Failing to Compete

Failing to Compete

Technology Development and Technology Systems in Africa

Sanjaya Lall and Carlo Pietrobelli

This unique study draws on extensive fieldwork assessing technology systems in Ghana, Kenya, Tanzania, Uganda and Zimbabwe in the context of their export competitiveness. Its emphasis is on the role of technology systems in building industrial competitiveness and in this it finds deficiencies in the systems in all these countries, though there are also significant differences between them. Comparisons are made with more successful economies, particularly those of East Asia, and policy implications are drawn for the strengthening of technology support systems. Central to the book is its combination of academic analysis with a strong policy focus – policy implications are drawn for each case-study country.

Chapter 6: Ghana

Sanjaya Lall and Carlo Pietrobelli

Subjects: development studies, development economics, economics and finance, development economics, economics of innovation, innovation and technology, economics of innovation


INTRODUCTION For the first 25 years after independence in 1957, Ghana pursued a strong import substitution strategy to promote industry, with a large role for stateowned enterprises. These policies failed to promote growth, and the economy went into a prolonged period of decline. By the 1970s there were signs of collapse everywhere (Chand and van Til, 1988); in 1982 the situation was greatly aggravated by a severe drought and the influx of over a million Ghanaians expelled from Nigeria. The government turned to foreign assistance and a macroeconomic programme was agreed with the IMF and the World Bank in April 1983. The agreement took the form of a structural adjustment programme (known as the ‘Economic Recovery Programme’, ERP). This aimed to stabilize the economy and reform economic policies.1 The main features of the ERP were as follows: • • • • • Unification and successive devaluations of the exchange rate; Liberalization of international trade; Dismantling most price and distribution controls and eliminating many subsidies; Broadening the tax base and improving tax collection; Increasing reliance on foreign development assistance, to bridge the gap between domestic savings and investments through access to external savings. Ghana used to be cited as an outstanding example of the success of structural adjustment (World Bank, 1993): GDP and consumption per capita grew in spite of deteriorating terms of trade. However, the outcome is more mixed and needs to be carefully interpreted. From a long-run perspective Ghana’s economic performance is not notable. GDP fell by 0.1 per cent per year in the...

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