Pro-poor fund set up to fight poverty

Accra (Greater Accra) 8th Sept. '99 - The Government, in collaboration with multilateral agencies, has created a new body - Social Investment Fund (SIF)- to evolve mechanisms for fighting poverty from the community level. The Fund, which is supported by the African Development Bank and the United Nations Development Programme (UNDP), will be used to support social programmes aimed at reducing poverty.

With a resource base of 18.6 million dollars (about 48 billion cedis), the Fund will be disbursed within five years to facilitate access of the poor to basic economic and social infrastructure and services at the community level. It is also expected to enhance access of the poor to financial support through small-scale money lending institutions and credit unions such as "Susu" collectors.

At a seminar to out-door the SIF, a company limited by guarantee and governed by board of directors, in Accra on Tuesday, Dr Kobena Erbynn, chairman of the SIF Board, said the Fund marks a sharp deviation from the previous "uncoordinated approach" to poverty reduction. He said SIF is an important vehicle of channelling funding to needy areas through sub-projects that seek to improve the livelihood of the poor. "SIF is not a fund to provide assistance to a single individual. It provides support for sub-projects in communities proposed by community-based organisations."

Dr Erbynn, who is Chairman of the National Development Planning Commission, said the sub-projects would include provision of potable water, small-scale irrigation, agro-processing and school rehabilitation projects, sanitation and improvement in quality education, primary health care and nutrition. He said food security and nutrition would be the entry point to poverty reduction since malnutrition could stunt growth and affect the development of the brain, which would undermine national manpower development effort. "SIF is a major breakthrough for us because poverty reduction is the core of the nation's development agenda, and for once everything possible will be done to ensure that we succeed."

There have been several projects towards reducing poverty since the structural adjustment programme started in 1984. Prominent among them was the Programme of Actions to Mitigate the Social Cost of Adjustment (PAMSCAD) instituted by the World Bank to reduce the shocks of the adjustment.

Dr Erbynn said a lot of lessons have been learnt from previous programmes, which were unsuccessful, and SIF would avoid the pitfalls as they come. Some of the pitfalls of previous programmes, he said, were that while huge sums went into consultancy and capacity building, only 19 per cent of funds went into the poverty reduction project. Community ownership of such projects was not the case in the past. Dr Isaac Chivore, acting Resident Representative of the UNDP, said a concerted effort from all stakeholders as well as the involvement of the poor was required to effectively tackle poverty reduction in Ghana. "It calls for modesty on our part, compassion and, above all, sound judgement in handling the scanty resources made available to support the productive poor," he said, adding that poverty reduction goes beyond the provision of physical infrastructure.

The UNDP Director said SIF, therefore, is to bridge a gap in the chain of reactions to reduce poverty. Mr Opoku Agyemang, Executive Director of SIF, traced the genesis of the Fund to the 1980s in some South American countries - Bolivia, Brazil, Chile, Argentina - where it was successful. In the 1990s it trickled down to Eastern Europe, Asia, Middle East and Africa. He said factors that led to the creation of the fund included high economic growth from structural reforms but which deepened poverty in some geographic areas and debt crisis that increased poverty. Mr Agyemang said the striking feature of SIF is its bottom-up approach that directly involves beneficiaries in identifying and implementing projects. Ghana, in spite of the high economic growth and success from the economic reforms, still contends with about 32 per cent of its population below the poverty line or spend under 200,000 cedis in a year.