## 1. Ghana’s Poverty Reduction Strategy (GPRS) was approved by the government ## Source details **Canonical URL:** [1. Ghana’s Poverty Reduction Strategy (GPRS) was approved by the government](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2004/_cr04208.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2004/_cr04208.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2004/_cr04208.pdf.json) --- ### Overview and endorsement - GPRS approved by the government in early 2003. - Joint staff assessment: GPRS provided a sound basis for achieving the government’s anti-poverty objectives. - In May 2003, the GPRS was endorsed by the Boards of the IMF and IDA as a basis for financial assistance from the two institutions. ### 2003 Annual Progress Report (APR): scope and linkage - APR prepared by the government with technical assistance of bilateral donors; national inter-agency poverty monitoring groups actively involved. - APR presents economic, financial and social statistics to track effectiveness across: macroeconomic stability; production and employment; human resource development; protecting the vulnerable and extremely poor; and governance. - Targets and indicators from the GPRS are closely linked to the Millennium Development Goals (MDGs). ### APR assessment — main achievements and disappointments - Achievements: - Real GDP growth in 2003: 5.2 percent (compared with 4.7 percent projected). - Inflation on track to reach single digits in 2003. - Reduced external vulnerability from build-up of international reserves. - No net domestic financing of the budget in 2003, implying a sharp reduction of debt relative to GDP. - Structural reform progress in sectors such as power and education; progress toward eliminating gender disparity in access to primary education. - Disappointments: - Continuation of quasi-fiscal activities due to lack of timely retail petroleum price and utility tariff adjustments. - Deterioration in health indicators: increase in infant mortality and under-5 mortality rates, and slow reduction in maternal mortality rates. ### Macroeconomic stability (implementation and prospects) - APR notes: - Economic growth in 2003 exceeded expectations and was above the outturn for 2002. - Decline of inflation achieved since the large retail petroleum price hike of early 2003. - Relative exchange-rate stability and buildup in gross official international reserves to record levels. - Improvements in public expenditure management and resource mobilization, resulting in a domestic primary surplus and no recourse to domestic borrowing by government in 2003. - Lower nominal interest rates, reduced government interest burden and scope for “crowding in” private sector credit. - Staff observations and forward-looking points: - APR could have emphasized capacity strengthening in the civil service to complement computerized accounting and financial management reforms. - Need to strengthen financial and technical management of public enterprises to stem financial losses and ensure reliable infrastructure delivery (energy, transport, telecommunications). - Further efforts needed to promote financial sector development, as elaborated in the authorities’ Financial Sector Strategic Plan. - Absence of recent and comparable poverty measures hampers assessments (last household survey dates from 1998/99). - Government decision to maintain petroleum prices fixed ahead of general elections in December 2004 will require substantial subsidies in 2004; authorities committed to trim low-priority expenditures to offset part of the fiscal cost of the subsidies. - Macro program judged by staff to be robust under plausible scenarios with higher world oil prices. - APR makes no reference to new petroleum pricing regime that would transfer responsibility for setting petroleum retail prices to oil marketing companies under an established formula; new regime to be enshrined in legislation for implementation in the first quarter of 2005. - A medium-term framework through 2008 is provided in the APR; the APR does not assess the authorities’ foreign-financing strategy and whether this would lead to a sustainable debt path. ### Production and employment - 2003 growth driven largely by agriculture and a benign external environment. - APR notes dependence on exports and the need for policies to encourage diversification and enhance international competitiveness. - Actions to remove impediments to business activity improved the investment climate and facilitated trade; little attention to policies increasing financial intermediation and access to capital for small- and medium-size enterprises. - Weak linkage analysis between growth and job creation due to lack of labor market and unemployment information; only labor market data available for APR was the 2003 Core Welfare Indicator Questionnaire (CWIQ). - Agriculture-led growth primarily boosted income in cocoa growing areas; no evidence of significant positive spillovers to the three northern savannah regions (Upper East, Upper West and Northern Regions). - Likely contributors to poor agricultural productivity: slow implementation of mechanization measures, limited promotion