the critical role of

the colonial state in relation to underdevelopment. The evidence

297

suggests that the administrative policies pursued during this
period secured the core pattern of an underdeveloped economy. For
example, the development of infrastructures--railways and roads--were
meant to open up the country in order to facilitate the extraction
of the resources of the country. Moreover, through the mechanism
of the colonial state the local labour was used in the interest of
capitalist enterprise. In relation to rural development the pattern
that emerged is best described as "extraversion." This process
implies an unequal international specialization involving a distor-
tion towards export activities such as mineral and agricultural
production, and a neglect of production for the home market. But
as this study indicated, this process of extraversion would not
have suceeded if the dominant local classes had not buttressed
these administrative policies. In short, the dominant classes
that survived from pre-colonial periods were used to sustain
capitalist economic enterprise. This internal development
increased the integration of the economy into the external world
system and at the same time facilitated underdevelopment. In
essence, the internal administrative programs and policies

pursued by the colonial state and supported by the dominant local
classes, created conditions of structural dependencey.

Thus at the end of formal colonialism, not only did the
economy become structurally weak and dependent, but there had
emerged sharp inequalities in production structures as well as
among the citizenry. Underdevelopment which is indicated by these

processes is largely the result of colonialism.

298

The study examines the transformationist strategy pursued
by the Nhrumah Administration. This strategy was essentially a
non-capitalist path to national development. The basic orientation
of this strategy was to undermine the colonial pattern of develop-
ment and thereby establish a socialist society. It also sought to
eliminate external as well as internal exploitation. The fifth
conclusion of the study is that, viewed within the context of the
historical conditions of Ghana, as well as the contemporary social,
economic and political forces, this strategy did not eliminate the
colonial development pattern for a number of reasons. The transition
to a socialist soceity was fraught with contradictory tendencies.
The colonial relations persisted and significantly counteracted
efforts to pursue independent economic objectives. The economy
which the Nkrumah Government inherited was fragile and significantly
disarticulated. The dependnece on one export crop made the economy
vulnerable to external economic pressures. In the face of these
problems the assumption of the ownership of the means of production
by the state had marginal effect on the overall economy.

The transformationist strategy implied industrialization and
mass participation in agricultural production. In this respect the
state organized various institutions to increase mass participation
as well as mechanize production. These activities were carried out
by organizations like the United Ghana Farmers Council Cooperative,

State Farms Corporation and the Workers Brigade. In the hope that

299

these organizations would lead the move toward increased rural
productivity, the government invested public funds as well as
utilized external loans to support the activities of these organiza-
tions. In addition, a significant amount of public and external
capital was invested in the importation of agricultural machinery.
The performance of these state organizations was far below the
national expectation. The organizations faced not only technical
problems but management problems, and showed low productivity in
many respects. Moreover, with the increased investment in mechani-
cal inputs, the economy became indebted to external sources. This
situation compounded the economic problems of the country. In
addition the program of socialist industrialization exacerbated the
problems related to technological dependence.

Another development that affected the transition to a
socialist society had to do with class contradictions. In other
words, a major explanation of the failure of these state organiza-
tions must be sought in terms of the extent to which the old and
new dominant social classes used them as a framework for private
surplus accumulation. The study therefore concludes that the
transition to socialism became difficult not only because of external
constraints, but also because of the desire of new social classes
to use these organizations to advance their own economic interests.
Given these contradictory tendencies in the transition to socialism
and the general economic conditions of Ghana at the time, it was
hardly possible to eliminate any of the features of an underdevloped

economy.

300

Finally, the study examined the gradualist strategy which
was pursued by the Military Government, the NLC and the Busia
Administration. This strategy was essentially a capitalist path
to national development. But more specifically it rejected the
basic theory that the state should be given the power to organize
economic production. Therefore, this strategy entailed a reduction
in the role of the state, the encouragement of foreign private
investment and external trade.

