Structure of the District economy

The major activities that support the Municipal economy are; agriculture (50.9%) trade and commerce (20.1%), industry (13.1%) and services (hotels, banking etc) (15.9%). These figures show that agriculture is the mainstay of the district economy employing about 60% of the active labour force.

A baseline survey conducted in the district capital reveals that about 40% of the labour force are engage in commerce while the public sector employs about 35%, agriculture 10% and industry constituting 5% which is a clear reflection of the urban characteristics of Akim Oda the Municipal capital as well as a commercial administrative centre. Agriculture is however a rural based sector of the district economy.

The major industrial activities in the district include micro and small scale manufacturing ranging from agro-processing, furniture works, construction, soap making and crafts. The high number of small scale industries (about 800) could promote economic of scale and improve efficiency.

There is also in existences National Board for small Scale Industries and Business Advisory Centre which provides tailor-made entrepreneurial, managerial and technical programmes for small scale businesses. Again, the Municipality has potentials for industrial sites for industrial set-ups; and also good roads connecting Accra, Koforidua, Agona-Swedru, Asamankese, 
Nsawam and other urban centres.

Employment

Employment opportunities in the district include the private and public sectors. Birim south district is among the few districts in the region with the highest proportion of workers in the private formal sector for both males and females. The table below shows the employment situation in the district.

Employment opportunities in the Municipality include the private and public sectors. Birim Central Municipal is among the few Assemblies in the region with the highest proportion of workers in the private formal sector for both males and females. The table below shows the employment situation in the Municipality.

Public and private sectors are the main sources of employment in the Municipality. The public sector employs about 3.6% of (7.6% males and 3.9% females) of the economically active population which is lower than the regional figure of 6.1% whilst the private sectors employs 93.3% (90.9% males and 95.4% females) compared to 92.8% for the region. Other sectors of employment include semi-public parastatals (0.5%) and NGOs and others (0.5%).

The above trend is attributable to the fact that Agriculture is the mainstay of the Municipal economy, employing most of the active laboure force. There is the dominance of small scale industrial and commercial activities such as trading, sawmilling, mining, processing activities, constructions and artisanship.

Further analysis of the employment situation indicates that, unemployment is predominant among the youth. Data from the labor office reveals that, out of the 4,162 jobseekers in 2005,1200 were underemployed, meaning they were engaged in some kind of employment, however their income levels were below the National Minimum Wage. Available data also reveals that, most of the unemployed persons registered have educational levels up to senior secondary level, GCE O’level and junior secondary level with majority of them up to JSS level.

The unemployment situation in the Municipality could be blamed on the lack of technical and vocational training centers and opportunities in the Municipality to equip the youth with employable skills. Other factors include; limited number of job opportunities in the industrial sector, high dependency ratio leading to poverty.

The above situation compels the youth to migrate to urban centers in search of non-existing job whilst others engage in social vices such as petty thieving, commercial sex and drug abuse. The effect of unemployment on the Municipal economy cannot be overemphasized as it leads to a serious drain on the economy since the youth form a greater percentage of the active population. There is therefore the need to create job opportunities for the youth through skills and entrepreneurial training and investment support for self employment.

The National Youth and Employment Programme currently on-going is an evidence of the Government’s commitment to providing job for the youth and also create job opportunities through skill training to enable the youth engage themselves in productive ventures as well as prepare them for future job security.

The Birim Central Municipal Assembly, under the phase one of the Programme, the youth are being employed in the areas of education, agriculture and sanitation. The Programme will also be extended to the health and ICT sectors where a number of qualified youth would be trained and employed in these sectors. There is also the need to focus attention on the area of skills and entrepreneurial training and investment support for self employment of the youth.
        
