Long-term growth hinges on structural reforms – World Bank

On the occasion of End Poverty Day, World Bank Country Director, Pierre Laporte has underscored the importance of structural reforms in securing the country’s long-term economic growth prospects.

Speaking at an End Poverty Day event in Accra dubbed ‘Delivering growth to people through better jobs in Ghana’, Mr. Laporte stressed that addressing the current crisis and restoring macroeconomic stability are vital for the nation’s future.

“Bolstering long-term growth prospects will require policies that support investment and human capital development, as well as enhancing resilience and crisis-preparedness, especially in agriculture and food systems. Well-targetted investments could create better jobs, lower income inequality and boost productivity,” Laporte stated.

He added that: “Policymakers must intensify efforts to grow their economies while protecting the most vulnerable. Jobs and employment are the surest way to reduce poverty and inequality. Impact is further multiplied in communities and across generations if we purposefully empower women, girls and young people”.

The past year has been exceptionally challenging for Ghana, as the economy faced a daunting task in recovering from the twin crises of COVID-19 pandemic and Russia’s invasion of Ukraine. This had a profound impact on the nation’s economy, compounding pre-existing fiscal vulnerabilities. High inflation and a steep depreciation of the cedi added to the country’s woes, while Ghana lost access to international markets.

The adverse global economic conditions and persistent challenges have disproportionately affected vulnerable segments of the population. Over a quarter of Ghanaians live on less than US$2.15 per day – and inflation over the past few years has eroded the purchasing power of households.

In the first half of 2023, there were signs of inflation easing following a peak of 54.1 percent last December; but it experienced a temporary increase in May. However, the disinflation process resumed, contradicting market expectations.

End Poverty Day, celebrated on October 17, holds particular significance this year. The United Nations declared this day in 1992 as the International Day for eradication of poverty, which aligns with the World Bank’s mission to end extreme poverty and promote shared prosperity.

The event took place during a critical period with nearly 700 million people worldwide living in extreme poverty – 10 percent of the global population, with over half of them residing in sub-Saharan Africa. Progress in global poverty reduction has stalled in recent years, and the world risks not meeting the 2030 goal of ending extreme poverty.

Extreme poverty is most concentrated in places where eradication is most challenging, including parts of sub-Saharan Africa, conflict-affected areas and rural regions. Children are disproportionately affected, with more than half of those living in extreme poverty being children.

Addressing poverty in all its dimensions is crucial. To improve well-being, countries like Ghana must ensure equitable access to health, education and basic infrastructure, providing a path toward better living standards for all citizens.

Inequalities – including income, education and opportunity – are interconnected and must be addressed simultaneously. Global inequality rose for the first time in decades during 2020, with the poorest people bearing the steepest costs of the pandemic.