Export trade, according to this strategy, constitutes the
engine of growth. Economic policy reflects this concern in view
of the desire to increase export production. In the search for
foreign participation, some state argicultural organizations were
sold out to multinational corporations (the rubber industry was
sold to Firestone). In addition, private entrepreneurs, particu-
larly Ghanaians, were encouraged to enter agricultural production
with subsidies from the Central Government. These included loans,
subsidized mechanized inputs and agricultural extension services.
In this respect agricultural extension service was reorganized in
order to encourage production of specific crops. These changes had
little effect in terms of overall participation of rural people in
production, but induced the concentration of resources in a few
hands and consequently the structure of rural production came to
reflect social and economic inequalities. Food production hardly
increased during this period, and to alleviate the problems of

shortages in food supply, government resorted to food and

301

commodity aid. At the close of these governments, about 58
million dollars had been added to the national debt.

In summary the Ghanaian experience demonstrates the nature
of the development problems of most African nations today. The
study illustrates how the colonial experience sets limits to the
growth and development possibilities of these nations and essentially
distorts their potentialities. It is clear that tackling the prob-
lems of underdevelopment in its full scope entails a struggle
against both internal and external forces. On the one hand, if
African societies are to develop through an active involvement of
all sectors including the state, they can do so by setting up
priorities that focus attention on the real needs of the people.
But it has to be realized that African nations are constrained by
their size and natural resource base and markets. In view of this,
African development can succeed and individual nation's capacities
strengthened within a continental framework. These issues
constitute the core of the discussion entitled "What can be done:

Some Considerations for African Nations.“

CHAPTER VII

WHAT CAN BE DONE: THE POSSIBILITIES FOR
GHANA AND AFRICAN COUNTRIES

The Ghanaian development experience reflects, in many ways,
the predicaments of most African states. These small states which
are products of colonialism were created without reference to
geographic, economic and sociological realities. Thus the size of
these states constitutes a serious impediment to independent develop-
ment. As this study showed, Ghana, like many states in Africa, was
limited because of economic size, non-availability of markets and
economies of scale that would allow for the attainment of the full
benefits of its industrialization and import substitution programs.
Ghana,compared to other states,is endowed with a wide variety of
natural resources in agriculture, forestry and mining, but because
of the country's incapacity to generate sustained development the
economy could not be diversified.

The experience of Ghana clearly shows that developing an
integrated and viable national economy entails considerable financial
outlay in social and economic fields. The operating budgets for

these programs were, however, far beyond Ghana's means.

302

303

revenue could not cover expenses of government nor could it support
economic activities for any measurable length of time. The attempt
to raise revenue through taxation, mainly on import and exports,
tended to complicate the problems. For example, national governments
restructured the tax system in order to reduce imports so as to
release foreign exchange for capital equipments. The 'new' tax
structure was also meant to help resolve the balance of payment
problems and to protect local industries against competition from
abroad. These measures simply complicated the inflationary problems.
To deal with domestic social and economic problems national govern-
ments had to resort to external borrowing mainly from western
industrial nations. This external borrowing, in the Ghanaian
experience, did not increase the development capacities of the
country; instead, it reinforced the country's dependency.

These problems therefore have posed serious challenges to
Ghanaian political leadership and have encouraged, on the part of
African leaders, a rethinking of relevant development strategies.

The problem of persistent underdevelopment in Ghana has therefore

led to a re-examination of past and present strategies and a formula-
tion of new ones. What is certain about this re-examination process
is that most Africans are interested in moving away from the

colonial pattern of development. The African leadership seems
concerned about the ways to resolve the internal weaknesses of

their countries in the hope of creating a framework for independent

national growth.

304

In view of these concerns, the discussion in this chapter
addresses briefly the question of an African framework within which
Ghana and other small states can achieve their goals of national
development. The discussion also focuses on some micro-level develop-
mental strategies that should serve as a basis for resolving the
internal dilemmas of these countries. It is the view that while the
African framework is a major means, micro-level efforts constitute
a sine qua non to viable continental development planning.

