Spatial Distribution of Resources and Poverty Incidence in Ghana
Published on: 2020-05-25
This paper investigates the spatial distribution of resources, production activities and poverty in Ghana. In the study, the presence of natural resources in an area over a period of time greatly influences industrial activities in that locality. Spatial distribution of natural resources positively influences most important production activities in the discovered areas. The production activities that take place in these areas certainly reflect on the poverty incidence of the people since it creates more employment opportunities in that area. We further made a comparison of two regions in two different climatic zones with varied resources to see how these resources contributes to poverty incidence and the overall development of these areas. Ironically, the Greater Accra does not have many natural resources as in other areas however, production activities are going on such areas because most of the resources are conveyed to Accra for production and thus creating more economic opportunities and reducing poverty incidence (5.6%) For Ghana to bridge the spatial inequalities that exists in the country, there must be strong commitment by government to ensure improved regulation in the mining sector to regulate illegal mining. There should also be better rural urban linkage.
KeywordsSpatial distribution of resources
Spatial or regional differences refer to the unequal distribution of resources, income and other socioeconomic variables across different geographical areas or locations, with a growing sense across many of the developing countries and other transitional economies including Ghana. It has become obvious that spatial and regional differences of income, economic activities and other social indicators are on the increase . With our immediate environment being the main source of livelihood for majority of Ghanaians with an ever increasing environmental degradation as a result of climatic and non-climatic factors, poverty remains a critical socioeconomic issue in Ghana E.T. Lawson 2012. It has become a well-known phenomenon with a lot of Empirical research backings which show that most developing countries that are highly endowed with natural resources tend to suffer slow economic growth and development due to various factors such as institutional framework, political instability, Lack of Necessary Infrastructure among others. All though natural resources might not have benefited some African and other developing countries, it’s still an undeniable fact that they are major drivers and facilitators of growth and development. Areas with uninhabitable environments or limited natural resources are of higher tendency to fall into the poverty trap, and this is particularly true for a developing country like Ghana. With the desire to eliminate global poverty by 2030, countries all over the world are implementing policies and making massive economic reforms with the sole aim of reducing this global hinder of sustainable development called poverty. The inability to have a clear understanding of poverty distribution may most likely prevent us from implementing appropriate socio-economic interventions and resulting in an inefficient allocation of resources, which in turn aggravates the problem . Studies carried out by reputable researchers have shown that poverty is not limited to low-income distribution but includes the lack of basic necessities such as education, healthcare, and housing. The dynamics of, poverty has since changed from a single economic concept to a multidimensional perspective In Ghana, interregional differences and the intra-regional disparities, spatial differences have become major drivers of social exclusion. Historically, the discussion over spatial inequality in Ghana generally hinges around the broad divide between the North and South taking cognizance of the availability of natural resources . The Northern divide found in the arid Savannah zone, and shares borders with Burkina Faso. On the other hand, the coastal South thus encompasses the main export crop-growing areas and the three largest metropolitan areas Lall S 2009. According to the UNDP HDR (2018), the supply of goods and services coupled with a harsh economic environment has positioned Northern Ghana to be more prone to experiences of exclusion. Thus the uneven distribution of basic infrastructure, as well as remoteness from centers of trade all, contribute to isolating some parts of the country. The differences in the provision of basic social services and job opportunities greatly reflect a wide range of social exclusion that is also influenced by rural-urban disparities As indicated by the Ghana Living Survey (GLSS 6) report, among rural localities where poverty is prominent, the poverty incidence is much higher among those living in rural savannah. In the period of 2012/13, the contribution to poverty incidence in rural savannah was found to be higher than in rural coastal and forest combined. Notably, rural savannah contributes more than 40% to the overall poverty in Ghana (GSS, 2014). In actual sense, the coastal and forest zones of Ghana seem to have found most of the country’s important natural resources as compared to the savannah as a result, the principle of proximity to raw materials is applied when it comes setting up of manufacturing firms. The districts in the South