Local economic development in Ghana: From the ‘lost decades’ to a policy ‘maturing’ stage

ABSTRACT

Analysis and studies of local economic development (LED) tend to be under the rubric of case studies to the neglect of their historical context and the role of international development agencies. This article attempts to fill this gap by focusing on the experiences of Ghana. Adopting a systematic review of the policy documents and existing literature, it was found that, despite its significance, LED was not the priority of the governments of pre and post immediate independence era. In the fourth republic of Ghana, LED gained prominence in the various policy documents but this appears to be rhetoric and camouflage because they have not seen real implementation. However, international development agencies have played a significant role in initiating, funding and implementing specific LED activities in the various districts in Ghana. Overall, LED in Ghana has crawled from the ‘lost decades’ to a policy ‘maturing stage’.

KEYWORDS:

• Local economic development
• development agencies
• local government
• policy
• Ghana

1. Introduction

Local economic development (LED) has recently gained prominence as a viable alternative to top-down development strategies which have largely failed to generate meaningful and sustainable development at the local level (Helmsing, 2003; Rodriguez-Pose, 2008; Rodriguez-Pose & Tijmstra, 2009; Rogerson, 2010; Nel & Rogerson, 2016). Ghana has made several efforts to promote LED as reflected in the various development plans, legislative and institutional frameworks over the years (MLGRD, 2010, 2012, 2014; Akudugu & Laube, 2013; Mensah et al., 2013a). International development agencies (e.g. ILO, GIZ and UNDP) have also played a significant role in terms of the design, formulation, implementation and financing of the LED agenda in Ghana. Their involvement has rekindled interest in LED and more importantly has spearheaded the formulation of a national LED policy in Ghana (Akudugu, 2013; Akudugu & Laube, 2013). This interest, acceptance and involvement of international development agencies in LED in Ghana is based on the view that LED has the potential to rejuvenate local economies by ‘fostering territorial competitiveness, strengthening local institutions, better management of the development process and internalising local resources’ (Rodriguez-Pose, 2008:23).

Even though LED research has begun in the Ghanaian context (Agyei, 2012; Akudugu & Laube, 2013; Mensah et al., 2013b; Adei et al., 2015) by providing case studies, only a few (e.g. Mensah et al., 2013a) have attempted to provide a systematic review of LED in Ghana. Even though Mensah et al.'s (2013a) study constitutes a useful starting point, a more rigorous and systematic review of the LED discourse from pre independence to the contemporary situation is needed. More unfortunately, the significant role played by international development agencies in promoting and supporting LED in Ghana remains a significant gap in the Ghanaian LED literature. Nonetheless, international development agencies in Ghana have facilitated and serve as a catalyst for transferring the LED approach from developed countries to the developing world (Rodriguez-Pose, 2002; Rodriguez-Pose & Tijmstra, 2009; Marais, 2010). LED research in Ghana will help map out our understanding of its status and point out the challenges and potential areas for local development. Drawing from the extant literature and relevant policy documents as well as LED theory, this article systematically and rigorously maps out the status and scholarship of LED policy and practice in Ghana and highlights the various initiatives undertaken by international development agencies in the formulation and implementation of LED in Ghana. This article contributes to the debate and evidence of LED in sub-Saharan Africa which has been largely unrepresented in the extant literature (Rogerson & Rogerson, 2010). It also provides a valuable resource for policy-makers, politicians, development agencies, local practitioners, local governments and all stakeholders involved in delivering LED.

Structurally, the next section provides a brief overview of the methodology employed in this study. The third section presents the views on what LED means and its origin, and provides a brief discussion of the theoretical underpinning of LED. This is followed by LED in Ghana, divided into three parts – pre independence, post independence and the fourth republic – and will discuss the role of international development agencies in promoting LED in Ghana. The fifth section will provide a detailed discussion of the paper and the final section will draw some conclusions from the article.

