Private solutions to public problems: How did we get here?

By Isaac FRIMPONG (Ph.D.)

As Ghana grapples with economic and social challenges, a beacon of hope equally emerges through the resourcefulness of its people; both young and old.

From the revolving door of political power to the economic reforms of the 1980s, devaluation of the cedi, financial sector clean-up, and the recent Domestic Debt Exchange Programme (DDEP), the effects continue to be felt among the workforce, the investment climate, and society at large. These challenges have, over time, constrained successive governments’ fiscal capabilities to strengthen and expand the social policy landscape.

In the face of these difficulties, there is a growing recognition that private initiatives are becoming increasingly important in addressing public challenges. Could these efforts be the result of what Hyden refers to as the ‘Economy of Affection’, a concept that is distinct from both capitalism and socialism? This economy however operates alongside the aforementioned two; often smoothening out their existing shortcomings.

It prioritises personal connections (whom you know) over mere knowledge (what you know), valuing the sharing of personal wealth over traditional economic investments, and emphasises immediate assistance over long-term gains. This article explores the innovative efforts led by private initiatives that are making significant progress in addressing some of the most important public issues, such as education, housing, social security, and employment.

Education

The Ghanaian educational system has undergone numerous reforms since the colonial interlude, with the overarching goal of expanding accessibility to education throughout the country. While significant progress has been made, not all children of school going age have been reached, and spatial imbalances have resulted in a reliance on private institutions for education in rural areas (at the onset).

The government has implemented policies such as Free and Compulsory Universal Basic Education (FCUBE), Free Senior High School, and the Education Strategic Plan (2018-2030) to address these inequalities and ensure universal access to tuition-free education, increase enrolment rates, and improve educational quality. Despite these efforts, there are questions about whether the quality of education has improved, and whether the financial burden of schooling remains a thing of the past¹.

Since the economic restructuring period of the 1980s, neoliberal ideologies have resurged in Ghana’s educational landscape, as evidenced by the proliferation of private educational providers across all levels of the system and the trend toward commercialising programmes within public institutions particularly in higher education.

The expansion of private education raises concerns about the underlying factors driving this trend, such as inadequate public school infrastructure, low educational quality, or poor academic outcomes.

Traditionally established in rural areas, private schools are increasingly becoming prevalent in urban centres, filling the gaps left by state-funded institutions and providing an alternative to families seeking immediate educational solutions.

They play a crucial role in relieving pressure on the public educational system by offering additional capacity to address overcrowding and facilities shortages. Furthermore, private schools offer flexibility in adopting innovative teaching methods and curricula. Additionally, they provide convenience in terms of proximity and admission policies, especially for students who would otherwise need to travel long distances to reach the nearest public school. This appeal attracts parents who prioritise ensuring their children have access to quality education.

Housing

Efficient housing is integral to a nation’s development by influencing well-being, economic stability, and social cohesion². According to the Ghana Statistical Service (GSS) report, the total number of residential structures as of 2021 was 5,862,890.

Residential structure refers to a structure used or intended to be used for dwelling, living, or sleeping by an individual, household, or group of people³. Despite various housing policies since independence, Ghana’s housing stock remains insufficient (1.8 million deficit), especially public housing, which is generally ineffective and underdeveloped.

To solve this public problem, private individuals are stepping in to create makeshift shelters or dwellings such as kiosks and containers, acquire land, and spearhead housing construction initiatives. This is evident across the country, mostly in populated areas such as Accra and Kumasi, where private homes or do-it-yourself homes are seen across the landscape.

Likewise, private real estate developers are also filling in the gaps left by the government’s inability to provide adequate housing. However, the market-driven pricing of these estates or houses may not align with the financial capacities of the majority of Ghanaians, underscoring the need for inclusive solutions.

Social security

Social security encompasses various aspects of human life that intersect with economic activities⁴. This includes providing income security for individuals facing circumstances such as unemployment, disability, old age, childcare, or the loss of a family member. During the colonial interlude, a social security system was introduced, but it was limited in scope and primarily benefited those engaged in formal labour.

This system supplemented rather than replaced indigenous social security arrangements, such as family and community support structures⁵. Furthermore, urbanisation, internal and external migration, and economic globalisation are impacting the effectiveness of indigenous social security systems and institutions^6-7.

Even with the introduction of recent policies like the three-tier pension system, which combines elements of provident funds and social insurance, there are significant limitations. These policies fail to adequately support not only the elderly but also the large number of individuals working in the informal economy⁸.

Once again, these individuals, due to their inability to participate in the employer-employee contract work; have developed their coping mechanisms, such as self-help schemes that originate from indigenous arrangements and although voluntary, deliver social security⁹ for them. Interestingly, technology is playing a role in sustaining these self-help groups by overcoming barriers such as distance.

Platforms like Facebook and WhatsApp are being utilised to maintain social connections among kin members, alumni associations, and other community groups. This adaptation demonstrates how technology is being leveraged to preserve and strengthen traditional social support networks in Ghana in the face of a lack of state support.

Work and Employment

The labour market in Ghana still bears the imprint of the colonial-era cash crop economy. This period witnessed relatively fewer restrictions on economic activities and movement, enabling indigenous people to sustain themselves through trading in cash crops such as coffee, cocoa, cotton, palm products, and groundnuts.

The transition to cash crop cultivation proved more efficient given the conditions of abundant land and scarce labour, leading to the emergence of a dominant agricultural production economy in the early to middle of the 20th century.

Notably, however, formal employment and trade were concentrated in selected urban centres to the detriment of the rest of the colony¹⁰. Alongside exporting cash crops, primarily cocoa, individuals were free to engage in diverse economic activities. This pattern of informal labour remains prevalent in present-day Ghana.

Even President Nkrumah’s industrialization efforts through the import substitution approach failed to generate enough formal job opportunities to accommodate the influx of graduates from the education system¹¹.

Various government policies, such as the Worker Brigade, National Entrepreneurship & Innovation Programme, Captains of Industry Programme, Youth Enterprise Support Fund, Skills Training and Entrepreneurship Programme, National Youth Employment Programme, Ghana Youth Employment and Entrepreneurial Development Agency (GYEEDA), and Business and Employment Assistance Programme have been implemented over the years. Yet, little has been achieved in terms of formal employment expansion.

Despite the state being the largest formal employer, economic restructuring in the 1980s resulted in formal job losses, exacerbating youth unemployment, and increasing the overall unemployment rate. In response, many newcomers to the labour market and those displaced from formal employment turned to the informal economy for livelihood. Today, the informal economy stands as the primary source of employment, and contributes to gross domestic product (GDP) and employment generation, with own-account workers (self-employed with no employees) being the most common employment category¹.

Conclusion

In light of Ghana’s difficulties, private initiatives are proving to be crucial in addressing public challenges and beyond. Therefore, collaboration between private efforts and government interventions is imperative for a comprehensive and sustainable strategy for nation-building. It is clear that a nuanced and inclusive plan that takes into account the diverse requirements and economic potential of the populace is essential. As Ghana progresses, the harmony between private creativity and public policy will likely determine the course of the nation’s future advancement.

Isaac is a Researcher: Pensions, Informal Labour Market, Social Policy in Africa, and Ageing Studies. [email protected]

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