Ghana
Poverty Reduction Strategy Paper

Ghana’s current socio-economic development agenda is to attain middle-income status. The emphasis is on changing the structure of the economy by developing the private sector, diversifying the export base, and increasing agricultural productivity and rural incomes. The importance is on the implementation of growth-inducing policies and programs that have the potential to support wealth creation and sustainable poverty reduction. The priorities include continued macroeconomic stability, accelerated private sector-led growth, vigorous human resource development, good governance, and civic responsibility in a decentralized democratic environment.

Abstract

Ghana’s current socio-economic development agenda is to attain middle-income status. The emphasis is on changing the structure of the economy by developing the private sector, diversifying the export base, and increasing agricultural productivity and rural incomes. The importance is on the implementation of growth-inducing policies and programs that have the potential to support wealth creation and sustainable poverty reduction. The priorities include continued macroeconomic stability, accelerated private sector-led growth, vigorous human resource development, good governance, and civic responsibility in a decentralized democratic environment.

CHAPTER ONE GPRS II: OUTLINE OF CONTENTS AND POLICIES

1.1 BACKGROUND

Ghana’s economy, which is largely agro-based, has in the past been characterised by high rates of inflation, continuous depreciation of the cedi, dwindling foreign reserves, an excessive public debt burden and fluctuating growth. Extensive implementation of liberalization and adjustment policies in the 1980s produced some growth in services and mining but did little to induce and sustain growth in agriculture and manufacturing. Both growth and incomes remained stagnant, resulting in deepening poverty.

During the 1990s, the levels of public expenditure on social development programmes for poverty reduction such as health and education were at 2.0 percent and 2.8 percent of GDP respectively. These levels of spending were much lower than what prevailed in other African countries, constraining poverty reduction and effective social change and development. Although general poverty levels decreased in the 1990s, certain areas of Ghana experienced growing and deepening incidence of poverty, with evidence of intensification of vulnerability and exclusion1 among certain social groups. This was particularly noticeable in the savannah and transitional zones in northern Ghana and in some coastal areas in the Central and Greater Accra regions. In the country as a whole, some large occupational groups such as small-scale food farmers, especially women, remained stuck below the poverty line, and the chances of survival of many children and youth remained precarious.

The first programmes under the Ghana Poverty Reduction Strategy (GPRS I) were formulated against the backdrop of a general economic crisis in which virtually all of Ghana’s key macroeconomic indicators were spiralling out of control. The focus of that programme was accordingly to re-align the macroeconomic situation as a necessary condition for the implementation of sectoral policies specifically targeted towards reducing the incidence of poverty as observed in the 1990s. In the meantime Ghana had applied for debt relief under the HIPC initiative, and had to observe the classical conditionality of that scheme, namely, that the savings from debt relief would be applied solely to “poverty alleviation” which in turn translated into the pursuit of the United Nations Millennium Development Goals. Indeed, the need to submit a PRSP was the immediate occasion for producing GPRS I and subsequent versions were envisaged at fitting into the same trajectory of national development policy.

At the onset, it became obvious that apart from HIPC savings, policies under GPRS had to address the issue of how to create wealth by restructuring the economy towards accelerated growth, so that the objectives of poverty reduction and the protection of the vulnerable and excluded could be sustained. The principal social objectives that were added to these related to improved governance, including the decentralization of government and reform of the public services to partner the private sector in national economic development within a decentralized democratic environment.

1.2 REVIEW OF GPRS I

For the three years under GPRS I, the main thrust of the government’s policy initiatives was aimed at maintaining macroeconomic stability. This was achieved through prudent fiscal and monetary policies aimed at reducing inflation, driving interest rates down to levels conducive to increased investments but still attractive enough to mobilize savings, ensuring stable but yet competitive exchange rates, and maintaining a fiscally sustainable debt regime. In the real economy a moderate rate of economic growth was to be achieved through the creation of an enabling environment for improved agricultural productivity and private sector-led agro-industrial development. As a result of the availability of HIPC savings the manifestations, and at the same time the causes, of the deepest poverty were to be directly attacked through greater investments in health, education, safe water and sanitation. Feeder roads and other transport infrastructure could be financed to facilitate distribution of agricultural products and services in favour of the rural poor. The main political objective of the GPRS I of ensuring that in the promotion and protection of civil liberties no Ghanaian was excluded from participating in decisions that affected their lives, has been pursued through HIPC supplementation of the resources available under the District Assemblies Common Fund and the Ghana Educational Trust Fund.

Considerable progress has been made towards achieving the objectives of GPRS I. The economy has been characterized by relative stability, with all the targeted macroeconomic indicators registering positive trends. Despite a series of major fuel price adjustments to absorb petroleum debt and respond to a fast-rising crude oil market, the overall consumer price index declined dramatically over the period, interest rates eventually fell and exchange rates stabilized. GDP grew at an average rate of 5 percent during the period, because it coincided with the dissemination of new high-productivity technologies in the all-important cocoa sector. As a result, unlike the classical pattern of sectoral contributions to growth in an emerging economy, Ghana’s economic growth under GPRS I (2002 – 2004) was led by the agricultural sector with 6% average growth rate, followed by industry and services respectively with 5% and 4.7%.

Generally in the social development circles there were increased expenditure outlays in support of the medium-term priorities of GPRS I with regard to special programmes targeted at the vulnerable and excluded. These included the rehabilitation of street children, increased access to legal aid services for the poor, integration of Persons With Disabilities (PWDs) into mainstream production and employment, and increased access of economically marginalized women to credit through the establishment of the government’s micro-credit scheme and the Women’s Development Fund supported by the government of Japan.

Despite these achievements, as was characteristic of the poverty reduction strategies sponsored by creditor institutions in that epoch, there was little room in the 2001 – 2005 programme for addressing issues, such as urbanisation, industrialisation, technical/vocational training, technology research and development – that must now engage greater attention in policy-making in Ghana as it aspires to join the ranks of the fast growing economies.

GPRS I has a number of limitations and bottlenecks. These included service delivery constraints and the persistence of regional differences in the distribution of some key outcomes in the health and educational sectors. The educational sector continues to be confronted with insufficient progress in primary school enrolment as well as geographical and gender disparities. In spite of the efforts made, gender disparities can be observed in all sectors including education, health, production, employment and access to and control over land.

Economic policy and management under GPRS I has been criticised for concentrating on macroeconomic stability rather than providing a clear policy direction which recognises a stable macroeconomic environment as a platform upon which to generate economic growth as a means to poverty reduction. Another criticism relates to the ineffectiveness of the participatory process adopted during its preparation and the implication for national ownership. The inability to involve more districts and local communities, and the limited engagement of Parliament and the private sector, have been cited as weaknesses in the process. A further criticism is the insufficiency of gender focus specification when addressing various poverty issues in the diagnostic, in the thematic areas, and in the policy matrices, as well as in the monitoring and evaluation framework.

While taking note of the shortcomings of GPRS I, government has taken even more significant initiatives in basic components of a strategy for the short term protection and improvement of living standards and the longer-term emancipation of people from the stranglehold of inherited poverty. A National Health Insurance System has been brought into effect in 2005 to guarantee every Ghanaian access to a professional health care from “cradle to grave” at affordable cost. In 2004 government promulgated an Educational Reform Programme which does not only assure every young Ghanaian the right to free basic education as prescribed by the National Constitution and the UN’s Millennium Development Goals, but will eventually give them the unrestricted opportunity to participate fully as members of a productive work force of a modernised, technological, and wealthcreating economy

1.3 POVERTY SITUATION

In formulating GPRS I, the incidence of poverty was analyzed and categorized on broad regional basis and this resulted in limitations in targeting poverty reduction interventions. However, further analysis of income poverty based on available data presents a clearer picture of poverty at district level as depicted in Appendix 1. This has provided the basis for more direct targeting of poverty reduction measures under GPRS II.

Table 1.1 shows the movement of some of the core welfare indicators for periods 1998/99 and 2003.

Table 1.1

Core Welfare Indicators

Source: CWIQ 1997 & 2003

1.4 GROWTH AND POVERTY REDUCTION STRATEGY (GPRS II)

The design and preparation of GPRS II (2006-2009) is thus guided by practical lessons and experiences drawn from the preparation and implementation of GPRS I (2003-2005). However, going beyond these, the government and the nation itself have also adopted developmental goals and vision based on the proposition that Ghana has now positioned itself to attain the social and economic status of emerging middle income countries within the next decade.

In place of the former Ghana Poverty Reduction Strategy (GPRS I), Government is accordingly launching a new Growth and Poverty Reduction Strategy (GPRS II 2006-2009). The change in name reflects the new direction of government policy which places more emphasis on growth. This document presents a set of coordinated national programme of social and economic development -- that set which illustrates how much a national programme can be purposefully steered to eliminate the worst manifestations of poverty, social deprivation and economic injustice, from Ghanaian society. Essentially, it integrates the otherwise disparate development agenda and sectoral commitments that compete for inclusion in the annual national budget into one comprehensive development policy framework to serve the basic objective of guaranteeing every Ghanaian a decent livelihood, especially for the most vulnerable and deprived (who are disproportionately made up of women, children and unemployed youth). It incorporates the relevant development strategies/policy documents of all the various sectors such as the Basic Education Improvement Programme and the 2004 White Paper in Education Reform, the Private Sector Development Strategy, Ghana Trade Policy, the Food and Agricultural Sector Development Programme and the National Gender and Children’s Policy.

GPRS II also seeks to operationalise various international agreements which are relevant to the poverty reduction objectives and of which Ghana is signatory. Principal among these are the Millennium Development Goals (MDGs), the New Partnership for African Development (NEPAD) and the African Peer Review Mechanism (APRM), the Convention on the Elimination of all forms of Discrimination Against Women (CEDAW) and the African and Beijing Platforms for Action. It is also consistent with the relevant ongoing programmes which government is pursuing with development partners.

1.4.1 Goal

The overarching goal of Ghana’s current socio-economic development agenda is to attain middle income status (with a per capita income of at least US$1000) by the year 2015 within a decentralized, democratic environment. This is to be complemented by the adoption of an overall social protection policy, aimed at empowering the vulnerable and excluded, especially women to contribute to and share in the benefits of growth of the economy, thus ensuring sustained poverty reduction.

This document reviews GPRS I, analyses growth trends, and defines the strategic direction and interventions aimed at achieving the basic poverty reduction goals prescribed in the MDGs framework and, beyond that, bringing Ghana within the threshold of middle income countries.

The technical computation of these goals in terms of the traditional indicators of “per capita gross national income” expressed in current United States dollars is at present inhibited by a number of professional constraints. First, greater portion of business in Ghana is conducted using the national currency – the Cedi. In the recent period of extreme turbulence in the relative value of the Cedi against the Dollar, translating the value of the nation’s entire production of goods and services into meaningful dollar terms is obviously a difficult and controversial exercise. Besides that complication of the exchange rate, our economists have also to cope with the influence of domestic price changes, including periods of hyper-inflation, on the measurement of the value of Ghana’s total economic output in real terms. A further difficulty is posed by challenges to data inaccuracies relating to the conduct of ten-year national population census.

The combined effect of the above factors is that depending on the methodologies and assumptions that have been employed by various agencies, estimates of the value of the productive work that is averagely done by every living Ghanaian today in a year, range from US$380 per head on the current World Bank rankings, to US $430 according to some local experts and to US$480 per head according to some internationally reputed rating agencies. These figures will be refined and the differences narrowed down as a result of the professional advances that are envisaged in the technical standards of governance under GPRS II.

The contemporary debate on the status of national income or demographic statistics not withstanding, what matters is that as a nation we are able to think through, agree upon and vigorously implement a realistic plan to bring about the vast improvements in our living standards such as are warranted by Ghana’s own endowments of human and material resources backed by the technological possibilities of the world that we share.

1.4.2 Linkage to GPRS I

With the attainment of relative macroeconomic stability under GPRS I, the direction of GPRS II is to accelerate economic growth and poverty reduction by assisting the private sector as much as possible to create wealth and by shaping the acts and policies of government deliberately so as to generate the maximum opportunities for additional employment.

However, there are two broad sets of constraints to achieving accelerated wealth creation and poverty reduction. The first is the vulnerability of the economy due to the persistent reliance on the export earnings from a few primary commodities. The second is the social structure which comprises a high proportion of children and youth. The attendant high dependency ratio is aggravated by the low level of literacy, working skills, and productivity especially among women and the rural population.

Accordingly, emphasis in this GPRS II is placed on measures to change the structure of the economy by developing the private sector, diversifying the export base and increasing agricultural productivity, processing and rural incomes.

While the GPRS I focused on poverty reduction programmes and projects, the emphasis of GPRS II is on growth-inducing policies and programmes as which have the potential to support wealth creation and poverty reduction. GPRS II is therefore anchored on pursuing the following priorities:

  • continued macroeconomic stability

  • accelerated private sector-led growth

  • vigorous human resource development

  • good governance and civic responsibility

Continued macroeconomic stability will be realized by ensuring prudent fiscal policy management, effective monetary policy, and a well-managed debt and international trade regime. It is accepted however that the highly reserved posture of macroeconomic policy which was appropriate to the convalescent economy under GPRS I has to be modified to meet the needs of a more expansionary thrust of policy under GPRS II. The Bank of Ghana is already leading the way by introducing measures such as the reduction in banks’ reserve requirements and the lowering of the cost of credit to business on a broad front.

But GPRS II should make its greatest impact in the real economy of agricultural and industrial production. Accelerated growth will be achieved through the development of a vibrant private sector with adequate capacity to lead the growth of agriculture and other emerging sectors including ICT and tourism. After decades of development effort, some of the most basic advances in production technologies have eluded Ghana. We did not need to overcome the terrible scourge of mass famine, but Ghana today has not even achieved basic food security in its traditional staple diet. The peasant woman who feeds this country is still using the same technology of cutlass and hoe which her grandmother used to feed a population one-fifth the size of today’s population.

Ghana’s timber industry is yet to derive optimum value for the nation from the forest resources which are in the meantime being exploited to exhaustion. A significant portion of wood material ends up as off-cuts and sawdust because of low investment in the technology of timber utilisation. The emerging success in Ghana’s textile industry has turned sour: the exportable surplus of cotton production has long disappeared, and now not only is the textile weaving industry in a state of crisis but even printing on imported cloth seems to be losing its competitiveness.

Overall, the contribution of modern industry to the modestly fast growth of the economy in the most recent years has been unacceptably low, mirroring a relatively stagnant inflow of foreign direct investment. The years of GPRS II should serve as a transition period when a basic platform of agro-industrial production and technology is built up to match the successes that have been achieved in the area of macroeconomic reform. Vigorous human resource development, good governance and civic responsibility will be pursued both to support growth and as important developmental goals in themselves.

1.4.3 Ghana’s Progress towards achieving the Millennium Development Goals (MDGs)

The MDGs span the critical development issues of poverty and hunger, education, health (especially child and maternal mortality), gender equality and women’s empowerment, environmental sustainability and global partnership for development, and thus provide an important subsidiary framework for defining specific objectives for GPRS II.

Ghana has, since 2000 adopted the targets of the MDGs as the minimum requirements for socioeconomic development and poverty reduction. Accordingly, Ghana began the monitoring of progress towards achieving the MDGs from 2002 even prior to the formal launching of GPRS I. The initial findings were that though some progress had been made, achieving the goals of the MDGs by 2015 would require additional effort particularly in the area of reducing maternal mortality.

Since then government has focused on removing the constraints hindering the realization of the MDGs. Table 1.2 below shows the progress that Ghana has made towards achieving the Millennium Development Goals.

Table 1.2

Ghana’s Progress towards Achieving the Millennium Development Goals

Source: NDPC 2004

Lack of data implies inability to score appropriately

1.5 STRUCTURE OF PRESENTATION OF GPRS II

GPRS II is presented in two volumes; Volume I, which is the policy framework of the Growth and Poverty Reduction Strategy analyses the macroeconomic context and the development policy choices that should be made to attain the goals of GPRS II. It includes a policy matrix, which outlines issues, policy objectives, and strategies, and also identifies the agencies responsible for implementing each component of the strategy. Volume II is a four-year framework of costed policies and strategies.

This document is organized into six chapters. Chapter 1 is the introduction which includes a discussion of recent experiences and future goals in national development, especially as they bear on the issues of poverty reduction. It also outlines the process of preparing the GPRS and the strategy for mass citizen involvement in the GPRS II process in as much as there is need to mobilise the whole body politic to assure its success. Chapter 2 presents the Macroeconomic Context and Policy choices, while Chapter 3 discusses the policies for Growth through Private Sector Development. Chapter 4 contains policies for Vigorous Human Resource Development, Chapter 5 deals with Good Governance and Civic Responsibility and, in Chapter 6 the plan for monitoring and evaluating the implementation of the GPRS II is presented. Finally Chapter 7 presents the financing arrangements for the implementation of the GPRS II.

The GPRS II document is not designed to present a set of cut and dried policies and programmes. It rather represents a medium term framework which offers a platform for maximising social dialogue with civil society and development partners in order to arrive at the best long term solutions to national development challenges.

The extensive process of consultation which has preceded this publication will be followed by a further and even more comprehensive programme of dialogue within the government itself, with Parliament, civil society, various interest groups, and development partners so that the crucial tasks of consolidation of policies and programmes under GPRS II can be accomplished. During the period of excessive debt dependency, the management of the development dialogue has seemed to be a duet between the Government establishments and its multilateral and bilateral foreign creditors. The ordinary mass of the people, whose future and fortunes were being decided, had no part or opinion in the process. The inevitable result was that all those programmes achieved scant success – because there was an insufficient conviction of “ownership” among either the state or the non-state partners in the implementation of the planned development programmes.

The processes of consultation that have already been conducted in the lead up to this publication are outlined below.

1.6 THE PROCESS OF PREPARING GPRS II

During the four year term of implementing this GPRS II it is imperative to institute procedures and relationships that will enhance the probability of attaining the objectives for national development and poverty reduction. The first requirement is that Ghanaians themselves will own and drive forward the process of development.

Accordingly the preparation of GPRS II has involved broad participation to ensure that diverse shades of opinion and experiences are reflected at all stages of the process. The planning process began with the formation of technical working teams, known as Cross-Sectoral Planning Groups (CSPGs) organized around the five thematic areas of GPRS I, namely:

  • Macroeconomic Stability

  • Production and Gainful Employment

  • Human Development and Provision of Basic Services

  • Vulnerability and Exclusion and

  • Good Governance

These five CPSGs metamorphosed into three at the later stages of the process on the basis of the three priority areas of Government, namely Private Sector Competitiveness, Human Resource Development and Good Governance.