2. Methodology

Data for this article were obtained from three main sources: existent literature; policy and legislative documents; and international development agencies’ LED documents. The extant literature provided insight into how LED had been practiced in Ghana over the years. Legislative and policy documents provided useful information on the legal frameworks, institutions and plans for LED in Ghana. International development agencies’ (GIZ, ILO and UNDP) LED programmes provided an understanding of the role that international development agencies have played in the promotion of LED in Ghana. These sources of data were considered useful for this study for three reasons. First, their contents cannot be influenced by the researcher’s presence or by the existence of a research investigation. Second, they are useful for longitudinal studies because they are beyond the memory of any living individual. Finally, they are considered appropriate for historical research (Thomas, 2004). However, we are aware that such documents can be difficult to interpret when they are taken out of their original context. Thus, we made sure that the documents were authentic, credible and representative (Thomas, 2004).

3. Local economic development: A brief review of the literature

LED has been increasingly seen as a viable alternative to top-down development strategies. This is largely due to the failure of top-down development strategies at the local level (Binns & Nel, 1999; Helmsing, 2003; Rodriguez-Pose, 2008; Rodriguez-Pose & Tijmstra, 2009; Rogerson, 2010). For instance, in developing countries the trickle-down effect of top-down development was largely not achieved (Nel & Rogerson, 2016). Thus, over the past two decades, the notion of LED has become of growing significance particularly in the developing world, due to among others the fact that ‘the prospects for and promises of LED seem to be huge’ (Akudugu & Laube, 2013:3). Indeed, leading international development agencies have been at the forefront and influential in diffusing the concept of LED from the Global North to the Global South (Marais, 2010; Akudugu, 2013; Rogerson, 2014). Hence, acceptance levels of LED have been raised and there has been growing willingness to adopt the approach of LED whereby local stakeholders assume greater responsibility for catalysing area prosperity (Rodriguez-Pose & Palavicini-Corona, 2013; Rogerson, 2014).

Despite its significance to the lives of people and development, LED has escaped a standard definition, making it not only elusive but a contested concept and open to multiple interpretations (Trah, 2004; Pike et al., 2007; Akudugu & Laube, 2013). For Blakely (1994), LED is the process in which local governments or community-based organisations engage to stimulate or maintain business activity and/or employment. In Ghana, LED is defined as:

the process by which local governments, local businesses and other actors join forces and resources to enter into new partnership agreements with each other or other stakeholders to create new jobs and stimulate economic activity in municipalities, towns and villages. (MLGRD, 2010:14)

The multiple definitions of LED are due to the lack of a clearly defined theoretical model and the fact that the main sources of its inspiration are experiences and imitations. Despite the slippery nature of LED, the emphasis of the concept is on endogenous development policies which make use of potentials and existing local resources including human, institutional and physical. It is also a participatory process which involves various stakeholders within a spatial unit who commit their efforts together to achieve progress.

The extant literature showed that LED originated from Europe after the Second World War in the 1950s and 1960s as a response to the place-based crises caused by war damage, industrial decline and dereliction in order to redevelop devastated districts and regions (Blakely, 1989; Rodriguez-Pose & Tijmastra, 2009). In North America, LED emerged in the 1960s and 1970s to address the impact of deindustrialisation in the ‘rust belt’ (Clark et al., 2010:40) and a response to the decline in economic growth (Dewar, 1998). During the 1980s and 1990s, LED emerged in East Asia partly fuelled by rising industrial and technological developments, and partly due to the need to create settlements and urban growth more rapidly to accommodate growing populations. In recent years, LED has become popular in Latin America, South Asia and Africa partly due to the need to promote balanced socio-economic development and partly due to ‘bottom-up’ processes to encourage local development or a process fuelled by international donors (Clark et al., 2010:41). Non Governmental Organisations (NGOs) in the 1980s and early 1900s acted as de-facto principal practitioners of promoting alternative development (Gomez & Helmsing, 2008) and played a significant role in the promotion of LED across the globe. Their approach focused on community-based employment, community empowerment and income generation for the poor in rural areas (Binns & Nel, 1999; Shaffer et al., 2006).

