The Economy And Culture Of Ghana
The country of Ghana is located in West Africa and has an area of 248,540 square kilometers; this is approximately the size of Britain or Illinois and Indiana combined. The capital of is the city of Accra and the current president since 2008 is John Atta Mills. Ghana is bordered by the African countries of Cote d’Ivoire to the west, Togo to the east, and Burkina Faso to the north. In 1957 Ghana was the first Sub-Saharan African nation to establish its independence from colonial rule shortly after its creation through the merger of the Gold Coast and Tagoland (9). Ghana is regionally regarded as a model for neighboring African nations.
Archaeological history traces humans in Ghana back to approximately 1,500 b.c. Prior to being colonized by the British in 1847 Ghana was inhabited by multiple African kingdoms including the Akan, Ashanti and Fante. Prior to the 15th century when Ghana began trading with Portugal not too much is known about its history other than the fact that it’s current ethnic groups; the Akan, Ga and Ewe probably arrived in the 13th century. Early trade with Portugal focused on the abundance of gold that Ghana had been gifted with. In 1481 as trade began Portugal established their first castle in the coastal town of Elmina. Approximately six decades later the Dutch arrived as traders and began to build forts around areas of heavy trade throughout the country. They were subsequently followed by English, Swedish and Danish traders that also built forts and outposts throughout the natural resource rich country. Throughout this period of time many traders suffered and died due to malaria (3).
In 1957 Ghana gained its independence from colonial rule and formed a parliamentary democracy. Over the next two decades multiple military and civilian regimes would control government. Throughout this time there were many coups and the country was considered unstable and somewhat ungovernable. In 1981, Lt. Jerry Rawlings, a native of Ghana, took power and suspended the Ghanaian constitution and banned political parties. The next few years were marked by economic stagnation and a severe contraction in the countries standard of living as well as overall development. Shortly, thereafter Rawlings negotiated a structured plan with the International Monetary Fund t(IMF) to subscribe to stated economic policies and the country regained its economic footing. In 1992 a new constitution was drafted and Jerry Rawlings was officially elected president of Ghana. The establishment of a new constitution and ensuing election of Jerry Rawlings as president began what is known as “The Fourth Republic,” and modern age of Ghana. Governmental powers were separated by President, Parliament, Cabinet, and Council of State. In addition, Ghana established an independent judiciary and a parliamentary democracy in which the president is elected by the people (3).
The Ghanaian economy is largely driven by exports as well as its large agricultural complex. In 2008 (the most recent release) Ghana had a Gross Domestic Product (GDP) of $16.7 USD and a population of 23.4 million of which about 11.5 million are active participants in the labor market – this translates to GDP per capita of about $713 or Gross National Income (GNI) per capita of about $630 (10). As far as size the Ghanaian economy is the 99th largest economy in the world, just behind North Korea and just larger than Turkmenistan (1). For better perspective their economy is roughly 1/30th the size of Wal-Mart, 1/10th the size of General Electric, ½ the size of Coca-Cola and about the size of Xerox (12). Ghana is considered one of the more developed countries in Sub-Saharan Africa and currently approximately 23.5% of the population lives at or below the poverty line (10). Their form of currency is the Ghana Cedi which currently trades about $1.4GH/$1USD.
Ghana is for the most part a free-market economy but still retains significant government ownership of certain State Owned Entities (SOE’s). Over the past two decades Ghana has worked to privatize a majority of the government’s SOE’s but still retains ownership of various companies in various industries including but not limited to retail, energy and telecom sectors (4). Based on the World Bank’s “Doing Business” report, Ghana ranks in at ‘92’ in the world index. The report is based on multiple items including ease of doing business, registering property, getting credit, protecting investors, paying taxes and enforcing contracts. Ghana ranks noticeably well as far as protecting investors at ‘41’ in the world index and lags behind in items such as starting a business ‘135,’ dealing with construction permits ‘153,’ and employing workers ‘133.’ Overall their ranking of ‘92’ does place them towards the top for countries located within the African continent and partially because of this Ghana is seen as the economic model for many African states.
