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Options for Reducing Regional Disparities in Growth and Poverty Reduction in Ghana

Options for Reducing Regional Disparities in Growth and Poverty Reduction in Ghana. Ramatu M. Al-Hassan, University of Ghana Xinshen Diao, IFPRI Beijing, China, 24 May, 2006. Outline of presentation. Regional diversity and poverty distribution Trends in poverty in the 1990s

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Options for Reducing Regional Disparities in Growth and Poverty Reduction in Ghana

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  1. Options for Reducing Regional Disparities in Growth and Poverty Reduction in Ghana Ramatu M. Al-Hassan, University of GhanaXinshen Diao, IFPRI Beijing, China, 24 May, 2006

  2. Outline of presentation • Regional diversity and poverty distribution • Trends in poverty in the 1990s • Sources of poverty reduction and growth • Simulation results of Economy-wide Multimarket Model • Implications and conclusions

  3. Regional Diversity • Agro-ecological diversity • Rainfall distribution • History • Education • Infrastructure distribution

  4. Regional Poverty Distribution

  5. Poverty Trends in the 1990s

  6. Sources of poverty reduction in the 1990s • Growth from Structural Adjustment Programme (Mid 1980s) PeriodGDP Growth • 1961 – 1983 0.9% • 1983 – 2003 4.8% (2.0% per capita)

  7. Factors underlying growth • Trade – 39% of GDP growth over 1983-2003 due to export growth • Public spending financed largely through aid • Growth of Services sector (trading, transportation) • Increased receipts of remittances

  8. Factors underlying growth (2) • Agriculture’s share in total exports – 25% • Cocoa’s share – 70% • Non-traditional agricultural exports growth – 20% • Northern Ghana does not produce many of these fast growing export commodities • Only yam as a non-traditional agric export

  9. Methodology • Economy-wide multimarket (EMM) model developed for Ghana (at IFPRI). • Identification of crops based on those with largest effect on income (Using GLSS 4 data)

  10. Poverty will be halved by 2015

  11. But, regional inequality increases

  12. Agriculture-led growth is more pro-poor

  13. Northern Ghana benefits more from agriculture-led growth ---- Poverty rate by 2015 ----

  14. Conclusions from simulation results • Current patterns of growth will halve poverty by 2015 at the national level, while regional inequality will be worsened. • Agriculture-led growth will be more effective in reducing poverty both at the national level and in the poor regions.

  15. Targeted growth simulations in Northern Ghana • Productivity growth in groundnut generates the largest poverty reduction effects in the three northern regions. • Cassava next to groundnut in Northern Region • Cowpea next to groundnut in Upper West region

  16. Effects of growth in productivity of staples on absolute poverty incidence by 2015

  17. Why are these crops making such impact? • They are widely grown as staple and cash crops • Actualising productivity growth requires addressing production constraints • Need to reduce yield gap • Pest control for groundnuts and cowpea (Integrated crop pest management)

  18. Adequacy of crop productivity growth • Crop productivity increases probably not enough • Poverty levels in 2015 still range between 38% in Northern region and 55% in Upper West region.

  19. What complementary investments? • Increased investment in human capital to optimise returns from migration • Increased investment in production infrastructure to attract additional private sector investment that generates forward linkages from groundnut production • Livestock not included in model; investments here can generate additional income growth. • Conglomeration of private sector activities necessary for private investment to take off

  20. In addition, reduction in poverty and inequality requires political commitment

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