1.6.1 Composition and Terms of Reference of Cross Sectoral Planning Groups (CSPGs)

CSPGs were composed of state and non-state actors drawn from Ministries, Departments and Agencies (MDAs), Professional Bodies, Tertiary Institutions, Research Institutions and Think Tanks, Non-Governmental Organizations (NGO), Community-Based Organizations (CBO), Private Sector, Organised Groups and Associations (TUC, Federation for the Blind & Disabled etc), Specialized Institutions, outstanding individuals with expertise in relevant fields as well as Development Partners.

Each CSPG was chaired by an individual selected by the group and was facilitated by a consultant who provided the technical backstopping and expertise, assisted by a research associate. Consistent with the MDGs requirement to ensure integration of environment in country’s policies and programmes (MDG 7 – Target 9), the SEA team of EPA/NDPC was represented on each CSPG. Each CSPG formed a core working group who collated reports on deliberations of that particular CSPG and drafted the report of the CSPG. Coordination of the process was done by technical staff of the NDPC secretariat

Issues relating to gender and the vulnerability and exclusion were mainstreamed into each of the thematic areas.

The Broad Terms of Reference of each CSPG were to:

  • determine the programmes, policies and plans to be rolled over from GPRS I to the updated GPRS 2006-2009

  • review the policies, programmes and projects with a view to identifying any missing links, and propose new initiatives

  • take into consideration recommendations from the Annual Progress Report (APR), the Poverty and Social Impact Analysis (PSIA), the Strategic Environmental Assessment (SEA), and other existing sector strategies and studies

  • mainstream cross-cutting issues such as the environment, employment, ICT, disability, HIV/AIDS, and population into the thematic areas

  • integrate international commitments such as the MDGs, the Millennium Challenge Account (MCA) NEPAD, PRSC, and MDBS into the various thematic areas

  • identify national priorities for the theme under consideration

  • develop relevant strategies for achieving the objectives in the GPRS II.

1.6.2 The Public Consultation Process

The public consultations strategy for GPRS II was aimed at consolidating the gains made in the dissemination of GPRS I through the use of vigorous print and electronic media campaigns as well as other communications media to achieve the twin objectives of creating awareness about the GPRS, and soliciting the views of a large segment of the Ghanaian population as input into the GPRS II.

The Strategic Objectives for Public Consultations Programme

The strategic objectives for the public consultation programme were to:

  • inform the public on the Government’s Growth and Poverty Reduction Agenda

  • highlight the new policy areas of GPRS II for stakeholders

  • solicit their views on priorities for GPRS II,

  • promote ownership of GPRS II by all Ghanaians.

From the Public Consultation Process, broad consensus was obtained on the following priorities which should drive the design and implementation of GPRS II

  • private Sector Competitiveness

  • human Resource Development

  • good Governance and Civic Responsibility

The policies and strategies related to the Vulnerable and Excluded were mainstreamed among other cross-cutting issues.

Scope and Methodology for the Public Consultation Process

The scope and method used for the public consultation process included:

  • National, Regional, District and community level workshops

  • Use of the electronic media (radio and television)

  • Public fora

  • Focus group discussions

Groups Targeted in the Consultation Process
  • Regional Ministers

  • Sector Ministers and their Deputies

  • Sector Ministers and their deputies

  • Council of State

  • Regional Coordinating Directors

  • Regional Planning Coordinating Units

  • District Chief Executives

  • District Planning Coordinating Units

  • District Assembly members

  • Traditional Authorities

  • Community Based Organizations

  • Community Groups

  • The Communications Media

  • Professional Bodies

  • Student Unions

  • Women leaders/Coalition of Women’s Groups and Women’s organizations

  • NGOs in Service Delivery and Religious Bodies

  • National Association of Local Authorities

  • Ghana Employers Association

  • Association of Ghana Industries

  • The Trades Union Congress

  • Research Institutions and Policy Think Tanks

  • Parliament

  • Political parties

  • Development partners

1.7 THE GPRS COMMUNICATION PROGRAMME

Feedback from the dissemination of the GPRS I and the Annual Progress Reports as well as the public consultations have been integrated in GPRS II. Communications under GPRS II will be enhanced through the continued implementation of the Communications Strategy to deepen ownership and to ensure effective implementation, monitoring and evaluation of the strategy. The Communications Programme will focus on the following:

  • development of popular versions of GPRS II (in English and major local languages)

  • expansion of sales outlets of GPRS II throughout the country

  • extensive dissemination of GPRS II through a variety of media to targeted audiences outlined in the Communications Strategy

  • forging and strengthening of strategic partnerships with state and non state actors for effective coordination of the dissemination of GPRS II and its Annual Progress Reports, management of expectations and feedback for the policy review process, and

  • deepening of development communications programmes and processes to foster the necessary attitudinal change in support of growth and poverty reduction.

Table 1.3

Chronology of Activitiess

CHAPTER TWO: MACROECONOMIC CONTEXT AND STRATEGIC DIRECTION

2.1 INTRODUCTION

This chapter sets the macroeconomic context and strategic direction for the implementation of GPRS II based on a review of the performance of the macro-economy in the recent past and identifies critical areas of intervention that would have maximum impact on accelerated growth and poverty reduction.

2.2 REVIEW OF MACROECONOMIC PERFORMANCE UNDER GPRS I

The policy thrust of the macroeconomic framework under GPRS I was towards promoting macroeconomic stability for sustainable economic growth and poverty reduction. Substantial progress was made towards the realization of macroeconomic stability. Indicators point to a reduction of inflation (year on year), from 40.5 percent in December 2000 to 11.8 percent by December 2004. Interest rates fell and the prime rate was reduced from 24 percent in 2003 to 15.5 percent by the third quarter of 2005. This decline in the prime rate has been accompanied by consequential reduction in the rates on other money market instruments including the 91-day treasury bill. The exchange rate was stable, depreciating at 2.2 percent against the dollar in 2004 as compared to 49.8 percent in 2000, the lowest since the foreign exchange market was liberalised. GDP grew at an average rate of 5 percent during the four-year period (2001-2004) compared with 4.1 percent in the preceding three years. This growth was led by the agricultural sector (5.5 percent), followed by industry (5.0 percent) and services (4.7 percent).

Relative stability of the economy was achieved in spite of the fact that Ghana’s main exports, cocoa and gold, as well as its major import, crude oil, have been subject to the volatile movements in international commodity pricing. Table 2.1 shows trends in selected macroeconomic indicators for the 2001-2004 period.

Table 2.1

Selected Key Economic Indicators

Source: Bank of Ghana, Economic and Financial Review, January 2005, Monetary Policy Committee Papers Ghana Statistical Service

2.2.1 Economic Performance by Sectors

(i) Agriculture

Tables 2.2 and Table 2.3 show the relative structure of Gross Domestic Product by economic activity between 2000 and 2004 (in percentages and growth rates at constant 1993 prices). Agriculture remains the largest contributor to GDP, followed by the services and industrial sectors respectively. Within the agricultural sector, the cocoa and forestry sub-sectors have made significant gains in relative shares, while the crops sub-sector has marginally lost share.

Table 2.2

Structure of GDP by Kind of Economic Activity in Percentages

Source: Ghana Statistical Service
Table 2.3

GDP by Kind of Economic Activity: Growth Rates at Constant 1993 Prices

Source: Ghana Statistical Service

In spite of the progress made in agriculture, the stagnation of technologies and in some areas the wide gender inequalities in access to and control over land and agricultural inputs, including extension services, as well as adverse environmental factors such as climate variability and land/soil degradation, continue to be challenges posed to the growth potential of the agricultural sector.

(ii) Industry

The industrial sector exhibited low performance, against the projected targets in GPRS I. Despite the overall poor performance of the sector, the construction, mining and quarrying sub-sectors made significant strides. This was the result of increased investments, especially in the roads and real estates sub-sectors of the economy where funding support from both local financial markets and remittances as well as Government and donor sources were available.

Growth in the mining sub-sector, particularly gold, was largely due to substantial infusion of capital from both local and external sources aided by the stable environment created by the institution of policies that have insulated earnings and costs from foreign exchange controls.

The manufacturing sub-sector continued to decline due largely to high costs of production and the influx of cheaper imports. While the liberalization of trade has increased access to imported inputs, weak enforcement of laws and regulations at the nation’s entry points has resulted in increasingly unfair trade practices. As a result, locally manufactured products have become increasingly uncompetitive, both in terms of price and quality.

(iii) Services

The services sector also contributed to the modest gains in GDP growth. This sector is driven by the wholesale and retail trade, as well as restaurants and hotels sub-sectors, which together accounts for about 60 percent of the contribution of all services to total production in the economy.

Although the financial services sub-sector made significant gains between 2001-2004, this did not impact sufficiently on the agricultural and manufacturing sectors. Generally the financial institutions have considered local manufacturing and agricultural enterprises as risky undertakings; this is of particular concern because of the adverse effect on small-scale farmers, especially women, who constitute the majority of the rural poor. On the other hand, the bulk of bank credit has been channelled to commercial activities, especially those involving import trade, at the expense of those sectors which could potentially serve as growth points to lead the required accelerated growth.2

To ensure the availability of credit to the potential growth points of the economy, government has established special institutions such as Export Development and Investment Fund (EDIF), the Presidential Special Initiatives (PSIs), the Micro Credit Unit and the Women’s Development Fund (WDF) to support financially marginalized enterprises. Although these schemes are yet to show fully their potential impact on overall economic growth, they indicate the fact that institutional credit is not sufficiently available to most micro, small and medium scale enterprises in Ghana, particularly those that involve women and the rural population.

2.2.2 Growth Trends since the Inception of Market-Led Development Strategy

Figure 2.1 shows real GDP growth rates for the period 1984-2004 following the inception of market-led development strategy in 1983. For the period 2002-2004 under GPRS I, the annual average growth rate of real GDP was 5.2 per cent. This is a marked improvement on the historical trend, and equal only to the average of the period 1984-1992.

Figure 2.1
Figure 2.1

GDP Growth Rates: 1984 - 2004

Citation: IMF Staff Country Reports 2006, 225; 10.5089/9781451814934.002.A001

Source: Budget Statement and Economic Policy Statement, Various Years

Table 2.4 shows government’s targeted real GDP growth rates against realized rates between 1995 and 2004. The trend in real GDP growth rates shows marked shortfalls between the targets and performance from 1995 till 2000. Between 2001 and 2004, actual real GDP growth rates either equaled or exceeded the targets. In 2004, the target was 5.2 percent while the actual growth rate was 5.8 percent, the most impressive performance since the 8.6 percent real GDP growth rate recorded in 1984. This indicates a potential for achieving higher rates in GDP growth.

Table 2.4

Projected Real GDP versus Actual Real GDP Growth Rates: 1995 – 2004

Source: Ghana Statistical Service

From these analyses, the following observations are made:

  • the high economic growth rates was led by the agricultural sector under GPRS I.

  • within the Agricultural sector cocoa was the dominant contributor to growth while other branches remained relatively stagnant

  • overall, the basic structure of the economy has not changed and Ghana’s economy is still fragile and vulnerable to external shocks

  • the level of growth which occurred has not been sufficiently high enough to support a mark reduction of poverty

  • the growth points of the various sectors of the economy do not have effective inter-sectoral linkages within the domestic economy. In particular, the agriculture- industry - consumer value chain remains weak and has not generated much opportunity for additional employment.

  • cocoa, forestry, mining, wholesale and retail trading, and hotels/tourism, which have been the principal growth points in the economy are largely linked to the external sector, and are subject to potential risks and shocks arising from international price movement.

  • it can however be argued, in retrospect, that the growth targets for 2001-2004 have not been ambitious enough when measured against the 4.8 per cent annual average already been attained in the 1984-2004 period as a whole.

These observations inform the formulation of macroeconomic policies and growth strategies for GPRS II.

2.3 MACROECONOMIC POLICIES, STRATEGIES AND TARGETS FOR GPRS II

2.3.1 Growth Target for GPRS II

GPRS II is guided by the overall objective of doubling the size of the Ghana economy (in terms of real production) within the next decade, and bringing the per capita income of the average Ghanaian to middle income level by 2015. This is expected to reflect in positive social change and improvement in the quality of life for all. It is in this regard that the growth targets are made taking cognizance of the corresponding objectives of NEPAD and MDGs, all of which specify some qualitative indices. These qualitative improvements are the really important objectives of the process of national development for the enhancement of human welfare and are the real substance of development policy.

As a guide to target setting, the current World Bank practice draws the line for concessionary IDAlending, which is for the benefit of “low-income” countries at US$965 per capita per annum. Above that level (with a few marginal exceptions) countries are regarded as “middle-income” and only eligible to borrow from the Bank on IBRD terms which are only a modification of the terms of credit on the private capital markets. On the World Bank scale Ghana is today rated at a level of $380, which reveals the challenging gap which must be overcome in attaining middle income status.

In developmental terms, middle income countries are characterized not only by the relatively high dollar value of their production, but also the following attributes:

  1. achieved international competitiveness in one or multiple aspects of the global trade in industrial or service products

  2. supported by a significant level of “scientific autonomy” which is reflected in their application of science and technology in their production processes and their ownership of intellectual property

  3. attainment of critical mass in economic propulsion, with high rates of domestic savings and investments, and the ability to tap into the worldwide pools of equity and loan capital

A narrow definition of our growth targets for the GPRS II period is 6 – 8% GDP per annum, but this must be firmly situated within the perspective of changing the inherent structure of production and joining the march of technological progress.

Assumptions

The economic growth targets derived from the current level of development and the feasible expectations in the long term perspective of the economy are based on the following assumptions:

  • the population growth rate will not exceed 2.6 per cent per annum, through the population management policies and strategies outlined in the sections on human resources development

  • macroeconomic stability, especially by containing inflation within single digit as from 2006 from the current rate of about 14.7 percent (August 2005). Accordingly, it is expected that the average annual change in the GDP deflator will not exceed 9 percent

  • a stable Cedi/ Dollar exchange rate with prudent management that will keep the Cedi depreciation below a 4 percent per annum ceiling

  • reduced cost of investment loans as incentives for stimulating investment in support of private sector-led growth. This is expected to be the dividend from sound macroeconomic management, and also reflect the reduction in risk factors that make loans to SMEs unattractive to banks

  • containment of fiscal deficits and preventing them from being a major source of monetary instability and price inflation. Two years after gaining a very favourable rating from leading agencies, Ghana is preparing to tap into the international capital market to supplement access to developmental resources. Prudent, debt management will entail taking into account the maturity profiles of debt against public sector borrowing requirements

  • an aggressive domestic revenue mobilization and its efficient use in driving the prioritized development targets. This is to be attained through administrative measures and enhancing the capacity of existing tax collection instruments and personnel

  • an efficient expenditure re-prioritization in favour of development expenditure and to ensure efficiency in the use of public resour

  • growth in aggregate investment, especially from packaged programmes such as the Millennium Challenge Account Compact with its integrated agro-based projects

The strategies for realizing these macroeconomic assumptions are outlined in section 5.6

Targets

Within the parameters of these general assumptions, it is targeted that the economy grows at an annual rate which will rise from 6 percent to 8 percent towards the realization of middle income status by 2015 (Table 2.5 & Table 2.6). The narrow definition of our growth targets for the GPRS II must be firmly situated within the perspective of changing the inherent structure of production and joining the march of technological progress.

Table 2.5

GDP growth Projections, (2006 – 2009)

Table 2.6

Gross Domestic Product by Kind of Economic Activity at Constant 1993 Prices Historical and Projected Growth Rates for GPRS II (2006 - 2009)

Compared to the realized average growth rate of 4.9 percent for the period 2001-2004, the targeted average growth rate of 6 to 8 percent and the sub-sectoral growth rates that could lead to middle income status pose a challenge to Ghanaians. These targeted growth rates are achievable with the right macroeconomic policies, incentive structures and the input requirements to support the private sector as the engine of wealth creation and poverty reduction.

Above all, whether Ghana realises the higher or only the lower ends of her growth potential will depend on two factors, namely,

  1. the implementation of a broad-based human resource development strategy including the measures envisaged in both the education and public sector reform programmes.

  2. opening of the channels between Ghana and the global capital markets so that both loanable funds, and equity investment which carries in its train the skills of management, science and technology, will flow more freely into the economy.

2.3.2 Strategic Direction of GPRS II

Accelerated growth of the economy will result from continued macroeconomic stability, a vibrant private sector, vigorous human resource development underpinned by deepening good governance and civic responsibility.

GPRS II will continue with the implementation of policies that will enhance and sustain the gains made in macroeconomic stability under GPRS I by ensuring:

  • prudent fiscal policy management

  • a monetary policy that is flexible enough to respond to external shocks, promote growth and ensure price stability

  • real interest rates that enhance effective mobilisation of savings and make credits affordable to the private sector

  • relatively stable real exchange rates that promote international trade

GPRS II will further address the structural constraints at the policy and institutional levels that impede increased productivity, adoption of technology and competitiveness of the private sector in relation to agriculture, industry and service sectors. This will empower the private sector to effectively play its role as the engine of wealth creation and poverty reduction.

Although the implementation of the proposed macroeconomic measures will contribute to achieving the growth targets it is recognised that their impact on various groups may not be at the same level. To improve upon macroeconomic policy design, poverty and social impact analysis (PSIA) will be conducted to asses the impact of policies on the poor. All impact analysis will contain a gender dimension.

While projections of sectoral contributions to GDP generally assume that natural assets will continue to contribute significantly to economic growth, an ongoing study to determine the costs of degradation of some renewable natural resources in relation to GDP points to the fact that the country may be losing about US$475 million annually which is approximately 5.5% of GDP. There is the therefore need to recognise the problem and initiate steps to reverse this trend in order to sustain the agriculture-led accelerated growth strategy envisaged in this framework.

2.3.3 Agriculture as Basis for Economic Growth and Structural Transformation

Economic growth and structural transformation is to be propelled by the agricultural sector in order to maximize the benefits of accelerated growth. The emphasis on agriculture-led growth strategy is predicated on a number of factors.

First, agriculture is the highest contributor to GDP and provides employment for over 60 percent of the population. Consequently growth in the sector will impact directly on growth of the economy as well as employment. Conversely, the economy cannot make overall progress unless the mass of small-scale food producers achieve significant improvement in their productivity through increased investment and changes in technology.

Secondly, the bulk of the poor, especially women, are engaged in agriculture – food crops, livestock and fisheries. Therefore accelerated development in agriculture will have direct benefit on poverty reduction in the villages and help to slow-down the rural-urban drift.

Thirdly, increased productivity in agriculture will ensure food security and contribute immensely to health and well being of the population.

