GHANA’S CAPITALISM WITHOUT CAPITALISTS

The Inconvenient Truth of Development

There’s an inconvenient truth about development that too many policymakers ignore: prosperity isn’t produced by slogans, committees, or conferences. It’s fundamentally generated by companies — organized systems of people and capital that transform resources into productive value. This distinction often highlights the difference between wealthy and developing nations.

Consider South Korea, which achieved prosperity not through grand speeches on industrialization, but through the rise of global enterprises like Samsung and Hyundai. Similarly, America’s enduring wealth lies not merely in its natural resources, but in the corporations that harnessed them. Ghana, by contrast, possesses a vibrant entrepreneurial spirit but struggles to foster a robust ecosystem of large-scale enterprises.

The Missing Engine of Organization

Ghana is undeniably rich in endowments: gold, oil, fertile land, and a young, dynamic population. What appears to be lacking is the robust institutional machinery capable of transforming these inputs into self-sustaining, thriving firms. Even in fundamental markets like taxi services, bottled water production, telecommunications, and mining, foreign firms often hold dominant positions.

This dominance isn’t due to a lack of Ghanaian initiative or ambition; rather, it stems from the absence of structured frameworks for cooperation and efficient capital accumulation that would enable local entrepreneurs to scale their ventures effectively. The outcome is a peculiar paradox: a nation teeming with hustlers, yet one that lacks a cohesive system of capitalists driving large-scale domestic industry.

The Politics of Dependency

For several decades, successive Ghanaian governments have, perhaps unintentionally, fostered a form of selective capitalism. This approach often indulges foreign investors with significant incentives while inadvertently neglecting or even hindering domestic ones. Foreign companies frequently benefit from tax holidays, royalty exemptions, and coveted “strategic investor” perks. Meanwhile, local businesses grapple with exorbitant interest rates (often above 30 percent), navigate opaque regulatory landscapes, and suffer from a distressing lack of policy consistency.

The impact of this disparity is evident in the numbers. Ghana’s investment-to-GDP ratio has remained stubbornly flat at around 26 percent for the past decade — significantly below the 35–40 percent threshold typically associated with sustained industrialization and economic transformation. This suggests that the state is not just passively neglecting domestic capital formation; it appears to be actively creating an uneven playing field that disadvantages local enterprises.

When the System Devours Its Own

Ghana’s economic history, particularly concerning its once-promising domestic companies, often reads like an obituary for lost champions. A closer look reveals a pattern of decline:

• Ashanti Goldfields: Founded in 1897 by Ghanaian entrepreneurs Joseph Ellis and Joseph Biney, it was once Africa’s leading mining powerhouse. By 2004, it had merged with South Africa’s AngloGold, effectively ending the existence of Ghana’s flagship industrial firm.
• Ghana Telecom: Subjected to multiple privatizations and re-privatizations across different political regimes, it eventually became 70 percent owned by Vodafone in 2008.
• Local Banks: Between 2017 and 2020, nine local banks were shut down in a sector clean-up, leading to foreign banks now controlling approximately 60 percent of total banking assets.
• Fan Milk: A beloved Ghanaian brand since 1960, it is now wholly owned by the French multinational Danone.
• Ghana Airways: The national carrier was liquidated in 2004, with no viable domestic replacement emerging to fill the void.

Each cycle seems to conclude similarly: significant domestic potential is absorbed or overwhelmed by a confluence of political instability and the aggressive encroachment of foreign capital.

The Contracting Trap

Perhaps nothing illustrates Ghana’s structural dysfunction more vividly than its approach to public contracts. Instead of engaging reputable firms with established capital and expertise, governments routinely award major projects to politically connected middlemen who often possess neither. The ‘Agenda 111’ hospital project serves as a stark example. Intended to construct 111 district hospitals — a noble and necessary goal — the initiative rapidly descended into disarray. Contracts were awarded to under-capitalized intermediaries, funding frequently stalled, and payments were often partial and delayed. The result is numerous idle construction sites across the country, while public debt continues to mount.

This pattern amounts to self-sabotage disguised as development. By consistently underfunding contractors, fragmenting oversight, and treating significant national projects as instruments of political patronage, the state inadvertently ensures its own infrastructure failures. One might argue that no external colonizer could devise a more efficient system for squandering public funds and hindering progress. Ultimately, a nation cannot hope to industrialize if it struggles to even build a basic hospital infrastructure.