There appear to be differences between LED in the developed and developing world. In the former, LED is largely characterised and driven by locality-specific crises of deindustrialisation and pressure to provide welfare to the local residents (Nel, 2001). In the latter, LED is at its infancy stage (Barberia & Biderman, 2010) and takes a much more basic form due to limited technology, resources and external support (Binns & Nel, 1999). Thus, LED in most developing countries is basically a survivalist strategy or self-reliance which is essentially aimed at achieving social rather than economic goals. However, Rodríguez-Pose & Tijmstra (2009) stressed that LED programmes in both the developed and developing world can be classified into two types: pro-growth and pro-poor. The first focuses on combating constraints that impede local businesses, retention of business, attracting new businesses and so forth, while the later focuses on poverty reduction and inclusion through welfare policies.

In Africa, LED evolved because of the collapse of social services, hyper-inflation, massive currency devaluation, vast debt burdens, disastrous effects of global trade, structural adjustment packages, transition to democracy and decentralisation, high unemployment and poverty (Maharaj & Rambali, 1998; Binns & Nel, 1999; Nel, 2001; Mensah et al., 2013a). Except for South Africa, LED is at its inception stage in most African countries (Marais, 2010; Rogerson, 2010; Rogerson & Rogerson, 2010). In synthesising the literature, Helmsing (2003) categorised LED initiatives in Africa into three categories: community economic development, enterprise development and locality development. In Ghana, successive governments have pursued plans and programmes for local development, but it was not until the fourth republic that LED gained prominence (Mensah et al., 2013a). In the fourth republic, several institutions and policy frameworks have been put in place to help build the capacities of and empower residents to utilise local resources to stimulate local development (Mensah et al., 2013a). International development agencies (ILO, GIZ and UNDP) have become an integral part of the promotion and implementation of LED initiatives in selected districts across Ghana.

From the endogenous theory perspective, LED has three main characteristics: it sets development activity within a territory rather than sectorial framework, with the scale of the territory being smaller than the nation-state; economic and other development activities are reoriented to maximise the retention of benefits within the local territory by valorising and exploiting local resources – physical and human; and development is contextualised by focusing on the needs, capacities and perspectives of local people (OECD, 1996; Ray, 1997). Bingham & Mier (1993) draw across a variety of disciplines to establish the foundation for using theory in LED which is basically a branch of regional development theory (Pike et al., 2006). With a focus on localities, LED theory emphasises on the ‘actors, structures, and processes of local regional growth as these exist and take place within a defined territory’ (Gomez & Helmsing, 2008:2490). LED theories can be broadly grouped into three categories. The first of these theories are structured in market-driven development in which firms are the central object of analysis. Here firms are the central actors while others play secondary roles. Public policy is mainly targeted at making the locality attractive to firms. The second set of theories focuses on mobilising local entrepreneurship, raising their capabilities and promoting inclusive economic organisation. The third set of theories focuses on alternative local development such as community development, civil society driven or social economy (Gomez & Helmsing, 2008).

Even though, most LED programmes are anchored ‘on one or more of these theories, the multiplicity of theoretical perspectives results in confusion among practitioners’ (Beer, 2009:63). This theoretical multiplicity has prompted Rowe (2009) to claim that no definitive all-encompassing theory of local or regional economic development exists; rather, ‘there are many theories that relate to and impact on LED, but none clearly provides a framework for understanding the complex relationships that comprise this interdisciplinary field of endeavour’ (2009:xviii). This has consequences to the extent that linkages between theory and practice in the emerging discipline of LED are, at best, ‘partial’ (Beer, 2009:68). Similarly, LED practitioners often have a narrow interest in matters beyond programme delivery and outcomes, while academic efforts at theory building are not focused on disseminating ideas and knowledge to practitioners (Beer, 2009).

4. Local economic development in Ghana: The trajectory so far

4.1. Pre and post-independence era

Even though Ghana was among the first countries in the world to have a national development plan (Vordzorgbe & Caiquo, 2001), it was not until 1988 that real effort for LED began. Previous national development plans – pre-independence era (1919–26; 1942–47; 1951–56) and post-independence era (1957–59; 1959–64; 1963/64–69/70; 1970–71; 1975/76–79/80) – were not LED oriented. In the pre-independence era, the colonial development plans were more concerned with building infrastructure needed to facilitate the exploitation and export of the country’s mineral resources while the post-independence development plans aimed at accelerating economic growth, starting a socialist transformation and removing all vestiges of the colonial structure (Vordzorgbe & Caiquo, 2001). Again, attention was largely on national development rather than regional and local development. Nevertheless, the 1963/64–69/70 plan initiated the northern development scheme as a means for leveraging and re-distributing resources to socio-economically excluded groups while the Operation Feed Yourself programme, a component of the 1975/76–79/80 plan, targeted local initiatives and indigenous enterprise (Kendie & Martens, 2008). Operation Feed Yourself was a programme directed at national self-reliance based on increased food production (see Girdner et al., 1980).