If broken down into its three largest components Ghana’s GDP would be comprised of approximately 36% agriculture, 39% services, and 25% industry (2). Like many countries within Africa agriculture along with exports (discussed later), are two of the largest drivers of Ghana’s economy. If broken down differently Ghana’s GDP is composed of approximately 78% private consumption, 18% Government consumption, 32% gross fixed investment, 40% exports and 67% imports (2). Ghana’s was fortunately endowed with a large amount of natural resources which serves to bolster its exports – one of the main driver’s of Ghana’s economy accounting for approximately 40% of GDP. Ghana’s main exports include gold 34% and cocoa and cocoa products 37% - following these two exports no single item accounts for more than 2% of total exports (2). Imports, which nclude about 67% of GDP (combined with exports creating a 27% trade deficit) are mainly composed of capital goods 52%, fuel and energy 28% and food 20% (2).
As Ghana is still considered a developing country it receives a significant portion of its government funding through multilateral and bilateral loans as well as supranational institutions such as the IMF and World Bank. Currently, government debt stands at about $4.97bn measured at current exchange rates in USD’s or roughly 50% of GDP as measured in most recently released FY 2008 terms. The fact that the federal government is currently running deficits of about 15% of GDP and does not have the same access to capital markets that a developed country would enjoy makes outside funding sources from other countries and the aforementioned institutions a necessity. In the past Ghana received funding from the International Bank for Reconstruction and Development (IBRD), a member of the World Bank Group and currently receives a significant portion of government funding (USD$1.330bn or ~27%) from the International Development Association – the interest-free loan-making window of the World Bank. They also receive a significant portion of government funding (USD$1.352bn or ~27%) from private investors and another (USD$1.356 or ~27%) from various short-term government, bridge, concessionary and private mechanisms. Other components of government debt include bilateral and multilateral loans from various countries around the world. Over the past decade Ghana has significantly reduced its outstanding stock of government debt from approximately 150% of GDP in 2000 to less than 50% of GDP in 2010. All sources in this paragraph were taken from World Bank Produced charts composed from the Development Economics Database (13).
Current significant economic trends with Ghana’s economy include a widening trade deficit, recent oil discoveries, continued government privatization of state owned enterprises (SOE) and a move towards a less labor intensive and more modernized production techniques. The widening trade deficit is a result of larger capital goods imports which is characteristic of a developing economy that does not yet have the production techniques to create their own advanced capital goods. Recent oil discoveries will serve to lower the trade deficit as a majority of the crude oil and crack products will be exported. Continued privatization of SOE’s will continue to ensure Ghana remains a model for various other African countries as well as bolster GDP growth within Ghana.
To begin to understand the current environment as well as the future prospects of Ghana we must first begin to understand its culture and its underlying values. From this basic understanding we can develop expectations of their system structures and make predictions on how Ghana will respond to the global environment.
We start our investigation of Ghana’s culture with the work of Geert Hofestede. In 1978, Hofestede surveyed thousands of IBM employees. This study determined that there are persistent characteristics in national cultures that can be categorized into four dimensions: power distance, uncertainty avoidance, masculinity, and individualism. Hofstede conducted a second survey in the 1990’s that resulted in a fifth dimension, long term orientation.
According to the website of Itim International, an international consulting firm that extensively uses the Hofestede dynamics, Ghana was surveyed and reported as part of West Africa along with Nigeria and Sierra Leone. The West African scores in the perspective dimensions were: power distance 77, uncertainty avoidance 54, masculinity 46, individualism 20, and long term orientation 16 (based on a possible score of 100).
Power distance is the willingness to tolerate unequal distribution of power from the bottom level of society and upwards. Ghana’s score of 77 is relatively high. As a consequence of this Ghana society values obedience to authority, are comfortable receiving commands from superiors without debate, and they prefer to resolve differences with superiors indirectly through a formal process (14,McShane, pg. 46). This high ranking is a reflection of Ghana’s focus on family in a patriarchal society.
