African Engineers: The Age of Kalabule3 min read
In developing countries, most of the trade in everyday household necessities is conducted in what economists call the informal sector. Here every transaction is in cash, few, if any, records are kept, taxes go uncollected and most government regulations are ignored. Governments strive to control the economy by collecting all the hard currency income from exports and issuing licences to limit imports. In Ghana in the 1970s, income fell well below the level needed to fund essential imports and service foreign debts. The issuing of scarce import licences by the military government became the source of much corruption. In the local markets imported goods circulated continuously at ever increasing prices as more and more people tried to share in the spoils of the trade. The rate of inflation rose to over 100 percent. The economic chaos that ensued was given the name ‘kalabule.’ It was a bad time for the community at large but many informal industrialists never had it so good, either before or since.
The origin of the term ‘kalabule is uncertain but it could be an Akan corruption of the Hausa term ‘kere kabure,’ ‘keep it quiet.’ In this era, a range of goods were designated essential commodities; most of these were imported and included tinned fish, evaporated milk, toilet soap, rice, sugar and toilet rolls. All essential commodities were scarce and the government attempted to introduce rationing by selling controlled amounts at ‘controlled prices’ to each member of the public at designated trading stores. However when any came to hand, the temptation to resell at a higher price was hard to resist. The Daily Graphic newspaper reported a story about one man accused in court of selling tins of sardines that had gone bad. He said in his defence that the fish was intended for trading, not for eating!
The slogan ‘No Brother in the Army’ started to appear on taxis and trotros as people saw that all soldiers’ families seemed to be prospering. The girlfriends of army officers were seen driving new Volkswagen Golf cars, which were soon widely known as ‘honey bottoms.’ All respect for the military government evaporated and individuals felt compelled to live by any means available.
Under the regime of General I K Acheampong, Ghana’s economy continued to decline. The foreign exchange rate for the Ghanaian cedi had become totally unrealistic. Goods imported with an import licence at the official exchange rate of 1.15 Ghanaian cedis to the US dollar could be sold at a rate equivalent to about 20 cedis to the dollar. This was the scale of profits that were being made by anyone fortunate enough to obtain an import licence or to buy imported goods at ‘controlled prices.’ The demand for import licences greatly exceeded the supply. The soldiers gave them to their relatives and girlfriends, and to the traders who paid the highest bribes.
At Suame Magazine in Kumasi, Ghana’s largest informal industrial area, some artisans were making a lot of money through having established a virtual monopoly in the sale of imported vehicle spare parts and engineering materials. Large stores and motor agencies, owned by British and European companies, were occasionally granted import licences to import these commodities. Forced to observe the law, they sold at ‘controlled prices’ whenever they received a shipment of goods from overseas. The Suame artisans, through their contacts working in these companies, got early warning of the shipments and arranged by various means to purchase whole consignments. When people got to know that the parts and materials were available only in the Magazine, all repair work was diverted there. The artisans not only made big profits from reselling the parts and materials but they also benefited from the increased demand for repairs.
Between 1970 and 1979 the population of Suame Magazine increased more than fivefold: from five thousand to around twenty seven thousand. There is little doubt that a large part of this expansion was financed by the profits of kalabule. Informal industries were able to invest in new workshops, plant and equipment, and many more opportunities were created for apprentices to learn a trade and for skilled men to gain employment. So, not all the consequences of the age of kalabule were bad!