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The LEAP Policy and Poverty Reduction in Ghana, Part 1

The link between Welfare States and Social Policies is a thin one, but the main difference is that while the former occurred in response to the effects of industrial activities in the industrialized economies, the latter is seen as deliberate social intervention policies aimed at solving social imbalances and inequalities.Social Policy is therefore seen as public services that govern the well-being of citizens and revolve around some five social challenges of poverty, poor health, inadequate housing, lack of education and employment.

By implementing social policies, governments strive to improve the quality of life for citizens and correct societal maladies.Ghana has implemented a variety of social policies since independence to address the needs of the poor and the most vulnerable in society.

However, one social policy that has persisted and survived different governments is the Livelihood Empowerment against Poverty (LEAP) Program. The LEAP program has enabled the poorest families in the country to meet their basic needs such as (food, clothing and shelter), be healthier, enroll their children in school as well as improve their attendance and adopt strategies to pull themselves out of poverty.

The LEAP program was founded in 2008 with the vision to ensure a harmonious society in which the survival and development of the sexes, children, and the vulnerable and persons with disability are guaranteed. The mission of LEAP is to achieve gender equality and equity, to facilitate the enforcement of the rights of children and to promote the integration and protection of the vulnerable, excluded and persons with disabilities.

Impact Assessment

The LEAP policy has contributed to the economic growth of local communities of beneficiaries. In 2015, there was an Impact Evaluation to study the benefits of the LEAP on beneficiaries by the University of North Carolina and the Institute of Statistical, Social and Economic Research (ISSER) of Ghana.

This quantitative study collected data comprising LEAP families with other families who have the same socio-economic profile but do not receive the LEAP grant. From this rigorous research, it was found out that the LEAP cash transfer program has had a significant impact on both beneficiaries and their families especially in areas such as food security, health, education, savings and investments.

The LEAP social policy has contributed to a reduction of food insecurity among beneficiary families. Due to delays in disbursing the grants to the beneficiaries in recent years, the lump sums received enables families to pay for items in bulk such as food grants and rice which has strengthened their ability to withstand economic shocks and meet their food needs. Aside the food needs, LEAP has also increased school enrollment and regular attendance of schoolchildren from beneficiary families. This is because beneficiary families are now able to keep up with additional fees and spend more on books and uniforms as well.

In addition to having more food to eat, the LEAP transfer also helps beneficiaries access to better quality food that is more nutritious. It also enables beneficiary households to eat diverse diet, which is good for their health. Data shows that as of 2012, 90% of LEAP families were enrolled in the National Health Insurance, an increase of about 7% points compared to 2010. LEAP has led to a significant increase in the number of children aged between 6 – 17, representing 16% points and aged 0 -5 representing 34% points enrolled in the National Health Insurance Scheme.  Through the LEAP policy, beneficiaries are able to pay for their medical prescriptions and undertake medical operations as well. This means that the LEAP policy has allowed beneficiary families to focus on their health needs.

The LEAP policy provides opportunities for the poor to exit poverty and have their lives transformed. The overriding objective of the LEAP policy is to empower poor families to ‘leap’ out of poverty. The monthly cash transfer to LEAP families would in the long run help transform their lives. Specifically, a number of LEAP families have felt sufficiently empowered to use their cash to increase loan- payment by 23% or savings by 10.8%. Further, the LEAP cash transfer has also increased the capacity of beneficiaries to access credits from small loan schemes. Through this, some of the beneficiaries are able to start their own small businesses.

 

LEAP social policy builds the capacities of beneficiaries to enable them become active participants in their communities. The policy helps to build the capacity of the beneficiaries and boosts the local economies of the beneficiary communities. In a Ghanaian society where reciprocity is very vital and critical for the maintenance of traditional social welfare mechanisms, LEAP has made it possible for beneficiaries to contribute to various groups in their communities such as farming groups. In the family level, LEAP has strengthened the capacity of beneficiaries to contribute to key social events and ceremonies in their communities. This helps to improve their self-esteem as well as increase their visibility and social status.

