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Strengthening Efforts for the Eradication of Poverty and Hunger: Ghana Country Review Report

This report provides an overview of Ghana's Medium-term Development Policy Framework and highlights key successes, challenges, and priority policies for poverty reduction and development. It examines the country's economic context, progress made under the Ghana Poverty Reduction Strategy, and the impact on poverty and hunger. The report emphasizes the importance of partnerships for sustainable development.

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Strengthening Efforts for the Eradication of Poverty and Hunger: Ghana Country Review Report

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  1. STRENGTHENING EFFORTS FOR THE ERADICATION OF POVERTY AND HUNGERGHANA: COUNTRY REVIEW REPORT THE ANNUAL MINISTERIAL REVIEW GENEVA, SWITZERLAND JULY 2007 Presented By Prof. George Gyan-Baffour (Deputy Minister of Finance and Economic Planning, Ghana)

  2. Outline Introduction: The context of Ghana’s Medium term Development Policy Framework Key Successes - 2000-2006 The Growth and Poverty Reduction Strategy (GPRS II) Key Features of the GPRS II Strategy Policy Thrust of the GPRS II Policy Framework Priority Policies and Targets, 2007 – 2009 Challenges to the attainment of the Overall objective of the Medium Term Development Policy Framework (GPRS II) Global Partnership for Development Conclusion

  3. The Context of Ghana’s Development Policy Framework The country launched an Economic Recovery Programme in 1983 followed by a Structural Adjustment Programme with the objectives to: correct the then prevailing serious macroeconomic imbalances transform the economy from a heavily regulated one to a deregulated market oriented economy engender a new economic regime of sustained accelerated growth and development

  4. The Context of Ghana’s Development Policy Framework Despite progress made under ERP/SAP in 2000: The economy basically remained the same: small, open and highly dependent on external inflows Economic growth remained stagnant at below 5% for almost two decades; GDP growth in 2000= 3.7%. Institutions of state remained weak Investments, particularly, private investment had hit its lowest levels in 2000 Poverty levels remained high at 49.5% of total population and 63.9% of the rural population

  5. The Context of Ghana’s Development Policy Framework strong imbalances in government finances; fiscal deficit = 8.2% of GDP in 2000. Monetary growth was high because of intensive government borrowing from the banking system to finance rising government fiscal deficit. End of year inflation stood at 40.5%, Banks borrowing interest rates was spiralling upwards and stood at 47% in 2000 Indebtedness was high with interest payments on external and domestic debt rising in nominal terms by 110.8% and 70% respectively in 2000, with the absolute payments of national debt service far exceeding the total capital (investment) expenditure of the state.

  6. The Context of Ghana’s Development Policy Framework These placed severe limitations on Ghana’s capacity to address the high level of poverty in the country. As a result the government applied to access the Enhanced Highly Indebted Poor Country (HIPC) facility so as to lessen the huge debt burden and enhance its fiscal space for addressing poverty and implementing programmes of reforms required to restore macroeconomic stability With this in view and as a requirement for accessing the HIPC initiative a national development policy framework, the Ghana Poverty Reduction Strategy (GPRS I) was formulated and implemented over the period 2003-2005.

  7. The Context of Ghana’s Development Policy Framework The strategy focused on the attainment of macroeconomic stability alongside the component of human development policies and programmes which targeted the objectives of improving access of Ghana’s population to basic needs and essential services. The strategy treated the MDGs as the long term minimum objectives for socio-economic development and influenced the determination of the country’s strategic priorities for national socio-economic development

  8. Key Successes - 2000-2006 Widened fiscal space 2000-2006  revenue-GDP ratio 17.7% to 23.5% Hence increases in government expenditure  32.34% to 36.77% of GDP End of year inflation dropping from 40.5% to 10.5% in 2006 Bank lending rates declining from 47% to 22% Cedi depreciation reducing from 49.8% (dollar) 0.9% Significant gains in investments in infrastructure: road, energy and ICT

  9. Key Successes - 2000-2006 (cont.) Significant increases in investments in the social sector in support of health, education, water and sanitation and special programmes targeted at women, children, the vulnerable and excluded. These have contributed to substantial progress towards the MDGs. Increasing credit to the private sector, and Ease of doing business in Ghana (CPIA = 3.9).

  10. Key Successes - 2000-2006 (cont.) Significant Contribution to growth: GDP growing from 3.7% to 6.2% Poverty has significantly reduced from 51.7% in 1991/92 to 26.5% in 2006 (This puts Ghana on the road to achieving the MDG 1 long before 2015

  11. Comparison of Poverty Rates in Ghana and Sub-Sahara Africa, 1991/2-2005/2006

  12. Key Successes - 2000-2006 (cont.) -Reducing Hunger- • Food Security Improving due to: • Improvements in domestic production • agricultural growth trends = upward • 1990-1994 = 1.1% • 1995-1999 = 4.4% • 2000-2006 = 5.1% • Crops and livestock production: • 1990-1994 = 0.9% • 1995-1999 = 4.1% • 2000-2006 = 4.6% • Food Access improving largely because of • improved agricultural growth • Poverty reduction from 49.5% to 28.5%

  13. Growth Performance of the Agricultural Sector, 2000-2006 

  14. Growth rates of Agricultural Sub-sectors, (1998-2006)

  15. Reducing Hunger Food Utilization: some improvements

  16. Children Nutritional Trends in Ghana, 1998-2003

  17. Children Nutritional Trends in Ghana, 1998-2006

  18. THE GROWTH AND POVERTY DEVELOPMENT STRATEGY (GPRS II) Based on the positive results of the implementation of the GPRS I, especially in the area of attaining macroeconomic stability and some measure of progress made towards attaining the objectives of human development including the MDGs a successor national development policy framework, the Growth and Poverty Reduction Strategy (GPRS II: 2006-2009) was formulated. While GPRS I focused on poverty Reduction Programmes and projects, the emphasis of GPRS II is on growth- inducing policies and programmes which have the potential to support wealth creation and poverty reduction.

