Why is Ghana an LEDC?

Why is Ghana an LEDC?

1. Historic Reasons

   • Each kingdom had their own language and culture, so developing the country as an entity was difficult.
   • The Transatlantic Slave Trade meant that they sold 5000 slaves to Europe annually.
     • This tore families apart and continued for 150 years.
   • Couldn't compete with European goods after 1901.
     • The British began exporting gold, Ghana's biggest export
     • Taxes were too high to trade in Europe

2. Political Reasons

   • Political Timeline:
     • 1957: Ghana is one of the first African countries to gain independence from colonies, the economic situation is positive.
       • 1958: Ghana is becoming a one-party state and won't accept Valco agreements, something that has hindered it's economy and electricity supply, today.
         • 1964: Now controlled by a dictator and turns to communist countries for assistance.
           • 1966: Dictator is over ruled and new elections are held
             • 1972: Leader Acheampong lacks experience and causes corruption growth
               • 1979: New party try to restore order. Previous leaders are executed
                 • 1984: Rawlings proves popular and rectifies the economy through strong connections and IMF funding
                   • 1985: Western donor countries begins questioning Human Rights in Ghana
                     • 1998: Electricity needs to be sourced from Cote d'Ivorie as
                       • 2001: Ghana accepts World Bank debt relief

3. Big Debts

   • Ghana owes $2.6 million in loans repayments
   • The money they began borrowing now has interest, leaving less for development projects

4. Environmental Reasons

   • Northen land is turning to desert due to overcultivation then worsened by droughts
     • 56% of Ghana's workforce are farmers
     • 3/4 of rainforest has been destroyed for firewood, timber and land
       • Soil degrades when it is exposed and people can't afford fertilisers
         • Less crops to sell

5. Trading Troubles

   • Many Ghanian farmers grow rice but this is now cheaper to source from Asia, putting them out of business
   • Ghana relies heavily on Cocoa for income but the world prices for this fluctuates a lot.
   • No trading tariffs in place to help Ghanian farmers locally, so they all suffer