500,000 Ghanaians could fall into poverty by 2010

Ghana is used an African success story and for good reason. The country had a great reduction in poverty from 1999 to 2006. The percentage of those in poverty in Ghana was at 36 percent but is now at 29 percent.

Now the World Bank predicts that 500,000 Ghanaians could fall back under the poverty line by 2010. In fact, the bank admits a policy that the bank persuaded the Ghanaian government to follow could contribute to the increase. The bank hopes that could turn around in the long term.

From Modern Ghana, this Stateman article quotes a World Bank report on the situatiuon.

Explaining what may give rise to an increase in income poverty for the next two years, the World Bank refers to the tight fiscal policy it 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).”