AKUFO-ADDO WELCOME NEW CHALLENGE
poorly maintained roads .
The sector also lacks post-harvest technological know-how and insufficient central government support . In 1992 , the share of agriculture to the GDP was 23.6 percent , growing to about 41 percent in 1995 . But the Ghana Statistical Service reports that this declined from 29.8 percent in 2010 to 22 percent at the end of last year .
A report by the World Bank Group showed that about 21 percent of the Ghanaian population has moved out of agriculture to other more productive economic sectors over the 18- year period between 1992 and 2010 . Akufo-Addo also faces rising inequality against the backdrop of declining poverty and may need to rethink of Ghana ’ s growth strategy to achieve some of his campaign promises to create jobs , restore rapid growth , build a factory in every district . The promise to give each constituency the equivalent of $ 1 million per year to pursue development projects will be eagerly anticipated as well .
The country holds promise , as evidenced by its attaining lower-middle income status in 2011 , and Ghanaians are eager for change . He appears to recognise this desire in his rather short victory statement : " I will not let you down . I will do all in my power to live up to your hopes and expectations ." Some of the challenges he faces are below courtesy of a paper by Ernest Aryeetey . Professor of Economics and Vice Chancellor , University of Ghana and William Baah-Boateng Senior Lecturer , Economics , University of Ghana published in The Conversation .
Slower employment growth
A key indicator of the health of an economy is the availability of jobs and their quality . This is measured by rates of unemployment and joblessness as well as poverty incidence and income inequality . Employment growth in Ghana has generally been slower than economic growth , raising concerns about the quality of the country ’ s growth . Ghana ’ s employment growth lags behind economic growth , with an estimated employment elasticity of output of 0.47 . This suggests that every 1 % of annual economic growth yields 0.47 % growth of total employment .
Beside the slow rate of job creation is the dominance of vulnerable employment and the working poverty rate . In 2010 , seven out of ten jobs were estimated to be vulnerable . Only one out of five jobs could be considered as productive jobs that meet the standard of decent work .
Robust economic growth , shortage of skills Economic growth and job creation depend on the size and quality of the labour force . The availability of human resources in the right quantity and quality form the foundation of growth and development . Ghana ’ s population of 26.3 million has been growing at an annual average of 2.5 % over the last three decades .
The size of Ghana ’ s labour force in 2013 stood at 12.31 million ( 94.8 % in employment and 5.2 % unemployed ). This is up from 6.04 million in 1992 , which translates into 3.4 % annual growth on average . Thus the economically active – 47 % of total population – are responsible for feeding the entire population . Ghana has a shortage of high skilled professionals . It is also short of semi-specialised skills , such as technical and vocational skills . Anecdotal evidence suggests that when Ghana started producing oil commercially in late 2010 , there were specific skills that were difficult to obtain domestically . These include engineers , drillers , production and operation workers . The industry had to rely on people from Côte d ’ Ivoire and Nigeria .
Crafting a new growth strategy
A KEY INDICATOR OF THE HEALTH OF AN ECONOMY IS THE AVAILABILITY OF JOBS AND THEIR QUALITY
Thus , fixing the problem of the declining manufacturing sub-sector and raising productivity in agriculture should be the priority of policy towards more inclusive growth . This calls for investment in areas that would promote manufacturing and agricultural activities where the potential for job creation is high .
The business operating environment must also be addressed . Macroeconomic instability culminating in high interest rates , and high taxes coupled with chronic energy problems make manufacturers less competitive . This makes them more fragile within a trade environment where firms face global competition .
Investment in the energy sector to ensure a consistent power supply within a stable macroeconomic environment would be a major step towards reducing constraints facing the manufacturing sector . The business environment could also be improved if the country ’ s institutional arrangements and regulatory framework are properly streamlined in line with best practices . On the supply side , low quality of labour requires urgent policy attention . Education and skills development have seen some improvement over the last three decades . But the pace appears to be slow . The link between education and productivity is quite clear . A comprehensive review of the education system is needed to assess the medium and long term relevance of education and skills development . Ghana could also leverage the strong growth performance of low labour absorption sectors of mining and oil extraction to boost growth in other sectors . It could do this by channelling returns from these sectors into infrastructure to support growth in agriculture and manufacturing .
30 Business Times Africa | 2016