THE OUTLOOK FOE GHANA

Created: 12/27/1957

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NATIONAL INTELLIGENCE ESTIMATE

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THE OUTLOOK FOR GHANA

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DrTBLUOBNCK ADVISORY COMMITTEE

oncurring were tha dine tot o/ /nf-pence and ffeMe'cl. Departmenttate,itan*/nieHlpence. Drpareoienf o/ foeAe7 ffanal MleUlpenre; (A* AjjUMM chut of staff. intel' pence,nd (Ae deputy director toe /nteUvence.joint staff. th4 atomic Dwrey cemmtnumo the iac end (A# AuuConl director. featral. abitatnei. the utbfect being omlrUfl of theiurudtctton.

SECRET-

THE OUTLOOK FOR GHANA

THE PROBLEM

To estimate Ghana's prospects for political stability and economic progress, and its probable orientation and policies over the next few years.

SUMMARY

Ghana's basic problems, temporarily disguised during the independencelast March, are coming to the fore. The country has considerable political experience and economicNevertheless, Prime Minister Nkrumah and his Convention People's Party (CPP) government areincreasing opposition and internal party dissension as they try to make Ghanaodern unitary' slate.

Ghana's fortunes will have aimpact both on the evolution of Africa and on the West's interests there for several reasons. Ghana wants toeading role among emerging African areas and its example and experience will affect developments beyond Its borders. It will seek economic assistance from the West and also from the Soviet Bloc. It offers opportunities for the Soviets totheir Influence in Africa.

Nkrumah probably will maintain his leading position for several years through shrewd maneuvering and moremeasures. But his currently ill-organized parliamentary opponents, as well as extreme leftists and otherwithin his own party, are likely to give him increasing trouble. Despite sporadic disorders, internal security will probably not present unmanageablein the next few years. However, if Nkrumah should disappear from therobable CPP split would soon result in political instability.

While Nkrumah will try to play arole in Africa, particularly in West Africa. Ghana's attention will be taken up with domestic problems and itsblunted by the opposition of other African states. Furthermore, it will need to avoid serious conflict with the UK and other Western countries important to its trade

Ghana's long-term prospects forand diversifying its economy are not favorable. Unless it receives foreign aid or investment, the government may not be able to support its current rate of development beyond the next two to

years without drawing downexchange reserves required for other purposes. Ghana's search for suchand wider markets will probably be accompanied by shiftsrather than sharp alterationsin its presenttrade pattern in the absenceajor Bloc effort in the area.for financing the Volta Riverin its entirety are uncertain, and Ghana probably will have to continue to depend on cocoa for its major source of income.

n foreign affairs, Nkrumah is likely to copy Nehru's policy ofelations with the US and the UK are likely to remain friendly in at least the short run while Ghana makes largefor aid. However, diplomatic and economic relations with the Soviet Bloc will almost certainly develop, and at least some aid will be accepted from that source if offered The Bloceriod, by using its opportunities for economic and subversive activity, mighteasure of influence in Ghana

DISCUSSION

British colony and protectorate of the Gold Coast7 became thestate of Ghana within theDespite two years of rising internal dissension and sporadic minor violence, this transformation was accomplished in anof generalast-minute, British-sponsored compromise on the proposed constitution wardederious threat from the various regionul and minority groups opposed to the concentration of powers in Prime Minister Kwame Nkrumah "sThat government, formed by thePeople's Party (CPP)ook officeetter than two-thirdsmajority. However, the appearance of harmony disguised basic conflicts both in the country and within the CPP.

We believe that developments in Ghanatbe first Tropical African colony to achieve independencewillonsiderableboth on the evolution of Africa and on the West's interests there for at least three main reasons: (a) Ghana's experience willnationalist aspirations and movements elsewhere In Africa, (b) Ghana is likely to try to obtain substantial foreign assistanceariety of sources including the US. and (cj it provides an opportunity for the expansion of Soviet influence in Africa.

