“World Bank Reports: 850,000 Ghanaians Pushed Into Poverty in 2022”

According to the latest Ghana Economic Update report titled “Price Surge: Unravelling Inflation’s Toll on Poverty and Food Security,” released by the World Bank in Accra on Wednesday, around 850,000 Ghanaians were pushed into poverty in 2022 due to rising prices of goods and services. The inflationary pressures have led to a decline in living standards, exacerbating poverty and food insecurity among households in Ghana.

The World Bank suggested several measures to address the situation, including policymakers increasing efforts to restore economic stability, alleviating the challenges faced by farmers, particularly the high cost of fertilizers, and expanding social intervention programs to protect vulnerable individuals.

For the medium-to-long-term, the Bank recommended focusing on investments in agriculture research and technology transfers. Such investments could help boost domestic production, reduce production costs, and enhance the quality and safety of food.

Mr. Paul Corral, a Senior Economist with the World Bank, explained that they used monetary indicators to measure annual household income and expenditure, and observed that inflation had significantly impacted poverty levels.

Mr. Kwabena Gyan Kwakye, a World Bank Economist, highlighted the adverse effects of the 2022 macroeconomic shocks, especially inflation, on the poor. He expressed concerns that the next two years would be challenging for Ghana’s poverty reduction efforts and emphasized the need to bring the economy back on track to achieve meaningful poverty reduction and shared prosperity.

The report suggested enhancing safety nets such as the Livelihood Empowerment Against Poverty (LEAP) to support the most vulnerable and build resilience against future shocks.

Mr. Ashwini Sebastian, a Senior Agricultural Economist with the World Bank, called for support to help farmers adjust to global demand and seize market opportunities, particularly given that many poor households are engaged in farming. Evidence-based policies should be implemented to alleviate constraints faced by farmers.

The 2017 Ghana Living Standards Survey revealed that 45.6% of the population were multidimensionally poor, while 23.4% faced consumption expenditure poverty, indicating deprivation in various aspects of life.

To address the inflation-driven food costs, Mr. John Foster Agyaho of the Ghana Statistical Service emphasized the importance of prioritizing road networks to connect farmers, addressing transportation and storage bottlenecks, and implementing measures to attract more youth into agriculture.

Ghana’s inflation reached 54.1% in December 2022, primarily driven by soaring food costs, leading to economic hardships for both formal and informal workers, as reported by the Ghana News Agency.

The World Bank’s report also indicated that Ghana’s economy could recover to its potential growth by 2025, dependent on the government’s implementation of structural reforms to tackle the root causes of the economic crisis and enhance economic growth and resilience through the country’s financial bailout program with the International Monetary Fund (IMF). Mr. Pierre Frank Laporte, World Bank Country Director for Ghana, Liberia, and Sierra Leone, expressed optimism that growth would recover to its potential as fiscal consolidation subsides and structural reforms yield positive results.

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