are better connected to markets, making it possible to attract more firms’ thereby increasing economic density within the area. This opportunity resulted in the creation of job opportunities in places where important resources such as gold, diamond, bauxite, oil, and cocoa are found thereby reducing the incidence of income poverty in those districts. The ability of an individual in a market economy like Ghana to consume goods and services depends on his or her income making the allocation, exploitation, management and availability of all forms of resources a necessity. However, the incidence of illegal mining activities popularly known as ‘galamsey’ going on in those areas remains an albatross around the necks of residence. Though ‘galamsey’ affects many facets of life, one area in which its impact is being felt most is the pollution of rivers and water bodies. ‘Galamsey’ does not only pollute rivers and water bodies but also leaves death traps for residence and miners themselves . Numerous studies both theoretical and empirical has been conducted on the issues of poverty incidence and its alleviation, spartial distribution of resources and other related areas . In their study in Lining in the mountainous villages of western china analyzing spatial differences and environmental factors influencing poverty incidence and reduction using spatial statistical methods and GeoDetector tools. The results indicated a notable decline in poverty incidence in most Lijiang villages during 2014–2018 under China’s poverty alleviation strategy. However, there were distinct spatial differences for both poverty incidence and reduction. The main environmental factors affecting poverty incidence and reduction are available water storage and geological hazard risks. They recommended that, targeted poverty alleviation should focus on, not only policy or socioeconomic factors, but also main environmental factors affecting poverty incidence and reduction. Hoang van 2019 analyzed the causal effect of forest resources on household income and poverty and their results indicated that households in forest areas have a higher income and lower level of poverty than those without forest resources. This confirms that forest areas offers extra opportunities especially for those who depend on their immediate environment for their survival. According to Yang lin 2018, there are numerous media through which economic inequality stands the chance of generating pressures on the resources available handle poverty. This leads to subjective basis which may emanate from objective circumstances lie social and geographical segregation. Apergis 2018, in their contribution to the resource curse hypothesis posited that the fossil energy resources exacerbate poverty and deepens the income inequality gap notwithstanding this, our study seeks to uncover whether or not, and production activities are boosted in areas where resources are found in commercial quantities and whether or not that has any bearing on poverty. Our emphasis will not be solely based on the divide of Northern and Southern Ghana in terms of spatial distribution of resources but will also consider an intra-regional review of cases where specific districts within a region are natural resources-rich and juxtapose that to other districts to measure its impact on poverty. Among the 16 administrative regions in Ghana, the Western region is said to be the country’s resource zone, hence we shall draw most inferences from that region.
Spatial Distribution Of Resources
The recent discovery of oil in commercial quantities prompted Ghana’s membership in the Extractive Industries Transparency Initiative (EITI) and the implementation of policies supporting natural resource sustainability, in anticipation of achieving faster economic growth and development . Considering the inability of most African countries to efficiently and effectively maximize their natural resources use, is still optimistic of the fortunes of Ghana and came out with a conclusion that Ghana's oil discovery cannot be a curse, but at worst, a treatable disease .
Ghana is divided into 16 administrative regions and categorized under three major belts based on some common environmental characteristics, namely: Greater Accra, Central, Western and Volta Regions as the Coastal Belt; Ashanti, Brong-Ahafo and Eastern Regions as the Forest Belt; and Northern, Upper East and Upper West Regions as the Savannah Belt RamsayEdge 2004. These classifications are, however, not absolute as there are cases of overlapping characteristics in some of the regions Bukari F, 2014. In (Figure 1), the map of Ghana is showing the distribution of the ten regions of Ghana and their major cities over the three belts of the country. Most of the country’s important resources can be found in the coastal belt, however, some incidence of poverty and vulnerability are still prevalent among the people who live in such areas. Despite the discovery of oil in the Western Region in 2010 in addition to already existing natural resources, the region’s severity of poverty had risen to 2.4% from 1.9% in 2013. In the coastal area generally, the incidence of poverty also rose from 6.4% in 2006 to 9.9% in 2013 (GSS, 2015). This trend compels scholars to raise critical questions whether the region’s resources are a curse or a blessing.
Figure 1: Regional distribution over the coastal, forest and savannah belts of Ghana.