Sources of Income

Residents of the Municipality drive their income from six major sources. These are crop farming, craft, business/trade, salaries, remittances and other minor sources, which have been grouped as others. Majority of households obtain their income from crop farming. This confirms the position of crop farming as the dominant economic activity in the dMunicipality. Up to 55.4% of households rely on crop farming as their main source of income. Salaries contributes 17.5% of total income compared with trading and other business enterprises each of which provides 13% of total income received by households in the district. Only 1% of household incomes are obtained from remittances. Details are in table below.

The analysis indicates that households that rely on salaries as their income source have higher incomes followed by households with crop farming as their source of income. Remittance constitutes only 1% of total incomes and only 4% of the total number of households relied on it. This confirms the observed gradual breakdown of the family support systems.

Levels of Income

The average household in the municipality subsists on an annual income of ¢7,632,211.68 which is relatively adequate for a household with a membership/size of five. This gives the municipality a mean per capital annual income of ¢2,125,456.00. However, income levels are generally low while at the same time a rather small proportion of the total population has relatively high levels indicating skewness in income distribution pattern. 

Even though average household incomes are in the region of ¢million, as much as 15% of houses in the district receive annual incomes in excess of ¢12million while 57% of households obtain less than ¢5million, it is significant to note that of 25% of this proportion, being a quarter of the households in the municipality subsists on less than ¢1million per annum. 

Households Expenditure Patterns

Households in the Municipality expand their incomes and other resources on a variety of items and activities. The main components of household expenditure are food clothing, education, transportation, rent, expenditure and funerals, health and housing construction. Others are donations, energy requirements, credit repayment and taxes repayment.

Food consumption was the main expenditure component, accounting for 35% of household expenses in the municipality. This is less than the national figure of 46% as at 2005. All households also spent on food purchases indicating that even in remote rural communities’ subsistence production are not the only type of economic activity and rural households are now firmly engaged in the cash economy.

Two other inferences could be made from the household expenditure levels on food items. The first is that it is probable that food prices are quite low hence amounts expenditure. The second is that a large proportion of households are engaged in crop farming hence they spend a relatively small proportion of their incomes to purchase supplementary food needs.

On the average, households spend ¢3,132,332.00 per annum on food purchases. The next most important item households spend on in terms of average expenditure made per household is energy supply. Funerals, clothing educational requirements are other items on which household expend. Details are in table 1.7On 30% of households made expenses on rent while 45% were engaged in the construction or rehabilitation of their houses. These imply that owner occupancy levels are high in the municipality. However, average amounts spent by households on rent and housing construction 
were low indicating housing improvement activities are on a very limited scale.

Poverty Situation

Poverty conditions are critical development issues. This is because there are poor people in every society and most development interventions are meant to reduce their levels of poverty. The problem however is the extent to which the implementation of various development programmes has been able to improve the condition of the poor. A measurement of well-being in the municipality was therefore undertaken to ascertain the extend of poverty and level of inequalities in living standards. Consumption data were used for the measurement instead of income data due to reliability of consumption data in less developed societies.

Poverty Lines

Poverty lines are cut-off or boundary lines separating the poor and non-poor in a society. They therefore enable one to distinguish between those who are poor and those who are better off in order to be able to describe the poverty situation in measurable terms. In this analysis, two poverty lines which are fractions of the mean standard of living measure are established for the district. These are the higher poverty line that establishes the base line for identifying the poor and the lower poverty line which is the defining benchmark that distinguishes those in hand core poverty situation. The mean annual household consumption measure for the municipality was ¢10,546,758.00 while the per capita figure was ¢2,134,230.00.

In accordance with the methodology utilized by the Ghana Statistical Services in the Ghana Living Standards Surveys, the higher poverty line represented 63.7% of the mean per capita ocnsumption measures and persons whose consumption levels for the year on the average fell below that measure are classified as poor while those consumption levels were below 50% of it are considered to be very poor. The higher poverty line for the municipality was ¢2,134,230.00 while a consumption level of ¢941,780.00 represented the lower poverty line which defines the ultra poor in the municipality In must be noted that comparison with the national poverty lines are inappropriate because the latter were computed based on 2001 price levels while the socio-economic surveys relied on current prices. Secondly, adult equivalent scales could not be used for the computation of poverty statistics for the municipality due to data limitations.

