The Ghana Poverty Reduction Strategy (GPRS): ISODEC’s Position Paper
Source: ISODEC
To qualify for the IMF’s Poverty Reduction and Growth Facility (PRGF) and assistance from the soft-loan window of the World Bank (the IDA) or the Regional Development Bank, Ghana was required to prepare a Poverty Reduction Strategy Paper (PRSP). After some hurried preparation, the IMF and World Bank boards gave their blessing to the document in February 2001 as part of the process in reaching the HIPC decision point.
The paper concludes that the PRSP process in Ghana and the development of the Ghana Poverty Reduction Strategy has generally been participatory and country-generated. However, this was done within the conditions laid down by the donor community for preparing PRSPs. As such, policies such as privatization and full cost recovery of utility services and basic social services as well as full trade liberalization have not been reviewed in spite of general dissatisfaction from the majority of Ghanaians. If poverty is to be reduced in this atmosphere then it is necessary to put in place social safety nets to assist poor households to maintain minimum consumption levels and access to basic social services.
Funding is the major constraint of the GPRS as resources generated internally are grossly inadequate while foreign debt has become unsustainable. The government has tied its hands further by committing to the condition that the funding should not be inflationary (monetary policies), should not lead to an unsustainable debt overhang (external borrowing), and should not lead to the crowding out of the private sector (domestic borrowing). No matter how beautiful the programmes are they will remain on the drawing board if we don’t get the necessary funding. This calls for a more efficient use of all resources at our disposal. The HIPC resources (if we get them) must be used to support the programmes in the GPRS. The Poverty Fund that is created should be open to public scrutiny, as past experience has shown that such funds can easily be diverted for political purposes. Local government
authorities must be given more resources, but with the necessary capacity, to implement poverty reducing programmes and projects with civil society oversight. For the tracking of poverty reducing expenditures, transparency is a necessary prescription and the involvement of all and sundry is a basic requirement for success in the implementation of the GPRS.
However, even before the GPRS has taken off, another initiative, the New Economic Partnership for African Development (NEPAD) is underway and has already been hailed as the solution to Africa’s problems: good social amenities, strengthened infrastructure base, information and technological advancement and efficient and reliable but affordable energy to spearhead growth in 2025. It remains to be seen whether the GPRS is another of those policy initiatives that have yielded no results for Ghana or there is going to be a change this time.
Click here to read the full report