Africa Region Working Paper Series No. 61

Evolution of Poverty and Welfare in Ghana in the 1990s: Achievements and Challenges

Abstract

This paper traces Ghana’s economic transition in the 1990s with special focus on its social welfare and poverty dynamics. Ghana returned to a slow but steady rate of economic growth, even though the world prices of its two main export commodities, gold and cocoa, declined. Poverty fell from just more than 50 percent to less than 40 percent between 1992-1998. However, this decrease in poverty has not been uniform across the country - most of the improvements in living standards have taken place in the southern parts of Ghana; the three northern regions, Northern, Upper West and Upper East Ghana, have experienced virtually no improvements and have even seen some increases in poverty.

This paper is a response to the renewed effort in Ghana by many stakeholders to understand the distribution and determinants of poverty. Rural poverty is still a pervasive phenomena, with Savannah region benefiting little from Ghana’s economic growth and poverty reduction experience of the 1990s. Export farmers have seen the greatest gains, while food crop farmers have been less fortunate. The analysis of determinants of poverty highlight the need to diversify exports and step up private sector growth as prerequisites for economic growth, employment generation and poverty reduction. In addition, the paper argues that infrastructure and access to financial and physical markets are important for poverty reduction. The paper also demonstrates that investments in social sectors need to give focused attention to developing a skilled labor force and post primary education, in addition to raising the social welfare of the poor.

Full text of paper. (359KB, In Adobe Acrobat format. Requires Acrobat PDF viewer)