West Africa Review (1999)
ISSN: 1525-4488
STRUCTURAL ADJUSTMENT PROGRAMS (SAPS) IN GHANA: INTERROGATING PNDC'S IMPLEMENTATION
| West Africa Review (1999) ISSN: 1525-4488 STRUCTURAL ADJUSTMENT PROGRAMS (SAPS) IN GHANA: INTERROGATING PNDC'S IMPLEMENTATION |
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Kwame Boafo-Arthur
Ghana's “economic miracle” under the Provisional National Defense Council (PNDC) led by Flt. Lt. J. J. Rawlings has earned profuse praises in many circles. This economic turnaround is attributed to the implementation of structural adjustment policies under the auspices of international financial institutions (IFIs), especially the twin Bretton Woods institutions: the IMF and the World Bank. However, “success” in this context must be thought of in relative terms. For sure, there have been an appreciable upswing in macroeconomic indicators on vital indices such as annual growth rate, reduction of the level of inflation, and an improvement in services (Government of Ghana, 1987; World Bank, 1993). At the same time, the impact of the adjustment programs on the general populace has been found to be negative especially with regard to employment generation and the wellbeing of the people (Jonah, 1989; Panford, 1997). In this context, I take success to imply the successful implementation of IMF/World Bank structural adjustment programs without any serious political backlash on the regime as it happened to the Second Republican government of K.A. Busia in 1972.
Until the advent of Rawlings on the Ghanaian political scene, for the second time, and his paradigmatic U-turn to the IMF for financial assistance (after initial socialist posturing), past Ghanaian leaders had supped with the IMF and the World Bank with long spoons. In fact, any interactions with such institutions had been used as a pretext for military intervention as in 1972, or provided opposition elements with the ammunition to foment trouble, as happened during the Third Republic 1979-81. Interestingly, today Rawlings continues to work closely with the IMF/World Bank even after metamorphosing into a civilian head of state, with no internal opposition to the relationship.
One could argue that Rawlings's successful implementation of IMF programs has in actual fact demystified the dreaded institutions and their equally dreaded packages of economic reform measures. Hitherto, previous regimes had gone to, or contemplated going to the institutions with trepidation not only because of the stringent conditionalities attached to IMF loans but also the serious political backlash such conditionalities unleash. Therefore, classical IMF conditionalities which include devaluation of the national currency, liberalization of trade and exchange controls, withdrawal of subsidies, retrenchment of labor, and reduction in government expenditure, had traditionally been viewed in Ghanaian politics as politically ruinous and a veritable recipe for military intervention. What then accounts for the successful implementation of such programs under the PNDC? Why did Rawlings succeed in imposing the draconian IMF/World Bank economic reform measures while his predecessors failed?
Our contention is that Rawlings's statecraft, which embodied “machiavellian” and neo-corporate tactics, stifled opposition to his military government, and to the adjustment programs put in place. Such hard-nosed tactics were coupled with conscious efforts at building a solid political base that has proved strong enough to withstand both domestic and external pressures. The donor community equally found in Rawlings the tough mindedness that, in their thinking, was the most appropriate prerequisite, in the 1980's, for the pursuit of such tough economic policies in Africa. Consequently, Rawlings became a convenient bridgehead through whom the long-term efficacy of adjustment policies in Africa was experimented. It is important to point out that through that Rawlings has become a direct beneficiary of structural adjustment at the expense of the people whose socioeconomic conditions continue to deteriorate.
My objective is a critical interrogation of SAPs implementation in Ghana, as well as the Fund's and the Bank's support either by omission or commission, for antidemocratic regimes before the introduction of political conditionalities as component part of donor assistance to developing economies. In the first part of this paper, I discuss Ghana's interactions with the IMF since the First Republic under the leadership of Dr. Kwame Nkrumah. For clarity, the section is divided into four subsections to reflect the governments and regimes that dealt with the IMF and how such interactions affected their political fortunes. The second part examines the Rawlings's phenomenon with reference to his form of statecraft and how this ensured the successful imposition of adjustment programs.
In May 1965, less than a year before the overthrow of the government of the Convention Peoples' Party (CPP) led by Dr. Kwame Nkrumah, Ghana made her first approach to the IMF for financial assistance. Later in the same year, assistance from the World Bank was also sought. The two institutions sent missions to Ghana, and officials prescribed non-inflationary borrowing and drastically reduced government spending to levels that could be covered by government revenues. The Nkrumah government found these stipulations unacceptable. Acceptance would have amounted to a cap on the expansionist development programs that had become a distinctive trademark of the CPP. Although Nkrumah has been much criticized for it, his expansionist programs that included diversification of the Ghanaian economy through import substituting industrialization (ISI) were in line with the tenets of the modernization theory propounded by W. W. Rostow and his adherents. 1
According to Rimmer (1992: 120), Nkrumah's rejection of the institutions' pressures “shook foreign confidence in the Ghanaian economy.” This was unfortunate because Ghana under Nkrumah's leadership achieved a lot in developmental terms given available resources. At a time of declining cocoa prices, the sole foreign exchange earner for Ghana, he needed support to keep on with his development programs. With the trim resources provided by cocoa he had raised the levels of medical and educational facilities; improved the road and rail network; constructed Tema harbor and the township together with related industrial facilities; and built the Akosombo dam (Frimpong-Ansah 1991). These development projects coupled with his financial commitments in the struggle against colonialism naturally led to broad financial expenses. A strict financial discipline as called for by the two institutions, Nkrumah and the CPP leadership might have thought, would not only have affected the momentum of the economic development strategy but could have equally scuttled it. Moreover, accepting such conditions for financial assistance would have meant compromising his transformation of Ghana's economy. It would seem to appear, therefore, that Nkrumah's rejection of IMF package was influenced much more by political dictates than economic prudence.
