A revolution in Ghanaian history was initiated by the establishment of direct sea trade with Europe following the arrival on the coast of Portuguese mariners in 1471. Initially Europe’s main interest in the country was as a source of gold, a commodity that was readily available on the coast in exchange for such European exports as cloth, hardware, beads, metals, spirits, arms, and ammunition. This gave rise to the name Gold Coast, by which the country was known until 1957. In an attempt to preserve a monopoly of the trade, the Portuguese initiated the practice of erecting stone fortresses (Elmina Castle, dating from 1482, was the first) on the coast on sites leased from the native states. In the 17th century the Portuguese monopoly, already considerably eroded, gave way completely when traders from the Netherlands, England, Denmark, Sweden, and Prussia—Protestant sea powers antagonistic to Iberian imperial pretensions—discovered that the commercial relations developed with the Gold Coast states could be adapted to the export of slaves, then in rapidly increasing demand for the American plantations, as well as to gold trading. By the mid-18th century the coastal scene was dominated by the presence of about 40 forts controlled by Dutch, British, or Danish merchants.

The presence of these permanent European bases on the coast had far-reaching consequences. The new centres of trade thus established were much more accessible than were the Sudanese emporia, and this, coupled with the greater capacity and efficiency of the sea-borne trade compared with the ancient overland routes, gradually brought about the reversal of the direction of the trade flow. The new wealth, tools and arms, and techniques and ideas introduced through close contact with Europeans initiated political and social as well as economic changes. The states north of the forest, hitherto the wealthiest and most powerful, declined in the face of new combinations farther south. At the end of the 17th century, the Akan state of Akwamu created an empire that, stretching from the central Gold Coast eastward to Dahomey, sought to control the trade roads to the coast of the whole eastern Gold Coast. The Akwamu empire was short-lived, but its example soon stimulated a union of the Asante (Ashanti) states of the central forest (see Asante empire), under the leadership of the founding Asantehene (king) Osei Tutu. The Asante union, after establishing its dominance over other neighbouring Akan states, expanded north of the forest to conquer Bono, Banda, Gonja, and Dagomba.

Having thus engrossed almost the whole of the area that served as a market and source of supply for the coastal trade, the Asante turned toward the coastlands. There traditional ways of life were being increasingly modified by contact with Europeans and their trade, and when, beginning in the latter part of the 18th century, Asante armies began to invade the coastal states, their peoples tended to look for leadership and protection to the European traders in the forts. But between 1803 and 1814 the Danes, English, and Dutch had each in turn outlawed their slave trades, and the gold trade was declining. The political uncertainty following the Asante invasions led by Asantehene Osei Bonsu impeded the development of new trades meant to replace the slave trade. In these circumstances the mutually suspicious European interests were reluctant to embark on new political responsibilities. However, during 1830–44, under the outstanding leadership of George Maclean, the British merchants began to assume an informal protectorate over the Fante states (see Fante confederacy), much to the commercial benefit of both parties. As a result, the British Colonial Office finally agreed to take over the British forts, and in 1850 it was able to buy out the Danes. However, trade declined under the new regime, which was averse to assuming formal control over the territory influenced from the forts, and in the 1860s, as a result of this British reticence and of the growth, from the 1820s onward, of Christian missionary education, the Fante states attempted to organize a European-style confederacy independent of British and Asante control. The Mankesim constitution (1871), written by Fante leaders, was immediately rejected by the British, who, finally prompted to action, now sought more direct control. Further Asante incursions into Fante and the final evacuation of the coast by the Dutch (1872) combined to impel a British military expedition into Asante in 1874, though it was unable to carry out a complete conquest and merely sacked the capital, Kumasi. The Gold Coast was declared a British colony in that same year, with the Asante still outside the colonial borders.

Colonial period

French and German activity in adjacent territories and the demand for better protection of British mining and commercial interests led to a further active period of British policy from 1896–1901, during which Asante was conquered and its northern hinterland formed into a British protectorate. The 56 years of British rule that followed did not immediately weld into one state the three elements of the territory—the colonies of the Gold Coast and Asante and the protectorate of the Northern Territories—to which after World War I was added a fourth, under mandate from the League of Nations, the western part of former German Togoland (see Togoland). But this was hardly the result of deliberate policy. The ever-increasing assimilation of European ways by the people on the Gold Coast had already made possible there the introduction of such organs of government as a legislative council (1850) and a supreme court (1853), but for many years Asante and the Northern Territories remained the sole responsibility of the governor, whose officials were from the 1920s onward encouraged to work with and through the authorities of the indigenous states. Attempts to introduce similar elements of indirect rule in the Gold Coast served mainly to stimulate a nationalist opposition among the educated professional classes, especially in the growing towns, which aimed at converting the legislative council into a fully responsible parliament.

What really brought the country together was the great development of its economy following the rapid expansion of cocoa growing by farmers in the forest. The cacao tree and its seeds—cocoa beans—were introduced in the 1870s. By the 1920s the Gold Coast, while continuing to export some gold, was producing more than half of the world’s supply of cocoa; timber and manganese later became additional exports of note. With the wealth created by this great increase of trade, it was possible to provide modern transport facilities—harbours, railways, roads—and social services, especially education (to the university level), all of which tended toward the conversion of the traditional social order, of groups bound together by kinship, into one in which individuals were linked principally by economic ties.

Political advancement tended to lag behind economic and social development, especially in the south (for the role of the Northern Territories was principally the supply of cheap labour for the Gold Coast and Asante). World War II, to which the Gold Coast contributed many men and materials, accentuated this lag, and in 1948 there were riots of workers and veterans in the larger towns. The Watson Commission of Inquiry reported that the Burns constitution of 1946, which had granted Africans a majority in the legislative council, was “outmoded at birth.” An all-African committee under Justice (later Sir James Henley) Coussey was appointed to work out a new constitution in which some executive power would be transferred to African ministers responsible to an African assembly. Meanwhile, a radical politician, Kwame Nkrumah, had established the Convention People’s Party (CPP), which, with wide popular support, campaigned with strikes and other actions under the slogan “Self-government now.” In 1951 the CPP won almost all the elective seats in the post-Coussey legislative assembly, whereupon Gov. Sir Charles Arden-Clarke invited Nkrumah to lead the new administration. A partnership developed between the two, so power was rapidly transferred to an all-African cabinet responsible to a popularly elected national assembly.

In 1956 the trust territory of British Togoland (see Togoland) chose by United Nations plebiscite to integrate with the Gold Coast. Having secured some 70 percent of the assembly seats in general elections in 1954 and 1956, Nkrumah and the CPP government were able in 1957 to obtain the recognition of their country, renamed Ghana, as an independent self-governing member of the Commonwealth and a member of the United Nations.