University of Ghana Legon, Faculty of Social Sciences

Juliana Ashaley-Nikoi

Development Studies, ISSER

Course: Interdisciplinary Perspectives in Development (ISDS 705)

Policy Brief:

 GEOGRAPHICAL DUAL ECONOMY OF GHANA

 

1.0 Introduction

Ghana’s economic development is characterized by undulation, retardation, stagnation and at times transient growth. This emanates from the fact that its socio-economic development like any organism, does not grow on all geographical, social and technological angles.  A classic example is the development divide between the North and the South. The North comprises the Northern, Upper East and Upper West and Brong Ahafo Regions. The South encompasses, Eastern, Ashanti, Volta, Western Central, and Greater Accra Regions.

In recent times, governments have been conscious of the challenge that dualism poses to development and have accordingly taken steps to address it via development programs. If Ghana will ever see accelerated development, there is the need to identify areas of dualistic developmental features and their causalities for action. This policy brief is intended to identify key developmental problems of geographical dualism. It primarily focuses on disparities in population patterns, poverty, income and expenditure levels between the North and the South. The paper will also offer policy prescriptions to address them. 

 

2.0 DUALISM IN GHANA  

2.1 What is dualism?

 The term “dualism” depicts conditions that many developing countries, including Ghana find themselves in, in the early stages of the developmental process. This situation invariably has far reaching implications for the pace and pattern of both present and future development. The development of a modern money economy alongside the indigenous economy is what has been termed as a dual economy. The domestic economy is considered to encompass two systems: money exchange and traditional economy (Meier, 1964). Dualism, essentially, refers to economic, social and geographical variations in an economy. These variations are generally manifested in differences in the level of technology between sectors or regions; differences in social customs and attitudes between an indigenous and an imported social system and differences in the degree of geographical development. Technological dualism is the gap that may exist between levels of technology in the rural subsistence sector and the industrialized monetized sector. On the other hand, where there are differences in social custom between the subsistence and exchange sectors of the economy, social dualism occurs  and lastly a gap in the levels of per capita income between regions in a geographical setting is geographical dualism (Thirwall, 2003); the focus of this paper.

 

3.  Ghana’s Geographical Dualism

Table 1: Population, Poverty, Income and Expenditure Patterns in Ghana.

Regions

Population

Poverty incidence

Mean Annual Income-(GHC)

Mean Annual Expenditure -(GHC)

 

Million

Population density

               

Headcount %

House-hold

Per-                    capita

Household                         

Per capita

 

2010

2010

2006

1999

1992

2008

2008

2008

2008

Ashanti

4,780,380

196.01

15.1

37.7

48.0

1,149

410               

      1, 967

682

Brong Ahafo

2,310,983

58.42

29.5

35.8

65.0

1,202

443

1,614

514

Central

2,201,863

224.09

20.3

27.7

41.2

1,310

464

1,810

676

Eastern

2,633,154

136.27

19.9

48.4

44.3

1,149

379

1,799

613

Greater Accra

 

4, 010, 054

 

1,235.76

 

11.8

 

15.2

 

25.8

 

1,529

 

544

 

2, 907

 

1,050

Northern

2,479,461

35. 23

70.4

83.9

88.4

1,452

296

1, 529

  362

Upper East

1,046,545

118.36

51.4

43.7

57.0

616

124

1, 066

  229

Upper West

702, 110

38.00

87.9

88.2

66.9

             606

     106

           901

 166

Volta

2,118,252

102.98

52.3

69.2

63.4

913

272

1, 514

491

Western

2,310,983

99.33

18.4

27.2

59.6

1,222

393

1,924

648

North

3.942

191.59

68.4

76.6

71.0

891.3

175.3

1165.3

252.3

Middle

9.077

254.43

26.5

33.5

50.9

1175.5

426.5

1690.5

598

South

11.204

1,798.4 3

17.5

26.3

42.4

1224.6

410.4

1990.8

695.6

Ghana

24, 658,823

103.38

28.7

39.5

51.7

1,217

397

1918

644

 

 Sundry sources: GSS (2012) for population and population density, GSS (2007) for poverty incidence, GSS (2007, Ghana Living Standard Survey. Round 5 ) for income and expenditure.

Table 1 depicts the spatial distribution of the population, poverty levels and expenditure and income patterns in the ten regions of the country. The population dimension demonstrates vividly an uneven distribution of the population; Ashanti region has the highest population rate of (4,780.380), followed by the Greater Accra region (4,010,054). Upper West and Upper East registered the least with 702.110 and 1,046,565 respectively. Northern region on one hand, has a higher population rate ( 2, 279,461)  than other regions  from the South, particularly Central and Western regions. On the other hand, the Northern Region which accounts for 29.5% of Ghana’s land area (GSS, 2012) has the lowest population density: 35.23. Greater Accra is the smallest Region, representing 1.4% ( GSS, 2012) of total land area and  exudes the highest  population density of 1, 235,76. The Ashanti Region has the highest population with about 10% of the total land area, indicating a population density of 296 per square kilometer ( ibid).

