Ghana: What lies ahead

Representatives from REST Ethiopia lead a group discussion with a graduation program participant during the Innovations in Social Protection and Livelihoods Development program in 2014.

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>>Authored by Paul Gostomski, Microcredit Summit Campaign Program Intern

The Microcredit Summit Campaign recently spoke with Mawutor Ablo, director of Social Protection at Ghana’s Ministry of Gender, Children and Social Protection, and also a participant in the Campaign’s Field Learning Program last year, Innovations in Social Protection and Livelihoods Development.

The program invited representatives from Ghana, Malawi, and Mozambique on a trip to observe leading social protection programs in Ethiopia and Mexico. In our discussion with Mr. Mawutor, we spoke about the changes made to Ghana’s social protection programs since we last met and what changes may be made in the future to increase the reach of the programs and strengthen outcomes for Ghana’s poorest.

The Ghana National Household Registry

In May 2014, the World Bank continued its support to Ghana through a credit of US$50 million to Ghana’s Finance Ministry with payments dispersed annually from 2015 to 2017.

The funds are directed to the Ghana Social Opportunities Project, which aims to extend Ghana’s Labor-Intensive Public Works (LIPW) program from 49 to 60 of Ghana’s 216 districts. LIPW also aims to expand the reach of grants from 100,000 to 150,000 poor households through the Livelihood Empowerment against Poverty (LEAP) program.

In addition, the social protection systems will be strengthened through improved targeting and the establishment of the Ghana National Household Registry (GNHR).

Ato Berhanu Woldemichael in a meeting

Mr. Ato Berhanu Woldemichael, as acting State Minister with the Food Security Directorate, oversees much of the government’s role in LEAP and LIPW.

Before the implementation of the household registry system, both LIPW and LEAP screened candidate households in selected districts independently. This has not caused an overlap yet, but with the extension of the Ghana Social Opportunities Project and its intended scaling up of both programs, overlap is inevitable, leading to possible disbursement conflicts between the two programs.

The GNHR will create a database that optimizes methods used in finding and selecting program candidates through a universal survey useful for multiple social protection programs in selecting participating households. Simply put, the GNHR and its universal survey will represent a more efficient and comprehensive method for selecting households for inclusion in the national social protection programs.

Mr. Mawutor expects the registry to improve the ability to target and reach the poorest in Ghana. He compared the registry to that of the successful Cadastro Unico, the national registry of Brazil established in 2001. Three years after Cadastro Unico was created, a study showed that the poorest quartile of the population received 80 percent of all social protection programs’ benefits.

By way of comparison, the cash transfer programs in place prior to the unified registry together distributed only 64 percent of the total benefits to the poorest quartile. This improvement in targeting is something Mr. Mawutor hopes to see take place in GNHR by reducing what he termed inclusion error — the participation of households living above the targeted poverty level — in programs like LEAP and LIPW.

The Move to Mobile Money

Leaders in charge of implementing Ghana’s social protection programs are interested in finding the most efficient way to distribute the cash transfers that are at the center of these initiatives. Currently, the most common method of disbursement is through smart cards. Here, recipients of a cash transfer can go to the post office or another government entity with their smart card to have their payment added to their smart card.

Ghana would like to move from this strategy because of the high transaction costs associated with it. Also, this method does not allow recipients to transfer the money they receive to, for example, a family member in need. Instead, Ghana would like mobile money to be the primary form of receiving cash transfers.

Ghana has already partnered with MTN, a mobile network operator from South Africa, and has thus far reached a point where about 10 percent of its payments are disbursed through mobile systems.

Hoping to expand this number, Mr. Mawutor told us that Ghana would be increasing its total number of providers to four companies this year. With the expansion, Mr. Mawutor hopes to make mobile banking more accessible to poorer areas by increasing the overall number of local branches across the country.

The addition of three new operators would also produce significant returns from the added competition to the market, producing incentives for each company to provide the best service.

Mr. Mawutor Ablo during the Innovations in Social Protection, along with the Hon. Dela Sowa, Deputy Minister of Gender, Children, and Social Protection. Together they have great responsibility for the social protection programing in Ghana.

Growth by Efficiency

Social protection programs in Ghana have made many changes in the past few years and they all seem to focus on efficiency. Both the establishment of the Ghana National Household Registry and the move to mobile money aim to cut the costs associated with these programs. The registry intends to better target those among the poorest in Ghana for participation in the social protection program and reduce the costs to serve them by removing redundancies between the various initiatives.

