How was Ghana, under the rule of Kwame Nkrumah, able to quickly build factories and roads? A. Iron tools, discovered after independence, were better than wooden and stone tools. B. Nkrumah's government borrowed heavily from the Soviet Union. C. Help from former European colonial powers helped Ghana industrialize. D. Profits from diamond sales provided the money needed to build infrastructure.
Answers
OPTION 'C'
Ghana’s post-independence industrial development has evolved from an import substitution industrialization (ISI) strategy to the current programme of private sector-led industrialization. Prior to Ghana’s independence in 1957, the industrial sector, a corollary of the colonial economic system, was small. Made up mainly of the domestic manufacturing sector, it contributed very little to economic growth. The inherited industrial sector was underdeveloped mainly because the colonial rulers had focused on the extraction of raw materials from the Gold Coast (Ghana) while at the same time creating an economic system heavily dependent on manufactured products from Britain. When Ghana gained independence from Britain, the Nkrumah-led Convention People’s Party (CPP) government considered industrialization to be a key factor in the modernization and development of the country. The extensive programme which emphasized import substitution aimed to transform the industrial structure and reduce dependence on colonial powers and other foreign economies for goods. According to Killick (2010), the CPP government prioritized import substitution because it was believed that it would eliminate the distortions of the earlier system, provide an escape from the dependence on primary exports and break the vicious circle of poverty. It was Nkrumah’s belief that every imported item which could have been manufactured locally, provided that conditions allowed it, added to Ghana’s continuing economic dependence on the colonial system and delayed industrial growth (see Killick 2010: 50). The ISI strategy of the Nkrumah-led government sought to exploit Ghana’s natural domestic resources to satisfy the basic needs of the population, create jobs, and assimilate and promote technological progress. This, ultimately, would modernize the Ghanaian society as a whole. As indicated by Baah-Nuakoh (1997), the general strategy adopted in the post-independence era was the extensive promotion of industrialization with specific emphasis on manufacturing development. This was to diversify the predominantly agricultural economy, create employment for the rapidly growing population, raise per capita incomes, improve the balance of payments and project the economy on the path of sustained and rapid economic growth. At the centre of the ISI strategy was the development of large-scale, capital-intensive manufacturing industries owned and managed by the state. Government invested heavily in infrastructure and manufacturing activities by setting up state-owned enterprises (SOEs) for domestic production of previously imported consumer goods, processing of exports of primary products (agricultural and mining), and the expansion and development of building materials and electrical, electronic and machinery industries. According to Steel (1972), the development of the electrical, electronic and machinery industry was to provide the necessary inputs needed to expand the industrial sector. As Steel notes (1972), it seemed that Nkrumah’s industrialization programme was entwined with socialism and macroeconomic policy within the framework of Ghana’s broader development plan. The period from the mid-1960s actually saw a massive involvement of the state in the industrial sector. The ISI strategy of this period was characterized by an emphasis on import substitution supported by high levels of effective protection. Protection of domestic production, as already indicated, was intended to reduce economic dependence on imports in favour of locally manufactured goods.
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