Fourthly, modernized agriculture will also prepare the ground for structural transformation between agriculture and industry. The demands of the markets for agricultural produce in whose production Ghana has comparative advantage entail the achievement of additional steps: the occurrence of volume and quality, packaging and conservation, marketing and delivery. Only through these can Ghana’s farmers realize higher incomes from both local and foreign sources

Fifth, while the rural areas can be expected to lose population share to urban areas as part of the long-range perspective of economic growth, a pressing social problem of Ghana today is the acute shortage of employment opportunities for the youth. Given the pervasive shortage of capital the quickest route to the solution of a problem that cannot wait is to absorb a maximum number of these in higher productivity and higher income farming pursuits.

Thus in the next few years the growth of the economy is planned to be led by the agricultural sector, which will provide the necessary inputs for a vibrant agro-processing industrial sector in the medium to long term. The security of Ghana’s domestic food supply is itself yet to be attained. But in addition, the areas of Ghana’s comparative advantage in agricultural production should be enhanced and transformed into competitive advantage in the sub–regional and more distant markets.

For agriculture to lead growth in the short term, the economy must diversify into other crops apart from the traditional cocoa, especially cereals and other cash crops for export markets including mangoes, papaya, pineapples, cashew nuts and vegetables. Cocoa will still be significant in the economy for decades yet to come. The recent spurt in Ghana’s cocoa production, arising in part from the rapid adoption of improved technology by the farmers, illustrates the developmental potential of our cocoa entrepreneurs, land and workers. Besides, new scientific evidence on the nutritional and health properties of cocoa, present opportunities which Ghana should prepare herself to exploit.

Nevertheless, more attention has to be given to these other crops. The decline in Ghana’s fisheries which still provides the major part of the national protein intake has to be reversed by increased investments in aqua-culture among other technological improvements. All these will contribute to the structural transformation of the economy, but more importantly the objective is to target the bulk of the poor farmers who are in the non-cocoa sectors of agriculture, and thereby realize better shared growth. Given the immensity of Ghana’s underutilized resources available for agriculture – land, sunlight, water and able-bodied youth – some of these targets in the diversification of agriculture could be rapidly implemented. The urgency of this is reinforced by the need to develop mechanisms to absorb the shocks arising from variability in the world pricing mechanism, especially of raw material and petroleum.

Converting Comparative Advantage in Crop Production into Competitive Advantage

Ghana has demonstrated that it can convert its comparative advantage into strong competitive advantage in crop production, especially as regards cashew nuts, mangoes, pineapple, papaya and vegetables. For instance in the 2005 Budget it was announced that in order to improve crop production, the Ministry of Food And Agriculture provided farmers with improved seeds and planting materials under the 5 Donor Assisted projects, currently being implemented in the crop sub-sector. About 9,000 plantlets of the MD2 pineapple cultivars were distributed to farmers to help Ghanaian farmers compete in the new popular MD2 variety of pineapple, which has gained European market share. Similarly, a total of 23 tonnes of improved cashew seeds were distributed to farmers. These will go to boost Ghana’s crop production for exports. Indications are that papaya is another excellent crop for Ghana’s competitive potential. Europe is currently importing approximately 40,000 tons of golden papaya per year and Brazil supplies 9 percent of this market. Market trends show that these 40,000 tons will increase to about 100,000 tons in the next five years which is worth hundreds of millions of dollars. The potential to capture a sizeable portion of the market exist. Not only is Ghana closer to Europe than Brazil, but has sweeter golden specie of papaya and can therefore focus on the European market. Ghana can convert its comparative advantage into competitive advantage through improved shipment, compliance with GhanaGap, large-scale irrigation production, and infrastructure development to enhance supply chain etc. and capture a significant portion of the European market for papaya.

2.3.4 Weaknesses and Threats to an Agriculture-Led Strategy

A number of factors limit optimal production in agriculture, especially production of crops, livestock and fisheries. Agriculture as a whole will always be dependent on natural conditions. Rainfall is unreliable with regard to its onset, duration, intensity and amount, and can disrupt food crop production. The failure of development policy over decades is that Ghana has not implemented accessible and easily affordable technologies to overcome these deficits. Ghana is not in the Sahel zone. There is no shortage of rain volumes even in the driest savannah for abundant and secure food production year after year. What is lacking is a systematic policy to conserve and utilise ample rainfall in all parts of the country. Some efforts in this direction have been frustrated by the choice of inappropriate technology. The example of Burkina Faso shows that simpler and cheaper technologies for the harvesting and use of our rain water endowments could yield Ghana immense benefits in agricultural productivity and poverty reduction. Additional risks in an agriculture-based strategy include bushfires, post harvest losses and uncertainties, storage, transportation and marketing problems. An equally important constraint is the dearth of affordable credit in agriculture. Even in the flagship of the cocoa sector, the only credit that was ever available from the organised bank in the system was via the short-term seasonal credit of the foreign buying companies. Food crops still do not have adequate marketing and financial support. For the producers, this makes crop farming a high-risk enterprise and in a vicious circular relationship, it also makes a high-risk field for its traders and bankers. Strenuous government intervention is the only way to break the cycle and attenuate the risks on both sides so that the private sector moves in our present development paradigm can successfully perform their roles in moving Ghana’s agriculture forward.

Variability in the natural conditions also adversely affect the livestock and fisheries sub-sectors in ways similar to that of crop farming. Under the GPRS II many interventions have to be carried out at public expense to overcome the disabilities that hinders growth.

Consequently, in order to achieve accelerated growth in Ghana’s agriculture a number of key interventions will be initiated to support agricultural productivity. These include strategic research and development activities, appropriate financing for the sector, value addition and improved marketing, efficient organization of production, and enhanced capacity of producers.

In the area of crop production in particular, the following measures will be pursued:

  • ensure women’s access to and control over land and agricultural inputs, including extension services

  • promote and support large scale farming and nucleus out-grower schemes for production of targeted/selected crops

  • enhance the productivity of small scale farmers by securing their access to extension, storage, price stability, credit, markets and land. Women small holder producers of food crops will be given needed impetus to improve their livelihood and assisted to benefit from the potential positive effects of linkages between agriculture, industry and exports

  • develop and use improved seeds/planting materials

  • intensify research-extension-farmer linkages to ensure that technologies are developed and disseminated appropriately to meet world-wide market standards

  • promote and support the use of weights and measures as well as grades and standards in the marketing of commodities so as to enhance commercial efficiency

  • strengthen farmer-based organizations, with full participation of women farmers, to enhance access to credit and other services. The emasculation of the Ghana Cooperative movement, which had previously attained a pre-eminent position in cocoa marketing and the national savings

  • improve storage/warehousing and distribution network, including refrigerated transport systems and cold storage facilities at the ports

  • improve rural infrastructural network, particularly road-rail linkages

  • promote the culture of community-based irrigation in order to move agriculture from reliance on the vagaries of the weather to a more scientifically managed systems of assuring water

  • improve data collection, collation, analysis and dissemination of results within the industry.

For completeness of the strategy, attention will be paid to cross-cutting issues such as gender, environment, human resource development and capacity building to complement and reinforce production and increased productivity for accelerated growth. Accordingly, the next chapter focuses on the issues and policies that will enhance private sector competitiveness to deliver growth, reduce poverty and improve overall quality of life.

2.3.5 Other Sectors

Although the growth process under GPRS II is expected to be propelled by the agricultural sector, attention will also be given to some strategic sectors that have long-term growth potentials. These include tourism, ICT, light industrialization based on textiles, garments and value addition to metallic and non-metallic minerals. Presently, most of these activities are gradually being developed within the framework of the selected Special Initiatives.

CHAPTER THREE PRIORITIES FOR PRIVATE SECTOR COMPETITIVENESS

3.1 PRIVATE SECTOR DEVELOPMENT

The objective of GPRS II is to achieve accelerated growth through modernised agriculture, led by a vibrant and competitive private sector. The challenge to the attainment of this objective is to how to systematically address the structural constraints at the policy and institutional levels that hamper private-sector competitiveness in agriculture in the medium term and in the industrial and other sectors over the long term.

Overview of the private sector under GPRS I (2002 – 2004)

Among the key strategies of the GPRS I (2003–2005) was to strengthen the private sector and enhance its capacity to function as the engine of growth and prosperity. The policy focus then was on developing a vibrant private sector in the medium-term through the following measures:

  • Facilitating private sector access to long term finance at affordable rates;

  • Reducing institutional and legal bottlenecks to private sector development; and

  • Promoting opportunities of modern entrepreneurship, especially among the youth, women and the vulnerable groups

To improve access and increase volume of credit at affordable prices and to increase sources of long-term funding for micro, small and medium enterprises Government in 2003 facilitated private sector access to credit sourced from the African Development Foundation (ADF), an Italian Credit facility of 10,000,000 Euros and a $17 million facility from the SOFITEL BANK of the USA.

The Ministry of Private Sector Development and PSI also established an Institutional and Legal Reform Division solely dedicated to reducing bottlenecks to private sector development as well as facilitating the collaboration between the public and private sector towards the drafting of a number of reform bills (including the Companies Code, the Insolvency Bill, Money Laundering Bill and Insurance Bill). A network infrastructure with appropriate software has been installed at the Registrar-General’s Department to enable the registration and retrieval of business names to be conducted electronically.

These initiatives notwithstanding, a number of critical issues still remain that require some urgent attention. Primary among them are: complex and non-transparent existing regulations, lack of access to finance, especially for women; falling but still fairly high interest rates; weak capacity of the government establishment to formulate, implement, monitor and evaluate private sector development; lack of focus of policies that explicitly take into address the specific needs of enterprises, especially the interests of micro, small and medium scale enterprises; Weak commercial dispute resolution system; insecurity and vulnerability in the informal sector where the youth and women predominate; weak linkages between the informal sector and the formal sector activities; lack of social protection for men and women in the informal sector; and weak institutional and regulatory framework for small business administration.

Key policies identified to address these constraints (Box 3.1) are the following: improving Ghana’s access to global and regional markets; enhancing the efficiency and accessibility of national markets; strengthening of firms’ competency and capacity to operate effectively and efficiently; enhancing government capacity for private sector policy formulation, implementation, and monitoring and evaluation; facilitate private sector access to capital; facilitate the removal of institutional and legal bottlenecks; facilitate innovation and entrepreneurship; improve the provision of public services; and accelerate the development of strategic sectors. These priority interventions are mutually re-enforcing and some of the strategies for the various interventions are elaborated below.

3.1.1 Improve Ghana’s access to global and regional markets

To improve Ghana’s access to global and regional markets, it is envisaged that the National Trade Policy which seeks to promote the integration of Ghana into global and regional markets will be fully implemented. Also the recommendations from the review of existing institutions responsible for providing quality standards and services to the private sector, such as Ghana Standards Board, Food and Drugs Board, and the Plant Protection and Regulatory Services will be implemented fully.

Given Ghana’s limited access to the global market, the objective of government’s export promotion drive will target the implementation of sector-specific measures to support strategic exports, focusing initially on the President’s Special Initiatives (PSI), as well as supporting local companies to participate in foreign and domestic trade shows, fairs and exhibitions. With a relatively weak private sector and low technological development, foreign private capital will be critical to the economic transformation of Ghana. To attract foreign investment, will require taking bold actions aimed at ensuring good governance, improving infrastructural development, accelerating judicial reforms, expanding trade and investment promotion, etc.

3.1.2 Enhance efficiency and accessibility to national markets

To ensure efficient and accessible national markets that support widespread private sectorled growth, the focus of policy is to address constraints relating to the macroeconomic environment, financial sector, public sector, contract enforcement/debt recovery, and land acquisition and property rights.

Macroeconomic Environment:

In order to improve the macroeconomic environment for growth, the challenge is to encourage dialogue among stakeholders on key macroeconomic issues through constant dissemination of a pre-budget discussion paper highlighting key macroeconomic issues for private sector development, forming a budget working group with a broad range of private sector stakeholders, and periodic benchmarking of Ghana’s macroeconomic policy environment.

Financial Sector Reform:

To ensure that the financial sector responds effectively to the needs of the private sector, financial sector reforms will be deepen. This will include the continuous implementation, monitoring and evaluation of the Financial Sector Strategic Plan (FINSSP), in addition to identifying and agreeing on a small number of key private sector development targets within the FINSSP. In particular efforts will be made to ensure that the urban and rural poor who form important components of the private sector are not squeezed out.

Public Sector Reform:

The policy priorities under public sector reforms will include: (i) ensuring private sector development is mainstreamed within the Public Sector Reform programme; (ii) development of pro-business tools within the Public Sector Reform Programme, including: service-focused training programmes for public servants; (iii) development of pro-business ‘Customer Charters’ and anti-corruption action plans for key private sector-related MDAs; (iv) conducting a fundamental review of tax policy and administration in relation to micro and small enterprises; and (v) development of a regulatory impact assessment methodology for all proposed new laws and regulations with significant private sector impact.

Contract enforcement / debt recovery:

To ensure that the country has an effective legal system that supports the rapid private sector growth envisaged in the framework, the following policy priorities will be given the much needed attention; (i) improve access to justice for businesses – especially micro and small businesses and enhance the mechanism for alternative dispute resolution within the context of the on-going Judicial Sector Reform Programme; and (ii) monitor and evaluate the level of access to justice for businesses in Ghana focusing on micro, small and medium size enterprises (MSMEs).

3.2 IMPROVING THE BUSINESS AND INVESTMENT ENVIRONMENT FOR AGRICULTURE-LED GROWTH

3.2.1 Modernized Agriculture

Achievement of the overall goal of GPRS II requires agriculture to continue to grow at the rate of 6% per annum over the next 4 years, with crops and livestock leading the growth at an average annual growth rate of about 6%, followed by forestry and logging, and fisheries at the rates of 5.1% and 4.8% per annum respectively. The cocoa sub-sector is expected to remain robust in support of the other sub-sectors.

Overview of the Agriculture sector (2003 – 2004)

Agriculture plays important roles in the socioeconomic development of Ghana. It contributes to insuring food security, provides raw materials for local industries, generates foreign exchange, and provides employment and incomes for most of the population (especially those living in the rural areas), thereby contributing to poverty reduction.

Since the implementation of GPRS I (2003-2005) some progress has been achieved in agriculture. Out of the twelve indicators monitored for the sector, seven recorded impressive progress over the period of implementation, with four of them exceeding their targets. Areas of noticeable progress were farmer access to mechanized tillage, access to processing equipment, area under fish farming, number of hatcheries constructed and reduction in post harvest losses. Farmer access to mechanized tillage increased from 5% in 2002 to 12% in 2004 as against the target of 15%, while access to processing equipment increased from 24% in 2003 to 42% in 2004 thereby exceeding the target of 30%. Area under fish farming exceeded its target of 450 hectares, recording 112.3 hectares for functional fish ponds, and 2480.8 hectares for reservoirs during the same period. In the case of post harvest losses, cereal losses achieved its intended target of 15-20% and perishables managed a moderate achievement of 33-35%, falling short of the target of 15-20%.

These notwithstanding, a number of important outstanding issues need to be resolved within the agriculture sector. The tractor to farmer ratio still remains low at 1:120,000, the extension officer farmer ratio was at 1:1,400 by the end of 2004 falling short of the 1: 1200 target, access to harvesters was at 2% falling short of the 5% target and quantity of fish produced per unit area of pond per cycle stood at 2.5 tons/ha/yr (not different from the 2002 and 2003 figures).

Further constraints to the sector’s capacity include: low crop yield and output due to low soil fertility and overdependency on rainfall; unsustainable agricultural practices; low exploitation of ground water for irrigation purposes; lack of access to credit, especially of small-scale women farmers; low productivity and low resistance breeds of livestock; and high incidence of animal diseases and poor disease surveillance systems. Others are inappropriate husbandry practices and low level of dairy production; inadequate/poor aquaculture infrastructure and low level of fish production from water bodies; limited value addition and high post-harvest losses; and limited access to marketing centres due to poor road network

There are a number of critical issues that must be addressed to achieve the ultimate aim of a competitive private sector that supports accelerated growth, particularly based on agriculture. The following broad areas have been earmarked for priority interventions:

  • reform to land acquisition and property rights

  • accelerating the provision of irrigation infrastructure

  • enhancing access to credit and inputs for agriculture

  • promoting selective crop development

  • modernising livestock development

  • improving access to mechanised agriculture

  • increasing access to extension services

  • provision of infrastructure for aquaculture

  • restoration of degraded environment

The strategies for these various interventions are elaborated below:

Reform to land acquisition and property rights:

Existing variations in access and control over land in different communities will be reexamined to promote easy access and ensure equity to all, especially to usufructory holdings in addition to improving the system of land registration to protect the interests of small holders. Furthermore, the establishment of agri-business zones and land banks will be promoted. The Land Administration Project will be reviewed to recognise the importance of property rights to MSMEs and the Land Title Registration Law of 1985 will be enforced as a means of ensuring security of tenure of small land holders, especially women and the youth.

Accelerating the provision of irrigation infrastructure:

In the past, a lot more emphasis was placed on the development of large dams to the neglect of small scale interventions such as dug-outs, hand-pump systems, valley bottom schemes, etc, which have the potential to reach smallholder farmers and are best suited for certain geographical areas. The focus of policy under the GPRS II is to target the rehabilitation, expansion and promotion of the use of the existing irrigation facilities and infrastructure; along with interventions to promote the development of small-scale community based valley-bottom irrigation schemes; ground water development and exploitation for irrigation purposes; and the promotion of hand-fix pumps for irrigation purposes. It is expected that these interventions will bring more land under cultivation, generate quick supply responses and benefit the poor in the rural areas.

Access to credit and inputs for agriculture:

Recognising the reluctance of the formal sector to lend to risky sectors such as agriculture, special interventions will be initiated to improve access to affordable credit by farmers with special emphasis on increasing the proportion of women that can gain access to credit; and promote and support the establishment of farmer-based organizations to enhance access to group credit and other crucial inputs and services.

Selective Crop Development:

The focus will be on promoting and supporting the development of key selected crops with proven potential to contribute significantly to domestic food security, agro industry and export. This will be facilitated through updating existing technological packages and promoting environmentally sustainable cropping practices in agro-forestry, land and water management. Some of the key initiatives will include: developing and multiplying new and improved seeds, promoting soil fertility management systems and ensuring the integration of pest and disease management system.

Livestock Development:

The emphasis in livestock development will be to ensure the provision of improved breeds of animals, institute animal feed quality control system, improve animal husbandry practices and promote efficient veterinary public health system.