of high-yield varieties, and delayed land reform. - Post-harvest losses and food security identified as issues to be addressed. - Insufficient emphasis in APR on: - Adequate maintenance expenditure in the road sector (activities centered on construction and rehabilitation, less on maintenance). - Improving reliability of energy supply; APR could have better explained how reforms (e.g., review of the VRA Act) will contribute to service delivery and the importance of timely retail petroleum and utility price adjustments. ### Natural resource management and environment - Reforestation: area under reforestation increased to 27,000 hectares in 2003, from 17,000 in 2002. - Savannahs comprise about 66 percent of Ghana’s land area; threats include overgrazing, bush fires, firewood harvesting, expansion of agricultural cultivation, and inappropriate crop management. - High forest areas: timber production occurring at four times the sustainable rate, with an annual rate of deforestation estimated at about 1.6 percent (about 65,000 hectares annually). - Mining, inappropriate farming systems and massive encroachment by farmers have reduced the extent and quality of forest resources, threatening wildlife and biodiversity. - APR indicates some progress in land administration reform to increase access to secured land title. ### Human resource development - Mixed outcomes from CWIQ and DHS: - Improved outcomes in education, water and sanitation sectors, and progress in fighting HIV/AIDS. - Worsening outcomes in health: increase in infant- and under-five mortality rates. - Education: - Marginal national improvement in access and quality of primary education; marked enrollment increases in most deprived regions. - Enrollment rate rose 3-6 percentage points in the 2003 academic year in deprived districts; trend expected to continue with gender differentiated capitation grants. - Staff recommendation: Ministry of Education, Youth and Sports should rationalize pupil assessment; interim quality indicators: textbook-pupil ratio, frequency of school supervision, and percentage of trained teachers. - APR launched the comprehensive Education Sector Strategy in November 2003; staff support targeted school construction and rehabilitation in low-access regions and districts. - Health: - Infant mortality rate increased from 57 to 64 (per thousand live births) in 2002 compared with 1998. - Under-five mortality rate rose from 108 to 111 (per thousand of the relevant population cohort) over the same period. - APR policy proposals: strengthen nutrition programs; increase immunization coverage; accelerate High Impact and Rapid Delivery Programs with UNICEF; introduce health insurance to improve financial access for the poor. - Staff recommendations: target poorest and most vulnerable groups; concentrate construction of model health facilities in most vulnerable districts (only about a third were developed in those areas in 2003); include wages and capital investments in future resource allocation formula to achieve more equitable financing; improve targeting of subsidies for the poor through exemptions or health insurance premia. - HIV/AIDS: - Ghana implementing 2001-2005 HIV/AIDS Strategic Framework focusing on prevention and improving quality of life for people living with HIV/AIDS, orphans and vulnerable children. - 2003 DHS: awareness of AIDS nearly universal among men and women in reproductive ages; sero-prevalence rates for 2003 are estimated at 3.8 percent. - Government initiatives: Voluntary Counseling and Testing centers; scaling up anti-retroviral therapy through donor-funded programs; support to orphans and vulnerable children via associations, traditional community groups and district authorities. - Government completed review of national response to HIV/AIDS policy indicating highly satisfactory progress; APR commends Ghana AIDS Commission; preliminary discussions underway to begin pooling funds for HIV/AIDS programs. ### Protecting the vulnerable and extremely poor - Government priorities: - Risk and vulnerability assessment completed to inform a comprehensive social protection strategy and social safety nets. - Objective to expand opportunities for vulnerable and excluded groups; commitment to assist street-children with skills acquisition and family reintegration. - APR fails to cite indicators or activities for “hard core” street children despite some successful programs reaching many such children. - Legal Aid Board provided assistance to over 4,500 poor people in 2003. - Women’s initiatives: - Women’s Development Fund created, providing support to about 20,000 women farmers. - About 50,000 new jobs have been created for women. - Ministry of Women’s Affairs returned trafficked children to their homes and APR refers to ongoing initiatives in education and health targeted at reducing gender-related gaps. ### Governance and public sector reform - APR reports actions to improve transparency and accountability: passage of the Public Procurement Act, the Financial Administration Act, and the Internal Audit Agency Act. - Freedom of Information and Whistle Blower bills placed before cabinet. - Staff observation: APR could have placed greater emphasis on steps taken and still needed to implement the provisions of new legislation effectively; effective implementation across public entities is necessary to achieve increased transparency and accountability in management of public expenditure. ### Staff critiques and policy recommendations drawn from APR analysis - General critique: - APR is systematic and insightful but often fails to draw concrete policy conclusions and recommendations from its analysis. - APR could be used more effectively to monitor current policies, suggest policy options where circumstances have changed, and signal policy settings that conflict with GPRS goals. - Specific recommendations: - Complement computerized public financial management with civil service capacity strengthening. - Strengthen financial and technical management of public enterprises to attract financing for new investment and ensure reliable infrastructure services. - Enhance focus on maintenance spending in the road sector and reliability of energy supply. - Address agricultural productivity constraints: mechanization, promotion of high-yield varieties, land reform, post-harvest losses, market opportunities, non-traditional exports, and women’s access to credit. - Improve poverty measurement via updated household survey to analyze distributional effects of growth and service delivery. - Target health and social interventions to the poorest and most vulnerable districts and groups. - Implement and operationalize new petroleum pricing regime (legislation for first quarter of 2005) to depoliticize pricing and insulate the budget from rising world oil prices. - Ensure effective implementation of recent governance legislation across public entities. *Source: _cr04208 - 1. Ghana’s Poverty Reduction Strategy (GPRS) was approved by the government* ### 21. Public sector reform continues to be an issue requiring close government attention. ### Public sector reform — overview and recent progress - Improving institutional and technical capacity in the public sector is described as "a critical element in attaining improved service delivery, and achieving the GPRS objectives." - Progress made in taking stock of past reform efforts and developing a road map for reform. - APR noted as a potentially good opportunity to identify priority measures and lay groundwork for acceleration of reforms once elections are over. ### Public expenditure management (PEM) — findings and gaps - Ghana meets 7 out of 16 PEM benchmarks, compared with 1 out of 15 in 2002. - Improvements recorded in: - (i) the regulatory framework for public expenditure management, including new legislation covering financial administration, internal auditing and procurement; - (ii) budget execution, with a reduction in the level of accumulated arrears; - (iii) expenditure classification, including poverty-reducing expenditures; - (iv) the reconciliation between accounting transactions and banking records. - Areas requiring further attention: - (i) internal control, and internal and external auditing; - (ii) enhancing the comprehensiveness of budget information and fiscal reporting; - (iii) the preparation of medium-term expenditure frameworks; - (iv) further developing the procurement system, especially now that the new procurement law has been approved, and implementation has begun. ### Linkages between the budget and the GPRS - APR conclusion: links between the budget and the GPRS need further strengthening. - Actual 2003 distribution of discretionary expenditures was "broadly in line with GPRS targets," with a shift of resources, including HIPC debt relief funds, toward the social sectors (education and health). - Constraint: 68 percent of poverty-related expenditures went toward public sector wages and salaries. ### Decentralization - 2003 decentralization progress cited: - enactment of the Local Government Services Act; - establishment of the Presidential Advisory Committee; - formal establishment of the Decentralization Secretariat; - commitment to implement the recently endorsed three-year National Decentralization Action Plan. - Remaining priority: focus on the financial autonomy of district assemblies to improve responsiveness and service delivery. ### Monitoring, evaluation, and participatory processes - Progress in GPRS monitoring and evaluation system development is essential to assess strategy implementation. - 2003 achievements: - preparation of the Core Welfare Indicator Questionnaire; - preparation of the Demographic and Health Survey; - preparation of four draft Poverty and Social Impact Analyses (PSIAs). - Authorities committed to finalizing five PSIAs. - Staff note data inconsistencies and availability challenges; recommend improving coverage and timeliness of poverty-related and social data. - Institutional development: plans to establish Poverty Monitoring Groups (PMGs) in districts and regions; development of institutional structures for ongoing review of GPRS indicators, targets and policies within national PMGs. - Shortcomings in APR process: - civil society and parliament were neither involved in APR preparation nor was their role