Uncertainty avoidance is the degree to which people tolerate ambiguity or feel threatened by uncertainty. Ghana’s score is relatively moderate at 54. This expresses their slight preference to avoid uncertainty. This indicates Ghana society prefers direct communication and structured systems with clearly documented rules of conduct (14, McShane, pg. 47).
Individualism is the extent to which a person values independence and personal uniqueness. Ghana’s score of 20 is relatively low. This indicates that Ghana is more of a collectivist society. Collectivist societies value duty to groups, identify themselves by group membership, and value group harmony (14, McShane, pg. 45). This preference results from Ghana’s focus on family and their history of tribal communities.
Masculinity, sometimes referred to as the achievement dynamic, reflects a competitive versus cooperative view of relations with other people. Ghana’s score of 46 reveals the society leans slightly towards feminism, or the nurturing pole. Societies with a feminist leaning emphasize relationships, modesty, and the well being of others (14, McShane, pg. 48). This preference is aligned with the focus on family and the social hierarchy found in tribal regions.
Long Term Orientation:
Long term orientation, based on Confucianism ideals, is described as Virtue without Truth. Ghana’s relatively low score of 16 indicates a strong leaning towards short term orientation. Societies with a short term orientation value respect for tradition, fulfilling social obligations, and protecting one’s ‘face’ (Itim International website). This dynamic is strongly influenced by the cultural history of a country.
In order to utilize these scored dimensions and use them to begin to create expectations about Ghana’s systems and environment we will consider two models that attempt to create a value hierarchy and relate system attributes that can be predicted, the Schwartz model and the Gray model.
Schwartz Value Circumplex:
A social psychologist, Shalom Schwartz built on the work of Geert Hofestede in his study, “Universals in Content and Structure of Values: Theoretical Advances and Empirical Tests in 20 Countries” (Advances in Experimental social Psychology, pg. 1-65). Schwartz derived a spectrum known as the values circumplex. While much of Schwartz’s model parallels the results of Hofestede’s the circumplex allows you to take a step further and attempt to narrow dynamics to an overall governing value that will provide the framework for future developments. The circumplex has 10 broad values that run on two axis: openness to change versus conservatism and self-enhancement versus self transcendence. The left quadrant closely parallels the individualism and masculinity dynamics in the Hofestede model. The right quadrant aligns with the feminism and short term orientation dynamics.
The Schwartz model groups Ghana with Nigeria which places Ghana in the upper right quadrant for tradition. This placement is based on their preference towards groups, moderation, and preserving the status quo.
We can now use the information we gathered from the Hofestede and Schwartz model in a model developed by S.J. Gray. Gray’s model helps us understand based on cultural aspects what kind of systems we can expect to develop in those countries. Gray’s model as explained in the paper, “Towards a Theory of Cultural Influence on the Development of Accounting Systems Internationally” focuses on accounting systems but the model can be applied to multiple system types. Gray’s model leverages the Hofestede values into four characteristics of a system: professionalism, uniformity, conservatism, and secrecy.
Gray’s model uses four hypotheses that combine multiple Hofestede values to determine the system characteristic. The four hypotheses as described in the paper “Towards a Theory of Cultural Influence on the Development of Accounting Systems Internationally” are below (15):
HI: The higher a country ranks in terms of individualism and the lower it ranks in terms of uncertainty avoidance and power distance then the more likely it is to rank highly in terms of professionalism.
H2: The higher a country ranks in terms of uncertainty avoidance and power distance and the lower it ranks in terms of individualism then the more likely it is to rank highly in terms of uniformity.
H3: The higher a country ranks in terms of uncertainty avoidance and the lower it ranks in terms of individualism and masculinity then the more likely it is to rank highly in terms of conservatism.