he brief euphoria attending Ghana's achievement of freedom is now over. The new nation Is being confronted with the difficulties inherent in lis gpocraplitcul, political,hana's national boundaries, generally established by colonial annexation at the end ofh century, cut through tribal. andumber of peoples, notably the Ewes along the Toga border. The government is faring the problem ofinto reality the expectations aroused by the prospect of independence These areobstaclesountry which is still largely underdeveloped Much of theRegion i* generations behind the coastal areas In the ways o! the modem world.some attachment to tribal customs and beliefs can be found among even the mostand urbanized Ghanaians. Ghanafrom British colonial rule the outward forms and procedines ul Western politicalThrsc institution* have changed as

'Ghana Li divided into five regions. Biutern. Western. Tra.ni Volta/TufoUnd (including toe southern portion ef former nrlUshihanU. andncorporating" theTugoUndJeople onountry roughly the sua of the ex Pernor* IS percent of them are Christians and there are some Ualemi. mostly in the North, but the banie majority anedee-abaned. heavily forested rainy area narrowing toward the east covers most Of th* Westernand shout half of AahanU sr.rt theegion: much orest of Ghana is savannah. See attached map

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they have been used by varied and oftenantagonistic social groups In differing stages of modernlaalion. However, theythe framework within which theof Ghana will take place.

Nkrumah and the CPP have threeobjectivesthe creationodem unitary stale, the development andof Ohana's economy, and theof Its influence throughout West Africa. Ghana, however, haaimited potential for economic developrnenl, and la deficient in people with administrative or managerialVenality Is widespread amongoffice-holders, and the influence of the remaining British civil servants is being minimised. There is spreading interna!over the rough-shod treatment of regional, tribal, and tradiUonallst opponents of the CPP Nkrumah not only has beento subdue the longstanding opposition in Ashantl and the North, but haa recently been faced with disaffection In his own stronghold of Accra. He apparently is also underpressure from militant left-wing elements within the CPP and Its affiliates to carry out rapidly the more radical aspects of the CPP program. The odds are that he and biswill have to rely increasingly onauthoritarian measures to retain power and put into effect their currently vague ideas for the creationodernized and united Ghana.

Political Trends Nkrumah continues to dominate the political scene In Ghana, as he has since shortly after his return to that country latend *'non-denominationalthe relatively youthful prime minister (in his late forties) has been exposedultitude of imperfectly assimilatedAlthough trained In both Catholic and Protestant theology, he still consults fetish oraclesprobably to some extent for political reasons. He can act either as the benign father of hla country oruthless ward boss as the occasion demands. Despite his educational attainments (Including fourearned In theis talents areIn terms of organising ability,and flamboyant oratory rather than of intellect. Contemptuous of theopposition loaders, he seems convinced that tie has correctly interpreted the will of Ghana'sn "shorn lie has based his political party and hi* fortunes, as givingandate tonitary, secular,state by whauver means he considers necessary. At the same time, he relies heavily on the advice of those whose views he finds congenial or whose knowledge he respects. His real views are not easily determined, but there can be no question ol his anticoloniallsra, his socialist approach to economic questions, his deep admirution for India's Nehru, and his determination to manipulate all Issuesthe conflict between the Soviet Bloc and theo the betterment of Ghana's position.

Nkrumah still commands the loyalty of most CPP leaders, the admiration of much of the party's rank and file, and the respect of many other Ghanaians, although hisis far greater In the coastal regions than elsewhere. However, much of this support was gained through personal contact and easywith his UH reased responsibility's. the prime minister has bean forced to become more aloof and formal. Nevertheless, his quasi-mystical identification with the struggle for independence is likely to preserve hissupport for at least the next year or two.

Under Nkiumali's leadership, the CPP since its formation9 has appealed to the masses, particularly to urban workers and to the many small farmers who look to thefor assistance in raising andtheir crops. Unlike earlier nationalist groups led by intellectuals, professional men, and traditional authorities, the CPP has pulled In the unemployed, tbe Illiterate, and the youth of the country. This essentiallymembership is one reason why the CPP government Is having such difficulty in filling administrative and technical posts with competent people. The CPP has the statusational party, withleats In the unicameral parliament.'

The CPP holds alleals of the Eastern and Westernf theshanU seats,f theorthern seats,f thenuu-Vol la/Togo land seats.

