The benefits of living in an underdeveloped country like Ghana for every smart entrepreneur

Ghana being underdeveloped posed a lot of advantages to the upcoming entrepreneur.

Last week, in a WhatsApp group, where a couple of my friends and I battle out our understanding of Ghana’s economy, a new entrant started a discussion on whether Ghana is a developed country or not.

To be honest, it was more of an argument than a discussion, but at the end of the day — which was actually three days of discussion — we came to the agreement that Ghana is truly an underdeveloped country.

Another thing we also agreed on was that, Ghana being underdeveloped posed a lot of advantages to the upcoming entrepreneur.

I proposed this idea, that, in the long run, we had better chances of making it in Ghana than elsewhere, just because Ghana was underdeveloped.

But let’s start things off the right way, is Ghana underdeveloped?

There are significant social and economic differences between developed and developing countries.

Many of the underlying causes of these differences are rooted in the long history of the development of such nations and include social, cultural and economic variables, historical and political elements, international relations, and geographical factors.

According to the UN, a developing country is a country with a relatively low standard of living, undeveloped industrial base, and moderate to low Human Development Index (HDI).

This index is a comparative measure of poverty, literacy, education, life expectancy, and other factors for countries worldwide. The index was developed in 1990 by Pakistani economist Mahbub ul Haq and has been used since 1993 by the United Nations Development Programme in its annual Human Development Report.

The HDI measures the average achievements in a country in two basic dimensions of human development:

• A long and healthy life, as measured by life expectancy at birth.
• Knowledge, as measured by the adult literacy rate (with two-thirds weight) and the combined primary, secondary, and tertiary gross enrolment ratio (with one-third weight).

Development entails a modern infrastructure (both physical and institutional), and a move away from low value-added sectors such as agriculture and natural resource extraction. Developed countries usually have economic systems based on continuous, self-sustaining economic growth and high standards of living.

Ghana is considered to be a less economically developed country mainly because of the fact that it is not very rich. Perhaps the best measure of this is the fact that its per capita GDP (when adjusted to take into account what things cost in the country) is well below the world average. Ghana’s GDP per capita is 6622.50 GHS (2016).

One can also call Ghana an LEDC because of the nature of its economy. A relatively high percentage of its people (56%) are involved in agriculture. Importantly, this is not a very efficient sector of the economy and only 30% of Ghana’s GDP comes from the labour of that 56%.

So yes, Ghana, as per the definition above is underdeveloped ( or a developing country, to be politically correct) and not a developed country.

Are there really benefits to living in an underdeveloped country like Ghana?

To answer this question in one line — yes there is, mainly because of opportunity.

Underdeveloped countries are often fertile ground for people with education, vision and access to capital, to create something positive. We are living in a time where more and more developing countries are stabilising and their economies are growing.

Infrastructural developments are being made at a phenomenal pace. Indeed, many people are surprised at the rate of development and improvements in standards of living in so many countries they have thus far perceived as ‘underdeveloped’.

There is a quiet ‘development revolution’ taking place that not many people living in the West are aware of. It may only hit them if their own positions in the world begin to slide as a result. As these economies start to catch up, it is a very exciting time and they offer the chance for people to make a go of their ideas and aspirations. For example, modern technology such as mobile phones and internet connectivity is having a profound effect on entrepreneurship and development in many countries.

Also, lots of these countries have large a diaspora in the West and they are feeding their energy back home in the form of information, creativity and capital.

The underdeveloped nature of Ghana also creates a great chance for entrepreneurs to innovate easily.

Like @paakoti stated in a Ghanaian Techpreneurs group on WhatsApp recently, “That’s the benefit of being so far behind the curve. You can catch up faster”.

He had earlier stated in the group, “We can simply Google how others solved it. You don’t even need to be smart anymore in this world…Someone somewhere has done it already. Just read about it and adapt to fit your situation”. We were discussing the slow innovation or lack thereof in the Ghanaian banking sector.

And he is more than right. With Ghana being so far behind the curve, all that is left for local entrepreneurs, policymakers and government officials to do is to look at the ways to adapt the best practices from other countries.

We would not have to reinvent the wheel, we’d just have to adapt it and shape it to our local conditions.