From July 10th to July 15th, 2006, the director of SOW-VU, Professor Michiel Keyzer, and two staff members, Bart van den Boom and Vasco Molini, visited Ghana to participate in a collaborative poverty analysis workshop and to discuss capacity building at the Ghana Statistical Service (GSS) and at the National Development Planning Commission (NDPC).
Poverty analysis workshop
The poverty analysis workshop organized by the GSS was entitled ‘Can Price-Weather Insurance Reduce Poverty in Rural Ghana?’ The team of SOW-VU presented a paper on the topic that employs recent advances in index insurance to study public-private arrangements that may help Ghanaian farmers to secure a minimum income of $0.8 per person per day. This minimum income corresponds to the official extreme poverty line (Accra 1999 prices; exchange rate 2400 cedi).
Evidence showed that many farmers in Ghana have an average income below the poverty line, especially those in the north and those with a per capita farm size below one acre. Of course, such farmers cannot by themselves secure the minimum income. Hence self-financing insurance arrangements must call upon solidarity of relatively rich farmers (from the south; large farms) with relatively poor ones (from the north; small farms). In the absence of such solidarity, a subsidy is needed to supplement the income of groups of farmers that are particularly poor. The issue then becomes who pays for the subsidy (richer farm groups; tax payers; external donors).
To study the ability of price-weather insurance to reduce poverty, the workshop recommended starting a pilot study.
Capacity building strategy
The team discussed capacity building at the GSS and at the NDPC. According to their mandate, the two institutes are assigned a key role in providing information to the Government and to the public as regards ongoing social and economic developments and the impact thereon of development policies. Both the GSS and the NDPC face difficulties to fulfill their mandate and play their role effectively. The shortage of qualified and motivated staff and the dependence on individual (foreign) consultants signify an immense need for capacity building.
A capacity building strategy to attract staff and to reduce the dependency on consultants was discussed with the acting Government Statistician of the GSS and the Director General of the NDPC, both of whom would welcome foreign assistance and institutional support from SOW-VU. Meetings with the Minister of Finance and Economic Planning, and with staff of the Office of the President confirmed the urgent need for strengthening capacities. Ample funds are available for this purpose and it was agreed to develop a capacity building program that could use these funds effectively.