On May 15, 1979, less than five weeks before constitutional elections were to be held, a group of junior officers led by Flight Lieutenant Jerry John Rawlings attempted a coup. Initially unsuccessful, the coup leaders were jailed and held for courtmartial . On June 4, however, sympathetic military officers overthrew the Akuffo regime and released Rawlings and his cohorts from prison fourteen days before the scheduled election. Although the SMC's pledge to return political power to civilian hands addressed the concerns of those who wanted civilian government, the young officers who had staged the June 4 coup insisted that issues critical to the image of the army and important for the stability of national politics had been ignored. Naomi Chazan, a leading analyst of Ghanaian politics, aptly assessed the significance of the 1979 coup in the following statement:
Unlike the initial SMC II [the Akuffo period, 1978-1979] rehabilitation effort which focused on the power elite, this second attempt at reconstruction from a situation of disintegration was propelled by growing alienation. It strove, by reforming the guidelines of public behavior, to define anew the state power structure and to revise its inherent social obligations. . . .

In retrospect the most irreversible outcome of this phase was the systematic eradication of the SMC leadership. . . . [Their] executions signaled not only the termination of the already fallacious myth of the nonviolence of Ghanaian politics, but, more to the point, the deadly serious determination of the new government to wipe the political slate clean.

Rawlings and the young officers formed the Armed Forces Revolutionary Council (AFRC). The armed forces were purged of senior officers accused of corrupting the image of the military. In carrying out its goal, however, the AFRC was caught between two groups with conflicting interests, Chazan observed. These included the "soldier-supporters of the AFRC who were happy to lash out at all manifestations of the old regimes; and the now organized political parties who decried the undue violence and advocated change with restraint.

Despite the coup and the subsequent executions of former heads of military governments (Afrifa of the NLC; Acheampong and some of his associates of the NRC; and Akuffo and leading members of the SMC), the planned elections took place, and Ghana had returned to constitutional rule by the end of September 1979. Before power was granted to the elected government, however, the AFRC sent the unambiguous message that "people dealing with the public, in whatever capacity, are subject to popular supervision, must abide by fundamental notions of probity, and have an obligation to put the good of the community above personal objective."

The AFRC position was that the nation's political leaders, at least those from within the military, had not been accountable to the people. The administration of Hilla Limann, inaugurated on September 24, 1979, at the beginning of the Third Republic, was thus expected to measure up to the new standard advocated by the AFRC.
Limann's People's National Party (PNP) began the Third Republic with control of only seventy-one of the 140 legislative seats. The opposition Popular Front Party (PFP) won forty-two seats, while twenty-six elective positions were distributed among three lesser parties. The percentage of the electorate that voted had fallen to 40 percent. Unlike the country's previous elected leaders, Limann was a former diplomat and a noncharismatic figure with no personal following. As Limann himself observed, the ruling PNP included people of conflicting ideological orientations. They sometimes disagreed strongly among themselves on national policies. Many observers, therefore, wondered whether the new government was equal to the task confronting the state.

The most immediate threat to the Limann administration, however, was the AFRC, especially those officers who organized themselves into the "June 4 Movement" to monitor the civilian administration. In an effort to keep the AFRC from looking over its shoulder, the government ordered Rawlings and several other army and police officers associated with the AFRC into retirement; nevertheless, Rawlings and his associates remained a latent threat, particularly as the economy continued its decline. The first Limann budget, for fiscal year 1981, estimated the Ghanaian inflation rate at 70 percent for that year, with a budget deficit equal to 30 percent of the gross national product . The Trade Union Congress claimed that its workers were no longer earning enough to pay for food, let alone anything else. A rash of strikes, many considered illegal by the government, resulted, each one lowering productivity and therefore national income. In September the government announced that all striking public workers would be dismissed. These factors rapidly eroded the limited support the Limann government enjoyed among civilians and soldiers. The government fell on December 31, 1981, in another Rawlings-led coup.