Development specialists including Nkrumah (1972) Frank
(1969) and Amin (1976) have called for alterations in African
policy priorities and national development frameworks. Nkrumah for
example, begins his call for new development perspective by tracing
the effects of colonialism on political and economic life of Africa;
and within this context sees Ghana's development as part of a broader
African revolutionary movement. To him the progress and development
of Ghana can be meaningful and viable if these processes are within
the framework of an 'African Unity.‘ What Nkrumah is suggesting is
that colonialism and neo-colonialism are pervasive. The only means
available to contain these phenomena is to undertake joint continental
development. The welfare of any one country, according to Nkrumah,
cannot supercede the interests of the continent.

On a more general and theoretical level, Frank argues that
underdevelopment in Third World countries cannot be eliminated by
following a capitalist development path. He maintains that capital-
ism has tended to reinforce the existing colonial structures and

relations. It is his view therefore that

305

short of liberation from the capitalist structure or

dissolution of the world capitalist system as a whole,

the capitalist satellite countries, regions, localities

and sectors are condemned to underdevelopment (l969 : ll).
Amin (1970) carries this argument a little further. He suggests
that the present strategy of outward-directed development, the
links of African economies through foreign trade with the West,
is at the root of the biases in their development. These biases take
the form of the dislocation of such economies and the accentuation
of sectoral disparities in productivity. An outward-directed
development is essentially unequal and this inequality tends to
increase the existing gap between poor and rich nations. To Amin,
an outward-directed development is not development but development
of underdevelopment. What is needed according to this view is
an 'inward-directed' strategy which can create the necessary
solidarity within a framework of common markets and economic
cooperation among African nations.

While this economic cooperation becomes a supra-national

concern it is also maintained that within African nations there is
a need to restructure the existing model of resource allocation and
resource use so as to increase the advantages of economic cooperation.
This implies that

The action of righting the resource allocation process

must largely be undertaken independently of the rules

of the market, by a direct assessment of needs: require-

ments in respect of food, housing, education and culture,
etc. (Amin, 1976: 383).

 

This change in resource allocation and use however demands much more

than the extension of the state's ownership of the means of

306

production. State control becomes vital and necessary only when it
is sustained by policies that radically alter the biases for economic
choice. The strategy reviewed has two facets: (1) African economic
cooperation and (2) national development within the framework of

continental cooperation.

Ghanaian Development Through African Cooperation

 

For several centuries Ghana,like many African states,
remained an extension of Britain and Europe. The national economy
exhibited uneven resource endowments and utilization, and the pattern
of development was largely shaped by the colonial experience.
Throughout the colonial period, the country's trade was dominated and
controlled by foreign interests. Because of the nature of balkaniza-
tion, Ghana had little trade with neighboring African countries, and
in fact, Ghana and its neighbors, Ivory Coast, Togo, Nigeria, Upper
Volta, pursued divergent but nationally parochial goals. As a
consequence, when colonialism ended, Ghana's economy continued to
be weak and dependent on Britain because of an absence of any
intra-African economic relations. It is therefore within this
context that is was argued by specialists in the area of development,
that Africa's interests would be served if there was cooperation.
Proponents however disagree on the nature of this cooperation. The
debate has been whether there should be regional flow or unified
continental planning. This debate is not the concern here. What
is critical at this point is the utility of African cooperation.

To Nkrumah, African cooperation wouldlead to the pooling of resources

307

in the critical sectors so as to permit all countries to take
advantage of the continent's resources. Instead of competing among
themselves, African nations would supplement each others effort;
Cooperation would resolve the problems generated by balkanization
and the development problems coUld be shared. Increased'intra-_
African relations wou1d also not only lead to a unified and stronger
bargaining position in world economic relations but would’lead to
the reduction of external dependence (164; see also Robson, 1968)._
Green and Seidman (1968) continue the arguments by proposing

a continental planning framework within which the reSources of the)
continent could be developed and used rationally. To Green and
Seidman ‘ '