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In addition to It* organizing work throughout the country, the party has gained considerable control over important voluntary organizationsnotably the Trades Union Congresslalmtxl membership of, the Farmers' Council, and the Ex-Servicemen's Union Nkrumah hasational AssociaUcn of Socialist Students Organizations (NASSO) to actadre of party intellectuals charged with "ideological and politicalhe recentof the unemployedBuildersatterned on the US CivilianCorps of, may alsoa channel for the exercise of CPP political control. Moreover, despite constitutionalto the contrary, the civil service and the judiciary are susceptible to CPP influence.

here hasecline In the internal unity of the CPP during the period since Ghana achieved Its Independence. This loss of cohesion, however, has not gone far enough to have any measurable effect on thestrength. Prior to7 the CPP, although it had broad popular support, lacked strong internal discipline andarge degree vras held together by the drive forDissension within the party has recently developed as groups and individuals have sought to advance their personal status cr ideas. Since this shaking-down process Is continuing, the relative strength of theleaders and groups within the CPP and its affiliates cannot be fully assessed.the possibilityplit In the CPP seems to constitute the most serious threat to Nkrumah's position.

hile the CPP and IU ministerial lead ers seem loyal to the prune minister and share his basic socialist orientation. Ideologicalare beginning to appear within the cabinet. Finance Minister Obedemah and Minister of Justice Ako Adjei iTKreashlgly appear to stand for relative conservatism. Kojo Botslo (recently named Minister of State and virtual deputy prime minister and CPP leader) and,reater extent, InteriorKrobo Edusel and Information Minister Kofi Baakoeemingly moreand dynamic element Nkrumahappears to incline more toward the latter group, which Includes his closest personal friends. Although Qbedertthh is said to be personally loyal lo Nkrumah, they disagree in many respect* and allegedly are barely on speaking terms. Loyally to Nkrumah is less strong below the ministerialard core of extreme socialists dominates NASSO. particularly through Secretary-General James Markham. It is also Influential In the labor movement andowerful advocate in Attorney General Geoffrey Blng, an extreme left-wing former British MP. This groupthe relatively cautious approach toreform and international relations which it consider* the Nkrumah government to be adopting.

he various regional and traditionalist groups opposed to the CPP have recentlyoose coalition as the United Partyut this docs not seem to portend any immediate change in their relatively weak parliamentaryhe merger resulted more from the guvernment'B decision to ban political parties with regional, tribal, andbases than from any newfound identity of views. These parties, led by the NLM, have had little in common beyond their opposition to Nkrumah and the centralizing policies of the CPP. Although advocating parliamentary democracy, they have fomented andviolence. Through such tactics the NLM caused the UK to persuade the CPPto accept cncesslons to the regions in7 constitution. However, the CPP not only is opposing the full Implementation of those concessionsreation or regional assemblies and houses of chiefsut has sent out regionalwith cabinet status to assert the authority of the central government. For the foreseeable future, the UP, unless it can profitplit In the CPP ranks, is likely to re-

' The OP constat* Of five opposition groupsin ParDamsnt; the most Important are the Northern People's Parly INPP>cats and the National Liberation Movement (NLM) based on Aabsntl, witheats. The UP Is also supportedr tribal movement, which resists the threat to localand land rights posed by the Influx ofInto Accra

main powerless to arrest by legal means the trend toward centra Haul ion

The few scorn identifiable localnow play no inrtriicmlent political role Such influence at the Communists possess is exerted through NASSO. at the lower levels wlUUn the labor movement, and through thelr associaUon with the extreme left-wingwho have easy access to governmentThere is no organized Communist party and little prospect of one being formed so long as the Communists continue theircourse of attempting to influence the CPP government from within the party and Its amiiaies. and so long as Nkrumahto oppose anym which might escape his control. In the likely event of Soviet Bloc missions being established to Ghana, local Communists will probably gain some increase in Influence and are likely to become increasingly troublesome to Nkrumah. However, the Communists are unlikely during the period of this estimate to win sufficient strength to determine basic government

Unless there should be defections among the CPP members of Parliament so large as to destroy Its majority, national elections will probably not be held until requiredhether or not the political scene will have basically changed by that time will depend largely on these (actors: (a) the government's ability to satisfy aroused popular expectations of economic benefits. <b| the degree to which Job demands by CPP members can be metritical loss of efficiency in official services, ici the reaction to the government's attack on opposition leaders, and (d) theof the governrnent to prevent significant detections from the CPP. On all these counts the prospects are for tome deterioration to the present situation.

