The 1972 Ghanaian coup d'état brought down Prime Minister Kofi Busia’s government after a currency devaluation set off mounting unrest in Accra. In the account presented here, the coup is the abrupt political consequence of an economic gamble: reforms intended to address Ghana’s worsening external crisis collided with the government’s dependence on politically important constituencies, and the new military rulers promptly reversed the devaluation.

Economic and Political Background

Busia came to power in 1969 facing political constraints similar to those that had confronted his predecessor, Kwame Nkrumah. His government pursued expansionary policies, maintained price controls through marketing boards, and kept the exchange rate overvalued. These choices helped transfer resources toward politically powerful groups, including urban constituencies whose support the government needed. Price controls squeezed agriculture while providing urban consumers with cheap food and generating revenue for government spending.

The policies were not sustainable. Ghana encountered repeated balance-of-payments crises and shortages of foreign exchange. On December 27, 1971, Busia signed an agreement with the International Monetary Fund that included a major currency devaluation. The International Monetary Fund, the World Bank, and the wider international community pressed him to carry out the agreed reforms. But the international pressure did not remove the domestic political risk: Busia understood that devaluation could imperil his government.

Unrest and Overthrow

The currency’s devaluation was followed by rioting and discontent in Accra, Ghana’s capital. Unrest mounted uncontrollably, and the military overthrew Busia. The coup was led by Lieutenant Colonel Acheampong, who immediately reversed the devaluation. The sequence made the political stakes of reform visible: a measure adopted to confront economic crisis produced immediate public discontent, and the government fell before the change could be sustained.

The reversal also marked a sharp break between Busia’s policy and the new military government’s first response. The account identifies the overthrow and reversal, but gives no further detail about the coup’s military operations or the political arrangements that followed. Its significance here rests on the direct connection between the reform gamble, unrest in the capital, and the removal of the government.

Significance

The episode challenges the idea that poverty persists mainly because rulers do not know which economic policies work. Busia’s choices are presented not as the product of ignorance or a mistaken belief that the policies were sound economics, but as political decisions shaped by the need to keep powerful groups content. The devaluation exposed how a government’s room to pursue reform could be limited by the constituencies on which its survival depended.

The coup therefore serves as an example of the distinction between policy advice and the political conditions required to enact policy. International institutions could press for reform, but their recommendations could not dissolve the incentives and constraints facing Ghana’s leaders. In the account’s argument, the obstacle to more growth-supporting policies was not simply a shortage of sound advice: it was the political and economic institutional setting in which leaders made decisions, and in which those decisions could trigger a change of government.