As the world marks this year’s International Day for the Eradication of Poverty today, the 2016 Ghana Poverty and Inequality Report reveals despite economic growth, inequality has been increasing and poverty remains prevalent.
This year’s theme for the International Day for the Eradication of Poverty, “Answering the Call to End Poverty: A path toward peaceful and inclusive societies”, celebrates the 25 year anniversary of the creation of this international day and the idea behind it: that hunger, lack of education, and violence are not inevitable. That extreme poverty must be something we all strive to eradicate.
According to the Report, Ghana has steadily experienced increasing growth of over 7% per year on average since 2005 following the attainment of middle-income country status in 2010 and discovery of offshore oil reserves, per capita growth in the country has remained relatively high.
“Despite the growth recorded, inequality has been increasing in the country and poverty remains prevalent in many areas. Given the importance of inequality in attaining the goal of poverty reduction, this paper sets out to comprehensively investigate the likelihood of inequality affecting the country’s poverty reduction efforts. The report specifically aims to (1) assess poverty trends in Ghana since the early 1990s, (2) estimate inequality levels and trends in Ghana over the same period, (3) determine to what extent the very poorest are benefiting from Ghana’s economic growth, and (4) assess the relationships between growth, poverty reduction and inequality.
In looking at poverty trends, the paper confirms that between 1992 and 2013 Ghana’s national level of poverty fell by more than half (from 56.5% to 24.2%), thereby achieving the MDG1 target.
However, the annual rate of reduction, according to of the poverty level slowed substantially from an average of 1.8 percentage points per year in the 1990s to 1.1 percentage point per year reduction since 2006 said the report.
Conversely, the rate of reduction of extreme poverty has not slowed since the 1990s and impressive progress in cutting extreme poverty was achieved even since 2006 (cut from 16.5% to 8.4%).
This means that relatively more progress has been made for the extreme poor in recent years than those living close to the poverty line.
Households in urban areas continue to have a much lower average rate of poverty than those in rural areas (10.6% versus 37.9%). However, urban poverty has dropped in recent years much faster than rural poverty and as a result, the gap between urban and rural areas has doubled – rural poverty is now almost 4 times as high as urban poverty compared to twice as high in the 1990s.
At the regional level, the Northern, Upper East, and Upper West regions continue to have the highest poverty rates. However, substantial progress has been achieved since 2006 in the Upper East region as poverty has dropped from 72.9% in 2006 to 44.4% in 2013. Of great concern is the Northern region which saw its high level of poverty fall only marginally from 55.7% to 50.4%.
Since the 1990s overall, the Northern region has seen the smallest progress in poverty reduction.
"This is a major issue for the country given that the Northern Region now makes up the largest number of poor people of any of Ghana’s ten regions (1.3 million)," the UN report notes.
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