Income inequality across regions increases

Accra, Sept. 10, GNA - Despite Ghana's recent gains in growth performance and poverty reduction, income inequality across regions and between men and women remained high.

According to a World Bank Country Economic Memorandum (CEM) report, although women's major roles benefit the society, they continue to earn much less than men, and poor women were the most economically vulnerable.

The inequalities, the report said, remained potent sources of political and social tensions, which needed to be tackled immediately. Mr Zeljko Bogetic, Task Team Manager of CEM, presenting the report at a forum on Monday, said while all main income groups - from the poorest to the richest - had benefited from the economic expansion since 1990s, the gains by the poorest were much lower than those of the rest of society.

The four-day forum was organised by the World Bank and the Government of Ghana on the theme, " Meeting the Challenge of Accelerated and Shared Growth in Ghana - Country Economic Memorandum Dissemination." Mr Bogetic said, while all regions saw gains in incomes and a reduction in poverty, the gains and poverty reduction were much less pronounced in the Northern Regions of Ghana.

He said the report had identified gaps in infrastructure, low productivity and weak business and investment climate as constraints that, if eliminated, would help Ghana sustain and accelerate growth and poverty reduction in the future.

He said to overcome the constraints, it was necessary to improve the overall policy environment in macroeconomic policy, especially in the fiscal and monetary management, efficiency, and sector policies. "There is the need for Ghana to eliminate infrastructure bottlenecks and widening the use of technology and Information Communication Technology and transferring to other agriculture sectors, the lessons from recent productivity gains in the cocoa sector", he said.

Mr. Bogetic stressed the need to introduce to the public sector, a new value-for-money and productivity-enhancing mindset that would lead to better use of resources and wider space for private sector innovation in the new technology-intensive sectors that offer opportunity for increased productivity.

In general, he said Ghana's policies had been good and its institutional capacity continued to improve, however, there were clear bottlenecks in the provision of public goods, such as infrastructure that threatened the ongoing economic expansion.

Mr Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning, said Ghana Poverty reduction Strategy II was to ensure accelerated growth of the economy through continued macroeconomic stability, a vibrant private sector, and vigorous human resources development underpinned by deepening good governance and civic responsibility. To this end, he said, government's policies, programmes and activities had been geared toward addressing the structural constraints at the policy and institutional levels that impede increased productivity, adoption of new technology, and competitiveness of the private sector in relation to the major sector of the economy. Mr. Baah-Wiredu said as Ghana took ownership for the achievements so far, "we are happy that the World Bank is helping to point out areas where we may improve upon to achieve our desired goals". He gave the assurance that government would endeavour to address issues in the report in the 2008 budget.