ECONOMY: Ghana’s Poverty Rate Fell from 53% to 21% Between 1991 & 2012, How Can We Sustain This?

On the road to middle class: A look back and a look ahead for Ghana. Vasco Molini discusses how Ghana's poverty rate has fallen and how the country can sustain.
I have vivid memories of my first trip to Ghana.
It was in July 2006 and I was in the country to do a research on Ghanaian farmers. It was in Accra, where I watched my team, Italy, win the FIFA World Cup final against France. Other than being a lucky charm to me, I thought Accra was a nice and safe town but,I felt that it had the potential to grow.
When I came back seven years later, I was pleasantly surprised by the changes. The city was dotted with new buildings, new roads, and had a really buoyant atmosphere. Of course, Accra is not representative of the whole country, but according to a recent report that Pierella Paci and I presented in October, growth and poverty reduction have been widespread in the country.
Now you may ask as to how Ghana was able to achieve this. In our report, Poverty Reduction in Ghana: Progress and Challenges, we show that sustained and inclusive growth in the last twenty years has allowed Ghana to more than halve its poverty rate, from 52.6% to 21.4% between 1991 and 2012. ( Note: For comparing 1991 and 2012 poverty rates for both absolute and extreme poverty, the study used the 1999 poverty line. Official poverty rates use the new poverty line re-based in 2013. )
The impact of rapid growth on poverty has been far stronger in Ghana than elsewhere in Sub-Saharan Africa. Indeed, until 2005 for every 1% increase in GDP In Ghana, the incidence of poverty fell by 2.5% — far above the Sub-Saharan average of 1.6%.
Its remarkable achievements in poverty reduction were made possible by diversifying the economy beyond agriculture while improving access to basic services, including education, health and Electricity . This is reflected in the raising skill-set and educational attainment of the Ghanaian labor force, which has become increasingly mobile as the economy continues to shift out of agriculture and rapid urbanization encourages greater employment in services and, to a lesser extent, industry. Meanwhile, improvements in agricultural productivity, driven in particular by cocoa and other cash crops, have facilitated structural transformation, though the sector still remains the main source of employment in the country.
As our report warns, however, future efforts to lower the incidence of poverty in Ghana will require containing regional disparities and vulnerabilities, as well as broadening access to opportunities for all citizens, particularly those in the north.
Indeed, location has been found to be a major contributor to poverty in Ghana. Case in point – the rising income inequality between north and south is a striking demonstration of diverging employment opportunities across the regions. While poverty rates have fallen below 20% in the large area that spans Ashanti, eastern, Greater Accra and western regions, southern Brong Ahafo and coastal Volta regions, rates remain far above 40% in most northern districts.