Poverty in Ghana remains a major challenge. It is mostly manifested in the form of low income, malnutrition, ill health, illiteracy and insecurity, among others. The sixth round of the Ghana Living Standards Survey (GLSS6) conducted in 2012/2013 classifies about a quarter of Ghanaians as poor—whilst under a tenth of the population are in extreme poverty.
In spite of the fact that the level of extreme poverty is relatively low, it is concentrated in rural savannah, with more than a quarter of the people falling into this category. The dynamics of poverty in Ghana indicate that poverty is still very much a rural phenomenon. Five out of the ten regions had their rates of poverty incidence higher than the national average of 24.2% while the remaining half had rates lower than the national average. Overall, the Upper West region is the poorest. Though most regions showed a reduction in poverty incidence since 2005/2006, the pattern of poverty by region remains the same according to the findings of the GLSS 6.
There have been several interventions by government, donor countries and organisations to help eradicate poverty in Ghana.
Notable amongst such policies and programmes are the Livelihood Empowerment Against Poverty (LEAP); school feeding programme and capitation grant, among others. All these policy interventions were implemented with the aim of alleviating poverty among the vulnerable population in Ghana. Further, the Ghana Poverty Reduction Strategy I and II (GPRS I & II) were also implemented as development plans with the central goal of accelerating the growth of the economy.
Currently, the first phase of the Ghana Shared Growth and Development Agenda (GSGDA) has been implemented and the second phase is ongoing with the aim of ensuring and sustaining macroeconomic stability. With all these interventions implemented and others ongoing, why are majority of Ghanaians saying they are still poor?
Ghana attained a low middle income status as a result of the appreciable increase in the GDP per capita after re-basing the economy in 2010. Based on the ultimate goal of the GPRS II, a middle income status was an indication of an improvement in poverty levels in Ghana. It is instructive to note that the use of low middle income status to measure improvement in the standards of living of the population can be very misleading.
The per capita income approach of tracking poverty trends in Ghana may not reflect the true living standards of the people because it is an average of the national GDP. If the increased national income went to the very few rich in the society instead of giving to the poor, then per capita income becomes an inaccurate measure of standard of living. Unless income is evenly distributed, per capita income will not be a satisfactory measure for standard of living.
A 2015 scientific survey by Pew Research Centre comprising about 1000 representative sample size from the 10 regions of Ghana revealed that about 67% of respondents agreed that government is run for the benefit of a few in Ghana; in comparison, other African countries such as Kenya, Uganda, Senegal, Tanzania, Nigeria and South Africa—all recorded lower percentages. To some extent, this questions the effectiveness of development policies including poverty alleviation programmes in Ghana as statistical data shows Ghana is a low middle income economy with a per capita GDP of about $1,380 as at 2015—yet poverty still remains one of the major challenges to socio-economic development.
Further studies suggest that the income gap between the rich and poor in Ghana continues to widen. The Institute of Economic Affairs’ (IEA) Socio-economic and Governance Survey (2015), for instance, revealed that government policies have not been effective in the areas of checking price increases, creating jobs, narrowing the gap between the rich and the poor and improving the living standards of the poor.
In fact on narrowing the gap between the rich and the poor, about 84% of the respondents said that government policies have been ineffective. This is in line with the Pew Research Centre’s finding noted above where an overwhelming number of respondents indicated that government is run for the benefit of a few. Such finding depicts the seemingly ineffective implementation of poverty alleviation policies in Ghana.
There is no doubt that the wide income gap between the rich and the poor in Ghana will continue to widen if this country still depends on GDP as a core measure for wellbeing. A country’s GDP is only an estimate of the total value of final goods and services it produces within a given period of time. Indeed, Simon Kuznets, the economist who back in the late 1930s first developed the GDP concept, warned that GDP was not a suitable measure of a country’s economic development and wellbeing.
Ghana can reach high income status in terms of GDP per capita but the majority of the people may continue to live in poverty. In this regard, using the GDP per capita approach may show that people are better off but, in reality, that may not be the case for a majority of the population.
A combination of the objective and the subjective approach of measuring wellbeing are required. The objective measure will deal with that aspect of the population who equate their poverty levels to their current income and consumption patterns whiles the subjective measure will investigate other factors such as illiteracy, exposure to risk, vulnerability, and other non monetary dimensions of poverty. This way, policy makers can determine the effectiveness of poverty reduction policies from the beneficiaries themselves rather than relying on the national per capita GDP as a measure of wellbeing.
If poverty can be reduced to the barest minimum in Ghana, rethinking the way poverty reduction policies are implemented together with less reliance on GDP as a measure of wellbeing is probably a prerequisite. A more pro-poor approach to dealing with poverty may be more ideal to ensure that citizens who are poor and are living in abject poverty enjoy direct benefits from such more pragmatic interventions.
One way of implementing this policy is by expanding the opportunities available to the poor in the areas where they are already active and willing to develop, such as agriculture. Policy makers could also implement policies to boost the demand for products and services rendered by the poor to ensure growth and improvement in the wellbeing of the poor.
The evidence from the Pew Research Centre and the IEA confirms government policies on poverty alleviation programmes have not achieved the optimum purpose for which they were implemented to reduce poverty in Ghana.
Poverty still remains a challenge in the Ghanaian setting. A varied range of fiscally sustainable policies suitable for the Ghanaian economy and targeted directly at the poor is required. The policies must balance the needs of the poor with the needs of the economy to help Ghana move in the right direction in order to reduce poverty.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the IEA.
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