Bridging the gaps: Reducing inequality and poverty through social reform

Broad economic growth and political stability have enabled Ghana to vastly improve living standards across the country in recent years, but reducing poverty and inequality remains one of its principal challenges. Recent government reform of the social sectors, particularly the introduction of the National Health Insurance Scheme (NHIS) in 2003, has yielded positive results, even if its medium- to longterm funding remains an issue (see Health chapter).

DEVELOPMENT INDICATORS: From 1990 to 2011 mortality rates in Ghana were reduced across the board, alongside a corresponding increase in the population’s life expectancy. According to statistics from the World Health Organisation’s 2013 Statistical Review, during the same time period, the neonatal mortality rate per 100 total births fell 25% from 32 to 24, while the infant mortality rate ( probability of dying before age 1 per 1000 live births) fell 31.6% from 76 to 52, and the under-five mortality rate dropped 35.5% from 121 per 1000 live births to 78. Meanwhile, the overall life expectancy in Ghana has increased 12.3% from 57 to 64. In each of these indicators Ghana places well ahead of averages of other countries on the African continent.

Meanwhile, figures from the UN Development Programme’s (UNDP) “Human Development Report 2013” also show Ghana as being ahead of the curve when compared to regional neighbours. Ghana’s human development index (HDI), a cumulative indicator that considers various data, including life expectancy, schooling and income, stands at of 0.558 and compares favourably with the regional average of 0.475. What is more, Ghana ranks among the top five countries in the world that are in the medium human development category and whose HDI ranking is greater than the country’s ranking in terms of gross national income (GNI) per capita. The 22-point difference between these two rankings for Ghana is indicative of a moderately efficient use of resources in terms of providing for basic standards of living.

GOVERNMENT SPENDING: Government spending, particularly in the health and education sectors, has increased significantly since the turn of the millennium, as efforts to improve the social wellbeing of the country’s citizenry continue to expand (see Health and Education chapter).

Total health care expenditure as a percentage of GDP increased from 4.7% to 5.2% from 2000 to 2010, while government expenditures on health as a percentage of the total budget increased from 8.3% to 12.1% during the same time frame. In effect, the government has taken over the role of primary health care provider for Ghana, as private participation in health care expenditures has dropped from 51.3% in 2000 to 41.8% in 2010.

HEALTH CARE DEVELOPMENTS: The passage of the National Health Insurance Scheme (NHIS) in 2003 marked a significant change in the structural framework of the sector by providing the entire country with access to more affordable health care.

Indeed, the NHIS has already provided services to 53.6% of the country’s population.

In addition to the NHIS’s very low subscriber premiums, the programme is funded through a variety of measures, including direct taxes, budget disbursements from the Social Security and National Insurance Trust and the general fund, and returns on investments (see Insurance chapter).

EDUCATION REFORM: The 2008 Education Act, which restructured the country’s public education scheme to include two years of kindergarten, six years of primary, three years of junior high and three years of high school, was the last major reorganisation of the system. While the overarching goal of Ghana’s successive administrations has been to achieve universal access to basic education, strides have also been made in improving the standards within the public school system.

The year 2012 bore witness to what could prove to be a critical reform after the completion of the Ghana Education Decentralisation Project, which was completed after two years of collaboration with the US Agency for International Development. The project seeks to shift decision-making power from federal entities, such as the Ministry of Education and the Ghana Education Service, to district- and school-level authorities – particularly when it comes to assessments pertaining to budget and personnel allocation (see Education chapter). Indeed, more efficient use of funding is one of the largest challenges as the Ministry of Education habitually receives the largest share of the national budget.

POVERTY: These improvements are the latest in a steady stream of policies that have sought to boost living standards and employment rates, and their effects have been by and large noticeable. Macroeconomic expansion over the past 20 years has seen the percentage of the population below the national poverty line fall from 51.7% in 1992 to 39.5% in 1998 and 28.5% in 2006, according to the latest available data from the World Bank.

Nevertheless, while economic growth has certainly had an impact on reducing the instances of poverty in the country, certain geographic and socioeconomic segments remain relatively isolated from the benefits of economic growth. Rural farmers, for example, particularly those in the drier northern regions of the country, have seen only small decreases in poverty levels over the past two decades because subsistence farmers lack the technology, finances and infrastructure to shift towards commercial agricultural development. Poverty within the rural population was last measured at 39.2% in 2006, having improved from 63.6% in 1992.

Though the most recent calculation of the nation’s Gini coefficient, whereby a score of 0 represents total equality and 1 corresponds to complete inequality, was reported by the UNDP’s “Human Development Report 2013” as 0.428, illustrating a comparatively equal income distribution amongst the population (South Africa, for example, ranks closer to 0.70), gender inequality in the country provides yet another obstacle to development.

GENDER INEQUALITY: The UNDP’s study found that Ghana ranks 121st worldwide in terms of gender inequality with a score of 0.565. Problems such as gender gaps in education, maternal mortality and a low representation of females in governing positions are all factors hindering the country’s ability to maximise its human resource potential. In addition, income equality amongst the genders, particularly in rural areas, is another of the main obstacles to reducing gender inequality in the country. For example, according to a 2012 study conducted by the Food and Agriculture Organisation of the UN, men receive five times more in wage employment than women in rural Ghana.

Ensuring that girls receive more than primary education is yet another issue authorities must face. Indeed, the Ministry of Education’s gender parity index, which reflects the gender difference between admission, enrolment and graduation rates in the public school system, decreases with the completion of each education level.

Several political changes to combat the problem at higher levels have taken place since the turn of the millennium, including the creation of a Ministry of Women and Children’s Affairs in 2001. Increasing female representation in government offices is also a frequently touted method of fighting gender inequality. However, despite increasing female representation within the national legislature – from 8.3% (19 of 230 seats) in 2008 to 10.2% (28 of 275 seats) in 2012 – women remain significantly underrepresented within government.

Although Ghana has had a number of female cabinet members in recent years, the ratification of an Affirmative Action (AA) Bill was designed specifically to address the issue of female representation in government; it is expected to be presented to the legislature in late 2013.

FORECAST: Though the road ahead may still be long, Ghana is certainly moving in the right direction. Just as the country’s economic and political progress is often portrayed as an example for the region, so too are its recent efforts to improve standards of living. In fact, Nigeria sent a 16-member delegation to Ghana’s National Health Insurance Authority to study how to better finance health care at home. Increases in government spending to improve the social livelihood of the nation are necessary to achieve its long-term socioeconomic goals.

However, structural reforms to the social sectors will continue to be pivotal in the effort to provide universal access to education and health care. Efforts aimed at reducing poverty and gender inequality are equally as important, with the expected ratification of the AA Bill representing a landmark piece of legislation. While the task of bridging the gaps within Ghana’s societal structure may indeed be daunting, the engineers appear to be well at work.