The only way to achieve the economic reconstruction and

development essential to fulfill the aspirations, needs

and demands of the peoples of Africa is through a sus-

tained shift to continental planning so as to unite

increasingly the resources, markets and capital of Africa

in a single substantial economic unit (22). '
Despite this emphasis on continental planning Green and Krishna
(1967) argue that the basis for its viability is the creation of
a harmony among national development plans in such a way as to
reflect the needs and interests of Africa. Unless these national
plans are developed as integral parts of the continental framework,
the plans would continue to impose a low ceiling on the individual
country's efforts. It follows therefore that integration helps in
promoting a wide range of economically viable activities.

There is a clear case for cooperation as illustrated by the

Ghanaian and Nigerian experiences with iron ore developments.

308 .

Seidman (1969) notes that in the 19605 Ghana built a small-scale,\
re-rolling mill to prOduce 30,000 to 40,000 tons of steel yearly
from scrap. This was to be a prelude to the development of its

own iron deposits in Northern Ghana. At the same time, Nigeria had
planned a 39,000,000 iron and steel project to produce 180,000 tons
to 250,000 tons a year (289). But an E.C.A. Report (1963) shows
that if West African states develop their metal industries jointly
they could free capital and resources for other industries more
appr0priate to their resource potential.

Another example is shown by the problems of developing
phosphate deposits in Togo. Until the 19705 this deposit was not
fully tapped because of lack of power, which Ghana has in abundance
through the hydro-electric project at Akosombo. At the same time
Ghana was in need of fertilizer to develop her agriculture; but
when power was provided by Ghana, it turned out that the management
agreement between Togo, France and the United States required that
eighty percent of the phosphate had to be shipped abroad. These
examples illustrate some of the problems African nations will con-
tinue to face even when they make c00perative efforts.

But the cooperative effort has some other drawbacks because
of political and ideological differences. Grundy (1963) discusses
these differences and notes that in contemporary Africa there have
emerged two broadly based ideologies of development. (The first
ideology implies a revolutionary vision of an equalitarian society

and the second emphasizes a "pragmatic" capitalist society through

309

cooperation with metropolitan countries. In addition to these
ideological differences, the problems oc cooperation are complicated
by the economic interests of multinational corporations.

Amin amply demonstrates how the multinational corporations
function to undermine the process towards economic cooperation
among African nations. The relationship between the European
economic groupings, the European Economic Community, tends to
complicate the problems of cooperation (Rivkin, 1966). Under the
Treaty of Rome, for example, some African countries, particularly
the French-speaking, were provided trade preferences which allowed
them access to European markets. Those African nations without
any relationships faced high tariffs on their agricultural exports.
The African nations associated with this economic group received
financial assistance to improve their agricultural development,
particularly cash crops which were needed in European markets.

Under these favorable conditions the associated African nations
tended to seek their developments not through intra-African coopera-
tion but through alliances with the metropolitan countries.

The problem of cooperation between Ghana and other African
states is illustrated by the entry of Britain into the European
Common Market. Britain's entry entailed vital economic and political
consequences for Ghana and the rest of the Commonwealth. The
European Common Market was formed to provide a framework for
increased trade and cooperation among European nations. But as the

associated status for French speaking African states showed, it

310

was used as a means for perpetuating colonial privileges in Africa
and thereby forestalling attempts at African economic cooperation
(see Parliamentary Debates, 1961). It was apparent therefore that
Britain's entry would introduce discriminations in trade between
Ghana and other states which are associated with the Common Market.
Thus Ghana's membership in the Commonwealth would mean that Britain
would continue to receive preferential treatment for Ghanaian goods.
But because of Britain's membership in the Common Market, Ghanaian
commodities would enter the European Market through Britain at
higher costs to friendly African countries, including Ethiopia and
Sudan. Clearly the operation of multinational corporations and
European attempts at cooperation tend to undermine the pooling of
resources and skills by African nations. Despite these problems
the effort at cooperation is no longer a question for debate. The
issue then is the role of individual nations in laying a foundation
for a meaningful and self-sustaining cooperative development.
Several national strategies have been proposed by development

specialists. Only two of them will be discussed here.

