December 21, 2018//-The Ghana government’s new Coordinated Program strives to create opportunities for all Ghanaians; safeguard the natural environment and ensure that it is resilient; deepen governance to fight corruption and enhance public accountability to maintain a stable, unified, and peaceful Ghana; and create a competitive business environment to build a strong and resilient economy.
Ghana has demonstrated, through experience, the possibility of rapid poverty reduction.
However, conditions today are different, as the structure of growth has changed, macroeconomy has become more volatile, new environmental challenges are emerging, and Ghana’s political economy continues to evolve.
Ghana needs to redirect its poverty reduction efforts to these new realities.
Pathways Toward Shared Prosperity
The most recent Systemic Country Diagnostic (SCD) for the country, Priorities for Ending Poverty and Boosting Shared Prosperity, points to four pathways (and an array of priority measures) to achieve shared prosperity in the coming years (shown in Figure 1):
- better macroeconomic management for economic diversification.
- better-quality jobs and opportunities
- reducing spatial inequities and vulnerability, and
- strengthening governance and government effectiveness.
Regaining and maintaining higher levels of growth remain critical and will require Ghana to avoid episodes of high macroeconomic volatility, safeguard its rapidly deteriorating natural environment, and diversify its sources of growth. Reducing red tape for businesses and facilitating trade in regional markets can help to spur diversification.
Unlike in the last decade, this growth needs to be charged with broader opportunities for Ghana’s population to unleash the productive potential of its women, its youth and its vulnerable populations.
Better-targeted public services — better-quality education and skills, and access to core assets like electricity, finance, and land – are needed to reduce persistent spatial and gender inequities so that the poor can take full advantage of growth.
To achieve this, the SCD highlights the central role of improving governance in key areas, in particular, fiscal policy, state-owned enterprise accountability, natural resource and public-sector management and local government.
Figure 1: A Framework for Achieving the Twin Goals in Ghana
Within this framework, three important policy choices emerge:
One critical choice for Ghana is to find the right balance between stabilization, growth, and long-term sustainability. Periodic swings in growth, due as much to policy shifts as external shocks, have delayed Ghana’s development, while unmanaged growth has depleted Ghana’s natural resource base.
Moving toward a national consensus around a consistent macro-policy framework that aligns long-term and short-term goals, that surpasses political cycles and weather shocks, and that efficiently invests time-bound mineral rents in protecting renewable resources, is crucial.
A second strategic question concerns the balance between government and the private sector in different sectors. Ghana needs to maximize investment in raising labor productivity in lagging areas/sectors and in creating better-quality jobs and opportunities.
Government and the private sector play different/complementary roles. Some sectors–have strong potential for creating jobs in the short term for those with limited skills and educated (as shown below).
Others hold opportunities for more private participation in services that can raise capacities of the next generation, including in new ICT innovations that could disrupt long-standing challenges in reaching the poor and protecting the vulnerable.
Job Creation Potential by Sector
All jobs Jobs for the poor Jobs for unskilled Jobs for uneducated 1 Agriculture and Agribusiness Agriculture and Agribusiness Agriculture and Agribusiness Agriculture and Agribusiness 2 Health and Education Food and Beverage Wholesale and Retail Trade Food and Beverage 3 Wholesale and Retail Trade Health and Education Food and Beverage Wholesale and Retail Trade
Joint analysis between Ghana CPSD and SCD teams.
A third strategic issue concerns the challenge of improving governance, and what role development partners such as the World Bank Group can play in supporting the continued evolution of Ghana’s accountability systems.
The government’s goal of moving ‘Ghana Beyond Aid’ and toward greater autonomy in managing the country’s resources for its long-term development is timely.
However, to further this process, this SCD finds that the government and development partners need to commit together to better manage aid for results.
Development partners should also continue to help strengthen capacity among Ghanaian actors and stakeholders for improved decision making, transparency, and mutual accountability.
By CAMILLE NUAMAH and Co-authors: MICHAEL GEIGER, TOMOMI TANAKA
This article was originally published on blogs.worldbank.org.