The Provisional National Defence Council took over power on 31 December 1981 and embarked on a series of implementations of an economic recovery programme (Phase I, 1983–89; and Phase II, 1987–89) aimed at transforming and stabilising the Ghanaian economy. However, in 1988 attention shifted to local development as the Provisional National Defence Council government adopted and implemented a comprehensive decentralisation policy through the enactment of the local government law of 1988 with the aim of moving governance to the local level for local development (Tandoh-Offin, 2013). Even before this, the government established the National Board for Small Scale Industries in 1985 as the apex governmental body for the promotion and development of the micro and small enterprises sector in Ghana. Similarly, as a way of promoting small-scale industrialisation at the local level through technology, the Ghana Regional Appropriate Technology Industrial Service project was set up in 1987 to help transfer appropriate technologies to small-scale industrialists by means of training, manufacturing and supply of machines, tools, plants and equipment (Mensah et al., 2013a). This shift to LED may be due to the failure of a top-down development approach to promote genuine local ownership of the development process.

4.2. The fourth republic

The period 1992 to the present marks the new era and significant turning point in the history of LED in Ghana, especially in policy frameworks. Major events and policy frameworks of the fourth republic are largely driven by the 1992 constitution of Ghana. Chapter 20 of the constitution envisages a local government system which should be largely decentralised. Article 245(a) empowers decentralised local government agencies, namely District Assemblies (DAs), to formulate and execute plans, programmes and strategies as well as the mobilisation of resources necessary for overall district development. The constitution further makes provisions in Article 252(1) and (2) for the establishment of the District Assemblies Common Fund (DACF) and subsequent allocation of not less than 5% (now 7.5%) of the total revenues of Ghana to the DAs for development. Following this constitutional provision, the DACF Act, 1993 (Act 455) was enacted. Thus, the constitution not only recognises DAs as local development agents, but also seeks to support them financially to effectively deliver their mandate. The local government Act of 1993 (Act 462) was passed in accordance with the constitution to strengthen DAs to pursue their role. Part 1 section 10(3a to e), 4 and 5 stipulated the role that DAs have in terms of being the overall custodians of development in their locality in collaboration with other agencies, ministries, departments, public corporations and NGOs in the district. DAs are therefore mandated to formulate District Medium Term Development Plans (DMTDP) to guide them.

Overall, the 1992 constitution designates DAs as the highest political authority in the district with deliberative, legislative and executive powers. This clearly emphasises a shift from top-down development and the devolution of power to DAs for LED. However, Crook (2003:79) argued that whereas DAs have achieved some modest increase in participatory governance, the same cannot be said of promoting the economic well-being of local residents. Tijmstra (2011) maintained that while significant responsibilities in the field of LED have been officially devolved to DAs for nearly two decades, most DAs have not been able to engage successfully with this part of their remit. Thus, although DAs are supposed to promote LED in their localities, they have not been able to do so effectively (Akudugu & Laube, 2013). In other words, DAs have focused on their legislative and administrative functions to the detriment of their LED functions (MLGRD, 2014). This is partially attributed to the unwillingness of the central government to fully devolve powers and the necessary funding to the DAs to promote local development initiative (Ribot, 2002; Crawford, 2008). For instance, DAs are supposed to follow the guidelines of the National Development Planning Commission (NDPC) for the preparation of their Medium Term Development Plan while the DACF is always delayed. This constrains the power and ability of DAs to design and implement local development initiatives that reflect the needs of their residents (Akudugu & Laube, 2013).