Toward A National Strategy For Ghana
This section reviews two major approaches to national
development--the basic needs approach and the rural development
approach and suggests that the latter provides a more comprehensive

and viable framework.

311

The Basic Needs Approach
The contention has been that the colonial pattern of

economic development did not create the framework within which the
basic needs of the Ghanaian and African population could be met.
Therefore, the first step toward economic independence is to pursue
a rational policy which focuses investments on basic needs production.
According to Rweyemamu (1972) the approach implied that

The means of production necessary for guaranteeing the

reproduction and expansion of basic goods are the only

means that can transform the economy from dependency

relationship to one of economic independence (132).
The argument for a basic goods industry is that (1) it would raise
physical output per head and thereby induce self-generating growth.
(2) it would raise productivity of other sectors and supply agricul-
ture with the needed inputs for its expansion, (3) it would generate
higher levels of consumption and (4) it would lead to capital
formation. It is therefore maintained that

if a backward country wishes to attain a high level

of growth fairly quickly, what is necessary is not

simply capital formation, but capital formation

directed to the capital goods sector (Rweyemamu,

1973: 82).
The policy choice here is industrialization that encourages the
development of textile industries, hospital equipments, busses, water
pipes and machinery for agriculture (Rweyemamu, 1972). Amin (1976)
shares this viewpoint when he notes that to provide immediate

improvements in the life of poor people, the most modern installa-

tions are necessary.

312

This was essentially the policy that Ghana pursued under
Nkrumah. While this approach is essentially useful, to made it the
core of a policy choice leads to increasing pressure on the national
economy. The Ghanaian experience shows that in the face of mounting
external pressures and domestic budgetary problems, it is unwise for
the present to invest in this sector without exercising prudence and
good judgment. No doubt the range of available technology and
techniques for this sector will continue to dependentcn1the external
capital equipment markets. It is hard to demonstrate empirically
how the capital goods sector by itself could foster development at
low cost. It would appear that the lessons of Ghana point to a
development package that has as its center rural and agricultural
developments with the capital goods sector only serving to stimulate
the elements in agricultural and rural development.

A Rural Development Approach:
The Policy Package for Ghana

The discussion here will draw attention to some policy
choices that can be made in order to create a viable basis for a
self-sustaining development in Ghana. The discussion therefore
emphasizes the critical position of a rural development program in
overall national development. Rural development is conceived in
terms of a series of quantitative and qualitative changes brought
about within a given rural population, resulting in improved living
conditions for the population through increased production capacity

(E.C.A. Report, 1972: 60). Viewed in this way, it is assumed that

313

the proposed rural development package can serve as a starting point
in the search for ways of reducing rural poverty.

This package emphasizes three major elements: (1) policy
choices must revolve around agricultural development with particular
reference to the expansion of food production and improvements in
nutrition for the population, (2) policy choices emphasizing agricul-
tural development must create the framework for rural industrializa-
tion, rural processing industries, storage and other related processes
that would stimulate increased agricultural production and (3) there
is a need for basic and viable infrastructure-roads, schools, imigra-
tion projects, and health care delivery systems. These projects
serve to further stimulate expansion of rural production capacities,
create opportunities for employment and generate income. It is the
view that the framework within which this infrastructure can be
built lies in public works programs. In short, this policy package
entails using expanded rural production capacity as the basis for
internal capital formation that is geared to the real needs of the
rural population. It would seem therefore that any effort to
eliminate rural poverty without dealing with the rural problem in an

interrelated way is bound to fail.

Agricultural Production

Throughout history the contribution of agriculture to develop-
ment has remained critical. The resources for the British industrial
revolution became available mainly because of the structural changes

in agricultural production. Similarly the Soviet Union achieved

314

major scientific and technological breakthroughs as a result of
changes in agriculture (Hutchinson, 1971).