We believe that Nkrumah through shrewd maneuvering will be able to prevent any basic split in the CPP or substantial defections from its parliamentary majority over at least the next year or two. Ifpilt ahouldor seriously threatened, Nkrumah might maintain his authority by suspending theIn any event, we believe thereetter than even chance that Nkrumah will remain in power as head of the government by one means or another over the next several years. His personal power has already been heightened by his assumption of manyformerly associated with British rule. Although he may not wish bo become ahis own character and future politicalIn Ghana in time might force him to take Increasingly authoritarian measures if he Is to continue as prime minister. He could probably only avoid such steps if his policies had meanwhile proved sufficiently successful to maintain his personal prestige and popular support for the CPP

Should Nkrumah die (violently oror give up his position, his followers within the CPP would probably remain infor at least the short term. But the party's centrifugal tendencies wouldwith the probable resultplitonsequent high degree of political Instability in Ghana.

Internal Security Prospects. The CPP over the short term will press on with its efforts to unify and modernize the country with every weapon at its command. Deep-rootedand tribal loyalties will, however, delay this process. Sporadic outbursts of civil disorders, especially in the unruly Ashanti Region, will occur during the next few yearstheirand intensity depending on the melh-ods and extent of government moves against the opposition and the nature of the economic situation. Both the CPP and the NLM have strong-armiolent outbreak could take place next spring when the government is scheduled to make clear its positionregional institutions, since that position will almost certainly be aimed at minimising their powers.

The government has available forof internalolice force ofenroughly half of them trained in riot squad operationsand an army of. There are no known plans for other types of armed forces. The army is largely officered and equipped (with small arms and light cannon) by the British, while nearly half the senior police officers arc British contract employees. The effectiveness of these forces will be adversely

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affected by tho gradual withdrawal of British personnel. However, for at least the next year or two, the government probably will be able to cope with almost any disturbance which the opposition could produce. Oneexception mightituation in which the Northern Territories were deeply involved,arge percentage of the army and police comes from the North. Another mightase in which the government took some extreme action which touchedeneral Ashanti uprising. In the event of aunconstitutional repressive move by the government, the British officers in the army and police might refuse to act. Even Inituation, however, the government would probably be able to enforce its will save In the exceptional circurnstances described above.

conomic Conditions and Trends. The CPP government's success will depend in large measure on progress toward Its secondthe development and diversification of Ghana's economy. The outlook for theof sizable funds for development is superficially good, but only for the short term. Ghana over the past few years has been able to finance the major portion of Itsfrom its own resourcesoutlays1 have been0 million.this was accomplished mainlyesult of inflated world prices for cocoa in the; those prices fcU sharply thereafter. Thus Ghana's economic position is heavilyon an export commodity which isto severely fluctuating prices and to limitation of production by various diseases. Over half of the country's export earnings were derived from cocoa' Timber, diamonds, gold, and manganese eachfor roughlyercent of thoseBut future prospects for greater yields of these commodities arc not bright. Ghana's most important known potential resources are its bauxite deposits, ranked third In terms of world reserves. Their full exploitation,will be very expensive. While there may be undiscovered mineral resources,in the North. Ghana's economic pros-

Cocoa production is the majorhana'n national incomeeitlmalrd Inbi million,3 per capita

peels are now dependent on development oi the bauxite deposits, agriculture, and second ary industry.

The governmentumber ofthrough which it is attempting todemands created by the rapid transitionubsistence to an exchange economy Despite Nkrumah's professed encouragement of free enterprise and foreign investment, the government is extending its control over an ever-widening sector of the economy. While foreign interests (mostly British) stillsuch fields as commerce and mining, all public utilities are owned by the government, which also engages in commercial banking services and owns various enterprises. The government exercises considerable control over the industrial and agricultural sectors through the Cocoa Marketing Board, theDevelopment Corporation, and the Agricultural Development Corporation. The growing scale of government economicis resulting in the operation of many public projectsoss, due to theirnature and the lack of managerial talent.

