Global Journal of Commerce & Management Perspective
Open Access

Abstract

The Cost - Benefit Analysis of internal migration, Poverty Reduction and Development in Ghana from 1990 - 2012

Nicholas Awuse and Patrick Tandoh-Offin

This study provides a comprehensive assessment of the costs and benefits analysis of internal migration in Ghana. It explains the possible mechanisms by which internal migration may impact on the development of Ghanaian economy and the methodologies and empirical implementations by which such impact may be measured. It provides all-inclusive review of the existing literature, and explains the data sets available that allow analysis in the Ghanaian context. It summarises some of the existing work that provides investigation into the costs and benefits of internal migration to the Country. While no simple unifying framework exists that allows the assessments of all consequences of internal migration, economic research has developed many tools to analyse the impact of migration and development on many specific areas. The research methodology used twenth year period and the prime rate or policy rate of the Bank of Ghana which on average stood at fifteen (15) percent. This was common among the periods over the years. Net Present Value of Migration from region of origin to destination regions. Using the decision rule, if the calculated value was a positive value then it was accepted as a viable project. It was found most migrants do not have jobs in the place of origin and so have to move out in order to get a job. The findings of this paper indicates that benefits outweighs the cost of the migrants and so there is enough grounds to justified why people move to the urban cities these days. Again, it was possible for every migrant to get something doing in the new place than his/her original place. It was recommended that existing literature and policy documents often should not overlook the important role that internal migration has played recently in reducing rural poverty. Contrary to conventional wisdom, which often views permanent migration as a hindrance to rural development because it transfers rural resources to urban areas, internal migration (with the help of urban resources) actually expands rural land and labour markets by making more rural land available for tenancy. Future research must examine this issue of internal migration and development seriously; the government’s poverty alleviation strategy must address the needs of the migrants, particularly urban poor migrants who often suffer eviction, ill health and other problems. Instead of applying residential criteria to identify the poor, vulnerable groups can be picked up from the work place, organised as occupational groups and provided with loans, food-for-work, crèche and other facilities on a daily basis. In conclusion therefore, to reduce the positive and negative impacts of internal migration and development to their equivalent money value Cost-Benefit Analysis determines whether on balance the migration is worthwhile. The equivalent money value is based upon information derived from migrants and labour market choices, the demand and supply schedules for labour affected by the movement.