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The 7 Year Development Plan That Jump Start Ghana’s Economy !
Posted by admin on 9th September 2016

By Kofi Nyaako!

The famous Seven Year Development Plan of Dr. Kwame Nkrumah

famously regarded as “The Blueprint for Ghana’s Accelerated Development”

Ghana starts the Seven-year Development Plan period with an economy which is mainly agricultural. Six out of every ten working Ghanaians are employed in agriculture and it is estimated that more than half of the national income of Ghana is produced by agriculture.

Country % Per capital income

India 70 25
GHANA 62 70
Japan 39 121
Denmark 23 370
U.S.A. 12 801
U.K 5 384

From the table we can see that the pattern seems to be; the richer the country, the smaller the proportion of the working population engaged in agriculture. Why is this, and how is it possible? The reason is that by raising the productivity of agriculture – using better methods, seeds and equipment – a much higher output has been achieved, using less labour, and thus releasing people to go to other forms of work.
It is in these other forms of work, particularly in manufacturing industry, that the fasted rates of growth have been achieved, in countries throughout the world. This is why a country such as ours, which aims to develop economically as quickly as possible, must increase the size of the industrial sector of its economy.
To do this, however, involves a transformation of agriculture, since a relatively smaller number of workers in agriculture must provide enough food to satisfy, either directly or through trade, the needs of the whole population. And while the re-redistribution of employment form the land to the factory is going on, the agricultural sector of the economy must provide both a home market for the manufactured goods, and a substantial part of the savings needed to finance the cost of industrial development. Therefore a great burden and responsibility for the success of economic development in Ghana rests on those in the community who are engaged in any way in agriculture. The history of other essential prerequisite for that sustained growth in national income which is the hallmark of success.
In broad terms then, during the next seven years, Ghana must expand her agricultural output and at the same time build a growing industrial sector. This modern industrial development will provide the basis for the expansion of national income needed to pay for the high standard of social services to which the government has committed itself. In order to run a modernized agriculture and a large number of new industries we need above all a skilled labour force and efficient managements.
Therefore this plan accords the highest priority to agriculture, industry and education as the sectors which must undergo revolutionary change.
A most important fact about this programme of economic development is that it requires lots of resources – material, human and financial – and the plan is the means of so organising them as to make the maximum use of them and to avoid unnecessary waste.
Industrial Development

We have already seen the dominant part played by agriculture in Ghana’s economy. The relatively small contribution of the industrial sector is itself mainly derived from small-scale establishments employing mostly family labour and using little capital or equipment.
Of Ghana’s large-scale industry the largest share is still held by mining and a construction. Each of these contributed 35 percent of the net output (value added) in all industries in 1959. This is a pattern of industry which is typical of the initial stages of development, with the extractive industries entirely oriented towards export markets and construction industry highly occupied with the building of social amenities such as roads and bridges, houses, offices, hospitals and schools.