Efforts to ensure LED led to the establishment of the Rural Enterprises Programme in 1994 to increase the number of rural micro and small enterprises that could generate profit, growth and employment opportunities for rural residents. The NDPC Act (Act 479, 1994) and the National Development Planning (Systems) Act (Act 480, 1994) were adopted to guide Ghana’s development planning. These Acts made it possible for development planning with full participation of local communities. Furthermore, Ghana Vision-2020 was adopted in 1996 based on Article 36(5) of the constitution. This led to the preparation of the first medium-term development plan (1996–2000). Even though Vision-2020 was largely prepared by the central government agencies, the preparation of the first medium-term development plan involved a very broad range of stakeholders (DAs, the private sector, NGOs, academics, workers and traditional authorities) (Vordzorgbe & Caiquo, 2001).

From 2001 to 2007, the government introduced the presidential special initiatives (Garments and Textiles, Agri-business [Cassava and Oil Palm] and Salt industries) as a way of promoting LED through local industrialisation. Between 2003 and 2009, the Ghana Poverty Reduction Strategy (GPRS) I (2003–05) & II (2006–09) became the main policy framework for allocating resources. Despite the importance of LED, the GPRS I & II could not state a clear role for DAs in terms of LED and neither did it create a suitable institution to bring together DAs, local authorities, the private sector and community members to develop a LED strategy (Mensah et al., 2013a). The Ghana Shared Growth and Development Agenda (GSGDA) I (2010–13) & II (2014–17) followed the GPRS. Except for indicating that the GSGDA is the main policy document to guide the preparation and implementation of DMTDP as well as formulating and implementing a national rural development policy and action plan, it is largely deficient in terms of LED.

Artisanal small mining is a major livelihood economic activity for most people in mining communities (Hilson & Potter, 2005; Wilson et al., 2015). Because of the environmental challenges associated with artisanal small mining, the government has sought to use alternative livelihood projects, also known as LED. Several corporate partners (e.g. Newmont Gold Mining, AngloGod Ashanti, Gold Fields Ghana) have responded positively to this initiative by developing alternative livelihood projects in their communities of operation, even though assessment of such interventions has provided mixed results, requiring a rethink about the alternative livelihood projects exercise in its entirety (Carson et al., 2005; Hilson & Banchirigah, 2009; Banchirigah & Hilson, 2010). In recent years, efforts have been made to re-orient DAs towards their neglected LED role. The Ministry of Local Government and Rural Development (MLGRD) formulated a new decentralisation policy with the aim of clarifying roles, and repositioning the DAs to effectively carry out their mandate and promote LED. It seeks to facilitate the formulation of a national LED framework to guide DAs in pursuing LED (MLGRD, 2010). The 2012–14 activity-based budget of the MLGRD captured LED and argued that the programme seeks to reduce the disparities between rural and urban areas in terms of income, quality of life and employment. It also seeks to attract investment to the local level for the growth and development of communities (MLGRD, 2012).

In 2014, the government of Ghana with the support of the UNDP and ILO came out with the national LED policy. The policy has as its broad objective the facilitation of economic growth, employment and income generation to promote household welfare and alleviate poverty (MLGRD, 2014). Based on the LED policy and with support from the UNDP and ILO, the operational manual on LED for DAs was developed in 2014 with the purpose of providing the conceptual issues on LED, the process of operationalisation and implementation tools (MLGRD, 2014). However, the current LED planning in Ghana largely follows the same old structures and patterns for development planning at the district level. Thus, LED is only a peripheral component of the DMTDP.

4.3. International development agencies and local economic development in Ghana

Even though several actors are involved in the promotion of LED in Ghana, the LED process is largely driven by three international development agencies (ILO, GIZ and UNDP) who work directly with selected DAs in Ghana. The ILO as part of promoting LED in Ghana introduced the following interventions: Ghana Decent Work Pilot Programme (2002–05); Ghana Working out of Poverty Project (2004–06); Strategic initiative (2006–07); and Ghana Decent Work Programme (2008–10). There are two regions that are implementing the ILO LED initiatives. The central region has eight districts while the eastern region has five districts (Tijmstra, 2011). At the heart of the ILO’s LED is the creation and expansion of decent job opportunities for local residents under conditions of freedom, equity, security and human dignity (Grooten, 2005) through sensitisation and capacity-building activities that enable a wide range of stakeholders in the world of work to participate in the design and implementation of locally tailored development (Tijmstra, 2011).

