University of Ghana http://ugspace.ug.edu.gh UNIVERSITY OF GHANA EXAMINING SAVINGS AND ASPIRATIONS IN AFRICAN SLUMS: EVIDENCE FROM GHANA BY VICTOR WOOLLAMS JNR (10703463) A THESIS SUBMITTED TO THE UNIVERSITY OF GHANA LEGON, IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF AN MSC IN DEVELOPMENT FINANCE DEGREE JULY, 2019 University of Ghana http://ugspace.ug.edu.gh DECLARATION I hereby declare that this work is the result of my own research and has not been presented by anyone for any academic award in this or any other university. All references used in the work have been fully acknowledged. I am solely responsible for any shortcoming. ..................................... ……………………… VICTOR WOOLLAMS JNR DATE (10703463) i University of Ghana http://ugspace.ug.edu.gh CERTIFICATION I hereby certify that this thesis was supervised in accordance with procedures laid down by the university. .......................................... ............................ DR. EDWARD ASIEDU DATE (SUPERVISOR) ii University of Ghana http://ugspace.ug.edu.gh DEDICATION I dedicate this thesis to the Almighty God and to my dear family for their love, care and support throughout my study. iii University of Ghana http://ugspace.ug.edu.gh ACKNOWLEDGEMENT The successful completion of this study would not have been accomplished without the guidance, co-operation and great support of some people. Foremost, I give thanks to the Almighty God for seeing me through this period. Next, I send my warmest gratitude to my supervisor, Dr. Edward Asiedu for his dedication. I thank him for taking a keen interest to direct me throughout this period. My profound gratitude goes to my father, Mr. Victor Woollams, his wife, and my siblings for all their support and prayers. I would also want to acknowledge my late mother, Mrs. Pearl Woollams whom I drew great inspiration and motivation from. Special thanks goes to Ga Mashie Development Agency (GAMADA) for their assistance. I remain grateful to Mr. Lamptey, and Emmanuel Agyabeng, for helping me out on the field to gather data. I really appreciate the help given to me by Nana Ama Boateng. I thank her for all her support and prayers. I am very grateful. I also thank Faustina and Emmanuel for all the help they meted out to me. To all my friends (George, Eunice, Sandra, Frank, Kojo, Samuel, Saadatu, Hodgson, Andy, Randy, Fred, and Diane) God bless you for your encouragement and support. Finally, to everyone whose name and work is mentioned as a reference, I am grateful for your help. iv University of Ghana http://ugspace.ug.edu.gh LIST OF TABLES Table 2.1: Slum Typologies in Ghana …………………………………………………………..19 Table 4.1: Descriptive Statistics…………………………………………………………………47 Table 4.2: Comparing the Mean Savings of Slum and Non-Slum Communities ……………….52 Table 4.3: Employment Aspirations of Slum and Non-Slum Communities…………………….53 Table 4.4: Comparing the Relocation Aspirations of Slum and Non-Slum Communities………54 Table 4.5: Probit Regression Estimates and Marginal Effect Estimates ………………………..55 v University of Ghana http://ugspace.ug.edu.gh LIST OF FIGURES Figure 3.1: Sub areas of Ga Mashie……………………………………………………………...31 Figure 3.2: A Map of Nima………………………………………………………………………33 Figure 3.3: Population Trends in Ga Mashie…………………………………………..................39 vi University of Ghana http://ugspace.ug.edu.gh LIST OF ABBREVIATIONS AMA - Accra Metropolitan Assembly ASCA - Accumulating Savings and Credit Associations Co. - Company EA - Enumeration Area GAMA - Greater Accra Metropolitan GAMADA - Ga Mashie Development Agency Ltd. - Limited MSME - Micro Small Medium Enterprises NBFC - Non-Bank Financial Companies NGO - Non-Governmental Agency PPS - Population Proportion to Size RoSCA - Rotating Savings and Credit Associations SCEF - Street Children Empowerment Fund UN - United Nations UNCHS - United Nations Commission on Human Settlement vii University of Ghana http://ugspace.ug.edu.gh TABLE OF CONTENTS CONTENTS……..……………………………………………………………………….......Page DECLARATION ............................................................................................................................ i CERTIFICATION ........................................................................................................................ ii DEDICATION .............................................................................................................................. iii ACKNOWLEDGEMENT ........................................................................................................... iv LIST OF TABLES ........................................................................................................................ v LIST OF FIGURES ..................................................................................................................... vi LIST OF ABBREVIATIONS .................................................................................................... vii TABLE OF CONTENTS ........................................................................................................... viii ABSTRACT ................................................................................................................................. xii CHAPTER ONE ........................................................................................................................... 1 INTRODUCTION ......................................................................................................................... 1 1.0 Introduction ........................................................................................................................... 1 1.1 Background to the Study ....................................................................................................... 1 1.2 Problem Statement ................................................................................................................ 3 1.3 Research Purpose .................................................................................................................. 5 1.4 Research Objectives .............................................................................................................. 5 1.5 Research Questions ............................................................................................................... 5 1.6 Significance of study ............................................................................................................. 5 viii University of Ghana http://ugspace.ug.edu.gh 1.7 Organisation of Study ........................................................................................................... 6 CHAPTER TWO .......................................................................................................................... 7 LITERATURE REVIEW ............................................................................................................. 7 2.0 Introduction ........................................................................................................................... 7 2.1 Theoretical Reviews .............................................................................................................. 7 2.1.1 What is Saving? ............................................................................................................. 7 2.1.2 Why People Save ........................................................................................................... 8 2.1.3 How people save ............................................................................................................ 8 2.1.4 Formal Mode of Saving ................................................................................................. 9 2.1.5 Informal Saving Institutions ......................................................................................... 10 2.1.6 Importance of Saving ................................................................................................... 11 2.1.7 Factors that affect saving behavior .............................................................................. 11 2.1.8 Savings in Ghana ......................................................................................................... 13 2.1.9 What is a Slum? ........................................................................................................... 15 2.1.10 How do Slums Come About? ..................................................................................... 16 2.1.11 Types of slums in Ghana ............................................................................................ 17 2.1.12 Savings in Slums and its Contribution to Development ............................................ 18 2.1.13 Aspirations ................................................................................................................. 19 2.2 Empirical Reviews .............................................................................................................. 21 2.2.1 Saving Behavior of Households in Asia ...................................................................... 21 ix University of Ghana http://ugspace.ug.edu.gh 2.2.2 A Report Undertaken in North America. ..................................................................... 22 2.2.3 A Report Undertaken in Africa on Slum Behavior. ..................................................... 23 2.2.4 A Report on Saving Behavior of Slums in Ghana. ...................................................... 24 2.2.5 Review on Aspirations ................................................................................................. 25 CHAPTER THREE .................................................................................................................... 28 RESEARCH METHODOLOGY .............................................................................................. 28 3.0 Introduction ......................................................................................................................... 28 3.1 Study Area Profile ............................................................................................................... 28 3.1.1 Accra ............................................................................................................................ 28 3.1.2 James Town .................................................................................................................. 30 3.1.3 Historical Background of Ga Mashie ........................................................................... 30 3.1.4 Nima ............................................................................................................................. 32 3.1.5 History of Nima ........................................................................................................... 32 3.1.6 Characteristics of Nima ................................................................................................ 33 3.1.7 Kanda ........................................................................................................................... 34 3.2 Methodology ....................................................................................................................... 35 3.3 Sample Size ......................................................................................................................... 37 3.4 Sanitation and Drainage ...................................................................................................... 37 3.5 Population ........................................................................................................................... 38 3.6 Socio-economic Conditions ................................................................................................ 39 x University of Ghana http://ugspace.ug.edu.gh 3.7 Interview ............................................................................................................................. 40 CHAPTER FOUR ....................................................................................................................... 44 ANALYSIS AND DISCUSSION OF RESULTS ...................................................................... 44 4.0 Introduction ......................................................................................................................... 44 4.1 Summary Statistics .............................................................................................................. 44 4.2 Results ................................................................................................................................. 49 4.2.1 The Level of Household Head Savings among Slums in Ghana ................................. 49 4.2.2 Differences in Savings between Non-Slum Areas and Slum Areas ............................ 50 4.2.3 Employment Aspirations of Slum and Non-Slum Communities ................................. 52 4.2.4 Relocation Aspirations between Non-Slum and Slum Areas ...................................... 53 4.2.5 Determinants of Aspiration to Migrate in Slums ......................................................... 54 CHAPTER FIVE ......................................................................................................................... 57 SUMMARY OF FINDINGS, CONCLUSION, AND RECOMMENDATIONS................... 57 5.0 Introduction ......................................................................................................................... 57 5.1 Summary of Findings .......................................................................................................... 57 5.2 Research Limitations ........................................................................................................... 59 5.3 Conclusion .......................................................................................................................... 59 5.4 Recommendations ............................................................................................................... 60 5.4.1 Recommended areas for further studies ....................................................................... 61 REFERENCES ............................................................................................................................ 