Even though Nkrumah's overthrow on February 24, 1966 by the military was not the direct outcome of his abortive dealings with the IMF, it was clear that Nkrumah was not the darling of the West and her financial institutions. He could not have been because of Nkrumah's anti-imperialist attacks and crusades, immense stature in Third World politics, and pragmatic and independent leanings at a time of intense cold war rivalry between the East and the West. In effect, though Nkrumah was dictatorial 2 and should have won the admiration of the Bank, his economic philosophy rooted as it was in centralized state planning was at odds with that of the financial institutions. Thus dictatorship, by itself, was not enough. In the politics of the period, it seemed that the dictatorial government must equally have the nerve to implement draconian adjustment measures.
What seems to have most disturbed the United States of America, leading voice in the decisions of the IMF and World Bank, was the purveying of an ideology of neutrality by the newly independent states in Africa, with Nkrumah as the unofficial spokesman, in the contest for global hegemony between communism and capitalism. In the view of the U.S., “to opt for neutrality (as many did) in the struggle between good and evil was naive and immoral” (Beckman, 1984: 228). Since the American CIA is alleged to have had a hand in the overthrow of Nkrumah (Stockwell, 1978; Seymour, 1980), it is difficult to speculate whether if he had accepted IMF conditionalities the plot for his overthrow would have been suspended.
The NLC that was formed after the ouster of Nkrumah had cordial relations with the IMF. The NLC had by May 1966, barely three months after the overthrow of Nkrumah, satisfied the Fund's conditions sufficiently enough to acquire a standby credit. The regime was also able to persuade Western creditors to accept a moratorium on debt servicing until a meeting to be sponsored by the IMF in December of the same year. In December 1966, representatives of the NLC met the Paris Club of Western governments. 3 An agreement was reached on a broad outline of debt rescheduling. Consequently, eighty percent of Ghana's debt, falling due between June 1966 and December 1968, was deferred to 1971-79. In October 1968, a second rescheduling agreement led to the deferment to 1974-81 of eighty percent of the debts which were to be paid in January 1969 and June 1972. The rescheduled debts had a grant element of twenty-five percent (Rimmer, 1992).
The point to be noted is that both the civilian government of Dr. Nkrumah and the military government of the NLC had cause to approach the IMF/World Bank. While the Nkrumah government rejected IMF conditionalities and thereby forfeited the institutions' support, the NLC military government was able to reach an agreement with the IMF and this paved way for a spate of debt rescheduling with Western creditor nations. The reason for this was the high level of credibility the NLC had in the West. The question to be asked is; how did the NLC military regime earn that credibility within that short period of time? It appears then that a regime, irrespective of its orientation earns credibility once it agrees to do the bidding of the Fund and the Bank. This means that the two financial institutions are unconcerned with issues of democracy. By the adoption of this position the Bretton Woods institutions have been condoning and conniving with repressive regimes all over the world. It becomes clear therefore that their yardstick has nothing to do with the long-term interest of the people. Whether it is a Yoweri Museveni, Daniel Arap Moi or Rawlings, all a regime has to demonstrate to earn credibility is the ability to push through anti- democratic, anti-labor and other anti-people policies. Between 1966 and 1968, IMF adjustment program in Ghana under the NLC focused on the following standard instruments:
It is difficult to conjecture whether the NLC would have been able to contain future pressures for deeper adjustments as Ghanaians witnessed under the PNDC if it had not handed over power as it had promised at the time of the coup. Already, as events were to show, there appeared to be a split within the army which led to the abortive coup of 1967 and the capture and murder of General E. K. Kotoka who was the prime architect of the 1966 coup.
In 1969 the NLC returned to the barracks after organizing national elections won by the Progress Party (PP) led by Dr. K. A. Busia. The Busia government came to represent an administration with impeccable liberal credentials, and proved to all that it was more than prepared to have fruitful relations with the IMF/World Bank. Unfortunately, it turned out to be the only national government whose implementation of IMF policies was used by the military as a pretext to overthrow it. Given its liberal orientation, recourse to the IMF and Western donors did not appear problematic, especially since J. H. Mensah who as NLC Finance Minister reached an agreement with the IMF, and also emerged as the Finance Minister of the PP government. To a large extent, the NLC was not accountable to the people because it was a military regime. On the other hand, the PP government having won the national election of 1969 was accountable to the electorate. The Busia government had to choose between “growth oriented policies and continuation with a policy of deflation” (Hutchful, 1985: 125). The government opted for the former even though the financial means to carry out expansive policies were not readily available. The government's position was contained in the 1971-1972 budget statement of the Finance Minister. He noted:
In the face of unfavorable trends that are forecast for tax revenues and the balance of payments, should the government cut back on development and even undertake measures of retrenchment in its operations? Or should government through its budget seek to support, maintain and perhaps increase momentum towards accelerated development, which had begun to show in the economy? The decision of our government is that it is necessary and possible to maintain expansion. This decision is based in part on our general policy that after many years of economic stagnation, the government should not, even in the face of considerable difficulties, take any action which would kill the trend towards economic expansion that has begun to emerge in Ghana in the past two years. We have many years of neglect to make up (Quoted in Frimpong- Ansah, 1991:103).
