Following its independence from Great Britain, Ghana had arguably the strongest economy among the new West African countries. It has continued to build on its economic strengths to become a middle-income country. This economic growth has fueled development that has increased the standard of living for many people in Ghana post-independence. However, development has not reached everyone equally, and this could cause problems in the future.
In 1957, Ghana achieved its independence with one of the best-educated populations in West Africa, reserves of gold and oil, and a population (temporarily) unified around the popular nationalist leader Kwame Nkrumah. Ghana made some strong economic moves out of the gate—investment in cocoa production for export, construction of a hydroelectric dam to support industrialization, creation of homegrown manufacturing industries to replace expensive foreign imports, and promotion of economic cooperation with its neighbors. Nkrumah attempted to implement development reforms funded by this economic growth.
However, Nkrumah was ousted in 1966 by a military coup. This coup ushered in years of volatile politics, with power shifting between military and civilian rule. In Ghana's economy, this caused slow growth due to uncertainty and shifting economic priorities. Money was skimmed off by military and political elites, and corruption increased. Ghana also accepted restrictions on its economic policies as a condition of International Monetary Fund loans. The success of such restrictions is debated by development economists. In 1992, Ghana adopted a new constitution, which called for multi-party democracy and free, fair elections. This heralded a new era of stability that has permitted economic growth under a free market model. In 2010, Ghana achieved middle-income country status.
Development has followed on the heels of economic growth, but has not reached everyone. Unicef estimates that after 1992, the percentage of Ghanaians living in poverty dropped from over 50% to under 25%. More than half of Ghanians still work in agriculture, but a variety of other industries have developed and support new, higher-paying jobs in the cities. These industries include oil production and refining, light manufacturing (including tech-adjacent industries and the refining/production of agricultural products like cocoa products and cotton textiles), and wind and solar energy. Despite the overall economic growth, development is not reaching everyone in Ghana. UNICEF estimates that inequality between the top and bottom tiers of society is increasing. In particular, certain rural areas have noticed very little change to their income from recent growth and have been hurt by rising prices driven by inflation. Since the rate of economic development is different in rural areas than in urban areas, this means certain ethnic groups are also benefiting more than others from economic growth. Gender inequality also remains an issue.
Economic growth drives development, but in turn, unequal rates of development can hurt economic growth. The effects of poverty—including poor health, earlier death, and lower rates of education—mean less participation in the economy, which slows growth. If Ghana does not find a way to share wealth with its poorest citizens, it may face declining rates of growth in the future.