Entrepreneurship and Poverty Reduction. The Case of the Youth in Small Scale Mining in ...

268 Pages·2016·12.26 MB·English

University of Ghana http://ugspace.ug.edu.gh
UNIVERSITY OF GHANA, LEGON

ENTREPRENEURSHIP AND POVERTY REDUCTION: THE CASE
OF THE YOUTH IN SMALL-SCALE MINING IN GHANA.

BY
MARSHALL KALA
(10096986)

THIS THESIS IS SUBMITTED TO THE UNIVERSITY OF GHANA,
LEGON IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR
THE AWARD OF PHD DEVELOPMENT STUDIES DEGREE

INSTITUTE OF STATISTICAL, SOCIAL AND ECONOMIC
RESEARCH

DECEMBER, 2015
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DECLARATION
I hereby declare that this thesis is my own work and that to the best of my knowledge
neither part nor the whole has ever been presented in this University or any other
university for the award of any academic degree except where due acknowledgement has
been made in the text.

……………………………… ………………….
MARSHALL KALA DATE
(Candidate)

Thesis Supervisory Committee

……………………………… ………………….
DR. ROBERT DARKO OSEI DATE

……………………………… ………………….
PROF. P. W. K. YANKSON DATE

……………………………… ………………….
PROF. KATHERINE GOUGH DATE

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DEDICATION
This thesis is dedicated to my late father, Mr. Charles Kala, who supported me in various
ways throughout the course of this work.
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ACKNOWLEDGEMENTS
First and foremost, my deepest appreciation to my three supervisors in the persons of
Profs. Robert Darko Osei, P. W. K. Yankson and Katherine Gough. They provided
valuable guidance and enhanced the learning process by sharing their unique knowledge in
different areas and ways. Special thanks go to Professor George Owusu for his support in
every respect.
I want to acknowledge Danida for the financial support, which made this project and thesis
possible. I am most grateful to the YEMP team for evincing such comradeship throughout
the entire period of this study. Special thanks to Soren, Thilde and Torben for their
invaluable support when I was in Denmark.
To the administrative staff of the PhD programe and ISSER at large, I say thank you for
the academic, economic and emotional support. I appreciate the various suggestions and
contributions of my colleagues on the PhD programme. I am also grateful to Aluizah
Amasaba, Jerry Kala, John Agandin and two others who helped in the data collection.
Special thanks to all the young entrepreneurs who took time off to give information
leading to the completion of this thesis. I am heavily indebted to the leadership of the two
settlements for their hospitality.
Finally, I want to declare my gratefulness to my family and to my friends for the social,
economic and emotional support throughout this endeavor.

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TABLE OF CONTENTS
Content Page
DECLARATION ........................................................................................................... i
DEDICATION .............................................................................................................. ii
ACKNOWLEDGEMENTS ......................................................................................... iii
TABLE OF CONTENTS ............................................................................................. iv
LIST OF TABLES ........................................................................................................ x
LIST OF FIGURES .................................................................................................... xii
LIST OF BOXES ........................................................................................................ xii
LIST OF ABBREVIATIONS .................................................................................... xiii
ABSTRACT ................................................................................................................ xv

CHAPTER ONE ........................................................................................................... 1
GENERAL INTRODUCTION ..................................................................................... 1
1.1 Introduction ......................................................................................................... 1
1.2 Problem Statement .............................................................................................. 5
1.3 Overall Aim of the Study .................................................................................... 8
1.3.1 Objectives of Study ....................................................................................... 8
1.4 Hypotheses .......................................................................................................... 9
1.5 Research Setting and Locations........................................................................... 9
1.6 Justification of the Study ................................................................................... 11
1.7. Study sites ......................................................................................................... 13
1.8 Thesis outline .................................................................................................... 19

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CHAPTER TWO ........................................................................................................ 21
YOUTH IN SMALL-SCALE MINING, POVERTY AND SOCIAL CAPITAL-
A THEORETICAL PERSPECTIVE .............................................................. 21
2.1 Introduction ....................................................................................................... 21
2.2 Social Capital Theory ........................................................................................ 21
2.3 Entrepreneurship ............................................................................................... 29
2.4 Small-scale Mining ............................................................................................ 30
2.4.1 Employment Trends in Small-scale Mining ............................................... 30
2.4.2 Small-scale Mining and Poverty Reduction ............................................... 32
2.4.3 Education and Small-scale Mining ............................................................. 35
2.4.4 Gender and Small-scale Mining ................................................................. 36
2.4.5 Small-scale Mining and the Environment .................................................. 38
2.5 Definition of Concepts ...................................................................................... 40
2.5.1 Social Capital .............................................................................................. 40
2.5.2 Entrepreneurship ......................................................................................... 41
2.5.3 Small-scale mining ..................................................................................... 44
2.5.4 Youth .......................................................................................................... 45
2.2.5 Poverty ........................................................................................................ 46
2.6 Conceptual Framework ..................................................................................... 49
2.7 Summary ........................................................................................................... 56