Opting for economic expansion amounted to a reversal of the economic stabilization measures of the NLC. The PP government therefore “appeared to have regarded most of the stabilization efforts of the NLC as having had an excessively contractionary effect on the economy, which it was necessary to reverse” (Frimpong-Ansah, 1991: 103). Despite his liberal credentials and several trips to Western capitals Busia failed to get ready Western support for his economic policies short of going to the IMF. Busia's failure could be attributed to the policy stance of the government. The adoption of expansionist policies as outlined in the 1971/72 budget implied government spending which run counter to the broad agreement the NLC had reached with the IMF and the Paris Club.
Negotiations with the IMF and the World Bank were protracted because of lack of consensus. Meetings between Ghana and Ghana's Consultative Group of aid giving donor countries chaired by the World Bank were held in July and December 1970 in London and Accra respectively. At both meetings, the consultative group was highly critical of the government's growth-oriented policies which Busia's government deemed crucial to the revitalization of the economy. The main obstacle to an agreement was the Finance Minister's refusal to succumb to policy measures advocated by the consultative group and the IMF/World Bank. Frustrated with the intransigence of his Finance Minister the Prime Minister split the Ministry of Finance and Economic Planning into two. Busia himself took control of the planning portfolio and left the Ministry of Finance under Mensah. The planning portfolio came under the direct control of a team of Harvard Development Advisory Service (DAS) economists who worked for the World Bank. In effect, the members of DAS were the imported technocrats mandated to oversee the World Bank programs.
The main assignment of DAS was to provide technical data and internal documentation that the Bank needed to make presentations to the Paris Club and other donors for development assistance and debt concessions. For sure, the DAS group and the Bank were synonymous. Peter Reiter, the World Bank's Resident Representative in Ghana noted: “If the Harvard people had been Bank people, they could not have done differently. They were like the Bank. They could observe things in much the same objective way as the Bank. They looked at things from the same vantage point as the Bank” (Quoted in Libby, 1976: 69). Two main differences between the Bank/DAS and Mensah emerged at the meetings. The Bank insisted on two distinct policy measures. It pressured Ghana to make one hundred percent payments of outstanding debt with interest due to private foreign business in order to restore creditors' confidence in Ghana's economy. Second, it urged that either devaluation or higher import surcharges should be implemented in order to restrict imports within the confines of Ghana's foreign exchange reserves (Libby, 1976). Mensah favored higher surcharges in the future but was strongly opposed to devaluation because of its political implications. Consequently, therewas a deadlock and the 1970 meetings with the Bank and the Consultative Group ended without any appreciable aid contributions and debt concessions from the donors.
The Prime Minister broke the deadlock by indicating his preparedness to accept the World Bank and major creditors' policy recommendations without consulting his Finance Minister. Busia's commitment led to the resumption of bilateral negotiations with Britain which held “approximately 25 percent of Ghana's medium-term or suppliers credits (contracted during the Nkrumah regime)” (Libby, 1976:74). Britain under the Conservative Party insisted on an agreement with the IMF as a condition for any assistance. This position was reiterated on November 12, 1971 when Busia had meetings in London with British officials including the Prime Minister Edward Heath. The irony is that Busia, whose political orientation was liberal, was forced into a conservative mold by the conservative government of Prime Minister Heath. Mensah continued to oppose any imposition of comprehensive IMF conditionalities because of its potential effect on government development policies, and by implication, on the socioeconomic wellbeing of the people. A corollary to this was the fear also that the government had very little political capital 4 to embark on World Bank policies that were clearly anti-people. Eventually, the Finance Minister had to succumb because he was the lone voice. More significantly, the Prime Minister had become completely dependent on external advisors, especially the members of DAS and World Bank officials (Chazan, 1983:161).
On December 27, 1971 after agreement with the IMF was signed the Prime Minister announced the IMF packages including the devaluation of the cedi. Immediately, prices of basic items like sugar, rice, and milk shot up. Seventeen days later, on January 13, 1972 the government was overthrown by the military. The coup makers led by then Colonel Ignatius Acheampong capitalized on the general dissatisfaction of Ghanaians after the implementation of IMF policies.
Busia's government paid the ultimate political price after the implementation of IMF policies. The imposition of IMF conditionalities heightened incipient discontent that was used as a pretext by the armed forces to overthrow the PP government. Even though Col. Acheampong had openly admitted that the coup was planned as far back as 1970 (Libby, 1976; Oquaye, 1980), it was arguably the general citizen resentment to the implementation of the IMF policies that assured the soldiers of citizen support for the coup. In other words, what was needed was an impeccable reason for the intervention. The IMF inspired massive devaluation of the cedi by 48.6 percent in December 1971 and the corresponding increase in the prices of various consumer items provided the awaited opportunity for the coup. 5
The NRC under Acheampong accused Dr. Busia of “permitting excessive international influence and of failure to take more radical action to suspend payment on the much publicized external debt” (Frimpong-Ansah, 1971:108). Acheampong therefore adopted measures aimed at legitimizing his illegal seizure of political power. Consequently, the NRC reversed the devaluation and on February 7, 1972 the cedi was revalued upward by 21.4 percent. This was followed by the unilateral repudiation of all external debts incurred as a result of fraudulent contracts. This amounted to $94.4 million. 6 Acheampong's approach antagonized donors and this foreclosed any possibility of his regime receiving concessional and long-term bilateral capital inflows. To counteract this, Acheampong adopted a policy of self-reliance and intensified the mobilization of domestic resources for national development. He was highly successful in this regard, especially during the first three years of his administration. He seized 55 percent of equity shares in foreign mining and timber businesses, 50 percent shares in the breweries, and 40 percent shares in foreign owned banking and insurance companies (Boafo-Arthur, 1989:148). The regime also ideologically mobilized Ghanaians to believe in themselves and launched the twin programs of Operation Feed Yourself (OFY) and Operation Feed Your Industries (OFI) under the catchy slogan of “grow what you eat and eat what you grow.” This compelled many bureaucrats to embark on backyard gardening and other farming ventures. Until his overthrow through a palace coup in 1978, Acheampong resisted IMF/World Bank pressures.