The ILO established the DA Sub-Committees on Productive and Gainful Employment made up of 15 members that provide leadership by informing, coordinating, mobilising and linking stakeholders at the district, national and international levels (Grooten, 2005; Tijmstra, 2011). These Sub-Committees also identify local potential and effectively harness this for the benefit of all in the district. This helps to facilitate social dialogue and encourage partnership between representatives of both the public and the informal sectors to enhance the voices of the vulnerable and marginalised groups (Grooten 2005; van Empel, 2007; Tijmstra, 2011). The ILO LED approach has produced significant results because it has helped hundreds of small businesses to improve, grow, expand and raise incomes, and has created more and better jobs in the process (Grooten 2005; van Empel, 2007; van Gerwen 2007; Ulrich, 2008; Arowolo & Asangalisah 2010).

The ILO approach has resulted in better enterprise management and employment creation, with women benefiting the most. Participants are now able to pay school fees of their wards, finance their up-keep and register with the National Health Insurance Scheme to take care of their health needs (Baisie, 2011). Using Johnson & Wasty’s (1993) four dimensions of ownership framework to assess the impact of the Ghana Decent Work Programme at both local and national levels, Tijmstra (2011) observed that, at the local level, ownership of LED was relatively high for all four dimensions while national-level ownership was mixed. The ILO working directly with national institutions such as the MLGRD and the NDPC has helped generate greater awareness of the LED approach in Ghana (Tijmstra, 2011).

The GIZ introduced its LED version known as Local and Regional Economic Development (LRED) as a component of its Rural Trade and Industry Promotion Project in 2005 (Crawford & Kayser, 2008; Akudugu & Laube, 2013). The main goal of the GIZ LRED approach rests on the design and implementation of a strategy that would help small and medium enterprises (SMEs) to expand in order to improve their output and incomes, making it a business and-market oriented approach (Hindson, 2007; Akudugu & Laube, 2013). To build a partnership at the local area for LRED, the GIZ uses regional economic round tables, and local and regional economic development platforms to bring key actors at the regional and district levels together to deliberate and take actions regarding the economic development of their regions and districts (Akudugu, 2013; Akudugu & Laube, 2013). The GIZ LRED was introduced in selected districts, first in Brong Ahafo Region and later in Ashanti, Western, Central and Northern Regions, by setting up light industrial zones as a way of strengthening district business centres.

The programme provides finance for grid extension, advisory services and training programmes for the light industrial areas. The key beneficiaries include wood processors, welders, car repairers, metalwork and agro-processing enterprises to gain secure access to land, electricity and other infrastructure (Owusu & Newiger-Addy, 2012; Akudugu & Laube, 2013). By bringing them under one roof, they can combine efforts to invest in and learn about new technologies in order to increase the number of clients. The concept of light industrial zones relates to Michael Porter’s notion of clusters, where enterprises with complementary services operate in a particular environment to complement each other. To promote and encourage participation in the light industrial zones, the GIZ uses radio stations in their operational areas to broadcast the purpose and significance of their intervention to residents (Owusu & Newiger-Addy, 2012).

The GIZ light industrial zone interventions have yielded significant results and benefits to residents. Records show that 697 businesses have moved to the zones, employing 2216 people. These businesses have been able to improve their productivity, leading to increased profits (Owusu & Newiger-Addy, 2012). However, the light industrial zones have encountered several challenges, particularly sustainability and extension of the current initiatives to other viable alternatives. For instance, after the withdrawal of the GIZ, LED activities have become dormant in the Brekum Municipality while in other districts LED initiatives have not gone beyond the establishment of light industrial zones (Akudugu, 2013; Akudugu & Laube, 2013). Moss et al. (2008:258) maintain that this is common among development interventions delivered by development agencies and perceived it as ‘aid or resource curse’.

