In 1981, Ghana faced severe economic difficulties and political unrest, stemming from years of mismanagement and corruption under various governments. Hilla Limann, the President, was unable to stabilize the situation, leading to dissatisfaction among the populace and within the military. On December 31, Flight Lieutenant Jerry Rawlings, who had previously attempted a coup in 1979, orchestrated a successful coup d'état. With the support of disillusioned military personnel and civilians, Rawlings seized power, dissolved Limann's government, and established the Provisional National Defence Council (PNDC).

The aftermath of the coup saw the imposition of military rule, with Rawlings as its head. He implemented a number of reforms aimed at addressing economic issues by nationalizing key industries and redistributing land. His notable initiatives included the establishment of the National Commission for Democracy, introducing a new political framework that allowed for civilian participation in governance over time. The events surrounding the coup not only changed the political landscape of Ghana but also had lasting repercussions on its governance and economic policies.

The coup also sparked a series of events leading to the eventual return to civilian rule in the late 1990s, after several years of military and reformed administrations under Rawlings. His leadership style and policies influenced Ghana's trajectory, highlighting the complexities of military rule amid ongoing democratic aspirations in West Africa.