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Ghana Poverty Assessment Summary

Core Content

This report provides an analysis of poverty and inequality trends in Ghana from 1991 to 2016, with a focus on regional disparities and the role of economic transformation, social protection programs, and human capital development in poverty reduction. It also includes an assessment of the potential impacts of the COVID-19 pandemic on poverty and welfare in the country.

Main Findings

Poverty Trends

• National Poverty Reduction: Between 1991 and 2012, Ghana achieved significant poverty reduction, with the national poverty rate falling from 52.7% to 24.2%. This was in line with the first Millennium Development Goal (MDG) of reducing poverty by more than half.
• Slowed Progress After 2012: From 2012 to 2016, the rate of poverty reduction slowed. The poverty rate dropped only slightly to 23.4%, and the poverty gap and severity indicators showed slight deterioration.
• GDP Growth: Real GDP per capita growth was robust from 1992 to 2012 (3.1% annually), but it decelerated to 1.6% per year from 2012 to 2016.
• Growth Elasticity of Poverty: The growth elasticity of poverty declined significantly, from 1.2% (1991-1998) to less than 0.1% (2012-2016), indicating that economic growth became less effective in reducing poverty.

Regional Poverty and Inequality

• Regional Disparities: Spatial inequality in welfare is growing, with the wealthiest four regions (Greater Accra, Ashanti, Central, and Eastern) experiencing significant poverty reduction, while the poorest four (Upper West, Upper East, Northern, and Volta) saw increases in poverty.
• Within-Region Inequality: Inequality within poor regions increased after 2012, while it decreased in wealthy regions.
• Labor Shifts: There was a substantial shift in labor from agriculture to non-agricultural sectors, especially in wealthier regions. However, in poorer regions, especially the northern ones, most people remained engaged in agriculture.

Human Capital Development

• Education Gaps: There is a significant gap in human capital development between rich and poor regions. Poorer regions have lower completion rates for primary and junior secondary schools, and lower learning outcomes.
• Human Capital Index (HCI): The HCI, which measures the potential productivity of a population, shows lower values in poorer regions, highlighting the need for improved education and health outcomes.

Social Protection Programs

• LEAP and LIPW: Social protection programs like the Livelihood Empowerment Against Poverty (LEAP) and Labor Intensive Public Works (LIPW) have been implemented to support the poor, but their coverage is limited and may not be sufficient to address all forms of poverty.
• NHIS Coverage: The National Health Insurance Scheme (NHIS) coverage rate increased from 2013 to 2017, but access remains uneven across regions.

Access to Services and Infrastructure

• Electricity and Mobile Phones: Access to electricity and mobile phones improved in many areas, but still lags behind in poorer regions.
• Digital Technology: The use of mobile money and digital platforms has increased, especially in urban areas, and is seen as a potential tool to support economic resilience.

Climate Change and Disasters

• Impact on Agriculture: Poor regions, particularly in the northern part of Ghana, face severe challenges due to climate change, including long dry seasons, droughts, and low agricultural productivity.
• Adaptation Needs: There is a need for better climate adaptation strategies, including improved irrigation and access to agricultural extension services.

Key Policy Recommendations

• Accelerate Pro-Poor Growth: Focus on job creation, especially in lagging regions, and improve the growth elasticity of poverty.
• Invest in Education: Enhance educational outcomes, particularly for children in poor households, to improve human capital development.
• Address Regional Inequality: Identify and implement strategies to increase economic opportunities in poor regions, including infrastructure development and climate change mitigation.
• Promote Digital Technology: Expand access to digital technology and internet services to support economic resilience and reduce the impact of shocks on consumption.
• Strengthen Social Protection: Expand the reach and effectiveness of social protection programs to ensure they support all vulnerable groups, especially those affected by high food prices.

Conclusion

The report highlights the importance of structural transformation, education, and digital technology in reducing poverty and inequality in Ghana. It also underscores the need for targeted interventions in lagging regions to ensure inclusive growth and poverty reduction. The potential impacts of the COVID-19 pandemic on poverty and welfare are also discussed, emphasizing the role of mobile money and the risks posed by disruptions in food supply and prices.