Poverty Reduction in Ghana
Poverty Reduction in Ghana

Income has become more unevenly distributed in Ghana as the richest constituting 10 percent of the population receive more than double the wealth of the poorest who are 40 percent of the population, a study has shown .

In the same vein, government spending on the poor sectors of the society has also declined added the study conducted by Africa Center for Energy Policy (ACEP) launched here late Wednesday..

Presenting parts of the findings under a sub-regional project initiated by global charity, Oxfam to study the link between fiscal policy and social inequality in three West African countries of Ghana, Sierra Leone and Burkina Faso Alhassan Idrissu, Head of Programs at ACEP pointed out that the drop in public spending on social protection was in line with the lower revenue out-turn in Ghana.

“Spending on health declined to 8.0 percent in 2016 compared with 11 percent in 2014; resulting in spending per person of 32 US Dollars compared with the global standard of 87 dollars. Educational spending also decreased marginally to 17 percent in 2016 compared with 18 percent in 2014,” Iddrisu revealed among many other examples.

He added: Fundamental to the widening inequality arising from spending deficit is that revenue mobilization through taxation has been low and regressive. “

Ghana collects 55 percent of its tax revenue from indirect sources such as Value Added Tax(VAT), excise duty and custom duties with Revenue to Gross Domestic Product (GDP) ratio standing below 16 percent as of 2017.

On his part, Magnus Ebo Duncan, Senior Research Fellow at Institute of Fiscal Studies (IFS) pointed out that just as Ghana’s poverty rate had been reducing since 1092, so also has the inequality gap been widening.

Ghana reduced its poverty rate to 24.2 percent by 2013 from 56.5 percent in 1992 under the Millennium Development Goals (MDGs) , but over the same period, the inequality gap widened to 40.9 percent in 2013 over the 37.2 percent recorded in 1992.

“Inequality between the North and South of Ghana has also increased over the years, although with a decline since 2006. The North continues to be more unequal than the South,” Duncan observed.

He said the major tool that can be used to reduce inequality is the annual budget f government as it can be used to target vulnerable groups for support.

Spending focused on increasing access to education and health, the expert said can enhance social mobility and help break the inter-generational transmission of poverty; “Expanding access for disadvantaged groups will also enhance the progressivity of public spending.” Enditem


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