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Ghana

Experiences with Ex-ante Poverty Impact Assessments of Macroeconomic Policies in Ghana March 13-16, 2006 Washington DC Nicholas Adamtey Centre for Budget Advocacy -ISODEC. Ghana. A country in West Africa Size 92,100 square miles Gained Political Independence in 1957

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Ghana

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  1. Experiences with Ex-ante Poverty Impact Assessments of Macroeconomic Policies in GhanaMarch 13-16, 2006Washington DCNicholas AdamteyCentre for Budget Advocacy -ISODEC

  2. Ghana • A country in West Africa • Size 92,100 square miles • Gained Political Independence in 1957 • Population 20.5 million (est. 2003) • GDP per capita between US $300 - $400 • Faced economic downturn in the 70s and early 80s

  3. Ghana and SAP • Ghana adopted a Structural Adjustment Program (SAP) in 1983, • trade liberalization, • public sector reforms (downsizing), • removal of subsidies on food, petroleum products and social services as well as increased taxes, • privatization, • the adoption of a flexible foreign exchange regime and the devaluation of the local currency • Growth rate above 4 per cent

  4. PAMSCAD and SAPRI • Program of Action to Mitigate the Social Costs of Adjustments (PAMSCAD)-which tried to address the negative impact of the Structural Adjustment Program of the 1980s • The World Bank sponsored Structural Adjustment Program Review Initiative (SAPRI) -tried to consider the impact of macroeconomic policies in Ghana especially the structural adjustment policies among a number of selected countries • there is no comprehensive tool for ex-ante poverty impact assessments of macroeconomic policies for Ghana

  5. HIPC and GPRS • Ghana had opted for debt relief under the Heavily Indebted Poor Country (HIPC) Initiative and the subsequent preparation of the Ghana Poverty Reduction Strategy (GPRS), the need for PSIA became more compelling • As part of the monitoring and evaluation system of the GPRS, the government (with financial support from some donors) commissioned a number of PSIAs to ensure that the implementation of the policies, programs and projects in the GPRS do not negatively impact the poor and the vulnerable but also a donor requirement

  6. PSIAs in Ghana • PSIA on Tackling Vulnerability and Exclusion In Ghana • PSIA on Energy Sector Reform In Ghana: Electricity Tariffs • PSIA on Enhancing Capacity for Pro-Poor Decentralization • PSIA on Economic Transformation of the Agricultural Sector • PSIA on Energy Sector Reforms: Assessing the Distributional Impact and Effects of Ghana’s Petroleum Pricing Policy

  7. Ghana Statistical Service and Data • Population and Housing census • Ghana Living Standards Survey (GLSS), • the Core Welfare Indicators Questionnaire (CWIQ) • the Ghana Demographic and Health Survey (GDHS) • the Ghana SAM for 1993 (with some consultants) • GTZ, MLGRD, NDPC and the NPRP/SIF have embarked on a project to prepare participatory poverty profiles and poverty maps in all the 110 districts as contribution towards a more effective pro-poor targeting of development initiatives

  8. Models of the Ghanaian Economy • Most of the partial equilibrium models focused on macroeconomic polices • Most CGE models focused macroeconomic policies with few extending to poverty issues • Those that touched on Poverty complained of the inadequacy of data desegregation in the GLSS • Ghana itself has not been able to develop comprehensive tools that can be used to carry out the policy task of ex ante poverty and social impact assessments in the country

  9. Tools • The general perception is that the currently available tools such as partial equilibrium analyses, general equilibrium simulations, macro econometric and other systemic models and verifications from monitoring systems, are adequate for undertaking ex ante poverty and social impact assessments in Ghana • PSIA revealed the diversity in institutional behaviour and needs when it comes to poverty impact assessment. The assumptions and levels of aggregation of the relevant institutions must relate to the reality

  10. Capacity • There are some individuals and institutions that have capacity to use develop and use ex-ante PSIA tools • Donors have assisted government institutions to build capacity on modelling though not ex-ante PSIA. • NGOs developing ex-ante PSIA -currently on-going project • To address the problem of capacity local partners link up with foreign partners on issue of PSIA.

  11. Participation • Most respondents were of the opinion that the IFIs and bilateral donors influenced policy makers’ decisions in macroeconomic policy far more than local politicians and other stakeholders • The role of researchers and organized groups or unions in influencing policy-making was rated very low • Policy makers listen when there is so much pressure from within or without

  12. Recommendations • Focus on poverty - Household Welfare and Livelihood, Vulnerability and Coping Mechanisms • Institutions –role of government (politics) -modelling the private/informal sector further desegregation -households further desegregation • Models –combination of CGE and econometric models which would be combined with most widespread indicators used in poverty and income distribution analysis – density functions, Lorenz curves, dominance analyses, Atkinson and Gini inequality indicators, FGT poverty indices, etc

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