The Contributions of the Multidimensional Poverty Index(MPI) To Poverty Reduction Strategies
Poverty Reduction in Ghana
The Contributions of the Multidimensional Poverty Index(MPI) To Poverty Reduction Strategies
Introduction
In 2018, a Statistical Update released an estimate of 105 developing countries that had an approximation of 5.7 billion people, which represents 77% of the entire world. Amongst the 5.7 billion people, 1.3 billion, which is 23.3% of the whole, were recorded to live in multidimensional poverty between 2006 and 2016-2017 (Selase, & Lu, 2018). About this result, a larger population of the world is living in dire poverty, and bold actions need to be done to promote people’s livings standards. When the United Nations sat down and saw that the world has numerous deficiencies which need to be filled, poverty was one of their primary concern. It is, therefore, from that point, in conjunction with the reports from the Statistical Update, that poverty and its alienation became part of its first actions.
Intending to realize sustainable development among global citizens, the United Nations knew that it wouldn’t be possible with the high level of poverty recorded in most of the developing countries. Despite having countries with strong economic growth as well as documented economic developments, many other countries were still languishing in dire poverty, which could then curtail the goals from realization. Poverty became the first goal of the united nations since it is a significant threat to economic growth. People’s livings standards play a vital role in realizing economic growth. Therefore, when many people tend to survive below the set standards, it would be hard to accomplish the goals.
Among the significant factors to consider when talking about economic growth are; Level of health, education level, and living standards. The three elements are related in the sense that one can never be realized without meeting the other. They tend to have an appositive relationship in the sense that an increase in one factor leads to an increase in the other element. Increased level education improved people’s health hence the opportunity to improve living standards. With a high level of education, it is effortless to improve health sectors, which in turn gives birth to productive society members hence good improved living standards.
The principal aim of the Multidimensional Poverty Index (MPI) is to identify multiple deprivations at the household and individual level in health, education, the living standards. In its wake to identify the needy families or impoverished members of the, Unlike the inequality adjustment Human Development Index, MPI uses microdata from household surveys where (Selase, & Lu, 2018). In conducting the study, each member found within the household is given a number classifying them as deprived or non-poor; this number is assigned depending on the weighted number of deprivations of his family; hence she experiences. After getting the targeted data, they are then aggregated using relevant software into the national measure of poverty.
As an operational means, the MPI is capable of reflecting both the headcount of those in multidimensional poverty and the average deprivation score, which is experienced by the poor people. This measure is mostly used to give a comprehensive picture of the population living in poverty and provides room for comparison across countries and regions. Also, the ethnic groups, urban and rural location, key households, and community characteristics can well be determined using this measure hence a vital instrument in poverty measure. Leading a better life by the citizens is the responsibility of the government. Provision of live essentials such as shelter, food, water, proper sanitation as well as security is some of the significant roles of the government. However, in many of the developing countries, provision of such essentials have been a problem hence a poor living
Among the 105 developing countries that were surveyed by the Statistical updates, Ghana was among the Sub-Saharan African countries that were sampled and found to be having a high level of poverty. According to the results, people were classified according to the number of dollars they consume in a day (Masset, & García, 2019). Therefore, people found to be living below $5.50 were regarded as inferior hence sampled. The table below, thus, shows historical data released on the number of people exposed to be living below 5.50 USD.
The data above suggest that many people in Ghana are still surviving below $5.50, which means many are still poor. As of 2016, which is only three years from now, many Ghanaians were still reported poor, meaning they had poor living standards, lack of quality education as well as surviving under poor health services. Compared o developed countries like the United States that has a poverty level of 15%, Ghana is still expected to do more when it comes to poverty alienation. With a dream of being counted as one of the developed countries in the coming years, Ghana has to do more when it comes to the exploitation of natural resources.
However, despite still seen to be languishing in dire poverty, progress in poverty alienation can be witnessed as the years continue to pass. From 1988 to 2016, it is only in 1991 that a negative growth was observed; from there, the country has been recording a reduced number of people living below 5.50 US dollars. The number continued to diminish as the years goes by, meaning education level, health standards, and people’s living standards are improving. The country is doing much to ensure that it improves its national education level as well as providing excellent health services to its people. In 2012, Ghana recorded a decline by a larger percentage of 16%, which means much was done by the government and its people to ensure that the country stays at a better place.
According to the reports released by Ghana’s national poverty line in October 2015, the strong economic growth that the country witnessed within the past two decades played a vital role in cutting the countries poverty rate by half. From 1991 to 2012, the country recorded a miracle reduction from 52.6% to 21.4% in its poverty rate. However, the newly released Poverty Reduction in Ghana: Progress and Challenges reported that the only way to record a sustained reduction in poverty requires inequality reduction commitment as well as improving access to opportunities for all citizens.
