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Poverty in Ghana

poverty in ghana
Overall poverty in Ghana has declined and Ghana has positioned itself as one of the more developed nations in Sub-Saharan Africa. 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%.Ghana is on track to meeting the Millennium Development Goals for income poverty, hunger, primary school completion, gender parity at school and access to water.

However challenges still exist. Rural, subsistence agricultural farmers are among the poorest socio-economic groups in Ghana. Most of these farmers reside in the northern region of Ghana and do not have access to the same infrastructure and services as do their urban southerners. At present, agriculture constitutes the dominant sector of the economy, although the developing oil industry shows promise in the near future.

Ghana’s Human Development Index stood at 0.558 in 2012. On a scale between 0 and 1, with 1 being the best possible HDI and 0 the worst. The HDI is a composite measure of health, education, and income which helps assess the standard of living. The 2012 average HDI in Sub-Saharan Africa stood at 0.475. Ghana may have the best HDI in the region, but on a global scale, it falls far behind most countries. Out of 186 countries surveyed in the 2012 HDI, Ghana placed 135th.

Ghana still aspires to reach a middle-income country status. It has one of the most stable governments in the region and one of the fastest growing economies thanks to the recent discovery of offshore oil in 2007. Per capita income is projected to reach at least US$1,035 by the end of 2013 with a projected average real GDP growth rate of 7-9%, annually.


Rate of Poverty in Ghana

At this rate, Ghanaians could achieve and sustain per capita income levels of at least $3,000 USD by the year 2020. Oil, gold, and cocoa are Ghana’s main industries. Ghana is Africa’s biggest gold miner after South Africa and is the world’s second largest cocoa producer after Côte d’Ivoire. The challenge is to make sure the wealth generated from these industries trickle-down to every Ghanaian.

One important factor to eradicating poverty in Ghana is to control population growth. As of the 2000 census, 44% of the population consists of children below 15 years of age with those above 65 accounting for only 5%. This presents a very large dependent population requiring huge investments in education and health care. Underemployment and unemployment is a concern among many young adults as well.

While the oil industry develops, agriculture still remains a major part of the economy.  Ghana’s agriculture is dominated by subsistence small holder production units with weak linkages, low-level technology and productivity, and un-competitiveness. The small-scale farmer who practices rain-fed agriculture, applies little or no fertilizer, and uses little technology is vulnerable to the unpredictable changes in the weather. Lack of land ownership rights also undermines the small farmer’s ability to invest in land improvements and farm expansion. Unless these issues are remedied, smallholder farmers will remain in a poverty trap.

In general, a broad-based human development strategy is recommended in order to keep Ghana on track for reducing its poverty. This includes improving the quality and access of education and healthcare for the young and the old. It requires providing micro-credits and financing to farmers and small businesses.

The development of the oil industry should translate to better infrastructure and more jobs for the average Ghanaian – and not be exclusively held in an enclave of the rich. Further, more women should be empowered to become leaders and entrepreneurs. And considering that Ghana’s current pattern of development puts a lot of stress on the environment – resulting in an economic cost of over 10% of Ghana’s GDP – Ghana needs to fix their environmental and sanitation management. More importantly, the disparities between those that live in the poorer north of the country and those that live in the privileged south should be bridged in order to eradicate extreme poverty out of Ghana once and for all.

– Maria Caluag

Sources: IMF, UNDP, BBC News