Unlike Acheampong, the Supreme Military Council (SMC II) headed by General Fred Akuffo succumbed to IMF pressures and introduced structural adjustment programs. The stabilization measures taken include: a) The devaluation of the cedi by 58 percent against the U.S. dollar, b) Reduction of the overall planned budgetary deficit from 1.5 billion cedis to 500 million cedis, c) Increase in cocoa price from 40 cedis to 80 cedis per load, and d) a demonetization exercise to mop up excess liquidity in the economy. This was supported by the IMF with Special Drawing Rights (SDR) of 53 million in January 1979 (Hutchful, 1985). The coup on June 4, 1979 that brought Rawlings and the Armed Forces Revolutionary Council (AFRC) to power effectively terminated the structural adjustment program initiated by General Fred Akuffo. The AFRC handed over power after general elections to Dr. Hilla Limann on September 24, 1979.
The Peoples' National Party (PNP) administration headed by President Limann was involved in fitful and unsuccessful negotiations with the IMF over a new adjustment program. Owing to widespread opposition to IMF conditionalities 7 and Limann's own fear of a possible political backlash, his government could not reach any agreement with the Fund until his overthrow by Flt. Lt. Rawlings on December 31 1981. Thus Rawlings's predecessors either went to the IMF and lost political power, or for fear of losing power refused to accept IMF conditionalities but ended losing power all the same. What major factors then underpinned Rawlings's successful implementation of IMF/World Bank structural adjustment policies during the time of the PNDC?
Various authors link the sustainability of structural adjustment programs (SAPs) in Ghana to the authoritarian political climate created by the PNDC. Peoples' role in government, as Peter Nyong'o (1987) indicates, have diminished over the years in Africa as a result of “political immobilization” or repression. Many governments therefore take undue advantages to pursue both economic and political policies that are anti-people. The contention has also been that “effective adjustment in practice has required a strong, determined and a relatively autonomous state, whether democratic or not” (Nelson, 1990: 9-10). Ghana under the PNDC is a case in point (Callaghy, 1990).
In view of the initial populist outbursts which engendered considerable alienation among middle, professional, mercantile and managerial classes (Ahiakpor, 1985; Gyimah-Boadi, 1990), the PNDC “relied on an array of non-democratic and authoritarian political practices in combination with neo-corporatist arrangements to gird its rule” (Gyimah-Boadi, 1990:333). It must be stressed that paternalistic political practices helped not only in stifling opposition but also facilitated the pursuit of draconian and politically unpopular economic program. The PNDC's authoritarian and non-democratic political measures have been summarized by Gyimah-Boadi (1990: 333-334) as follows:
i) The lack of public participation in the making of important national decisions such as the ERP/SAP, education and local government reforms. The PNDC also adopted undefined appointment and termination procedures in the top levels of government and the public service. It depended on 'hidden advisers' with undefined roles and titles giving the appearance of a 'palace' regime doing ‘palace' politics and giving lip service to participation while actual public involvement is severely circumscribed;
(ii) An idiosyncratic political style and an accompanying disregard for due process seen in the head of state's occasional revocations of the rulings of tribunals and courts and his demands for retrials; frequent suspensions, interdictions and outright dismissal of public servants over the radio without giving such officials any chance to defend their records publicly; the use of retroactive decrees to secure tribunal convictions and to back government actions; the use of the state's investigative apparatus such as the National Investigations Committee (NIC) to harass and embarrass individuals who oppose the government or its policies; the introduction of nebulous crime categories such as 'acts with intention to sabotage the economy' and 'economic intelligence gathering', as well as new and bizarre varieties of punishment such as 'de- citizenisation' and 'de-naturalization'. Indeed, the very existence of the public tribunals, in which prosecution and judgeship appear to be fused, and the proliferation of adjudication bodies, some of which run their own cells, stand as poignant pointers to the erosion of civil liberties;
(iii) ubiquity of security apparatus and personnel, reflected in the proliferation of paramilitary and security organizations such as the Civil Defense Organization (CDO), Peoples Militia, Commandos, and the Bureau of National Investigation (BNI), and an assortment of 'outlaw' police and military figures such as Warrant Officers Salifu Amankwa, Nkwantabisa and Jack, who have their own troops and who act as 'musclemen', 'enforcers' and 'vigilantes' at large;
(iv) A pattern of political violence which has resulted in the state of affairs now prevailing in Ghana, aptly described as 'the culture of silence', execution by firing squad of subversive elements, usually after kangaroo trials; repression and intimidation of political opponents (real and imagined) through verbal lynching and name-calling in the state-controlled media; arrest and detention for long periods of leaders of organizations which have expressed opposition to government policies. A manifestation of this 'culture of silence' is the total absence of any public expression of opposition to PNDC policies or actions. It is instructive to note that ... a traditionally controversial matter such as the annual budget has not attracted any public criticism. Through intimidation and fear, the PNDC has managed to depoliticize many political issues in Ghana;
(vi) 'diversionary politics' in which the PNDC persists with its revolutionary and leftist posturing and its appropriation of revolutionary symbols, especially in foreign policy pronouncements, while it simultaneously pursues conventional/orthodox economic policies. The PNDC engages in the rhetoric of people's power and 'participatory democracy' as top-down decisions are made.