In Ghana, the UNDP has since 2009 engaged the central government, DAs and local communities in its SME projects which seek to enhance peoples’ livelihood and community development (Akudugu, 2013; Akudugu & Laube, 2013). At the local level, the UNDP has been providing capacity-building, training and financial support for individuals to start or expand their businesses, but in recent times changed such an approach in favour of LED in order for local communities to take ownership of such interventions. At the national level, the UNDP seeks to influence and shape policy direction by working with institutions such as MLGRD, NDPC, Institute of Local Government Studies and the local government service to institutionalise LED in Ghana. The UNDP seeks to promote inclusive growth and address crucial development disparities in Ghana by strengthening economic viability of all districts. This is evident in its 2012–16 country programme document for Ghana which states that with a national framework for LED complemented by district LED strategies it could stimulate and transform economies of districts and create new jobs and income-generation opportunities (UNDP, 2011). As part of national efforts towards the scaling up of the LED approach in Ghana, the UNDP has piloted a LED scheme under the supervision of the NDPC in seven districts (Akudugu, 2013; Akudugu & Laube, 2013). It is crucial to note that apart from these international development agencies, several NGOs, both local and international, and other development agencies have been engaged in local development and empowerment of the local people.

5. Discussion

With the dwindling results of top-down development policies, the concept of LED has assumed significance as an alternative/complement to traditional development strategies and as a valid and viable way to overcome the development problems at the local level. The presented review of the trajectory of LED in Ghana reveals interesting findings. First, the planning approaches in the pre-independence era were mainly geared towards infrastructural development of the nation. Second, the post-independence era development plans up to 1987 mainly focused on industrialisation, infrastructure and dealing with the economic imbalances in the country. The objective of these development plans did not fit into the characteristics of LED as given by various authors (e.g. Blakely, 1994; Rodriguez-Pose & Tijmstra, 2009).

Whereas LED focuses on tailor-made strategies by local stakeholders, the pre-independence era development plans up to 1987 were mainly decided by the central government with little or no input from local actors and adopted a sectorial rather than territorial approach. However, this focus is understandable to some extent because the country was in the process of building a strong infrastructural base before descending to the local level. Indeed, during this era the general assumption was that industrialisation and infrastructural development will have a trickle-down effect that will lead to the achievement of other social goals at the local level. Therefore, despite laudable initiatives such as town improvements, northern development schemes, Operation Feed Yourself, diversification of the agricultural sector and the Program of Action to Mitigate the Social Cost of Adjustment, this period could largely be described as the ‘lost decades’ of LED in Ghana.

Third, even though decentralisation in Ghana started in 1988, it was not until the fourth republic that LED policy frameworks began to assume importance. This shift to LED may be due to the failure of top-down development approach to promote genuine local ownership of the development process. The 1992 constitution, several Acts of Parliament (Act 455, Act 462, Act 479, Act 480) and various national development frameworks (Ghana-Vision 2020, GPRS I & II, GSGDA I & II) recognise and place responsibilities on DAs to effectively promote local level development. By these, DAs are mandated to design and implement tailor-made programmes and activities based on their social and economic conditions (MLGRD, 2014).

These interventions must be in conformity with the district planning guidelines issued by the NDPC. Since 2010, the case for LED has dotted the MLGRD’s policy documents (MLGRD, 2010, 2012, 2014). In fact, after 25 years of decentralisation in Ghana, the MLGRD officially formulated and launched a national framework and LED manual that will provide a vision and direction for robust and inclusive local economies, exploiting local opportunities and addressing local needs (MLGRD, 2014). These two policy documents ushered Ghana into a ‘policy maturity’ period for LED. Overall, LED has become important within the development planning landscape of Ghana.

Fourth, whereas LED policy appears to mature, it is important to note that LED is still implemented in the old top-down fashion and the commitment of the relevant actors to the promotion and practice of LED at the district level is in doubt (Akudugu & Laube, 2013). For instance, despite the LED manual specifying the roles and responsibilities of key stakeholders (inter-ministerial coordinating committee council on decentralisation, MLGRD, advisory council, LED secretariat, NDPC, parliament and metropolitan, municipal and district assemblies [MMDAs]), it appears that only the LED secretariat had been established while MMDAs that are supposed to be the centre of LED have remained relatively inactive. Again, LED currently falls under the broad plans of the DMTDP with no specific LED programmes at the local level. Similarly, district planning officers have added LED to their responsibilities because there are no specific offices and staff for LED at the local level, even though the planning officer is more a development planner than a LED expert.

