Simulating the Impact of the Global Economic Crisis and Policy Responses on Children in Ghana

Like many countries in sub-Saharan Africa, Ghana is experiencing the impact of the global crisis and the uncertain economic outlook. Indeed, as Ghana’s economy is among the most open in Africa, it is expected that the country has been and will continue to be severely affected by the crisis, although strong export prices of its main exports (gold and cocoa) may at least partially counteract the effects associated with the crisis. The main goal of this paper is to understand the potential impacts of the 2008/9 global crisis on different dimensions of child poverty (monetary, hunger, school participation, child labour and access to health services) in Ghana and to support the policy-maker in designing the most appropriate policy response to counteract the negative effects of the crisis. As timely data are not available, a combined macro-micro economic model to predict the impact of the global crisis on children was developed. Simulations suggest that the financial crisis would increase monetary poverty and hunger across all regions of Ghana, eroding many of the gains made over the past few years. Indeed, in comparison with the year preceding the crisis, instead of a reduction of four percentage points in child monetary poverty in 2011 predicted in the absence of crisis, the simulations indicate a 6.6 percentage point increase, with a continuous increasing pattern over the period of study. The global crisis is also predicted to severely deepen hunger among children, which is simulated to increase up to 6.6 percentage points in 2011 beginning with a sharp increase already in 2009. For both monetary poverty and hunger, the impact of the crisis differs across all regions, with the Eastern, Volta and Greater Accra regions predicted to be the most affected. Children’s participation in schooling and labour, as well as their access to health services, are forecast to be much less affected by the crisis, although it is found to reverse predicted increases in enrolment and health access (with substitution toward more modern types of health services) and forecasted reductions in child labour. Finally, alternative policy options have been simulated: a cash transfer programme targeted to poor children is found to be generally more effective in protecting children than food subsidies. Indeed, with a total budget equivalent to 1% of 2008 GDP, a cash transfer – equivalent to an individual annual amount of 19.8 Cedis – would cut the predicted increase in monetary poverty by over two percentage points in 2011. Although Ghana might be in a position to rapidly implement a cash transfer programme building on the existing Livelihood Empowerment against Poverty (LEAP) programme, other interventions (or mix of policies) might be more cost-effective in the short run. A combination of a universal or regionally targeted cash transfer programmes for children aged 0 to 5 years old, together with a school-feeding programme in poorer regions, might represent an effective way to intervene quickly to improve child well-being.Global economic crisis, child poverty, hunger, education, child labour, health, West and Central Africa, Ghana, social protection

Correlates of flood preparedness in urban households: Evidence from the Greater Accra Metropolitan Area of Ghana

The annual floods in cities in Sub-Saharan Africa are exacerbated by the impacts of climate change. For coastal cities double flood burden from storms and sea level rise are phenomenal and in response, data is gradually emerging on the exposure of urban areas and households’ adaptation of which population determinants are mostly omitted. This paper uses a household survey of flood experiences, analyzed with the Tobit model to understand the social and demographic factors that drive households' preparedness for floods in the Greater Accra Metropolitan Area in Ghana. Findings show that the age and income of the household head and planned adaptation significantly increased the likelihood of households’ preparedness for floods. While community access to financial assistance reduced the likelihood of household preparedness, membership in social support groups and the availability of community-level social amenities and shelters increased the likelihood of household preparedness by 0.81 units (p<0.05), 1.72 units (p<0.01) and 1.33 units (p<0.01) respectively. Therefore, enhanced education and awareness of flood risks are major factors of flood disaster risk reduction amidst neighborhood networks towards scaling the relevance of anticipatory flood contingency planning in coastal urban planning and management and a recipe for mainstreaming the Sendai Framework for Disaster Risk Reduction

Microenterprise financing preference: Testing POH within the context of Ghana's rural financial market