Agriculture Mechanisation:

Whilst promoting increased mechanisation in large scale agriculture, emphasis will also be given to the development and use of small-scale technologies that target smallholder farmers, especially women, in the areas of tillage, storage and processing such as bullock ploughs.

Access to extension services:

In seeking to expand the coverage and effectiveness of extension services in general, special attention will be given to commodities targeted to lead accelerated growth in the sector. This will increase the proportion of both men and women farmers that are reached particularly in the transition and savannah zones. In addition Extension Information Centres (EIC) will be established.

Provision of infrastructure for aquaculture:

To reduce overdependence on marine fisheries which has proven to be increasingly unsustainable, there is the need to scale up investments in inland fisheries, especially aquaculture. Some of the key interventions include: development of aquaculture infrastructure including fish hatcheries; promotion of private investment in aquaculture; utilization of irrigation systems and other impounded reservoirs for aquaculture. These will be supported by research and development aimed at promoting modern technological packages in support of aquaculture.

Restoration of degraded environment:

A major impediment to increased productivity and sustainability in agriculture is the environmental degradation associated with traditional farming practices. To minimize the impact of environmental degradation, and in line with MDG 7, the intended interventions are aimed at restoring the degraded natural resources especially water and land, ensuring sustainable use of natural resources for economic growth, and protecting and conserving unique habitats, natural treasures and bio-diversity. To achieve these objectives, the strategies will include the following:

Environment: (i) initiate measures to stem land degradation and towards regulating the impact of climate variability/change; (ii) promote an efficient and accessible industrial and domestic waste management system that deals with the plastic menace and promotes composting; (iii) promote integrated ecosystem management as well as human centred biodiversity conservation initiatives; and (iv) promote the use of environmentally friendly technologies and practices. Others include enacting relevant environmental laws to protect the environment at all times, as well as ensuring the enforcement of the existing environmental laws; and development of multi-agency approach to enhance resource management and the environment

Lands and forestry: (i) encourage reforestation of degraded forest and off-reserve areas; (ii) promote the development and use of alternative wood products, as well as plantation/woodlot development among communities; (iii) manage and enhance Ghana’s land and permanent estate of forest and wildlife protected areas; (iv) ensure that socioeconomic activities are consistent with sound land administration practices; (v) develop a sustainable strategy for forest and wildlife to support eco-tourism and generate foreign exchange.

Fisheries: (i) ensure adequate scientific data for precautionary approach to fisheries management; (ii) establishment of co-management mechanisms for fisheries resources management; (iii) control of fishing effort; (iv) enhance fisheries resource of water bodies; (v) develop multi-agency approach to enhance resource management and the environment; and (vi) support effective monitoring, control and surveillance (MCS) system to ensure compliance with laws and regulations on fisheries.

3.2.2 Promoting Trade and Industry

In line with the long term vision of developing an agro-based industrial economy, the interventions in agriculture will be complemented with appropriate interventions in the Trade and Industry sector. Within the strategic growth framework, the broad industrial sector is expected to grow at the rate of 6% per annum over the next four years, with the construction sub-sector leading the growth with 7.1% average annual growth rate. The manufacturing sub-sector is expected to make a strong showing with the mining and quarrying sub-sectors growing at 6.6% and 4.4% average annual growth rates respectively, due to the coming into operation of the integrated aluminium project. The wholesale and retail sub-sector is expected to grow at an average rate of 6% over the same period. The broad policy objectives and strategies outlined to achieve these include:

Ensure proper integration of the nation’s production sectors into the domestic market: identify and promote opportunities for economically beneficial linkages along production and supply chains in new and existing productive sectors; and promote credit catalysts and rural service centres where larger traders and associations can access credit and on-lend to small traders and small farmers.

Increased Agro-processing: promote and support the processing, preservation and utilization of crops, animal and fish products; develop and promote the use of standardized packaging materials and institutionalize the use of weights and measures; facilitate establishment of small-scale agro-processing industries for export; promote the establishment of fish storage facilities, including community level facilities; and facilitate the establishment of small-scale fish processing industries.

Agricultural Marketing: development of farmer based organizations (FBO) capable of securing fair prices for products; encourage the setting up of satellite markets in urban centres to provide outlets for rural farmers to dispose off their products; encourage the private sector to set-up produce buying companies; and promote and support product development and cold chain establishment.

Enhance access to export markets: provide concessionary export finance facilities to exporters; promote competition in airport cargo handling; encourage private sector investment in construction and operation of cold chain facilities from production point to the port; facilitate the provision by private sector of well organised container terminals with security, equipment, effective operators and computerised tracking; improve the multilateral trading environment by fully participating in negotiations and rule setting in multilateral trading fora to ensure that Ghana’s national interests are secured; create a fair, transparent and equitable trade regime; and facilitate trade through Ghana’s borders to reduce costs and improve ease of trade

Increase industrial output and improve the competitiveness of domestic industrial products: mobilize domestic and international resources for production of value-added products; enhance accessibility to productive infrastructure (i.e. road, water, telecommunication, electricity, etc); promote efficient management practices in production systems; promote the use of local products and services in government procurement; actively promote made in Ghana products within domestic and international markets; ensure the removal of technical barriers in the way of key current and potential export products; and assist exporters to comply with international standards required by selected export markets

Other policy interventions include: facilitate the development of commercially viable export and domestic market oriented enterprises in the rural areas; promote industrial subcontracting and partnership exchange through a mechanism for large companies to outsource their non-core activities to SMEs and identify areas of interface and linkages between large and small scale enterprises; and promote the development of the craft industry, targeting those with potential for export.

Ensure the health, safety and economic interest of consumers: ensure the enforcement of legislation that prevents the sale of unsafe and poor quality goods on the local market; strengthen the regulatory and enforcement framework for protection of economic rights of consumers; develop and implement national consumer awareness programmes; encourage formation of consumer association; and ensure representation of consumers on relevant national bodies

These set of policies provide clear guidelines for the implementation of the government’s domestic and international trade policy, while ensuring a consistent and stable policy environment within which the private sector and consumers can operate effectively. It is expected that greater emphasis on these policy areas will bring about increased competitiveness of producers in local and international markets.

3.3 SUPPORT SERVICES

Strategic support sectors that would be developed to facilitate improved productivity in agriculture and agro-industry include:

3.3.1 Transportation

Road especially, rail and water transport are by far the principal forms of transport in Ghana. However exports of fruits and vegetables are mainly by air transport. Improving overall road maintenance, and rehabilitating farm-to-market roads, bridges and ferries would lower transportation costs and integrate rural economies with the urban economy. It would also lengthen vehicle life, reduce transportation costs and save foreign exchange in fuel and spare parts imports, and generate savings in travel time. The broad policy objectives therefore include: ensure the provision, expansion and maintenance of transport infrastructure of all kinds; and ensure provision of affordable and accessible transport system that recognises the needs of people with disabilities. A single Ministry of Transport will promote synergy and enhance planning and operations.

Some of the strategies proposed to achieve these stated objectives are: increase spatial access to markets through improvements in farm-to-markets roads; rehabilitate or accelerate the development of one major road linking rural and urban markets in every region; continue to develop and rehabilitate major highways in the country; provide adequate and modern railway terminals and platforms; promote the development of a well integrated and modern rail track system; maintain and provide efficient and modern ports and harbours infrastructure across the country; and construct three major highways to connect trans- ECOWAS Highway.

Other strategies include promoting the adoption of Intermediate Means of Transport (IMT), encouraging general aviation and aviation support services such as the use of micro light aircraft in agriculture, passenger transport and health delivery, and the promoting subregional transport systems including air transport that ensures efficient movement of goods and persons across borders.

Achieving these objectives also requires an efficient institutional and regulatory framework. Subsequently the following strategies will be pursued: promote road, rail, air and river transport safety and traffic management scheme to reduce accidents; promote effective and sustainable maintenance of the road system (through the decentralization programme); promote private sector involvement in the financing, construction and maintenance of road, and rails, as well as provide entry point and terminal services; strengthen local capacity in both consulting and construction services and government capacity in the road, rail, air and marine sector; promote private participation in the investment and management of aviation infrastructure and equipment; promote high safety, security and environmental standards in the aviation industry; restructure the Ghana Civil Aviation to play its core role as an independent regulator of the aviation industry; strengthen and enforce the existing regulatory and institutional framework for efficient ports, rail, air and water transport system.

3.3.2 Energy

To support a growing agro-industrial and services sector, as well as the needs of households, the policy thrust for the sector is set within the context of ensuring a reliable supply of high quality energy services. The broad policy interventions outlined to achieve this overall goal include: ensure increased access to modern forms of energy to the poor and vulnerable; modernise and expand power infrastructure; improve the regulatory environment in the power sector, ensure full cost recovery for power supply and delivery while protecting the poor; and ensure productive and efficient use of energy and minimise the environmental impacts of energy supply and consumption through increased energy efficient technologies.

Other policy objectives include: promote and encourage private sector participation in the energy sector; diversify the national energy mix by implementing programmes to support renewable energy sources in Ghana (i.e. hydro, wind, solar PV etc.).

3.3.3 Science and Technology

The major goal of National Science and Technology (S&T) Policy is to establish an efficient research system which contributes to national development objectives. Promotion of a science and technology culture at all levels of the society and the mastery of known and mature technologies and their application in agriculture and industry will accelerate economic growth and social transformation. Science and technology policy objective will therefore be to: promote the adoption of appropriate technologies, both local and foreign, with the capacity to improve productivity and efficiency in the agricultural, industrial and services sectors especially for micro, small and medium rural enterprises; promote research and development in all sectors of the economy; build relevant linkages between research and production to ensure that research outputs are utilised; provide institutional and regulatory framework to promote the development of science and technology.

3.4 DEVELOPING ADDITIONAL SECTORS TO SUPPORT GROWTH

In addition to the focus on developing the agro-industrial and support sectors, there are other sectors which will be targeted for development particularly in view of their employment creation and income generation potentials. These include: mining (especially exploration and exploitation of the lesser developed minerals such as salt) and value addition to traditional minerals; Information and Communication Technology (ICT); tourism; music and film industry; as well as the development and production of commodities under the Special Initiatives for export including garments and textiles.

3.4.1 Developing Information and Communication Technology (ICT)

The implementation of an Information and Communication Technology (ICT) Strategy or “Connectivity Agenda”, will be another priority in diversification of the economy. It will be a pivotal tool to improve governance, accountability and transparency, develop human resource potential, and strengthen national unity. ICT will facilitate e-transactions; increase public sector efficiency and transparency; and grant citizens access to public services by making them available online (e-government). Through outreach programmes, ICT will enable low-income individuals to gain access to the internet. It will also promote e-exports such as out-sourcing, and data processing (see Box 3.3), encourage economic diversification and create new jobs, particularly for women and the youth; and establish network connectivity to lower unit costs and increase benefits from network externalities.

To take advantage of the opportunities in this sector, Government will partner the private sector to increase coverage of telephones particularly in rural and peri-urban communities; improve the quality of telephone service; establish national network of internet backbone/broadband; implement National e-governance programme; implement National Electronic Security system; promote and support e-commerce to facilitate trade and commerce in the economy; implement National ICT strategy in Agriculture, Health and the Music industry; and source FDI and local investment to promote the development and marketing of hardware and suitable software.

Other interventions that will be implemented include: provide telephone coverage to all public schools and communities in Ghana; provide internet access to all districts with a model Senior Secondary School; ensure that ICT is made a core subject of all post-basic educational institutions including universities teacher training colleges; promote in-service ICT training for teachers; and encourage small companies to make use of services/assets made available by the national internet backbone.

Potentials of ICT as major source of income and employment generation

When ACS/BPS introduced its data-entry operations in Ghana in May 2000, it brought more computers into one site than had existed anywhere else in Ghana. It also successfully introduced an entirely new kind of occupation, new methods of working, and a new system of piece-rate payment which had failed in other industries where it was introduced previously. In just a year of activity, the firm grew from 30 to 700 employees. The system works as follows: the headquarters of ACS/BPS, based in the United States, electronically sends scanned medical claim forms to Ghana, where over 700 clerks then input data by hand from the scanned images.

This has raised the salary and status of data entry clerks who now typically earn between $100 and $200 per month, in a country where the local average income is close to $32 per month. Of significance is that 95 per cent of the staff is female. Other ripple effects include outsourcing of services, including transport, security, catering and training, as well as buying its computer hardware from local vendors. The firm plans to expand: to open another three sites and employ another 3,000 employees. One concern is its ability to find skilled labour, and to this end, it aims to tap into the student population of local universities and polytechnics. It has already developed an arrangement with Ghanaian secretarial colleges, teaching students to use its software.

3.4.2 Mining

In addition to the exploitation of the traditional minerals such as gold and diamonds, a policy to promote value addition to other mineral resources including bauxite and limestone, and also the exploitation of lesser known minerals such as salt will be promoted.

In the process, efforts will be made to control illicit activities and deleterious effects of mining; sustain the mining sector through continuous exploration, exploitation and management of mineral resources; improve the environmental and natural resources management for health and safety; promote collaborative management of mineral resources; and promote the use of international best practices to enhance the competitiveness of the mining sector as a whole.

3.4.3 Developing the Tourism Sector for Revenue and Employment Generation

Tourism is a young but expanding industry in Ghana. It currently accounts for almost 4 percent of GDP, and at the current annual growth rate of 12 per cent, tourism has the potential of becoming Ghana’s main foreign exchange earner. Ghana’s comparative advantage in this sector includes historical, cultural and archaeological sites that attract regional and international tourists (including African-Americans interested in Ghana’s history with respect to slavery). Potential also exists for ecotourism. Recent indication that the new Ministry of Tourism will preserve important national sites reinforces this sector’s potential for investment. However, there are major constraints to be overcome, including Ghana’s lack of adequate infrastructure, marketing, and health and safety-related services and others that are important for tourists, such as tourist police and loss-recovery facilities. Tourism’s infrastructure is weak, with few world-class hotels and almost no tourist-related services.

Within this context government will develop plans and strategies aimed at harnessing the potentials of the sector towards the provision of employment and incomes, while ensuring the preservation of the nation’s culture and sustainable management of the environment. The broad policy thrust shall, therefore, be “to realise the potentials of the sector by making Ghana a competitive and quality tourism destination whilst preserving the country’s cultural, historical and environmental heritage”. Key policy interventions and strategies expected to be pursued over the period will include:

Promote tourism as a major source of domestic revenue: market Ghana as a competitive tourist destination; design programmes to reduce the credit constraint of operators in the tourism sector with particular focus on women entrepreneurs; enhance tourism services and standards through inspection, licensing and classification of formal and informal tourism establishments; and enhance human resource capacity of skilled and unskilled personnel in the hospitality industry.

Promote domestic tourism to foster national cohesion as well as redistribution of income: This will involve vigorous promotion of domestic tourism to encourage Ghanaians to appreciate and preserve their national heritage and create wealth in the communities.

Promote sustainable and responsible tourism in such a way to preserve historical, cultural and natural heritage: develop sustainable ecotourism, culture and historical sites; promote sustainable development and management of coastal lands; and enforce measures to reduce waste and antisocial behaviours and practices arising from tourist activities.

Promote crafts industry for tourist trade and export: provide opportunities and technical assistance for micro-enterprises of rural and urban crafts procurers and improve the quality and marketing of their products for the tourist industry and export.

3.4.4 The Music and Film Industry for Growth and Job Creation

The music and film industry is fast-growing with unlimited potential. As one of Ghana’s most significant pioneer industries, the music and film industry is a powerful means of enhancing the country’s identity and distinctiveness, while simultaneously creating employment, developing human skills and generating social capital and cohesion.

However, like any Ghanaian industry, it is infused with the perennial problems of lack of access to finance, limited application of modern technology, lack of effective laws and regulations to protect intellectual property rights, low level of awareness on intellectual property rights, lack of enforcement and supervision of laws and regulations, and inadequate export promotion services. One of the most devastating aspects of this legacy is that local music and films industry is not developing as fast as it should.

Towards this end the policy objectives proposed under the GPRS II to promote the industry to support tourism as well as make it a growth point for job and wealth creation include: provide the right legal and regulatory framework for promoting the music and films industry; promote the use of ICT and support of Multimedia Technology in the industry; support the development of both human and institutional capacity for the industry. The specific interventions to achieve these objectives have been outlined in the Policy matrix (Appendix IA).

3.5 EMPLOYMENT GENERATION AND IMPROVEMENT AND EXPANSION OF SAFETY NETS

GPRS II will pursue an employment-centred cross-sectoral development strategy for accelerated growth and poverty reduction. This is to ensure that employment expands along with production and that the benefits of growth are widely shared through better job opportunities and improved/enhanced incomes for poverty reduction. The broad employment sector objective will be to ensure an adequate, well regulated, stable labour market to support accelerated growth.

Pursuant to this strategic orientation, the National Employment Policy will address objectives for youth employment, labour market information, industry-based skills training, local economic development to support the large and growing informal economy, and also improvements in productivity ad incomes. A cross-sectoral approach to employment policy implementation will underpin the overall national strategy. The strategy also entails initiatives for social protection, social dialogue, and social inclusion, especially, of the disabled, women and aged.

The policy measures will enhance productivity and income/wage, with equal opportunities for men and women in all sectors of the economy, including the informal economy, ensure the effective implementation of a coherent employment policy on the youth, women, the vulnerable and excluded; and a comprehensive and integrated employment creation, monitoring and evaluation system.

Consistent with the Gender and Children’s Policy, the Draft National Youth Policy, the Draft National Disability Policy, and Draft National Ageing Policy, a comprehensive Social Protection Framework will cover the vulnerable and excluded in society. It will promote conditional and unconditional cash transfer systems and other support to displaced workers, while they seek employment, pregnant and lactating women, and provide target subsidies to the elderly, pensioners, smallholder farmers and people with disabilities. The Social Protection Strategy will also expand the coverage of the school feeding programme, and facilitate access to micro-credit for small scale informal operators.

Government will facilitate the enhanced capacity of the relevant agencies, including the Ministry of Manpower Youth and Employment and its departments and agencies with a focus on the Department of Social Welfare to carry out their statutory functions effectively and responsibly. In addition, the social partners, relevant civil society and nongovernmental organizations will be encouraged to play a strategic role in complementing government’s employment and social protection efforts. The Ministry of Manpower, Youth and Employment will establish an effective system to coordinate and monitor these efforts and activities to ensure efficiency within the economy, as well as equitable benefits to targeted beneficiaries.