63 xi University of Ghana http://ugspace.ug.edu.gh ABSTRACT Savings is an important mechanism that drives capital formation and economic growth. Savings behavior among slum dwellers is a topic of interest since individuals from these areas are seen as low income earners living in squalor. The aim of this study is to examine the savings behavior as well as the employment and accommodation aspirations of residents of Jamestown, and Nima, comparing them to those of residents in Kanda, a non-slum community. A total of two hundred and forty respondents obtained from simple random technique were interviewed to collect data. The study confirmed that residents of slum areas have a high tendency to save although in lower levels than residents of non-slum areas. About 68% of the respondents living within the slum communities save. It was also realized that a majority of slum dwellers are actively employed and receive lower earnings than residents in non-slum areas. A whopping 91% of the people in the slum communities are engaged in some form of employment. Despite their low remuneration and poor living conditions, the study showed there is a general reluctance of slum dwellers to change their jobs or relocate to other communities. Only 33.5% want to relocate to other neighborhoods. They indicated strong family ties, and a sense of belonging as the reasons why they choose to remain in their communities. In terms of education, 22% of the interviewees in the slum communities have no form of formal education. Also, 7.5% of the respondents have primary education, 13.5% have been educated to the Junior High School level, 31.5% reached the Senior High Level, with only 4.5% attaining education to the tertiary level. However, 21% have been through some form of adult education. Based on these findings, it was recommended that governmental agencies and financial institutions have a major role to play in empowering slum residents with the knowledge and ability to increase their savings through initiatives that improve xii University of Ghana http://ugspace.ug.edu.gh their financial literacy and their current trades. Government is also advised to embark on projects that upgrade slums instead of relocation or eviction of slum dwellers as upgrading is likely to yield more productive results. xiii University of Ghana http://ugspace.ug.edu.gh CHAPTER ONE INTRODUCTION 1.0 Introduction This chapter talks about the background to the study, the problem statement, research purpose, research objectives and questions, significance of study, and the organisation of the study. 1.1 Background to the Study It is widely accepted that to ease pressure on income for emergency situations or for a future purchase, the advised practice is to engage in savings (Kempson & Finney, 2011). Usually, most people are tempted to save the remainder of their incomes after making the necessary expense (Amu & Amu, 2012). For the high and middle income earners, their source of income is usually regulated and thus, savings behavior of people within those income brackets is more easily determinable (Rehman & Fahridi, 2011). However, the nature of revenues of low income earners being limited coupled with their expenses, generates curiosity as to how they save if they do, and where they are most likely to save. This work examines the geographical boundaries of Accra using slums as a catchment area for the target group. It is quite essential, given the current unease the financial sector in Ghana is facing that financial institutions and government agencies investigate the pattern of savings behavior among their customer base and perhaps explore how to position themselves to better serve them. Slums are described as residential areas with substandard living conditions and squalor by World Bank (2006). This is elaborated by the Slum Almanac of the UN Habitat (2015/2016) that of the 1 University of Ghana http://ugspace.ug.edu.gh world’s population, one in eight people suffer household deprivations such as lack of access to purified water source or potable water, improved hygiene or sanitation, durable housing structures, and security of tenure. This translates to about nine hundred and thirty million people around the world living in slums. Out of this number, two hundred million of slum dwellers are in Sub- Saharan Africa, making 61.7% of the continent’s populace residing in urban areas (Racelma, 2012). The economic status of the residents of such areas, much like their living conditions, is substandard. They indulge in low income generating jobs such as small-scale fishing or farming, janitorial services, petty trading and the likes. With the household sizes in such areas, it suggests that household expenses would make it nearly impossible, if not entirely impossible to save. Keynes had described savings as a luxury good since they cannot afford to save as they do not earn much. (Modgliani, 1986) Notwithstanding this, numerous studies have proven that in Sub-Saharan Africa, poor households do save, however it is difficult to (Robinson, 2001; Nga, 2007). Prina (2012), alludes slum dwellers do save, and that given the chance, they slowly amass lesser sums of money into huge sums that they seldom withdraw to cater for their health, education, and food expenses or even to repay debt. There is the necessity to liaise savings with aspirations as there is the tendency for one’s savings behavior to be influenced by the person’s aspirations. In order to have a good understanding of an individual’s aspirations, Hart (2016) claims aspirations are future-oriented, motivated by conscious and unconscious impetuses and are symbolic of an individual or group’s obligations towards a particular course. According to Hart (2016), a valuable concept for a human to prosper in his or her own right is the freedom or free will to aspire. She further went on to reveal that, arguably, aspirations constitute the core or origin of many important capabilities which support human flourishing to the extent that, when one’s aspirations are stumbled upon, it leads to the 2 University of Ghana http://ugspace.ug.edu.gh constraint of some capability or the other. One’s aspirations are influenced by the capabilities the person strives for. On the other hand, Stuzer (2004) states that, two theories are responsible for establishing ones aspirations. The first being a person’s adaptation to repetitive spurs, as provided by consumption and income level. This simply means people get intrigued when they receive additional materials due to the novelty these materials bring with them, however over time, their effects diminish. The second theory postulates that there are social comparisons with relevant others. This means that people’s aspirations are driven based on the positions of others. Individuals are content with they have only when others in their social class do not have better than them. Another school of thought according to Bernard, Dercon, Orkin and Taffesse (2014) claim that, financially less endowed people hardly make investments even when they make some returns because they have low aspirations and form mental models which disregard some options for investment. 1.2 Problem Statement Essential mechanisms that drive capital formation and economic growth in many developing countries include savings and investment (Issahaku, 2011). Studies such as Abu (2010), and Odhiambo (2009) have established that savings is a key driver of the national economy and an important factor of the development of the financial sector of any economy. Unny (2012) refers to the fact that saving is seen as one of the drivers of growth and also, the household sector contributes a large chunk of the total savings. In the UN-Habitat Report on Global Urban Indicators in 2014, it was found that 37.9% of Ghana’s urban population are living in slums. This significant portion of the population is engaged in various economic activities such as production of local foods and supply of scrap metal (King, Amponsah, & Quansah, 2011). Seeing the economic activity of slum 3 University of Ghana http://ugspace.ug.edu.gh dwellers in urban areas in Ghana, their contribution to economic growth through savings and investment may also be considered. This raises questions whether slum dwellers save, and if they do, why and how do they save what influences their propensity to save and what recommendations can be derived from this knowledge to create significant reforms to the financial sector for economic growth. Recent studies stress on the importance of savings as a lot of the deprived people in the society do not have access to formal banking services (Prina, 2012). Within the capital city of Accra, prominent slum areas include Jamestown and Nima which are characterized by poor quality housing and highly dense settlements of low income inhabitants. Bolmick (1993) discusses how slum dwellers in South Africa were able to change their lives and economic status through communal organization savings which was invested in housing. This may suggest that slum dwellers aspire to develop themselves; they aspire to be better. Examining the aspirations of slum dwellers even though a quite challenging task to take up will go a long way to inform the decision making of policy makers and those who in one way or the other seek to improve the lives of slum dwellers. Studies by Issahaku (2011), and Safo-Kantanka (2016) suggest that most inhabitants of deprived areas in the Volta and Western Regions of Ghana respectively, do save in either formal financial or informal financial agencies. Their savings behavior were found to be positively influenced by factors such as income level and improved access to financial institutions while factors hindering savings included financial illiteracy, poor state of transportation routes and high family or social demands. This study aims to investigate the savings behavior of the inhabitants of selected slum areas in Accra (James Town, and Nima) to deduce policies and structures that could be adopted to encourage savings in such areas taking into consideration their aspirations. 4 University of Ghana http://ugspace.ug.edu.gh 1.3 Research Purpose This research seeks to find out the savings behavior and aspirations of slum dwellers in James Town and Nima, as well as their income and accommodation aspirations, and juxtapose the findings with residents of Kanda and its environs to aid the government and civil society improve the living conditions of residents in slum communities. 1.4 Research Objectives The objectives of this study are; a. To examine the level of household savings among slums in Ghana. b. To examine differences in savings between non-slum and slum areas. c. To examine employment aspirations amongst slum dwellers as against non-slum dwellers. d. To examine relocation aspirations amongst slum dwellers as against non-slum dwellers. 1.5 Research Questions a. What is the level of household savings among slums in Ghana? b. Are there differences between savings in slums and non-slum areas? c. What are the employment aspirations of slum dwellers as against non-slum dwellers? d. What are the relocation aspirations of slum dwellers as against non-slum dwellers? 1.6 Significance of study Saving is a very important culture to cultivate since it goes a long way to benefit the country at large. Slum dwellers are seen as people whose standard of living is very low. However, existing 5 University of Ghana http://ugspace.ug.edu.gh literature suggests that inhabitants in these areas still find themselves doing some sort of work, be it petty trading, fishing, farming, menial jobs, to mention but a few. It is very rational for individuals to aspire to hit certain heights in their lives however this assertion is not exclusive to everyone. Some people actually do not seek to improve on their conditions and are actually very content with what they have to the extent of not aspiring or aiming higher. This study also sought to bring out the various aspirations of slum dwellers as against people living in non-slum communities. This research is being carried out to know more about the work they do in Accra, their general living conditions, their understanding of saving, and the challenges they go through with regards to managing their finances so that the right recommendations will be made to help banks, micro- finance institutions, private investors, the district assemblies, and the government as a whole to get some sort of information on how to better the lives of these slum dwellers and hence propagate financial inclusion and the United Nations Development Programme’s (UNDP) Sustainable Development Goals. 1.7 Organisation of Study The first chapter talks about the introduction (research background, problem, and purpose), the research objectives, questions, significance of the study, and the Organization of the research. Chapter two focuses on reviewed literature of other researchers on savings behavior of slum dwellers. Chapter three entails the methodology – this encompasses the study area profile, the sampling techniques and sample size, and how the data was collected and analysed. In the chapter four, focus was drawn on analyzing the data collected, and discussing the findings. The final chapter i.e. chapter five has the summary, conclusion and the needed recommendations. 6 University of Ghana http://ugspace.ug.edu.gh CHAPTER TWO LITERATURE REVIEW 2.0 Introduction This chapter provides insight on what saving is, why people save, how people save, formal mode of saving, informal saving institution, importance of saving, factors that affect saving behavior, saving in Ghana, what slums are, how slums come about, the types of slums in Ghana, saving in slums and its contribution to development, aspirations, and empirical reviews. 2.1 Theoretical Reviews 2.1.1 What is Saving? Saving can be defined simply as a postponed expense i.e. money not spent presently to be used in the future. Miller & VanHoose (2001) describe saving as a consumption forgone. The setting aside of a part of current earnings to be used in the future is what saving is all about. In support of this definition, Clayton & Brown (1983) simply state that saving is an absence of spending. This would propose that whatever portion of one’s income that is not consumed is saved. Ahmed (2002) however, is of the view that money must be deliberately set aside for future use through careful management of income and control over expenditure. Landburg & Feistone (1976) add that, saving take a careful planning and careful budgeting but the result is a relative financial gain and security. The actual use of the savings may or may not be defined as at the time of setting aside. Individuals or households may save towards a particular expenditure in the future or decide to set some money aside for any unexpected circumstance that may arise (Amu, 2008). 7 University of Ghana http://ugspace.ug.edu.gh 2.1.2 Why People Save Many are the reasons why individuals or families may desire to set aside a part of earnings today to be used in the future. Olson & DeFrain (2000) mentions that the most significant reason why people is to prepare for future uncertainties which present financial strain such as the likelihood of financial strain, job loss, divorce, illness, pregnancy and many others. In addition to these, savings may be used to defray expensive costs such as the down payment for homes, purchase of new car, or for education as some of the reasons why families save money (Smith, 1991). The possibility of earning interest on monies saved may be an incentive for many. Landburg & Feistone (1976) found that also, many families save with some institutions so they can be considered for loans from the institution. Owiredu (2015) mentions savings as a source of income during periods of unemployment or after pension to enable individuals maintain a satisfactory lifestyle even without a steady stream of remuneration. 