>>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).
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.
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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