During the plan period, Ghana intends to develop the large-scale industrial sector considerably by:-
(a) Setting up industries wherever practicable which will provide domestic substitutes for the manufactured staples of consumer demand, the supply of which has at present to be imported;
(b) Processing wherever economically feasible, those agricultural and mining commodities that are now exported as primary products, such as cocoa, timber and gold;
(c) Setting up industries to provide materials for the building industry, in order to conserve foreign exchange, and to lower costs of construction;
(d) Setting up, as appropriate, basic industries in the fields of metals and chemicals;
(e) Starting the development of other basic industries which will form part of later stages of industrialisation in subsequent plans;
(f) Planning industrial development in harmony with the development of other African countries.
Of total imports in 1962, 42 percent was in the form of food, drink, tobacco, textiles, clothing and other consumption goods. These cost a lot of money – nearly £G50 millions in 1962. The more industries that can be set up in Ghana successfully to produce substitutes for these goods, the more money will be available to import raw materials, fuel and equipment. These cannot yet be produced in Ghana, but they are essential for the industrial and agricultural development that is the object for the Plan. It is hoped that by the end of the Plan most of Ghana’s demand for consumption goods such as textiles, shoes, tinned meat and fish, drinks and sugar will be met form domestic sources of supply. It is also intended that, by that time, some items of durable consumers goods such as refrigerators, electric bulbs, cookers, fans, cars and buses the first step to the local manufacture of these goods.
By processing materials which are at present exported in their primary state, Ghana will obtain several advantages. First, it will increase the earnings of foreign exchange, since the goods will be sold a t a higher price than those in the raw state. Secondly, it will increase employment. And, thirdly, it will tend to widen the range of our customers, thus spreading the risks of unforeseen and large fluctuations in our sales to individual countries abroad, which are the bane of primary producers.
Costs of construction in Ghana are very high, due mainly to very low productivity, but also to the use of imported materials, which are such during the Plan period which, by grinding imported clinker into cement, will save some amount of foreign exchange. Increasing use of local bricks, titles, aluminum sheets and wooden window frames instead of imported cement, asbestos sheets, galvanished iron sheets and Aluminum window frames will contribute to the reduction in building costs and the saving of foreign exchange. Standardisation and mass production of component for building, especially houses, will be other important ways of achieving these economies.
One of the main reasons for industrializing along the lines described is to save foreign exchange, which will be released for the import of machinery, equipment and fuel. Already a refinery has been built at Tema which will reduce the foreign exchange costs of fuel. By the end of the plan it is expected that a start will have been made on other industries providing materials for industry, such as a basic chemical industry.