2.1.3 How people save The concept of saving has been in existence since the emergence of the human race. In order to have enough during scarce and difficult time, people learnt to put a potion aside during abundant seasons. How or where to save is a decision the individual or family had to make based on their desire for the security of their income and also deriving maximum satisfaction (Amu, 2008). In the past, most people saved by hiding money under their beds or burying it in their backyards but now, with the emergence of banks and other financial institutions, various options are available to any saver (Railly, 1992). Basically, there are two main forms of saving; formal or informal savings. 8 University of Ghana http://ugspace.ug.edu.gh 2.1.4 Formal Mode of Saving Individuals or families may decide to keep their money with regulated financial agencies, commercial banks for example, or other financial agencies such as insurance companies, credit unions or microsavings and credit facilities (Boateng, 1994). Commercial banks provide an avenue for individuals or families to set money aside to be used in the future while rewarding the saver in the form of interest payment on their savings. Commercial banks also make funds available as loans for those who need them for other purposes like investment (Reed, Cotter, Gill, Smith 1976). The term non-bank financial agency covers various forms of financial institutions including companies that offer mortgage, hire purchase and leasing, microsavings and credit services as well as insurance companies, cooperative and credit unions and building societies (Amu, 2008). These institutions provide services such as deposit-taking and lending to small scale enterprises as well as consumers, trading in short-term financial securities etc. (Bank of Ghana, 2006). Insurance companies provide four main types of insurance for families and individuals. These are life insurance that includes term insurance and permanent insurance, motor insurance, fire and theft insurance. Families can save their money in life insurance policies with insurance companies for use in the future Ahmed (2002). Another formal savings venture families and individuals is credit unions. Credit unions are organized by people who share a common bond such as employees of a company, religious groups or labour unions with the main aim of helping members save for future expenditure such as procurement of automobiles, household appliances and sometimes meet emergencies (Clayton & Brown, 1983). Credit unions are usually owned and managed by the members. Boateng (1994) observed that credit unions accept deposits and make loans to only its members. Membership of credit unions are usually defined and restricted to a particular group of people who are encouraged 9 University of Ghana http://ugspace.ug.edu.gh to make regular contributions towards a common fund from which loans are usually granted to members at very low rates. 2.1.5 Informal Saving Institutions These are savings done outside the outlined formal savings sector. Options in the informal savings sector comprise walking banks, ‘susu’, society welfare groups and keeping funds at home or with a trusted person (Aryeetey & Gockel, 1998). Many groups may decide among themselves to make periodic contributions called “susu” and the total sum is given to one member after the other till each member has a turn, then the cycle is repeated (Boateng, 1994). This saving option enables contributors to acquire assets which they would have otherwise had difficulty in purchasing with earnings. In order to enjoy a turn, members would have to be diligent with their contributions. The “Walking Bank” is another savings arrangement some individuals and families use to save. The organizer usually goes round daily or weekly to collect contributions from individuals who want to save (Ahmed, 2002; Boateng, 1994). This is popular with people in the informal sector who do not make monthly income. They use this venture to regularize their earnings or to accumulate funds to undertake a venture or to procure some goods. Their contributions are remitted at the end of each month and the collector usually takes a charge of one day’s contribution. Welfare Societies are common in most communities and work places. Members contribute fixed amounts to an elected treasurer with the aim of assisting each other in times of need. Members do not have direct access to their savings but are supported in times of need as loans which can be repaid without interest or in some cases, very minimal interest (Ahmed, 2002). Some families and individuals may also purchase capital or non-consumable items that are likely to increase in value over time as a savings or investment venture. They later resell these items for a higher price. The 10 University of Ghana http://ugspace.ug.edu.gh most common purchase made with this purpose is land which increases in value with each passing year (Boateng, 1994). Naturally, some people would prefer to keep their monies home due to lack of trust in financial institutions or for those in rural areas, the absence of these institutions (Ahmed, 2002). 2.1.6 Importance of Saving In order for a country to develop economically, savings play a key role in both the macro and micro level. It forms the root for capital formation and investment for macro-economic growth (Issahaku, 2011). Savings, for individuals, serves as a buffer to cushion future eventualities and a means of starting up or expanding new or existing businesses respectively. To some extent, individuals acquire wealth and become financially liberated through savings. A country’s debt could be settled internally when the proportion of household savings is high (Sutton & Jenkins, 2007). Stenga (2011), stipulates some of the key roles savings play in the lives of individuals and the nation at large. He specifies capital accumulation as one of the importance of savings. According to him, savings is a get out of jail free card used by households during income deficits and also, a means of increasing national output and development by stimulating investment of people and firms alike. In a nutshell, household savings are therefore pivotal for ventures in infrastructure, technology as well as education, paramount for the growth of any economy. 2.1.7 Factors that affect saving behavior An individual’s level of income is considered the most momentous factor influencing the savings behavior of individuals. Generally, more income means more activity in the economy and vice versa (Asghar and Ahmed, 2004). Niculescu-Aron (2012) also found that the decision to save is 11 University of Ghana http://ugspace.ug.edu.gh influenced strongly by saving facility from which households benefit. The availability of appropriate saving schemes motivates individuals to save in order to benefit from the scheme. Studies within Africa have indicated no positive correlation between financial liberation and private savings (Attanasio & Banks, 2000). Loayza, Schmdit-Hebbel & Serven, (2000) also indicates that income growth does not directly influence private savings positively. Maimbo & Mavrotas (2000), also found that recent financial reforms have not resulted in an increase in private savings. The study claimed Zambia’s low savings rate was as a result of the poor functional institutions in the country. As a result, individuals and families preferred to own hard currencies. Several other studies also confirmed the negative correlation between financial sector reforms and private savings in Ghana (Akoena & Gockel, 2002; Aryeetey & Gockel, 1991; Zorklui & Barbie, 2003). In Owiredu (2015) study on Savings Patterns of Public Sector Workers, he found out that most (48%) of the respondents gave safety of savings as the major reason influencing their decision to save in a particular institution. Also, the study indicates a pattern in savings behavior in relation to the sex of the respondent, his or her academic status, monthly earnings and marital status. For savings and investment in a society to thrive there is the need for financial reforms to be unbiased and transparent (Faridi & Bashir 2010). The objective and transparent financial safety nets have to be created that have a positive impact on saving and investment in society (Faridi & Bashir, 2010). Within the finance and services sectors, it is imperative to have an efficient financial security system that helps the government formulate effective economic strategies designed to encourage optimal functioning of the markets. (Dupas & Robinson, 2013). These influence the economic growth of a country within the immediate term as well as in the foreseeable future (Owiredu, 2015). In their study of twenty-five African countries including Ghana, Hussain, Mohammed & Kameir (2002) found the activities of the informal financial market to be a 12 University of Ghana http://ugspace.ug.edu.gh significant contributing factor of financial savings and investment as against the real interest rate. Other empirical studies also indicate that increase in real interest presents a high cost of borrowing which encourages individuals and families to save (Faridi & Bashir, 2010; Owiredu, 2015). Every banking institution including other financial institutions encourages people to economize with an expectation of passing on a considerable measure of rate of interest on the saving amount. When the rate of interest is high people are more interested to keep rather than invest and when the rate of interest is less people are less inclined towards saving rather than they are likely to invest more in an expectation of producing a more rate of replication. (Owiredu, 2015) In a study in the rural areas of Ghana in 2008 by Steiner, Giesbert & Bendig (2009) assessed how savings are influenced by remittances, risk exposure and shock experience. The findings revealed that education, household size, remittances, death of a relation and other shocks had an appreciable influence on whether households save or not. Amponsah (2015) study findings show that financial illiteracy negatively affects saving behaviour. This shows that having an appreciable knowledge about finances has an influence on the saving behaviour of an individual. Amoako & Cobbinah (2011) had a study on savings and investment behavior of the working population in Kumasi Central which revealed that most people opened their account after securing employment, giving credence to the fact employment is a major determinant of savings. It was again found that the self-employed saved more than salaried workers. The reason could be that because they had the desire to see their businesses expand, they saw savings as form of capital mobilization. 2.1.8 Savings in Ghana Quartey & Blankson (2005), revealed in their study that, many households in Ghana did not have savings accounts. Only a few people actually owned savings account with majority of the holders 13 University of Ghana http://ugspace.ug.edu.gh (i.e. over sixty percent) being children. Amu & Amu (2012) also postulated that, insufficient financial intermediaries coupled with limited income levels of the population is a cause of low savings in the country. Households preferred to spend their monies on appliances like radio and sewing machines in addition to furniture, and a mode of transport rather than investing in landed properties or in the capital market like purchasing shares (Quartey & Blankson 2005). These give the indication that Ghanaians preferred to spend on things they could readily use either than investing in the capital market. Amu & Amu (2012), in their study ranked the reasons for which the people of Ho saved. The first and paramount reason they unveiled was, the people of Ho saved to safeguard themselves against emergencies. Gathering money to purchase luxurious items, and also relying on after retiring from work were the second reasons for which they saved. The final reason which happened to have been the least reason they spelled out was that, the inhabitants of Ho saved to increase their value. This happens when the value of their savings increase as the value of whatever they save in appreciates over time, The researchers also went ahead to unravel the items that repressed the abilities of the respondents to put money on the side. These can be classified into personal causes, societal hindrances and economic causes, and finally organizational constraints. Taking these items in isolation, the personal causes can be broken down into several factors. Some of which are misuse of funds got, spending monies got on chronic sicknesses, and finally the security of the income. With regards to the societal hindrances and economic causes, two sub reasons being large dependency burdens from family members, and societal pressure came up. For the organizational constraints, reasons such as insincerity of group members when informal savings forms such as group savings are adopted, high transactional charges from the banks, too much time spent in 14 University of Ghana http://ugspace.ug.edu.gh banks mainly due to congestion, and finally the remoteness of where some of the formal saving institutions are located. Amu & Amu (2012) also found out that, families having smaller amounts of monies to save, save frequently than families having larger amounts of money to save. This means those who save smaller funds visit the banks or put money aside more frequently than those with hefty sums of money who normally save it on monthly or occasional basis. According to Issahaku’s study in Nadowli, the following were revealed to influence the behavior of residents towards saving and investment: cover for unexpected emergencies, asset purchase, saving towards predictable expenses (e.g. school fees or levies, health insurance premium), for use in the future, pension fund, saving towards investment, to reap higher returns, and luxury. He found that the educational level of the household head is a positive influence on their inclination to save. This could be because of the increased awareness that comes along with schooling. Issahaku,’s research work also postulated that individuals with improved income have higher education and concurrently, higher savings rate (Issahaku, 2011). In his recommendations, Issahaku stressed the need to improve financial literacy through the creation of awareness by financial institutions. He also suggested increased education on family planning in a bid to reduce the number of dependents as this was found as a hindrance to saving. 