Has Ghana Taken Liberal Economic Policies too Far — and at What Cost?

Upon the advice of Western financiers who have provided assistance to Ghana for decades, the country has been implementing liberal economic policies that largely emphasise free markets, free trade, private enterprise and limited government. But are these policies suited to a developing country like Ghana? What has been the impact of these policies on the Ghanaian economy? Are there alternative policies to correct any negative effects of liberal policies in the country? This paper seeks answers to these questions. In general, it finds that Ghana may have taken liberal policies too far as these policies seem to be unsuited to less mature economies. In particular, the adoption of unbridled liberal policies has: i) perpetuated production of low value-added commodities; ii) inhibited industrialisation and transformation of the economy; iii) exacerbated macroeconomic imbalances; and iii) stifled growth. Based on the experiences of western countries in their early stages of development and that of more successful Asian countries, the paper recommends direct state intervention policies to unleash the country’s growth potential.