Ghana - Development strategy for poverty reduction

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 20186 - GH REPUBLIC OF GHANA DEVELOPMENT STRATEGY FOR POVERTY REDUCTION March 8,2000 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.   FOR OFFICLIL USE ONLY REPUBLIC OF GHANA DEVELOPMENT STRATEGY FOR POVERTY REDUCTION Ministry of Finance Government of Ghana Accra, March 1, 2000 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.   DEVELOPMENT STRATEGY FOR POVERTY REDUCTION A. GHANA'S DEVELOPMENT STRATEGY AND PRIORITIES .................................................................1 STRATEGIC POLICY FRAMEWORK ................................................................. 1 POLITICAL DEVELOPMENTS ................................................................2.... B. POVERTY TRENDS IN GHANA IN THE 1990S ................................................................2.. POVERTY BY REGION ................................................................4.... POVERTY BY MAIN ECONOMIC ACTIVITY................................................................................................. POVERTY MEASURING AND MONITORING.............................................................................................. C. RECENT DEVELOPMENTS AND ECONOMIC OUTLOOK ........................................................................ D. STRATEGIES FOR POVERTY REDUCTION ................................................................. I.. THE COMPREHENSIVE DEVELOPMENT FRAMEWORK (CDF ............................................................... 9 E. POVERTY REDUCTION AGENDA FOR 2000-2002. 10 (I) SOCIAL SECTOR POLICIES AND EXPENDITURES .1 Social Sector Expenditure .l.. Education...1... Health .13.. Water.14... (Il) THE ACCELERATED AGRICULTURE GROWTH AND DEVELOPMENT STRATEGY .15 (III) COCOA SECTOR STRATEGY 16. (IV) IMPROVING INFRASTRUCTURE LJNKAGES. 17 (V) ENVIRONMENT .17.. (VI) PRIVATE SECTOR AND ENTERPRENEURIAL DEVELOPMENT. 1 (VIl) GOVERNANCE, FINANCIAL MANAGEMENT AND ANTI-CORRUPTION PROGRAMMES 19 Main Challenges . 19.. Anti-Corruption .20.. Public Financial Management Reform Programme (PUFM4RP) .21 Decentralisation .22. F. NEXT STEPS ................................................................... CONSULTATIVE PROCESS FOR THE PREPARATION OF GHANA - VISION 2020 ................................. 23 NATIONAL ECONOMIC FORUM .................................................................. 23.. PREPARATION OF THE POVERTY REDUCTION STRATEGY PAPER ..................................................... 2.4  LIST OF ABBREVIATIONS AND ACRONYMS ADR - Alternative Dispute Resolution AgSSIP - Agricultural Services Sector Investment Program BOG - Bank of Ghana BPEMS - Budget and Public Expenditure Management System CCA - Common Country Assessment CDF - Comprehensive Development Framework CG - Consultative Group CHRAJ - Commission on Human Rights and Administrative Justice CPRP - Country Poverty Reduction Programme CSOs - Civil Society Organisations CSPGs - Cross-Sectoral Planning Groups CWIQ - Core Welfare Indicators Questionnaire CWSA - Community Water and Sanitation Agency DACF - District Assemblies Common Fund DAs - District Assemblies DPCUs - District Planning Co-ordinating Units ESOP - Employee Share Ownership Programme GDHS - Ghana Demographic and Health Survey GDP - Gross Domestic Product GER - Gross Enrolment Ratio GIPC - Ghana Investment Promotion Centre GLSS - Ghana Living Standard Survey GOG - Government of Ghana GSS - Ghana Statistical Service GWCL - Ghana Water Company Limited IMCPR - Inter-Ministerial Committee on Poverty Reduction IMF - International Monetary Fund JSS - Junior Secondary School LBCs - Licensed Buying Companies MDAs - Ministries Departments and Agencies MOE - Ministry of Education MOFA - Ministry of Food and Agriculture MTADP - Medium Term Agricultural Development Programme MTEF - Medium Term Expenditure Framework NCTE - National Council on Tertiary Education NDPC - National Development Planning commission NGOs - Non-Governmental Organisations NIC - National Insurance Commission NIRP - National Institutional Renewal Programme NPRP - National Poverty Reduction Programme PIMES - Participatory Impact Monitoring and Evaluation System PMM - Poverty Monitoring and Measurement PPA - Participatory Poverty Assessment PPMEDs - Policy, Planning, Monitoring and Evaluation Divisions PRSP - Poverty Reduction Strategy Paper PRU - Poverty Reduction Unit PUFMARP - Public Financial Management Reform Programme PURC - Public Utilities Regulatory Commission PUSERMOS- Public Sector Reinvention and Modernisation Strategy REPOs - Repurchase Agreements  SAP - Structural Adjustment Programme SFO - Serious Fraud Office SIF - Social Investment Fund SOEs - State Owned Enterprises SRC - Securities Regulatory Commission SSS - Senior Secondary School TCOP - Technical Committee on Poverty UN - United Nations UNDAF - United Nations Development Assistance Framework VAT - Value Added Tax VIP - Village Infrastructure Programme   A. Ghana's Development Strategy and Priorities Strategic Policy Framework 1. The overriding aim of the GoG's economic development programme is the reduction of poverty and general improvement in the welfare of Ghanaians. Developed in 1995, the strategy for poverty reduction lays emphasis on economic growth, integrated rural development, the expansion of employment opportunities, and improved access by the rural and urban poor to basic public services such as education, health care, water and sanitation, and family planning services. Principal objectives of the strategy include attaining: * a reduction in the incidence of poverty in both rural and urban areas; strengthened capabilities of the poor and vulnerable to earn income; a reduced gender and geographical and socio-economic disparities; and * a healthier, better educated and more productive population. 2. Principal elements of the strategy to achieve these objectives include: . accelerating economic growth through the balanced implementation of sound fiscal, monetary, and other macroeconomic policies; astrengthening the agricultural sector to make it more productive through the use of more modern farming methods and marketing practices; I  * broadening and deepening the maufacturing and services sectors in order to create new business opportunities as well as increase urban and rural employment opportunities; * increasing investment in human resources through improving the quality of and access to nutrition, education, health, water and sanitation services; * encouraging the development of an indigenous entrepreneurial class through improving access to training, financial services, credit and local and foreign markets; and * reducing the isolation of poor communities through strengthening economic infrastructure such as roads and communications networks. Political Developments 3. Ghana continues to have a high degree of political consensus on the broad direction of economic policy. In fact, consensus building on key policy issues on education, the economy and health, among others, by all stakeholders has been promoted by the Government, since 1996. Almost all the political parties are committed to implementing reforms that will accelerate growth and reduce poverty. The fundamental differences lie only in what policy options should be chosen in attaining the growth and development goals outlined in theGhana - Vision 2020 document. 4. Ghana's democratic process has been deepened since the last presidential and parliamentary elections in 1996. On the whole, Ghana has what it takes to make the democratic process more effective and efficient. The next elections are scheduled for December 2000 and all the political parties in the country are working towards full participation in the process. The voters register will be re-opened in April and all eligible voters are to be given photo voter identity cards. There is an active and unfettered media and the independence of the judiciary has not only been guaranteed by the constitution, but also remains a facet of Ghana's political order. B. Poverty Trends in Ghana in the 1990s 5. The overall trend in poverty during the 1990s has been broadly favourable in Ghana. Taking the upper poverty line of