Policies towards poverty: Ghana and Tanzania in the 1990's

Average Growth in the Economies

Figure 1 shows the distribution of the log of per capita household consumption for both countries for the first and second surveys we are analysing. Table 1 shows the summary statistics of the data on which the Figure is based. The patterns are very similar in that both the distributions are clearly close to being log normal and there is some increase in the means. The growth rates are very similar with that for Ghana being 9 per cent for the 11 year period from 1987/88 to 1998/99 while that for Tanzania it is 11 per cent for the 9 year period from 1991 to 2000. These growth rates are very low.

The data shown in the figure is in 1999 US$, no conversion has been made for purchasing power parity. These figures have been derived from constant price domestic figures. The conversion to US$  uses the exchange rate for the base period for the prices which is 1998/99 for Ghana and 2000 for Tanzania.

Figure 1

Table 1: Summary Statistics for the Log of Household Expenditure per Capita in (1999) US$

Thus the growth rates shown are not affected by any changes in international prices or changes in the real exchange rate. The Figure shows a substantial difference in per capita consumption, expenditures in Ghana are three times those in Tanzania. This may reflect a range of factors which we do not investigate as our primary interest is in comparing changes over time within each country. We leave to later work understanding the sources of the very large differences in per capita consumption across the countries implied by the data.

            It is apparent from the Figure that any decline in poverty in the sense of the headcount measure will be much clearer in Tanzania than in Ghana. For Tanzania the distribution clearly shifts so that at all income levels below the mean the proportion earning any given level of income has fallen. For Ghana the distributions cross at low levels. Finally the standard deviation of the distribution increases for Ghana but not for Tanzania. We note that this is not necessarily inconsistent with the published reports as our data is confined to households headed either by a wage employee, the self-employed or farmers: there is a residual category excluded from our analysis which is included in the summary statistics in the reports. We turn now to a consideration of who benefited from the growth.

previous > next