ECONOMIC RECOVERY PROGRAM AND ITS SOCIO-ECONOMIC EFFECT ON GHANA

In the 1980s, the economic situation in Ghana had reached a critical state where the regime had no option that to turn to the IMF to rescue its economy. The ERP came with reforms that led to divesture of state assets through privatization as well as devaluation of Ghana Cedis. This policy adopted by the PNDC regime is part of the world order present at that time. this article focuses on the socio-economic impacts of the economic recovery programme on the lives of the ordinary Ghanaian. I further delves into the unbearable economic hardship Ghanaians had to go through as a results of the economic recovery programme under the PNDC regime.

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This hardships was as a results of the liberal policies that was not incline to welfare policies of the state. The ERP policies implemented was not the same as the radical policies implemented by Ghana’s first president Dr. Kwame Nkrumah and this was as a result of the world order that exited at that time. Rawlings regime turn to the IMF which is an agency of the world liberal order that existed when the regime sought their assistance to recover the economy. The adoption of these policies did not determine our local policies however, it was strongly shaped by the conditions that was attached to it. This era saw the privatization of State assets and layoff of workers that worsen the economic situations in Ghana.

The ERP results in an uneven social, and economic development that suffocated the subaltern in abject poverty. In effect, the real intentions why Ghana adopted the policy was not fulfil due to the sudden departure from the policy after the neo liberal world order emerges. In as much as the ERP came with some liberal reforms, such reforms was a bit alien to the citizens who for long, had been fed by the State.

Impacts of ERP on Ghanaians

In as much as the ERP was to rescue the economy from crushing, it worsens the plight of the subalterns who was already suffering but government subventions kept them surviving. Under the ERP policies adopted, the government of Ghana was forced to abandon its policy of funding universal healthcare. This policy brought about burden on the lives of the poor and those who are living in the villages. This led to the spread of disease in the villages and among city folks that could not afford healthcare. This policy was force down the throat of the PNDC regime that presented itself as a pro poor regime. This was clearly a set back of the ERP policies adopted with the aim of helping the poor out of their misery. Children during this period died of basic disease that could have been avoided if the policy was not in place or adopted. Epidemics started breaking in areas where there was under reported data of OPD in the hospitals. Under this policy, Ghana saw the surge in viral disease such as HIV/AIDS, Malarial, Yellow Fever etc. The strict conditionality attached to the ERP resulted in this cash and carry policy in the healthcare policy in Ghana.

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The policies change brought about as a result of the ERP was felt more in the education sector where government resorted to cash and carry policy. The government stop funding public education from basic school to the university. Basic teaching and learning materials that was provided by the State stopped and parents were made to carry the burden alone unlike in precious years where the State take care of such costs. At this period, parents who could not pay for their wards to be in school had to withdraw them from school.

“A significant number of redeployment affected access, quality, and outcomes. For example, government subsidies on textbooks and boarding school feedings were replaced by a cost-recovery measure known as “cost-sharing” with a requirement for parents to pay part of the cost of education for their children”.
-(Abukari, Kuyini, & Mohammed, 2015)

The Northern sector that was under free pre tertiary education was abolished and was replace by cash and carry this was same to university education that was free for all before the ERP policies that was liberal and capitalists in nature.
Again, the privatization of State companies as well as devaluation of the Cedi brought about downsizings of staffs in these sectors. Ghanaians that were employed by the State had to lose their jobs due to privatization and liberal policies that was profited oriented. The devaluation of the currency brought about inflation and high cost of living in the country. This was one of the main decision that woefully affected working class at the time. The State cuts its funding on education, agriculture, healthcare etc. coupled with privatization that had adverse effect on the economy. State companies like mining companies were sold out to transnational corporations and other business conglomerates. Even informal sectors that was a preserve of Ghanaians started seeing foreign invasion in this sectors.

Another effect of the economic recovery programme, is the neglect on agriculture sector by government led to shortage of inputs and decline in crop production. Government scraped its import subsidies on farming tools and chemicals used in farming. This decision led to decline in food production in areas that primarily depends on agriculture for their survival. Cocoa and other cash crop saw a sharp decline thus, resulting in low exportation of it which in turn, crippled the economy further. This led to migration to neighboring countries where policies were somewhat favorable. The refusal of the government to subsidize farming inputs led to low production and low prices which forced farmers to smuggle cocoa to Ivory Coast where the price was fairly good than the price in Ghana.

To conclude, the economic recovery programme adopted by the PNDC regime was to salvage the economy and to help provide a roadmap to economic development. However, such nice plans could not be implemented because the policy in itself was an international order that came with strict conditionality’s that had an adverse effect on the lives of the ordinary Ghanaian. The ERP was an order that shaped Ghana’s internal policy of welfare State.