Fifth, the ILO, GIZ and UNDP have reinvigorated the spirit of LED in Ghana. Whereas the ILO has initiated and implemented LED in Ghana through their decent work project, the GIZ and UNDP sought to promote LED through the light industrial concept and SME projects respectively. Although there are considerable differences between the approaches used by these agencies, they have in common the search for endogenous development based on local actors, resources and capacities. Their interventions have yielded significant positive results for the residents, especially providing jobs and stimulating business activities at the local level (Grooten, 2005; van Empel, 2007; van Gerwen, 2007). While the contribution of these agencies has led to the successful implementation of LED initiatives, the sustenance of their interventions and even their replication by local actors has been disappointing. This is probably due to the ‘supply-driven’ approach adopted by these agencies. For instance, despite the participation in the various LED initiatives, these agencies have a strong influence on most of the economic activities that were developed (Akudugu, 2013). Adopting such an approach often fails to promote local ownership of development interventions. Generally, five variations of LED can be identified in Ghana: central government-led LED, local government-led LED, local organisations and local NGO-led LED, international organisation-led LED, and individual-led LED.

To move the LED agenda forward in order to ensure sustainable rural and local development in Ghana, we suggest the following actions. First, LED is basically a bottom-up approach to development, and hence it is important to have designated LED personnel in all DAs and build their capacity to engage relevant actors to jointly design and implement their own LED initiatives because this will lead to local ownership. Training and capacity-building should focus on the areas of strategic planning, economic mapping; strengths, weaknesses, opportunities and threats analysis, value chain, business climate survey, business and investment climate assessment, business retention and expansion. Existing institutions such as universities, the Institute of Local Government Studies, Ghana Institute of Management and Public Administration and various research centres can be engaged to build the capacity of LED staff. Second, there is the need to give priority to LED in the DMTDP and guidelines for their preparation provided by the MLGRD and NDPC. This must clarify the roles of the various stakeholders and the coordination among them. Thus, the guidelines, the DMTDP, the national LED framework and the LED manual for DAs should be harmonised to give a clear direction for the promotion of LED at the district level. There is also the need to build partnerships between DAs and all local stakeholders ─ NGOs, community based organisations, traditional authorities and local associations, among others.

Third, LED requires commitment of the national government not only in terms of policy and institutions but also financing. Local governments on their own cannot sufficiently perform LED functions because they lack resources, capacities and capabilities (Wekwete, 2014). The central government needs to financially support LED initiatives at the local level. The LED manual did not clearly specify funding for LED initiatives. We offer three ways to finance LED in Ghana. First, a portion of the DACF should be set aside for financing LED. Second, the central government can set up a LED fund largely through public-sector funding provided to the MLGRD to be disbursed to local governments, the LED secretariat and the NDPC through the national budget. Third, funding through international development agencies, NGOs and private-sector investments can be channelled through a variety of mechanisms ─ commercial banks, microfinance institutions, public–private partnership packages, loan guarantees, revolving loan funds, and cooperative and community financial organisations.

6. Conclusions

Generally, LED has become increasingly important in both the Global North and Global South due to its place-based approach to development planning. Whereas Ghana had put in place various development plans since the pre-independence era, it was not until 1988 that the real effort to mobilise local stakeholders for local development began. The pre-independence era development plans up to 1987 were more interested in economic and infrastructural development and therefore the case for LED was very limited. From 1988 to the present, LED in Ghana has significantly been recognised through various policy frameworks. However, LED in Ghana seems to be more entrenched in policy than in practice. Thus, the numerous policy documents ranging from the constitution to various legislations and MLGRD action plans that stress LED appear to be political rhetoric at best because they have not seen real implementation. On the contrary, international development agencies have actively promoted and implemented LED initiatives in Ghana. LED in Ghana is at a start-up level because only few districts have implemented LED initiatives, especially in areas where international development agencies are involved. In conclusion, LED in Ghana has crawled from the ‘lost decades’ to a policy ‘maturing stage’.

Disclosure statement

No potential conflict of interest was reported by the authors.