The World Bank Ghana Economic Update released sometime last week, cautions that it will be a mistake to carry out short-term, but necessary, adjustments in the economy at the expense of Ghana’s future, which is best embodied by country’s youth. The report states that the youth has been growing rapidly and now represents 36 percent of the population, adding that the economy’s strong growth performance of the past 30 years has however not delivered enough jobs for them.
Citing the National Population Census, the report said it established that in 2021 approximately three-quarters of unemployed adults were ‘young’.
“While governments have created multiple policies and programmes to address youth unemployment over the years, the many programmes aimed at helping them have often fallen short of the massive needs,” the report said.
The sixth 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 mobilization, reining in on energy sector expenses, and ensuring all public expenditures maximize value for money. It observes that such measures will help address Ghana’s debt sustainability concerns which have heightened over the past year.
The report notes that Ghana needs a holistic policy environment encompassing both labour supply and demand side interventions. Among various recommendations, the report calls for programmes that incorporate new skills required by employers such as basic digital and soft skills into the education system; as well as operationalize job intermediation systems to ensure that young people are appropriately linked to available jobs, while creating more opportunities for quality jobs.
Commenting on the report, Pierre Laporte, the World Bank Country Director for Ghana said: “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.”
The report urges the Ghana government to review all youth employment programmes to maximize their effectiveness and relevance, and where applicable, diminish duplications of effort; the education system will need to adapt to make sure that it produces relevant skills; and technology should be fully leveraged to promote technological adoptions, and beyond adoption, and the government should identify and intentionally invest in the value chain of technology, while creating markets for SMEs.
It however indicates that Ghana’s growth prospects are positive if it can control the major risks it faces, with growth expected to reach 5.0 per cent in 2022 and to average 5.6 per cent a year over 2022-2024.
The report notes that growth is expected to be broad-based, led by agriculture and services and a stronger industry sector, supported by high extractives prices, adding that, 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 per cent.
However, the report points out that recovery 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.
“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,” says Kwabena Gyan Kwakye, a co-author and Economist.
By Emmanuel K. Dogbevi
Copyright ©2022 by NewsBridge Africa
All rights reserved. This article or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher except for the use of brief quotations in reviews.