during implementation adequately spelled out; - APR should have indicated how and when it will be presented to parliament and the expected impact of its recommendations on policy decisions and future budget allocations; - APR indicated an assigned role to civil society organizations in assisting monitoring and evaluation but could have elaborated where collaboration will be sought. - The GPRS process is increasingly forming the basis for government-donor dialogue. ### Conclusion and policy recommendations - Overall assessment: Ghana has made satisfactory progress in implementing the GPRS; policy measures of the past year represent a credible set of reforms. - Expectations regarding enhanced public expenditure management and control, as well as continued macroeconomic stability, "have largely been met." - Staffs' suggested priorities: - consolidate macroeconomic stability; - improve public expenditure management further, especially in the health sector where outcomes have been disappointing despite increased outlays; - strengthen the monitoring and evaluation system to track outcomes in quantitative terms; - ensure broad stakeholder participation in the preparation of the APR, integrating public consultation and grassroots feedback. - Final assessment: staffs of the World Bank and the IMF consider that the annual progress report provides a well-documented picture of the implementation of Ghana’s poverty reduction strategy in 2003, that the overall strategy continues to provide a credible policy framework for reducing poverty, and that it is a sound basis for reaching the completion point under the enhanced HIPC Initiative and continued World Bank and IMF concessional assistance. The staffs recommend that the respective Executive Directors of the World Bank and the IMF reach the same conclusion. *Source: _cr04208 - 21. Public sector reform continues to be an issue requiring close government attention.* ### 1. Ghana’s Poverty Reduction Strategy (GPRS) was approved by the government ### _cr04208 - 1. Ghana’s Poverty Reduction Strategy (GPRS) was approved by the government ### Overview and endorsement - GPRS approved by the government in early 2003. - Joint staff assessment: GPRS provided a sound basis for achieving the government’s anti-poverty objectives. - In May 2003, the GPRS was endorsed by the Boards of the IMF and IDA as a basis for financial assistance from the two institutions. ### 2003 Annual Progress Report (APR): scope and linkage - APR prepared by the government with technical assistance of bilateral donors; national inter-agency poverty monitoring groups actively involved. - APR presents economic, financial and social statistics to track effectiveness across: macroeconomic stability; production and employment; human resource development; protecting the vulnerable and extremely poor; and governance. - Targets and indicators from the GPRS are closely linked to the Millennium Development Goals (MDGs). ### APR assessment — main achievements and disappointments - Achievements highlighted: - Macroeconomic performance: real GDP growth stronger than expected in 2003 (5.2 percent, compared with 4.7 percent projected); inflation on track to reach single digits this year; reduced external vulnerability from build-up of international reserves. - Fiscal discipline and public expenditure management: no net domestic financing of the budget in 2003, implying a sharp reduction of debt relative to GDP. - Structural reform in certain sectors, such as power and education; progress toward eliminating gender disparity in access to primary education. - Disappointments highlighted: - Continuation of quasi-fiscal activities due to lack of timely retail petroleum price and utility tariff adjustments, which come with a high cost. - Delivery of some social services, notably deterioration in health indicators: increase in infant mortality and under-5 mortality rates, and slow reduction in maternal mortality rates. ### Macroeconomic stability (implementation and prospects) - APR notes: - Economic growth in 2003 exceeded expectations and was above the outturn for 2002. - Decline of inflation achieved since the large retail petroleum price hike of early 2003. - Relative exchange-rate stability and buildup in gross official international reserves to record levels. - Improvements in public expenditure management and resource mobilization, resulting in a domestic primary surplus and no recourse to domestic borrowing by government in 2003. - These improvements lowered nominal interest rates, reduced government interest burden and created scope for “crowding in” private sector credit. - Staff observations and forward-looking points: - APR could have emphasized capacity strengthening in the civil service to complement computerized accounting and financial management reforms. - Need to strengthen financial and technical management of public enterprises to stem financial losses and ensure reliable infrastructure delivery (energy, transport, telecommunications). - Further efforts needed to promote financial sector development, as elaborated in the authorities’ Financial Sector Strategic Plan. - Absence of recent and comparable