The Cost of Political Whiplash

Adding to these challenges is a chronic case of policy schizophrenia. Each change in government often brings a wholesale reset of the rules: new boards are appointed, existing deals are re-evaluated, and old contracts are frequently torn up. The Telekom Malaysia fiasco in the early 2000s and the PDS–ECG concession reversal in 2019 — which cost Ghana a staggering $190 million in U.S. funding — stand as prominent case studies of this instability. A 2014 study of firms listed on the Ghana Stock Exchange revealed a concerning trend: profits tended to rise during election years, only to plunge by approximately 30 percent afterward. This pattern sends a clear message to investors: in Ghana, the business climate is as volatile as the political weather.

A Country Without a Brain

Beneath all these overt failures lies a more subtle, yet profound, institutional deficit: Ghana appears to lack a coherent, national “thinking center.” There is no centralized technocratic hub — a collective of the nation’s brightest economists, engineers, and financiers — tasked with strategic planning and the meticulous execution of critical national projects. Instead, ministries often operate in isolated silos, duplicating efforts, wasting resources, and frequently undermining one another’s initiatives.

The financial cost of this disorganization is enormous. In 2021 alone, Ghana paid ₵125 million in judgment debts — substantial compensation for bungled or unilaterally canceled contracts. This isn’t merely bad luck; it is bureaucratic chaos monetized. Without robust coordination and continuity, even well-intentioned ideas risk transforming into significant fiscal liabilities. In such an environment, it becomes rational for entrepreneurs to focus on building ‘CEO-lifestyle businesses’ — entities designed primarily to chase government contracts rather than to innovate and compete in broader markets. The system inadvertently rewards political connections over genuine competence. The unfortunate outcome is a capitalism primarily focused on consumption: gleaming SUVs, air-conditioned offices, and a critical dearth of export-driven industries.

A Crucial Test: The Telecom Opportunity

The government now faces a timely opportunity to potentially break this detrimental cycle. The prospective sale of AT Ghana (formerly AirtelTigo), one of the nation’s few domestically controlled telecom assets, presents a strategic opening. Telecommunications is no longer a mere convenience; it has evolved into critical national infrastructure. Data, connectivity, and digital payments will profoundly shape every facet of economic and security policy in the coming decade. Yet, Ghana’s current telecom landscape is heavily dominated by foreign giants: MTN controls roughly 60 percent of mobile subscriptions, with Vodafone holding another 20 percent.

If Ghana simply offloads AT Ghana to yet another external buyer, it will only entrench this existing imbalance. Instead, the government could strategically subsidize the sale to a credible consortium of Ghanaian investors, absorbing a portion of the company’s debt to ensure a financially viable, privately owned, Ghanaian challenger. While some naysayers might voice concerns about potential corruption, this moment calls for the political will to compel a few domestic business leaders and banks to collaborate for the greater national interest. Yes, this approach would incur short-term costs, but it would build invaluable strategic capacity in the long term. As telecoms become as vital as electricity or water, allowing foreign entities to control this critical sector could prove incredibly expensive down the line. Empowering a domestic group to anchor this sector now would arguably be one of the smartest industrial policies Ghana could implement. This decision will truly differentiate countries that proactively plan from those that merely improvise.

Learning From Those Who Got It Right

Other nations have successfully navigated similar development challenges by adopting strategic and consistent policies:

• South Korea: Linked state support directly to export performance and withdrew it from underperforming firms, fostering competitiveness.
• Malaysia: Established a transparent “Pioneer Status” regime, accessible equally to both domestic and foreign firms, encouraging investment and growth.
• Chile: Utilized its CORFO (Corporación de Fomento de la Producción) as a state venture capital fund, effectively serving as a launchpad for innovation and new industries.
• Crucially, all these nations demonstrated significant policy continuity across electoral cycles — a concept that still largely eludes Ghana.

Ghana’s tragedy is not primarily external exploitation; it is fundamentally internal disorganization. The nation continues to export its valuable resources and import prosperity because it consistently fails to organize its own intellectual capital, discipline its spending, and strategically protect its burgeoning entrepreneurs. Capitalism, in its effective form, is not chaos; it is intelligent coordination. Until Ghana learns to effectively build, finance, and defend its own firms — from mining conglomerates to telecommunications operators — it will likely remain what it is now: a capitalist economy desperately searching for its own capitalists, a democracy that continuously subcontracts its future. We cannot, therefore, exclusively blame colonialism for what contemporary incompetence is now achieving with alarming efficiency.