H4: The higher a country ranks in terms of uncertainty avoidance and power distance and the lower it ranks in terms of individualism and masculinity then the more likely it is to rank highly in terms of secrecy.
This results in a prediction that Ghana will develop systems that are under statutory control, uniform, conservative, and are secretive.
This characteristic reveals a countries preference for compliance with legal regulations and government control over systems (15, Gray, pg. 8). Countries with statutory control such as the French civil law system focus on creating detailed legal compliance directives. Practitioners within the system then focus on applying laws and codes to issues rather than using personal judgment to determine outcomes.
This characteristic reveals a countries’ preference for uniform principles that are applied consistently between participants and over time (15, Gray, pg. 8). This in conjunction with a preference for statutory control will usually result in a preference for rule based systems rather than principle based systems. This may cause difficulty in events such as the push to create International Financial Reporting Standards (IFRS) acceptance.
This characteristic describes a preference for a cautious approach to measurement as to cope with the uncertainty of future events (15, Gray, pg.8). Conservatism is consistent with Ghana’s focus on tradition. Ghana however, only has a mild preference for the overriding values that dictate this preference, masculinity and uncertainty avoidance. This may indicate they take only a slightly cautious approach to measurement in contrast to countries such as Japan with a stronger preference.
This characteristic describes a preference for confidentiality and restricted disclosure to those directly involved in decision making (15, Gray, pg. 8) This characteristic is closely linked with countries that have a large power distance and low individualistic Hofestede scores. Ghana’s scores in these dimensions would suggest Ghana has a strong preference for secrecy which will greatly affect how it relates to the international community. For example, Ghana’s ability to attract foreign direct investment and raise capital may depend on its ability to adopt IFRS standards that principally require greater levels of transparency.
To understand how Ghana will interact with the global community and respond to its current environment we must consider not just Ghana’s cultural preferences for system development but also how the global community perceives Ghana’s current systems and their ability to adapt. In order to do this we will look at two sources: Transparency International Corruption Perception Index 2009 and the Milken Institute’s Opacity Index 2009.
Transparency International Corruption Perception Index 2009:
According to Transparency International which scores the perceived corruption of a country in relation to the other 179 countries surveyed Ghana ranks 69th with a score of 3.9. While this score was better than 66% of the African countries surveyed they were still well below Botswana, Mauritius and Cape Verde. Transparency International explains that Ghana has increasingly strengthened its legal framework overall but enforcement remains inconsistent. There has been multiple high profile corruption scandals that have undermined the governments push to create a stronger legal system. So while they are making strides towards their goals inconsistency remains an important issue to be addressed (17).
Milken Institute’s Opacity Index 2009:
The Opacity Index, originated by PricewaterhouseCoopers Ltd. In 2001 and continued after 2004 by the non-profit Milken Institute broadens the perceptions surveyed for countries to the CLEAR model. While Transparency International primarily uses the legal framework to describe corruption the CLEAR model includes: Corruption, Legal, Economic, Accounting, and Regulation. The original purpose of the CLEAR model and score was to assess the risk premium that should be applied to capital investment due to perceptions of lack of transparency in systems. The Milken Institute instead ranks countries and uses the scores to create expectations about countries’ stability, growth, and ability to attract foreign investment. While Ghana is not directly assessed, we can use the scores assigned to Nigeria for comparisons (18).
The scores are applied on a scale of 1-100 with the lower the score the stronger the system and the more transparent it is perceived to be. Nigeria, and by extension Ghana, has particularly high scores for corruption, legal, and accounting criteria. This is due to two factors: secrecy and inconsistency. The Milken Institute assessed the legal and accounting scores particularly high because of the great inconsistency between the currently adopted rules and the actual practices observed. For example, while official rules state a simplified step by step process for appealing a conviction, in reality it is a game of “who you know”. The score for regulation has decreased as the countries have taken steps to tighten legal frameworks and are starting to emphasize greater education standards for judges and attorneys. Overall, Nigeria was ranked 48th which makes it the lowest ranked country of the countries surveyed. This will create problems for Ghana in their attempts to attract foreign direct investment, create sustained growth, and respond to the global communities’ demands.
