Sustainable economic development
Title: Programme for Sustainable Economic Development (PSED)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Lead executing agency: Ministry of Finance (MoF)
Overall term: 2006 to 2019
Ghana’s economic development since the mid 1990s has been one of the greatest success stories in sub-Saharan Africa. However, there are substantial differences in the distribution of incomes and assets among the country’s population. Many people find it difficult to secure employment due to their lack of vocational training. Around 85 per cent of the economically active population of Ghana (estimated at 11.5 million) is employed in the informal sector, where financial services are rarely available and hardly affordable. This shows that not all population groups have the same economic opportunities. One major challenge faced by Ghana is how to make its economic development more inclusive.
Access to innovative, demand-oriented microfinance services and to employment in micro, small and medium-sized enterprises has improved.
Operating at the interface between the public, private and financial sectors, the programme is active in three areas:
- Financial systems development
Strengthening the microfinance and insurance sectors through improved supervision and regu-lation lays the foundation for consumer protection and basic financial education for small-scale entrepreneurs and low-income workers.
- Vocational training
Since 2012 the programme has been implementing the Ghana Skills Development Initiative (GSDI), which focuses on measures to modernise traditional apprenticeships in the informal sector in connection with courses offered at formal vocational training institutions. The initia-tive supports Ghana’s vocational education and training agency (COTVET) in implementing skills-based training courses at workplaces and schools. It strengthens the role of business associations and their members in vocational training and supports training providers in im-plementing the courses developed for master craftsmen, workers and trainees. Since 2016, the third phase of GSDI, which is being co-financed by the EU, has also been introduced in additional regions and sectors, and along agricultural value chains. GSDI works in close co-operation with the Ghana Technical and Vocational Education and Training Voucher Project (GTVP), promoted by KfW Development Bank, which finances the courses at schools.
- Employment promotion for returnees and potential migrants
These measures have been implemented since October 2017 with the aim of improving the employment and income situation in three selected regions, both for Ghanaian returnees and for people intending to migrate, thereby contributing to reintegration or providing an alternative to migration. Through specially tailored training courses, as well as assistance in setting up businesses (mentoring/coaching, access to financial services), the project supports the target groups in becoming self-employed or finding paid employment.
Access to financial services for low-income workers has improved from 1.14 million customers in 2012 to 1.41 million in 2016. Micro-insurance cover has increased to 7.5 million low-income workers, corre-sponding to 28 per cent of the population.
The vocational training approach has been successfully tested in three regions and for five trades, with a total of 16 training providers and ten business associations receiving support for the implemen-tation of the courses developed, each for 232 trainees and the same number of master craftsmen. In March 2016, 81 per cent of trainees successfully passed their exam and obtained a nationally recog-nised certificate. The implementation of GTVP is expected to increase the number of beneficiaries to a total of up to 12,000 participants.
In the area of employment and migration, more than 300 people have been trained to date, including approximately 40 returnees.
A large number of people around the country have received their first ever basic education in financial matters at road shows organised in cooperation with 110 microfinance institutions. These institutions have improved their customer service and the quality of their financial products. This in turn has helped them attract more customers and significantly increase the level of the savings deposits. The experience gained has been presented at international conferences.