CHAPTER THREE ..................................................................................................... 57
METHODOLOGICAL APPROACH ......................................................................... 57
3.1 Introduction ....................................................................................................... 57
3.2 Philosophical Worldview .................................................................................. 57
3.3 Methodological Approach ................................................................................. 58
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3.4 Research Design ................................................................................................ 59
3.4.1 Explorative phase ........................................................................................ 59
3.4.2 Quantitative data collection ........................................................................ 60
3.4.2.1 Unit of Analysis ........................................................................................ 61
3.4.2.2 Sampling strategy and sample size .......................................................... 61
3.4.2.3 Survey Instrument .................................................................................... 62
3.4.3 Qualitative data collection .......................................................................... 63
3.5 Data Analytical Techniques .............................................................................. 64
3.5.1 Quantitative Analytical Measures ............................................................... 65
3.5.2 Analysis of Qualitative Data ....................................................................... 73
3.6 Summary ........................................................................................................... 73

CHAPTER FOUR ....................................................................................................... 74
DEVELOPMENT OF THE SMALL-SCALE MINING SECTOR IN GHANA ....... 74
4.1 Introduction ....................................................................................................... 74
4.2 Political Economy of Ghana .............................................................................. 74
4.3 Structure of the economy .................................................................................. 77
4.4 Historical development of the mining sector..................................................... 80
4.4.1 Colonial era ................................................................................................. 81
4.4.2 Post-independence to pre-SAPS ................................................................. 82
4.4.3 SAPs and Policies measures taken.............................................................. 83
4.5 Contribution of the mining sector...................................................................... 85
4.6 Institutions of the Mining sector ....................................................................... 88
4.7 Profile of sampled Entrepreneurs ...................................................................... 91
4.8 Summary ......................................................................................................... 104
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CHAPTER FIVE ....................................................................................................... 106
AN ANALYSIS OF THE INSTITUTIONAL CONTEXT OF SMALL-SCALE
MINING ........................................................................................................ 106
5.1 Introduction ..................................................................................................... 106
5.2 Institutions and the scale problem (Macro) ..................................................... 107
5.3 Local Institutions, Social capital and youth in small-scale mining ................. 111
5.4 Rules and regulations governing business activities and behaviour ............... 116
5.5 Institutions and Business Operations .............................................................. 121
5.6 Summary ......................................................................................................... 122

CHAPTER SIX ......................................................................................................... 123
SOCIAL CAPITAL, EMPLOYMENT AND ENTREPRENEURSHIP IN THE
SMALL-SCALE MINING SECTOR ........................................................... 123
6.1 Introduction ..................................................................................................... 123
6.2 Vulnerability context ....................................................................................... 123
6.3 Social Capital and Small-scale Mining ........................................................... 125
6.4 Social capital and Financing ............................................................................ 127
6.4.1 Financing Start-ups ................................................................................... 127
6.4.2 Operational financing ............................................................................... 128
6.5 Motivations of the youth entrepreneurs ........................................................... 130
6.6 Entrepreneurial activities in Small-scale Mining ............................................ 135
6.6.1 Entrepreneurial activities in mining .......................................................... 135
6.6.2 Entrepreneurial activities that support mining .......................................... 143
6.6.3 Multiple entrepreneurial activities ............................................................ 147
6.7 Econometric Analysis ...................................................................................... 148
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6.8 Summary ......................................................................................................... 151

CHAPTER SEVEN ................................................................................................... 154
SMALL-SCALE MINING, VULNERABILITY AND POVERTY REDUCTION 154
7.1 Introduction ..................................................................................................... 154
7.2 Shocks ............................................................................................................. 154
7.3 Investment ....................................................................................................... 157
7.4 Poverty and Small-scale Mining ..................................................................... 160
7.5 Subjective Assessment of Poverty .................................................................. 174
7.6 Happiness with Life ......................................................................................... 177
7.7 Summary ......................................................................................................... 178

CHAPTER EIGHT ................................................................................................... 180
CONCLUSION ......................................................................................................... 180
8.1 Introduction ..................................................................................................... 180
8.2 Summary of the Major Findings...................................................................... 180
8.3 Policy Implications of the Findings ................................................................. 185
8.4 Recommendations ........................................................................................... 188
8.5 Contribution to Knowledge ............................................................................. 190
8.6 Directions for Future Research ........................................................................ 193

REFERENCES ...................................................................................................... 195

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APPENDICES
Appendix 1 Thesis Questionnaire ......................................................................... 231
Appendix 2 Variables for Construction of wealth Index....................................... 245
Appendix 3 Multinomial probit regression ........................................................... 246
Appendix 4 Hypothesis Testing ............................................................................ 248
Appendix 5 Diagnostics for OLS regression ......................................................... 249

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