A country’s accounting environment is one of the most important ingredients of development. In today’s world it is very critical for a country to have strong accounting practices to participate in the global economy. These arguments are evident from the experience of GHANA. Ghana is trying to attract foreign direct investments and portfolio investments. However, they have failed miserably in doing so. One of the major reasons for this is their weakness in regulation, compliance, and enforcement of accounting and auditing standards and rules. Ghana accounting and auditing standards borrow heavily from International accounting and auditing standards. However, they have failed to maintain pace with the developments in these standards. As a result, most of their standards are outdated and plagued with problems.
A survey of institutional investors revealed serious concerns over the quality of financial reporting and auditing in Ghana. Following example helps to put in perspective the seriousness of the problem. The “independent” external auditors are asked to compile the financial statements for the company before auditing them. Also, there is no consistency in applying the published rules for financial reporting. Some companies use Ghana Accounting Standards and some use International Financial Reporting Standards (IFRS), with no concrete guidelines from the authorities. Given these problems, this section of the paper discusses the accounting institutional framework, Ghana Accounting Standards (GAS) and the problems with GAS.
The Companies Code, Act 179 (1963) is the law for incorporating a company in Ghana and therefore it provides the requirement for preparation and publication of financial statements, disclosures and auditing. The Ghana counterpart of the US SEC is Securities and Exchange Commission of Ghana (SECG). The importance of The Companies Code lies in the fact that it has huge impact on the investments and the companies in Ghana. However, The Code suffers from significant problems. It does not provide a clear guidance on policies to follow for the preparation and publication of financial statements; it was adopted 41 years ago and since then it has not been updated, and there is inherent problem in the procedures for appointing and firing auditors. Another important accounting authority in Ghana is the Institute of Chartered Accountants of Ghana (ICAG). It is the Ghana counterpart of the AICPA in the US. ICAG acts as a regulator of accounting profession in Ghana. However, one of the major drawbacks faced by the country in the accounting area is that they lack an independent regulatory authority like the PCAOB in the United States. Due to the lack of qualified accounting professionals there has been a fierce competition among the audit firms and due to the lack of appropriate regulatory control the auditors sometimes do not follow the rules. To intensify the problem, there are some uncertified auditors that are performing audits of firms. ICAG is lacking in identifying and taking proper disciplinary action against such uncertified auditors and those auditors who do not follow proper policies and procedures.
As mentioned earlier, over the years ICAG has failed to update the international standards originally adopted. Therefore, there are significant gaps in the accounting standards of Ghana. Following are some major differences as reported in the Report on the Observance of Standards and Codes (19):
1. International accounting standards require a “statement of changes in equity” as a basic financial statement. However, Ghana standards don’t require any such statement. Only some disclosures are required about the capital and income surplus accounts.
2. One of the major differences is in the area of extraordinary items. As per IAS and US GAAP very few items can enter this category. However, according to Ghana standards items such as changes in accounting policies should be part of extraordinary items. Such changes are shown as an adjustment to the beginning retained earnings according to IAS and US GAAP.
3. IAS and US GAAP require the presentation of minority interest on the face of the financial statements. However, Ghana standards omit such disclosure.
4. Deferred tax assets are only recognized for deprecation timing differences under Ghana standards. Whereas, IAS and US GAAP require it for all timing differences in addition to requiring a valuation account for the deferred tax asset.
5. IAS and US GAAP require segment reporting. According to US GAAP, external revenue of all the reporting segments should be equal to or greater than 75% of the consolidated revenue. If this criterion is not met than more segments have to be identified. However, Ghana accounting standards do not require any such disclosures. This can be a major issue for investors because reporting segments provide important information such as the major geographic areas of operations, major customers, products and services, etc. These items form the core of fundamental analysis by the investors.
