Ghana has the world's largest manmade lake and the 1-gigawatt Aksombo Hydroelectric Plant, built to supply electricity to Africa's largest aluminum smelter. But the smelter has been idle since 2009, a casualty of low aluminum prices and persistent electricity shortages that have forced the government to divert the power elsewhere.
Ghana is a typical example of the world's worst-managed economies: It's a country that shouldn't be poor, but it is. The West African nation's gross domestic product per capita fell 9% last year to $621, ranking it 154th out of 184 countries tracked by the International Monetary Fund, below resource-impoverished Haiti. With a $3 billion trade deficit last year and $4.9 billion in external debt, Ghana is struggling to pay its bills even as it sits on some of the world's biggest reserves of gold and bauxite, as well as considerable amounts of offshore oil, which is being developed by Anadarko Petroleum and others.
In Pictures: The 10 Worst Economies
In Pictures: The World's Busiest Ports
The World's Biggest Illicit Industries
In Pictures: Billionaire Convicts And Inmates
In Pictures: Wall Street's 10 Biggest Bears
"Ghana's problems are mostly homegrown," said Peter Allum, the IMF's mission chief to Ghana, in February. Forbes ranks Ghana ninth on our list of the world's worst economies.
As the world focuses on Greece and the rest of the so-called PIIGs--Portugal, Italy and Ireland--in their fight to reverse years of irresponsible fiscal policies, another group of nations make them look positively well-managed. Forbes screened IMF data for countries that have low and declining per-capita GDP, high trade deficits and high inflation, all indicators of bad economic management regardless of the country's inherent wealth.
All have at least one trait in common: Their governments discourage private investment--and economic growth--through policies of crony capitalism, expropriation or arbitrary enforcement of the laws. That makes it hard to generate hard currency to pay off government debt and discourages citizens from investing in education to improve their own economic lot.
"Most of these vulnerably low-income countries are in a trap," said Otaviano Canuto, vice president and head of the World Bank's Poverty Reduction and Economic Management Network. "The climate is not conducive to investments, not only in factories and agricultural improvements, but in education."
No surprise as to the winner of this race to the bottom: Zimbabwe, a country where the annual inflation rate hit the surreal level of more than 500 billion percent in late 2008 as the government of dictator Robert Mugabe tried to print his way out of his own mistaken economic policies. Before the fever broke last year, Zimbabwe restaurants felt compelled to post signs reminding patrons not to use the nearly worthless dollar bills as toilet paper. Zimbabwe's inflation rate has since dropped to around 5% as the country abandoned its currency and allowed transactions to be conducted in U.S. dollars and other currencies. But it still was forced to import 500,000 tons of maize last year to make up for shortfalls in its once-bountiful agricultural sector.
Image: Burundi
Text and images: Copyright Forbes.com Any unauthorised reproducton is prohibited.
|
Currency 