2.1.9 What is a Slum? Many organizations and scholars have defined slums in several diverse ways. The UN-HABITAT (2003) used the characteristics to define what a slum household is. It avowed a slum household to be a cluster of people residing in on abode which are deprived of at least one of the following: proximity to safe drinking water, good sanitary conditions, stable or durable housing structure, security of tenure, and a sufficient living area. As stated by Shah (2014), the slum communities 15 University of Ghana http://ugspace.ug.edu.gh are the way they are because the government marginalized by the public authorities in that they are not seen as an essential part of the city. The circumstances in which slum dwellers are born, reside, work, and even age in are molded as a result of far reaching mechanisms of dissemination of money, control or power, and resources at the world, country and local levels. The Accra Metropolitan Assembly followed a similar trajectory by using the characteristics of slum areas to define what a slum is. Per their words, a slum is a place with a dearth in the ensuing conditions, adequate living space, sustainable or durable housing structures, availability to potable drinking water, no encumbrances on the land acquisition, and good sanitation and drainage (Ovenseri-Ogbomo, Afful & Kio, 2011). 2.1.10 How do Slums Come About? Adarkwa & Post (2001) associate the creation of slum areas to the spurt in the spread of cities and the failure of government to meet the demand of the increased population with adequate supply of housing or formulate sustainable housing policies to cater for the need. The World Bank in its 2002 World Development Report also attribute the emergence of slums to the imbalance of housing need and housing supply in fast-spreading cities, as well as poverty. Poverty was also cited as one of the causes of the creation of slums by Hari (2006). This is also supported by Durand-Lasserve (1996) who states that the ongoing mismatch between the increasing need for housing and its steady provision for that need has resulted in the creation and the perpetuation of slums in developing countries. The United Nations Commission on Human Settlement (UNCHS, 2003) warns that the unfettered growth of the population in urban areas in developing countries will inevitably lead to the breed and spread of slums. The victims of this imbalance and poverty usually settle on lands they do not have title or permits to, in such masses 16 University of Ghana http://ugspace.ug.edu.gh that bring about unhealthy living conditions and overcrowding. They usually live in makeshift structures without basic housing facilities Partha and Kishor (2012). In her study, Shah (2012) explains that within urban areas across the world, slum dwellers make up about 32 percent of the population. This figure, she explains, is higher in developing countries (32 percent) and at its worst within the Sub-Sahran region of Africa (62 percent). 2.1.11 Types of slums in Ghana Slums in Ghana can be grouped into three, indigenous communities, migrant communities and newly emerging squatter communities. The table below shows the types of slums and their characteristics in Ghana Table 2.1: Slum Typologies in Ghana Type Land Housing Infrastructure Housing Ownership Quality Status Indigenous Traditional Moderate Moderate Without Communities Homes permits Migrant Community With the owner’s Substandard Low grade Without consent “Zongo” Permits Newly Emerging Without legal Extremely None Without Squatter Community. documentation Substandard permits Source: Slum Development in Ghana (Afrane, 2010 as cited by Dakpallah, 2011). From the table, indigenous communities live in traditional building structures with fairly good facilities but usually do not have the necessary documents to show actual ownership. The second group being the migrant communities usually have permitted access to the lands by its owners. They usually have makeshift amenities that are not durable nor long lasting because they view the 17 University of Ghana http://ugspace.ug.edu.gh residence as a temporary home i.e. the “pilgrim mentality”. Thirdly, there is the newly emerging squatter communities who occupy lands they do not titles to nor any permission from the land owners. The migrant community and the newly emerging squatter community are the most significant contributors to the growing spread of slums within urban centers (Dakpallah, 2011). 2.1.12 Savings in Slums and its Contribution to Development Slums, though regarded as detrimental to the national economy, also contribute to the development of a country’s economy. Owusu (2011) highlights that many residents of slums are engaged in the supply of scrap metals to industries in Ghana. Several local foodstuff and food items, kenkey for example, are prepared and marketed by slum dwellers for the consumption of neighboring communities. (Dinye & Acheampong, 2013). Shah (2014) explores how microsavings within slum settlements are patronized as a means of empowering individuals to save for future use during emergencies, purchasing assets or improving their standard of living. This initiative as discussed by Mitlin, Satterwaite & Bartlett (2011), encouraged savings discipline in slum dwellers by encouraging them to set aside a small amount each day. The respondents realized they are able to save more this way than they thought they could. The initiative of Microsavings in slums such as the “Mahila Milan” in India provides their customers with adequate funds during an emergency on conditions more suitable to the borrower with reduced risk of debt as compared to formal financial organizations or local lenders. (Mitlin et al., 2011). Patel, Burra & D’Cruz (2001) and Bolmick (1993) illustrate the contribution of slum dwellers through microsavings towards housing in South Africa in an initiative they analyzed. The initiative was instituted by the government post- apartheid, an attempt to reduce the cost of housing and infrastructure for financially challenged 18 University of Ghana http://ugspace.ug.edu.gh citizens. This program enabled many local housing savings organizations to advocate for direct funds which helped their member secure their own homes (Shah, 2014). Mitlin D. et al. (2011) also discuss the Poor People’s Movement in South Africa which was founded as a savings scheme with the vision of building a better future in 2000. It encouraged members to save what they can regularly in various schemes of the group such as the Funeral Savings and the Value Added Savings. Through this initiative, several community projects have been developed in housing, food security and agriculture as well as waste recycling. These inhabitants of urban slums and rural settlements have been able to better themselves and their communities through savings initiatives. This can also serve as an indicator of the aspirations of slum dwellers to improve their economic status through better housing and living conditions, asset/wealth creation and improved jobs. 2.1.13 Aspirations Stutzer (2002) examines the how a person’s happiness could be associated with their desired income and discovered that the people we share residence with influence our income aspirations. He realized that the wealthier one’s neighbours are, the higher we aspire our income to be. The study indicated that the level of interaction between community residents is positively related to the level of influence on each individual. Hence, within communities where residents socialize with each other, they are more likely to be influenced by changes in income of fellow residents than in communities where there is no interaction. The study also mentions that averagely, many households earn more than what people generally believe to be the barest they find sufficient. That income aspirations are usually assumed to be unattainably higher than actual income being earned, was proven not to be a fact. However, one 19 University of Ghana http://ugspace.ug.edu.gh cannot say de facto that the level of aspiration cannot influence one’s state of mind. The study simply explains that one’s desired income serves as a benchmark that individuals refer their actual earnings to (which may fall below or above the reference point). Regardless if the income many consider as adequate is lower than their actual earnings, still the contrast between aspirations and earnings in reality may be significant. This merely indicates that higher income does not necessarily mean higher income aspirations. The researcher positively linked income aspirations of residents of a community to its income per capita, highlighting this as the reason why residents of industrialized communities are not getting happier in spite of the significant growth of their economy over the last few years. It was also realized during the study that income aspirations rise as one progresses in education. Also, for people with health issues and entrepreneurs, income aspirations were found to be high as compared to the healthy and employees respectively. Kabiru et al. (2013) also examined youth groups who in their younger years desired to relocate to “better” communities in order to attain aspirations. They found an adjustment of this desire in their later years in that, they were now more inclined to remain in their slum communities not only because they had accepted that the possibility of relocating was financially unattainable to them but rather because they desired to improve their communities through community engagement and help other residents less fortunate than themselves (Kabiru et al., 2013). An interesting report by Kapse, Pofale & Mathur (2012) studies attempts by various countries within some Western and Indian cities to improve the quality of life in slum areas. It was realized that the in-situ upgradation of slums is the best approach to improving the lives of slum dwellers as against relocation which the paper suggests to be a failure. It is indicated that slum dwellers do want better living conditions but are reluctant to relocate from their communities due to factors including loss of livelihood, security of tenure and the inefficiency of governmental policies on 20 University of Ghana http://ugspace.ug.edu.gh relocation of slum dwellers. In their study, the key factors in designing a successful slum relocation scheme is for the relocation site to be of close proximity to the original area or a nearby area where job opportunity is significant. Also, amenities such as water supply, garbage disposal and legal supply of electricity was mentioned as an incentive to relocate. To ensure sustainability of the project, it was suggested that communal activities encouraging community empowerment, sense of belonging and unity should be held occasionally. 2.2 Empirical Reviews This entails research reports of works done in Asia, North America, Africa, and Ghana. 2.2.1 Saving Behavior of Households in Asia Taking a look at a few previous works conducted by various researchers on the topic, it is realized that generally, low income earners have a high tendency to save. Unny (2012) in her report on “Examining the Factors Influencing Savings of Rural Households in Kerala” found that despite the low per capita income of the area, the rate of savings was very high. Factors found to influence savings positively include the level of earnings of the household head, his academic status, income disparities, as well as the value of assets owned. Negative influence, however include the number of male dependents, number of people within the household earning income, and the proportion of earners to dependents. It was also found that among the various occupations in the area, families engaged in trades other than farming are more inclined to save. It was thus concluded that strategic policies are needed to explore the potential of rural households through savings, as they have a high propensity to save. This could help stabilize the economy and bridge the gap in development of rural areas. 21 University of Ghana http://ugspace.ug.edu.gh Moulick (2008) found out in his report, “Understanding and Responding to the Savings Behavior of the Poor People in the North East of India”, that the financial strength of a respondent, influences the manner in which the person saves; be it through the informal, semi-formal, or formal channels. According to him this could also be in monetary terms, in kind, or making use of the accounts based savings method. It was quite obvious saving in cash and keeping it in the house would have been a popular choice due to its easy accessibility and liquidity nonetheless the risk of it being pilfered or spent frivolously made it an unpopular mechanism. One option that delivered swift and higher yields was saving in-kind (especially through the procreation of livestock) nevertheless, this method was attributed to the low income earners in the society. They used this option because of the lack of a better option available to them. It was also realized that, in the North Eastern part of India, conspicuous saving practices were; making use of the Non-Bank Financial Companies (NBFCs), Accumulating Savings and Credit Associations (ASCAs), and finally, Rotating Savings and Credit Associations (RoSCAs). These were popular because of their user-friendliness, and wider outreach than the other saving methods. Moulick concluded the report by saying a secure and accessible account would have been very preferable, all the same, these formal structures pose a lot of hurdles. They are not easily accessible in that, just a few formal financial institutions are available. The products these formal institutions offer are delivered by personnel who are insensitive to the necessities of the poor or low income earners. It makes them feel ostracized. 2.2.2 A Report Undertaken in North America. Karlan, D., Ratan, A. L., & Zinman, J. (2014) in their work on “Savings by and for the Poor: A Research Review and Agenda - Review of Income and Wealth” postulate that, various demand- 22 University of Ghana http://ugspace.ug.edu.gh side constraints depress saving even among those with access. Social claimants, lack of knowledge, and or behavioral biases may lead to sub-optimal saving. Even when there is unavailability or unaffordability of savings products, the poor often save under mattresses, in informal groups, and or in livestock. Microfinance institutions are expanding their initial microcredit focus to include the provision of savings products now. To date, micro-finance institutions have 72 million micro-savings customers, as against 94 million microcredit customers. (Microfinance Information Exchange, 2012). This study also described five categories of saving frictions: transaction costs, absence of confidence and regulatory obstacles, gaps in information and knowledge, social limitations, and last but not least, cognitive biases. In conclusion, people who are not too well to do, are able to and actually put money on the side, but often use official or informal tools with high-risk, high-cost, and restricted functionality frictions on the market, including transaction costs, absence of confidence, and legislative obstacles that hamper the provision of saving products. 