6. There are no disclosures of borrowing cost as per Ghana standards. This is again a gigantic drawback which affects equity as well as debt investors.
As mentioned earlier there is a compliance gap where many companies do not follow Ghana accounting standards. This is evident from a review of some financial statements conducted by the Report on the Observance of Standards and Codes (ROSC) team. Some of major compliance gaps found are:
1. Many companies did not differentiate between the current and non-current assets. This can increase a lot of work on the part of the analysts who are trying to analyze the working capital condition and liquidity condition of the company. Some companies did not have the proper format, as per Ghana standards, of cash flow statements.
2. In some instances the subsidiaries that should have been consolidated, as per the Ghana standards, were not consolidated and missed important disclosures.
3. Another important issue that came to attentions in the ROSC review of the financial statements was that many companies failed to disclose related party transactions and those that did, did not provide sufficient information required by Ghana standards. This is bound to make investors shy away from investing in Ghana.
4. Both IAS and Ghana standards require a disclosure of assets that are pledged for borrowings. This makes business sense as the new investors, especially creditors, must have this information to make a prudent decision. However, most companies did not include this information. This coupled with lack of information on borrowing rates (as discussed earlier) can significantly discourage investors.
Some companies that claim to have used IAS did not meet the requirements of IAS.
5. Four companies made such a claim and none of them addressed the requirement for disclosure of related party transactions, impairment of assets, financial instruments, and employee benefits.
6. Three out four did not present statements of changes in equity which is a required component of financial statements as per IAS.
7. IAS requires that profit/loss on discontinued operations should be shown on the face of the income statement after income from discontinued operations. However, one of the four companies that claimed to have used IAS did not include such profits in the income statements. Worse, they classified some discontinued operations as extraordinary items.
These are just some problems related to the accounting issues. The companies in Ghana also have plethora of problems in complying with auditing rules.
Having said this, one of the major changes towards improvement in the accounting practices in Ghana is that the country adopted IFRS in 2007 with phased implementation by 2009. ICGA has been chosen to spearhead this initiative. The interesting thing to see is whether the authorities in Ghana will be able to implement IFRS appropriately. Just adopting IFRS will not solve the problem in a country that is plagued with abundant accounting irregularities. To succeed in its initiatives, Ghana will have to ensure that IFRS requirements are complied with in their entirety. At this point, it seems a little difficult because ICAG, which is leading this initiative, is over burdened with too many tasks and doesn’t have the necessary resources to properly execute such a huge endeavor.
In today’s society, inhabitants in both developed and developing nations would agree that property ownership often defines one’s wealth or social status. Researchers such as Abraham Maslow would even argue that property ownership would fall into the biological and physiological need category that is essential to human survival, thus warranting proper protection. However, in a legal environment such as Ghana, where drastic changes have already taken place throughout history as the country has moved towards a democratic form of government, this property rights deficit still remains.
Ghana’s legal system began a vast overhaul with the country’s inception of the 1992 constitution on January 7,1993.  The 1992 constitution, which is credited for the creation of the separate branches of government and bestowing appropriate powers to each branch, set the stage for the creation of “fundamental human rights and freedoms enforceable by the courts” . However even today, these rights as compared to other thriving nations around the world, are limited due to gender inequality and the reluctance to abandon old traditional ways of life.
According to the World Bank’s indicators measured in 2009, Ghana ranked in the top 50 in three indicators, registering property, protecting investors, and enforcing contracts.  However, absent social welfare conditions, these indicators paint a skewed picture that perhaps it is relatively easy to obtain property when in fact, multiple barriers exist. More importantly the indicators fail to depict the fact that “outright ownership of land is still a rare form of land tenure in Ghana” .
