Finance minister assures public on safety of social programs

Finance minister assures public on safety of social programs

Finance Minister Ken Ofori-Atta has given the assurance that the Ghanaian government is committed to safeguarding social interventions under the current International Monetary Fund (IMF) program. This comes as concerns linger concerning the potential impact of fiscal tightening and reduced capital expenditure on the country's most vulnerable, who are already battling skyrocketing inflation.

During the 2023 mid-year budget presentation, Mr. Ofori-Atta addressed these worries by underscoring the government's determination to promote inclusive growth and offer aid to those in need, despite ongoing fiscal adjustments.

"The IMF-supported PC-PEG has also prioritized social protection reforms to ensure the vulnerable are safeguarded from the impacts of the ongoing fiscal adjustment," Mr. Ofori-Atta declared.

On this note, the minister announced the forthcoming introduction of an indexation mechanism for LEAP program benefits, scheduled to be rolled out by the end of September 2023. This mechanism aims to ensure that the benefits provided to beneficiaries align with inflation and other economic fluctuations.

Furthermore, the LEAP program will expand its reach, aiming to assist more individuals struggling financially, and improve its targeting to encompass the 'extreme poor' by 2024. Mr. Ofori-Atta affirmed the government's dedication to ensuring no vulnerable individual is left behind by enhancing targeting, enabling the focus on those requiring assistance most.

Social spending on health, social protection, and education will be under close scrutiny to guarantee timely disbursement of funds to beneficiaries, according to the minister. He emphasized that effective disbursement of resources is vital to ensure that the desired impact of social programs is felt by Ghana's citizens.

1H Review

During the first half of the year, a total of GH¢169.9 million was disbursed under the LEAP program, reaching approximately 346,000 households consisting of 1.5 million individuals, as per the minister's report. The monthly grant for beneficiary households was increased from GH¢32 to GH¢64 for one-member households and GH¢38 to GH¢76 for two-member households.

The government's goal under this program is to help approximately 8% of the population, equivalent to 2.5 million people. The goal is to lift more families out of poverty and provide them with a shot at a brighter future.

In addition to the LEAP program, Mr. Ofori-Atta highlighted the government's unwavering commitment to improving other social protection initiatives. Particularly significant is the expansion of the Ghana School Feeding Programme, which went from 1.67 million beneficiaries in 2016 to 3.8 million beneficiaries by June 2023.

The feeding grant's cost per meal, per child, per day was raised to GH¢1.20 for the 2023 school year. On the Capitation Grant, he highlighted its positive impact on basic school enrollment, contributing to an increase from 6 million pupils for the 2021/2022 school year to 6.1 million pupils for the 2022/2023 school year.

Free Senior High School (Free SHS)/Technical and Vocational Education and Training (Free TVET) programs registered a total of 447,396 first-year students enrolled during the 2022/2023 school year, adding to the total number of beneficiaries at 1.3 million students.

"Government continued construction of 9 state-of-the-art TVET centers to offer modern facilities and equipment, enabling effective skills training and empowering young people with the necessary skills for employment and entrepreneurship," he further stated.

Implementing Cycle 8 of the Complementary Basic Education Programme (CBEP) in February 2023 led to the enrollment of 5,000 learners by the end of June 2023.

Enrichment Data: The intention behind the indexation mechanism in social protection programs, such as LEAP in Ghana, is typically to adjust benefits according to inflation or other economic indicators. This helps maintain the purchasing power of the benefits, ensuring their continued effectiveness in addressing poverty and supporting livelihoods. The Ghanaian government's decision to implement such a mechanism is in line with broader efforts to strengthen the sustainability and impact of its social protection reforms. Precise details about the indexation mechanism, including the specific indicators it will be linked to and its implementation, can be found in the strategy paper or official documents from the Ministry of Finance in Ghana.

1. The LEAP program's indexation mechanism, scheduled for Q4 2023, aims to align benefits with inflation and economic fluctuations, ensuring the support for the vulnerable remains effective amidst economic growth.
2. In education, the Ghana School Feeding Programme has expanded to reach 3.8 million beneficiaries, with the feeding grant cost per meal, per child increasing to GH¢1.20 for the 2023 school year.
3. The government is committed to safeguarding social protection reforms, as demonstrated by the expansion of the Ghana School Feeding Programme and the anticipated indexation mechanism for the LEAP program.
4. The LEAP program aims to assist more financially struggling individuals and improve its targeting to encompass the 'extreme poor' by 2024, signifying a focus on education-and-self-development and health-and-wellness.
5. Finance Minister Ken Ofori-Atta emphasized the importance of ensuring timely disbursement of funds to maintain the impact of social programs, including health, social protection, and education.
6. Beyond the LEAP program, various business and employment initiatives are pursued, such as constructing 9 state-of-the-art TVET centers for effective skills training and empowering young people for entrepreneurship.

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