A study of obstacles to economic development of Ghana and South Africa with particular emphasis on inadequate investment capacity
This study is about the problem of economic development of Ghana and South Africa which arises from the fact that these countries lack the needed investment capacity. As a prelude to the analysis of savings and investment patterns, attention was firstly given to the orientation to the study. Secondly, a theoretical study of economic development and under development was made with particular emphasis to the orthodox, political economy and contramordernization approaches. Thirdly, intuitive and discriminate analytical procedures were used to distinguish economic from non economic obstacles to economic development of the countries under study. The analysis of savings and investment patterns indicate that as a percentage to G.D.P. they are generally lower in Ghana than South Africa. Various reasons account for this state of affairs. Among others, it is found that poverty is rife among the people, especially in rural areas. It also emerged from the study that financial sector savings mobilization is poor. This performance is attributed to constraints such as underdeveloped financial infrastructure and lack of competition among financial institutions in Ghana. For South Africa, the unequal distribution of wealth and acts of violence and political instability continue to undermine private investment. Public sector savings for sometime has been negative. This arises from excess of government consumption over government revenues. Several important conclusions emerged from the study, viz. that both countries are characterised by high rates of population growth which imposes strain on resources needed to provide basic facilities, that poverty is rife in both countries, and poor nutrition and lack of protection from preventable diseases resulted in high morbidity and relatively low life expectancy particilarly in rural areas, that Ghana and South Africa are both rich in terms of natural resources but natural wealth being produced is not retained within the countries due to lack of funds and knowledge required to harness resources, necessitating a call for external assistance, that generally, social and economic infrastructure are restricted to urban areas in both countries and finally, that acts of violence and political instability is undermining investment prospects. This is more pronounced in South Africa than in Ghana. Among others, it is recommended that rural restructuring to provide family planning and recreation centres, health centres, social amenities and jobs be planned and established. A foundation for re-orientating the entire education system toward the promotion of creativity, science and the acquisition of more flexible basic skills be established. This must involve the private sector. In an attempt to provide enabling environment to promote investment and economic development, it is recommended that prudent fiscal and monetary policies be established and governments to undertake comprehensive review of ail legislations and administrative practices which affect commercial and industrial activities. Finally, this dissertation attempts to draw a synthesis between theory and practice and to reflect on political stability upon which popular savings and investment aspirations can be developed.
Ghana--Economic conditions., South Africa--Economic conditions., Economic development -- Ghana and South Africa
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