What is the BoP in Ghana ?
Focus on change for the BoP
IB and IGB deliberately create impact for the poor and low-income people. These are the people at the base of the socio-economic pyramid, typically the bottom 40% income groups. However, most IB/IGB do not focus exclusively on the BoP but also the better off income groups. In such cases:
- At least 40% of the impact created should be for the BoP.
- Most IB/IGB companies create 60-80% of their income among the BoP.
Income Thresholds in Ghana’s IB/IGB Initiative
The income thresholds used in the IB/IGB initiative are derived from national income and expenditure data, aligned with the international poverty discussion, and adjusted to the national conditions.
- While the national minimum income line reflects roughly the international poverty line for poor countries,
- The minimum wage and the country’s poverty line actually reflect the severe poverty line;
- The B40 line is higher and aligned with the more appropriate poverty line for lower middle-income countries like Ghana.
The World Bank’s quasi-relative poverty concept (since 2018) is used to define the BoP in Ghana.
Suggested Income Thresholds for the BoP in Ghana
While thresholds should guide discussions, companies are encouraged to use these flexibly to better reflect their investment and impact cases. The chart below illustrates the income thresholds for very poor, poor, and low-income households that form the BoP.
For more information on the BoP poverty line and how it is calculated, see this concept note.