Hutchful (1997:257-258) also notes that several new organs that were created “acquired a reputation for terrorizing civilians.” These included the Forces Reserve Battalion, the Civil Defense Organization and the Mobisquads. These were successful in “detecting and diffusing plots against the regime, especially by being articulated with a network of CDRs [Committees for the Defense of the Revolution].” According to Hutchful “other strategies included the manipulation of ethnic divisions within the military, the increased reliance on Ewe officers and troops, and the rapid rotation of key commands and postings.” Hutchful's findings buttress Adu Boahen's (1992:50) criticism of the then chairman Rawlings and his PNDC for fanning ethnicity or tribalism “wittingly or unwittingly, consciously or unconsciously.”
In addition, neo-corporatist arrangements that witnessed the strengthening of organizations like the 31st December Women's Movement under the leadership of Mrs. Rawlings, and the Ghana Private Road Transport Union (GPRTU) were put in place. While the former specializes in the mobilization of women, the latter being under the umbrage of the Trades Union Congress (TUC) succeeded in charting an autonomous course any time there was government-labor confrontations. Also, the creation of the Tripartite Committee comprising representatives of the government, the Employers Association and workers organization succeeded in containing potentially explosive labor agitation for improvement in worker remuneration.
To counteract anticipated labor backlash due to anti-labor policies inherent in adjustment programs, the PNDC adopted 'divisive tactics' to polarize the labor front. Workers Defence Committees (WDCs), later renamed CDRs, emerged as a direct response to a call by the chairman of the PNDC on January 5, 1982. The CDRs were effectively used to divide the ranks of workers and thereby prevented collective labor action against the government. The CDRS seemed to have operated to supplant instead of complementing the labor unions as instruments of worker's power (Ninsin, 1989 and 1991). The TUC appeared to have earlier on been fragmented by government instigated internal power struggle that led to the formation of the Association of Local Unions (ALU) (Ninsin, 1987; Graham, 1989). This militant group attacked the TUC leadership for corruption and other vices and succeeded in replacing the old TUC leadership with an interim management committee (Ninsin, 1987). Thus, indirectly a power base was built through the politics of neo-corporatist arrangement that bordered on divide-and-rule. Naturally, those instigated to cause divisions stood to gain from that by virtue of getting new positions of authority. Their support for the regime could therefore not be questioned.
Strong-arm tactics such as the deployment of armed personnel against workers (for instance, as it happened in the case of workers of Assene Household Enamelware Limited), and the outright dismissal of the leaders of striking workers (e.g. State Gold Mining Corporation at Dunkwa mines) were also adopted. Still bent on weakening the labor front, workers of Customs, Excise and Preventive Service (CEPS) were weaned from the Public Service Workers Union and de-unionized by turning it into a security agency of the government (Ninsin, 1991). As a security agency, it came directly under the control of the Armed Forces and the Commander-in-Chief Flt. Lt. Rawlings. It is worthy of note that governmental hard line attitude toward labor began after the “honeymoon” period of close collaboration with labor between 1982-83. The strong anti-labor stance and policies on wages, employment and prices were adopted in line with the implementation of adjustment policies. The assault on labor was therefore to check anticipated protest by labor due to the negative impact of the program on workers and other vulnerable groups.