  19. KEY FEATURES OF THE STRATEGY GPRS II essentially integrates the otherwise disparate development agenda and sectoral commitments that competes for inclusion in the annual national budget in to one comprehensive development policy framework Thus it operationalises various international agreements and commitments of which Ghana is a signatory (Millennium Development Goals (MDGs), the New Partnership for Africa Development (NEPAD), the Africa Peer Review Mechanism (APRM), the Convention on the Elimination of all forms of Discrimination Against Women (CEDAW) It is anchored on four main pillars: Continued Macroeconomic Stability Private Sector Competitiveness Vigorous Human Resource Development Good Governance and Civic Responsibility

  20. PRIORITY POLICIES AND TARGETS, 2007 - 2009 • In the medium term, the Government will focus on specific areas for implementation that are seen critical to achieving the long term objective of becoming the middle income country. • Real GDP Growth Rate of 8.0% by 2009 • Per capita GDP of US$686 by 2009

  21. PRIORITY POLICIES AND TARGETS, 2007 - 2009 • Agriculture modernization: The aim is to go beyond subsistence agriculture and increase agricultural productivity • Close the Infrastructure Gap: • Roads; The target is to have more than 55% of the entire national road network in good condition by 2009 up from the current (2006) indicator level of 45% • Energy; The target is (I) to install a total of about 300 Megawatts of additional capacity (approximately 17% of installed capacity) in 2007; (II) To develop and construct new power stations, (II) Explore alternative sources of energy • ICT; Increase teledensity by at least 27% annually, and increase internet access by an annual rate of not less than 2%.

  22. PRIORITY POLICIES AND TARGETS, 2007 - 2009 • In Education the objectives are: • increase access to and participation in education and training at all levels • bridge gender gaps in access to education in all districts • improve the quality of teaching and learning; • improve efficiency in the delivery of education services • promote science and technology education at all levels with particular attention to increased participation of girls. Consequently, the target is to: • achieve literacy rate (i.e. proportion of adult population able to read and write) of about 68.20%; • Gross Enrolment Rate (GER) at the Primary level of 97.80%, JSS of 80.40% and SSS of 31% by 2009. • In doing this, effort will be made at achieving Gender Parity Index (GPI) for gross enrolment of 1 at all levels (i.e. KG, Primary, JSS and SSS)

  23. PRIORITY POLICIES AND TARGETS, 2007 - 2009 • Health • Expand and sustain high coverage of quality interventions and services, particularly malaria, infant & maternal mortality, HIV/AIDS etc • Target for HIV/AIDS: 50% ARVs coverage from the current 3.2%; • HIV/AIDS prevalence reduced to 2.0% by 2009 from 3.2% now • Water supply: The target is to increase access to above 60% by 2009. • Good Governance: The focus will be on • Strengthening the process of decentralization • Improve existing institutional capacities including Parliament • Fostering greater civic responsibility

  24. CHALLENGES TO THE ATTAINMENT OF THE OVERALL OBJECTIVE OF THE MEDIUM TERM DEVELOPMENT FRAMEWORK (GPRS II) • One of the key assumptions underlying the attainment of the minimum GDP growth of 8% and per capita GDP of US$686 over the medium term (by 2009) is increased investment in the key sectors of the economy, particularly in the area of infrastructure (i.e. energy, roads and railways, ICT, etc) • The recent analysis of the investment needs for the key sectors of the economy indicates a total investment requirements of about US$10,555.5 million over the period 2007-2009, of which GOG revenue projections amounts to US$3,115.7 million (about 30% of the estimated requirement). • This leaves an average financing gap of about US$3,518.5 million per annum.

  25. CHALLENGES TO THE ATTAINMENT OF THE OVERALL OBJECTIVE OF THE MEDIUM TERM DEVELOPMENT FRAMEWORK (GPRS II) This gap is expected to be filled by: Resource mobilization through grant finance and budget support. external loans on concessional terms with a minimum grant element of 35%. Non-concessional loans to be limited by specific projects in any specific year. The implication of this is that development partners have to scale up resource support to Ghana which currently stands at about US$1,306.25 million per annum.

  26. Global Partnership for Development • Strengthening the partnership between Ghana and her Development Partners has been central to the formulation, implementation and monitoring of the GPRS. • The principles of the partnership are based on the Paris Declaration and include: • strengthening country’s ownership of the development process, • ensuring the alignment of development partner support on national priority, • ensuring harmonisation of donor procedures and country systems

  27. Global Partnership for Development • managing resources on the basis of agreed results and use information to improve decision making. • ensuring mutual accountability in relation to resource flow and results achieved through the implementation of national strategy • Within this framework GOG expect an increased in the current level of donor support over the next 3 years. • The GOG expect more loans on concessional terms with a minimum grant element of 35% as against non-concessional loans. • The GOG expects more budget support instead of projects loans which is difficult to coordinate and manage. This will allow for integration of aid flows into the planning, implementation, monitoring and evaluation phases of the budget cycle.

  28. CONCLUSION Achieving an accelerated growth, with employment creation and poverty reduction, will require massive investment in priority sectors of the economy. The country has come far with the help of its Development Partners and fiscal prudence on the part of Government in the achievement of some remarkable progress which makes the future bright. There is the need to maintain the momentum of growth and the achievement of the Millenium Development Goals. To do this concerted efforts must be made towards investing in some key areas of the economy. This will require scaling up of resources on the part of Government and its Development Partners to make it feasible.

  29. THANK YOU !!

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