The Incidence of Poverty

The incidence of poverty represents the number of persons whose incomes or consumption levels fall below the poverty line and can be classified as poor person in the district. As much as 40% of the municipality population were found with consumption levels below the upper poverty line and were living in poverty. The number of poor persons in the municipality is therefore 68.825. Up to 32% of the populations were below the lower poverty line which means that as many as 60,205 persons are very poor and require early and essential support to enable them improve upon their well-being to acceptable levels.

The Poverty Gap

The poverty gap quantifies the proportion by which the income or consumption levels of the poor fall below the average living standards measure. It therefore provides a numerical dimension of how much the poor need in order to get out their poverty situation. The aggregate poverty gap gives monetary estimation of resources required to assist the poor to emerge out of poverty. Poverty levels manifests itself in terms of low incomes due to the collapse of rail ways system, small farm sizes, poor road net work, poor housing conditions, high level of child labor, malnutrition and high illiteracy areas. The measure of poverty gap for the municipality is 0.55 which indicates that the consumption levels of the poor are quite below the average living standards in the municipality.

The aggregate poverty gap amounted to ¢24billion which implies that the municipal authorities in collaboration with its development partners must assemble and transfer resources of this value to the poor in order to improve their well-being. In addition to these indicators, the poverty profile and maps prepared in 2004 which sought the views of all manner of stakeholders, revealed 8 poverty pockets in the municipality based on the level of distribution as well as accessibility to health education, post and telecommunication, water and sanitation.

It is observed from the table that manifestation of poverty in the various pockets had similar characteristics which did not give distinct difference among them. This was due to the homogeneous nature of the district. However differences identifies in the area of distribution of accessibility to services put together into composite poverty perspective which shows slight difference among these area was used to rank them into the most poverty struck to least. The composite poverty map attached depicts this picture clearly.

Finance

The Birim Central Municipal Assembly derives its revenue from two main sources, namely traditional/locally generated and external including grants from central government and other donor funds. The major sources of the internally generated funds includes but not limited to basic and property rates, licenses, fees and fines and investments while the Central government’s sources includes District Assemblies Common Fund  (DACF) allocation, salaries and donor funds.

Almost 98% of revenue generated is from DACF and donor funds which are used for capital expenditure while 75% of locally generated revenue constitutes recurrent expenditure. The remaining 25% goes to supplement expenditure of capital items. The tables below depict the revenue to the Assembly as well as the revenue and expenditure patterns over the past 4 year.
 
Revenue receipts for this defined period in relation to locally generated funds have shown some inconsistencies in the growth rate. Total receipts for this period is approximately ¢ 4,815,185,124. Inflows from external sources amount to 36.9 billion constituting the greatest source of funds for development interventions over the four year period.

On the performance of locally generated revenue, inflows from lands have shown dominance over other forms of receipts. This laudable performance was as a result of the release of ceded components of stool lands. There is therefore the need to work hard on the other items under lands.

Fees and fines which constitute the second highest inflows have shown some improvement over the period but effort should be made to improve performance since it has the potential to generate more revenues.

Expenditure

Expenditure analysis shows an encouraging discipline and prudent use of financial resources on development interventions. It has however been observed that over the years, no amount from IGF has been spent on any physical/infrastructural development projects which was unacceptable. On the other hand, expenditure over 90%, a situation which might be partly blamed on increase in fuel prices, but management must improve expenditure design plans in this are.

Another are that needs serious attention is the expenditure on repairs and renewals which for example jumped over 67% increase. There is therefore the need to put in effective control measures to reduce such expenditures.