But throughout this period the contribution of expanding
agriculture was predominantly through food production. Food became
a far greater part of the initial effort as urban populations grew
as well. It was much later that export production became a dominant
concern especially as Britain sought to monopolize world trade.
Unfortunately, as part of colonial policy, agricultural production
in all African countries became the foundation for European industrial
expansion. Consequently the emphasis on agricultural production had
from the beginning emphasized export production at the expense of
food production. The inadequacy of this export production policy
has been reflected by the excessive commitment of public funds to
food imports during the colonial and post-colonial periods. More-
over, the growth of the national economies have become heavily
dependent on the export sector, the fortunes of which are influenced
largely by external factors.

What this rural development approach seeks to emphasize is
that the export-oriented agricultural policy must give way to a
home-supply policy in which food production remains at the center.
In essence an emphasis on mass production and consumption food will
reduce Ghana's dependence on food imports and commodity aid. This
will help ease the pressure on the economy and thereby save foreign
exchange that could be used to purchase needed capital goods for

rural industrialization. In addition, food production could

315

contribute to easing the inflationary pressure in the Ghanaian

economy.

Agriculture and Rural
IndustriaTization

 

 

Food production must be integrally related to rural indus-
trialization. In a specific sense rural industrialization should
emphasize agricultural processing industries which would concentrate
on the production of those consumer goods and inputs required by
farmers and the urban population. It is assumed that such a rural
industrial approach could stimulate both food and allied production
and other raw materials.

The debate persists as to where to start on the issue of
rural industrialization. It has been argued that industrialization
is only necessary when the labour situation is inadequate. Others,
including Schumaker (1973), have argued for such an approach but
with emphasis on 'intermediate' or appropriate technologies. What
is proposed is a shift from modern technologies which are labour
saving, to intermediate technologies that take account of the
labour situation in developing countries. This intermediate tech-
nology is supposed to be half-way between computer-automation and
traditional handicrafts which use much less capital, and much more
labour, more men and fewer or simpler machines (Cambridge Conference
Report, 1971). Generally then, simplified production techniques
would minimize demand for skilled manpower and capital. It is

further argued that this technology would facilitate increased

316

employment and investment without excessive external aid. Schumaker
(1975) is essentially correct in proposing the intermediate or
appropriate technology approach. What is untenable in his analysis,
however, is where such a technology should come from. In this case
he maintains that the work on developing 'appropriate' technology
has to start in the industrialized nations. This is because the
assembling and systematizing of knowledge can best be done where
technical knowledge and facilities already exist. To Schumaker
therefore,

the mobilization of technical knowledge for the evolving

of self-help techniques must come from countries that

possess such knowledge. Only if this occurs can a useful

dialogue on technology develop (135).

This position obviously denies the existence of indigenous
technologies that can be modified to suit the changing conditions
of rural and agricultural development. It would seem that the
Schumaker approach is premised on the notion that development can
only take place in African countries if 'intermediate technology'
is transferred from 'advanced' industrial nations. This would
however be a new form of technological dependence. The most
rational approach is to begin with what the rural people already
have in the form of technology and techniques for processing. It
is only through this strategy that rural people can be helped in
undertaking development that would be beneficial to them.

There are a number of techniques which are known to the
rural people. They are labour-intensive and efficient. A few

examples should illustrate the point. The techniques of dehydration

317

through sun-drying of a number of crops has been an established
practice. For purposes of preservation, crops like cassava are
grated, dried and roasted into a food item called Gari. There is
a system of curing and preserving fish through drying, smoking and
salting. The handicraft industries, i.e., basket-making, wood and
metal works, have all been geared towards rural production needs
in the rural societies. It is these local technologies that need
support.

