AfricaFocus (Washington, DC)

Ghana: Economic Challenges

13 January 2009


analysis

Washington, DC — Incoming Ghanaian President John Atta Mills faces high expectations on coming into office this month. Visitors to the candidate's official website (http://www.attamills2008.com/site) made their priorities clear: 63% said he should focus on economic issues, 18% on national unity, 13% on education, and 6% on health care. But he also faces demands from international financial institutions; the World Bank country director warned in a January report that despite recent growth, both the fiscal and balance of payments deficits of the country were "unsustainable."

Two years ago the Ghana Human Development Report found that the country had made substantial progress against poverty over the previous eight years. It also found advances in areas such as primary education and health, while documenting continuing inequalities by gender, region, and the urban/rural divide. The report's statistical conclusions were reinforced by an Afrobarometer survey in March 2008, in which majorities reported some economic improvement, but also concern about inequality and the negative effects of some government policies.

This AfricaFocus Bulletin contains brief excerpts from the 2007 Ghana Human Development Report: Towards a More Inclusive Society, and from the June 2008 Afrobarometer report on its opinion survey about economic conditions in Ghana. The full 222-page Human Development Report is available at

http://www.undp-gha.org/publication.php and http://hdr.undp.org; the Afrobarometer report at http://www.afrobarometer.org

Another AfricaFocus Bulletin sent out today contains selections of commentaries on the successful presidential election and transfer of power in Ghana, as well as links to additional resources.

For previous AfricaFocus Bulletins on Ghana, and additional links, visit http://www.africafocus.org/country/ghana.php

For a recent authoritative book on Ghana's economic prospects , primarily by Ghanaian scholars, see Ernest Aryeetey and Ravi Kanbur, eds., The Economy of Ghana: Analytical Perspectives on Stability, Growth, and Poverty (James Currey):

http://www.africafocus.org/books/isbn.php?1847010032

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Ghana Human Development Report 2007

Towards a More Inclusive Society

United Nations Development Programme (UNDP)

[brief excerpts from full 222-page report]

Full report is available at

http://www.undp-gha.org/publication.php

and http://hdr.undp.org

Data on Human Development indices in Ghana from UNDP's annual Human Development Reports is available at http://tinyurl.com/95ykmf

Livelihoods And The Economy

Poverty Levels in Ghana

... The proportion of Ghanaians described as poor in 2005/06 was 28.5%, falling from 39.5% in 1998/99. Those described as extremely poor declined from 26.8% to 18.2%. Thus the first Millennium Development Goal of halving the poverty rate would be met by 2009 if the current growth rates are maintained.

The decline in poverty and extreme poverty between 1998/99 and 2005/2006 was more evenly distributed than in the earlier period of 1991/92 to 1998/99. All the localities and regions with the exception of Greater Accra and Upper West Region experienced declines in poverty. ... The Central and Eastern Regions experienced the largest decline in poverty of about 28.5%; these declines may be attributed to the concentration of programmes implemented under the President's Special Initiatives on cassava, pineapples, and oil palm in the Central Region and export crops of pineapples and cocoa in the Eastern region.

The general decline in poverty can be attributed to the high growth rates achieved during the period of implementation of the GPRS I and II. The growth has come from high growth in cocoa production benefiting from government intervention. Thus the benefits of the growth are seen in the more significant reductions in poverty in the cocoa producing localities and Regions.

...

Poverty trends in Ghana also differ among the various economic sectors (Figure 2.3). Poverty is particularly evident in two sectors in Ghana: agriculture and the informal sector, with the agricultural sector being the worse affected. Next to agriculture, 29 percent of those in micro and small enterprises live below the poverty line (National Policy Group, 2005). It was also observed that there is a general decline in the incidence of poverty for all groups. The absolute figures indicate that food crop farmers are the poorest compared to people in other activities. They recorded the highest poverty incidence-68 percent in 1991/92 but it fell to 46 percent in 2005/06.

Access to Education

In Ghana, both public and other key stakeholders such as religious and private institutions, provide basic school education, some secondary and tertiary education. The general story of developments in education is that access has improved considerably since 2004

[However] Progress at all levels of education in Ghana has been less than satisfactory or quite mixed (NDPC, 2007).

Access to Basic Education

Access to basic education is operationalised by the Ghana Statistical Service (GSS, 1998/99) as having a facility within one kilometre radius from one's place of residence.

There are regional differences in access to primary school. Regions in the southern sector of the country have greater access to primary education than the northern sector. The Upper East Region has the poorest access to primary education (61.9%) followed by the Upper West Region (67.1%). The factors that account for the low access to primary education in the three northern regions include sparse population distribution, poverty and the general deprivation in most areas. Access differs from urban to rural locations. Urban areas have better access to primary education than rural areas (93.2% compared to 81.0% respectively).

The picture is grimmer with respect to access to secondary education. The national average for access to secondary school is 43.3 percent, but it is even worse for the northern regions which average 15.5 per cent.

Apart from the north-south disparities, there exist differences between rural and urban areas. Access to secondary education is higher in urban areas (62.6%) than in rural areas (28.8%).

Moreover, the quality of education in the rural areas is poorer.

Similar explanatory factors of poor infrastructure and poverty, coupled with the tendency for more qualified secondary teachers to refuse posting to rural areas. Thus, in terms of education and related personal self-fulfilment and advancement, northern Ghana in particular and also the remote rural areas are increasingly excluded.

Patterns in Literacy

Relevant Links

Table 2.6 presents the distribution of literacy levels for persons aged 15 years and above by region and sex, based on information from the 2000 Census. Over half (57.4%) of the total population of Ghana are literate; while 16.4 percent are literate in English only, 2.5 percent are literate in a local language only and 38.1 percent are literate in both English and a Ghanaian language. This implies that Ghanaians are generally more versed in learning through the English language than through their own indigenous language(s).There is a higher proportion of illiterate females (50.2%) than males (33.6%). Differences in access to economic opportunities, reinforced by some cultural practices are largely responsible for the much higher illiteracy rate of females and rural populations.

At the regional level, Table 2.7 indicates that for both sexes Greater Accra has the lowest illiteracy rate (18.4%), followed by Ashanti (35%) and Eastern (36.4%). The highest illiteracy levels are found in the three northern regions of Ghana (76.2% for Northern, 76.5% for Upper East and 73.4% for Upper West).

Statistics also indicate that illiteracy is much higher in rural (55.6%) than urban (26.9%) areas and in both areas females have higher illiteracy levels (34.2% urban and 64.5% rural) than males (19.2% urban and 46.4% rural).

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