CHAPTER FOUR HUMAN RESOURCE DEVELOPMENT

4.1 INTRODUCTION

The development of the human resources of the country is one of the three key pillars of the GPRS II. The main goal is to ensure the development of a knowledgeable, well-trained, disciplined and healthy population with the capacity to drive and sustain the private sectorled growth strategy. An essential component of the strategy is to ensure the right to basic social services such as health care, safe drinking water and sanitation and decent housing that improve the well being of all Ghanaians. An equally important aspect of the human resource development strategy is to ensure the protection of the rights of the vulnerable members of society, especially children, women, people with disabilities, the elderly and rural communities.

4.2 REVIEW OF HUMAN RESOURCE DEVELOPMENT UNDER GPRS I

Under GPRS I a number of measures were instituted in the medium-term to enhance the environment for sustainable human resource development. These included enhancing access to education; reducing gender disparities in education; and improving skills through training. In the health and other sectors priority measures focused on enhancing access to and delivery of quality health services; increasing access to safe drinking water and adequate environmental sanitation; population management; and controlling the HIV/AIDS epidemic. Key achievements are as summarized in box 4.1 below.

Situational analysis of Human Resource Development under GPRS I

Considerable progress has been made towards the attainment of the objectives of Human Development under GPRS I. In education, enrolment rates have increased in primary, JSS and the post-basic sub-sectors. Gender Parity Index (GPI) and survival and completion rates have also all improved at the national level. Enrolment rates in the deprived districts and three northern regions have also shown marked improvements, generally above the national growth rate, albeit from low levels. In addition facilities at both secondary and tertiary levels have experienced rapid expansion.

In the health sector, most of the indicators show that considerable progress has been made in improving the health status of the Ghanaian. For instance life expectancy at birth has increased form 58% in 1998 to 60% in 2003. On the other hand infant and childhood mortality have worsen, increasing from 57% to 64% over the same period.

Limited access to safe water remains a perennial problem in many Ghanaian communities. Currently about 63% of urban dwellers and 46.4% of rural dwellers have access to safe water. Many rural communities continue to rely on ponds and streams as their main source of water, resulting in undue exposure to guinea worm, bilharzia and other water-borne diseases. Although considerably better than rural water supply, urban water supply is generally less than satisfactory, especially in slums and other high population density areas where the capacity of water supply infrastructure has been overstretched.

The provision of adequate sewage and sanitation facilities is less than adequate. Households with access to adequate toilet facility (flush/ventilated improved pit), for example, is very low. Proper disposal of solid waste is also a major problem in peri-urban and urban communities as health hazards are created by urban drains, which are often, choked with refuse and stagnant water.

From the fore-going review, it is evident that there are still a number of policy issues that need to be addressed a comprehensive human resource development effort. Consequently the following broad policy areas have been identified as priorities for the development of the requisite human resources for accelerated economic growth: education, training and skills development; access to health care and adequate nutrition, malaria control and HIV/AIDS prevention and treatment; access to safe water and adequate sanitation; housing and slum upgrading; and population management.

The strategy will also include the promotion of vigorous health education campaign on the adoption of healthy environmental practices and lifestyles. In addition, outstanding issues relating to vulnerability and social exclusion will be mainstreamed into the human resource development strategy.

4.3 EDUCATION, SKILLS, MANPOWER AND SPORTS DEVELOPMENT FOR ACCELERATED GROWTH

In the broad education sector a holistic package of interventions have been identified as priorities for attaining a middle income country with a minimum per capita income of US$1000 by 2015. The strategy begins with early childhood development (0 – 8years) where the critical foundations are laid for psycho-social, emotional, and intellectual development. Initiatives that will give the best start in life for every Ghanaian child will be pursued. This will include measures that will strengthen the family, other caregivers and early childhood development programmes.

4.3.1 Formal Education

The basic education sub-sector is the next major building block for the development of human resources for accelerated growth. The policy issues/gaps in this sub-sector that need to be addressed include: inadequate progress in school enrolments; persistent geographical and gender disparities in access to education; less than satisfactory quality education; inadequate technical and vocational skills and ICT training.

Education Reform Policy

The Education Reform Policy is aimed at addressing the weaknesses of the current educational system with a view to making it more responsive to current challenges. Specifically the policy addresses issues pertaining to the development and delivery of education, access to different levels of the education ladder, Information and Communication Technology (ICT), distance education, professional development and the management and financing of education. The essential elements of the reform include, among others, the following:

  • re-structuring of the current Basic Education System to provide universal compulsory basic education comprising of 2 years of Kindergarten, 6 years of Primary, 3 years of Junior High and then 4 years of Senior High.

  • emphasis on Technical, Agricultural and Vocational education as credible alternatives to general education for the majority of youth, especially for the 15 to 19 year bracket.

  • formalization of community-based apprenticeship/skills training to offer opportunity for those who drop out of school to acquire proficiency in marketable skills

  • improving Teacher Education, including teacher development at all levels of education

  • improving institutions that provide education for children with special needs

The policy-related issues in the secondary education sub-sector are: equitable distribution of well-equipped secondary schools; well-trained and motivated teachers; and inability to absorb the majority of pupils who complete the compulsory basic education programme.

At the tertiary level the critical policy issues relate to: inadequate physical infrastructure to absorb the growing number of young adults who seek admission to tertiary institutions; and insufficient numbers of qualified and well motivated academic staff. The new Educational Sector Reform Programme introduced in 2004 aims at addressing these issues, particularly in the basic and secondary education sub-sectors.

Priority policy interventions in the education sector that will deepen and sustain the progress made in education under GPRS I and accelerate growth include the following: (i) increase access to and participation in education and training at all levels; (ii) bridge gender gaps in access to education in all districts; (iii) improve quality of teaching and learning; (iv) improve efficiency in the delivery of education services (v) promote science and technology education at all levels with particular attention to increased participation of girls.

Increasing access to and participation in education and training:

At the basic level, policy measures include: expand pre-school access in all basic schools to give every child a good start in learning; accelerate the rehabilitation/development of basic school infrastructure (with water and toilet facilities) particularly in most deprived districts; remove barriers to primary school entry and retention; shift the burden of payment for education services away from poorer families of children at the lower levels (especially the girl-child); facilitate the implementation of the capitation grant in all public primary schools; expand the ongoing school feeding programme to all poor districts; ensure that buildings and other physical infrastructure in schools are made accessible to the people with disabilities; adopt targeted programmes to improve access in underserved areas; improve the provision of JSS workshops in basic schools; enact laws that support implementation of FCUBE; and expand non-formal education in partnership with community groups, NGOs and private providers.

At the senior secondary school level, strategies will focus on: accelerate the implementation of the programme to upgrade one secondary school to “model secondary school” status in each district in order to address the issue of geographical disparities in access to quality secondary education; rehabilitate/develop physical infrastructure, provision of libraries and equipping science laboratories in other schools in the districts. In co-educational institutions, steps will be taken to ensure equitable access to facilities and opportunities for both boys and girls.

Strategies to improve and extend technical and vocational education and training include: establishment of a National Council for Technical and Vocational Education; ensure the relevance and coverage of vocational and technical training; (allowing for the diversification of vocational and technical curriculum e.g. to include agriculture and business studies); facilitate functional linkage between training institutions and industry; support private-public partnership in the management of vocational and technical schools; promote entrepreneurship among the youth.

At the tertiary level, on-going programmes for enhancing infrastructural development in the universities and polytechnics will be expanded to provide essential facilities like libraries, lecture halls, laboratories, workshops, equipment, and residential accommodation. A National Policy on Distance Education will be adopted and distance education centres established in all regions of the country.

Bridging gender gap in access to education:

Strategies towards attaining gender parity in access to education and meeting the objectives of MDG 3 will include provision of incentives/scholarship schemes to increase girls enrolment, retention and completion, particularly in the deprived areas; and sensitising parents and communities on the importance of girls’ education.

Improving the quality of teaching and learning:

To improve the quality of basic education, the strategy will focus on: introduce programme of national education quality assessment: expand teacher retention schemes; ensure teacher development (including upgrading and equipping Teacher Training Colleges to offer diploma courses), ensure deployment of teachers, particularly to more remote and rural areas; (iv) strengthen the supervision of teachers; provide incentive schemes for teachers especially female teachers who serve as role models, in deprived areas; ensure timely distribution of teaching and learning materials, including textbooks; improve the teaching of science, technology and mathematics in all basic schools; and develop and promote the use of ICT in schools and institutions of higher learning.

Improving the quality and efficiency in the delivery of education services:

The strategy to improve the quality and efficiency in the delivery of education services will include: strengthen and improve educational planning and management; promote and support private sector participation in education; strengthen monitoring and evaluation framework and reporting channels; strengthen institutional arrangement for enhancing the role of CBO, CSO in advocacy, monitoring and evaluation.

Promoting of science and technology education at all levels:

Improvements in production techniques for more efficient production of larger quantities and high quality goods and services in the growth sectors require workers with modern scientific knowledge and ICT culture. Strategies to achieve this objective include providing incentive schemes to attract more teachers into the teaching of science and ICT; support science and research institutions; provide incentives to attract science students; increase funding for research and technology development including ICT; and support private sector initiatives in science and education.

4.3.2 Training and Skills Development

Outside the formal education system, many young people lack the requisite skills and entrepreneurial know-how to access jobs in the labour market, thus making them vulnerable in their livelihoods and subject to exploitation including the worst forms of child labour. Groups of young people requiring support most in this regard include: young persons 15 years and above who never went to school or who drop out of primary school and JSS; those who have completed JSS and SSS but are unemployed due to poor quality/relevance of education received; young people who have acquired some skills but need retraining especially in good management practices to enhance their access to the labour market; and young persons with disabilities.

Skills and entrepreneurial development will be guided by the following priorities: (i) provide skills and entrepreneurial training in a gender responsive and equitable manner; (ii) promote dialogue between industry and skills/professional training institutions to produce skilled labour required by industry; (iii) strengthen and support HR training institutions; (iv) promote apprenticeship training; (v) promote the adoption of the National Youth Policy and enactment of the Disability Bill.

Provide skill and entrepreneurial training:

In order to provide skill and entrepreneurial training the following strategies will be adopted: train unemployed in competency-based, demand-driven skills, including the STEP programme; promote and establish production units in all vocational training centres; set standards for vocational training and entrepreneurial development; intensify co-operative education and its practice in collaboration with stakeholders; revamp the Factories Inspectorate Division to intensify health and safety education at the workplace and training institutions; expand training infrastructure for skills upgrading; improve management skills and business efficiency; promote training of people with disability and; implement National apprenticeship programme.

Promote dialogue between industry and skills/professional training institutions to produce skilled labour required by industry:

The strategy is to promote dialogue between industry and skills/professional training institutions to produce demand driven skilled labour and establish effective collaboration between HR institutions and industry.

Strengthen and support HR Training Institutions:

The strategy to strengthen and support HR training institutions will include the following: assist HR institutions to develop new syllabi/curricula to meet requirements of industry and employees as well as persons preferring self-employment; conduct training needs assessment: provide logistical support.

4.3.3 Sports Development

Sports enhance one’s personal abilities, general health, self-esteem while contributing to socio-economic development including improving public health and social cohesion. On the global level, sports foster friendship, cooperation and understanding between nations. In relation to the sport for excellence and sports for development and peace policies, priority interventions to support growth and poverty reduction will: build coalition and partnership in sports development; promote national integration and unity through sports; and promote international friendship, solidarity and cooperation.

Building coalition and partnership in sports development:

Strategies will include strengthening the capacities of the national sports institutions and organisations and enhancing the involvement of corporate bodies and individuals in sports promotion and development.

Promoting national integration and unity:

Adequate and appropriate sports and recreational facilities will be provided at local, district, regional and national levels, ensuring availability and affordability of sports equipment, promoting the production of local sports equipment, building the capacity of community sports clubs, amateur and professional clubs and fitness clubs and motivating and encouraging sports talents to achieve full potential.

Promoting international friendship, solidarity and cooperation:

Strengthening international friendship, solidarity and cooperation to achieve growth and poverty reduction will be promoted by establishing linkages and partnership with countries and international sport agencies committed to the development of sports, thereby enhancing its potential contribution to national development objectives.

4.4 IMPROVED ACCESS TO HEALTH CARE, MALARIA CONTROL AND PREVENTION OF HIV/AIDS

4.4.1 Improving Access to Health Care

Generally the health status of Ghanaians has improved over the years. However there exist marked differences in some health indicators among the different geographical regions and socio-economic groupings. These variations in health status are in part due to differential access to quality health care. Despite the considerable investments in the provision of health care facilities, a significant proportion of the people lack access to quality health services. The main constraining factors affecting access to health care include geographical, financial barriers, service delivery and broad socio-cultural barriers including gender.

Factors contributing to poor geographical access include low capital investment in health facilities, poor feeder road systems in the country, poor location of facilities and lack of communication facilities. Service delivery barriers that have constrained access to quality health care include organizational and management constraints; weak support systems such as transportation and equipment for service delivery; human resource constraints. The exodus of critical health professionals in recent years is undermining efforts to improve access.

The ‘Cash and Carry System’ of paying for health care at the point of service is a key financial barrier to health care access for the poor. To remove the financial barrier to health services, the government initiated the National Health Insurance Scheme in 2001 aimed at abolishing this system and limiting out of pocket cash payment at the point of service delivery (see Box 4.3). The scheme makes provision for the poorest and most vulnerable people to be identified and exempted from making financial contributions to the system.

National Health Insurance Scheme

The National Health Insurance was initiated to address the problem of financial barrier to health care posed by the ‘Cash and Carry System’ which requires out-of-pocket payment for health care at the point of service delivery.

The National Health Insurance Act (2004), Act 650, has been enacted and a Legislative instrument, LI 809, has also been passed to provide operational and administrative guidelines for its implementation. A Ministerial Oversight Committee has been formed. A National Health Insurance Council is in place.

District Mutual Health Insurance Schemes (DMHIS) serve as vehicles for delivering pro-poor policy to the underprivileged segment of society. All districts have been provided with an average of ¢250 million each as start-up capital for the establishment of a DMHIS. So far 123 district schemes have been set up out of a total of the 138 districts and personnel to serve as District Scheme Managers have been recruited.

Currently a minimum benefit package covers about 95% of diseases in Ghana. Some of the diseases covered are malaria, diarrhoea, upper respiratory tract infections, skin diseases, tuberculosis, asthma and hypertension.

Challenges to the successful implementation of the NHIS are (a) how to increase enrolment of members into the district schemes and the NHIC plans to intensify education to improve this. (b) Costing of various types of services at the different health delivery points in order to fix tariffs / fees with health-care providers.

The Ministries of Health, Local Government & Rural Development and Information as well as the NHIC need to intensify work in order to make this important national programme succeed.

The strategy for improved health care in Ghana under GPRS I, envisaged increasing total health expenditure as percentage of the total government expenditure from about 5% in 2000 to about 7% in 2004 and 7.5% in 2005. This increased expenditure, which was likely to guarantee a per capita health expenditure equivalent to $10, is too low to bring Ghana anywhere near the internationally recommended levels of about $30-40 per capita expenditure necessary to cover the costs of a basic minimum package of preventive and curative services. The Ghana, Macroeconomic and Health Initiative (GMHI) report recommends in the short term increasing government spending on health for the 2003 to 2007 financial years to the level that would raise the contacts for preventive and curative care from 0.34-0.44 OPD visits/ per-capita/year to 0.75 OPD visits/capita/year or raising the health expenditure per capita per year to around $20 by 2007.

In order to accelerate access to quality health services, the health sector will continue to deepen efforts and focus on the three broad policy objectives: (i) bridge equity gap in access to quality health and nutrition services; (ii) ensure sustainable financing arrangements that protect the poor; (iii) enhance efficiency in service delivery.

Bridging Equity Gap in Access to Quality Health and Nutrition Services:

Strategies to be implemented under this policy objective include: develop “close to client’ services to the poor; develop resource allocation criteria and a facility distribution plan to improve targeting of poor groups and geographical areas; redistribute health workers in favour of deprived areas; provide outreach services and clinics in deprived rural and periurban areas; improve Community-based Health Planning and Services (CHPS); develop and implement high impact yielding strategies for U5M & MM and malnutrition; including scaling-up the successful Accelerated Child Survival and Development (ACSD) interventions; develop at least one fully functioning and well equipped hospital in each district; eradicate guinea worm and intensify implementation of DOTS strategy of the National Tuberculosis programme; improve access to reproductive health services by reducing unmet needs of family planning; improve essential obstetric care to reduce maternal mortality; and improve availability and access to essential and affordable drugs on sustainable basis.

Ensuring Sustainable Financing Arrangements that Protect the Poor:

Strategies under this objective include: accelerate the implementation of the National Health Insurance Scheme including the exemption policy through guided introduction of District mutual health insurance schemes, fix low acceptable levels of payment for the poor. The exemption policy will be strengthened to enhance access of poor and vulnerable groups to healthcare by improving the eligibility criteria, procedures, public awareness and responsiveness of the health service facilities.

Strengthening Efficiency in Service Delivery:

Strategies to strengthen efficiency in service delivery will include: expand pre-service health training institution facilities to increase intakes of trainees; providing incentive schemes to support the retention and redistribution of trained health personnel; decentralize human resource management to the regional level; strengthening systems for accountability in health service delivery; collaborate with informal health service providers, expand community-based health service delivery; improve the quality of traditional health service delivery system; accelerate the provision of staff accommodation at all levels; improve data collection in Epidemic Prevention and Care; strengthen M&E of services; clarifying roles of MOH-GHS and District Assemblies in health service delivery (HSD); enhance linkages between public, private and NGOs, collaborating with other MDAs like Ghana Aids Commission, National Population Council, Ministry of Education, Ministry of Food and Agriculture and the Community Water and Sanitation Agency in service delivery.

4.4.2 Malaria Control

Malaria in Ghana is the single most important cause of mortality especially among children under five years and pregnant women. In 2002, for instance, malaria was estimated to account for 44.5% of all outpatient illnesses, 36.9% of all admissions and 13.2% of all deaths in health facilities in Ghana. The disease is responsible for a substantial number of miscarriages and low birth weight babies among pregnant women. Among this group, malaria accounts for 13.8% of OPD attendance, 10.6% of admissions and 9.4% of deaths. Around 800,000 children under the age of five die from malaria in Africa every year, making this disease one of the major causes of infant and juvenile mortality.

Apart from the health consequences of malaria, it puts a heavy burden on economic development. It is estimated that a single bout of malaria costs a sum equivalent to over 10 working days in Africa. In Ghana malaria accounts for significant portion of the disease burden, causing about 10.6% of lost Disability Adjusted Life Years (DALY) and costing an equivalent of about 3% of GDP annually in economic burden. Hence the need to prioritize the control of malaria under the health sector interventions of GPRS II.

Government Effort at Controlling Malaria

Intensive government efforts at controlling malaria in Ghana dates back to 1957 when a malaria control unit within the MOH was established in the Volta Region in collaboration with WHO to train personnel in geographical reconnaissance, malariometric and entomological surveys, and to conduct trials of indoor residual insecticide application in the control of adult mosquito population. Ghana followed-up this in 1961 with the creation of a National Malaria Services when the country adopted the global Malaria Eradication Programme, which used residual spraying and larvicides to control malaria parasites. The programme had to be discontinued in 1967 due to technical and financial reasons. In 1992, the country launched a 5-year (1993-1997) National Malaria Control Action Plan with the focus on capacity building for improved disease management in health facilities. Drawing on past experiences and lessons, an accelerated malaria control programme piloted in 30 districts, was launched in 1997, again with a focus on case management.

Since 1998 Ghana has committed itself to the Roll Back Malaria (RBM) Initiative of WHO, which builds on the Global Malaria Strategy with a focus on Africa. The goal of the Roll Back Malaria Initiative is to halve the world’s malaria burden by 2010. Consequently the country drew up a ‘Medium Term Strategic Plan for Malaria Control in Ghana’ (1998-2002), which sought to improve the coverage of malaria control activity by adopting an inter-sectoral approach involving other government sectors and partnership with the private sector and the community3. It has also committed itself to the Abuja Declaration on Roll Back Malaria in Africa, which similarly seeks to achieve specific targets on malaria prevention and control with time limits.

The Ministry of Health produced a Roll Back Malaria (RBM) Strategic Plan in 2000 with the overall goal of facilitating human resource development by reducing the malaria disease burden. The RBM is in line with the objectives of MDG 6. The following priority interventions in the RBM plan will be promoted and strengthened in GPRS II: improve malaria case management; multiple prevention; improved partnership; and focused research.

Improving Malaria Case Management:

Primary interventions include ensuring early case recognition, ensuring appropriate response and referral and improving access to services.

Enhancing Multiple Prevention:

Preventive strategies include: promote use of insecticide treated bednets, especially by children and pregnant women; encourage drainage, mosquito proofing and general sanitation; promote limited application of indoor and outdoor residual spraying; and promote chemoprophylaxis for pregnant women.

Improving Partnership:

The strategy to achieve this objective is to create and sustain partnerships for malaria control through close collaboration between departments and programmes in the health sector, partnerships between government sectors and partnerships with NGOs, private sector, informal sector, communities and traditional healers.

Focused Research:

The objective of this component of RBM is to ensure that efforts to roll back malaria are supported and well informed by well researched information to guide policy decisions and monitor progress and outcomes of key interventions. This will be achieved by increasing availability of funds for research; focused research agenda and improved dissemination and utilization of results; and capacity development for research.

4.4.3 HIV/AIDS Prevention

In addition to the malaria menace, HIV/AIDS pandemic at the prevalence rate of 3.4% has a negative impact on productivity. It results in loss of productive assets, high treatment costs and the break in the transfer of valuable livelihood knowledge from one generation to the next.

The following strategies will be adopted to prevent the spread of HIV/AIDS in order to keep the prevalence rate below 5%: reduce new HIV/STI transmission; reduce the impact of HIV/AIDS related vulnerability, morbidity and mortality; and enhance the coordination and management of the national HIV/AIDS response.

Reduce new HIV /STI transmission:

The objective of reducing new infections will be achieved by intensifying behaviour change strategies, especially for high risk groups; preventing mother-to child transmissions; ensuring safe blood and blood products transfusion; improve HIV/AIDS/STI management; promoting safe sex practices; increase access to voluntary counselling and testing, condoms, and integrated youth friendly services; develop national behaviour change communication strategy, advocate for elimination of negative socio-cultural practices, address gender based vulnerability including violence, coercion and marginalization, strengthen links between HIV prevention programmes and reproductive health and information services.

Reduce the impact of HIV/AIDS related vulnerability, morbidity and mortality:

Policy measures with respect to this objective include: enhance service delivery; promote strategies to reduce stigma and discrimination, rapid scale-up of comprehensive care including antiretroviral therapy to all who need it; effectively standardize the utilization of useful traditional and alternative medicine for the provision of long-term care; ensure supportive environment for persons infected or affected by HIV/AIDS; ensure safety of orphans and vulnerable children; strengthen linkages between institutional care and community/home based care; increase assess to basic package of services for PLWHA.

Enhance the management of the national HIV/AIDS response:

Policy measures for achieving this objective will include: strengthen the capacity and core functions of the Ghana AIDS Commission; enhance the existing favourable, socio-political and policy environment; promote a multi-sectoral and multi-disciplinary approach in the formulation and implementation of HIV/AIDS/STDs policies and programmes at national, region and district levels, building capacity of weak frontline institutions; develop and implement clear strategies for research, monitoring and evaluation; mobilize resources to meet the increasing demand of new and diversified programmes

4.5 POPULATION MANAGEMENT

Population growth has strong linkages with economic growth and sustainable social development. Population growth increases the quantity of labour without necessarily improving its quality. Hence, population growth rates above 2 percent have been found to be counterproductive to growth. Even though the population growth rate in Ghana has reduced from its high level of about 3% in 1994 to 2.7% in 2000, it continues to outstrip the provision of social services and infrastructure. The high fertility rate has also resulted in a youthful population with a high dependency ratio. The immediate challenge for human resources development is to formulate appropriate strategies to manage the population to ensure that population growth rate is maintained at a level that will support economic growth and social development.

Population management will be based on the following priorities: promote access to and utilization of family planning services; educate the youth on sexual relationship, fertility regulation, adolescent health, marriage and child bearing; promote sexual health, delayed marriage and child bearing; promote compulsory education for children especially the girlchild up to secondary; promote compulsory and universal birth registration as a basic right and population management measure; integrate population variables into the GPRS at the national, regional and district levels and improve population database for the GPRS; promote the integration of HIV/AIDS into Sexual and Reproductive Health programmes; and strengthen the multi-sectoral, multi-disciplinary institutional co-ordination collaboration and networking for population management.

Promote access to and utilization of family planning service:

The strategies which will be implemented under this policy objective include: decentralize counselling services; strengthen the family planning component of maternal health delivery; and promote the sale of contraceptives through community agents, including maternity homes and field agents. Research will be undertaken on traditional practices and belief systems which inhibit contraceptive use followed by appropriate action.

Educate the youth on sexual relationship, fertility regulation, adolescent health, marriage and child bearing:

The strategies which will be implemented will include: promote family planning/RH education into formal and informal and out of school training programmes to prepare the youth for responsible parenthood; scale up effective implementation of the Adolescent Reproductive Health Policy.

Promote the integration of HIV/AIDS into Sexual and Reproductive Health programmes, delayed marriage and child bearing:

Strategies to promote sexual health, delay marriage and childbearing, include: ensure availability of and accessibility to family planning services to all who seek such services including youth-friendly services; educate and motivate the population at community levels on health, social and demographic values of family planning; promote formal education of girls as well as adult education and functional literacy with bias towards the maintenance of family values, reproductive health, population and development interrelation; conduct research into socio-cultural practices that promote early marriage, betrothal, early sexual behaviour and take appropriate social and legal action.

Promote compulsory education for children especially the girl-child up to secondary level:

The strategy will focus on programmes that encourage girls to stay in school up to at least the secondary level, improve school enrolment rate and reduce the high drop out rate.

Promote compulsory and universal birth registration:

The issue of birth registration was not addressed in the first GPRS. GPRS II recognises birth registration as in an important population management issue as well as the fundamental right of the child as a citizen. The implementation of the existing policy and programme will be accelerated to achieve universal coverage of 100% by 2009 from the current level of 50%.

Strengthening the multi-agency Co-ordination for Population Management:

The policy interventions in this regard will include: build the capacity of the National Population Council and partner agencies for the integration of population concerns in the GPRS; provide technical leadership to co-ordinate population activities at all levels; and develop appropriate advocacy strategies for population management.

4.6 SAFE WATER AND ENVIRONMENTAL SANITATION

Improving access to potable water and sanitation is critical to achieving favourable health outcomes, which in turn facilitate economic growth and sustained poverty reduction. In particular improvement in access to safe water enhances school attendance, reduces women’s workload and frees them to participate effectively in economic empowerment and governance activities. On the other hand, adequate sewerage and sanitation facilities are important for environmental cleanliness and prevention of many infectious diseases such as diarrhoea and dysentery.

There are several on-going investments in safe water provision through the rehabilitation and expansion of water systems for both rural and urban communities. There is the need to accelerate these interventions. The following priorities will guide the delivery of safe water and sanitation in the next four years: accelerate provision of safe water in rural and urban areas; accelerate the provision of adequate sanitation; and improve environmental sanitation in urban and rural areas.

Accelerate the provision of safe water in rural and urban areas:

Rural: Policy interventions to accelerate the provision of safe water in the rural areas will include: provide new investments in rural water, especially in guinea worm endemic areas; strengthen the management of on-going investments in deprived regions; ensure timely disbursement of recurrent budget to Community, Water and Sanitation Agency (CWSA); ensure timely disbursement of the District Assembly Common Fund; strengthen publicprivate and NGO partnerships in water provision; improve community owned and managed water supply systems; provide for in the building code an enactment requiring all building plans to include rain harvesting facilities, provide check-dams (dug out) to harvest rainwater for agricultural purposes, strengthen human resource capacity in water and to disseminate information on safe water.

Urban: Strategies to accelerate the provision of safe water in the urban areas will include the following: establish regional offices of Public Utilities and Regulatory Commission; mobilize new investments for urban water systems; extend distribution networks especially to low income consumers; strengthen the management of Ghana Water Company to enhance service delivery; assess lifeline tariff for poor urban households; provide standpipes for the poor; provide, in the building code, an enactment requiring all building plans to include rain harvesting facilities; support the introduction of private sector into management and operation of the water supply systems under management and/or lease contract arrangement and to disseminate information on safe water.

Accelerate the provision of adequate sanitation:

Strategies to accelerate the provision of adequate sanitation consists of: promote the construction and use of domestic latrines; improve the treatment and disposal of waste in major towns and cities; enforce laws on the provision of sanitation facilities by landlords; promote widespread use of simplified sewerage systems in poor areas; improve the management of urban sewerage systems; improve household and institutional sanitation including schools; rationalize and update District Assembly bye-laws on safe management of liquid and solid waste at the household level; integrate hygiene education into water and sanitation delivery.

Improve environmental sanitation:

Interventions that will be implemented to improve environmental sanitation will involve: promote physical planning in both urban and rural areas, including the acquisition of land for the treatment and disposal of solid waste in major towns and cities; establish water and sanitation boards in small towns; support public-private partnership in solid waste management; and build the capacity of District Assemblies to better manage environmental sanitation

4.7 URBAN DEVELOPMENT, HOUSING AND SLUM UPGRADING/URBAN REGENERATION

4.7.1 Housing

Access to adequate housing, safe water and sanitation facilities, is an important ingredient in efforts to improve the health outcomes and livelihood of Ghanaians. Current estimate of housing needs by the Ministry of Works and Housing indicate that the country needs at least seventy thousand (70,000) housing units annually. Presently, the national supply is about 35% of this figure. Lack of sufficient housing units in the urban areas has contributed to overcrowding, development of illegal structures, children and young people living in the streets and undue pressure on the already limited water and sanitation facilities.

GPRS II treats housing provision as a strategic area for stimulating economic growth while at the same time improving the living conditions of Ghanaians. The very activity of providing housing contributes to economic growth through multiplier effect of housing construction on the economy. It is estimated that for every ten thousand dollars (US$10,000) spent on housing construction more than seven (7) jobs are created in related industries and enterprises. Government is in the process of reviewing the National Shelter Policy, with the ultimate goal of providing adequate and affordable housing with requisite infrastructure and basic services to satisfy the needs of the people.

4.7.2 Slum Upgrading/Urban Regeneration

The growing incidence of slum development in Ghana has been the result of rural-urban migration, limited supply of land, and regulatory frameworks that are, at best, indifferent and hostile to the needs of the poor. In 2001, the number of people living in slums in Ghanaian cities was estimated to be 4,993,000 and growing at a rate of 1.8% per annum. The slum areas are very pronounced in Accra, Kumasi, Sekondi-Takoradi, Tema and Tamale with growing incidence in the secondary cities of Cape Coast, Koforidua, Sunyani, Ho and Bolgatanga.

Priority strategies for housing and slum upgrading are as follows: strengthen the physical planning of urban settlements and ensure the enforcement of planning regulations and implementation of planning schemes; upgrade basic services in the urban areas; promote adequate supply of safe and affordable shelter; improve housing conditions in rural areas and low-income urban areas; facilitate adequate housing finance for all income groups; and) develop and promote the use of local building materials.

Promote Urban Infrastructure development and provision of basic Services:

The strategies to address urban infrastructure development and provision of basic services will include: provide and implement strategic/development plans for urban centres, enforce rules on land use plans; co-ordinate all aspects of town development; facilitate public/private partnerships in the development of urban infrastructure; provide basic urban services; foster the growth of settlements which can support rural transformation; improve infrastructure facilities in slum areas and restrict the formation of new slums; ensure efficient and effective management of flood control and drainage systems; and promote and facilitate private sector participation in flood control systems and coastal protection.

Increase access to safe and affordable shelter:

In order to increase access to safe and affordable shelter the following interventions will be pursued: streamline and improve land acquisition procedures; encourage mortgage financing by financial institutions to provide varied ending and savings services to house owners, would-be house owners and housing developers; facilitate private sector involvement in the provision of rental accommodation in urban centres; ensure that all houses have adequate facilities, which are friendly to persons living with disability and located in healthy environment, and promote the manufacturing and use of local building materials and appropriate technologies in housing.

4.8 SOCIAL POLICY FRAMEWORK FOR MAINSTREAMING THE VULNERABLE AND EXCLUDED IN HUMAN RESOURCE DEVELOPMENT

A significant proportion of Ghanaians including children, unemployed youth, women, persons with disabilities and the elderly either do not reach their full human potential or cannot contribute effectively to economic growth and sustainable social development due to vulnerability and exclusion. Their needs cut across many sectors and their human resource development requires a coherent and integrated Social Policy Framework and an overarching Social Protection Strategy. Several relevant social policies already exist including, the Early Childhood Care and Development (ECD) Policy, Gender and Children’s Policy, Education Reform Policy, Health Reform Policy, Draft National Disability Policy, National Population Policy, Draft Youth Policy and Draft National Ageing Policy. A Draft Social Protection Strategy to cover the needs especially of the vulnerable and excluded has also been prepared. These would form the basis of the overall Social Development Policy Framework.

Issues of vulnerability and exclusion have been mainstreamed in the GPRS II. A comprehensive Social Policy Framework to update existing policies where necessary and provide guidelines for improved social development performance to bolster economic growth will be developed and adopted to strengthen the process of empowering the vulnerable and excluded to reduce their risks, protect their rights and enhance their contribution to national development

Critical policy issues to be addressed in GPRS II, besides education and health, include: integrated child development; strengthening of the family; HIV/AIDS; capacity development in social work and volunteerism; database on vulnerable and excluded groups; and institutional strengthening, linkages and coordination.

4.8.1 Integrated Child Development

As noted earlier, human capital formation starts from early childhood. Studies worldwide also show that investments in holistic early childhood care and development for children before birth to 8 years old covering care, infant stimulation, social and cognitive development, health, nutrition and early learning yield the highest rate of return of any child development activity at later stages in the life cycle. The returns are both in cost savings in fighting later poor health, malnutrition, poor cognitive and learning outcomes, school drop out etc and in positive human development, equality, poverty reduction and economic growth. Hence vigorous efforts will be made to implement the ECD policy to ensure that Ghanaian children receive the best possible care and start in life to guarantee their survival in a knowledge-based world. This will also ensure the reduction in the time burden of women and girls.

Priority attention will also be given to: child protection issues including intensified special programmes to eliminate the worst forms of child labour and child trafficking, child abuse, commercial sex exploitation of children and streetism; protect orphans and vulnerable children (OVC) and children in conflict with the law; enact the Disability, Human Trafficking and Domestic Violence Bills. The National Commission on Children and Development under MOWAC will be strengthened to harmonise and coordinate policies and activities of child development across sectors.

4.8.2 Strengthening the Family

Family values are under threat as cases of neglect and abuse of spouses and children increase and there is emerging dislocation of youth and parental authority and guidance. Trends in increasing single parent and female headed households indicate stresses on family members especially children. This is worsened by the fact that the family as an institution receives little or no attention from both public and private sector agencies. Departments and civil society organisations that traditionally address issues of family welfare have been quite weak and of limited effectiveness. Policy measures to alleviate the situation include: multifaceted support to build family capacity to provide for and care for its members according to their particular needs as girls, boys, women, men and the elderly taking into account peculiar social norms and practices; parenting and family life education through multimedia channels, civil society groups and trades associations; strengthen intersectoral collaboration among MMDAs and with NGOs.

4.8.3 HIV/AIDS and Vulnerability and Exclusion

HIV/AIDS presents a rapidly emerging challenge to social security in Ghana. There should be an explicit strategy to harmonise efforts of public and private agencies in the campaign for behaviour change, as a means of reducing the potential impact of HIV/AIDS on vulnerability and exclusion. At the same time, the campaign against stigma and other forms of discrimination, as well as advocacy for treatment should be seen as parts of the effort to reduce vulnerability.

4.8.4 Capacity Development in Social Work and Volunteerism

There is a serious human capacity limitation in this area. Programmes to equip social services practitioners and new entrants with the necessary skills and at varying levels of expertise should be pursued. Existing training facilities at post secondary and tertiary levels need to be strengthened to support schools for PWDs, care programmes and skills training programmes. In addition, a more professional approach to the management of volunteerism should be introduced to encourage Ghanaians to give their time and resources towards the care and empowerment of vulnerable and excluded groups. Non-diploma short courses can be used to provide hands-on training in some cases. Community based support networks present an opportunity for such capacity building initiatives.

4.8.5 Database on the Vulnerable and Excluded Groups

A simple but efficient data management system will be put in place to draw social sector data into a common database that can be analysed by the Ghana Statistical Service (GSS) and presented as national statistics on the vulnerable and excluded. MMDAs should collaborate with the GSS, national research institutes, and NGOs on needed research and indepth studies ensuring that data collected are disaggregated by age, gender and geographical location. The database will facilitate and sharpen programme design, targeting, mainstreaming and monitoring and evaluation of vulnerability and exclusion in the country.