2.2.3 A Report Undertaken in Africa on Slum Behavior. Looking at the households in Malawi, the Opportunity International Bank of Malawi in their report on, “The Assessment of Household having Behavior and Access to Financial Services in Malawi”, identified a probable disparity between saving ability and actual savings behavior which caused them to undertake a research to probe into this issue and bring out the best recommendations to curtail the issue. The bank then instituted the study to assess income sources and levels of households in Malawi and how they relate to savings behavior. Households were studied across various clusters, geographical area, income levels and uses, savings culture, and how easily accessible the financial services are to them. 23 University of Ghana http://ugspace.ug.edu.gh It was confirmed that within the study area, the main livelihood activities were farming, and small scale business with external sources of income (mainly being remittances from family members) only representing a small proportion of their income sources. From the survey conducted, only a small fraction of the respondents interviewed save from the highest incomes they got. They rather spend much of it on consumables or household expenses.The research also found out that the respondents actually have the means to really set some money aside however, for them to actually open a bank account or save a portion of their incomes, their household income level played an invaluable role. The study revealed that a majority of household in selected clusters prefer to save incomes in business ventures as they speculate they would generate better returns through profit than when they invest in a low interest bearing account. It was recommended to the bank that they offer loans to micro small and medium enterprises (MSMEs) using savings accounts as collateral, giving regard to the feasibility and profitability of the business. Since it was established that the highest cash need season coincides with the peak of the farming period, the bank was encouraged to use this knowledge to structure well planned savings and loan products that meet household needs during this period. This would mean designing a savings and loan structure that allows households to save more during the harvest season to enable the bank lend more during the farming period. 2.2.4 A Report on Saving Behavior of Slums in Ghana. In 2008, Manasseh Amu investigated, “The Saving and Investment Behavior of Rural Households in the Ho Municipality of the Volta Region of Ghana.” The research was carried out to study the savings behavior of families in the municipality as to whether they did save or not, how often they saved (that is even if they saved at all), and also the forms of savings and the problems they 24 University of Ghana http://ugspace.ug.edu.gh encountered whilst saving. It was realized during the study that there seemed to be a general lack of knowledge or ignorance regarding savings and investment among rural families within the municipality. Informal forms of savings were preferred by the families to the formal savings. Some of the constraints to the respondent’s ability to invest and save were insufficient funding, over- dependence on natural weather or climate, and market disruptions. Some respondents were also hindered by the bad state of transportation infrastructure, family and societal demands, and financial illiteracy, high input costs of investment and fear of failure in business or investment. It was therefore concluded that, income levels of residents in the area are generally low to even meet the needs of the families let alone to set some aside for the future. 2.2.5 Review on Aspirations McBride (2010) in his work on “Money, Happiness, and Aspiratons; An Experimental Study mentioned that, according to Frey and Stutzer (2002), various economists have concluded that a rise in earnings significantly influences one’s happiness, indicating that most people may evaluate their happiness by their level of income. In their study, they discuss the concept of happiness and various disputes in its measurement. Blanchflower and Oswald, (2004) consider other non- pecuniary determinants of happiness such as marital status, sexual activity, age and one’s wellbeing. There is also the discussion by Clark, Frijters & Shields (2008) that any increase in earnings which is usually offset by an increase in expenditure, taking away the initial feeling of happiness when one receives a rise. In this, we realize that a higher income only temporarily improves one’s happiness, it is uncertain whether this happiness is sustainable in the long term. This calls for a 25 University of Ghana http://ugspace.ug.edu.gh probe into the formation of income ambitions which led to the recognition of these important factors. One, that the level of income people aspire for is dependent on previous income levels. In that, people who were paid higher in the past currently have higher targets in revenues and as such do not record significant increase in happiness at a raise in income (McBride, 2010). Secondly, that one’s income aspirations is also significantly influenced by the earnings of their peers. Thus, when an individual’s peers receive a raise they experience a decrease in their own happiness. (McBride, 2010). Lastly, one’s aspirations is positively influenced by one’s income expectations (Clark et al, 2008). McBride’s study sought to examine the evidence of these factors that tie income aspirations and happiness in a controlled area as an experiment. The author admits that it arguable that trial subjects in such an experiment will form income aspirations in the same way individuals form ambitions in their earnings, given that one’s revenue is dependent on the duration of work, social interventions, forces of demand and supply and many other social factors. It was feared that without the influence of these factors, trial subjects in such a research will formulate their goals differently. Regardless, McBride’s experiment supports the fundamental theory linking income aspirations to happiness. He further adds that, a controlled environment allows the researcher to manipulate and control the previously proposed determinants of aspirations. Here, the researcher can identify which factors are directly at play between income aspirations and happiness and determine which ones have more significant influence in the creation of aspirations. The trial is designed in such a way that the test subjects’ decisions only affect their own settlements and not those of others in the study. It concurrently receives data on previous expenses, social comparisons and anticipated rewards. The subjects are engaged in the game of ‘matching pennies’ against several programmed challengers. After a round of the game, the subjects are informed of 26 University of Ghana http://ugspace.ug.edu.gh their reward and they describe their own reactions to their reward. It was found that where the reward remains the same, a rise in aspirations significantly reduces one’s reported fulfilment. This is a clear indication that aspirations do in fact influence one’s happiness. Also, it was noted that subjects compare themselves to only peers they find to have similarities with; those who played against the same kind of opponent. Previous rewards seemed to have only a negligible influence. Both expected rewards and the reward of peers in a similar match were found to affect the satisfaction of subjects negatively. Thus the outcome of the study supports the theory that fulfilment with rewards is closely linked with aspirations which vary with environmental conditions significantly, the rewards of peers and one’s reward targets. 27 University of Ghana http://ugspace.ug.edu.gh CHAPTER THREE RESEARCH METHODOLOGY 3.0 Introduction This chapter talks about the study area profile and research methodology. It discusses the processes through which the study objectives are carried out, and also describes the neighborhood characteristics of the selected study areas; James Town, Nima and Kanda, all in the Greater Accra Region. 3.1 Study Area Profile This portion talks about the study area profiles of Accra, Ga Mashie, James Town, Nima and Kanda 3.1.1 Accra Accra being the capital of Ghana is divided into four geographical regions namely North, West, East, and, Central. The Accra Metropolitan Assembly serves as the political and administrative authority for the city of Accra. The areas this study focuses on are James Town, Kanda and Nima which are all within the domain of Accra Metropolitan Assembly (A.M.A). There are six sub-metropolitan district councils within the AMA. These are the Ablekuma South, and Central, Ayawaso Central, Ashiedu Keteke, Osu Klottey, and Okaikoi South. James Town is a part of the Ashiedu Keteke sub-metro whereas Kanda and Nima both fall under the Ayawaso 28 University of Ghana http://ugspace.ug.edu.gh Central sub-metropolitan district and constituency as well. When it comes to land use planning in the metropolis, the Town and Country Planning Department is in the helm of affairs. Accra has about fifty official neighborhoods (planned and unplanned) within its limit. The total area is 173km²(67sqmi). The borders encompassing this city are the intersection of the Lafa Stream and Mallam Junction serving as the Western Border, the Great Hall of University of Ghana establishing the Northern Border, The Nautical College forming the Eastern Border, and finally the Gulf of Guinea creating the Southern Border. According to the World Population Review, the capital and largest city of Ghana is Accra, which has an urban population of 2.27 million. The Greater Accra Metropolitan Area (GAMA) has about 4 million inhabitants, which makes it the 11th largest metro area in Africa. Accra features a Tropical Savanna Climate that borders on a hot semi-arid climate with an annual rainfall averaging 730mm. Housing in the capital city can be grouped into low, middle, and high income areas. The low income areas comprises of about 58% of the total population whereas the middle income areas have about 32% of the population and the remaining 10% going to the high income areas. A large chunk of the cities informal businesses are situated in the low income areas. Chorkor, Achimota, and Airport Residential Area are examples of the low, middle and high income areas respectively. Economically, Accra is the center for manufacturing, marketing, finance, insurance, and transportation. The predominant economic activities are fishing and urban agriculture. Fishing operations are most protruding at the shores of James Town, La, Teshie and Chorkor. Most of the administrative activities of the country are carried out in Accra. It can boast of the Bank of Ghana, the Parliament House, Supreme Court, Independence Square, Flagstaff House, and the only International Airport in Ghana which is the Kotoka International Airport. 29 University of Ghana http://ugspace.ug.edu.gh 3.1.2 James Town This community is primarily dominated by fisher folk from the Ga ethnic group. The town is one of the oldest in the city of Accra having emerged around the 17th century by the construction of the James Fort and Ussher Fort on the coast of the Gulf of Guinea. The area had become heavily developed by the end of the 19th century and by the 20th Century had become of the densest areas in Accra, housing about 125,000 people (Ghana Statistical Services Census Reports 2010). Its glory is nearly forgotten as the community has dilapidated into one of the famous slums in the capital city. 3.1.3 Historical Background of Ga Mashie Figure 3.1: Sub areas of Ga Mashie Source: Spatial Anthropolgy (2011) 30 University of Ghana http://ugspace.ug.edu.gh Ga Mashie is made up of various sub areas. Name origins are mainly from clan and family clan names. However, company names, shrines and market names also form part of the description of the territory. Inhabitants use those sub-areas names as reference points in Ga Mashie. (Spatial Anthropology in James Town, 2011). Ga Mashie which has its other name as Old Accra in times past consists of two communities namely James Town and Ussher Town. It is where the original Gas initially settled making it one of the oldest if not the oldest community in Accra. The Gas first settled there in the 16th century. During the 16th and 17th Century the Europeans came into contact with this area for trading purposes. Ga Mashie, constituting of the two communities, covers an area of 100 hectares along the southwest coast of Accra. This division came about as a result of the influence of Europeans from the Netherlands, Britain and Denmark, who were allowed to build trading lodges on the coast in the 17th century (GAMADA). The Ports was first established in Old Accra before it was moved to Tema in 1962. During its existence, it transformed the economy of Old Accra positively drawing a large chunk of the elites to reside there. Most of the structures were originally two storey structures. In 1877, Old Accra became the capital of Gold Coast. The first president of Ghana Dr. Kwame Nkrumah had even been a member of parliament of this constituency before. The plummeting of the economy of Old Accra started with a series of activities. First, the bubonic plague, which spread in 1908 with devastating consequences, forced the colonial power to indiscriminately demolish many houses, with further negative effects on the population. The earthquake in 1939 also led to the collapse of most of the two storey inaugural buildings, the Harbor was also transferred to Tema, causing the elites to relocate to the Northern part of the city leading to the decline of the wealth from the community (Quarcoopome, 1993). 31 University of Ghana http://ugspace.ug.edu.gh 3.1.4 Nima Nima is a densely populated neighborhood which lies to the north of Accra Ring Road. It is bordered at the north by Maamobi and Achimota and to the west, it is separated from Accra New Town by the Odaw stream. Interestingly, it shares a boundary with the upper income neighbourhood of Kanda Estate to the east. Figure 3.2: A Map of Nima Source: Google Map 3.1.5 History of Nima In the 1940s, before being sold on the Accra market, Nima became a place for the Fulani tribe's Futa family for pasturing livestock. With Accra's growth in the 1940s, there was a demand for housing property within Nima, and the Futa family had to allocate plots for settlement to 32 University of Ghana http://ugspace.ug.edu.gh individuals. The population influx to Nima was caused by an increase due primarily to work possibilities provided by the base. The Gold Coast soldiers further enhanced the population of Nima when they returned from serving in the Second World War. The region was subsequently flooded by migrants, mostly from northern Ghana and other West African nations attracted to the site owing to low rents and land accessibility for home building (Yankson, 2000; Essumuah & Tonah, 2004). Nima was thus fully occupied by the mid-1960s (Yankson, 2000). Migrants from northern Ghana and other nations in Western Africa have become a continuous community characteristic. Other ethnic groups from Ghana have recently influenced the community. Nima is no longer a homogeneous group in the 1950s, but is more heterogeneous and includes the main ethnic groups in the country. 