This article analyzes forms, structure, drivers and Implications of inequalities in Ghana; examines its political economy and suggests remedial policy options and challenges. Regarding economic inequalities, it shows that despite a general reduction in the incidence of income poverty, its depth has increased: with a wider income distribution gap between the poorest and richest households; marked disparities between the well-endowed South and the impoverished North; and a gendered bias in the distribution of wealth assets. Overall, the non-diversified nature of Ghana’s recent rapid growth has not boosted employment or reduced inequalities.
Ghana is known for its stability, good governance and relatively well-developed institutional capacities that support the gradual achievement of human rights. Having experienced steadily increasing economic growth of over 7% per year on average since 2005, Ghana attained lower-middle income country status in 2010. Income from offshore oil reserves discovered in 2007 began to flow in 2011, creating double-digit growth for the year. Accompanying income growth has been a rapid reduction in monetary poverty from 51.7% in 1992 to 24.2% of the population by 2013, meaning that Ghana has achieved the MDG 1 target.
The DFID-ESRC Growth Research Programme (DEGRP) produces a range of knowledge products which link the research of DEGRP to a number of research and policy debates on the following themes: agriculture; financial markets; and innovation and growth. The theme of structural transformation is the basis of much of the programme’s work; the concept involves productivity change through broad-based shifts in employment across sectors. This paper relates to the financial markets theme and draws together a number of essays that emerged from a public debate in Ghana on ‘What does it take to build a stable and efficient financial sector for sustaining growth and structural transformation in Africa?’
The lead speaker, Governor Wampah of the Central Bank of Ghana argued that by enabling greater diversification, risk sharing and investment in higher productivity activities, financial development can facilitate resource allocation and therefore, economic transformation. Efforts to develop the financial sector, according to him, should focus on enhancing depth, access, efficiency and stability. He argues that financial sector support to the real sector remains weak in many African countries, with corporate lending at the short end. There is also a lack of adequate competition, with an oligopolistic banking sector, leading to inefficient pricing of financial assets. He concluded that building a sound, stable and efficient financial sector is indispensable for sustained economic growth and structural transformation.
Many studies suggest that one of the main reasons for Africa’s dismal growth performance over most of the 20th century is its degree of ethnic fragmentation. Yet, there is still insufficient knowledge about whether ethnic diversity necessarily entails large economic costs, or whether the implications of diversity depend, inter alia, on the government’s approach toward the ethnic question. We note that economic growth tends to increase average incomes, but it also affects the income distribution. Then, if growth is accompanied by growing economic inequality, the perception of the impartiality of the government toward different ethnic groups is likely to be important for whether growth can be sustained, or whether sparks of growth will evaporate because of rising political divisions and internal conflicts. In this paper, we study whether the degree of ethnic impartiality in the government’s policies is related to the emergence of sustained growth in sub-Saharan Africa, irrespective of the actual content of the policies. We measure perceptions about the impartiality of the government with survey data from the Afrobarometer covering 20 countries starting in the late 1990 s. Our main definition of sustained growth is when there is a GDP per capita growth rate of at least 2% for at least five consecutive years. Our empirical results suggest that countries whose governments are perceived as impartial are more likely to experience sustained growth. We conclude that in order to ensure economic development, it is not only important to choose the ‘‘right” policies, but also to implement these policies in a fair manner.
A Summary Report of the Pan-African Conference on Inequalities in the Context of Structural Transformation that was held in Accra, Ghana 2014.
The main objective of this country case study is to provide information on the various forms of inequalities in Ghana, their structure, drivers and implications, as well as, to examine a range of policy options and lessons. Following this introduction, the rest of the sections is organised as follows. Section Two presents an analysis of key domains of inequalities in Ghana, focusing on the nature, dynamics and main drivers. Section Three looks at the political economy of inequalities in Ghana, emphasizing the role of colonial, political and traditional power, as well as challenges. A brief overview of data availability and challenges in accessing information is presented in Section Four. Section Five assesses the recent policy interventions and responses in addressing inequalities, with special emphasis on how the agenda for structural economic and social transformation might address inequalities. Summary of lessons learnt and policy challenges concludes the study in Section Six.The study is primarily based on secondary data sources including Ghana’s population censuses (2000 and 2010) and a host of the nationally representative sample surveys conducted in Ghana .
