Ghana’s economic growth not matched with employment – Report
Preliminary report of a study on youth unemployment in Ghana has indicated that growth in the national economy in the past two decades has not been matched with increase in employment.
According to the report, the challenge of the Ghanaian economy was that while the service sectors like the banks had grown, their growth was not propelling any growth in agricultural and manufacturing sectors which had the potential for creating employment.
The study in Ghana, jointly undertaken by the Japan International Cooperation Agency (JICA) and the University of Ghana, revealed that while the country’s economy grew at 14.4 percent in 2011, mainly due to the mining and oil sectors, their enclave nature and the fact that the sectors had low absorption for labour intensive activities resulted in no significant employment creation.
“The snail pace response of employment generation to growth of the economy is largely linked to the slow growth of labour intensive sectors of the economy such as manufacturing and agriculture as against remarkable growth of low labour absorption sectors of mining and services,” the study said.
The study is being replicated in Kenya, South Africa and Ethiopia.
The findings are expected to inform discussions on youth unemployment in Africa at the 5th Tokyo International Conference on African Development (TICAD V) to be held in May, 2013.
A workshop to discuss a draft report of the research was held in Accra yesterday,
The researchers for the study in Ghana include Professor Ernest Aryeetey, the Vice Chancellor, Dr William Baah-Boateng of the Department of Economics and Dr Charles Ackah of the Institute of Statistical, Social and Economic Research (ISSER), all of the University of Ghana.
One of the highlights of the findings was that job creation had been less responsive to income changes in the last two decades in Ghana.
Again, there was an increase of 0.4 percent in employment for each percentage point of GDP growth.
The study estimated that employment elasticity of output dropped from an average of 0.64 between 1992 to 2000 to 0.52 and 0.4 in 2001-2004 and 2005-2008, respectively (ILO, 2008).
According to the study the absorption of the unemployed or the underemployed into productive jobs was the only way to bring about a sustainable reduction of poverty.
In the study, about 34.2 percent of young people aged 15-24 were estimated to be jobless in 1998/99, dropping to 26.9 percent in 2006.
It found that an emerging dimension of youth employment in Ghana in recent times was the increasing unemployment among the educated.
Professor Aryeetey, who is also the lead researcher, said the lack of correlation between economic growth and employment was contrary to the norm.
In his view, the way forward in solving the unemployment challenge in Ghana, was for clarity on the part of the state in its vision for the manufacturing/industrial sector and how it would assist in achieving that vision.
The Chief Representative of JICA in Ghana, Mr Jiro Inamura, in his remarks, promised that the Japanese government would commit substantial resources to innovative programmes that would come out of recommendations at the end of the study.
For him, creating decent jobs was also a challenge to be dealt with as there was no point in creating several jobs in the informal sector that were not decent.
Mr Inamura was pleased with the research and expressed eagerness in further collaborating with the researchers on the recommendations of the study.
Presenting an outline of the broader study, a Senior Programme Officer at the JICA UK Office, Dr Simon Heap, said the gravity of the challenge of youth unemployment was that by 2015, almost half of the world’s population would comprise the youth in Africa.
Dr Heep said the underlying rationale for the study, was for the funding of innovative projects to get the youth into decent employment.
In line with that, about a million dollars had been voted by the Japanese government for the purpose over a three-year period in each of the countries of study.
Source: Daily Graphic