Ghana is endowed with several mineral deposits such as gold, Natural gas, diamond, silver, manganese, bauxite, iron ore, limestone, salt, and silica sands. The country has produced and exported gold for centuries. In precolonial times to present-day, Ghana was one source of the gold that reached Europe through trans-Saharan trade routes, with the industry accounting for 5% of the country's GDP and minerals makeup 37% of total exports, of which gold contributes over 90% (33.3%) of the total mineral exports. Thus, the main focus of Ghana's mining and minerals development industry remains focused on gold. Ghana has also been a major producer of bauxite, manganese, and diamonds in Africa It is therefore instructive to note that, the mineral basins are scattered all over the 16 administrative regions of Ghana. However, large deposits of the minerals are found in the southern parts of Ghana. Again, most of the Gold mining companies as well as illegal mining activities commonly referred to as “galamsey” are located in the Western, Ashanti and Central Regions. Diamond mining is commonly found in the Eastern region. The activities of “galamsey” have mainly led to the pollution of water bodies that many dwellers in these areas depend on for household consumption. This results in poor health and an increase in social vices though local economies may boom. Gold and bauxite alone account for 64.4% of Ghana primary exports. The importance of this sector to Ghana’s economy is on the increase. According to the Extractive Industries Transparency Initiative, an international body which monitors payments between governments and companies, Ghana’s government took in $50 million in mining revenues alone in 2011, compared to $20 million in 2010 Despite the increase in revenue, it must be stated in general that the true picture ofthe sector is not a happy one for three reasons: (a) Transactions, contracting and decisions about mining undertaking are not transparent and have limited public oversight; (b) Fiscal terms are all too often poorly or improperly defined and have not ensured maximum benefits to the citizens of Ghana; and (c) The negative externalities, thus environmental and social effects have not been major considerations in any of the stages of mining activities, with detrimental consequences on the health, lives, and livelihood of those who live in areas within which mining activities occur. Mining activities, for the most part, have not been for broad and sustained improvements in living standards of citizens, enriching only mining companies, their foreign affiliates, and a narrow local elite (IEA, 2010).
Oil and Gas Production
The exploration of oil and gas in Ghana dates back to the 1890s in the Tano Basin. Following the discovering of oil and gas in commercial quantities in 2007, the country began production after two years, thus in 2010, Ghana started the commercial production of oil at the Jubilee Field located in the Western Region near Takoradi. With a projected production span of 20 years, the field is estimated to produce between 800 million to over one billion barrels of oil and 120 mmscf/day of associated gas. Ghana has already benefited a total sum of $4.009 billion from petroleum revenue in the seven years of petroleum production. The current government flagship program on education, “Free SHS” is being financed by revenue from Oil resources.
Cocoa came to Ghana in 1876 when a Ghanaian named Tetteh Quarshie brought some cocoa pods to Ghana from Equatorial Guinea. He cultivated the beans on his farm in Ghana and was able to grow several seedlings and from the 1900s cocoa growing spread in Ghana. By 1911 Ghana was the world’s leading cocoa exporter, supplying the growing European chocolate market. As introduced by commercial farmers in the Eastern Region’s districts of Akuapem and Krobo, and has emerged as a leading producer in the world, Ghana experienced a major decline in production in the 1960s-70s, with a near collapse of the sector in the early 1980s. Production steadily recovered in the mid-1980s after the introduction of economic recovery programs. The 1990s marked the beginning of a revival with production nearly doubling between 2001 and 2003. Ghana’s cocoa development could be identified in four different phases: introduction and exponential growth (1900 to 1937); stagnation followed by a brief but rapid growth following Ghana’s independence (1938 to 1964); near collapse of the sector (1965 to 1982); and the recovery and expansion (1983 to 2008) with the introduction of the Economic Recovery Programme . This is shown in the diagram below (Figure 2);
Figure 2: Cocoa production trend from 1900-2008.
Source: Grill & Duffus Group Statistics, and Ghana Cocoa Marketing Board, C.M.B. newsletter
Cocoa production relies heavily on farmers and the availability of land, farmers’ education and the residents of the areas where cocoa is planted. These factors become the issues and barriers to poverty reduction and sustainable development (World Cocoa Foundation, 2012). According to the International Food Policy Research Institute, cocoa has played a major role in the poverty reduction and development of Ghana. Ghana also plays an important role in the international cocoa market being the second largest producer of cocoa beans in the world after Ivory Coast and representing about 20% of global production (ICCO annual reports). Ghana’s cocoa has grown by small-holder farmer Cocoa has been a major contributor to the growth of Ghana’s formal economy. Accounting for 30% of the total export (80% in raw form) earnings and provides income for about six million people [9-11]. Ghana’s cocoa has grown by small-holder farmer engagement as the case of other cocoa growing countries. The sector employs about 2 million people who are engaged in farming, trade, transportation and processing of cocoa World Bank, 2011. Though the statistics look good, the real positive impact of cocoa for people living within these regions cannot be directly felt because many people still do not have sufficient income to feed, schools in most of these areas are still under trees, healthcare delivery is poor and unemployment is high.
