Ghana’s Textile Sector:
Cost Structure and Efficiency
Adib F. Millet.
Thesis submitted for the degree of PhD.
School of Oriental and Africian Studies.
London WC1.
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ABSTRACT OF THESIS.
The Ghanaian t e x t i l e sector, a f t e r decades o f p ro te c tio n , is today operating in a fre e trade environment. This means th a t i t is now having to compete with imports in terms o f p ric e and q u a lity .
Thus, in t h is study, i t is argued th a t e ff ic ie n c y of production and cost c u ttin g measures-are important in aiding the t e x t i l e sector in Ghana to become more competitive w ith imports. The e ff ic ie n c y and cost s tru cture of the Ghanaian t e x t i l e sector are therefore examined in an attempt to estimate the degree of technical in e ffic ie n c y and the e ff e c t of cost c u ttin g measure on the price of in d iv id u a l t e x t i l e f ir m s ' output. Technical in e ffic ie n c y is estimated using a stochastic f r o n t i e r approach.
The main fin d in g s are th a t fir m s ' technical in e ffic ie n c y declined to r e l a t i v e l y low levels as they became more exposed to foreign competition. Also, the competitive p o s itio n of Ghanaian t e x t i l e firm s , as f a r as competition with imports is concerned, can be g re a tly enhanced as a r e s u lt of the various cost c u ttin g measures looked a t. This resulted in some firm s achieving an export p o te n tia l as a r e s u lt of the p o te n tia l reduction in t h e i r p ric e .
F in a lly , some p o lic y options are explored. These include:
change in tax p o lic ie s ; change in fu e l water and power charges; a devaluation of the exchange ra te ; and incentives f o r c a p ita l
investment.
ACKNOWLEDGEMENT.
I am deeply indebted to my supervisor Mr. Michael Hodd f o r his e ff e c tiv e , and f r i e n d l y guidance.
A. M i l l e t .
TABLE OF CONTENTS.
T it le Page.
Abstract.
Acknowledgements.
Table of Contents.
List of Tables.
L ist of Figures.
List of Abbreviations.
1. Introduction. 1
2. Ghana: Economy. 3
2.1 In tro d u c tio n . 3
2.2 Employment and Output in Industry and
A g ric u ltu re : 1960-83. 5
2.3 The I n d u s t r ia lis a t io n Strategy. 7 2.4 The Downturn of the 1970's and Early 1980's. 13
2.5 The Economic Recovery Programme. 29
2.6 The ERP's Successes and Failures. 32
2.6.1 Trade and Commodity Prices. 34
2.6.2 Investment. 41
2.6.3 Aid Dependence. 43
2.6.4 Banking and the Credit Squeeze. 47
2.6.5 Industry 51
2.7 Summary. 57
3. Cotton C ultivation. 61
3.1 In tro d u c tio n . 61
3.2 A frican Production in Perspective. 62
3.2.1 Performance: Price, Non-Price Factors. 64
3.2.1.1 Price Factors. 64
3 .2 .1.2 Non-Price Factors. 65
3.3 Cotton C u ltiv a tio n in Ghana. 70
3.3.1 Early Attempts. 71
3.3.2 Today's P rivatise d Sector. 74
3.4 Structure of the Cost of Production. 79
3.5 L in t Cotton Price. 84
3.6 Q uality of Ghanaian L in t. 86
3.6.1 Harvesting. 87
3.6.2 C la s s ific a tio n and Evaluation. 88
3.6.3 Results o f Tests on Q ua lity. 89
3.7 Summary. 94
4. The World T e x tile Industry. 97
4.1 In tro d u c tio n . 97
4.2 Economic H istory o f World T e x tile Industry. 97
4.3 Modern Industry. 99
4.3.1 Employment and Output. 99
4.3.2 The LTA and the MFA. 100
4.3.3 E ffects o f MFA on Developing Countries. 103 4.3.4 T e x tile s Manufacturing and New Technologies. 107 4.3.5 Impact of Technology on Labour P ro d u c tiv ity
and Comparative Advantage. 124
4.3.6 Technology D iffu s io n . 127
4.4 Summary. 128
5. The Ghanaian T e xtile Sector. 129
5.1 In tro d u c tio n . 129
5.2 The T r a d itio n a l T e x tile Sector. 129
5.3 The Modern T e x tile Industry. 130
5.3.1 Size. 131
5.3.2 Location. 140
5.3.3 Ownership. 143
5.3.4 Capacity U t i l i s a t i o n . 145
5.4 Plant by Plant Resumee. 147
5.5 Summary. 168
6. The Measurement of Productive Efficiency. 171
6.1 In tro d u c tio n . 171
6.2 E ffic ie n c y Measurement. 173
6.3 Approaches to Production Fron tie rs. 176
6.4 The Pure Programming Approach. 177
6.4.1 Data Envelopment Analysis. 177
6.4.2 Consistency Approach Through Data Adjustment. 178
6.5 The Modified Programming Approach. 180
6.6 The D ete rm inistic S t a t i s t i c a l F ro ntie r Approach. 182
6.7 The Stochastic F ro n tie r Approach. 184
6.7.1 Technical E ffic ie n c y Only. 184
6.7.2 Technical and A llo c a tiv e E ffic ie n c y . 189
6.7.2.1 A n a ly tic Solutions. 192
6 .7 .2.2 Approximate Solutions. 199
6 .7 .2.3 Q ualitaive Solutions. 202
6.7.3 Other Systems Approaches. 203
6.7.4 Avoiding Disturbance Term Assumptions. 204
6.7.4.1 Panel Data. 204
6.7.4.2 Panel Data With Time
Varying In e ffic ie n c y 207
6.8 Summary 211
7. Data Collection. 213
7.1 Questionnaire. 213
7.2 F ir s t F i e ld t r i p . 213
7.2.1 C ap ita l, Labour, and Output Data f o r
Technical E ffic ie n c y Estimation. 214
7.3 Second F i e ld t r i p . 217
7.3.1 The Ghana Cotton Company Questionnaire. 217
7.3.2 Cost Structure Questionnaire. 218
7.4 Summary. 219
8. Estimating Technical Inefficiency fo r the
Period 1979-89. 220
8.1 In tro d u c tio n . 220
8.2 Empirical Model. 221
8.3 Results o f Estimation. 226
8.4 Summary. 230
9. Costs in Ghanaian T e xtile Industry. 231
9.1 In tro d u c tio n . 231
9.2 Costs Faced by T e x tile Firms. 231
9.3 Why Firms Need to Cut Costs. 233
9.4 Total Manufacturing Costs. 236
9.4.1 Yarn Manufacturing Costs. 236
9.4.2 Fabric Manufacturing Costs. 239
9.5 Endogenous Costs. 244
9.5.1 Labour: Price and P ro d u c tiv ity . 244 9.5.2 Raw M aterial Cost/Q uality and
E ffic ie n c y of Use 245
9.5.3 E ffic ie n c y of Fuel, Power, and Water Use. 246 9.5.4 Summary of Results of Technical
In e ffic ie n c y Estimation. 248
9.6 Exogenous Costs. 256
9.6.1 E l e c t r i c i t y , Fuel, and Water, Price/Tax. 256
9.6.2 Taxes. 259
9.6.2.1 D irect and In d ire c t Tax Incidence. 259 9.6.2.2 Taxes in T e xtiles Sector. 264 9.6.3 Exchange Rate Devaluation and
Fiscal/Monetary Contraction. 267
9.7 S e n s it iv it y Analysis of Cost. 273
9.7.1 Export P o te n tia l. 285
9.8 Summary. 287
10. Policy. 288
10.1 In tro d u c tio n . 288
10.2 Trade and Economic Growth. 288
10.2.1 Empirical Studies on Exports and Growth. 290
10*2.2 C ausality. 293 10.3 Reasons f o r Macroeconomic Policy Review. 294
10.3.1 Terms of Trade. 294
10.3.2 Investment. 296
10.3.3 Sunk Costs. 296
10.3.4 The Adjustment Process Argument. 297 10.3.5 The Late In d u s t r ia lis a t io n Argument. 298
10.3.6 Level Playing Field Argument. 299
10.4 Benefits of P ro d u c tiv ity Improvements. 300
10.5 P olicy P re s c rip tio n . 304
10.6 Summary. 307
11. Summary. 309
References and Bibliography. 314
Appendix 1. A1
Appendix 2. A13
LIST OF TABLES.
2.1 Percentage D is tr ib u tio n of GDP by In d u s tr ia l O rigin
at Current Prices, Selected Years. 6
2.2 D is tr ib u tio n o f Employment by Ind ustrie s. 8 2.3 Real, Per Capita and Per Real Per Capita GDP,
Population and D e fla to r. (1985=100). 14
2.4 Selected Economic Ind icators as % of GDP. 22 3.1 Performance of the Ghana Cotton Company. 76 3.2 Production of L in t , in Kgs. per Hectare,
by (GCC) and Selected Countries. 78
3.3 D eta il of Cotton Growing Costs of Ghana
Cotton Company, 1991. 80
3.4 Cotton Growing Costs f o r Ghana Cotton Company and
Selected Countries (% o f t o t a l c o s t). 81 3.5 Comparison of Ghana Cotton Fibre C ha racteristics
f o r 1987 and 1990. 90
5.1 Establishments by Employment Size Class and
T e x tile s Sub-Division, 1987. 132
5.2 Persons Engaged by Employment Size Class and
T e x tile Industry Group, 1987. 133
5.3 Output and Employment in Woven T e x tile s , Annual
Averages 1970-72, and 1973-75. 134
5.4 Percentage D is trib u tio n of Sources of Inputs f o r
Selected Medium and Large-Scale In d ustrie s. 141 5.5 Persons Engaged and Establishments by
Selected Regions, 1987. 142
5.6 Persons Engaged by type of Ownership, 1987. 144
5.7 Summary of T e x tile Firms Surveyed. 148
5.8 Level o f Technology in Plants. 149
8.1 Capital of Firms in Ghanaian T e x tile Sector,
M illio n Cedis, 1979-1989. 223
8.2 Labour of Firms in Ghanaian T e x tile Sector,
M illio n Cedis, 1979-1989. 224
8.3 Output of Firms in Ghanaian T e x tile Sector,
M illio n Cedis, 1979-1989. 225
8.4 Result of Maximising Likelihood Function. 228 8.5 Technical In e ffic ie n c y (u) of Firms in Ghanaian
T e x tile Industry ( in %). 229
9.1 E l e c t r i c i t y Prices f o r T e x tile Firms (1992). 247 9.2 Light Fuel O il Price, and E l e c t r i c i t y Prices f o r
Industry in Selected Cases (1991). 258
9.3 Price of Water in Ghanaian Industry (1992). 260 9.4 Price of Firm (C) Producing IMI JAVA P rin ts ,
and Result of Cost Cutting Measures. 277
9.5 Price of Firm (H) Producing REAL WAX P rin ts ,
and Result o f Cost Cutting Measures. 278
9.6 Price of Firm (A) Producing REAL WAX P rin ts ,
and Result o f Cost Cutting Measures. 279
9.7 Price o f Firm (J) Producing IMI JAVA P rin ts ,
and Result of Cost Cutting Measures. 281
9.8 Export P otential of Firm (J) IMI JAVA P rin ts and
Firm (A) REAL WAX P rin ts : 1990. 286
LIST OF FIGURES.
2.1 Per Capita Real GDP f o r Ghana, A fric a , (US$ o f 1985). 12
2.1a Real Per Capita GDP (1985 p ric e s ). 16
2.3 I n f la t i o n in Ghana: 1968-990. 18
2.8 Balance o f Payments: Overall Balance. 19
2.9 Real Government Finance: D e fic it/S u rp lu s at 1985 prices. 20 2.5 Real Unit Price & Volume of Cocoa Exports, (1980=100). 23
2.2 Relative Cost of Imports, (1980=100). 25
2.4 Ghana's Export Structure: 1986. 35
2.6 Terms o f Trade of Selected Country Groupings, 1980-89. 38
2.6a Ghana's Terms of Trade: 1967-1987. 39
2.7 Trade Balance (E xpo rts-Im ports). 44
2.10 Debt 46
2.11 Ghana's In d u s tr ia l Output, Employment, and Real Wages. 52 2.12 Index Numbers of Manufacturing f o r Selected Items. 53 2.13 Value Added Per Worker in Manufacturing in US$
at Constant 1980 price s. 54
3.1 World Cotton Consumption in M illio n s of
Bales: 1950-1990. 63
3.2 Ghana Cotton Company Cotton Area and Production. 77 3.3 L in t Cotton Price: Ghanaian vrs. World Price (US$). 85 3.4 Ghanaian Cotton Fibre Lengths: % of Total f o r 1987
and 1990 Samples. 91
4.1 Bales of Fibre at T e x tile M i l l . 109
4.2 Automatic Bale Plucker/Feed. I l l
4.3 Chute Feeds. I l l
4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11a 4.11b 4 . 12a 4.12b 4.13a 4.13b 4.14
5.1 5.2 5.3
5.4
5.5
6.1 9.1
9.2
Carding
Rotor or Open-End Spinning.
Rapier Weaving Looms ( s h u t t le le s s ) . Shuttle Looms.
Yarn Dyeing.
Continuous Washing.
Stenters -Continuous Fin ish ing.
Real Wax P r in t.
Real Wax P r in t.
Im ita tio n Wax/Java P r in t.
Im ita tio n Wax/Java P r in t.
Machine Woven Kente.
Machine Woven Kente
Hourly Wages (US$) in T e x tile s Sector of Selected Countries, 1985.
Production o f Cloth, 1976-88.
T e x tile Growth Rates 1965-85 f o r Selected Countries Establishments and Persons Engaged in Spinning Weaving and F in ish ing , 1987.
Number of Establishments and Persons Engaged in T e x tile s , %, 1987.
Estimated Rate of Capacity U t i l i s a t i o n in Large and Medium Scale Firms: %.
Technical and A llo c a tiv e E ffic ie n c y .
P o s s ib ilit ie s f o r Cost Reduction in Ghanaian T e x tile s Manufacturing.
Total Cost of Yarn in Selected Countries and f o r
112 112 116 116 119 119
120 121 121 122 122
123 123
124.1 135 137
138
139
146 174
232
Plant B in Ghana, 1985. 238 9.3 Cost o f Yarn in Selected Countries and f o r
Plant B in Ghana, 1985. 240
9.4 Total Cost of Fabric in Plant B (1989) and
Selected Countries (1985). 241
9.5 Cost of Fabric in Plant B (1989) and
Selected Countries (1985). 243
9.6 Technical In e ffic ie n c y (u) of Firms in Ghanaian t
T e x tile Industry. 249 !
9.7 Technical In e ffic ie n c y (u) of firm s in Ghanaian
T e x tile Industry. 251
9.8 Capital Labour Ratios in Ghanaian
T e x tile Firms: 1979-89. 252
9.9 Capital Output Ratios in Ghanaian T e x tile
Firms: 1979-89. 253
9.10 Labour Output Ratios in Ghanaian T e x tile
Firms: 1979-89. 254
9.11 Tax Incidence: P a r tia l E quilibrium . 263 9.12 Rates of Personal Income Tax in Ghana and Kenya. 265 9.13 E ffe c t of Exchange Rate Devaluation. 269 9.14 Nominal Exchange Rates and Purchasing Power P a rity
(PPP) in Ghana: 1963=100. 271
9.14a Nominal Exchange Rates and Purchasing Power P a rity
in Ghana: 1963=100. 272
10.1 Benefits and Costs of P ro d u c tiv ity Improvements. 301
ABBREVIATIONS.
BOP: Balance of Payments.
CAD: Computer Aided Design.
CBS: Central Bureau o f S t a t is t ic s . CDB: Cotton Development Board.
CES: Constant E l a s t i c i t y o f S u b s titu tio n . CET: Constant E l a s t i c i t y o f Transformation.
COLS: Corrected Ordinary Least Squares.
DEA: Data Envelopment Analysis.
DMU: Decision Making U nit.
DRC: Domestic Resource Cost.
EC: European Community.
EEC: European Economic Community.
EDT: Total Debt Outstanding.
ERP: Economic Recovery Programme.
GATT: General Agreement on T a r r if s and Trade GCC: Ghana Cotton Company.
GCCQ: Ghana Cotton Company Questionnaire.
GDP: Gross Domestic Product.
GIC: Ghana Investment Centre.
GLS: Generalized Least Squares.
GNP: Gross National Product.
GPF: Generalised Production Function.
GIC: Ghana Investment Centre.
GIHOC: Ghana In d u s tr ia l Holding Company.
IDC: In d u s tr ia l Development Corporation.
IFS: In te rn a tio n a l Financial S t a t is t ic s . IMF: In te rn a tio n a l Monetary Fund.
INT: In te re s t.
LDC: Less Developed Country.
LTA: Long Term Arrangement.
MLE: Maximum Likelihood Estimator.
MFA: M u lt if ib r e Arrangement.
ODI: Overseas Development I n s t it u t e .
OECD: Rganisation f o r Economic Cooperation and Develpoment.
PEP: P ro d u c tiv ity Enhancing Programme.
PPP: Purchasing Power P a rity .
SGM: Symmetric Generalised McFadden.
STA: Short Term Arrangement.
TDS: Total Debt Service.
TOT: Terms of Trade.
UNIDO: United Nations In d u s tr ia l Development Organisation.
WB: World Bank.
WDR: World Development Report.
XGS: Exports.
1. INTRODUCTION.
The Ghanaian t e x t i l e sector, a f t e r having been protected fo r decades in the p r e - lib e r a lis a t io n period proceeding 1983, is today operating in a open market environment. This has meant th a t the sector is now open to competition from imports. Thus, e ffice n cy of production and cost c u ttin g measures have become an important component in aiding Ghana's t e x t i l e sector to compete in th is lib e r a lis e d economic climate.
This study is therefore concerned with the cost stru ctu re and e ff ic ie n c y o f the Ghanaian t e x t i l e sector. The Ghanaian t e x t i l e sector is reviewed, in Chapter (2 ), in order to put the t e x t il e s sector in perspective. Chapter (3) looks at the competitiveness of Ghanaian cotton c u lt iv a t io n r e la t iv e to world c u lt i v a t i o n . The study then goes on to examine the world te x ile s ind ustry, in Chapter (4),
in an attempt to shed some l i g h t on the comparative advantage which developing countries might p o t e n t ia lly enjoy in view of the fa c t th a t t h e i r labour costs are r e la t i v e l y lower.
Chapter (5) reviews the h is to ry of t e x t i l e s in Ghana, as well as summarising the state of the Ghanaian t e x t i l e s sector as seen at the time the fie ld w o rk was conducted.
Chapter (6) reviewed the l it e r a t u r e on the measurement of productive e ff ic ic e n c y , while Chapter (7) gives a b r i e f account of
the questionnaires and the method of data c o lle c t io n . Chapter (8) is involved w ith estim ating technical in e ffic ie n c y in s ix t e x t il e s firm s f o r the period 1979-89, and Chapter (9) explores cost reducing measures to improve the competitiveness of t e x t i l e s . P olicy options are explored in Chapter (10), and a summary of the study is given in Chapter (11).
2. GHANA: ECONOMY.
2 .1 . Introduction.
A fte r a period of r e la t iv e pro sp e rity in the 1960vs, Ghana experienced a protracted economic decline in the fo llo w in g two decades characterised, in varying in te n s ity , by pe rsisten t high i n f l a t i o n , d e clin ing production and exports, flo u r is h in g i l l e g a l a c t i v i t i e s , and p o l i t i c a l i n s t a b i l i t y . A gradual decline in per capita income increased the incidence of absolute poverty and was accompanied by a worsening o f income d is t r ib u t io n , growing unemployment, and the emigration of s k i l l e d professionals.
Discouraged by t h is d e te rio ra tio n in the economy, aid donors gradually reduced t h e i r support, which f u r t h e r worsened the balance of payments s itu a tio n .
Although the economic d e te rio ra tio n was p a r t ly caused by external fa c to rs , such as the two o i l price shocks, the sharp ris e in world in te re s t ra te s, and a collapse of primary commodity prices in the e a rly 1980's, the main cause was inadequate economic p o lic ie s . Beginning in 1983, a major re o rie n ta tio n of economic p o lic ie s took place with the adoption o f the Economic Recovery Programme, (ERP), under the tutelage of the In te rn a tio n a l Monetary Fund, (IMF), and the World Bank, (WB). The key reforms include import lib e r a l i s a t i o n and the a b o litio n of import licensin g ; massive devaluation of the Cedi; the removal of price
c o n tro ls ; the e lim in a tio n of the budget d e f i c i t ; and reduced public sector borrowing from the banking system.
I t remains to be seen whether the gains achieved to date w i l l be consolidated. Cries o f success would be premature. On the balance of payments f r o n t , Ghana w i l l continue to be u n he a lthily r e li a n t on aid . Prices of the two main exports - cocoa and gold which account f o r 70 per cent of foreign earnings - are forecast to remain r e l a t i v e l y weak. Timber exports w i l l be constrained too by environmental and conservation considerations. Aid dependence is heightened by the reluctance of fo re ig n investors to commit new funds to Ghana, and a p a r t ic u la r ly worrying aspect of t h is dependence is the increasing reliance on fo re ig n technical assistance which is taking place.
F in a lly , ind ustry, while having been weakened by prolonged disinvestment in the e arly 1980s, is , on the whole, having to face competition from imports while using old and run-down c a p ita l stock.
This chapter is divided into seven sections. A fte r the in tro du ctio n in Section (2 .1 ), Section (2.2) compares the r e la t iv e size of ind ustry and a g r ic u ltu r e . Section (2.3) gives a b r ie f review of the in d u s t r ia lis a t io n push started by Nkrumah in the 1960s.
Section (2.4) is interested in what went wrong and the re s u ltin g economic downturn of the 1970s and e a rly 1980s. Section (2.5) gives an overview of the ERP of 1983. Section (2.6) looks at the ERP's successes and f a ilu r e s under the fo llo w in g sub-sections: (2.6.1)
trade, (2 .6 .2 ) investment, (2.6.3 ) aid, (2 .6 .4 ) c r e d it and banking, (2.6.5 ) industry. The summary is in Section (2 .7 ).
2.2. Employment and Output in Industry and Agriculture: 1960-83.
Ghana was known as the Gold Coast u n t i l her p o l i t i c a l independence from the B r it is h in 1957. The change of name was implemented p r im a r ily to take account of the b e l ie f th a t the Akan ethnic group, which made up about 45 percent o f the t o t a l population*, migrated to i t s present location from the old Ghana Empire when i t f e l l in the 13th century. The change in name was also meant to serve as a mark of national id e n t it y and hence as an
in s p ir a tio n to the then emergent lib e r a tio n movement in A fric a ^ .
The country is bordered by three former French colonies: on the west by the Ivory Coast, on the northwest by Burkina Faso, and on the east by Togo. The southern part of the country is a 554 km of A tla n t ic c o a stlin e facin g the Gulf of Guinea.
A g ric u ltu re is by f a r the largest sector o f the economy. As can be seen from Table (2 .1 ), i t s c o n trib u tio n to GDP at constant prices was 46.5 percent in 1970. By th ea rly 1980s i t s share was approximately 60 percent. The share of ind ustry in GDP was 18.3 in 1970, r is in g to 21.0 percent in 1975, and f a l l i n g sharply to 11.4 percent in 1980 and f u r th e r to 6.2 percent in 1982. The share of the services sector f e l l from 40.7 percent of GDP in 1965 to 27.6 percent in 1980 and then rose sharply to 36.4 percent in 1982. Huq (1989)
P er ce n ta g e D is tr ib u tio n of G D P by In d u s tr ia l O rig in at C u rr en t P ri c e s , se le ct ed years.
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indicates th a t the sharp r is e of the service share in 1982 is due to the r is e o f the share of the wholesale and r e t a i l sub-sector during the 1980-82 period as a r e s u lt of high prices during t h i s period.
Table (2 .2) shows the occupational d i s t r ib u t i o n of the labour force. I t can be seen from th is th a t in 1960, a g ric u ltu re engaged 61.5 percent of the t o t a l labour fo rc e , d e c lin in g to 57.0 percent by 1970. While a g r ic u ltu r e 's proportionate share of the
labour force f e l l in t h is period, both manufacturing and services recorded sub stan tial employment growth rates. Huq (1989) points out th a t t h i s trend is in lin e w ith the universal performance of these three sectors in the course of economic development.
2.3. The In d u s trialis atio n Strategy.
I n d u s t r ia lis a t io n was an o f f i c i a l p o lic y of the government as f a r back as 1947 when a s ta tu to ry body - the In d u s tria l Development Corporation (IDC) - was established to 'f o s t e r in d u s tria l growth' (Grayson 1971, p . 73). Among i t s objectives was 'securing the in v e s tig a tio n , form ulation and carrying out o f proje cts f o r developing in d u s trie s in the Gold C o a s t .
The emphasis on in d u s t r ia lis a t io n was also apparent in Nkrumah's development plans, issued s h o rtly a f t e r he became Prime M in is te r of the Gold Coast Colony in 1951 and a f t e r independence in
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"Our f i r s t Development Plan [1952-7] concentrated on communications, p u b lic works, education and general services. I t prepared the way f o r our in d u s t r ia lis a t io n d r iv e . "
"This was the keynote of our Second Development Plan [1959-64]
which w i l l provide f o r the establishment of many fa c t o r ie s , of varying size, to produce a range of hundreds of d if f e r e n t produ cts.1,4
Nkrumah emphasised the ro le of im p o rt-s u b s titu tin g domestic manufacturing in d u strie s in order to reduce fore ig n dependence fo r those goods. Thus, in d u s t r ia lis a t io n was o r i g i n a l l y conceived:
"P rim a rily as a means of achieving economic independence and growth, ra th e r than as a response to foreign exchange needs."5
According to the Economic Survey (1962) i t was not u n t i l 1962 th a t the country had i t s f i r s t serious balance of payments d e f i c i t , and reference was made to "helping the balance of payments s itu a tio n " as a primary reason f o r encouraging domestic production.
To speed up the in d u s t r ia lis a t io n process, Nkrumah introduced a package of incentives f o r the manufacturing sector in the 1960s. For example, the Capital Investment Act was passed in 1963. t h is a ct, as is pointed out in the Ghana Economic Review (1973-75), offered a wide range of f is c a l and other concessions to p o te n tia l investors including: tax holidays of up to f i v e years;
accelerated depreciation rates f o r b u ild in g pla n t and machinery;
exemption from customs duties on machinery, raw m a terials, spare parts and f u e l; deferment o f company r e g is t r a t io n fees and stamp duty f o r up to f i v e years on c a p ita l invested in approved p rojects;
guaranteed remittance of c a p ita l and p r o f i t s and employment tax c r e d it f o r a period o f up to ten years.
Apart from these incentives, industry was given prote ctio n . This involved the imposition o f t a r i f f s , quotas and complete r e s t r ic t io n s on the importation of c e rta in manufactured products.
Steel (1972), f o r example, points out th a t the import licensing system, which was established in 1961, became an important determinant of investment and production in manufacturing.
Thus, the main build-up o f the in d u s tr ia l sector took place in the 1960's, under Nkrumah. But, as K i l l i c k (1978) points out, e ff ic ie n c y was low and in d u s tr ia l output growth was poor. In f a c t , Steel (1972) used the E ffe c tiv e Rate of Protection (ERP), and Leith (1974) used the Domestic Resource Cost (DRC) to examine the e ff ic ie n c y o f in d u strie s in Ghana.
S te e l's work indicates th a t i f t a r i f f s and licensin g had been removed in the period being studied ( i . e . 1967-68), only 15.4 percent o f the firm s surveyed would have been competitive with imports at the o f f i c i a l exchange ra te , and devaluation by 50 percent would have raised th a t fig u re only up to 25.6 percent. L e ith 's study shows th a t the ERP varied widely f o r the firm s surveyed in the period 1968-70, and gives negative value added at world prices in a number
o f instances.
The re s u lts o f Steel and Leith cast doubts on the e ffic ie n c y o f im p o rt-s u b s titu tin g in d u s t r ia lis a t io n in Ghana as pursued up to 1970. Steel concludes:
"These firm s represent a waste of investment funds and a f a i l u r e of import s u b s titu tio n , i f they are c o n tin u a lly operated at the level and cost s tru c tu re observed in 1967-8. As of th a t year, Ghana's i n d u s t r ia lis a t io n and import s u b s titu tio n p o lic ie s were extremely unsuccessful in esta b lishin g a s tru c tu re and level of manufacturing output which could e f f i c i e n t l y reduce foreign exchange requirements and stim ulate growth of GNP."
Therefore, despite a r is in g investment to GDP r a t i o between 1958-65, as indicated by Brown (1972), the real per capita GDP, which grew s te a d ily in the period 1960-63 and was above the African average, f e l l sharply in the 1963-67 period and was by then below both i t s 1960 level and below the African average re a l per capita GDP as can be seen from Figure (2 .1 ).
Steel (1972) therefore concludes th a t:
"there is no evidence th a t the i n d u s t r ia lis a t io n programme was successful in s tim u la tin g a r is e in income during the period under study, and i t may have been p a r t ly responsible f o r the decline in re a l per capita income, to the extent th a t i t d iverted resources away from other sectors."
That the economic decline of t h is e a rly period of independence was not more severe is explained by the fo llo w in g fa c to rs . F i r s t l y , the export prices of cocoa and timber were buoyant,
P er C a p it a R e a l G D P fo r G h a n a , Af ri ca , (U S $ of 1 9 8 5 ).
Source: Africasee OECD, (1990); Ghanasee IMP, IFS yearbook, various.while export volumes were increasing. Secondly, apart from the i l l - considered in d u s t r ia l investments, Nkrumah spent more l i b e r a l l y than the c o lo n ia l regime on health and education. Therefore, the physical ind ica tors of welfare a l l showed s ig n if ic a n t improvement. And t h i r d l y , as pointed out by Green (1987), s t e r lin g balances accumulated in the la te c o lo n ia l period were s t i l l there to be drawn from, while various other c a p ita l inflows had not yet dried up.
2.4. The Downturn of the 1970s and Early 1980s.
A fte r only f i f t e e n years of independence, and before the exasperating fa c to rs th a t led to the economic collapse o f the e a rly 1980s, key features of a counter-productive strategy were v is ib le ( K i l l i c k , 1978). During most of the 1970's and e a rly 1980's Ghana suffered an economic malaise marked by shrinking output, high and accelerating i n f l a t i o n , and growing external imbalances.
With a population growth of about 3 per cent a year in th is period (see population fig u re s in Table ( 2 . 3 ) ) , per capita income was s u b s ta n tia lly eroded. Figure (2.1a) plots real per capita GDP f o r the period 1955 - 1988. Three trends are d is c e rn ib le : a f lu c tu a tin g but r is in g trend from 1955 to 1974; a sharp d e clin in g trend from 1975 to an a l l time low real per capita GDP in 1984; and then a mild recovery from 1985 to 1988. Thus as ODI (1988) points out, and as revealed by Figure (2.1 a), i t was in the 1970s th a t Ghana changed from being a middle-income to becoming a low income country - the only African
Real, Per Capita and Real Per Capita GDP, Population and Deflator. (1985 = 100)
Table 2.3.
QDP in Billion*
of Cod I*
QDP Deflator 1965=100
Real QDP (’B5«=pric**) Billion* of Cadi*
Population Million*
Par Capita QDP Par Capita Real OOP
’65 price* (’OOO*)
195S 0.6 0,36 174,1 5.83 106.3 29.9
1956 0.6 0.36 177.2 6.02 106.8 29.4
1957 0.7 0.37 1B1.6 6.20 108.7 29.3
1956 0.7 0,38 188.6 6.39 111.3 29.5
1959 0.8 0.38 210.1 6.58 123.3 31.9
1960 0.9 0.41 224.8 6.78 128.5 33.2
1961 0.9 0.41 238.6 6.85 141.6 34.8
1962 1.0 0.42 250.2 6.93 143.9 36.1
1963 1.1 0.44 258.8 7.01 157.1 36.9
1964 1.2 0.47 264.4 7.40 162.2 35.7
1965 1.5 0.54 268.0 7.74 193.8 34.6
1966 1.5 0.57 268.3 7.91 189.6 33.9
1967 1.5 0.58 260.2 8.08 185.6 32.2
1966 1.7 0.62 277.0 8.26 205.8 33.5
1969 2.0 0.68 293.2 8.44 237.0 34.7
1970 2.3 0.71 313.1 8.61 267.1 36.4
Source: IMF, IFS yearbook, various.
Real, Per Capita and Real Per Capita GDP, Population and Deflator. (1985 = 100)
Table 2.3 (cont)..
ODP in Billion*
of Cadi*
QDP Daflator 1885=100
Aaal QDP (*65 prtcaa) Billion* of Cadi*
Population Million*
Par Capita QDP Par Capita Raal QDP
’65 prica* fOOOs)
1871 2.5 0.75 330.5 8.86 282.2 37.3
1872 2.8 0.87 322.2 9.09 308.0 35.4
1873 3,5 0.94 371.4 9.39 372.7 39.6
1874 4.7 1.21 384.0 9.61 489.1 40.0
1875 5.3 1.58 334.6 9.87 537.0 33.9
1876 6.5 2.03 322,8 10.31 630.5 31.3
1877 11.2 3.39 330.1 10.41 1,075.9 31.7
1876 21.0 5.86 358.1 10.75 1,953.5 33.3
1878 28.2 8.14 346.7 11.09 2,542.8 31.3
1860 42.9 12.36 346.7 11.34 3.7B3.3 30.6
1861 72.6 21.29 340.6 11.55 6,285.7 29.5
1862 86.5 27.35 316.0 11.73 7,374.3 26.9
1883
I
184.0 57.83 I
318.0 11.92 15,436.0 26.7
1864 270.6 82.90 326.4 12.39 21,840.0 26.3
1865 343,0 j 100.00 343.0 12.72 26,965,0 27.0
1886 511.4 141.70 360.9 13.05 39,187.0 27.7
1887 746.0 197.30 378.2 13.39 55,713.0 28.2
1888 1,057.9 263.30 401.7 14.13 74,869.0 28.4
Source: IMF: IFS 1984,88, Jan. 91.
R e a l P er C a p it a G D P (1 98 5 pr ices). F ig u re 2 .1 a .
OCO
oo
co
T3O o
to
CM CM
CO 00 o>
to 000)
o00
O)
LOr^
CD
o
CD
to
CO
05
oCO CD
10to CD
CO
*
Source: IMF; IFS yearbook, various.
country known to have made such a t r a n s it io n .
The performance of i n f l a t i o n , f o r the period 1968 to 1990, is i l l u s t r a t e d in Figure (2 .3 ). This can also be divided in to three periods: a period of r e l a t i v e l y low i n f l a t i o n in the 1968-1974 period ( i . e below 20 percent); a period o f predominantly high i n f l a t i o n from 1975 to 1983, w ith three years, 1977, 1981 and 1983 having over 110 percent i n f l a t i o n and a peak of 123 percent in 1983; and a period of r e l a t i v e l y moderate i n f l a t i o n from 1984 to 1990 w ith an average i n f l a t i o n value o f approximately 23 percent. Thus we can see th a t the period 1975-83 was a period o f extremely high i n f l a t i o n .
By 1982, the country had incurred large external payments arrea rs. Figure (2.8) shows Ghana's balance of payments s itu a tio n in the period 1960 to 1989. The remarkable feature which can be seen from t h is fig u r e is th a t there was a BOP d e f i c i t f o r 16 out of the 24 years in the period 1960 to 1983 w ith three years having a d e f i c i t of over $100m, (1974, 1976 and 1983), and one year, 1981, having a d e f i c i t o f nearly $300m. In the period 1984 to 1989, th is s itu a tio n was d r a s t i c a l l y reversed with an o v e ra ll surplus being recorded f o r every year except 1986, and a surplus of over $100m f o r each of the three years in the 1987-89 period. The conclusion to be drawn from t h is is th a t the BOP d e f i c i t in the 1970s and e a rly 1980s was s p i r a l l in g out o f c o n tro l.
Figure (2.9) gives a graphic p ic tu re o f government finances in real terms f o r the period 1965 to 1988. From t h i s , i t can be seen
In fl a ti o n in G h a n a : 1 9 6 8 -1 9 9 0 . F ig u re 2. 3.
Source: IMF, IFS yearbook, various.Balance of Payments: Overall Balance.
Figure 2.8.
$m 2 0 0
100
- 1 0 0
- 2 0 0
- 3 0 0
1960 1965 1970 1975 1980 1985 1989
Source: IMF, IFS Yearbook, various.
Real Government Finance: Deficit/Surplus at 1985 prices
Figure 2.9.
100
c e d is (m illio n s )
- 1 0 0
- 2 0 0 h
- 3 0 0
- 4 0 0 j i i i i J L
HI in!
1965 1970 1975 1980 1985 1988
Source: IMF, IFS Yearbook, various.
th a t a budget d e f i c i t was incurred in the twenty one year period between 1965 and 1985. This showed an accelerating trend in the 1965 to 1975 period w ith a high of over 350 m illio n cedis being reached in 1975. A f a l l i n g trend is shown in the 1975 to 1988 period, with the budget being in s l i g h t surplus in re al terms f o r each year in the 1986-88 period. Thus a great deal of f i s c a l imprudence was exh ibited by the respective Ghanaian governments f o r nearly three s o lid decades.
As can be seen from Table (2 .4 ), domestic saving and investment f e l l away in cre asing ly ra p id ly from an average o f 10.9 percent of GDP and 11.5 percent of GDP re s p e c tiv e ly in the 1971-75 period, to 5.6 percent and 5.1 percent re s p e c tiv e ly in the 1976-82 period. Domestic savings was as low as 0.9 percent of GDP in 1983.
Figure (2.11) shows the increase in in d u s t r ia l output and employment from 1963 to peak in 1974. Then an exponential and rapid f a l l can be seen in both employment and output from 1975 to 1988. The volume of cocoa exports, given in Figure ( 2 .5 ), showed a steady trend in the period 1960 to 1973, a f t e r which a sharply f a l l i n g trend can be seen f o r the period 1974 to 1982, followed by a mild recovery in the 1983-88 period.
The above indicates th a t the productive base of the economy was ra p id ly eroded in t h i s period. This was as a r e s u lt of the emigration of s k i l l e d labour, lack of c a p ita l form ation, and a d e te rio ra tio n of in fr a s tr u c tu r e .
S el ec te d E co n o m ic In d ic at o rs as % of G D P . Ta bl e 2 .4 .
1987 r-O) o
CO 0.4
1986 10.2 ! 11.9 1—
o
1985
to 7.4 -2.0
1984 4.4 ZL 00
1
1983 60 ! 3.8 -2.7
1976-82 5.6
to -7.5
1971-75 10.9 11.5 -10.1
DomesticSavings GrossInvestment Budget Deficit
§o>
1=
c 5
T3
(0C T3
Cn fo 0)e 3O
R e a l U n it P ri ce & V o lu m e of Coc oa E x p o rt s , (1980 =1 00).
Source: IMF, IFS Yearbook, various.These i l l s re fle c te d a combination of exogenous factors and inappropriate economic p o lic y s ig n a ls. The l a t t e r discouraged production, exports, savings, and investment, while encouraging consumption, imports, and various corrup t practices, including a burgeoning underground economy.
One such p o lic y signal was the maintenance o f an over-valued cedi. This was caused by a combination of high domestic i n f l a t i o n and a f a i l u r e to devalue the nominal value of the cedi in terms of foreign currencies. This made imported goods r e l a t i v e l y cheaper than t h e i r domestic s u b s titu te s . As can be seen from Figure (2 .2 ), the r e la t iv e cost of imports, as measured by the r a t i o o f the import price index to the GOP d e f la t o r , remained r e l a t i v e l y high in the period 1967-74. But between 1974-80, despite an absolute r is e in the u n it cost o f imports estimated at 139 per cent, the r e la t iv e cost of imports f e l l by 450 per cent, and, by 1987, a 30 f o ld decrease in t h i s fig u r e had taken place, i . e . , 3000 percent decrease.
The economic decline was fu e lle d by the p o lic y favouring rapid in d u s t r ia lis a t io n by an i n e f f i c i e n t state enterprise sector to the neglect of an a g r ic u ltu r a l sector th a t t r a d i t i o n a l l y had been the most important foreign exchange earner. Thus, as mentioned in Section (2.3) above, inward-looking in d u s t r ia lis a t io n p o lic y attached overwhelming importance to s e lf- r e lia n c e by e sta b lish in g im p o rt-s u b s titu tin g industrie s under h ig h ly p ro te ctive trade and non-trade b a rr ie r s . These enjoyed p ro te c tio n under an
Relative Cost of Imports, (1980 = 100).
Figure 2.2.
In d ex n u m b e r 1 8 0 0
1 6 0 0
1 4 0 0
1200
1 0 0 0
8 0 0
6 0 0
4 0 0
20 0
1970 1976 1980 1985
—1 GDP D e fla to r Rel. C o s t of Im ports Im p o rt P rice
Source: IMF; IFS yearbook, various.
in cre asing ly r e s t r i c t i v e im po rt-lice n sing system and high t a r i f f s . Protection was in d is c rim in a te ly extended to a l l industries and j u s t i f i e d on in fa n t- in d u s t r y grounds, irre s p e c tiv e of t h e ir
longer-term comparative advantage.
Despite, or even because o f, these p r o te c t io n is t p o lic ie s , an overwhelming m a jo rity of state enterprises suffered heavy losses, which were borne by the Government and u ltim a te ly financed by bank c r e d it (Toye 1989, p . 54).
Ghana's f i s c a l p o s itio n was fu r th e r burdened by a p o lic y in which the Government assumed the ro le of employer of la s t re s o rt. As Van Hear (1988, p . 19) states, a large bureaucracy was b u i l t up containing many nonproductive and ghost workers ( f i c t i t i o u s names on the p a y ro ll) 12,000 of whom were la id o f f in 1987 and a fu r t h e r 5,000 in the f i r s t h a lf of 1988.
As discussed by Ewusi (1988, p . 7), the revenue base shrank as a r e s u lt of the sharp decline in cocoa exports in the 1974-82 period, and other trade flows on which the tax system heavily depended. Large budget d e f i c i t s were financed through the banking system. This fu e lle d domestic demand under conditions of d e clin in g domestic supply and led to growing balance of payments d e f i c i t s and acce lerating i n f l a t i o n . A vicious c i r c l e developed in which successive governments t r i e d to cure macroeconomic imbalances with c on tro ls on d is t r ib u t io n and prices without addressing the expansionary f i s c a l and monetary p o lic ie s . I n f la t io n
was countered by p rice c o n tro ls ; balance o f payments d e f i c i t s were countered by import c o n tro ls ; and s c a r c itie s were countered by d is t r ib u t io n c o n tro ls . These in te r v e n tio n is t p o lic ie s suppressed market force s, causing much of the economy to go underground and c o n trib u tin g to the corruption and in e f f ic ie n c y of the a d m in istra tion .
A study in the World Development Report (WDR) (1983) ranking developing countries according to the nature and in te n s ity of d is t o r t io n s p r e v a ilin g during 1970-80 found Ghana had the greatest d is t o r t io n amongst the sample countries. These d is t o r t io n s , feeding on themselves, contributed to gross in e f f ic ie n c y through m is a llo catio n of resources, and destroyed incentives f o r production and exports.
In the e a rly 1980's, when Ghana's fundamentally weakened economy was confronted with sharply d e te r io ra tin g external conditions and a p e rs is te n t drought, the economic c r i s i s f u l l y surfaced and the economy almost ground to a h a lt . By 1983, the year in which the economic recovery programme was launched, the economy had been la rg e ly devastated. Signs of collapse were everywhere.
The re a l wage had f a l l e n by 560 percent per cent of i t s 1974 level (see Figure (2 .1 1 )). As can be seen from Table (2 .4 ), gross investment in the 1976-82 period amounted to 5.1 per cent of GDP - barely s u f f ic i e n t to replace the depreciated c a p ita l stock and providing no margin f o r economic growth. The economy was starved of imported inputs and, as a r e s u lt , capacity u t i l i s a t i o n in the
manufacturing sector was reduced to only 18 per cent by 1984, (as can be seen from Figure (4.5) in Chapter ( 4 ) ) .
Signs were widespread th a t an in f la t io n a r y psychology had become deeply entrenched. I n f la t i o n , which had been running f o r the previous decade at an average annual ra te of over 50 per cent, surged to 123 per cent in 1983. The i n f l a t i o n ra te re fle c te d p a r a lle l market prices and not the c o n tro lle d prices to which v i r t u a l l y a l l of the economy was subject. Nominal in te re s t rates had been kept low - those on savings deposits, f o r example, amounted to only about 11 per cent a year (Financial Times
1989). Holding money had become so u n a ttra c tiv e th a t the money balances, in p a r t ic u la r savings deposits, held w ith the banking system had declined sharply and the income v e lo c it y of money had nearly doubled from an average of about f i v e in e a r l i e r years to nine in 1983.
The external sector, too, was devastated. With the exchange ra te pegged at 2.75 cedis to a d o lla r since 1978, the real exchange ra te had appreciated by 816 per cent by 1983 from a r e l a t i v e l y undisturbed ra te in 1981®. The currency appreciation, together w ith the pervasive r e s t r ic t io n s on Ghana's in te rn a tio n a l trade and payments, caused o f f i c i a l exports to plummet. As shown in Pick (1987), by the beginning of 1983, the p a r a lle l market ra te f o r fore ig n exchange was about 40 times the o f f i c i a l ra te . Grave d i f f i c u l t i e s were being encountered in meeting payments f o r essential imports and f o r servicing the
external debt. As pointed out by Financial Times (1989), external payments arrears equivalent to about a f u l l yea r's export earnings accumulated.
The public sector was in a precarious s ta te . As pointed out by Loxely (1988, p . 25), tax revenues had collapsed to about 5 per cent of GDP, dragging expenditures down and s e rio u s ly eroding the Government's a b i l i t y to function and to maintain the economic and social in fr a s tr u c tu r e .
2 .5 .The Economic Recovery Programme.
Confronted with t h is s itu a tio n , the Government formulated the Economic Recovery Programme in 1983. I t was designed from the beginning with a series of ( p a r t i a l l y overlapping) phases; s t a b i l is a t i o n was to give way to r e h a b i li t a t i o n o f the economy, and t h i s in tu rn was to lead to a phase of economic lib e r a lis a t io n ^ . Support was intended to come from many sources such as, the IMF, the WB, b i l a t e r a l aid donors, and even tu a lly, p riv a te foreign investors.
The s t a b ilis a t io n e f f o r t was aimed at the domestic economy and at improving the balance of payments. In p a r t ic u la r , in f l a t i o n had to be c o n tro lle d and a measure of p rice l i b e r a lis a t io n introduced, so th a t the necessary adjustments in r e la t iv e prices could be e ffe cted . As budgetary revenues continued to decline
i n i t i a l l y , the f i s c a l adjustment was achieved through a compression in government expenditures to 8.6 per cent of GDP from 10.2 per cent the year before (Loxely 1988). Real wages were frozen, government operating and maintenance expenditures were re stra in ed , and development outlays were sharply reduced. These actions which were thought to be necessary to s t a b ilis e the economy, exacted a cost by depressing the level o f economic a c t i v i t y and postponing the r e h a b i li t a t i o n of the economy.
The centrepiece of external sector reform was depreciation of the exchange rate from 2.75 Cedis = $1 to 30 Cedis = $1 by the end of 1983. The exchange ra te adjustment f a c i l i t a t e d the f i r s t of a series of annual increases in the producer p ric e o f cocoa.
Since much of the exchange rate adjustment merely made up f o r past i n f l a t i o n , the depreciation did not appear to add markedly to the increase in the domestic price le v e l. However, , as indicated by Financial Times (1989), prices of important in d iv id u a l commodities, such as petroleum, increased sharply, and at the same time, many prices were decontrolled. Thus the p r in c ip a l of a f u l l pass-through of exchange ra te adjustments to local prices was established.
Ewusi (1987, p . 20), amongst others, points out th a t i t was not u n t i l la te in 1984 th a t the economic outlook improved, as a r e s u lt of the Government's perseverance with the s t a b ilis a t io n p o lic ie s . A g ric u ltu ra l production recovered sharply, s tim u la tin g exports and domestic food supplies. Food
prices declined markedly. The l a t t e r improvement contributed to a s ig n if ic a n t deceleration of i n f l a t i o n because price s of food items account f o r about h a lf of the consumer p rice index. This improvement in the i n f l a t i o n outlook occurred despite a sharp acceleration in the growth of the money supply, r e f le c t in g the fina ncing needs of a recovering economy.
The exchange ra te depreciation benefited both the external and government sectors. As stated by Financial Times (1989), the domestic terms of trade moved in favour o f tradables f o r the f i r s t time in more than a decade and an increased producer price stimulated production and o f f i c i a l cocoa exports. The tax base improved as a r e s u lt of the impact of the devaluation on tra d e -re la te d taxes, which permitted an increase in government spending despite a f u r t h e r reduction in the f i s c a l d e f i c i t . The sizable increase in external assistance permitted a large increase in imports, while at the same time external payments arrears could be reduced.
Signs th a t the s t a b ilis a t io n strategy was succeeding permitted a change in emphasis in e a rly 1985 toward the r e h a b ilit a t io n o f some of the more severely damaged parts of the economy - in p a r t ic u la r in fr a s tr u c tu r e , the key export in d u s trie s , and the pu blic sector. With support from the World Bank and b i l a t e r a l donors, in fr a s tr u c tu r e r e h a b ilit a t io n projects were undertaken in the tra n s p o rt, power, communications, and water supply sectors (Ewusi 1987, p . 40).