poverty measures hampers assessments (last household survey dates from 1998/99). - Government decision to maintain petroleum prices fixed ahead of general elections in December 2004 will require substantial subsidies in 2004; authorities committed to trim low-priority expenditures to offset part of the fiscal cost of the subsidies. - Macro program judged by staff to be robust under plausible scenarios with higher world oil prices. - APR makes no reference to new petroleum pricing regime that would transfer responsibility for setting petroleum retail prices to oil marketing companies under an established formula; new regime to be enshrined in legislation for implementation in the first quarter of 2005. - A medium-term framework through 2008 is provided in the APR; the APR does not assess the authorities’ foreign-financing strategy and whether this would lead to a sustainable debt path. ### Production and employment - 2003 growth driven largely by agriculture and a benign external environment. - APR notes dependence on exports and the need for policies to encourage diversification and enhance international competitiveness. - Actions to remove impediments to business activity improved the investment climate and facilitated trade; little attention to policies increasing financial intermediation and access to capital for small- and medium-size enterprises. - Weak link analysis between growth and job creation due to lack of labor market and unemployment information; only labor market data available for APR was the 2003 Core Welfare Indicator Questionnaire (CWIQ). - Agriculture-led growth primarily boosted income levels in cocoa growing areas; no evidence of significant positive spillovers to the three northern savannah regions (Upper East, Upper West and Northern Regions). - Staffs identify likely contributors to poor agricultural productivity: slow implementation of mechanization measures, limited promotion of high-yield varieties, and delayed land reform. - Post-harvest losses and food security identified as issues to be addressed. - Insufficient emphasis in APR on: - Adequate maintenance expenditure in the road sector (activities centered on construction and rehabilitation, less on maintenance). - Improving reliability of energy supply; APR could have better explained how reforms (e.g., review of the VRA Act) will contribute to service delivery and the importance of timely retail petroleum and utility price adjustments. ### Natural resource management and environment - Reforestation progress: area under reforestation increased to 27,000 hectares in 2003, from 17,000 in 2002. - Savannahs comprise about 66 percent of Ghana’s land area; they face threats from overgrazing, bush fires, firewood harvesting, expansion of agricultural cultivation, and inappropriate crop management. - High forest areas: timber production occurring at four times the sustainable rate, with an annual rate of deforestation estimated at about 1.6 percent (about 65,000 hectares annually), threatening rural energy sources and off-reserve forests. - Mining, inappropriate farming systems and massive encroachment by farmers have reduced the extent and quality of forest resources, threatening wildlife and biodiversity. - APR indicates some progress in land administration reform to increase access to secured land title. ### Human resource development - APR cites mixed outcomes from CWIQ and DHS: - Improved outcomes in education, water and sanitation sectors, and progress in fighting HIV/AIDS. - Worsening outcomes in health: increase in infant- and under-five mortality rates. - Education: - Marginal national improvement in access and quality of primary education; marked enrollment increases in most deprived regions. - Enrollment rate rose 3-6 percentage points in the 2003 academic year in deprived districts; trend expected to continue with gender differentiated capitation grants. - Staff recommendation: Ministry of Education, Youth and Sports should rationalize pupil assessment; until then, use textbook-pupil ratio, frequency of school supervision, and percentage of trained teachers as interim quality indicators. - APR launched the comprehensive Education Sector Strategy in November 2003; staff support targeted school construction and rehabilitation in low-access regions and districts. - Health: - APR notes increases in infant- and under-five mortality rates since 1998; staff note specific figures: infant mortality rate increased from 57 to 64 (per thousand live births) in 2002 compared with 1998; under-five mortality rate rose from 108 to 111 (per thousand of the relevant population cohort) over the same period. - APR proposes policies: strengthen nutrition programs; increase immunization coverage; accelerate High Impact and Rapid Delivery Programs with UNICEF; introduce health insurance to improve financial access for the poor. - Staff recommendations: target poorest and most vulnerable groups; concentrate construction of model health facilities in most vulnerable districts (only about a third were developed in those areas in 2003); include wages and capital investments in future resource allocation formula to achieve more