3.1.6 Characteristics of Nima Nima’s ethnic composition could be said to be dominated by people from Northern Ghana followed by Akans and then Ewes (The 2000 Population and Housing Census; Owusu et al., 2008). In terms of religion, a little over half of the population of Nima are Muslims. The 2000 census shows that a dominant percentage of the population profess to following Islam with Christianity being the second most popular religion residents of Nima identify with. The 2000 census also makes available information on the educational levels of the population aged six years and older. It was recorded that over a third of the population have never been formally educated and about a quarter of residents have had primary education. The residents who had received secondary or tertiary education fell below five percent (5%) of the population. (The 2000 Population and Housing Census; Owusu et al., 2008) 33 University of Ghana http://ugspace.ug.edu.gh There is a high rate of unemployment in Nima, according to instructional statistics. Local employment status represents the comparatively small educational rates reported. The proportion of people in the government and formal financial industries was smaller than in the private and informal employment industries. A higher proportion of the population actively employed were self-employed with less than a third of the residents working in the public sector. The remaining proportion of economically active inhabitants of Nima were engaged in activities, including domestic employment, apprenticeship, and unpaid family contributions. (The 2000 Population and Housing Census; Owusu et al., 2008) Nima is currently seen as a transitional as well as a permanent location for migrants. As a temporary site, fresh migrants seeking a foothold in the town of Accra migrate first to Nima owing to the comparative ease of access to help from family members in Nima and the accessibility of inexpensive housing. In addition, young people wishing to embark on international migration perspective Nima as a location of transition. Between temporary and permanent migrants in Nima, families who have resided in Nima for so many years can be positioned that they are now comparatively well off and relocate to Accra's new suburbs, particularly the peri-urban regions. (Maxwell et al., 1998; Owusu 2005; Owusu & Agyei 2007; Owusu et al., 2008). 3.1.7 Kanda In contrast with the socio-economic statuses of the areas considered above, Kanda is a middle-to- upper income residential area which is only separated from Nima by the Kanda Highway. The distinct difference between the adjacent neighborhood is pretty alarming. Kanda has a good road network and residential planning structure. The residents of the community have access to potable water and electricity. 34 University of Ghana http://ugspace.ug.edu.gh 3.2 Methodology The data sources for the survey comprises of primary data. The primary data is made up of questionnaire survey, and interviews with households and various stakeholders within the selected communities. Questionnaires consist of both open-ended and close-ended questions. In order for rich data to be obtained, open-ended questions were adopted to allow respondents to provide their own answers. Close-ended questions were adopted where respondents were given a list of answers to choose from. Accra was chosen as the research area for the purposes of the survey. Within Accra there are so many communities or localities; Jamestown was chosen purposively based on the AMA’s piloting of the participatory slum upgrading project. Nima was chosen due to the history surrounding its formation. Kanda was purposively chosen to study its striking contrast from Nima, which is only a street away. The communities were divided into enumeration areas based on the Ghana Statistical Service allocation of Enumeration Areas (EA). Each enumeration area was given a specific landmark and the name of the land mark was used for the EA. The team also employed the use of Population Proportion to Size (PPS) technique in allocating sampling size within the EA’s. A high population gets more numbers as compared to a relatively less population. A simple random technique was used to select the Enumeration Areas within the Jamestown community. This was necessary since all the EA’s within the community could not be selected for interviewing purposes. The simple random technique allows for the probability of all the EA’s to stand the chance of being selected, without any bias. A total of two hundred questionnaires were distributed in James Town and Nima with forty distributed in Kanda (across the Hilla Limann Highway). 35 University of Ghana http://ugspace.ug.edu.gh The data collected from the field was entered and coded using Microsoft Excel 2013 for analysis. Stata statistical tool was used to give meaning to the data collected and entered. This software was deemed most suitable to analyse the data collected. It is a very reliable software. With the summary statistics of the demographic characteristics, the number of observation, mean, maximum and minimum concepts were examined and interpreted. The various objectives were analysed using the mean scores, mean difference, t-value, and p-value. The t-value and p-value aided in knowing the significance of the concepts selected to be analysed. Probit regression was used to estimate the determinants of aspiration to migrate in slums. The Probit model was accepted because of the dichotomous nature of the dependent variable. The Probit model is a model of statistical probability in the dependent variable with two classifications. Probit analysis is based on the normal cumulative distribution of probability. The binary dependent variable assumes zero and one values. The Probit analysis provides statistically significant findings which will tell the likelihood of slum dwellers to relocate or remain in their locality. Y = βX + e Where; Y = Desired outcome variable X = Independent Variable β = Coefficient of explanatory variables The dependent variable is a dummy variable. It is One when a person wants to migrate, and Zero when a person chooses not to migrate. Pᵢ = P(Y=1/X) = P(Yt ≤ Yi) = P(Zi ≤ βX) = F(βX) Pᵢ = The probability that an event will occur 36 University of Ghana http://ugspace.ug.edu.gh P(Y=1/X) this is a probability that a person will migrate Z i = standard normal distribution F = standard normal cumulative distribution function Therefore the Y = β₀ + β1Marriageit + β2Educationit + β3Ageit + β4Incomeit + β5Employmentit + ᶓ 3.3 Sample Size The sample size for the respondents interviewed in James Town and Nima are a hundred each whereas that of Kanda is forty. 3.4 Sanitation and Drainage According to a report on a survey carried out by GAMADA, about 90% of households in James Town use public toilets. A few of the households have private water closets within their premises however upon a reconnaissance within the early hours of the day, it was revealed that some of the inhabitants of the area still use the shores of the beaches as their place of convenience with the reason of reveling in the fresh air from the shores. Quite a number of households locate their bathrooms outside the house, most of which are constructed with masonry blocks or timber planks and are mostly or usually located next to or on drains to facilitate the quick disposal of waste water that comes straight into the gutters. It is important to note that, since there are less public urinals in the area, the bathrooms also double as urinals. The Ga Mashie Development Agency (GAMADA) in tandem with the UN-Habitat upon 37 University of Ghana http://ugspace.ug.edu.gh its implementation of the Participatory Slum Upgrade Project has provided places of convenience to some selected households to aid eradicate this act and reduce the burden on the public toilets. The drains in James Town are mostly opened with a few having slabs covering them. These drains border the tarred streets and are very close to the houses of the inhabitants. The survey also organized by GAMADA revealed that about 97% of inhabitants in this community dispose of liquid waste into the open drains. Some of the households also emit soil waste into these drains causing unpleasant stench in the vicinity. During the rainy season most especially, the drains get choked as a result of blockages caused by the disposal of solid wastes into the drains. As a result of this, some agencies have called it upon themselves to put in some interventions to help keep the city clean but the mindset of the people needs to be really changed via a lot of education. 3.5 Population The population of Ga Mashie as a whole according to the Ghana Statistical Services Center Report as of the year 2010 was 125,000 people. Upon a survey conducted by GAMADA, it was realized that the population of James Town alone is 40% of the population of Ga Mashie hence James Town has a population of about 50,000 people. Below is a diagram representing the population trends in Ga Mashie from the year 1891-2010. This data proves the rapid population growth of this community. 38 University of Ghana http://ugspace.ug.edu.gh Figure 3.3: Population Trends in Ga Mashie Source: Ghana Statistical Services Census Reports (2010). 3.6 Socio-economic Conditions Socio-economic status describes an individual’s or population’s standard of living, lifestyle and above all development and progress. Slums represent a vicious circle of poverty in many developing countries and due to this the economic status of slum dwellers are low. Traditionally, Jamestown's individuals have been primarily occupied by fishing, which presently employs about 16,000 individuals. Historically, there has always been a division of labor between Jamestown's males and females. The men have been involved in the actual fishing activities, and the women have been responsible for preservation, marketing and trading. Most females in James Town are fishermen who sell their products in the Salaga and London markets; other females make and sell kenkey to inhabitants of the society. Most traders have too little capital to engage in large- scale trading so they engage in petty trading. Petty trading plays a major role in the community in 39 University of Ghana http://ugspace.ug.edu.gh that those who are engaged in it, set up kiosks and tables in front of their homes and sell items such as calling cards and sweets which provides income. There are no banks or formal banking systems in the area, apart from two micro-credit centres (susu) in the area. The absence of a formal financing system has limited the potential for growth within the local economy. There are printing presses and three manufacturing businesses in the region, apart from fishing and trading, which could become excellent job opportunities. The three businesses are M&G Pharmaceuticals that produce pharmaceutical goods such as tablets, capsules and syrups; Universal Cosmetics (GHC) Ltd whilst Charkieh Plastics and Packing Co. Ltd manufactures plastic products. Currently, most businesses are recruiting very few community employees due to the low educational rates there. Even if they hire inhabitants of the society, they are on a casual employee basis. Finally, it is essential to remember the significance of barbers, tailors, shoemakers, etc. in the region of such self-employed trade. On average, these trades employ two assistants, and given the correct business coaching, they could expand to employ more community employees while training fresh entrepreneurs. Other sources of income for households are carpentry, building artisans, teaching, and janitorial services. 3.7 Interview In the course of undertaking the research, there was the need to conduct an interview with the Ga Mashie Development Agency. An institution set up in Jamestown to help with slum upgrading in the locality. In respect to this, the project manager of the Ga-mashie Development Agency (GAMADA) was interviewed. 40 University of Ghana http://ugspace.ug.edu.gh It was realized there are government interventions to upgrade slums through the piloting of the phase 3 of the slum up-grading project by the UN-HABITAT. Also, there are other policies directed towards this course which the project manager disclosed that he in person has never come across of any of such document or policies. The slum-upgrading program championed by the UN- HABITAT is however accepted by the government and specifically the Ministry of Local Government. The UN-HABITAT however uses the participatory approach which has been adopted by the Ministry in their approach towards slum upgrading. The participatory approach involves the community from the onset and hence, they play specific roles so that they understand whatever is ongoing and appreciate the need for the slum upgrade. This serves as a form of education to the community so everybody gets to appreciate the need for improvement of their home. In the study area for instance, they have a committee known as the Ga Mashie Development Committee which is made up of people from the various sections of the community to spearhead the decisions of the natives of the community. This committee comprises of the Chief representing the local authority, the Queen Mother who represents the Queen Mother’s association, the Chief Fisherman representing the Fishermen Association, a youth that represents the youth of the community, the Traders Union representing the Traders Association, persons with disability, and the assembly members. They make sure every stakeholder is represented on this committee so as to get everyone involved in the processes of the committee. Slum upgrading is broad and has many sectors such as housing, sanitation, the socio-economic sector among others. The socio-economic aspect takes into consideration creating jobs for the natives so as to be able to make some money for their day to day activities and in the long run channel some of the resources gathered toward their houses. In this regard, there has been training- programs such as an alley pavement training program, a sanitation training program, a youth 41 University of Ghana http://ugspace.ug.edu.gh artifact community program which trained some natives in the various sectors and has created employment for these people. Also, there is a community-fund which provides financial help to natives to help improve their businesses and also set up businesses to create more employment. The housing upgrading is the most problematic feature of the area and this is because most of the houses in Jamestown are family owned and one person cannot take a decision alone to allow their property to be upgraded and it is also difficult to get the whole family to come to a consensus to allow the agency to upgrade or even investors. Another problem is that, most houses do not have land tittle in the study area, which equally delimits the agency or investors to be able to undertake a smooth upgrading program. Getting a name to even register the land becomes conflicting to the families in the study area and in cases where names are agreed upon, the processes towards obtaining the land tittle is equally a long one. The holistic approach of the UN-HABITAT policy touches on every aspect of slums and a lot has been done so far such as the creation of alley pavements to prevent flooding and breeding of mosquitoes in stagnant waters, there has been the construction of in-house toilet facilities in most houses and everyday about four tons of waste is taken per day from the community to prevent chocked drains among others. In the community, there are other NGO’s such as Art for Change, which uses art to create awareness in the community, Street Children Empowerment Fund (SCEF), which looks at the education of deprived kids in the society. The program has a basketball and handball courts which allows the community to utilize and enhance recreation in the community in addition to programs organized by the city authority. There is an ongoing spatial planning which looks at trying to capture the entire land size of the community and see if there are available lands or available space that can be created to enable expansions to take place now and in the future. 