1961-Early 1966: Soviet-Style Economic Reforms Unsuccessful in Ghana; Foreign Debt Grows

Ghanaian President Kwame Nkrumah introduces his Soviet-inspired Seven-Year Plan to establish state-owned factories and public authorities. The projects are financed by foreign loans and taxes, saddling the country with debt and stifling certain sectors of the economy. Cocoa production in Ghana drops dramatically when farmers, whose income has been reduced by the government marketing board’s price controls, begin smuggling cocoa to neighboring countries or switch to other crops. As a result, Ghana ceases to be the world’s largest cocoa producer. Burdened with debt, the Ghanaian economy contracts, undermining the Nkrumah government’s popularity. The downturn brings widespread unrest which is exacerbated by criticisms that Nkrumah is focusing too much on the promotion of his vision of African-unity (see 1960-1966). [Yergin and Stanislaw, 1998; Encyclopaedia Britannica, 2004]