Socio-Economic Development, Cost Of Putting New Wine In Old Bottle

The Ghanaian economy continues to experience growing and deepening levels of poverty with evidence of escalation among some social and occupational groups. Ghanaian workers, especially women and the youth are still stuck below the poverty line with little prospects of clawing ever out of these dark depths.

Governments since independence have pursued various policies to accelerate the growth of the economy and improve living standards. However, the challenges of economic mismanagement and weak social cohesion, has intensified the brunt of poverty in recent years. The situasion remains precarius as the agro-based economy battles high rates of inflation, depreciation of the cedi, energy crisis, and excessive public debt burden.

The Ghanaian economy under successive governments was not without these challenges though. Addressing these challenges and guiding the economic evolution of the country, has meant the implementation of several economic development policies noticeably, The Economic Recovery Programme, Structural Adjustment Programmes, HIPC Initiative and the Ghana Poverty Reduction Strategy (GPRS I & II).

Rhetoric and Reality

The GPRS policy framework was formulated to arrest rising poverty through the effective implementation of programmes which had the capacity to support fiscal and monetary policies. More importantly, to promote sustainable economic growth and realign a distorted macroeconomic environment.

The implementation of the GPRS I and II, especially between the periods of 2003 and 2009, did not significantly impact livelihoods as promised. Indeed, very little, for example was done to sustain and modernise agriculture, the mainstay of our economy.

As a result growth remained stagnant deepening poverty in many parts of the country, predominantly in the Savannah and Coastal regions of Ghana.

Although some growth occurred in the services and mining sectors, Ghana still recorded a marginal increase in real GDP as it went up from 6.2 percent in 2006 to 6.5 per cent in 2007.

The increase was not largely attributed to an effective implementation of GPRS I & II but rather to a general increase in government consumption spending and investment.

These economic gains however shimmered under heightened global economic crisis significantly declining real per capita growth rate in 2009. Consequently, Ghana recorded a budget deficit of 940.75 million U.S Dollars for the first time as the total import bill rose.

With the agricultural sector still generating some 33 per cent of total national ouput, albeit the many daunting challenges it faced.

In 2010, The Ghana Shared Growth and Development Agenda (GSGDA) , emerged to deal with the fiscal deficits and external shocks that the global upsurge of crude oil and food prices brought about.

With the implementation of the GSGDA, economic growth doubled in 2010, increasing rapidly from 7.7 per cent to 14.4 per cent in 2011. But the growth rate was by reason of oil exports which commenced around that period.

Though the economic gains made from the oil exports, were significant, Ghana’s end- of- the year inflation still continued to rise spiralling the macroeconomic environment out of control.

It is argued in many circles that falling interest rates recorded around that period were but indications of a readjusted macroeconomic environment. This is quite incorrect because the current exchange rate developments are still constituted by the cedi falling against the U.S dollar and other major currencies.

How has the macroeconomic environment realigned under these developments?. One thing for sure, with the attendent problems of the cedi depreciation, is a consistent deterioration of the overall balance of payments, worsening Ghana’s account deficits- a problem that the GSGDA was meant to square off. So clearly, with the employment of the GSGDA development framework, the key structural challenges of the past persist and poverty grows.

Although the Ghana Living Standards Surveys (GLSS) show a continued fall in poverty from 51.7 per cent to 28.7 per cent in the Forest zones and other cocoa producing communities, the situasion deteriorates in the fishing and food –producing communities of the North, Central and Greater Accra regions.

How may we exonerate ourselves from a vulgar hypothesis that high geographical disparity exists in all the poverty reduction strategies we have adopted and implemented since independence?.

Notwithstanding the improvements recorded in economic growth, unemployment rate among the youth continues to streak upwards in all parts of the country.

Way Forward

These disturbing developments require an urgent policy response for a more inclusive and sustainable economic growth. With the formulation and implementation of a new development framework, inclusive economic growth could easily be realised.

As lessons learnt and valuable experiences of the past strategies would guide present programmes. Future policy frameworks, should consequently focus on equitable income distribution, enjoining the full participation of the have nots- especially the youth, women and persons with disabilities in all regions.

The previous development policy frameworks to some extent had been characterised by growing inequalities and exclusion among Ghanains leaving many vulnerable and poor inspite of growing national prosperity. Pursuing a fresh economic growth strategy, and avoiding the mistakes of the past would boost economic growth and development, ensuring Social cohesion in a nation deeply polarised along Partisan divides.