There were also various kinds of political intimidation of unprecedented dimensions. In 1988, Adu Boahen noted during the J.B. Danquah Memorial Lectures that Ghanaians did not protest or stage riots not out of trust for the PNDC but because of fear of being detained, liquidated or dragged before vetting and investigating committees. This fear as depicted by Adu Boahen ushered in the proverbial 'culture of silence' in Ghanaian politics. E. A. Haizel, the then Executive Secretary of the National Commission for Democracy underlined the negative implication of this phenomenon. He noted: “The culture of silence has so trapped the people that there is now a lot of murmuring and passivism around instead of a positive declaration of opinion” (Cited in Boahen, 1992: 52). The fact is that nobody wanted to openly criticize the PNDC knowing how the government treated political opponents. 8
The measures adopted by the PNDC in the wake of the implementation of adjustment policies seem to have fallen directly in line with the position and thinking of high level operatives of the Bretton Woods institutions. Deepak Lal, a World Bank economist once noted that “courageous, ruthless and perhaps undemocratic government is required to ride roughshod over the newly created interest groups” (Quoted in Olukoshi, 1992). Lal's position (which appeared to have the unofficial support of the World Bank/IMF during the period) would seem to support the notion that a ruthless government, whether military or civilian, will secure the political preconditions needed for economic development through adjustment policies. It seemed also to be the view of the late dictator Ferdinand Marcos of the Philippine. Marcos declared martial law to create “a conducive political climate” for the implementation of World Bank programs in Philippines to integrate the country into the global economy being created by the World Bank. He noted: “Only an authoritarian system will be able to carry forth the mass consent and to exercise the authority necessary to implement new values, measures, and sacrifices” (cited in Bello, Kinley and Elinson 1982: 26). One may ask for the sort of values Marcos had in mind. One is tempted therefore to state that Marcos was after such values, measures, and sacrifices that would work to his advantage and that of international finance capital. Marcos's position may not necessarily be wholly true because his constitutional term of office was about to expire and he seemed to have imposed martial law to stay in power. Nonetheless, it is arguable, as in the Ghanaian case when Col. Acheampong staged his coup d'etat in 1972, that the introduction of austere IMF/Bank measures, have in some cases, provided the raison d'etre for military interventions, the enhancement of dictatorial powers, and the imposition of martial law. 9
Some of the reasons for the World Bank and IMF support for dictatorial Third World leaders from the mid-1970s were summarized by Vincente Paterno, Chief of the Board of Investments in the Philippines during the time of Marcos. In his view, measures favoring foreign investments (martial law in the Philippines and military dictatorship under the PNDC were “steps that would have been difficult to accomplish prior to the proclamation of martial law and would certainly have consumed many months, and probably years to debate.” The absence of martial law might have imposed severe constraints on the implementation of adjustment. Government agencies might have faced attacks from any of several fronts. According to Paterno, these include “denunciation in the press or in the halls of Congress, injunction from taking action that may be issued by some courts, investigation of one sort or another, or, in some cases, reduction of the agencies' operating budget appropriations.” (cited in Bello, Kinley and Elinson 1982: 30). Martial law in essence ensured that “many of these risks are eliminated” (Bello, Kinley and Elinson 1982: 30). Since democratic institutions were deemed risky instruments of governance, martial law or dictatorial decrees as under the PNDC had to be imposed to ensure safe and uninterrupted experimentation. IMF adjustment prescriptions before the 1990s, whether in the Philippines under Marcos or in Ghana under Rawlings's PNDC was, to a large extent, propelled by governmental ruthlessness.
In Ghana, ruthlessness had already been exhibited when the Armed Forces Revolutionary Council (AFRC) also under the chairmanship of Rawlings, killed by firing squad eight army officers three of whom were former Heads of State. There was no proper trial for those executed by firing squad. The fear depicted by Adu Boahen and the imagery of Deepak Lal's ruthlessness fitted the world-view of Rawlings during the PNDC era. And he acted as such, with very rewarding results, in the process of power consolidation and political legitimization. The abduction and murder of three High Court judges (including a nursing mother), and a retired army officer who was also the Managing Director of the Ghana Industrial Holding Corporation (GIHOC), on June 30 1982, were meant to put fear in the people. This heinous act, during the time of the PNDC, conjured the same imagery of ruthlessness as depicted by Marcos' martial law in the Philippines, Mobutu Sese Seko's arbitrariness for over three decades in the former Zaire, and the repressive rule of President Suharto of Indonesia. These were rulers who were ready to do anything to instill fear in their people and thereby maintain their hold on power.
Societal conflicts were resolved by the PNDC “through a mixture of peaceful negotiation, compromises and violence”(Boahen, 1997:127). The ERP/SAP itself was the baby of initial secret consultations and negotiations between September 1982 and the beginning of 1983. By the time SAP was made public the psyche of most Ghanaians had been frayed and traumatized by the unprecedented ruthlessness of the regime. This ruthlessness conforms to the kind of statecraft embedded in some elements of realist politics that borders on irrationalism or aggressiveness for its own sake. 10 First, the people had to be subdued through oppression in the name of statecraft before the introduction of adjustment. Second, the momentum of intimidation had to be maintained to put potential opponents of SAP in check after its introduction. 11
Rawlings, as chairman of the PNDC, was keen on ensuring societal tensions that could amount to anarchy. There was the need, he had said publicly, for the “democratization of violence.” He rationalized that if you have the gun you have power. Hence oppression through the use of the gun became a permanent feature of statecraft under the PNDC. This explains why many quasi-military organizations including the CDOs and the militia emerged. The Forces Reserve Battalion popularly called the Commandos is a de facto Presidential Guard. The protection and security of the Chairman/President has been its major job. In the social and political realms, however, Rawlings's ideology of the democratization of violence and the quasi-military organs it gave birth to completely muzzled both active and nascent opposition. It is not surprising therefore that, just like the Philippines, the military became the linchpin of the political power structure ably supported by civilian technocrats and cronies of the leadership of the PNDC. As Alfred Stepan (1990:43) has pointed out:
Like the core supporters, the military and security officials who wield the regime's coercive power will tend strongly to identify the interests of their organizations with those of the regime. This group may even conclude that considerations of national security positively require that the armed forces run the government. Faced with a strong regime enjoying the allegiance of these two formidable groups, the third group-the passive supporters will submit to authoritarian hegemony. They will remain quiescent and pliable, even to the point of participating in the institutions that serve as the regime's indirect, non-coercive bulwarks.