Land ownership methods that are practiced today date back to Ghana’s ancestral days. The effects of globalization have yet to be felt because these traditional practices have slowed progress. Under these traditional practices, the ownership of land is heavily influenced by the extended family structure. More specifically, the power of land ownership rests with elders whom are stool chiefs, clan heads, and/or skins whom hold the “allodial” or absolute ownership to land on behalf of the community’s people.  The chief ensures that land is “the property of lineage” and that it is passed down to its appropriate descendant(s) accordingly . Thus, strict enforcement of these lineage rules by those with allodial powers ultimately have created many barriers to ownership in general and prevented many business ventures.
Few women and investors enjoy property rights in Ghana due to the strict interpretation of the lineage rule. The wife is ultimately excluded because she is an outsider to the husband’s family lineage line. Thus, she can only own land if the husband chooses to award her a portion in the form of a public gift, however it is not an obligation. The public’s recognition of the land as a gift is not only tradition but serves to hold the public as a witness in Ghanaian courts if the land is ever called into claim after the husband’s death.
Whereas wives in the community face difficulties acquiring land, investors face even greater ones. Due to the nature of business and that it often requires huge plots of land, potential investors hoping to do business in Ghana must acquire titles from multiple allodial titleholders. This process is not only time-consuming but can also become costly as the investor must make deals with each individual titleholder. The odds of the cooperation of multiple titleholders to relinquish ownership is often thought to be highly unlikely, therefore many potential investors choose to do business elsewhere rather than bear the loss of potential time and capital wasted.
Potential Application of the base of the pyramid:
Constraints such as property rights are just one of many constraints that exist within the Ghanaian community that if restructured, could generate an abundance of wealth. Considering, two-thirds of the country’s population resides in rural areas where traditional are still prevalent and villages operate despite the lack of running water, electricity, and other basic necessities the need for disruptive change definitely exists. 
The underlying factor keeping the two-thirds of the rural population in poverty is undoubtedly the absence of potential investors and the potential capital that they could bring into the community. Perhaps if more investors took base of the pyramid approaches and implemented ideas such as Dr. Kwame Asumadu’s (prominent columnist and Ghanaian researcher) “land banks”, more seriously more investors and the community in general would enjoy property rights.  Dr. Asumadu’s government controlled land banks would allow owners to offer land to lease or rent on a long term basis in exchange for steady income from the property owners. Thus, the banks would not only serve to provide additional income to the property owners but would also eliminate barriers to entry such as the need to do business with multiple titleholders and the inability of the investor to hold title ownership during the course of incorporation.
While “land banks” are not the only solution to solving the problems of property rights in Ghana, any successful base of the pyramid approach is going to require that Ghanaian communities abandon its outdated traditional practices and accept disruptive change. Without the implementation of innovative ideas such as “land banks” many communities will never reach its full potential.
Globalization, although a newly coined term, has been around for centuries impacting cultures and counties all around the world. The impact of globalization on African nations began around the colonization after World War II. Since then the western world has influenced the economic, cultural, and political development of African nations such as Ghana (2). Ghana was considered one of the leading examples of successful globalization and has begun to see economic progress. Ghana was seeing an decrease in poverty every progressing year as well as developing a strong hold on democratic voting policy.This progress has not been without its repercussions and globalization has recently seen Ghanaian people resist the changes brought about by the western world. Whether resistance to globalization resides around economic, cultural, or political concerns the astronomical effect it has on developing nations is only going to continue growing due to the increase in communication mediums and technological innovations (3).
Traditional Ghanian culture has quickly began to merge with western culture and many opposing individuals are struggling to hold onto what they have left . Children are being raised in households who choose to speak English over their native tongue because English is the most widely used language in the global economy and it will give them an advantage in the business world. Many traditional Ghanaian families dismiss this as disruptive to the country because it creates an emphasis on communication with the western world and in return creates a communication barrier with those individuals who speak the native tongue of Ghana. The opposition stems from the desire of its people to hold on the traditional Ghanaian culture. Because of technology and the internet individuals now have access to information all over the world and it has positively impacted those education systems that have funds for such technology (6). When one of the most well known Chiefs of Ghana, Asanteman, died it was first announced on a foreign network (4). This just shows how media is global and not just local anymore. Television is changing the type of music that people listen to and the clothing they wear as well as exposing children to violence and drugs all while we are seeing a trend of parents giving more attention to economic wealth than family values.
