The Burdens of Debt

Ever since the 1966 overthrow of Ghana's President and self-styled Osagyefo (Redeemer), the late Kwame Nkrumah, his once prosperous country has borne the burden of the $1 billion in foreign debts that Nkrumah left behind. When a group of army officers under Colonel Ignatius Kutu Acheam-pong seized power last year, they decided to solve the problem by repudiating a $94 million obligation to Britain (on the grounds that it had been incurred through corruption) and by declaring an indefinite moratorium on much of the remaining debt. A few months later, Acheampong proclaimed Ghanaian control over "the commanding heights of the economy" and nationalized 55% of the country's foreign-owned gold, diamond and timber operations.

These solutions have proved ineffective. Credit in most Western countries dried up completely, and Ghana was obliged to pay cash for its vital imports. Food shortages quickly developed, and prices skyrocketed. Acheam-pong's National Redemption Council put up $23 million in subsidies to keep down the price of imported food. The plan worked well for a while, but smugglers began buying up the cheap food and peddling it in neighboring Togo in exchange for such luxury items as whisky and cigarettes that were short in Ghana.

To make matters worse, the colonels seemed determined to turn Ghana into one big boot camp by "drilling" people--forcing them to run and roll on the ground at gunpoint--for the slightest offense. A number of civil servants have found themselves drilled for reporting late to work, and one customs inspector at Accra airport suffered the same punishment for daring to check a Cabinet Minister's baggage.

Boon. The only thing that has saved Ghana from economic disaster is a steep rise in the world price of cocoa, which has doubled since the Redemption Council came to power. Since Ghana produces more than one-third of the world's cocoa and depends on it for 70% of its foreign exchange, the boon has given Acheampong a chance to try to restore Ghana's credit overseas. He is said to be ready to negotiate a rescheduling of the country's debts, but he is hoping for some very sweet terms: a ten-year moratorium and then a 50-year repayment period.

Once these negotiations are out of the way, Acheampong will have a chance to think about holding elections and returning the country to civilian rule. But all this will be out of the question, he says, "as long as there is work to be done getting Ghana back on its feet." Given the scope of the job, that may be a very long time indeed.

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