 

Research has also shown that about 80% of the beneficiaries of the LEAP policy spend their income inside the local economy and as such, boosts the local economy thereby making sure that the entire community benefits from the programme.  For example, a recent study estimated that every GHc 1 transferred to a beneficiary family has the potential to increase local income by GHc 2.50. This shows that the impact of the cash transfer on the local economy is likely to significantly exceed the amount transferred to beneficiaries, which is a significant impact.

In addition, the LEAP policy enables beneficiary households to avoid asset disinvestment and indebtedness. This is due to the fact that the LEAP transfers help to reduce borrowing and financial risk and asset disinvestment amongst beneficiary households while increasing their capacity to cope on a day– to –day basis through risk-adverse coping strategies.

Finally, a key component among the impacts of the LEAP social policy is its ability to reduce child labor while keeping children in school. Research regarding the LEAP transfer has shown that it has brought about a reduction in child labor as children from beneficiary households who used to work all day in order to earn incomes to supplement that from their parents no longer work during school hours.The LEAP policy has drastically reduced this phenomenon of children working during school hours.

 

Missing Links

Despite these positivesassociated with Ghana’s flagship social intervention policy, the policy is embedded with many problems.One of the challenges that is threatening to reverse the gains of the LEAP program is the delays in paying the monthly grants to beneficiary households. This really affects the planning of beneficiaries on how to invest the money. In cases of delays, beneficiaries are unable to take urgent and critical decisions such as what to use the cash transfers either as a safety net or as a productive investment. Worse of it is that when there are payments intervals, there is the possibility of asset disinvestment to provide and maintain basic needs such as consumption.

Another challengehas to do with the procedures involved in the selection of the beneficiaries of the policy. Available research indicates that people who are extremely poor and should have been considered for the LEAP program are excluded from it. This is partly because of the fact that the selection criterion of beneficiaries of the policy is not clear and transparent enough.

Currently, the selection committee is made up of local leaders and the assembly members of the various communities. Issues of conflict of interest in the selection process and elite capture usually surface when local leaders such these constitute the selection panel. Therefore, in the absence of transparent selection procedures, non-beneficiaries often feel the selection process is either biased or politicized in favor of households that are aligned to the political party in power.

Beyond the problems of delays in payments to beneficiaries and challenges associated with the selection process, one important aspect that requires attention of the government is whether there is value for money in the LEAP policy as well as the future of the program. It is suggested that the LEAP policy needs to be reviewed such that it would be ‘viewed’ as an incubator, thus one that shelters or offers temporal protection to individuals for a while before releasing them to stand on their own. The LEAP program should be structured in a way that it becomes one that develops tax paying and tax making members of the society.

Cash transfers are intended not to be lifetime benefits. Instead, they ought to deliver value for money and empower the beneficiaries to break the cycle of poverty. Unfortunately, LEAP does not come with similar sustainability measures. This is an inexcusable lapse in the program design. It is indeed the responsibility of every caring government to implement social programs that seek to protect the most vulnerable people in society. However, a mere cash transfer is not enough to eradicate poverty and produce value for money. It is argued that the LEAP program be structured in a way that it has a maturity period and one that develops taxpaying and tax making for the society, this is the only way through which the country would truly eradicate powerty and guarantee the sustainability of the policy.

It is often argued that the best way to address poverty and inequalities in a society is not cash transfers but building the capacities of the poor through skills training to empower themselves is a better way of addressing issues of poverty and inequalities. In the specific case of the LEAP policy, the unreliable and low grants received by the beneficiary households are too low to effect a fundamental change in their poverty condition.

Conclusion

Globally, cash transfers are increasingly becoming an important social protection policy among the middle and low-income countries as a measure to address a range of gendered economic and social vulnerabilities. The Livelihood Empowerment against Poverty (LEAP), which is Ghana’s current flagship social policy, continues to impact positively on the lives of the poor and the vulnerable in Ghana since its implantation in 2008. However, issues of sustainability might be a big challenge going forward as the project is hugely funded by donors. Delays in paying beneficiaries and problems in the targeting of beneficiaries are challenges that might derail the gains of this rather laudable social policy.

By George Akeliwira

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