The provision of adequate housing is a major aspect of government policy and an important influence on the productivity of labour. The physical standards of housing in Ghana and is location in relation to the places of work must be improved. The government’s housing policy aims at ensuring that adequate housing will be available to meet the requirements of the working force, especially in urban areas, where new economic activities are expected to develop.
The rate of urbanization in Ghana, as indeed in many other developing counties, has been very rapid in the period after the last war, and there is no doubt that this development will continue.
It means that there is and still will be a great pressure on available housing in urban areas. From 1948 to 1960 the average number of persons per house in the larger cities increased by about 30 percent to more than 19 persons per house.
Houses in cities and towns are more expensive to construct than in rural areas, due to the higher standard and cost of land preparation. Today it costs about £G110 to house a city dweller, and about £70 to house a town dweller and about £50 to house a village dweller.
It is estimated that the population in the cities (Accra, Kumasi, Sekondi-Takoradi) will increase by about 250,000 persons and in towns with more than 10,000 inhabitants by 350,000 person, during the course of the Seven-year Plan. A national housing programme to provide adequately for housing needs is therefore going to be expensive.
In order to prevent unsystematic construction of houses, town-planning will be much more developed, and some redevelopment of larger cities will be started.
The government had already by 1962 spent about £G9 million on housing construction. But in the coming seven years it will be necessary to invest £G44.5 million, as a minimum, in new houses in the urban areas, of which £G13.3 million will be in houses for those with low incomes. Of this, government intends to provide about £G20 million. Private individuals and business enterprises should provide the rest.
The government will try to arrange to make more funds available for housing by stimulating the flow of loans, through banks, insurance companies, building societies, pension funds and so on, into the house building market. But event when it will be necessary for the government to the finance some part of the construction cost from its own resources. Government will try in addiction to arrange foreign loans for housing purposes, which will be directly or indirectly channeled to the various house-building agencies.
It is the intention of the government that the existing housing agencies shall continue to build houses and on a larger scale. Besides this, promoters of new industrial plants in Ghana will be encouraged to provide houses for their workers.
The biggest problem of housing in Ghana is its cost. The government has to find ways to reduce the cost of building materials, mainly through the use of more indigenous materials. It is also essential that the construction industry itself be made more efficient. If this succeeds then, as in some other African counties, it may be possible to build houses for workers at a cost of not more that £G350 each.
Education and manpower
The success of the Seven-year Plan is finally dependent upon the abilities and the honest hard work of the people who are charged with the responsibility of carrying out the activities required by the Plan. The most perfect plan in the world would fail if personnel with the education, training and experience required to fill the new jobs were not available in sufficient quantity.
About 1,100,000 fresh employees are called for by 1970 to fill the new jobs which will be created and to replace those who will leave the labour force during the seven-ear period. Of this total, nearly half must be prepared for employment in the skilled and higher level occupations, ranging from artisans, to teachers and other professional occupations. With these heavy demands for trained manpower in mind it is necessary to expand and adjust the educational system accordingly.
Basic changes are being introduced which will result in considerable saving in the time required to complete segment of the educational programme. These reductions in the length of the educational cycles will provide increased numbers of school leavers to qualify for employment within the period of the Plan. The present four-year middle school will be replaced by a two–year continuing school with a strong vocational emphasis. This means that students will be available for employment in eight years, including six years in primary schools, rather than ten years as they now are. The period in secondary school has been reduced from 5 years to 4 years, so that these students will complete this schooling one year sooner.
These changes will also reduce the time required for a complete education from primary school to University degree, from the present eighteen years to fifteen years. These reductions will have the effect of making available 300,000 additional employees with varying levels of education before 1970. In addition, the reductions are being carried through without lowering the educational standards. This has been accomplished by the introduction of modern teaching materials and methods and revisions of the course of study. The basic changes were hastened by the needs of Ghana’s development plans; their effect on the society as a whole would however be welcomed in any case.
To carry out this expansion programme more than 40,000 additional teachers will be needed by the schools and universities. As a result of the expansion, educational institutions will provide about 850,000 educated Ghanaians ready t take important places in government, business and industry. The outflow form these institutions will be approximately as follows:
Together with those now employed, these 861,000 people will provide the manpower which will make it possible for the Plan to succeed. The buildings and facilities required for the post-primary educational growth will require an investment of more than £G64 million. This investment in the youth and future of Ghana cannot be denied.
The contributions of the educational system to the success of the Plan will be large and important. However, the educational system cannot be expected to solve the entire manpower problem. Even with considerable education the students joining the labour force will be almost totally without actual work experience and they will require training and familiarization in the jobs in which they are employed.
The largest share of responsibility must rest, therefore, with those who are now employed, whether in government, commerce, industry or service. It is on their experience and skill that the success of the new projects institutions must depend. Expanded in-service training programmes and adult education schemes are being organised to assist these employees as they are called upon to take over increasing responsibility as craftsmen, foremen, technicians and managers. The Institute of Public Education, the Workers’ College, the Universities and the other specialized institutions are doubling their efforts to make specialized training available on a part-time and off-hours basis.
The employment targets set by the plan are high-over one million new workers will join the labour force. These new workers, some of replace those who will have left, and others additional, are expected to be distributed among the various sections of the economy in approximately the following manner:
Inevitably, shortages of personnel with specialized qualifications will develop. Shortages of this type are most likely to occur in the managerial, professional and technical fields, where the number of such personnel is limited and extensive training experience are required. Nevertheless, the goals can be reached with the full support of the people, the government and the institutions upon which manpower development depends.

The table below gives an indication of the rate of education expansion which is planned during the next seven years


Enrolment Total Enrolment Total

1963 1969

Primary-Middle 1,200,000 2,200,000
Secondary 23,000 78,000
Teacher Training 6,000 21,000

Technical 4,000 6,000

Clerical Training 100 5,000

Universities 2,000 5,000

Agriculture Manufacturing Construction Utilities Commerce Transport Service Mining Total

300,000 25,000 225,000 105,000 10,000 160,000 85,000 165,000 1,075,000


Middle & Continuing Secondary Universities Trade & Teacher Office Total

Schools Schools Technical Training Clerical

750,000 46,000 9,000 14,000 31,000 11,000 861,000