World Bank Predicts Increasing Poverty under Mills

Asare Otchere-Darko ,

- 500,000 GHANAIANS TO FALL BELOW POVERTY LINE BY 2010

“In 2009 and 2010 income poverty could rise further, as per capita private consumption growth is expected to fall,” says aWorld Bank report on Ghana, dated June 15, 2009.

The World Bank estimates that half a million more Ghanaians will fall below the poverty line by 2010.

The same report notes, “Ghana recorded very significantpoverty reduction between 1999 and 2006. The estimated proportion of the poor in the total population went down from 39 percent in 1999 to 29 percent in 2006.”

This should see Ghana’s population living in abject poverty go up again to at least 31% under President John Atta Mills, according to an article written by Asare “Gabby” Otchere-Darko, the Executive Director of the Danquah Institute.

At the same time unemployed Ghanaians and young graduates hoping to get a job in the public sector are rebuffed by a two-year net freeze on public sector recruitment, says Gabby.

The World Bank report on Ghana is for the Economic Governance and Poverty Reduction Credit of $300 million.

Explaining what may give rise to an increase in income poverty for the next two years, the World Bank refers to the tight fiscal policyit has persuaded the Mills government to implement. It says, poverty will rise further “because the planned macroeconomic adjustment entails increased cost recovery in the energy sector and increased taxation, staff forecasts aggregate per capita private consumption growth to fall, which will result in income poverty rising by as much as 2 percentage points between 2008 and 2010 (an additional 500,000 people below the poverty line at US$1.25 a day) assuming unchanged income distribution.”

Meanwhile, under the New Patriotic Party, the World Bank admits that “all major regions recorded reductions in poverty,” with some achieving them much more rapidly than others.

Unfortunately, the bulk of poverty has become concentrated in the three northern regions which now comprise about 80 percent of the poor.

Efforts to address the special needs of these lagging regions had been initiated in the recent past, and there are “ongoing efforts to amplify them in the context of an ambitious Savanna Accelerated Development initiative which is supported by several Development Partners (DPs) including the Bank,” the report adds.

Though the NPP has been portrayed by its political opponents as anti-poor, the World Bank admits that when “the domestic price of food rose substantially against that of non food items between November 2007 and July 2008,” the Kufuor administration, went ahead to protect the purchasing power of the poor with “tax exemptions on fuel and food instituted in 2008 and still operational, and by a scaling up of safety nets (including additional health and educational benefits, a new program of direct transfers to the ultra-poor, and subsidies for fertilizers in food insecure regions).”