equitable financing; improve targeting of subsidies for the poor through exemptions or health insurance premia. - HIV/AIDS: - Ghana implementing 2001-2005 HIV/AIDS Strategic Framework focusing on prevention and improving quality of life for people living with HIV/AIDS, orphans and vulnerable children. - 2003 DHS: awareness of AIDS nearly universal among men and women in reproductive ages; sero-prevalence rates for 2003 are estimated at 3.8 percent, considerably below the 5 percent benchmark. - Government initiatives: Voluntary Counseling and Testing centers; scaling up anti-retroviral therapy through donor-funded programs; support to orphans and vulnerable children via associations, traditional community groups and district authorities. - Government completed review of national response to HIV/AIDS policy indicating highly satisfactory progress; APR commends Ghana AIDS Commission; preliminary discussions underway to begin pooling funds for HIV/AIDS programs. ### Protecting the vulnerable and extremely poor - Government priorities: - Risk and vulnerability assessment completed to inform a comprehensive social protection strategy and social safety nets. - Objective to expand opportunities for vulnerable and excluded groups; commitment to assist street-children with skills acquisition and family reintegration. - APR fails to cite indicators or activities for “hard core” street children despite some successful programs reaching many such children. - Legal Aid Board provided assistance to over 4,500 poor people in 2003. - Women’s initiatives: - Women’s Development Fund created, providing support to about 20,000 women farmers. - About 50,000 new jobs have been created for women. - Ministry of Women’s Affairs returned trafficked children to their homes and APR refers to ongoing initiatives in education and health targeted at reducing gender-related gaps. ### Governance and public sector reform - APR reports actions to improve transparency and accountability: passage of the Public Procurement Act, the Financial Administration Act, and the Internal Audit Agency Act. - Freedom of Information and Whistle Blower bills placed before cabinet. - Staff observation: APR could have placed greater emphasis on steps taken and still needed to implement the provisions of new legislation effectively; effective implementation across public entities is necessary to achieve increased transparency and accountability in management of public expenditure. ### Staff critiques and policy recommendations drawn from APR analysis - APR is systematic and insightful but often fails to draw concrete policy conclusions and recommendations from its analysis. - APR could be used more effectively to: - Monitor current policies and suggest policy options where circumstances have changed. - Signal policy settings that conflict with GPRS goals. - Highlight costs of delaying price adjustments in the energy sector (notably petroleum prices) and alternative options for assisting energy consumers. - Assess impact on Ghana of higher world oil prices and a potential global slowdown. - Specific policy and implementation recommendations emphasized by staff: - Complement computerized public financial management with civil service capacity strengthening. - Strengthen financial and technical management of public enterprises to attract financing for new investment and ensure reliable infrastructure services. - Enhance focus on maintenance spending in the road sector and reliability of energy supply. - Address agricultural productivity constraints: mechanization, promotion of high-yield varieties, land reform, post-harvest losses, market opportunities, non-traditional exports, and women’s access to credit. - Improve poverty measurement via updated household survey to analyze distributional effects of growth and service delivery. - Target health and social interventions to the poorest and most vulnerable districts and groups. - Implement and operationalize new petroleum pricing regime (legislation for first quarter of 2005) to depoliticize pricing and insulate the budget from rising world oil prices. - Ensure effective implementation of recent governance legislation across public entities. *Source: _cr04208 - 1. Ghana’s Poverty Reduction Strategy (GPRS) was approved by the government* ### 21. Public sector reform continues to be an issue requiring close government attention. ### 21. Public sector reform continues to be an issue requiring close government attention. ### Public sector reform — overview and recent progress - Improving institutional and technical capacity in the public sector is described as "a critical element in attaining improved service delivery, and achieving the GPRS objectives." - Over the past several months, progress has been made in taking stock of past reform efforts and developing a road map for reform. - The APR is noted as having been a potentially good opportunity to identify priority measures and lay the groundwork for acceleration of reforms once the elections are over. ### Public expenditure management (PEM) — findings and gaps - Ghana now meets 7 out of 16 PEM benchmarks, compared with 1 out of 15 in 2002. - Areas