4.8.6 Institutional Strengthening, Linkages and Coordination

Major problems plaguing the design and implementation of social development programmes to address vulnerability are inadequate institutional framework, capacity and poor coordination. Four sector ministries have been identified as social sector ministries including MMYE, MOES, MOH and MOWAC. The Department of Community Development of the MLGRD provides assistance. Other agencies providing specialised but related support include CHRAJ, WAJU and the Legal Aid Board. Then there are numerous NGOs, CBOs and civil society organisations giving attention, care and support. The programmes of all these agencies and organisations often overlap leading to duplication and fragmentation of efforts. Compounding the problem is the absence of an overall Social Policy Framework to guide agency contributions and coordination

Policy measures to address this situation include: strengthen the technical capacity of key agencies such as the Department of Social Welfare, Department of Community Development, WAJU and CHRAJ; provide adequate human and financial resources to these and other agencies to effectively meet the needs of the vulnerable and excluded; promote greater linkages, complementarities and coordination among the agencies and organisations to maximize their ability to improve the lives and empower the vulnerable and excluded groups in the society.

CHAPTER FIVE GOOD GOVERNANCE AND CIVIC RESPONSIBILITY

5.1 INTRODUCTION

The broad objective of good governance and civic responsibility is to empower state and non-state entities to participate in the development process and to collaborate in promoting peace and stability in the body politic. Deepening the practice of good governance and promoting civic responsibility is one of the three areas of priority under GPRS II. The strategy to achieve this objective is to promote effective, responsible and accountable state machinery with improved capacity to engage the productive private sector and civil society in formulating policies and strategies for accelerated growth and poverty reduction and in the implementation monitoring and evaluation.

As part of the strategy for ensuring good governance, Ghana was one of the first countries to subscribe to the African Peer Review Mechanism (APRM) under the NEPAD initiative (See Box 5.1).

African Peer Review Mechanism

The African Peer Review Mechanism (APRM), which is an initiative of the New Partnership of African Development (NEPAD), is a mutually agreed upon instrument which members of the African Union (AU) have voluntary acceded to as part of an African self-monitoring mechanism. The primary purpose of the APRM is to foster the adoption of policies, standards and practices that will lead to political stability, high economic growth, sustainable development and accelerated sub-regional and continental economic integration. This is expected to be achieved through the sharing of experiences and reinforcing successful and best practices, including identifying deficiencies and assessing the needs for capacity building.

In line with the initiative, Ghana completed its first country self-assessment process in February 2005. Subsequently, the assessment has been reviewed by the group of African eminent persons. Preparation of the final report on the independent country review is in progress.

Since the major objective of the APRM is to promote the use of a participatory monitoring and evaluation instrument for tracking deficiencies and weaknesses identified in the national self assessment report, the outcome of the report will influence the implementation of policies formulated under GPRS II.

5.2 REVIEW OF GOVERNANCE UNDER GPRS I

The priority areas for good governance under GPRS I included public sector reform, decentralisation, and security and rule of law. Some of the significant achievements are presented below.

5.2.1 Public Sector Reform

As part of the Public Sector Reform Programme, Government introduced programmes aimed at adjusting central government structures and organisations to make them more efficient, effective, and private sector-friendly. Public Financial Management Law, namely, the Financial Administration Act, 2003, (Act 654), The Internal Audit Agency Act, 2003 (Act 658) and the Public Procurement Act, 2003, (Act 663), have been enacted to regulate the utilization of public funds. In addition new approaches in the scope, timing and quality of reporting on budget management have been introduced.

Many other state and non-state institutions4 that have oversight responsibility for public resources are being strengthened. Fast track courts are being computerised and Parliament is being assisted with capacity building and other resources. Also key staff of the Judicial Service has acquired skills in Performance Management, Alternative Dispute Resolution, Court Automation, Case Management and Change Management.

Outside government, civil society groups such as the Ghana Anti-Corruption Coalition gained increased capacity to discharge its anti corruption advocacy.

The monitoring and evaluation of policy implementation in general has improved. The National Development Planning Commission has undertaken reviews of the implementation of GPRS and has issued three Annual Progress Reports (2002, 2003 and 2004). The dissemination of the APRs has improved public understanding of the GPRS and helped to secure public interest and ownership in monitoring the implementation of the strategy.

5.2.2 Decentralisation

In the area of decentralisation, greater fiscal, administrative and political empowerment at the sub-national levels has occurred through a number of policy initiatives. The District Assembly Common Fund (DACF), HIPC and other grant transfers are now regular sources of revenue for district development programmes

To enhance the capacity of the District Assemblies to deliver on their mandate, a number of far-reaching policy initiatives have been introduced, among which are: the preparation of the National Decentralization Action Plan (NDAP); the establishment of Presidential Advisory Committee on Decentralization; the passage of the Local Government Service Bill into an Act; and the piloting of the cost-saving composite budgeting system in three districts.

In line with the goal of bringing democracy closer to the citizens and deepening good governance, 28 new District Assemblies have been created bringing the total to 138. There is growing collaboration between civil society groups and District Assemblies in managing district development programmes.

5.2.3 Security and Rule of Law

Considerable resources have been released for the empowerment of all law enforcement agencies and this has contributed in no small measure to the prevailing peace and security in Ghana.

Support to the security agencies including police service has enabled it to recruit additional officers, increase its equipment and logistical base, improve policing techniques, improve crime response rate and create neighbourhood watch committees as a complement to its work. Data shows a declining trend in the crime rate, which has further helped to maintain the current state of peace and security in the country. To promote safety and security of women and children, the Women and Juvenile Unit (WAJU) of the Police service is expanding its presence beyond the regional capitals.

At the broader level the objective of deepening the rule of law through a more robust administration of justice has led to the provision of increased support to the Ministry of Justice and Attorney General’s Department, to enable it organise legal aid clinics, and expedite action on the handling of cases in court, especially for the poor and disadvantaged.

Additionally the work of the other key governance institutions including the National Commission on Civic Education and Parliament has registered positive growth. These institutions have mounted educational campaigns on civic responsibilities and on government policies. Through the repeal of prohibitive pieces of legislation, the role of the media in enhancing information dissemination has been greatly enhanced.

5.2 CHALLENGES TO GOVERNANCE

Despite these achievements the following areas still present challenges for good governance which need to be addressed under GPRS II:

  • strengthening the process of democratisation

  • improving existing institutional, legislative and policy environment

  • evidence-based decision making

  • ensuring gender equity

  • fostering greater civic responsibility

  • integrating traditional authorities into formal institutional structures for governance.

5.3.1 Strengthening the process of democratization

A major challenge to governance is the need to strengthen the process of democratisation. The focus is on creating space for increased citizen participation in local governance through an effective decentralisation programme, promoting the growth of strong governance institutions and integrating traditional authorities, the private sector and civil society into formal national governance structures and empowering them through information.

5.3.2 Improving existing institutional, legal and policy environment

The shift in emphasis of national policy towards accelerated economic growth presents another challenge to good governance, which involves the principles of transparency and accountability. For example there is the need for deliberate attempts at restoring public confidence in the banking system in order to raise the level of savings which is a prerequisite for increased local investments.

Of equal importance is the need to secure individual and corporate property rights. Appropriate policies and legislation that protect property rights, promote fidelity to contractual agreements and boost investor confidence need to be introduced or enforced where they already exist, as part of the broad governance strategy. These principles should be reflected at all levels in the management of fiscal policy, monetary policy and international trade, all of which have a strong bearing on the quest to achieve efficiency in public resource use, restrain inflationary pressures and increase the international competitiveness of the economy.

5.3.3 Evidence-based decision-making and public dialogue

Although in recent years there has been some progress towards improving the quality and availability of statistics, there is still a long way to go to ensure that sufficient high-quality statistics and other information are produced and disseminated routinely and on a timely basis. Definite measures are needed to stem the loss of institutional capacity, in terms of both human resource and essential tools that have hampered the ability of the national statistical system to support government’s development efforts. The capacity of the statistical system, encompassing all data generating MDAs and civil society should be enhanced to promote evidence-based governance in the public and private sectors and strengthen the government’s ability to prescribe appropriate policies and assess policy effectiveness in critical areas, including macroeconomic policy, population management, gender equity, among others, in order to accelerate growth and poverty reduction.

5.3.4 Ensuring gender equity

The pursuit of gender equity is universally recognized as a basic prerequisite of good governance. Existing constitutional guarantees of fundamental rights and freedom provide legal backing for the protection of rights of all citizens, including women and children. However, Ghana is yet to attain the standards set by the international community as far as incorporating gender considerations into governance policies and programmes are concerned. A more daunting challenge in this regard is ensuring that these constitutional and legal provisions are practised.

5.3.5 Fostering greater civic responsibility

One of the main consequences of protracted periods of bad governance has been the eroding of public confidence in the institutions of state and a general lapse into apathetic, undisciplined and complacent attitudes on the part of many citizens. Personal interests and goals override public interests, often with negative outcomes in the use of time and financial resources of the state. This has undermined productivity and created hindrances to rapid economic growth. GPRS II proposes strategies to encourage active engagement of the citizenry in the process of national development within an environment that promotes responsible and disciplined civic behaviour. The strategies focus on education and dialogue, strengthening of law enforcement and exposure to systems that gradually lead to attitudinal change for the better.

5.3.6 Involving Traditional Authorities in Development

Provisions in the 1992 Constitution exclude chiefs from active involvement in partisan politics. Chiefs have also not been given any formal representation in the local government structure beyond discretionary participation in the district assemblies deliberation. These have not held back the role of chiefs as catalysts of development within and beyond their immediate communities. Reports of poor quality of service provision by local government administration and by external contractors within the jurisdiction of chiefs, have led to less efficient use of public resources. As part of the process of generating social accountability and achieving better development effectiveness, involving chiefs in formal development structures is becoming an unavoidable imperative. The challenge remains as to the nature of the integration and levels at which such integration should be done. An equally engaging challenge is whether to keep the institution outside the formal structures and channel some resources directly to chiefs to support their development efforts.

5.4 GOVERNANCE STRATEGIES IN GPRS II

The emphasis of GPRS II on accelerated economic growth calls for a corresponding realignment of the governance benchmarks. The appropriate policies and pieces of legislation that protect property rights, reduce the fear and aversion to savings, promote fidelity to contractual agreements and boost investor confidence, will be introduced or enforced where they already exist as part of the broad governance strategy. Additionally, the nature and processes of managing fiscal policy, monetary policy and international trade have strong bearing on the quest to achieve efficiency in public resource use, restrain inflationary pressures and increase international competitiveness of the economy.

In order to facilitate implementation in the medium term the main governance policy objectives under GPRS II are prioritised under four broad headings. These are political governance, economic governance, corporate governance and evidence-based decision making.

5.5 POLITICAL GOVERNANCE

Given the advances made in the practice of good governance and the challenges noted above, the need to consolidate and expand democratic practices has become a critical imperative. Key policy priorities in governance have been identified to include: strengthening parliament, enhancing decentralisation, protecting rights under rule of law, ensuring public safety and security, managing public policy, empowering women and vulnerable groups, enhancing development communication, ensuring good corporate governance, increasing access to information, and promoting civic responsibility. The policy priorities are discussed below.

5.5.1 Strengthening Parliament

The effectiveness of parliament has been constrained due to the fusion of functions of the arms of government leading to role conflicts for certain members of the legislature who concurrently hold ministerial responsibilities within the Executive. Resource disparity also appears to be undermining the roles of different arms of government, particularly Parliament.

To minimize the effect of conflict of roles and the risks associated with the fusion of functions of the arms of government, a review of constitutional power relations and the channeling of increased resources to parliament are proposed. A constitutional review commission will be established with a mandate to examine and make recommendations on among others, the issues of:

  • maximum number of ministers that can be appointed and by the Executive

  • maximum number of ministers that can be appointed from the membership of Parliament

  • the perceived/apparent conflict of interest in the discharge of the dual roles of the Minister for Justice and Attorney General

  • the nature and processes of Assets Declaration by public office holders

  • the age of retirement for public service office holders

  • the maximum number of judges appointed to the Supreme Court

  • entrenched provisions in the Constitution

  • election of District Chief Executives

5.5.2 Enhancing Decentralization

A number of implementation difficulties have emerged since the introduction of the District Assembly concept as the core of the decentralization policy in 1988. The main constraints identified under the decentralization process include absence of a shared conceptual and political understanding across government and civil society regarding the overall pace and direction of decentralization and a general inconsistency between the legal framework for decentralization and the local government reform initiative.

The strategy to enhance decentralization includes improving administrative, political and fiscal decentralization.

With respect to administrative decentralization, a key policy objective is to strengthen the capacity of Metropolitan/Municipal/District Assemblies (MMDAs) for accountable, efficient, effective performance and service delivery. A complementary objective is to institutionalize district level planning and budgeting using a participatory approach. In this regard steps will be taken to accelerate the establishment of the Local Government Service.

Promoting citizen participation in local governance will necessarily involve accelerating the devolution of political power to the districts and sub-district structures. In the area of development planning and monitoring, GPRS II recognizes that implementation and monitoring of policies and strategies is a shared responsibility between sub-national level institutions and agencies, and those at the national level. Existing practices have been highly centralised and supply driven. Programmes will be introduced to strengthen the ownership and involvement of regional and district authorities in the GPRS II process. In addition, social accountability will be strengthened to improve the environment for citizen involvement in the development process. Regional and District Development Monitoring Groups will be adequately empowered to participate effectively in monitoring the implementation of the GPRS.

Progress towards the implementation of fiscal decentralization remains slow as MDAs still retain large fiscal decision-making powers at the expense of the MMDAs. This is largely due to the absence of the appropriate legal framework to support fiscal decentralization. Equally worrying is the issue of the low revenue generating capacity of most MMDAs. The programme to implement the recently reviewed Financial Memoranda for MMDAs offers a good opportunity to improve revenue mobilization and utilization by MMDAs. Appropriate strategies are proposed in the Policy Matrix in the Appendix I.

5.5.3 Protecting Rights under the Rule of Law

There is the need to promote and protect economic, social, cultural, civil and political rights as enshrined in the constitution and all international human rights instruments to which Ghana is signatory. The quality of the administration of justice is central to securing these rights. The major difficulties associated with the administration of justice in Ghana can be categorised into two, namely judicial and attitudinal. Those that can be traced to the judiciary include delays and costs in administration of justice resulting in lack of confidence in the judiciary, and inaccessibility of justice and legal institutions. Key attitudinal issues relate to poor compliance with rules, regulations and procedures and weak enforcement of existing rules, regulations and procedures.

The strategies for addressing these constraints are detailed in the Policy Matrix in Appendix IA.

5.5.4 Ensuring Public Safety & Security

A secure and safe country enables individuals to pursue their economic activities without fear. The disruptive effects of civil strife and external aggression threaten the practice of good governance. Cases of states that are becoming gradually dysfunctional and on the brink of total collapse are evident in Africa. Forestalling such disruptions is critical for growth and poverty reduction. These considerations are instrumental in identifying public safety and security as an important policy priority. This policy priority addresses issues related to ensuring citizen safety, internal security and territorial integrity and covers immigration, control of narcotics and small arm

Increasing national capacity to assure safety of life and property including as well as strategic national installations from man-made and natural disasters is an imperative. This is to be achieved through institutionalization of early warning systems and promoting disaster management consciousness at all levels, including effective sharing of information among public safety and security institutions.

5.5.5 Public Policy Management and Public Sector Reform

Addressing the challenge of public policy management requires a multifaceted approach. The strategy proposed will among others seek to promote the participation of people of all political persuasions, state and non-state actors including traditional authorities in the design and implementation of national development agenda. Traditional rulers for example would be encouraged to make inputs at the district, regional and national levels. This is aimed at promoting ownership and achieving national consensus, thereby assuring policy sustainability without disruption occasioned by changes in political administration.

Additionally, the strategy seeks to reduce overlapping functions in MDAs and promote adequate and formalized public - civic society interface through the on-going Public Sector Reform programmes. These include interventions in the area of: (i) reform of pay policy implementation and the evolution of efficient performance management and evaluation system in the public and civil service; (ii) institution of systems of reward for efficient performance and penalties for inefficiencies; and (iii) institutionalization of ethics training at all levels of the public service to promote transparency and accountability and reduce corruption. These will be augmented by institutionalization and internalization of policy formulation, planning and programming, compilation of relevant data, and a well coordinated Monitoring and Evaluation System at all levels.

An ultimate aim of improving public policy management is to achieve sustainable development, which is in line with MDG 7 i.e. mainstreaming of sustainable development principles into national policies and programmes. The evidence in Ghana suggests inconsistencies in the consideration of the environment in the public policy process. The strategy is to ensure that sustainable development principles are institutionalized and mainstreamed by subjecting the public policy formulation process to Strategic Environmental Assessment (SEA).

Public policy is effective if it is evidence-driven. The GPRS II will promote evidence-based decision-making through strengthening of institutions that have the responsibility to generate the appropriate data and information on policy implementation in a timely and a more proactive manner.

5.5.6 Fighting Corruption and Economic Crimes

The government policy on corruption, over the past years has been focused on eliminating malfeasance in public administration, especially those that relate to fraudulent payments and wages. The CHRAJ, SFO, the Audit Service and the Controller and Accountant-General’s Department were all supported to perform their statutory duties. Other complementary measures that were taken included; the introduction and stern application of criminal law, promotion of civic education, promotion of the National Integrity Initiative (as a local chapter of Transparency International), and the creation of the Ghana Anti-Corruption Coalition. The Office of Accountability was created in 2003 as an internal corrective body under the Presidency, with the responsibility for identifying and dealing with issues relating to corruption within the Executive.

The incidence of corruption and economic crimes still remains a challenge to good governance. To address this problem, GPRS II proposes a three-pronged approach; (i) reducing opportunities for rent-seeking, (ii) strengthening the capacity of the anti-corruption institutions and the law enforcement agencies; and (iii) encouraging civil society organizations, including the media to play their role effectively. Specific strategies to achieve these objectives are outlined in the attached matrix.

5.5.7 Empowering Women

Disparities among women and men are being reduced as a result of specific interventions at all levels of the economic, political, social and cultural structures. Despite progress made to broaden the space for women in politics and decision-making, a lot more needs to be done. Among the interventions to address the imbalance is the reform of outmoded customs that violate women’s rights. The active participation of traditional authorities in this respect cannot be over-emphasized. There is also the need for mainstreaming gender into policy formulation and budgeting processes, supported with proper documentation and analysis of the patterns and magnitude of sex-differentials in key indicators.

Existing gaps in the legal framework that limit the opportunities of women to participate in public decision-making on an equitable basis will be closed. The systematic compilation, analysis and dissemination of gender disaggregated statistics on all aspects of life - social, economic and political, is essential for effective targeting of programme interventions.