Revenue Projections

The analyses of local revenue generated from 2003 – 2004 have shown a growth rate of 26% and a fall in performance from 2004 – 2005 to about 0.2%. However, the total growth rate for the period is about 5.1%. this is in sharp contrast to the growth rate of about 60% for the DACF. Assuming the average growth rate of 5.1%, is maintained, it is expected that, total revenue (IGF) to be generated between 2006 and 2009 is estimated at ¢3.85 billion. For the DACF, the average percentage growth rate is about 16.3%. This brings the expected inflows to an approximate amount of 31.8%.
 
Problems Confronting Revenue Mobilization

1. Poor monitoring and supervision by management
2. Lack of motivation for revenue staff
3. Poor market and public facilities
4. Low publication on rates payment
5. Non-enforcement of bye-laws
6. Inadequate logistics, such as Wallington boot, rain coat, vehicle or transport facilities, computers for the rate collection.
7. Political interference in the implementation of laws and regulations
8. Poor rates collection mechanism
9. Low level personnel manning revenue sections
10. Lack of training programmes for the collectors
11. In adequate revenue data.

Recommendations

• Regular training of collectors
• Recruitment of highly qualified personnel eg HND Accountancy to man the revenue section.
• Improvement in revenue collection mechanism ( computerization of revenue data).
• Improvement in the infrastructure in the markets
• Provide logistics- computers, rain coats, Willington boats, transport facilities.
• Institute incentives schemes and reward systems for collectors
• Improve monitoring and supervision of the collectors
•  Update revenue data base

Investment and Business Potential

The Birim Central Municipal Assembly is predominantly an agricultural one, with activities centred mainly on crop production. Agriculture employs 50.9% of the labour force, but most farming is subsistence.

However, the enabling environment and good infrastructure allows for intensive agricultural production. The municipality’s proximity to River Birim provides potential for irrigation farming.

The soil is suitable for large-scale cassava, maize, plantain, cocoa and vegetable production. There is also high potential for export crops such as cola, cocoa, oil palm, black pepper, coffee and citrus. Extensive availability of veterinary services can help boost livestock and poultry production. Availability of vast farmlands provides the potential for large-scale farming.

The huge potential labour force is also good for large-scale manual farming. Industrial activity is pronounced in the district, especially at Akim Oda and Manso. These industrial activities range from sawmills employing high technology to artifacts and other craftworks, which are produced using few tools. There are about 500 small-scale industries, which could promote economies of scale for industrial investors, and improve efficiency.

There are entrepreneurship programmes in place on starting and managing small-scale businesses, and these are supported by a considerable number of apprenticeship schemes.

Importantly, there are many good sites available for setting up industries. Good roads link the district with large and affluent urban markets such as Accra, Koforidua, Nsawam, Agona-Swedru and Asamankese.

Finally, there is availability of a wide range of industrial raw materials, such as cocoa seeds, timber and oil. There are plenty of investment opportunities in the services sector too. For instance, there is high demand for telephone services, something which calls for the establishment of business and communication centres, especially in the big towns like Achiase, Akroso, Aperade, Asene, Manso and Akim Swedru.

Similarly, postal services are unavailable in a number of communities, which creates opportunities for the establishment of private postal services. The potential existing in tourism development calls for the establishment of tourism information centres. Housing development too holds strong prospects in the municipality.

Although there is not yet an acute shortage of housing in the municipality, there is a problem of housing quality and in the urban areas the danger of overcrowding is becoming real. The high demand for residential accommodation is the result of large concentration of workers in the district. There is vast land for real estate development to meet this effective demand and investors can put this to good use.

Financial Institutions

Financial sector is operated by five main banks namely:

• Barclays Bank, SSB Bank,
• Ghana Commercial Bank and the
• Rural Banks (South Birim and Akyem Bosome Rural Banks).
• The Banks are concentrated at: Akim Oda,
• Akim Swedru Agencies at Akim Manso.

Insurances Services are also available but on a small scale.