Purpose – The purpose of this paper is to investigate the determinants of financing preference of micro and small enterprises (MSEs) whilst distinguishing a broader range of financing sources beyond what is typically the case within the corporate finance literature. Design/methodology/approach – Under the framework of ordinal logistic regression, the paper also tests whether there is evidence of hierarchical preference ordering as predicted by pecking order theory (POH) using field survey data for 2009. Findings – The authors relate that new enterprises are more likely to prefer low cost and less risky or less formal financing such as internal or bootstrap finances. However, as the enterprise gets established or matures, its capacity to seek formal financing increases, thereby becoming more likely to prefer or being in a higher category of formal financing. While the paper affirms the POH, it is argued that this order is a consequence of severe persistent constraints other than sheer preference. The findings further reveal that, microentrepreneur's and MSE's-specific level socio-economic characteristics such as owner's education or financial literacy status, households tangible assets, ownership structure, enterprise size, as well as sensitivity to high interest rates in the credit market, to be important determinants of either past (start-up), present or future financing preference. Originality/value – The main value of this paper is to analyse the determinants of financing preference of MSEs within the context of rural financial market (RFM) from a developing country perspective.Developing countries, Financing, Financing preference, Ghana, Micro enterprises, Pecking order theory, Small enterprises

The Effect of Foreign Aid on Economic Growth in Ghana

This paper uses time series data from 1972 to 2012 on Ghana to test the hypothesis that foreign aid can promote growth in developing countries. The ARDL approach to cointegration (bounds test) was employed to examine both the long run and short run relationships between aid and economic growth. The results of the bounds test showed that there is cointegration between foreign aid and economic growth in Ghana. This was further confirmed by the error correction term which was very significant and correctly signed. The error correction term showed that the speed of convergence to long run equilibrium is moderate. From the results, labour, capital and government expenditure have positive impact on economic growth in Ghana in both the long run and the short run whereas foreign aid and interest payment on external debt have negative impact on growth. In order to derive a positive benefit of foreign aid, we recommend the provision of economic aid which is geared towards capital formation and skills development of labour through education and training rather than political aid since the results show that capital and labour have positive impact on economic growth. We also recommend the provision of more grants and less loans as aid to Ghana because interest payment on external debt has been found in the study to have negative effect on economic growth because most foreign aid are not invested in projects with direct future cash flows

Multi-Vector Approach to Cities’ Transition to Low-Carbon Emission Developments

Globally, cities have made efforts to shift to low-carbon emission development (LED), amidst air pollution, greenhouse gas (GHG) emissions, and high temperature anomalies. However, the emphasis on cities to help shift the global economy to LED has been on a single individual sector approach operating in silos rather than the inter and intra-specific outcomes of multiple sectors. Thus, there are uncertainties of adopting suitable pathways for cities&rsquo; transition to LED, due largely to data paucity and policy incoherence, constrained further by barriers to integrating science, policy, and practice. Hence, the need for cities to take advantage of the benefits of multi-directional perspectives of multiple sectors acting together&mdash;the &ldquo;multi-vector&rdquo; approach, to confront key questions of climate compatible development (CCD) that support LED. Therefore, the paper extends the development narratives of the CCD approach to an &ldquo;enhanced&rdquo; climate compatible development (EnCCD) pathway with in-built questions and determinants to scope cities&rsquo; transition to LED. The EnCCD suggests that the standalone intersection between mitigation and development to deliver LED will not result in cities&rsquo; resilience unless (i) co-benefits, which are outcomes of mitigation and adaptation, and (ii) climate-resilient development, the product of adaptation and development, coevolved. Therefore, the EnCCD transforms the development policy focus of cities on separate, single-purpose sectors, such as energy or transport, into multi-sector portfolios having synergistic benefits of mitigation, adaptation, and development strategies

Simulating the Impact of the Global Economic Crisis and Policy Responses on Children in Ghana

Like many countries in sub-Saharan Africa, Ghana is experiencing the impact of the global crisis and the uncertain economic outlook. Indeed, as Ghana’s economy is among the most open in Africa, it is expected that the country has been and will continue to be severely affected by the crisis, although strong export prices of its main exports (gold and cocoa) may at least partially counteract the effects associated with the crisis. The main goal of this paper is to understand the potential impacts of the 2008/9 global crisis on different dimensions of child poverty (monetary, hunger, school participation, child labour and access to health services) in Ghana and to support the policy-maker in designing the most appropriate policy response to counteract the negative effects of the crisis. As timely data are not available, a combined macro-micro economic model to predict the impact of the global crisis on children was developed. Simulations suggest that the financial crisis would increase monetary poverty and hunger across all regions of Ghana, eroding many of the gains made over the past few years. Indeed, in comparison with the year preceding the crisis, instead of a reduction of four percentage points in child monetary poverty in 2011 predicted in the absence of crisis, the simulations indicate a 6.6 percentage point increase, with a continuous increasing pattern over the period of study.child education; child health; child labour; child poverty; econometric models; economic crisis; hunger; social protection;