The oppression and arbitrary rule seemed to have suited the IMF and World Bank in the 1980s and at the same time silenced most Ghanaians, were backed by draconian decrees. The existence of obnoxious laws such as the Preventive Custody Law, 1982 (PNDCL 4) under which any person could be arrested and detained “in the interest of national security;” 12 PNDC Law 91 (limited the application of habeas corpus); and PNDC Law 78 prescribed death by firing squad to political offenders. The independent media was crippled with the introduction of the Newspaper Licensing Law 1989 (PNDCL 211). Even before the law was passed, the government had closed down the Free Press and the Catholic Standard which were very critical of government policies. These laws effectively complemented the physical mechanisms of intimidation, and cowed Ghanaians and rendered opposition to the PNDC regime too risky. These laws restricted “opposition politics to the highly intrepid or the occasional mad person” (Gyimah-Boadi, 1991:38).
The military too was ready at the beck and call of the regime. The politicization of the armed forces appeared to have made most members forget their apolitical nature. Any form of opposition to the PNDC was equated to a challenge to the power and authority of the armed forces. This politicization most probably explains why on the eve of the transformation process to democracy the army commander Brigadier Akafia warned Ghanaians that “any provocation and temptations of the PNDC are provocation and temptations of the Armed Forces” (Cited in Boafo-Arthur, 1991: 47). The army commander was stating the obvious because the PNDC was the army and the army was the PNDC. 13
Ghanaians were conquered through a combination of a complex web of courageous ambition, neocorporatism, intimidation, and force of arms. It must be stressed that “all conquests call for ruthless methods” (Doyle 1997:96). 14 In my view, it does not matter whether the conquests take the form of the enslavement of Africans in historic times or the ongoing mental enslavement, cultural subjugation, and economic marginalization. In the Ghanaian situation, it also did not matter whether the conquest took the form of induced fear through the demonstration effect of military excesses in 1979 and during the PNDC era. Again, it did not matter whether conquest was attained through the conscious creation of what I term “a domestic dependency syndrome” whereby if you did not support the PNDC you stood the risk of losing everything. 15
Simply, autocracy and intolerance became distinctive features of the PNDC administration. Consequently, political differences were conceptualized as subversion and all forms of expressed opposition to either economic or political policies were conceived as challenges to governmental power that had to be crushed. Rawlings, according to a former World Bank official Matthew Martins (1991: 242), was “prepared to be ruthless when he believed it was necessary, by detaining trade unionists, academics or students or overruling or sacking anti-IMF politicians or officials.” A Professor of Political Science of the Hebrew University of Jerusalem and a member of the
Israeli Knesset Naomi Chazan (1991:22) has had cause to comment on Rawlings mode of governance. She notes that the exercise of power by Rawlings during the PNDC era followed “familiar patterns of officially sanctioned repression, intolerance and exclusion” while methods of political control adopted were “all of a strongly authoritarian sort.” Decision-making was centralized, consultation was abandoned, and hidden advisers became the norm with exponential intrigues at the Castle (the seat of government). In addition, the security apparatus was used with careless abandon and violent techniques such as torture and summary execution were used to suppress any sign of opposition. Chazan again notes that the PNDC never faulted in the utilization of coercive methods and in its capriciousness with wanton violation of human rights and curtailment of basic freedom. Jeff Haynes (1991: 413) thus points to the contradictions involved in Rawlings's “seizure of power for the ‘people' and his arbitrary rule, imprisonment and sometimes torture of the same people for expressing contrary opinion.”
The implementation of adjustment was successful, among other reasons, because of the so- called populist mobilization, which in reality was a mixture of voluntary commitment and compulsion (Gyimah-Boadi, 1990). These methods became the norm, especially when the regime lost its originally strong urban support on account of anti-labor and anti-urban policies subsumed in adjustment policies. Nonetheless, the adoption of populist slogans based on claims of participatory democracy and autonomy, probity and accountability, continued to galvanize some form of support for the program.
J.A. Frimpong-Ansah (1991:153-154), a former governor of the Bank of Ghana also identified other factors that helped in sustaining adjustment. These include the lack of effective and well organized opposition as a result of the fact that the radical groups traditionally opposed to any form of relationship with the Bretton Woods institutions were those compelled by circumstances to implement adjustment policies. He mentions also the PNDC's demonstration of greater political will and commitment to its programs than previous governments.
On the issue of the acquiescence of the radical groups to the dictates of IMF/WB programs, it must be noted that the PNDC government had to purge itself of the ultra-leftists who were brazenly opposed to any form of relationship with IFIs. This was after an abortive trip to Eastern Europe and Cuba to solicit economic and financial support (Hansen, 1987). And, perhaps, in fairness to previous regimes, one need to recall that the terms of office of the governments of the second and third republics were both cut short after twenty-seven months each in office. Thus, it is difficult to assess, whether for instance, the implementation of IMF sponsored program during the Second Republic would have yielded fruits.
Added to the foregoing factors was the emergence in the course of time, of revolutionary administrators who became the new ‘technocratic staff' just as in the Philippines. This technocratic staff worked in close collaboration with foreign consultants and aid officials who were always in the ministries. For instance, the World Bank had over forty missions to Ghana in 1987 alone (Riddel, 1992). Thus the IMF and the Bank could not have been oblivious to the various extra-legal measures put in motion by the PNDC. The institutions simply turned a blind eye to the regime's excesses for the sake of the program. One may therefore be tempted to ask: If the IMF/Bank was not tacitly in favor of the illiberal political climate for the sake of adjustment programs at that time, why did the institutions continue to prop the regime with steady inflows of loans? Why was there not a single condemnation by the IMF/Bank of the regime's intimidatory tactics, disregard for due process, etc.? Why did the institutions fail to officially “threaten” the regime with the suspension of aid as a means of enforcing respect for the fundamental rights of Ghanaians?
