Simulating the Impact of the Global Economic Crisis and Policy Responses on Children in Ghana

Like many countries in sub-Saharan Africa, Ghana is experiencing the impact of the global crisis and the uncertain economic outlook. Indeed, as Ghana’s economy is among the most open in Africa, it is expected that the country has been and will continue to be severely affected by the crisis, although strong export prices of its main exports (gold and cocoa) may at least partially counteract the effects associated with the crisis. The main goal of this paper is to understand the potential impacts of the 2008/9 global crisis on different dimensions of child poverty (monetary, hunger, school participation, child labour and access to health services) in Ghana and to support the policy-maker in designing the most appropriate policy response to counteract the negative effects of the crisis. As timely data are not available, a combined macro-micro economic model to predict the impact of the global crisis on children was developed. Simulations suggest that the financial crisis would increase monetary poverty and hunger across all regions of Ghana, eroding many of the gains made over the past few years. Indeed, in comparison with the year preceding the crisis, instead of a reduction of four percentage points in child monetary poverty in 2011 predicted in the absence of crisis, the simulations indicate a 6.6 percentage point increase, with a continuous increasing pattern over the period of study.