The government's immediate economic objectives are being pursued under the First Development Planhich stresses basic facilities and socialwo-year consolidated Development Plan is now envisaged which will Include new schemes as well as uncompleted projects from previous programsillion tn development expenditures are scheduled to be spent innding next June. Aside from theseigh priority Is being given theVolta River project. Its primaryis to provide electric power sufficient for production ofons of aluminum annually. However, the most recentof the full project placed its final cost at about one billion dollars, mostly in foreign exchange. In addition, prospects forGhanaian aluminum have beenby the changing world aluminumposition.

There is some doubt as to theability to support even its current rate of expenditures for development beyond the next two to three years without drawing down

foreign exchange reserves required for other purposes. When Ghana became independent last March cocoa prices had reached the lowest levelith consequentthroughout the economy. The country6 experienced an unfavorable tradeon current accountillion, the fust serious payments deficit In recent years; this was met by drawing on overseas balances (which stood at0 million at.esult, certainhave been made in the current ordinary budget of5 million, but they are largely offset by new expenditures for foreign relations and Internal security. At theof0 liana's sterling holdings earmarked for development were equivalent0 millionadequate to support theplanned rate of expenditure for at least tbe next two years. Although cocoa prices have risen considerably in recent months, they do not promise any large addition to development funds,

hus tbe government is now seekingassistance from vaiious Western sources to supplement its development funds and obviate the necessity for drawing heavily on stabilization and currency reserves. It has received Soviet emissaries with whomof trade and credit relations and estab* llshment of diplomatic relations have been discussed, it has announced that It will ask the USSR and Communist China, as well as Free-World nations, to receive Ghanaian trade missions. The government Is alsosoundings of possible foreign financial assistance lor the Volla River project, which Is far beyond its own means. The most that Ghana could Invest in the project wouldbe0 million; this would require the virtual elimination of all otherprojects and. as mentionederious drain on reserves needed for other pur-poses. Although Ghana will make everyto undertake the full project, itart (le, tbe processing of bauxite Into alumina) If sufficient financing is not forthcoming, in any case, it is likely to move cautiously on the issue In the near future to avoid the riskolitical setback If it Isto obtain assistance

Since Ghana's foreign trade is largely oriented toward the UK, the OEEC countries, and ihe US, it would probably prefer to receive external aid from Western sourcesforrather than Ideological reasons. How. ever, the government will try to insure that in approaching Hie West It does not preclude the possibility of economic benefits from the Soviet Bloc; even moderate Ghanaians are urging that all possible contributors ofcapital behance to bid against each other. Ghana Is particularly concerned about the effect of the proposed European Common Market duties on cocoa, which favor imports from the French and Belgian colonics, and therefore wishes lo expand its tradewith the dollar area, the Bloc, and Japan In order to reduce its dependence on Western European markets

While trade with the Soviet Bloc6 was only about two percent of Ghana's total, the USSR's heavy cocoa purchases on the eve of Ghana's independence (taking advantage both of favorable buying terms and of the propaganda opening) were probably aof increased trade or barterwith the Bloc over the next few years There will almost certainly be some shifts in the future trade pattern with the West, but sharp deviations are unlikely over the next few years In the absenceajor Bloc effort involving long-term credits for development

Ghana's long-term prospects forand diversifying its economy are notLocal private investment funds are virtually nil, and foreign private capital isto be attracted to the area because of limited opportunities, increased government controls, and the fear of political instability. Even with another period of high returns for cocoa. Ghana's rapid expansion would be hampered by the traditional living pattern and tlie shortage of educational facilities, skills, and incentives for saving andUntil these problems arearge share of expenditures will continue to go into consumption, and the provision of social services will strain eovernmcnt resources. Ghana probably will have to continue toon agriculture for its major source of income.

