Most trade in household essentials is done in the informal sector in the developing world. All transactions are conducted in cash. No records or taxes are kept and almost all government regulations are ignored. To control the economy, governments collect all hard currency earned from exports. They also issue licences that limit imports. Ghana’s 1970s income was far below that required to pay imports or service foreign debts. Many corruption was caused by the issue of few import licenses by the military government. As more people sought to profit from the trade, imported goods continued to circulate on local markets at increasing prices. Inflation rose to more than 100 percent. Called “kalabule” for the economic disaster that followed, it was dubbed so. The community was affected by the chaos, but informal workers have had better times than ever before.
Although the origins of the term kalabule are not known, it is possible that it was an Akan corruption or Hausa expression of the Hausa phrase kere kabure which means ‘keep quiet’. A variety of commodities were considered essential in this time period. Most of them were imported, including tinned fish and evaporated milk as well as rice and sugar. Because all essential commodities were in short supply, the government attempted to introduce price control by selling restricted quantities of each commodity at controlled prices to the general public. It was difficult to resist the temptation of reselling at a higher cost when some came in hand. The Daily Graphic published a report about a man who was accused of selling bad sardines tins. In his defense, he said that the fish was meant for trading and not consumption.
As people realized that the families of soldiers were prospering, they began to use the slogan “No Brother in Army” on their taxis and tramros. New Volkswagen Golf cars were being driven by the wives of military officers, who were then known as honey bottoms. The military government was disregarded and people felt forced to do whatever it took.
Ghana’s economy declined under the General I K Acheampong regime. It was impossible to get a foreign currency rate of 1.15 Ghanaian cents to the US dollar. An import license granting access to goods from Ghana could enable them to be imported at an official rate of 1.15 Ghanaian centis to US dollars. This would allow them to trade at rates equivalent to around 20 cedis per dollar. These were the profits made by those who had been able to get an import licence, or buy imported goods at a ‘controlled price’. Import licences were in high demand. These were handed to soldiers’ relatives, girlfriends and traders by those who took the greatest bribes.
In Kumasi (Ghana’s most informal industrial region), Suame Magazine was home to some skilled artisans who were able to make a large profit by having a virtual monopoly over the sales of import vehicle spare parts. Sometimes, import licenses were granted to large stores or motor agencies that are owned by European and British companies. They were forced to follow the law and sold goods at “controlled prices” whenever they received goods from abroad. Through their connections in these companies the Suame artisans were able to get early notice of shipments and arrange for whole consignments through various methods. The Magazine was the only place that had the necessary parts and materials. All repairs were diverted to there when this information became available. Not only did the artisans make huge profits reselling parts and materials, but also they benefited greatly from increased repair demand.
Suame Magazine’s population grew fivefold in the period 1970-1979, from approximately five thousand to about twenty seven thousand. The profits of Kalabule are a significant part of the expansion. The informal industry was able to finance new plant, machinery, workshops and other equipment. Many more jobs were made available for both skilled and inexperienced workers. The age of Kalabule did not have all its negative consequences.