Ghana’s main economic initiatives would do little to reduce poverty – UN expert warns

What IMANI intends to do about it

In the light of the sad verdict Mr. Philip Alston(Australia) the UN the Special Rapporteur on extreme poverty and human rights gave on Ghanaian government’s flagship economic policies,( see below) IMANI Africa will be conducting an audit of economic policies in Ghana with the goal of increasing economic freedom and prosperity on 16th July, 2018. Economic freedom, extended to all, has been shown to generate positive social and economic outcomes, including opportunity, diversification of the economy, increased economic growth, enhanced job creation, political stability, and the peaceful development of other freedoms.

The audit will be based on the Economic Freedom of the World Index. The index provides a comprehensive description of an economy, examining five economic policy dimensions: size of government, legal systems and property rights, sound money, freedom to trade internationally, and regulations. In detail, the index shows the current status of economic policy and how the policy can be improved. It also provides models of world class policy that, if implemented, would bring renewed growth and prosperity to Ghana. Details later.

Ghana’s flagship policies might well stimulate the country’s economy but they won’t do much to get rid of poverty, even though that is their stated aim, says a UN human rights expert.

1. “The Government claims that the economic stimulus provided by these programmes will automatically cut the country’s high rates of poverty and growing rates of urbanisation, but the main beneficiaries will be people with capital, and those who are politically well-connected,” said the UN Special Rapporteur on extreme poverty and human rights, Philip Alston.

2. Alston’s comments mark the presentation of his report to the UN Human Rights Council in Geneva on 21 June, on his 10-day fact-finding visit to Ghana in April 2018 during which he examined the country’s policies including “one factory, one district”, “one village, one dam”, and “one constituency, one million dollars”.

3. “There is nothing in the design of the schemes to suggest they are capable of generating the sort of large-scale employment opportunities, or training for unskilled workers that would be needed to make a significant contribution either to eliminating extreme poverty or relieving urban crowding,” Alston explained.

“Inequality in Ghana is on the rise. It’s estimated that the number of millionaires in Ghana will increase by 80 per cent in the next decade, while almost a quarter of the rest of the population will continue to live in poverty,” said the expert.

4.“Ghana currently spends only 1.4 percent of GDP on social protection. By comparison, other similar countries in sub-Saharan Africa spend 50 per cent more, or an average of 2.1 percent.

5. “Around 90 percent of spending by the Ministry of Gender, Children and Social Protections’ (the key Ministry for implementing social protection programmes) is said to come from donor partners. However, donors have indicated that social sector aid is very likely to fall in the context of the Government’s push for a ‘Ghana Beyond Aid’.

6. “This places the country’s vital social protection programmes at great risk of being eroded, unless dramatic steps are taken to change the existing approach. Even the IMF has stressed Ghana’s need to protect social spending,” warned Alston, who has recently released a separate report criticising the Fund.

7. “The bottom line in Ghana is that more revenue could very easily be generated if the political will existed, and even a small amount of it could be used to provide serious and sustainable financing for an expanded package of social protection measures that would make large inroads against poverty,” the Special Rapporteur stressed.