After globalization sparked the international exchange of goods and services in Ghana the country implemented a strategy called Vision 2020 in its hopes to become a middle class nation with a strong global economy. Much of its political reform was influenced by the World Bank and adoption of policies fostered the economic development in Ghana (3). Multinational corporations began to utilize Ghana for inexpensive labor to decrease manufacturing costs. Although this creates jobs for many individuals in the short term if we explore deeper into the impact of off shoring we will see that it in fact does not benefit the economy of Ghana. These jobs provide cheap labor for individuals who are sometimes children workers. For one, the children are missing out on an opportunity for education which would create a more knowledgeable skilled work force and in return would help Ghana‘s economic development in the long run (1).The biggest impact of globalization has been on the agricultural industry mainly because agriculture accounts for 70% of employment. During the early part of the reform small family farmers were supported by a 20% import tax on poultry. When the tariff was decreased it made it even more difficult for local farmers to gain a market share because imported goods were available in higher numbers and for lower cost (2). The high costs associated with micro farming as well as the low prices of import products make it difficult for these farms to produce a profit much less live off of their earnings. The agriculture sector of Ghana has only gotten more competitive because of policy reform among its government such as trade liberalization, deregulation, and privatized organizations (3). In 1994 a new investment code was put into place and created investment incentives for Ghana citizens. These incentives created greater regulation round the rules of investment so that individuals will have confidence in investment decisions. Some of the incentives given by Ghana are monetary incentives for foreign equipment purchases and free transferability of profits and dividends. The goal is to encourage investments and keep more profit in the hands of its people (1).
There is no right answer when deciding if the impact of globalization is positive or negative because it is a conglomeration of the two and each individual is effected differently. For the young eager student globalization has set a path for potential greatness; however, for the elderly farmer who grows produce for a living competition may result in poverty.
The emergence of globalization forced the development of organizations that govern and control the trade and exchange environment. The creation of these organizations followed closely in line with the colonization of the African nations as I mentioned above. As the Second World War ended the world saw a need to come together and regulate trade among different nations (2). One main goal of Ghana reform was to align trade regulations with the World Trade Organization in hopes to foster more efficient trade and create competition among its local industries in hopes to increase local competition (3). Around this time many Non Governmental Agencies were formed to help individuals negatively impacted by globalization. Many of these organizations aid Ghana in rural areas where the small farms and businesses are unable to keep up with external competition. While these Non Governmental Agencies are trying to help counter the effects of globalization the IMF and World Bank are all pushing policies and providing financial aid to expand globalization within Ghana. These organizations have provided millions of dollars in funds but aid doesn't seem to help. Lending money to citizens of Ghana creates debt for citizens without means to pay back the funds. At this point in time the Ghanaian economy is dependent on aid but is slowly create economic development by increasing its oil production. The last time the World Bank had to lend money to Ghana was to fund a health improvement program in 1999 which helps show just show how far Ghana has come in the past ten years (5). The revenue from oil exports is the main revenue that funds Ghana and as increased production occurs the country will begin to stand alone without the help of aid from these global organizations.
If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website then please click on the link below to request removal:
More from UK Essays
- Free Essays Index - Return to the FREE Essays Index
- More Economics Essays - More Free Economics Essays (submitted by students)
- Economics Essay Writing Service -find out more about how we can help you
- Example Economics Essays - See examples of Economics Essays (written by our in-house experts)
Need help with your essay?
We offer a bespoke essay writing service and can produce an essay to your exact requirements, written by one of our expert academic writing team. Simply click on the button below to order your essay, you will see an instant price based on your specific needs before the order is processed: