Introduction

When Ghana became the first African nation to achieve independence from colonial rule on 6 March 1957, there was much jubilation and hope that it would pioneer the way toward rapid growth and development for Africa as a continent. Indeed, Ghana experienced reasonably high growth soon thereafter, but by 1965 per capita growth was already negative, and when the coup d'état overthrew the Nkrumah regime in February 1966, per capita income was below its value at the time of independence. Conditions appeared to improve significantly during the late 1960s and early 1970s. However, the mid-1970s saw the beginning of significant deterioration, so that, by the early 1980s, per capita GDP had reached its nadir in the history of Ghana's post-independence. While economic conditions have improved markedly since then, the growth rate has failed to accelerate significantly, and per capita income has yet to reach its level in 1957.

In 1993 Ghana set itself the target of becoming an upper middle-income country by 2020, requiring an estimated GDP growth rate of about 8% per annum. In the five years since the inception of the set targets, however, the economy showed no capacity to move towards it. Whereas GDP was expected to grow by between 7.1% and 8.3% in the period 1996-2000, actual growth was between 4.2% and 5.0%. In 1999, for example, all macroeconomic targets were off by quite substantial margins, and the trend continued into 2000.