With changing conditions a number of these techniques have
been modified and recent empirical studies have established the
positive contribution of these industries to rural development.
Liedholm and Chuta (1976) have established in the case of Sierra
Leone that the small industries have affected rural income distribu-
tion through inducing increases in agricultural production. They
noted that bakers essentially used domestically produced flour;
blacksmiths producing agricultural implements used charcoal and
metal scraps which were also local products while carpenters used
local timber, plywood and veneer (24). What is suggested is that
these industries to have positive linkage effects on agriculture.
King and Byerlee (1977) also emphasize in their income distribution
studies that in Siera Leone consumption patterns in rural areas
are quite labour intensive since eighty-four percent of all increases
in consumer expenditures go for goods produced by the small-scale
agricultural fishing and industrial units. Consequently, a major
proportion of rural incomes tends to be spent on goods produced in

the rural areas.

318

The rural industries are not labour displacing and thus they
also serve to create avenues for employment. Again Leidholm and
Chuta (1976) and Byerlee et. a1. (1977) are instructive. In their
studies it was revealed that these rural industries generated not
only increased output but also more employment per unit of capital
than large-scale industries. Leidholm and Chuta noted therefore
that "those specific processes and small-scale industry groups that
are more labour-intensive also generate on the average more output
per unit capital" (106). Steel (1977) in his study of small-scale
employment in Ghana came to the same conclusions. He agrues, for
example, that although large-scale manufacturing has been a particu-
larly dynamic sector in the economy, its continued growth does not
appear to offer a solution to Ghana's employment problems (50). ‘
Steel shows that the small-scale‘industries continue to play a
critical role in productivity and labour absorption. The most
important industries in this respect include food preparation and
processing; beverage making; furniture and wood work; vehicle
repairs and metal works.‘ Together they provide two-thirds of total
employment in the intermediate industrial sector (120).

Most significant is that these intermediate industries have
several advantages. The entry into this sector is easy and because
of its competitive nature, prices and costs tend to be low. The
industries in this sector often obtain idle materials and capital
from the capital intensive industries. Thus this intermediate

‘industrial sector has recycling and recouping functions which in,

319

turn permit a fuller and efficient utilization of the country's
resources.

What the empirical findings suggest is that the small
industrial processes have a major role to play in an integrated
development program; and if the processes involved in this sector
are carried out in relation to rural and national needs, the produc-
tion capacities of the citizens would be increased.

Apart from these small-scale industries this policy package
can be supported by existing rural industries established in the
19605 under the Nkrumah administration. During that period, a
number of food processing and capital goods industries were
established based on advanced technologies such as the canning
industries, oil palm and pineapple processing. These industries
could be made to stimulate the process of rural development. What
is needed is a program to reactivate them to fit the requirements

of the rural program.

Public Works Programs

 

The programs of increased agricultural production and
rural industrialization need to be sustained by a viable network
of infrastructures. This can be carried out within the framework
of a public works prpgram. The public works program is here con-
ceived in terms of

public sector activites which combine two main objectives:
creating new sources of employment and income for low
income groups, and constructing assets which will enhance

productivity and stimulate economic growth (World Bank
Staff Paper No. 224, 1976: l).

320

Without doubt the experiments with public works in
developing countries have shown negative results; but these have
been effected not so much by the philosophy underlying these institu-
tions, but the problems which stemmed from poor public commitment,
poor program design and the management and implementations of
programs. There can be no doubt that the program served as an instru-
ment for public involvement, particulary through its labour absorp-
tion capacities. Its contribution to the employment situation is
quite real. To illustrate this point it should be noted that the
rate of growth of the labour force in Ghana has been on the increase,
and is presently estimated at between nine and ten percent, and it
may be even higher. Among the recorded unemployed there are the
unskilled migrant labourers and new entrants, particularly middle
school leavers. The labour supply situation and the rate of unemploy-
ment has been an embarrassment to Ghanaian governments, and so a
rural development policy has to take account of this labour. Public
works programs provide the framework by which this labour can be
made to participate actively in the rural economy.

