The effects of institutional weakness, absence of a common culture, and pervasive corruption are hard to escape

There has been a fair amount of press over the past two or three years about the perceived improvement in productivity in Africa and how those improvements were not yet making a dent in the general perception of Africa as an economic basket case. I suspect that there is probably a decadal improvement but that the ratio of noise to signal in Africa is so high that it is very hard to discern that improvement. I have also read a number of authors taking exception to the case that there is any improvement.

Ghana isn’t doing as well as many people think by Tyler Cowen calls the rosy scenario into question, at least as far as Ghana is concerned.

Ghana will turn to the International Monetary Fund for help after the west African country’s currency plunged roughly 40 per cent this year against the dollar, making the cedi the worst performing currency in the world in 2014.

Nearly three years after the start of oil production, which was meant to further strengthen the country’s fiscal position, the public purse is looking empty. Ghana is battling a double-digit fiscal deficit after a 75 per cent increase in public salaries over two years. Inflation is rising rapidly as the cedi plunges.

Ghana ran a fiscal deficit equal to 10.1 per cent of gross domestic product in 2013. The government has promised to lower the deficit to 8.5 per cent this year, but observers believe it would struggled to reduce it below 10 per cent.

Despite oil production, you have currency devaluation of 40%, 75% increase in public salaries, and annual fiscal deficit of 10%. The effects of institutional weakness, absence of a common culture, and pervasive corruption are hard to escape.