According to Pierella Paci, a lead economist with the Poverty Practice at the World Bank, Ghana has a big challenge in ensuring that prosperity is shared equally among its population. Just like any other Sub-Saharan country, inequality in resource distribution is a significant factor. Corruption has primarily hit the continent, leaving people with government powers only the eligible people to be regarded as inferior. A more substantial percentage of government resources are not reaching the general public since few individuals with the ability to sit down and share the more significant portion of it among themselves. The corruption level within these countries continually creates a more substantial gap between the poor and rich hence rising levels of poverty.
According to the results released by UNICEF, the poverty rate in Ghana recorded a slight contradiction since 2005. In a typical economic system, an increase in economic growth is accompanied by reduced inequality as well as a low level of poverty. However, with an increase in the economic growth of 7% every year, the level of difference in Ghana is increasing, and the poverty rate increases as well. In regards to this, despite efforts to works in creating a larger GDP for the country, most of the revenues are distributed to people regarded as high class, many used for corruption purposes while the majority are neglected.
Despite getting money from the tax collectors, the government is not channeling its money in the development of education, health sectors, roads, providing basic needs to the public, but most of the funds are used for personal gains. Results from UNICEF further reveals Ghana is currently has a status of middle income due to the discovery of offshore oil reserves in 2007. Looking at the rural and urban households in Ghana, there is a vast difference. Urban households and leading a remarkably better life with all the life necessities and luxury at their disposal. However, rural households are living below the poverty line. The is disparity is said to be growing with the growth of the economy hence increasing the gap between the rich and the poor.
In looking at the gap by percentage, the poverty rate in urban areas is rated at only 10.6%, which is believed to be nothing as compared to the poverty rate in rural areas, which is rated at 37.9%. Children, women, and disabled being the largest group languishing in poverty, it reported that almost 4 million children in Ghana are living below the poverty line as indicated by the Kuznets Hypothesis. Today, a Ghanaian is about 40% likely to be impoverished than a Ghanaian Adult; this figure has recorded a staggering 15% rise since 1999.
According to the World Bank, despite many other factors that can result in delayed economic growth in a country, Ghana is significantly faced with a high level of unemployment among youths. The ongoing delays in the debt resolutions that were accrued by the energy state-owned enterprises, high costs of electricity, and the national imbalanced between the supply and demand. Despite making projections of improvements from the oil and non-oil enterprises to hasten the economic growth by 2017, the country is still staying below its standards, leading to an increased level of poverty. Upon averaging the national consumption rate of citizens in Ghana, the wealthy households are sad to be consuming a third of the entire domestic consumption. In contrast, the poor consume only 1.7% nationally.
In 2016, a study revealed that the richest who makes only 20% of the entire national population had more than half of the country’s income at their disposal. The whole nation, which should be equally distributed among the citizens, was only owned by 20% of the entire population. Such a scenario justifies a high level of inequality, leading to increased poverty rates since the gap between the rich and the keeps on widening. The more the rich keeps on earning, the higher the rate of poverty rate increased hence a low living standard of the rural population.
As a measure of trying to combat the increasing poverty level in Ghana and other Suh-Saharan African countries, the multidimensional poverty levels, consumptions, and trends are found to be varying. Seeing Sub-Saharan countries as regional bias is not necessarily right since the subnational regions are ranging among countries. The Multidimensional Poverty Index is determined to know the contribution of the government sector in Ghana (Bukar et al., 2018). However, despite having high levels of poverty disparities within the country, it is interesting to realize that the contribution is different. This would mean that, despite the rich siphoning all the government resources, the poor have branded themselves incapacitated; hence they largely depend on the poor for survival.
Ghana faced a massive streak of poverty, and its citizens would wish to record a good life like others. Poor people are optimistic that one day they will get the chance to lead a better life like the poor. However, the only problem is that. They don’t know when will this come; they can never predict when will they have better living standards, good health as well as quality education. The country is therefore advised that to initiate sound public policies, the use of valuable global MPI information at both the national and subnational levels is essential.
One of the Multidimensional Poverty Index mission is to identify the number of household members living in poverty and then giving policy advice on how possible the poverty can be reduced or alienated. Being an international institution that is approved to measure the level of poverty in nations, most of its pieces of advice to go the government on what best should be done to help manage the situation. In this case, the MIP is helping the Ghanaian government to focus on programs that are poverty elimination oriented (Kyei, Carolan-Olah, & McCann, 2016). Taking people out of poverty should, therefore, be the primary aim of the government through the provision of excellent health services, providing quality education, the creation of more employment opportunities to increase living standards as well as dealing with corruption issues effectively.