42 University of Ghana http://ugspace.ug.edu.gh Lack of funding is a prime challenge. The demand for the available funds exceeds the funds available to help the people in the community in supporting their businesses and even carry out improvements in the community. There is also less interest from the sub-metro, AMA, city authority and other authorities in the slum upgrading project as they channel the available resources into short-term projects instead. There is no form of ethnic or religious conflict in the course of executing works but rather, the conflict often realized is the change in lifestyle due to an improvement on the part of the lives of natives of the community. An example is a situation where there is the need to use public space for road and there is a shop located in that same space already for several years. Getting the shop owner to relocate and accept the new use normally creates misunderstandings between the agency and the public. 43 University of Ghana http://ugspace.ug.edu.gh CHAPTER FOUR ANALYSIS AND DISCUSSION OF RESULTS 4.0 Introduction This chapter analyses and discusses the data collected from the field survey in relation to examining the savings behavior of African slums: Evidence in Ghana. 4.1 Summary Statistics Table 4.1 below, exudes a summary of the field data collected on James Town, Nima and Kanda. It entails the number of respondents interviewed for each area, the mean score, standard deviation, and the maximum and minimum values of each variable. The respondents from slum areas made up 83.3% of the total sample size with those from the non-slum area comprising 16.7% of the sample. From the table 4.1, it can be seen that out of a total of 240 respondents interviewed from the two slum communities (James Town, and Nima), and the non-slum community (Kanda), it was recorded that 69.6% actually save with the remaining 30.5% not saving. About 64% of respondents who were slum dwellers save with the other 36% not engaged in any saving practice, while among the respondents living in non-slum areas, 97.5% were engaged in saving with the remaining 2.5% not engaged in saving. The average amount saved was GHS2, 311.293 with the maximum amount being GHS12, 000. The mean amount saved a year by the slum dwellers was about GHS1,400 whereas the average amount saved by the non-slum respondents was GHS6,850 per annum. 44 University of Ghana http://ugspace.ug.edu.gh About 70% of the interviewees were married with the remaining 30% single. Out of the respondents who lived in slum areas, 65.5% were married with 34.5% not married. 90% of respondents from non-slum areas were married with the other 10% either single, divorced or widowed. When it comes to the employment status, about 92% of the people were engaged in some sort of employment with the remaining 8% being unemployed. About 91% of respondents from the slum areas reported to be engaged in employment while the number in the non-slum area was 95% meaning 9% and 5% of the respondents from the slum areas and non-slum areas respectively were not working. Out of 240 respondents, 20% were found to have no form of formal education, and 35.6% reported to have had secondary/vocational education. Less than 10.5% of the respondents have had tertiary education, while for 11.3%, the highest education level attained was JSS/Middle School. Adult literacy was the form of education 17.5% of the respondents had received, while about 6.3% had only received primary/basic education. With the respondents from slum areas, about 22% were not formally educated. About 7.5% had basic primary education, while 13.5% had furthered to JHS education. Slum residents who had received adult education formed 21% of total respondents from slum areas and those who had attended SHS or had some vocational training were 31.5%. Tertiary education was patronized least, recording only 4.5% of respondents. Among the respondents from the slums, senior members (60 years and above) were the least, taking up 4%, followed by 46% of respondents who fell within the ages of 36 to 60 years. The youth made up 50% of respondents from slum areas. In the case of the non-slum area, 55% of the respondents fell between ages 15-35 while 45% were between 36 to 60 years. Males made up 56.6% of respondents and 43.4% were females. Out of this, non-slum areas recorded 47.5% males whereas slum areas had 59% male respondents. Concerning the gender of 45 University of Ghana http://ugspace.ug.edu.gh household heads, 77.5% of the households among the respondents had male household heads while 22.5% had female household heads meaning most of the structures are owned by males. Within the slum areas, 74% of respondents were from households led by men with the other 26% led by women whilst the non-slum area recorded 95% male-headed households and 5% female-headed households. Concerning income classes among respondents, 20.83% receive between GHS101 to GHS200 a week making up the middle class, whereas low income earners who earned GHS100.00 or less a week constituted 20.4% of respondents. High income earners made up 58.75% of the respondents, i.e. per this analysis, those who earned above GHS200.00 each week were categorized as high income earners. About 51.5% of respondents from slum areas earned a minimum of GHS200.00 a week, while respondents who earned between GHS101 and GHS200 made up 25% of the slum respondents. Low income earners, making less than GHS101 a week comprised 23.5% of the slum respondents. For the non-slum area, 95% of respondents earned more than GHS200 a week with the remaining 5% earning at most GHS200 a week. When asked if they would like to switch jobs, about 73% of respondents seemed content with their current employment while the remaining 27% expressed desire to change jobs. Roughly 30% of slum dwellers said they would want to change their current work while 12.5% of respondents from non-slum areas said they would like to switch employment. Out of the sample size, 71.3% of respondents do not want to relocate while 28.7% expressed aspirations to move elsewhere. Only 5% of respondents from non-slum areas desired to relocate elsewhere whereas 33.5% of slum dwellers wanted to move elsewhere. 46 University of Ghana http://ugspace.ug.edu.gh Table 4.1: Descriptive Statistics Variables Obs. Mean Std. Dev Min Max Total Respondents Interviewed Respondents who save 240 0.6958333 0.461015 0 1 Savings 240 2311.293 2627.858 0 12000 Marital Status 240 0.6958333 0.461015 0 1 Employment Status 240 0.9166667 0.276963 0 1 Education level Secondary/ Vocational 240 0.3458333 0.4766332 0 1 Tertiary 240 0.1041667 0.306115 0 1 Primary 240 0.0625 0.2425673 0 1 Adult Literacy 240 0.175 0.3807612 0 1 JSS/ Middle 240 0.1125 0.316641 0 1 Age & Gender Middle 240 0.45 0.4985334 0 1 Youth 240 0.333333 0.1798806 0 1 Male Respondents 240 0.566666 0.4965712 0 1 Male Household Heads 240 0.775 0.418455 0 1 Slum Residents 240 0.8333333 0.3734568 0 1 Level Income Income Level of Middle Class 240 0.2083333 0.4069652 0 1 Income Level of High Class 240 0.5875 0.493313 0 1 Aspirations 47 University of Ghana http://ugspace.ug.edu.gh Employment 240 0.2708333 0.4453189 0 1 Relocation 240 0.2875 0.4535425 0 1 Respondents in Slum Communities Only Respondents Who Save 200 0.64 0.4812045 0 1 Savings 200 1398.99 1508.094 0 7000 Marital Status 200 0.655 0.4765612 0 1 Employment Status 200 0.91 0.2868999 0 1 Educational Status Secondary/ Vocational 200 0.315 0.465815 0 1 Tertiary 200 0.045 0.2078243 0 1 Primary 200 0.075 0.2640523 0 1 Adult Literacy 200 0.21 0.4083303 0 1 JSS/ Middle 200 0.135 0.3425811 0 1 Age & Gender Middle 200 0.46 0.4996481 0 1 Old 200 0.04 1964509 0 1 Male Respondents 200 0.59 0.4930675 0 1 Male Household Heads 200 0.74 0.439735 0 1 Income Level Middle Class 200 0.25 0.4340993 0 1 High Class 200 0.515 0.5010291 0 1 Aspirations Employment 200 0.3 0.4594075 0 1 48 University of Ghana http://ugspace.ug.edu.gh Relocation 200 0.335 0.4731749 0 1 Respondents in Non-Slum Communities Only Respondents Who Save 40 0.975 0.1581139 0 1 Savings 40 6850 2284.844 0 12000 Marital Status 40 0.9 0.3038218 0 1 Employment Status 40 0.95 0.2207214 0 1 Education SHS/Vocational 40 0.5 0.5063697 0 1 Tertiary 40 0.4 0.4961389 0 1 Middle Age 40 0.45 0.5038315 0 1 Gender & Income Male Household Head 40 0.95 0.2207214 0 1 High Income 40 0.95 0.2207214 0 1 Aspirations Employment 40 0.125 0.3349321 0 1 Relocation 40 0.05 0.2207214 0 1 Source: Researcher’s Fieldwork (2019) 4.2 Results 4.2.1 The Level of Household Head Savings among Slums in Ghana Out of the 200 respondents interviewed from the slum communities, it was recorded that the average savings was GHS1398.66 per annum. Slum residents were found to be much inclined towards savings as 64% of respondents from slum areas were engaged in some form of savings. 49 University of Ghana http://ugspace.ug.edu.gh This suggests there is a high tendency to save among residents of slum areas. This is supported by Unny’s report in 2012 on a study in Kerala which indicated that despite the low per capita income of the area, the residents had a high tendency to save. This finding also indicates that there is a general knowledge of savings among slum residents which in Amu’s study in Ho (Amu, 2008) it was suggested that there was general lack of knowledge on savings by residents of deprived areas. Among the reasons why they save, respondents mentioned emergency, education and health conditions that may request for the use of saved funds. Amu & Amu’s study in 2012 and Issahaku’s study in 2011 confirm that residents living in deprived areas of Ho and Nadowli, respectively, also save for similar reasons. Residents from slum areas who are not saving mentioned the following as reasons why they are unable to save; high dependency levels, insufficient income, habit of spending income and lack of trust in the financial system. Amu & Amu (2012) also reported a negative influence of dependency ratio and level of expenditure on savings of respondents in Ho. On the lack of trust in the financial system, the study by Owiredu (2015) suggested that a majority of his respondents mentioned the safety of their savings as a principal factor which determines which institution they save in. Faridi et al (2010) also recommended that objective and transparent financial safety nets would have a positive impact on savings in society. 4.2.2 Differences in Savings between Non-Slum Areas and Slum Areas Looking at table 4.2 below, it was realized that the mean savings of 200 residents in slum areas was GHS 1,398.99 per annum. This figure is quite small as compared to the GHS6,850.00 reported as mean savings of 40 non-slum residents. This result is significant at the 1% level. Residents in the non-slum area right across the street of Nima (Hilla Limann High Street) had about 95% of 50 University of Ghana http://ugspace.ug.edu.gh respondents earning more than GHS200 a week as compared to the 51.5% of residents in slum areas earning that much. It is not surprising, therefore, that the average savings of residents in slum areas widely deviates from that of the respondents living in non-slum areas. This could suggest that with higher earnings, slum residents may save more. From the Unny (2012) study, the level of income of the household head was found to be a significant determinant of the level of savings. This relationship between level of income and level of savings seems to suggest that with higher earnings, the respondents may save more. One may suggest that employment could be a factor here however, the employment rate of respondents living in selected slums was recorded in this study as 91% as against 95% in non-slum residents. The close margin between the employment ratios compared to the wide gap seen in level of savings suggests that slum dwellers are gainfully employed but have lower remuneration than the respondents from non-slum areas. The low remuneration of slum dwellers could be associated to what kind of jobs they are employed in, which could be determined by their level of education. Within the slum areas, 22% of the respondents were found to have no formal education as against the less than 10% recorded in the non-slum area. Also, about 90% of respondents from the non-slum area had formal education at least to the SHS or vocational level as compared to the slum areas which recorded only 36% of its respondents in the same category. Roughly 42% of the respondents from slum areas had formal education to levels below SHS standards. The study by Owiredu (2015) relates patterns in academic status, monthly earnings and marital status to savings behavior. This confirms that educational level and monthly earnings do have a significant influence on the level of savings. Looking at the marital status of respondents, 65.5% of the slum dwellers were married whereas 90% of those from the non-slum areas were married. Owiredu’s study suggested that married couples have more liabilities which discourage them from 51 University of Ghana http://ugspace.ug.edu.gh saving. This assertion does not hold in the current study since more respondents from non-slum areas were married than seen in slum areas however, they had higher levels of savings than those residing in slum areas. Table 4.2: Comparing the Mean Savings of Slum and Non-Slum Communities Slum Non-Slum Mean Savings 1398.99 6850 Observations 200 40 Mean Difference 5451.01 T-value 18.9385 P-value 0.000 Source: Researcher’s Fieldwork (2019) 4.2.3 Employment Aspirations of Slum and Non-Slum Communities From the table 4.3, it was found that about 30% of residents in the slum communities were looking to change their employment whereas 70% were satisfied with their current employment. For residents of non-slum areas, about 12.5% of them indicated that they desired a change of employment. This result is significant at the 10% level. More of the respondents from non-slum areas are satisfied with their current employment. This may suggest that many of the respondents from the non-slum areas are satisfied with their current careers