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Lessons to Learn: Ghana took the less corrupt road to development

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Lessons to Learn: Ghana took the less corrupt road to development

Like Uganda, Ghana recently discovered oil. Ghana’s stability has attracted investors and their action on corruption has seen it become a middle income country. Internet Photo. 

By Nelson Wesonga

Posted  Thursday, July 19  2012 at  01:00

In Summary

Unlike the Asian Tigers, Ghana is much more similar to Uganda, in terms of resources they have. Both were also low-income countries and have traditional kingdoms and yet, compared to Uganda, Ghana has made strides in its development and is now a lower middle income country.

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Usually, it is with the likes of East and Southeast Asia that Uganda is told to look to as models of economic development.

But little mention is made of another African country – one that just like Uganda is blessed with fertile soils and reliable rainfall enough to support its crop production.

Just like Uganda, it is rich with mineral resources, boasting copper, iron ore, gold, diamonds, bauxite, manganese, wolfram, nickel or uranium.

And just like Uganda, it has recently discovered oil.

But Ghana is in another league. Earnings from minerals sector could cater for Uganda’s entire 2012/2013 Budget – according to its government, in 2011, Ghana earned USD$5 billion from the export of minerals alone.

As Uganda’s lawmakers have so far resisted opening their books on oil, Ghana (already in commercial production with its offshore rigs) has been lauded for its transparency and ease of doing business.

Experts say although by no means graft-free, Ghana’s economic development has made leaps and bounds over Uganda in large part, by taking the less corrupt path.

A tale of two economies
Through the late 1950s and early 1960s, both were low-income countries – with Ghana’s per capita income at $262 whereas Uganda’s was $119.45.

Between 1957 and 1962, both became independent and started off with a lot of promise. But now Uganda remains a low-income country (where the average annual income is $1,005 (Shs2.5 million) or less), while Ghana has propelled itself to become a lower-middle-income country (where the average incomes range from $1,005 to $3,975 (Shs9.9 million).

The World Bank estimates Uganda’s per capita income to be $490 (Shs1.2 million) while Ghana’s is $1,190 (Shs2.9 million) per year. Ghanaians have a better quality of life, and better life expectancies (60 years, compared to 54 years for Ugandans).

Due to improvements in health service delivery, infant mortality in Ghana is 51 per 1,000 live births whereas in Uganda it is 54 per 1,000.

The World Bank adds that Ghana’s economic growth rate in 2011 was 7.7 per cent whereas Uganda’s was 6.1 per cent.

A shared past
British colonial power moved in to rule the two countries in the 1880s.

Both Uganda and Ghana also have apolitical traditional kingdoms. They both underwent coup d’états, once suspended their constitutions, banned political parties and had their economies stagnated as a result of those upheavals.

They also largely reversed the preceding regimes policies on, say, produce marketing boards, once devalued their currencies, were facing with ballooning public expenditure, and had to suffer low prices for their cash crops.

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