This report investigates the issue of income inequality in eight sub-Saharan African countries (Ghana, Kenya, Malawi, Nigeria, Sierra Leone, South Africa, Zambia and Zimbabwe). While there is growing public recognition that inequality is the issue for our time – both globally and in sub-Saharan Africa – there is little definitive analysis of income inequality trends on the continent. This report seeks to contribute in this area, looking at whether income inequality is, in fact, rising and in what context this is occurring. In particular, this report seeks to locate an analysis of tax systems in sub-Saharan Africa in the context of these economic inequalities, given the primary importance of national tax systems in redistributing wealth.
The report looks at national taxation systems and international taxation issues – and, critically, the relationship between them. In this way it reveals how the enabling environment for tax dodging impacts on national tax systems in sub-Saharan Africa. It also dissects the trends in revenue generation, tax equity and tax reforms across the eight countries. It has a special focus on the experiences of two countries – Kenya and South Africa – which have two of the stronger tax systems in sub-Saharan Africa but which also have extensive shortcomings in the area of tax equity.
The evidence gathered in this report shows that increasing income inequality should be of huge concern to governments in at least six out of the eight countries – Ghana, Nigeria, South Africa, Zambia, Kenya and Malawi. In Ghana and Nigeria, income inequality is rising strongly. In Nigeria, between 1986 and 2010, there has been a 75% increase in the concentration of income in the country. In Ghana there has been a 50% increase in the concentration of income over an 18-year period. In Zambia income inequality is now at its highest levels since data was collected. South Africa has one of the highest levels of inequality in the world and one which keeps increasing. The sharp rise in the incomes of the richest 5% is driving the increase at the top end. Yet there is no evidence of progress in tackling this inequality, or even much preoccupation with it, in South Africa’s new National Development Plan.
This paper generates analyses survey data on inequality among infants and children aged under five years by consumption in Brazil, Cote d’Ivoire, Ghana , Nepal, Nicaragua, Pakistan , the Philippines , South Africa and Viet Nam. The data were obtained from the Living Standards Measurement Study and the Cebu Longitudinal Health and Nutrition Survey . Mortality rates were estimated directly where complete fertility histories were available and indirectly otherwise. Mortality distributions were compared out for all pairwise intercountry comparisons, standards, errors, were calculated for the concentration indices; and tests of intercountry differences in inequality were performed .
Accounts by journalists of war in several countries of sub-Saharan Africa in the 1990s have raised concern that ethnic cleavages and overlapping religious and racial affiliations may widen inequalities in health and survival among ethnic groups throughout the region, particularly among children. Paradoxically, there has been no systematic examination of ethnic inequality in child survival chances across countries in the region. This paper uses survey data collected in the 1990s in 11 countries ( Central African Republic , Cote d Ivoire , Ghana, Kenya , Mali , Namibia , Niger , Rwanda , Senegal , Uganda and Zambia) to examine whether ethnic inequality in child mortality has been present and spreading in sub-Saharan Africa since 1980s. The focus was on one or two groups in each country which may have experienced distinct child health ans survival chances , compared to the rest of the national population as a result of their geographical location .
Studies on urban-rural mortality differentials in Sub-Saharan Africa show that overall mortality, and infant and child mortality in particular, is generally lower in urbanthan in rural areas. Various factors account for this, including the high concentration of salaried workers (who generally have higher incomes) in urban centers, better education in urban areas, the concentration of public infrastructure in urban areas that provides sanitation services, including water supply, household waste and excreta removal and disinfection, and hospital infrastructure, with health conditions that are more favorable in urban than in rural areas.
This paper discusses the factors likely to explain the observed urban-rural differences in infant and child mortality in Sub-Saharan Africa. The paper addresses five points: the first two discusses the factors likely to be associated with excess urban mortality; the third assesses recent trends in infant and child mortality in a few selected countries in Sub-Saharan Africa; the fourth point deals with the determinants of infant and child mortality, with emphasis on the role of urban-rural residence as a differentiating factor. The last point provides the most salient results and a few recommendations