The move to mobile money aims to make funds more accessible to beneficiaries, increasing the potential for positive outcomes resulting from the programs. With these changes, it is clear Ghana is dedicated to maximizing results.

We look forward to continuing to follow new developments from Ghana over time and continuing to be a close supporter of the work of Ghana’s Ministry of Gender, Children, and Social Protection.


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Related reading

Social protection: innovative programs deliver financial services at scale

Participants of the Innovations in Social Protection project

Participants of the 2014 Innovations in Social Protection and Livelihoods Development initiative

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Agricultural value chains that reach to small scale producers


>>Authored by Jesse Marsden, Manager, Research and Operations

April is the Month of MicrofinanceLearn more

April is the Month of Microfinance
Learn more

We at the Microcredit Summit Campaign have advocated for scaling up the full range of microfinance services (savings, credit, insurance, and beyond) as one sector’s contribution to a broader effort to end extreme poverty. Experience of the development community suggests that ending extreme poverty will take a multifaceted approach that matches and sequences the right combination of financial and non-financial services with an ever-varying set of binding constraints faced by individuals living in extreme poverty.

Some 40 years have passed since modern microfinance got underway with micro loans to villagers in Jobra, and innovation and learning have helped micro-financial services and interventions greatly evolve to now include a wide array of forms and functions. Last August, the Microcredit Summit Campaign led a learning tour to deeply investigate some of the newest and most promising innovations in delivering micro-financial services to those living in extreme poverty.

Six delegates representing ministries that oversee social protection programs in Ghana, Malawi, and Mozambique took a twelve-day journey with us across two continents in advance of the 17th Microcredit Summit. They observed innovative approaches for social protection programs to address the causes and symptoms of extreme poverty.

The learning and exposure visit, called “Innovations in Social Protection and Livelihoods Development,” was an initiative led by our 100 Million Project in partnership with The MasterCard Foundation. Delegates to the program from participating learned first-hand what is working well and what challenges exist for program implementers in Ethiopia and Mexico.

Policy makers then developed innovation plans for 2015 to act on lessons learned from their trip after returning home. In one example, the Malawi delegation, based on their innovation plan, fully redesigned their social protection plan (which they were preparing before their trip) to include savings schemes and digital transfer technologies to support implementation. This will have an impact on some 860,000 households (or more than 4 million individuals) living in extreme poverty served by the program.

Rainy season roads

Rainy season roads in Ethiopia

Ethiopia’s Productive Safety Net Program

The Ministry of Agriculture oversees the implementation of the Productive Safety Net Program (PSNP) in Ethiopia which is designed to address food insecurity, a key development and poverty issue in the country. PSNP uses a cash transfer process in combination with participation in a public works scheme, generating water and soil related improvements in remote areas of the country in order to build the capacity of drought stricken areas to endure weather related shocks. In return for working in a 10-person group for a set number of days per month, a monthly cash transfer is granted for six months each year that the individual participants.

These groups of 10 people select a public works improvement project to implement from a set of options developed by PSNP administrators based on the local conditions. Options often include projects to control and prevent the erosion of farming or grazing areas, rain capture systems to mitigate the impact of drought, and even infrastructure improvements such as bridges or access roads. An engineering expert is assigned to each group to ensure quality construction of the improvement and safety of the structure built.

Participants are considered “graduated” from PSNP once her or his status as “food secure” is verified by the Ministry of Agriculture, which states that “A household will be graduate when, in the absence of receiving PSNP transfers, it can meet its food needs for all 12 months and is able to withstand modest shocks.”

The Relief Society of Tigray

The delegates traveled to the northern Tigray Region of Ethiopia to visit public works completed or underway as part of PSNP outside the city of Mek’ele. The Relief Society of Tigray (REST), one of the largest NGO microfinance implementers in the country, hosted the delegation and our visits to sites where REST acts as the local partner to PSNP. Ministry and REST representatives highlighted this effective government-NGO partnership as a key to the program’s success.

The delegation visited a number of key water-related improvements and some of these images depict the massive amount of work conducted over the last seven years since the initiation of the program.

Mexico’s Conditional Cash Transfer Program

The learning program continued in Mexico where the delegation enjoyed a day of briefings, exploring the Oportunidades program (now known as Prospera), Mexico’s conditional cash transfer program (CCT) overseen by PRONAFIM in the State of Yucatán.

