The Imperative of Establishing a Sustainable Welfare System in Ghana: Lessons from the Global North

Article Summary

This article discusses welfare systems in Global North countries and their relevance to Ghana. It highlights Ghana's socioeconomic challenges, especially after COVID-19. The need for a robust welfare system is emphasized. The article also addresses issues like corruption and proposes reforms for effective governance.

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Introduction

Welfare systems are essential for social protection in many nations. They help people facing unemployment, health crises, and poverty. Countries in the Global North have established strong welfare regimes over decades.

In contrast, many Global South nations struggle with similar frameworks. Ghana faces historical and political challenges that hinder its development. The COVID-19 pandemic highlighted the urgent need for better social safety nets.

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Welfare Systems of the Global North: An Overview

Countries like the U.S., U.K., Germany, Sweden, and Canada developed welfare states through consensus and growth. These systems offer healthcare services, unemployment insurance, pensions, child support, education subsidies, and housing.

Funding comes from progressive taxes on income and corporations. Social insurance schemes also play a significant role in pensions and unemployment benefits. This model helps reduce inequality and promotes social cohesion.

Effective governance is crucial for these systems to function well. Transparency and low corruption levels ensure funds are used properly. Political commitment has allowed these programs to survive economic shocks.

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Current Socioeconomic Context of Ghana

Ghana is a lower-middle-income country with recent democratic progress. Its economy includes agriculture, mining, and services but faces structural issues like income inequality.

COVID-19 caused severe economic disruptions in Ghana's informal sector. Lockdowns affected livelihoods without access to formal social insurance. Government revenues fell while demand for health spending increased.

Ongoing inflation and global tensions strain fiscal stability further. The pandemic showed that Ghana needs more resilient social protection systems.

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The Imperative for a Welfare System in Ghana

Ghana must create a comprehensive welfare system to support vulnerable groups effectively. Such a system would reduce poverty and inequality while boosting economic resilience.

Social protection provides income support and access to essential services like healthcare and education. This is vital as many Ghanaians live near the poverty line.

Effective social protection can enhance human capital by reducing health-related financial burdens. Access to healthcare encourages investments in health and education.

Education support improves literacy among younger generations, aiding economic growth. Well-designed welfare systems also strengthen social cohesion by reducing disparities within society.

Moreover, welfare spending stimulates the economy by increasing household consumption. Programs like child allowances can boost demand for goods during recessions.

Establishing a welfare system goes beyond justice; it supports national stability too.

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Challenges in Implementing Welfare Systems in Ghana

Several obstacles hinder developing sustainable welfare frameworks in Ghana. Corruption, nepotism, and misappropriation have historically compromised resource mobilization efforts.

These issues erode public trust while limiting service quality across programs. Corruption can exclude eligible beneficiaries from receiving aid or divert funds away from intended uses.

Ghana’s large informal economy complicates contributions to social insurance due to irregular incomes affecting premium collection efforts.
Limited administrative capacity restricts accurate targeting of vulnerable populations as well.
Rising debt burdens further limit government capacity to finance expansive welfare programs effectively.


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Lessons from Global North Systems for Ghana

To develop effective welfare systems similar to those in the Global North, Ghana should adopt several strategies:

1) Strengthening Governance: Focus on transparency by reinforcing anti-corruption measures.
2) Expanding Tax Revenue: Broaden tax bases through compliance reforms while encouraging formalization of businesses.
3) Designing Inclusive Programs: Combine contributory insurance with non-contributory assistance schemes.
4) Leveraging Technology: Use digital platforms like mobile money for secure benefit delivery.
5) Long-term Commitment: Involve citizens in policy design to ensure continuity beyond electoral cycles.


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Conclusion

Global North welfare systems provide valuable lessons for building equitable programs that promote growth.
Ghana faces an urgent need for an inclusive benefits system following COVID-19 challenges.
Despite governance constraints, establishing a tailored welfare state is possible through strategic reforms.
A robust system will not only provide safety nets but also drive national development forward.


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About the Author

Dominic Senayah is an International Relations Researcher focusing on Trade, Migration, and Diplomacy with experience in Business Development.