To be sure, until the early 1990s and the adoption of political conditionalities as necessary components of governance (World Bank, 1989), it appears the institutions did not deem it necessary to penalize a dictatorial regime that was cooperating in the implementation of their policies. It seemed that what mattered to them were the creation of the anticipated political and economic conditions deemed conducive for the unchallenged implementation of IMF/Bank sponsored policies. The visible presence of donor representatives in an era of unprecedented dictatorship and subjugation of Ghanaians would seem to suggest that the IFI's were covertly in agreement with the various extra-judicial measures taken to ensure Ghanaian acceptance of the harsh economic policies.
It is very clear from the foregoing that the sustainability of structural adjustment in Ghana could, to a large extent, be attributed to the undemocratic nature of the erstwhile PNDC. Its ruthless mode of governance was markedly different from the practices of earlier regimes. Alternatively, it could be argued also that the impressive outcome of the policies (Anyemedu, 1993: Rothchild, 1991; Toye, 1991) probably emboldened the PNDC to continue with the adjustment programs with the hope of an eventual economic break-through. Although Rawlings himself had cause to doubt the acclaimed success of the policies (African Business, 1990), no changes in the mode of implementation took place probably because of anticipation in the long run for very positive impact.
The fact that the PNDC had its own way for over a decade could not insulate it from the global geo-political and economic changes that followed the crumbling of the Communist bloc. It must be reiterated that before the unanticipated collapse of the Communist bloc, domestic pressures were steadily mounting for democratic changes in the country. However, global political changes and its impact on various democratic processes in Africa seem to have revitalized the enfeebled and battered associational groups which had been clamoring for liberal democratic governance ever since the PNDC sacked the democratically elected government of Limann. Efforts before then were largely unsuccessful.
Apart from the undemocratic tactics of the PNDC, the IFI's also gave maximum support to the regime. Rawlings's style of governance, his tough-mindedness, human rights abuses, clamp down on the basic freedoms of Ghanaians, were in consonance with the prevailing IMF/World Bank thinking on how best a leader could implement adjustment policies. In certain instances, the Fund bent its rigid rules on program application just to ensure the political survival of Rawlings (Martin, 1991). The initial success might have also strengthened the resolve of the donors to make a success out of Rawlings. This was to demonstrate the efficacy of their new thinking on how best to develop a tottering economy through structural adjustment. The Fund and the Bank dared not fail. Jaycox the Vice President of the Bank for Africa notes:
If they (World Bank) fail in a series of countries ... then it is a failure of our approach to the economy, a failure of our institution, a failure of our political will, and there is no way that we'll be able to say that it is just a failure of Africa” (Quoted in Callaghy, 1989).
Thus, to the Bank and the Fund, the failure of Rawlings in the implementation of SAPs amounted to the failure of their institutions. Have the institutions not failed as a result of the recognition that in contemporary times dictatorship is a negative approach to nation building? Did these tactics not fail in the Philippines under Marcos? 16 Adam Przeworski (1992: 56-57) argues:
The autocratic character of such “Washington- style” reforms helps to undermine representative institutions, personalize politics, and engender a climate in which politics becomes either reduced to fixes, or else inflated into a search for redemption. Thus even when neo-liberal reforms make economic sense, they weaken representative institutions. Freedom and material security are things that most people prize highly, but ideological zeal tends only to increase human suffering and many of the currently fashionable policy prescriptions are based on nothing more than zeal.
The regime was able to impose its will and the adjustment programs on Ghanaians without any serious reactions that would have rolled back the adjustment programs, modified its implementation, 17 or incorporated domestic inputs. This was the case because “reforms tend to be enacted by fiat or rail-roaded through legislatures without any changes reflecting the divergence of interests and opinions. The political style of implementation tends toward rule by decree; governments seek to mobilize their supporters rather than accept the compromises that might result from public consultation” (Przeworski 1992: 56). In that sense, the financial institutions attained their objectives. However, the Bretton Woods institutions' realization of the need for countervailing power, and the expressed abhorrence of personalized political power (World Bank, 1989) strengthen the argument that ruthlessness, intimidation, and arbitrary rule are negative tools in nation building. The paradigmatic change seeks to support political pluralism and promises to withdraw assistance from rulers who fail to open the political space for the views of countervailing forces. The introduction of political conditionalities was timely. Its seems, however, that the indifference of the institutions to the political excesses of dictators who willingly implemented their sponsored adjustment policies in the 1980s, implied tacit support, either by omission or commission, to rapacious and ruthless dictators who were bent on attaining their political and economic agendas.
The author is grateful to Dr. Nkiru Nzegwu, Senior Fellow at the institute for the Study of Gender in Africa at the James S. Coleman African Studies Center, University of California, Los Angeles for critical and constructive comments on an earlier draft of this paper. I am equally appreciative of the logistical support provided by the Center during my stay as a Fulbright Senior African Research Scholar (1997-1998).
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Citation Format
Boafo-Arthur, Kwame. (1999). STRUCTURAL ADJUSTMENT PROGRAMS (SAPS) IN GHANA: INTERROGATING PNDC's IMPLEMENTATION. West Africa Review: 1, 1. [iuicode: http://www.icaap.org/iuicode?101.1.1.3].