The briefing focused on the structures and relationships necessary within the policy framework to make Prospera work under the national-level Ministry of Social Development (SEDESOL). The delegates learned how the national development bank, BANSEFI, plays an integral role as a facilitator of cash transfers and an accounting hub for the program, and how important it is for the national government and regulatory authorities to be involved throughout the implementation of the program.

The delegation also met participants of the program Jovenes con Oportunidades (“Youth with Opportunities”), which provides higher education scholarships to youth of families participating in other social development programs of PRONAFIM. The families we met were participating in a health clinic through SEDESOL, enabling their college-age children to receive scholarships to attend universities or polytechnic schools. In this way, the program contributes to improved health while it supports access to higher education among low-income families.

The delegation spent the next day visiting the Cristo Rey Cooperative in the town of Izamal. Cristo Rey is a CCT distributor, partnered with BANSEFI, for the Prospera program. The delegation learned about their operations including a deep dive into the structure and aims of the child savings program that serves over 3,000 children. The presentation also included a look at the IT infrastructure Cristo Rey requires to be an effective partner in Prospera.

What we learned

The purpose of the learning tour was not to learn everything there is to know about successfully using social protection interventions to end extreme poverty. Not everything is known yet. But, it was an opportunity for the six members of the delegation — all of whom work with similar financial and social interventions in their home countries — to develop new ideas based on evidence of success in order to help reshape or improve the programs they oversee. As mentioned, Malawi has completely re-envisioned their program. Others have also begun asking how they can access a new learning tour looking at the use of digital solutions to help deliver programs.

The picture of microfinance is one of innovation and creatively combining services in very intentional ways to meet a huge variety of binding constraints faced by those living in extreme poverty. Agricultural financial tools, cash transfers, graduation model programs, and technology all featured prominently in the learning tour, and these are showing exciting promise in meeting the needs of the extreme poor at scale and in ways that still remain flexible. We look forward to exploring these pathways more!

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Relevant resources

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Photo courtesy of FAO

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Agricultural value chains that reach to small scale producers


Join our next Campaign Commitment E-Workshop!

Agricultural Risk Management:
Innovations you should know about

April 21, 2015 | 10 AM (GMT-4)

The Microcredit Summit Campaign is proud to present the next installment in our Campaign Commitment E-Workshops Series. The UN’s Food and Agricultural Organization (FAO) and the International Labour Organization (ILO) will lead you through a discussion into new tools for understanding and mitigating the many and varied risks facing smallholder farmer.

Both FAO and ILO launched Campaign Commitments in 2014. We look forward to learning about their accomplishments on these fronts and where they are breaking new ground. Hear about how ILO and FAO are identifying key areas of service gaps and other challenges facing smallholder and substance farmers, be introduced to ILO’s 4-dimensional risk mitigation tool, and learn about the ways non-financial services are working to support reducing vulnerability.

JOIN US…
Tuesday, April 21st
10:00 AM (GMT-4)

…for the E-WORKSHOP
“Agricultural Risk Management: Innovations you should know about”

This webinar will be conducted in English. We will live-tweet using the hashtag #Commit100M in English, Spanish, and French.

Presenting Organizations
International Labour Organization
Food and Agricultural Organization
Microcredit Summit Campaign

ILO and FAO both launched Campaign Commitments! We invite you also to…

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UN’s Food and Agriculture Organization announces a Campaign Commitment

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The Microcredit Summit Campaign welcomes the Food and Agriculture Organization (FAO), the UN specialized agency for agricultural development, as the newest Campaign Commitment member, joining a global coalition of organizations committed to specific, measurable, and time-bound actions to advance the Campaign’s goal of helping 100 million families lift themselves out of poverty. Their Commitment to disseminate research that enables inclusive agricultural investments to their 143 countries will ensure more inclusive agricultural investments. Read the full Press Release.

The United Nations specialized agency for agricultural development, the Food and Agriculture Organization (FAO) aims to achieve food security for all and to provide high-quality food so that all people may live active and healthy lives. FAO strives to eradicate food insecurity and malnutrition, eliminate poverty by working towards economic and social progress, and promote the sustainable use of natural resources. The Microcredit Summit Campaign is proud to announce its newest Commitment: FAO to disseminate research that enables inclusive agricultural investments.
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