This framework therefore serves at least three basic
purposes. It serves as a means for building cheaply rural infra-
structure--roads, markets, and supporting services to agriculture
including extension and rural information. It is a means for creating
rural income, and with this income converted into demand for food,
agricultural production would be given a boost in the process. It
will enable the rural people to finance their own developments with

little support from central government and external sources. This

321

issue is critical in view of the present problem of local support
for rural programs. In Ghana at present, local and regional councils
are unable to support development projects unless central government
gives active support because these councils cannot raise enough
local revenues to support a minimum development program. According
to a report by the Commissioner responsible for local government,
the amount of local developments financed (by local rural people)
from their own resources constitute an insignificant part of the
local government budgets. In most cases, about twenty-five percent
of the potential tax is not collected, and in a number of local
council areas the cost of revenue collection exceeds the total
amount of revenue that is collected. In short the Central Government
has always subsidized local councils by contributing about sixty
percent of their total budget (Report: Commission of Local Government,
1957). It does not appear that to create a self-sustaining rural
development program, it is not enough to broaden the socio-economic
base, i.e., increased agricultural production, rural industrial
processing and infrastructure; the program has to be sustained by
the local people through their paying taxes and increasing their
demand for agricultural products. The public works programs are
meant to give added momentum to this process through employment
creation, income generation and infrastructures.

In summary, rural industrialization, particularly food
processing, creates the initial market for food products. Simultane-

ously increasing incomes in agriculture, rural industries and the

322

public works sectors,encourages demand for food and other agricul-
tural commodities. In this respect Mellor (1975) suggests that

Increased rural incomes demand greater potential for

rural investment and improved rural infrastructure.

They create an environment favorable for small scale

industry which in turn fosters employment and resources

to help pay for rural infrastructures (21).

There is certainly much that the Ghanaian is capable of

doing without excessive external assistance. The ecological and
> other agronomic factors are largely favorable. Ghanaians can and
should be able to exploit the agricultural and rural industrial
resources in their own interest. What is really essential is the
elimination of the structural distortions in the economy which
arise from colonial domination and exploitation, and the continuing
maintenance of these forms of domination under nationalist govern-
ments. The rural development approach that has been suggested is

only a first step which must take account of the current political

structures which also maintain underdevelopment.

APPENDICES

323

324

 

 

     

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A -\\3.’ Sekondi
“"1 \ -~ Takoradi

 

m $333633: cm, 7 Tobacco
g Banana J Jute R Rubber

‘ on Palms ca Citrus -_.. Limit ot Cocoa
& Coconut C Coffee — Forest Area

 

APPENDIX A.--Map 1: Distribution of Cash Crops

 

325

 

   

 

 

 

 

N‘P."“.
e-e-o-O—e-o-o-O’.-.-.—.-.-.‘e 0’. .’
1 Tomatoes 1
. °\,
\.\ Gumea Corn Millet Maize \1
‘1 Millet I?
I Yams . P
‘ Rice Gumea Corn ,°
" Groundnuls Millet l
\ Mane Millet L.)-
} Yams '5’“
,1. Yams /'
1‘. Tobacco Millet '-
\ 1.
. J
i. V
1. Yams \-
\ )'\
1 I, 3
.I / f”
5 Yams , l
I" ’__,/j Rice I i .
[’l’,’ Yanss Yams :Plan'tains
" Pl \ / i
I! antains \\ ,Coco Yams
j Coco Yams \\ 1 \',
.’ Vegetables \ L", I
I! Cassava \\ / .l'
( Maize \\\ ,I I)
. ‘~“ I e
( Vegmables \\\ ////.’/ \.
. 1
‘ Coco Yams \\ l/,/ ‘\
e I .-’I
\ Plantations Maize 7" \s
.\ Cassava / Cassava
.‘ Cassava / Maize
.“ Coco Yams ’4;
.,.\. Plantams I yam s
3 ,—’”7
-..... /’ Mall 0 50 miles
RICE / g1 14 1 J

 

APPENDIX B.--Map 2:

Distribution of Food Crops

 

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326

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