that recorded improvements: - (i) the regulatory framework for public expenditure management, including new legislation covering financial administration, internal auditing and procurement; - (ii) budget execution, with a reduction in the level of accumulated arrears; - (iii) expenditure classification, including poverty-reducing expenditures; - (iv) the reconciliation between accounting transactions and banking records. - Areas requiring further attention: - (i) internal control, and internal and external auditing; - (ii) enhancing the comprehensiveness of budget information and fiscal reporting; - (iii) the preparation of medium-term expenditure frameworks; - (iv) further developing the procurement system, especially now that the new procurement law has been approved, and implementation has begun. ### Linkages between the budget and the GPRS - The APR concludes that the links between the budget and the GPRS need further strengthening. - The actual 2003 distribution of discretionary expenditures was "broadly in line with GPRS targets," with a shift of resources, including HIPC debt relief funds, toward the social sectors (education and health). - A constraint: 68 percent of poverty-related expenditures went toward public sector wages and salaries, limiting the impact of higher expenditures on better services for the poor. - The APR notes improved correspondence between GPRS priorities and spending allocations in the 2004 budget, aided by use of GPRS monitoring and evaluation structures during budget preparation. ### Decentralization - The APR reports that in 2003 the decentralization process was reinvigorated, citing: - enactment of the Local Government Services Act; - establishment of the Presidential Advisory Committee; - formal establishment of the Decentralization Secretariat; - commitment to implement the recently endorsed three-year National Decentralization Action Plan. - Remaining priority: focus on the financial autonomy of district assemblies so they can become more responsive to local needs and capable of expanding and improving service delivery. ### Monitoring, evaluation, and participatory processes - Progress in GPRS monitoring and evaluation system development is highlighted as essential to assess whether the strategy remains on course. - 2003 achievements cited: - preparation of the Core Welfare Indicator Questionnaire; - preparation of the Demographic and Health Survey; - preparation of four draft Poverty and Social Impact Analyses (PSIAs). - Authorities committed to finalizing five PSIAs. - Staffs note data inconsistencies and availability as a challenge for poverty monitoring and recommend further efforts to improve coverage and timeliness of poverty-related and social data. - Institutional development: - development of institutional structures for ongoing review of GPRS indicators, targets and policies within national Poverty Monitoring Groups (PMGs); - staffs endorse plans to establish PMGs in districts and regions. - Shortcomings in the APR process: - civil society and parliament were neither involved in the preparation of the APR nor was their role during implementation adequately spelled out; - the progress report should have indicated how and when the APR will be presented to parliament and the expected impact of its recommendations on policy decisions and future budget allocations; - the APR did indicate an assigned role to civil society organizations in assisting monitoring and evaluation but could have elaborated where collaboration will be sought. - The GPRS process is increasingly forming the basis for government-donor dialogue. ### Conclusion and policy recommendations - Overall assessment: Ghana has made satisfactory progress in implementing the GPRS, with the policy measures of the past year representing a credible set of reforms. - The expectations regarding enhanced public expenditure management and control, as well as continued macroeconomic stability, "have largely been met." - Staffs' suggested priorities: - consolidate macroeconomic stability; - improve public expenditure management further, especially in the health sector, where, despite increased outlays, outcomes have been disappointing; - strengthen the monitoring and evaluation system to track outcomes in quantitative terms; - ensure broad stakeholder participation in the preparation of the APR, integrating public consultation and grassroots feedback. - Final assessment: the staffs of the World Bank and the IMF consider that the annual progress report provides a well-documented picture of the implementation of Ghana’s poverty reduction strategy in 2003, that the overall strategy continues to provide a credible policy framework for reducing poverty, and that it is a sound basis for reaching the completion point under the enhanced HIPC Initiative and continued World Bank and IMF concessional assistance. The staffs recommend that the respective Executive Directors of the World Bank and the IMF reach the same conclusion. *Source: _cr04208 - 21. Public sector reform continues to be an issue requiring close government attention.* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2004/_cr04208.pdf_