Ghana needs a holistic policy environment encompassing both labor supply and demand side interventions says a new World Bank Group Report. Among various recommendations, the report calls for programs that incorporate new skills required by employers such as basic digital and soft skills into the education system; as well as operationalise job intermediation systems to ensure that young people are appropriately linked to available jobs, while creating more opportunities for quality jobs.
The 6th Ghana Economic Update titled “Preserving the future: rising to the youth employment challenge” suggests that to boost youth employment, Ghana also needs to strengthen its macroeconomic framework through decisive and sustainable fiscal consolidation, notably, by improving domestic revenue mobilisation, reining in on energy sector expenses, and ensuring all public expenditures maximise value for money. The report observes that such measures will help address Ghana’s debt sustainability concerns which have heightened over the past year.
“Restoring the macroeconomic stability will be key to creating more and better jobs, but so will be improving access to finance for businesses, especially small and medium enterprises, and fully leveraging the opportunities created by the Africa Continental Free Trade Area (AfCFTA), to ensure that Ghanaian entrepreneurs can access new markets and stay competitive” says Pierre Laporte World Bank Country Director for Ghana.
Ghana’s growth prospects are positive if it can control the major risks it faces, with growth expected to reach 5.0 percent in 2022 and to average 5.6 per year over 2022-2024. Growth is expected to be broad-based, led by agriculture and services and a stronger industry sector, supported by high extractives prices. Ghana has in many ways held remarkably well, not going into a recession in 2020 and showing signs of a rapid recovery in 2021, with a growth rate of 5.4 percent. However, this has come at a great cost, most evident in high fiscal deficits. The deficits have resulted in rapid debt accumulation with the country now facing financing difficulties, with limited access to international markets, and a high cost of debt service
“To address the mounting debt sustainability concerns, government must continue to pursue fiscal consolidation and seek to return to compliance with the fiscal rule, says Kwabena Gyan Kwakye, a co-author and Economist. “It is commendable to note that, the government has set forth an ambitious fiscal consolidation path driven by high revenues and reductions in COVID-19 expenditures and financial sector bailouts. However fiscal policy should also aim to ensure well-targeted support for the vulnerable – including those struggling because of the pandemic, as well as those affected by commodity price spikes now intensified by the war in Ukraine”.
The report cautions that it will be a mistake to carry out short-term, but necessary, adjustments at the expense of Ghana’s future, which is best embodied by Ghana’s youth. The report notes that Ghana’s youth has been growing rapidly and now represents 36 percent of the population. The economy’s strong growth performance of the past 30 years has however not delivered enough jobs for them. The National Population Census established that in 2021 approximately three-quarters of unemployed adults were ‘young’. While governments have created multiple policies and programs to address youth unemployment over the years, the many programs aimed at helping them have often fallen short of the massive needs.
Source: World Bank
