Economic Policies

At the beginning of 1966, on the eve of the February coup, the country was insolvent. Its funds were insufficient not only to cover current imports but the air and shipping fares owed to foreign carriers, and the debt repayments due to its many external creditors. Sizeable arrears on import bills had already accumulated, ¹ and overseas suppliers were beginning to balk at shipping to Ghana. Western governments had been approached by the C.P.P. administration for help, despite several years of anti-Western rhetoric in the party-controlled press, but none was prepared to underwrite the substantial aid that was needed. Aid had also been solicited from the International Monetary Fund, but a number of the Fund's conditions for a stand-by credit were politically unacceptable to Nkrumah and his party advisors. ² With the Communist countries, Ghana traded on the basis of bilateral agreements which allowed import surpluses within specified money limits; but, by the end of 1965, the government had exceeded the permissible limits with a majority of the country's ten Communist partners, ³ and there was no evidence that the Soviet Union or the other major Eastern suppliers were ready to extend special credits on the scale needed to replenish Ghana's depleted stocks or to compensate for supplies lost from Western sources. ⁴ Such limited new credits as might have been negotiated from any source would very likely have been offset by the heavy capital and interest payments on the external debt which in February 1966 stood at £120 million. ⁵ Because of the predominance of medium-term suppliers' credit, the capital and interest payments for 1966 were scheduled to be £28 million, or about 29 per cent of the year's total export receipts. ⁶