The MIB is advising the government that, in its attempt to remove its people from poverty, it should never be done partially, no one should not be left behind. Favoring other regions due to political issues of societal conflicts should not be considered during this period. The nation is in a state that overall resurgence is necessary, favoring other regions will only increase poverty since the inequality gap will widen. Investments are essential for public health, schools as well as public services within the rural areas. Rural regions have been receiving a very minimal number of government resources, unlike the urban areas which are favored in many cases.
The deprivation of living standards is affecting large numbers of people. Cooking fuel, electricity, sanitation, water access, and flooring are increasingly becoming a problem among people. Therefore, addressing the deprivations will not only have an impact on the MIP but will also participate in reducing the related poverty aspects such as child mortality and malnutrition (Kyei, Carolan-Olah, & McCann, 2016). Despite poverty having many dimensions, its management should not be regionally based. It should be the responsibility of the national government to monitors regional resource allocation and ensuring that equity is achieved in the process.
Focusing on one dimension is inefficient in the poverty alienation; all the aspects need the same focus and commitment since the operation of a single size is affected by the action of another one. For example, when the government does not improve its education system, the low quality will be offered hence reducing the skilled labor within the region. In that sense, health systems will not get qualified people who could work to improve the health of society. In the same situation, sick people will not be able to take part in development activities hence reduced the living standards of many people. An educated population is healthy; thus, they take part in development activities to remove poverty within their regions.
It should again be understood that growth alone does not result in multidimensional poverty reduction; however, without increase, poverty can never be reduced. Therefore, the government needs to complement its growth strategies with specific multisectoral poverty reduction programs that directly deal with varied poverty dimensions (Awortwi & Musahara, 2016). The economic and socio-demographic change that is championed by the structural transformations, improved education level that has led to the emergence of the skilled labor force and geographical mobility has enabled the country to record a reduction in its poverty level. Thanks to the MPI that set standards for the government after reporting the poverty level of the regions.
Since the 1990s, Ghana has managed to record a staggering annual growth in its domestic product averaging between 4 and 5%. The growth rate continued, and by the end of 2006, it had reached 8% meaning the government and its citizens are doing much to eradicate poverty among them. Being one of the goals of the United Nations, governments, proven global institutions, NGOs, privates as well as the general public were all called to come out and make sure that they eradicate poverty among them. Citizens were expected to take part in activities like going to school, taking part in development activities, reporting corruption as a measure of helping the government to use its resources on them rightfully.
The rapid growth has played a vital role in accelerated poverty reduction, with a record reduction from 52.6% to 21.4% between 1991 and 2012. Previously the country had recorded a poverty rate that is less than half of the entire continent’s average. The extreme poverty has declined by a more significant margin dropping from 37.6% to 9.6% between 1991 and 2013. Before the introduction of MPI was introduced in Ghana, the infant mortality rate 57 death per 1000 live births (Molini, & Paci, 2015). This was a record as of 1998; however, in 2014, the mortality rate had declines 41 with children of under years of age mortality declining by more than half. Ghana has lived for a very long time with agriculture as the central sector of employment
In recent periods, diversification has enabled the Ghanaian economy to grow beyond agriculture hence creating more employment opportunities to its people. With increased levels of employment, the country is getting more form the GDP. Thus, being able to fund most of the government activities such as provisions good health, regular power supply, improved education standards, proper sanitation, improved roads, and the entire infrastructure of the nation. The government has also managed to control the allocation of its resources strategies, ensuring equity is attained during distribution to help remove its people from poverty.
Despite the country still recording cases like growing inequality in household consumption, welfare disparities among regions, and deteriorating macroeconomic environment, the state can boast of tremendous improvement in many government sectors. The poverty level has recorded an immense decline helping the country to move to middle-class status, thanks to the realization of the oil extraction site from its offshore (Molini, & Paci, 2015). The national economy is continuously recording growth with sustained improvement in essential sectors like schools, health centers, and household welfare. Ghana, as one of the significant economies of West Africa, was once known to have impoverished people, with the majority living below 5.50 USD.
Most of the African economies indeed have very levels of poverty, however, countries like Ghana are some of the countries that African can boast of as countries with strong economies. Despite still doing below many European countries, Ghana has developed in many of its sectors, recording reduced rates of poverty. The national government has managed to improve its health centers, education centers as well as improving people’s living standards as some of the deprivations that were reported by the MPI. These actions have consequently, led to increased employment opportunities among youths and reduced mortality rate among the infants. The inequality gap has reduced increasing the number of national income and consumption among the rural populations.