In developing countries, most of the trade in household essentials takes place in what economists call the informal sector. Here, every transaction is in cash, few if any records are kept, taxes are not charged, and most government regulations are ignored. Governments strive to control the economy by collecting all foreign exchange earnings from exports and issuing licenses to limit imports. In Ghana in the 1970s, incomes fell well below the level needed to finance essential imports and external debt service. The issuance of few import licenses by the military government became a source of much corruption. In local markets, imported goods continually circulated at ever-increasing prices as more and more people tried to share the spoils of trade. The inflation rate rose to more than 100 percent. The economic chaos that followed was called “kalabule.” It was a bad time for the community at large, but many informal industrialists have never had it so good, 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 variety of goods were designated commodities; most of them were imported and included canned fish, evaporated milk, toilet soap, rice, sugar, and toilet paper rolls. All commodities were in short supply and the government attempted to introduce rationing by selling controlled quantities at “controlled prices” to each member of the public in designated commercial stores. However, when one arrived, the temptation to resell at a higher price was hard to resist. The Daily Graphic newspaper reported a story about a man accused in court of selling sardine cans that had gone bad. He said in his defense that the fish was meant to be traded, not eaten!

The slogan ‘No brother in the army’ started popping up in taxis and cars when people saw that all the soldiers’ families seemed to be thriving. Girlfriends of army officers were seen driving new Volkswagen Golf cars, which were soon widely known as ‘honey funds’. All respect for the military government evaporated and the people felt compelled to live by all available means.

Under General IK Acheampong, Ghana’s economy continued to decline. The exchange rate for the Ghana cedi had become totally unrealistic. Goods imported with an import license 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 benefits for anyone lucky enough to obtain an import license or to buy imported goods at “controlled prices.” The demand for import licenses far exceeded the supply. Soldiers gave them to their relatives and girlfriends, and to merchants who paid the highest prizes.

At Suame Magazine in Kumasi, Ghana’s largest informal industrial zone, some artisans were making a lot of money by establishing a virtual monopoly on the sale of imported vehicle parts and engineering materials. Large department stores and car dealerships, owned by British and European companies, occasionally received import licenses to import these products. Forced to observe the law, they sold at “controlled prices” each time they received a shipment of goods from abroad. The Suame artisans, through their contacts who work in these companies, received an early warning of the shipments and organized by various means the purchase of complete shipments. When people found out that parts and materials were only available from the magazine, all repair work was diverted there. Not only did the artisans make huge profits by reselling parts and materials, they also benefited from the increased demand for repairs.

Between 1970 and 1979 the population of the Suame Magazine multiplied by more than five: from five thousand to around twenty-seven thousand. There is no doubt that much of this expansion was financed by Kalabule profits. 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 obtain employment. So not all the consequences of the Kalabule era were bad!