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Probable Foreign Potlctet. The CPP leaders probably will do their beat to adapt Ghana's external policies to these economicSuch policies thus will be based on pragmatic rather than ideological grounds. Nkrumah has forcefullyolicyon-alignment" in International affairs, and is likely to copy Nehru's attitudethe great powers. Hence, hiswill tend to appraise foreign countries by the degree of sympathy they display for Ghana's aspirations. The neutralist attitude of Ghana's leaders, their acceptance oftheir propensity forand their wish tourely African outlook will lead them to explore the possibilities of playing the West off against the Bloc.

Nkrumah'* pan-African sentiments are likely toarticular effort by Ghana toajor role In the continent's affairs. His proposalonference of independent African statesnow scheduled forndicates his likely tactics in thisOn such occasions, Nkrumah will seek recognitionrimary spokesman fornationalism. The very fact of Ghana'sheightens the pressures form other African territories, but there is as yet no indication that Ghana is ready to give more than diplomatic and propaganda support to other nationalist movements,perhaps to those in contiguous areas. Furthermore, while the rank and file ofmovements in Africa south of the Sahara acclaim Nkrumah'? achievements, many leadersespecially in nearby West African areasare his potential rivals and are. suspicious of the possible effects of his influence In their countries.

Nkrumah has an interest inest African federation initially composed of Ghana and the several British colonies In the region as they achieve independence. However, most Ghanaians are nowwith domestic questions. Nkrumah will be further inhibited from any action In this realm by the present need to avoid conflict with the UK. for economic reasons, and by fears of the eventual supremacy of Nigeria, whichar greater economic potential and population than Ghana.

! The loathcrn part oi Togo is dominated by the Bwe people: the majority ol Bwei rimidc in Ohana.

In at least the short term, Ghana'sis likely to be directed toward the French territories which surround it. While officially supporting Independence for the Trustof Togo, which is alreadyhe CPP is likely toolicy for its union withhis, and other possible covert moves, probably willin controversy with France and somein the region concerned. Elsewhere in the area, Ghana's relations with Liberia are likely to be marred by rivalry and mutualDespite its seemingly Irlendly relations with Egypt, Ghana will be sensitive to any attempt at domination. Its recent contacts and agreements with Israel show that Ohana, while maintaining close ties with the Arab states as fellow members of the Afro-Asian UN group, will not necessarily endorse all their views.

Ghana's relations with the UK will besubject to mutual Irritants, but there is litUc likelihood that Ghana will leave the Commonwealth as long as it expects tofrom the association. However, Nkrumah might make himself Governor-Generalepublic within theAny major problem that might arise with the UK would probably be of an economic nature, and would specifically concern Ghana's large holdings of sterling or itsfor Commonwealth protection against loss of cocoa revenues. The outlook forBritish assistance Is dim.

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the event of hostilities with the Soviet Bloc unless Ghana Itself were involved. Whether or not transit facilities might be available in other case* would largely depend upon Ghana's relations with the countries

ttitudes and policies toward the US will probably be shaped largely by economicA growing number of Ohanaians nave visited the US, where they have been particularly impressed by technicalbut repelled by the racialwhich they encountered. Both on the latter count and because of the extremes in which its anticolonialism is expressed. Ghana does not find moderate US policies veryOhana nevertheless is favorablytoward the US at present, especially since It is regarded as the logical source of the foreign capital and technical assistancefor the Volta project, and Ghana is likely to make large requests for aid In the near future.

owever, even if offered substantialassistance, it is highly unlikely that Ghana would undertake to forego ostensibly profitable trade relations with Uie Communist Bloc. Economic relations with tho Bloc will probably increase. Some degree of Blocand commercial representation iscertain to be accepted by Ghana, thereby giving theoothold In West Africa The Bloceriod, by using its oppor tunitles lor economic and subversive activity mightignificant measure ofIn Ghana

he extent of Soviet influence will depend in large part upon the degree to which Ghana may become dependent on the Blor forand financial assistance or foror its exports We believe that Ohana'sto avoid close alignment with any great power and to act independently In African affairs will limit both Soviet and WesternIn at least the short run. However, the practice o( the Bloc of taking positions on 'colonial" and racial matters similar to those of the former colonies will often result in Ghana's lining up with the Bloc on certain issues before the UK. These relationships are likely to develop regardless of any countering Western actions,

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