Ghana

9-706-497
REV: AUGUST 14, 2007

MICHAEL E. PORTER

Ghana: National Economic Strategy
In the decade after the Second World War, Ghana was one of Africa’s most successful economies.
The world’s largest producer of cocoa and one of the world’s largest exporters of gold, Ghana was the
showpiece of Britain’s African colonies. It had the most developed infrastructure in west Africa and
one ofthe best-educated workforces on the continent.
Ghana became the first independent country in sub-Saharan Africa in 1957 but quickly fell into
economic decline. In 1983, facing economic collapse, Ghana embarked on one of the first structural
adjustment programs in Africa and pursued economic reform for nearly two decades. Despite
substantial gains, Ghana’s gross domestic product (GDP) percapita was still just two-thirds of the
average in sub-Saharan Africa, and recent economic growth had been anemic (see Exhibit 1).
In January 2001, President John Kufuor took office in the first democratic transfer of power in
Ghana’s history. In front of a euphoric populace, Kufuor promised, in his inaugural speech, a “golden
age of business” and a zero-tolerance policy on corruption. Thechallenge was how to break the cycle
of Ghana’s poor economic performance.

Country Background
Situated between the French-speaking nations of Côte d’Ivoire, Burkina Faso, and Togo, the
coastal west African Republic of Ghana was roughly the size of Oregon at 238,537 square kilometers
(see Exhibit 2 and Appendix A). Ghana consisted mainly of low plains with a plateau in the southcentral region of thecountry. The southern coastal belt was distinguished by mangrove swamps at
the outlet of Ghana’s many rivers. The country’s largest river, the Volta, had been dammed in the
1960s to form Lake Volta, the world’s largest artificial lake. The central regions of Ghana were
endowed with thick tropical forests covering a third of the country. It was here that the greatest
quantity of Ghana’stimber, minerals, and agricultural exports were produced. The north of the
country consisted mainly of savannah with few resources.
Ghana’s climate was tropical with temperatures ranging from 72 to 95 degrees Fahrenheit. The
country experienced heavy rains from April to July and a dry season from October to March. Ghana
suffered from occasional nationwide droughts and recurrent droughts in thenorth. Many regions
had inadequate supplies of water, or water sources were polluted. Ghana’s climate was particularly
suitable for growing tropical fruit including cocoa, pineapples, bananas, and palm oil. Like many
developing countries, however, Ghana had suffered from deforestation, overgrazing, and soil________________________________________________________________________________________________________________
Professor Michael E. Porter and Research Associate Kjell Carlsson prepared this case with the assistance of Research Associate Michael
McCreless. This case was developed from published sources and interviews with observers from the public and private sectors. HBS cases are
developed solely as the basis for class discussion. Cases are not intended to serve as endorsements,sources of primary data, or illustrations of
effective or ineffective management.
Copyright © 2006, 2007 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-5457685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be
reproduced, stored in a retrievalsystem, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical,
photocopying, recording, or otherwise—without the permission of Harvard Business School.

706-497

Ghana: National Economic Strategy

erosion. The country controlled significant fish stocks in the eastern Atlantic. Ghana was rich in
mineral resources, particularly gold, diamonds, bauxite, and...