Development Southern Africa

ISSN: 0376-835X (Print) 1470-3637 (Online) Journal homepage: http://www.tandfonline.com/loi/cdsa20

Local economic development in Ghana: From the

lost decades to a policy maturing stage

James Kwame Mensah, Justice Nyigmah Bawole & Albert Ahenkan

To cite this article: James Kwame Mensah, Justice Nyigmah Bawole & Albert Ahenkan (2017)
Local economic development in Ghana: From the lost decades to a policy maturing stage,
Development Southern Africa, 34:5, 607-621, DOI: 10.1080/0376835X.2017.1310032

To link to this article: http://dx.doi.org/10.1080/0376835X.2017.1310032

Published online: 28 Apr 2017.

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 DEVELOPMENT SOUTHERN AFRICA, 2017
VOL. 34, NO. 5, 607621
https://doi.org/10.1080/0376835X.2017.1310032

Local economic development in Ghana: From the lost

decades to a policy maturing stage
James Kwame Mensaha, Justice Nyigmah Bawoleb and Albert Ahenkanb
a
Department of Business Administration, University of Professional Studies, Accra, Ghana; bDepartment of
Public Administration and Health Services Management, University of Ghana Business School, Accra, Ghana

ABSTRACT KEYWORDS
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Analysis and studies of local economic development (LED) tend to Local economic
be under the rubric of case studies to the neglect of their development; development
historical context and the role of international development agencies; local government;
agencies. This article attempts to fill this gap by focusing on the policy; Ghana
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.

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; Rodri-
guez-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).

CONTACT James Kwame Mensah mensjam@gmail.com Department of Business Administration, University of

Professional Studies, Accra, PO Box LG 149, Legon, Accra, Ghana
2017 Government Technical Advisory Centre (GTAC)
 608 J. K. MENSAH ET AL.

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 rig-
orous and systematic review of the LED discourse from pre independence to the contem-
porary 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 understand-
ing of its status and point out the challenges and potential areas for local development.
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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 & Roger-
son, 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 pro-
moting 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 researchers presence or by the exist-
ence 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 represen-
tative (Thomas, 2004).
 DEVELOPMENT SOUTHERN AFRICA 609

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 devel-
opment 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,
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2014). Hence, acceptance levels of LED have been raised and there has been growing will-
ingness to adopt the approach of LED whereby local stakeholders assume greater respon-
sibility 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 stan-
dard 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 denitions of LED are due to the lack of a clearly dened 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, insti-
tutional 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
 610 J. K. MENSAH ET AL.

de-facto principal practitioners of promoting alternative development (Gomez & Helms-

ing, 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 deindus-
trialisation 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, Rodrguez-
Pose & Tijmstra (2009) stressed that LED programmes in both the developed and devel-
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oping 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, struc-
tural adjustment packages, transition to democracy and decentralisation, high unemploy-
ment 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, suc-
cessive 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 implemen-
tation 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
 DEVELOPMENT SOUTHERN AFRICA 611

local entrepreneurship, raising their capabilities and promoting inclusive economic organ-
isation. The third set of theories focuses on alternative local development such as commu-
nity 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 defini-
tive 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 fra-
mework 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
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delivery and outcomes, while academic efforts at theory building are not focused on dis-
seminating 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 devel-
opment plan (Vordzorgbe & Caiquo, 2001), it was not until 1988 that real effort for LED
began. Previous national development plans pre-independence era (191926; 194247;
195156) and post-independence era (195759; 195964; 1963/6469/70; 197071; 1975/
7679/80) were not LED oriented. In the pre-independence era, the colonial develop-
ment plans were more concerned with building infrastructure needed to facilitate the
exploitation and export of the countrys mineral resources while the post-independence
development plans aimed at accelerating economic growth, starting a socialist transform-
ation and removing all vestiges of the colonial structure (Vordzorgbe & Caiquo, 2001).
Again, attention was largely on national development rather than regional and local devel-
opment. Nevertheless, the 1963/6469/70 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,
198389; and Phase II, 198789) 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 decen-
tralisation 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 indus-
trialisation at the local level through technology, the Ghana Regional Appropriate
 612 J. K. MENSAH ET AL.

Technology Industrial Service project was set up in 1987 to help transfer appropriate tech-
nologies 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 owner-
ship 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 frame-
works of the fourth republic are largely driven by the 1992 constitution of Ghana. Chapter
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20 of the constitution envisages a local government system which should be largely decen-
tralised. 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 consti-
tution 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).
 DEVELOPMENT SOUTHERN AFRICA 613

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 Ghanas development planning. These Acts made it possible for devel-
opment 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 (19962000). 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) (Vord-
zorgbe & Caiquo, 2001).
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From 2001 to 2007, the government introduced the presidential special initiatives (Gar-
ments 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 (200305) & II (200609) 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 (201013) & II (201417) followed the GPRS.
Except for indicating that the GSGDA is the main policy document to guide the prep-
aration 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 environ-
mental 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 posi-
tively 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 formu-
lation of a national LED framework to guide DAs in pursuing LED (MLGRD, 2010).
The 201214 activity-based budget of the MLGRD captured LED and argued that the pro-
gramme 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 econ-
omic growth, employment and income generation to promote household welfare and alle-
viate poverty (MLGRD, 2014). Based on the LED policy and with support from the UNDP
 614 J. K. MENSAH ET AL.

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 dis-
trict 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
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LED in Ghana introduced the following interventions: Ghana Decent Work Pilot Pro-
gramme (200205); Ghana Working out of Poverty Project (200406); Strategic initiative
(200607); and Ghana Decent Work Programme (200810). 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 ILOs 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 cre-
ation, 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 & Wastys
(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 insti-
tutions 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 Develop-
ment (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
 DEVELOPMENT SOUTHERN AFRICA 615

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 pro-
grammes for the light industrial areas. The key beneficiaries include wood processors,
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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 Porters notion of clusters, where enter-
prises 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 encoun-
tered 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 commu-
nity 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 201216
country programme document for Ghana which states that with a national framework
for LED complemented by district LED strategies it could stimulate and transform econ-
omies of districts and create new jobs and income-generation opportunities (UNDP,
 616 J. K. MENSAH ET AL.

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 inter-
national 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.
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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 develop-
ment 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-inde-
pendence era development plans up to 1987 were mainly decided by the central govern-
ment 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 industrialis-
ation 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 initiat-
ives such as town improvements, northern development schemes, Operation Feed Your-
self, 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 own-
ership 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 MLGRDs 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
 DEVELOPMENT SOUTHERN AFRICA 617

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, munici-
pal 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 rela-
tively 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
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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 activi-
ties at the local level (Grooten, 2005; van Empel, 2007; van Gerwen, 2007). While the con-
tribution 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 dis-
appointing. 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 devel-
opment 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
 618 J. K. MENSAH ET AL.

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, tra-
ditional 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 suffi-
ciently 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
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governments, the LED secretariat and the NDPC through the national budget. Third,
funding through international development agencies, NGOs and private-sector invest-
ments can be channelled through a variety of mechanisms commercial banks, microfi-
nance institutions, publicprivate 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, inter-
national 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.

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