because it matches their educational level and fulfills their desired earnings. More slum dwellers given the low income levels as compared to the non-slum dwellers still indicated they were satisfied with the current work they were doing. This could mean that as far as they earn something to fend for themselves and their families they are okay. They are not too bothered with getting huge salaries. The satisfaction of 52 University of Ghana http://ugspace.ug.edu.gh working is enough for them. This result contradicts that of Stutzer (2002) who discussed in his work that, the wealthier one’s neighbour’s are, the higher one aspires in income. Table 4.3: Comparing the Employment Aspirations of Slum and Non-Slum Areas Slum Non-Slum Employment Aspirations 0.3 0.125 Observations 200 40 Mean Difference -0.175 T-value -2.2889 P-value 0.0115 Source: Researcher’s Fieldwork (2019) 4.2.4 Relocation Aspirations between Non-Slum and Slum Areas According to table 4.5 below, there was a low desire to relocate recorded among the respondents. About 33.5% of respondents from slum areas expressed desire to relocate as compared to 5% of the non-slum residents who wanted to relocate. This result is significant at the 1% level. The general reluctance to relocate was attributed to the following reasons; security of tenure, sense of belonging and family ties among others. The difference between the ratio of respondents from slums who want to relocate and that of residents from the non-slum areas is quite predictable. Looking at the contrast of living conditions between the two areas, it is understandable why fewer residents of non-slum areas would desire to relocate. More than 66% of residents in slum areas were reluctant to relocate despite the living conditions presented by slums. This seems to confirm the study by Kapse, Pofale and Mathur (2012) which indicates that slum dwellers are more open to upgrading themselves within the same community 53 University of Ghana http://ugspace.ug.edu.gh rather than relocating to other communities with better facilities. The study confirms that slum dwellers have a sense of belonging to their communities and will therefore be less willing to relocate. Other factor mentioned by the Kapse et al (2012) study include loss of livelihood and inefficient government action towards relocation. Table 4.4: Comparing the Relocation Aspirations of Slum and Non-Slum Communities Slum Non-Slum Relocation Aspirations 0.335 0.05 Observations 200 40 Mean Difference -0.285 T-value -3.7244 P-value 0.0001 Source: Researcher’s Fieldwork (2019) 4.2.5 Determinants of Aspiration to Migrate in Slums Probit regression was used to estimate the determinants of relocation aspirations of slum dwellers. Table 4.5 gives a breakdown of the various variables and shows the significance of each variable. The data set had 200 observations which were all from the slum communities. From the table, marriage, employment status, level of education, income level, and employment aspirations contribute significantly to influence slum dwellers relocation aspirations. Table 4.5 shows that marriage negatively influences slum dwellers likelihood to relocate in that, married couples living in James Town and Nima are less likely to relocate to other communities as compared to their single counterparts and this is at the 1% significance level. With the status of employment, the probit regression shows that respondents who are employed are more likely to 54 University of Ghana http://ugspace.ug.edu.gh relocate from their neighborhood than those with no form of employment and this result is significant at the 10 percent level. Certain particular levels of education have the likelihood of impacting relocation aspiration of slum dwellers. From the table, respondents with secondary, tertiary, and junior high school education are more likely to move from their current locality to other places than those without any form of education. This result is significant at the 5%, 1%, and 10% levels respectively. From the table, it was also realized that respondents above the age of sixty are less likely to relocate from the slum communities they reside. With regards to the income levels, respondents with an income bracket of GHS101 to GHS200 a week are less likely to relocate as compared to respondents earning GHS100 and below. This result is significant at the 10% level. Finally, the respondents who aspire to get occupations other than what they are currently engaged in are more likely to relocate to different neighborhoods as compared to the respondents who have no aspirations of changing their current jobs. This result is significant at the 1% level. Table 4.5: Probit Regression Estimates and Marginal Effect Estimates Dependent Variable Relocation Aspirations of Slum Dwellers Independent Variables Coef. Std. Err Z Marginal Effect Std. Err Z Savings -0.0001 (0.000) -1.33 -0.000 (0.000) -1.33 Marriage -1.778*** (0.317) -5.58 -0.336*** (0.101) -7.80 Employment Status 1.152* (0.549) 2.09 0.218* (0.101) 0.031 Educational Level Secondary 0.983* (0.384) 2.56 0.198** (0.075) 2.65 Tertiary 1.939** (0.713) 272 0.439** (0.196) 2.61 Primary 0.447 (0.518) 0.86 0.081 (0.099) 0.82 Adult Literacy -0.032 (0.513) -0.06 -0.005 (0.084) -0.06 JHS/Middle -0.859* (0.435) 1.97 0.169* (0.089) 1.91 Age 55 University of Ghana http://ugspace.ug.edu.gh Middle 0.037 (0.329) 0.11 0.007 (0.063) 0.11 Old -1.788* (1.078) -1.66 -2.52** (0.097) -2.61 Gender Male 0.013 (0.309) 0.04 0.002 (0.059) 0.04 Household Head 0.402 (0.337) 1.19 0.076 (0.063) 1.20 Income Level Middle Class 0.912* (0.404) 2.26 0.169* (0.068) 2.46 High Class 0.400 (0.399) 1.00 0.069 (0.652) 1.06 Employment Aspiration 1.156*** (0.317) 3.26 0.218*** (0.055) 3.94 Constant -1.975*** (0.686) -2.88 Observations 200 Log Likelihood -66.494121 Pseudo R2 0.4769 Prob > chi2 0.0000 Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1 Source: Author’s Computation 56 University of Ghana http://ugspace.ug.edu.gh CHAPTER FIVE SUMMARY OF FINDINGS, CONCLUSION, AND RECOMMENDATIONS 5.0 Introduction This chapter emphasizes the summary, limitations of the study, conclusion and the proposed recommendations to better the lives of slum dwellers. 5.1 Summary of Findings The study has established that household heads in the selected slum areas do engage in savings. Generally, the respondents showed a high propensity to save as only about 30% of respondents were not engaged in any form of savings. Majority of the respondents were engaged in some form of employment. Popular trades among the slum residents include janitoring, food vending, fishing and petty trading. For the non-slum areas, most of the respondents were engaged in white-collar or professional job areas such as banking, business & commerce and teaching. The average annual savings of residents in slum areas were quite low recording GHS1,398.99, a whooping GHS5,451.00 from the mean annual savings of non-slum residents. Looking at the level of income, majority of respondents reported income of more than GHS200.00 a week although relatively more residents from non-slum areas fell into this category than those from slum communities. Only about 5% of respondents from the non-slum community earned GHS200.00 a week or less as compared to the 48.5% of slum residents who reported earnings of at least GHS200.00 a week. Whether or not respondents from either community was employed did not seem to affect their savings behavior much, as only 8% of the total number of respondents were 57 University of Ghana http://ugspace.ug.edu.gh not actively employed. This suggests that although residents in slums may be actively employed, they have lower remuneration than most residents in non-slum areas. Marital status was found to have little relationship to the respondent’s propensity to save. Same goes for the gender of household head since, in both the slum and non-slum areas, majority of household heads were male. Educational status, however, presented results which suggests its influence on level of income and employment. In the non-slum community, over 90% of respondents had received at least training in vocational skills or to SHS level whereas 22% of respondents from slum areas did not have any form of formal education. Regardless of this, with confidence from the high levels of interest in savings recorded in the slum areas, it seems possible slum residents can increase their savings when their annual remuneration increases. It did not seem likely, however, that this increase in earnings would occur due to a change in employment as a general reluctance to change employment was recorded. Within the slum areas, about 70% of respondents opted to remain in their current jobs. Comparing this to the 87.5% of respondents in non-slum areas who expressed reluctance in switching jobs, it is needless to say that obviously more non-slum residents would be satisfied with their current employment as it likely generates their desired income or utilizes their intellectual capabilities. It was however surprising that only 30% of respondents from slum areas wanted a change in employment despite their low level of earnings. This suggests a degree of comfort in their present conditions which was confirmed also by the reluctance of slum dwellers to relocate from their communities. Only 33.5% of respondents from slum areas expressed desire to relocate to other communities. This finding was linked to the sense of belonging and family ties they have in their communities. The non-slum area was no different, recording only 5% of respondents who were willing to relocate from their community. It is 58 University of Ghana http://ugspace.ug.edu.gh however not surprising that this group are generally against relocation as the living conditions in this community is relatively better and more comfortable than the slum areas. 5.2 Research Limitations  There are five major slums in Accra. These are Ashiaman, Fadama, Ga-Mashie, Nima, and Agbogbloshie however this research focused on two out of the five due to time and resource constraints.  Due to the illiteracy levels of the respondents, the questionnaires had to be translated in their local dialect.  A total of two hundred and forty respondents were interviewed with 200 hundred coming from the selected slum communities and 40 coming from the non-slum community because of time constraints.  With the selected slum communities, one hundred respondents each were interviewed for the two slum communities.  Some of the questionnaires were not completed because of time constraints on the part of the respondents. 5.3 Conclusion In this study, we have established that the residents of slum areas i.e. Nima and Jamestown save and actually possess a high propensity to save. Although the level of savings in non-slum areas is considerably higher than that of the residents of slum areas, there is an indication that with an increase in earnings, slum dwellers can save more. Majority of slum dwellers are actively employed and higher levels of literacy were recorded than anticipated. 59 University of Ghana http://ugspace.ug.edu.gh The study also indicates that slum dwellers are generally reluctant towards change; either in employment or their place of residence. Although their current jobs were generating low earnings, majority do not desire to change their employment. They are comfortable with their jobs, considering their high tendency to save, with improvements in their trade, they would likely increase their level of savings. The study recorded minimal desire of slum dwellers to relocate, mostly due to the sense of belonging and also the proximity to family members they enjoy in their current communities. 5.4 Recommendations Findings of the study highlight the need for actions by financial institutions and government agencies to increase the level of savings among residents of slum areas. In this study, it was realized that slum dwellers save for emergencies and unforeseen expenses in education and health. It is important for financial institutions to customize savings packages to motivate slum residents to save more. Mistrust in financial institutions was mentioned by some respondents who do not save as the reason for their lack of interest in savings. It is in the best interest of the financial sector to focus some of the reforms being introduced in the finance industry on this group of citizens as well. The high propensity to save expressed by this group is an important indication of their potential to contribute to private savings across the country. It has been established in this study that slum dwellers are reluctant to relocate and therefore slum relocation projects by government are likely to fail. Government agencies such as Ministry of Inner-cities and Zongo Development and Metropolitan Assemblies must focus on upgrading the living conditions of slum dwellers instead of evicting or relocating them. This would better serve 60 University of Ghana http://ugspace.ug.edu.gh the purpose of the project and also give slum dwellers the opportunity to improve upon themselves economically. The mandate on the Ministry of Inner-cities and Zongo Development to empower citizens such as slum dwellers through social and economic policies should be encouraged. Financial institutions and the Ministry of Finance can partner with the Ministry of Inner-cities and Zongo Development on an initiative to educate the residents in slum areas on financial literacy so they better manage their earnings and save more. Avenues for financial counselling can be created by financial institutions to educate slum residents on how to save effectively and also encourage a savings attitude in those who do not save. To increase their savings, slum dwellers should consider reducing their expenditure, especially expenses on recreational activities. With proper budgeting and discipline, they can increase their savings significantly. Slum residents should make use of government initiatives to develop their knowledge and skills to upgrade their trades and earn more. Using innovative and modern methods to expand their business and trade will increase their earnings and likely improve their level of savings too. 5.4.1 Recommended areas for further studies Further research can explore the following areas: i. Investigating the savings behavior of slum dwellers in other West African Cities. ii. Comparative analysis of level of savings among different income classes within slum residents iii. The level of happiness of slum dwellers concerning their employment or income across different slum areas within the country. This will deeply examine the employment or 61 University of Ghana http://ugspace.ug.edu.gh income aspirations of slum dwellers in Ghana and how significantly it affects their overall wellbeing or happiness. iv. Expectations on living conditions of slum dwellers, investigating which facilities or amenities they value. This could help shape government policies on slum upgrade. 62 University of Ghana http://ugspace.ug.edu.gh REFERENCES Abu, N. 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