Amongst the 16 administrative regions of Ghana, the incidence of poverty and poverty gap are not evenly distributed. Greater Accra which is mainly driven by the services industry has a very low level (5.6%) of poverty incidence, which is 18.6% points lower than the national rate of poverty. The Upper West region had a high absolute poverty rate of 70.7% as compared to the Western region’s poverty rate of 20.9% which had more production activities within the districts than the Upper West region. The table below depicts the statistics (Figure 3) (Table 1);
Table 1: Poverty incidence and poverty gap by region (%), 2005/2006-2016/2017.
In the construction above, it is perceived that the major resource-rich region (Western) records a low incidence of poverty (20.9%) that is below the national average of 24.2%. The global trend also shows that oil and gas are other important commodities that contribute to the wealth of many economies including Ghana.
Figure 3: Poverty incidence by region.
The discovery of these resources largely attracts manufacturing firms and industries to be located close to such areas and thus leading to the creation of employment opportunities and invariably contributing to the reduction of poverty. Gold mining in the Upper West region, however, is still on the small scale, therefore, cannot absorb most of the unemployed workforce. The shea industry is growing at a fast pace. Exports have increased by 600% in the last 20 years. Over the last three years, partnerships between private sector, donors, civil society organizations, and government committed US$ 37 million to empower women and protect the ecosystem in shea producing communities [12-17]. However, the real picture is that the industry is only benefitting aggregators over local producers, though employing many women, the rate of poverty reduction has not been significantly felt as a result of the industry’s expansion. Stakeholders should, therefore, design policies that protect the interest producers in shea processing communities for poverty to decline.
From the earlier discussion, it has been revealed that the Western Region has the largest deposit of natural resources in the country and it is considered a case for our study [18-22]. The figures below depict the poverty index and spatial distribution of mineral resources in the western region of Ghana (Figure 4,5). A cursory look at maps above shows that Aowni, Wassa Amenfi West and Suaman largely engage in cocoa production resulting in a less than 10% poverty incidence, which is lower than the regional average of 20.9% and 24.2% as the national average. Also, Prestea and Tarkwa have a large deposit of Gold and mining activities taking place in different areas which have attracted a lot of economic activities and employment opportunities causing the incidence of poverty which stands at 15% to fall below the regional and national averages as stated above.
Figure 4: Poverty Map of the Western Region.
Source: GSS, 2015.
Figure 5: Resource Map of the Western Region.
Source: minerals commission Ghana
Wassa Amenfi Central, however, records a poverty incidence rate of 60-69.9% which is higher than the regional and national averages. This district has five (5) forest reserves which has limited cocoa production activities, hence limited employment opportunities. Notwithstanding this, economic activities are centered on agriculture that employs about 77.4% of the population (GSS, 2014) but due to the large forest reserves, these agricultural activities are high on the subsistence level [23-28].
In Ghana, there seems to be an uneven distribution of natural resources across the administrative regions and ecological zones. This kind of distribution has resulted in the creation of additional jobs in areas they are found. It is also observed that poverty may be prevalent in areas where resources are mostly exploited at the expense of the people who live there. Also, economic activities usually are promoted within such geographical areas which affect the level of inflation within the local economy. Cost of living becomes so high for the locals and ordinary residents, which to a large extent increases the poverty incidence of the people. Notwithstanding this argument, the dearth of natural resources in an area is said to still have a wider effect on poverty incidence as in the case of the Upper West region hence, efforts must be directed at prospecting and exploiting the unexploited resources in various location of Ghana that could aid in bridging the developmental gap of the country. Spatial distribution of natural resources positively influences most important production activities in the discovered areas. A boom in production activities within an areas certainly reflect on the poverty incidence of the people since it creates both direct and indirect employment opportunities in that area. Ironically, Greater Accra is said to be among the less resources regions in the country however, production activities is still high because resources are conveyed to Accra and Tema for production and thus creating more economic opportunities and reducing poverty incidence (5.6%) (GSS, 2014). Beyond the development gap between the southern half and northern half of the country, it is also a noticeable fact that most of the disparities exist between resource exploited areas and non-resource exploited areas. For Ghana to bridge the spatial inequalities that exists in the country, there must be strong commitment by government to ensure that the following are met: The government should plan for a better rural-urban linkages, improved regulation in the mining sector to regulate illegal mining Ensuring that people have equitable access to basic needs and public goods. Decentralization of Ghana’s industrial sector to ensure equal development. Diversification of the economy should be vigorously pursued, Royalties must be dedicated to the development of infrastructure in the localities and In order to create direct jobs or employment, processing plants should be sited in the localities.
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