5.5.8 Enhancing Development Communication

The lack of a coherent communications strategy has been identified as one of the major limitations of GPRS I.

The main challenges therefore are the management of information both quantitative and qualitative – inter/intra institutional frameworks and the lack of adequate database for planning. The key strategy is to ensure implementation of existing communication strategies at all levels while promoting the development of modern information management system including e-governance and the application of ICT in the information flow. Strategies to strengthen the critical role of the media in enhancing development communication will be promoted.

5.5.9 Promoting Civic Responsibility

Civic responsibility involves understanding what it takes to be a good citizen, as well as acceptable attitudes and behaviour within the society and at workplaces that promote sustainable national development. The increasing over-dependence on government by communities for the provision of all basic necessities of life undermines ownership, maintenance and the sense of civic responsibility for sustaining development initiatives. Over the years, state and non-state institutions have played various advocacy roles in integrating civic responsibility in the body politic; however a lot remains to be done with respect to indiscipline and disregard for laws, poor work ethics and attitudes, irresponsible conduct of adults and lack of a sense of patriotism. To address these issues a number of strategies both at the formal and the informal level will be pursued.

In the public domain, rules and regulations will be enforced systematically in all spheres, including school, workplaces, on the streets, in religious institutions, etc. Also measures will be instituted to reward responsible behaviour. Institutions including National Commission for Civic Education will be strengthened to pursue advocacy roles in this regard.

The return of society to traditional values of neighbourly conduct, respect for authority, honesty and integrity, will be pursued through the full implementation of Ghana Cultural policy. In addition the formal and informal institutions of socialization and learning will be supported to perform their roles as channels of change. At the community level, traditional authorities would be empowered to actively participate in ensuring responsible civic behaviour. Additionally, civic education materials taught in basic schools will be expanded to include civic responsibilities. Partnership with the public media will be strengthened to promote civic responsible behaviour.

5.6 ECONOMIC GOVERNANCE

Lessons learnt from the implementation of GPRS I point to the attainment of generally positive targeted economic indicators. However there is the need to sustain these gains, while introducing new initiatives where necessary to support accelerated growth and poverty reduction.

The priorities for enhancing Economic Governance under GPRS II will focus on Fiscal Policy Management, Monetary Policy Management and International Trade Management.

5.6.1 Fiscal Policy Management

Ongoing initiatives elaborated in GPRS I will be enhanced. The strategies will focus on improving public expenditure management, promoting effective debt management, and improving fiscal resource mobilization.

Improving Public Expenditure Management:

Efforts will be intensified to further improve public expenditure management started under the GPRS I such as the adoption of computerised accounting and financial management systems. The MTEF and PUFMARP initiatives will be reviewed and refinanced with a view to further strengthening its implementation. The BPEMS will also be fully implemented.

Other strategies will include developing a more effective mechanism for data collection, commitment control and procurement, transparency in the use of special statutory funds, enforcing budget controls on the State Owned Enterprises (SOEs) and strengthening payroll management.

Promoting Effective Debt Management:

Considerable success has been achieved in restructuring and reducing the domestic debt stock. The domestic debt management efforts will be continued to further reduce and stabilise the domestic debt to stem the increase in interest payments and achieve the desired decline in real interest rates.

This requires more effective mechanisms to monitor the debt stock, restructure the domestic debt to ensure a greater balance between short and long-term debt instruments re-direct more resources to reduce the size of the domestic debt and limit domestic borrowing.

5.6.2 Improving Fiscal Resource Mobilization

Achieving higher levels of growth and poverty reduction requires increasing revenue generating capacities to finance and sustain the growth and poverty reduction efforts.

The strategies include: minimize revenue leakages in all revenue collection agencies; review and revise existing taxes, fees and user charges; strengthen the capacities of revenue collecting agencies; and strengthening the District Assemblies for improved tax collection.

5.6.3 Monetary Policy Management

Monetary policy management will continue to focus on price and exchange rate stability. This is to further reduce inflation, minimise exchange rate fluctuations and promote the efficient operation of the banking and credit systems. The Bank of Ghana will work to remove the inefficiencies in the management of the financial sector in order to allow for a well functioning sector which impacts positively on growth and poverty reduction.

Government in pursuit of monetary policy will continue to use open market operations and adjustments in the prime rate to achieve its objectives. The thrust of monetary policy will be on market-oriented policy measures that will allow for smooth functioning of the financial system, in addition to creating a more diversified financial sector and improved access to financial services. The effective functioning of the Monetary Policy Committee (MPC) will be ensured to: achieve price and exchange rate stability; improve liquidity management; establish an efficient inter-bank foreign exchange market; and improve the institutional, legal and regulatory framework for monetary management. In addition the establishment of a central securities depository for government securities, enactment of long-term savings law for private pension and housing schemes, and improvement in the administrative framework for micro finance will be central to monetary policy.

Given the growing importance of foreign remittances in the Ghanaian economy, policies aimed at reducing the cost of remittances (both implicit and explicit) as well as those aimed at channelling remittances through the formal sector will be pursued.

5.6.4 International Trade Management

The main governance issues underlying international trade management within the framework of trade liberalization are related to international treaties, agreements, market access, trade barriers, dumping, among others. A comprehensive Trade Policy has been developed for Ghana that provides guidelines for the implementation of government’s domestic and international trade agenda. The policy is set within the context of Ghana’s long-term strategic vision of achieving middle-income status by 2015 and also becoming a leading agro-industrial country. The fundamental principle underlying the Trade Policy is the recognition of the private sector as the engine of growth with government providing a trade-enabling environment to actively stimulate private sector initiatives.

GPRS II will promote the elimination of constraints to international trade including: reduce the administrative bottlenecks associated with the export and import processes; minimize the incidence of “dumping”; diversify and increase the export base; promote new areas of competitive advantage; continue to take full advantage of preferential access to markets (AGOA, EU-ACP); engage fully in multi-lateral trade negotiations; and set up information system to track and measure progress in these areas.

5.7 GOOD CORPORATE GOVERNANCE

The quality of corporate governance practices has a direct impact on accelerated growth and poverty reduction. The recent events leading to business failures around the world and the misapplication of public funds in Ghana have reinforced the need for effective corporate governance. The strategic direction in this regard will be to: promote an enabling environment and effective regulatory framework for corporate management; ensure that corporations act as good corporate citizens with regard to human rights, social responsibility and environmental sustainability; promote the adoption of codes of good business ethics in achieving the objectives of the organization; ensure that corporations treat all their stakeholders in a fair and just manner, and; provide for accountability of corporations and directors.

5.8 PROMOTING EVIDENCE-BASED DECISION MAKING

Availability of relevant and timely statistics is critical to enabling conditions for policy development and assessment that allow for measuring inputs, outcomes, and impacts. Relevant, reliable statistics convey the clearest message with regards to policy intention, evidence-based outcome, effectiveness, and accountability of the government. They are also the most effective means to empower and facilitate the public’s participation in the national development process, and ensure transparency and accountability, including policy dialogue, policy formulation, monitoring of implementation, and evaluation of the outcomes.

A major challenge to strengthening the data base for policy formulation and decisionmaking is how to shift from the existing practise of using a fragmented set of uncoordinated statistical programmes to a national statistical system with coherent and integrated activities, and harmonized methodologies. This will ensure that consistent definitions are used and comparable statistics are produced and disseminated.

Strategies to address this issue will include strengthening of the national statistical system to generate good-quality and consistent data on the key areas of the GPRS II, including in particular, the development of economic indicators.

Among the activities to upgrade the performance of the national statistical system and ensure transparency and accountability are: rationalizing the production of data within the statistical system, defining the roles and mandates of the various data producing institutions, adopting common definitions, methods and classifications; a review of the Statistical Law and adoption of a statistical master plan; and application of international standards and good practices system-wide, including the United Nations Principles for Official Statistics and the IMF’s General Data Dissemination Standards.

CHAPTER SIX MONITORING AND EVALUATION

6.1 INTRODUCTION

Monitoring and Evaluation (M&E) has served as an essential management tool in the GPRS I, and will provide an additional impetus both in the pursuit of policy, programme and project effectiveness and to ensure accountability, responsiveness and transparency in the allocation of resources in GPRS II.

6.2 REVIEW OF M&E SYSTEM UNDER GPRS I

A comprehensive GPRS Monitoring and Evaluation Plan was formulated to support the implementation of GPRS I. Key policy initiatives under the plan included the following;

  • development of institutional framework for coordinating the system, including analysis and mode of reporting on the progress on GPRS implementation to different stakeholders, including Government, civil society and development partners

  • establishment of monitoring indicators against GPRS baselines and core targets

  • establishment of special indicators to facilitate the tracking of the HIPC, Millennium Development Goals (MDGs), and the Medium terms priorities.

  • studies to enhance the knowledge and data base for the conduct of objective impact analysis of GPRS (i.e. PSIAs).

  • plans for dissemination and a communication strategy were adopted, based on sound understanding of the key stakeholders, the information they required from the monitoring and evaluation system, how best to communicate with them, and what range and style of outputs should be produced.

  • wider stakeholder participation (government, parliament, NGOs, CSOs, private sector) in monitoring progress of the GPRS was agreed in the Monitoring and Evaluation Plan

6.2.1 Key Achievements

M&E Institutional Arrangements: The following groups were established to support the implementation of the GPRS I Monitoring and Evaluation Plan: (i) The National Intra- Agency Poverty Monitoring Groups (NIPMG) chaired by representatives of MDAs (ii) GPRS Dissemination Committee; and (iii) The PSIA Technical and Advisory Committees.

Five NIPMG based on the GPRS I thematic areas have been established at the national level. These groups are inter-sectoral and include both governmental and non-governmental representatives selected for their expertise in a specific thematic area. To deepen the M&E institutional arrangements, Regional poverty monitoring groups have been established as well.

M&E Communication Strategy: A comprehensive communication strategy was developed at the end of the third quarter of 2003, to inform and educate all stakeholders about the GPRS and the APRs findings. In addition, the interaction with civil society organisations (CSOs) has been improved to enhance the mechanism of effective representation in the M&E process.

Monitoring the GPRS Indicators: The Annual Progress Report (APR) has provided the key platform for the monitoring and evaluation of progress towards the achievement of GPRS targets as well as the outcomes and impacts of government policies. Three successions of APRs (2002, 2003 and 2004) have been prepared and widely disseminated. The recommendations from these reports have influenced the respective annual national budgets and the formulation of GPRS II.

As part of the process of determining the impact of the socio-economic policies on the poor, poverty and social impact analysis (PSIAs) studies were also undertaken. The National Development Planning Commission (NDPC) with the support of development partners has commissioned five PSIAs to ascertain the impacts of selected policy reforms implemented under the GPRS.

6.2.2 The Challenges

Among the lessons drawn from the implementation of the current M&E system are the severe institutional and technical capacity constraints and the fragmented set of uncoordinated information, both at the national and sub-national levels that confront the development of an effective and efficient M&E system. The two key institutions, the National Development Planning Commission (NDPC) and the Ghana Statistical Service (GSS), continue to depend on the existing systems of MDAs, who are the primary sources, of information. These systems which have been in place over different time spans reflect a variety of approaches to sector specific monitoring and varying degrees of success. Another level of contribution lies with the regional and district level institutions, embodied in the District Assemblies.

6.3 STRENGTHENING THE M&E SYSTEM UNDER GPRS II

In spite of the achievements in M&E for the GPRS I, more is needed to ensure that the system is firmly established, recognized and accepted by all, with full participation and contribution of all stakeholders. The key institutions need to be strengthened and empowered to lead the process and sustain the system with continuous flow of timely, reliable, accurate and relevant information that will be used to track progress. A common, centrally located database will be established for the storage and retrieval of basic data for the country as a whole, and also by regions and districts, providing easy assess to all stakeholders, of which a national database in the form of (GhanaInfo)5 is the core.

The primary goal of the M&E System under GPRS II is to facilitate the tracking of progress and effectiveness, as well as to identify bottlenecks associated with the implementation of the Strategy. The proposed system, which forms an integral part of the GPRS II, would have the following specific objectives:

  • reinforcing institutional arrangements with adequate capacity to support and sustain effective monitoring and evaluation

  • strengthening and effectively coordinating existing mechanisms for monitoring and evaluating the effectiveness of public sector service delivery

  • evolving an efficient system for generating relevant, reliable and timely quantitative and qualitative information

  • managing an effective feedback mechanism that make statistical information available in useable form to government and civil society

  • ensuring a holistic approach to M&E that would include monitoring of inputs (notably resource allocation and use), as well as processes and outputs, in addition to evaluating the outcomes of programmes/ projects.

  • fostering participatory M&E

  • improving coordination between CMAs and MDAs to strengthen demand for M&E.

6.3.1 Reinforcing institutional arrangements

The key institutions involved in the participatory M&E system includes: Office of the President, Parliament, NDPC, Ministry of Finance and Economic Planning, Ghana Statistical Service, PPMEDs of MDAs, National Inter-Agency Monitoring Groups, Regional Monitoring Groups, District Monitoring Groups and Civil Society Organisations. The technical responsibility for coordinating the system rests with NDPC in active collaboration with GSS.

In conformity with the decentralization policy, it is important that all district assemblies have staff on their team representing these two institutional components of the M&E system.

To ensure improved implementation of the M&E plan the institutional arrangements currently in place will be reviewed to identify ways of strengthening roles and institutional capacities.

6.3.2 Strengthening and effective coordination of existing mechanisms

Greater coordination is needed between the key government agencies including the Office of President, NDPC, MOFEP, GSS, MLGRD and the other MDAs. This includes better information flow and incentives for monitoring and evaluation at all levels. There is therefore the need to build the capacities and develop the expertise in these key institutions for effective coordination and sustainability of the M&E system.

6.3.3 Evolving an efficient system for evidence-based monitoring and evaluation:

Adopting an evidence-based M&E systems will mean ensuring a holistic approach to M&E that would include monitoring of inputs (notably resource allocation and use), as well as processes and outputs, in addition to evaluating the outcomes of programmes/ projects. Essential to the M&E plan is the selection of core indicators to be used in tracking the performance of the GPRS II implementation. Indicators will be disaggregated to a level appropriate for proper tracking of differential impact of poverty with respect to districts, gender, and ecological zones. Data collected during the implementation of GPRS I and other existing reports and surveys will form the basis for developing indicators, where appropriate, for GPRS II.

The Ghana Statistical Service (GSS) will oversee data collection and compilation activities across government institutions. The GSS will therefore continue to take the lead role in all major surveys and in the systematic compilation of statistics and indicators from all major sources of data, i.e., censuses, sample surveys, and administrative records.

A crucial component of evidence-based M&E is the management of effective feedback mechanisms which is in turn contingent upon a good data dissemination system founded on a comprehensive database. At present, though the Ghana Statistical Service does not produce enough statistics to meet the wide range of needs, the limited data available through censuses and surveys are underutilized, and are generally not made available to users who could add value to the statistics through their research and policy analysis. Moreover, most MDAs collect administrative information that can be processed to generate valuable statistics. More concerted effort would need to be made to harness the potentials of these rich sources of data.

The GhanaInfo will be the software for the compilation and dissemination of indicators required for monitoring GPRS II at the district, regional and national levels. A National Expenditure Tracking System (NETS) has been developed by the Ministry of Finance and Economic Planning and the Accountant General’s Department to capture all sources of public sector funds and expenditure. This system is being rolled out to MDAs. The NETS will serve as a useful link for the monitoring (at least on expenditure or inputs) of the implementation of the GPRS when harmonization of GPRS format with the MTEF budget format is completed.

6.3.4 Ensuring participatory monitoring and evaluation

Under GPRS II a participatory M&E mechanism will be implemented by deploying the knowledge resources of a wide of stakeholders including central and local governments, NGOs, civil society organisations, the private sector, the academic community and, especially, poor people themselves in the monitoring and evaluation processes. This will be achieved through consultative mechanisms including Citizen’s Report Cards and independent results elicited from the African Peer Review Mechanism (APRM) which periodically assesses the performance of Government interventions and their impact on growth and poverty reduction.

Dissemination of information on growth and poverty reduction will continue to be a key component of the monitoring and evaluation plan. Efforts will be made to ensure that timely information is available in the right form to meet the needs of stakeholders, including development partners.

Regular Bulletins will be prepared and disseminated by PPMEDs and MMDAs to inform stakeholders on the status of M&E activities. Annual Progress Reports (APRs) will continue to be produced in the first quarter of each year by the National Development Planning Commission. The report will summarise the movements of significant indicators during the year, including the Millennium Development Goals, the District Assemblies’ Common Fund, and the disbursement and utilization of HIPC funds.

A central repository of relevant documentation on the GPRS will be established at the NDPC.

CHAPTER SEVEN FINANCING THE GPRS II

7.1 The Resource Envelope

The resource envelope comprises both domestic and external sources of financing. In each of the four years within the GPRS II period, budgetary resources will constitute an average of 35 percent of annual GDP. Domestic revenue sources make up some 23 percent of GDP, while grants from bilateral and multilateral sources constitute about 5.5 percent of GDP. The remaining 6.5 percent is expected to come from divestiture receipts, programme loans and exceptional financing arrangements.

It is envisage that Ghana would gradually wean itself off excessive reliance on donor budgetary support. This will entail intensified domestic revenue mobilization that will not damage Ghana’s competitiveness within a tax framework ascertained as fair by taxpayers, especially by corporate enterprises. Although the potential for additional domestic resource mobilization appears to be circumscribed, efforts will be directed at increased tax revenue mobilization at the margin through three main areas, viz:

  • broadening the tax base to raise the tax – GDP ratio with minimal additional tax increases after critical impact analyses

  • elimination of exemptions and loopholes in the tax system, and

  • strengthening of tax administration, especially in areas where efficiency gains have not been fully explored exhausted, such as customs and the informal sector.

With regard to external inflows, it is expected that HIPC savings and other debt relief as well as resources from the Millennium Challenge Account will be channelled to augment domestic resources. Proceeds from the MCA Compact, in particular, will largely enhance the financing of transport and irrigation facilities required to promote integrated agricultural development. With the current improved sovereign ratings and the deepening and sustenance of political and economic governance, Ghana can take advantage of resources on the international capital market by issuing sovereign bonds.

Additionally, the financial environment is expected to improve significantly with the implementation of the Financial Sector Strategic Plan. This initiative will impact positively on the mobilization of domestic savings for the strengthening of the private sector. Two key policy instruments, namely, the long term savings schemes, and the Venture Capital funds will be instituted to strengthen the financial environment for the implementation of the GPRS II.

Table 7.1:

Medium Term Expenditure Framework - 2005-2009