Ghana

GHANA PRESENTS interesting scenarios for understanding the complexity and difficulty of analyzing poverty in Africa. Ghana is one of the least-developed countries in the world, according to standards set by the United Nations. To put it into perspective, the poverty rate was 46 percent in 1994 and decreased to 39 percent in 2000; it was 40 percent at the end of 2004. It should be noted that the population in 1994 was about 18 million and in 2004 it was 20 million. The type of economy in Ghana will partly explain the level of poverty.

The economy is heavily dependent on subsistence agriculture that is carried on by mostly illiterate rural folks. According to 1999 estimates, 60 percent of the workforce were employed in agriculture and contributed about 60 percent of the Gross Domestic Product (GDP). In contrast, industry accounted for 15 percent of GDP, and services 25 percent. Unemployment has always been high, standing at 20 percent in 1997. High unemployment rates have coupled with an inflationary rate of 13 percent.

The result has been that many Ghanaians depend on remittances by those living abroad, reflected in the fact that in 2004 alone, Ghanaians working in other countries made remittances totaling $1.5 billion. This is money in individuals’ pockets that increases their purchasing power, hence the unusually high GDP per capita of $1,305, although in essence people who live this way live precariously.

Other manifestations of poverty in Ghana include the high level of illiteracy and inadequate healthcare facilities, especially in rural areas. Nationally, the literacy rate stands at 73 percent. Government expenditure on education is only 2.8 percent of GDP, in spite of high-sounding rhetoric of reform of the education sector enunciated in Vision 2020. Similarly, patient-to-doctor ratios are disappointingly low, even in urban areas, while people in rural areas do not see actual doctors where there are clinics. Health superintendents who do not have the expertise to diagnose complex health problems man rural healthcare centers. Government allocates two percent of GDP to the health sector. Understandably, life expectancy is low. According to World Health Organization figures for 2002, life expectancy at birth is 57 and 60 years for males and females respectively, while infant mortality per 1,000 births is 352 for boys and 295 for girls.

In spite of this appalling picture, the international donor community holds Ghana up as a model of growth and stability in sub-Saharan Africa. Shortly after passing the African Growth and Opportunity Act (AGOA) in 2000, the U.S. government declared Ghana eligible. Similarly, Ghana has since 2001 been admitted to the World Bank's Highly Indebted Poor Countries (HIPC) initiative. Thus we are left with an obvious conundrum. The country with nearly half the population living in poverty is also held up as a model of growth and hope.

There are two ways to understand the situation. The first relates to Ghana's former colonial status and what that has meant for its place in the global political economy. An erudite Ghanaian put it best when he said that Ghanaians under colonial rule were encouraged to “produce what they do not consume and consume what they do not produce.” Ghana is endowed with natural and human resources, two of three essential elements needed to start a process of industrialization.

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