  Undoubtedly, the over concentration of the populace in the Greater Accra Region has occurred through the principal  media of labour migration, capital movements and trade, culminating in  plethora of wider socio-economic opportunities. Indeed, migration patterns in Ghana have led to concentration of population in the Middle and Southern Regions.  This tends to inure enormous benefits to the favoured region thereby aggravating the developmental deficiencies in already stagnate regions and ultimately retarding the whole economy (Myrdal, 1963). It is therefore not surprising that the North remains consistently poor despite government interventions. As per the table 1 in 1992 poverty incidence was 71.0% and increased in 1996 to 76% and in 2006 declined marginally to 68.4%.  In contrast, poverty incidence in the South, in 1992, hinged at 42.4% and drastically reduced to 26% in 1996 and then in 2006 declined significantly again   to 17.5% in 2006. Thus poverty has over the years consistently and substantially reduced in the South while the reverse holds for the North.  This implies that the South tends to respond more positively to government policies aimed at poverty reduction.  The then Ghana Poverty Reduction Strategies, implemented between 2000 and 2008 is a case in point.

 

 It is equally significant to note that Ghana’s population is highly urbanized. More than half of the population lives in urban areas. Between 2000 and 2010, the proportion of people living in urban areas substantially increased (GSS.2013).  It is only the Upper West Region that experienced a decline of urban dwellers from 17.5% to 16.3%, between 2000 and 2010 (GSS, 2013).

 The effects of immigration on the expanding regions also tend to engender other ripple effects in areas such as income and expenditure patterns against the lagging regions.

3.1 Income and Expenditure

The average annual household expenditure in Ghana is about GH¢1,918.00. On average, the annual per capita consumption expenditure in Ghana is GH¢644.00, indicating an overall average expenditure of about GH¢2.00 per person per day. At the regional level, Greater Accra has the highest consumption expenditure of an annual average of GH¢2,907.00 Ashanti follows with an average household consumption expenditure of GH¢1,967.00 while Upper West has the lowest consumption expenditure of GH¢901.00 which is about half the national consumption expenditure (GSS, 2007).  

 

In terms of per capita expenditure, Greater Accra Region has the highest annual average per capita expenditure of GH¢1,050 indicating an average expenditure of less than GH¢5 per person per day. Ashanti Region and Central follow with GH¢682 and GH¢676 respectively. Upper West, Upper East, Northern and Volta on the other hand, recorded the lowest average annual per capita expenditure. This, once again amply demonstrates that poverty is very high in the northern regions, particularly in Upper West (GSS, 2007). 

In terms of per capita income, Greater Accra once again recorded the highest GH¢544. Upper West and Upper East regions have average annual per capita incomes of less than GH¢130 while Northern and Volta Regions have per capita incomes less than GH¢300 ( GSS, 2008) . In addition, households in urban localities have  higher incomes  than ;an average annual income of GH¢1,415) households in rural localities; annual income of GH¢1,067 ( GSS, 2007). 

 Apart from Greater Accra which obtains about 57 % of its income from formal employment, many of the regions derive their main source of income from agricultural activities. Households in Brong Ahafo, Northern, Upper East and Upper West Regions derive more than 50 percent of their income from agricultural activities and rely on traditional modes of  farming ; relying heavily on hoes and cutlasses. The major source of income for the Ashanti Region is drawn from non-agricultural activities or self-employment. Further, wage income (26.5%) and remittances (16.1%) also contribute significantly to household income in the Ashanti region (GSS, 2007).  This phenomenon might explain why the North has lower income levels than the South.

Geographical dualism can further be expatiated by looking at education and health.  This stems from the fact that spillover effects emanating from population and poverty variations do not only affect income and expenditure but also extend to other social activities such as health and education. Primary school attendance and general literacy rates in the North are lower,  57.0  and 33.0 respectively, in contrast to 76.5 and 80.0 in the South ( ibid). In addition, in the northern sector of the country, only a quarter of women can read and write, as against three quarters in the South. Further, the 2008 Demographic and Health Survey, indicates that the prevalence of  children who are underweight under five years are found most in the Upper East 30% , followed by the Northern Region,  24%.

4. Outlook

Ghana’s geographical dualism is preponderantly demonstrated in differences in population and poverty patterns and more importantly in variations in income and expenditures. The South, buoyed by the concentration of vibrant economic activities, boasts of a higher population rate cum population density of 11.204 and 1,798. 43 compared to 3, 942 and 191.59 respectively of the North. This situation also facilities migration to urban areas particularly those in the South. 

Households in the three Northern Regions consistently remain poor despite government targeted policy initiatives such as the Savannah Accelerated Development Authority (SADA) andtargeted social intervention programmes such as the Livelihood Empowerment Against Poverty (LEAP), Capitation Grant, and the Ghana School Feeding and other supplementary programmes. In addition, income and expenditure patterns followed the same trend; per capita income of 696 in the South  as against 252  in the North and per capita expenditure of  410 in the South as compared to 175 in the North. This phenomenon could be attributed to over reliance on unmechanized agriculture. In terms of education and health, once again, the North is on low ebb.  Hence paper calls for decentralized government investment in infrastructure and mechanization of agriculture to complement other government initiatives in bridging the gap between the North and South.

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