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Economic growth not translating into jobs – Economist

March 2, 2018, 3:22 p.m.

The rate of unemployment continues to increase despite the significant economic growth recorded over the last 12 months, as low absorption sectors such as mining, oil and gas, and financial intermediation drive growth.

Prof. William Baah-Boateng of the Department of Economics, University of Ghana said: “From the demand side, we realise that the country is not generating sufficient jobs to absorb the rising number of unemployed people into the labour market every year.

“We’ve been growing; we grew at 14% in 2011. Growth came down, but in 2017 growth went up beyond 7%. That means we are picking up again. But you also have to look at the source of growth.”

Speaking at the Ghana Policy Dialogue on job-creation for the youth, organised by the Africa Centre for Economic Transformation (ACET), he noted that attention must be paid to the agriculture, manufacturing and tourism sectors to create more jobs.

“We need to look at agriculture, manufacturing and tourism. Research has shown that these are the activities or sectors that have the potential of generating a high level of employment. We need to sit down and plan well,” he explained.

Manufacturing and agriculture, known to have high labour absorption, are among the poorest-performing sectors in the economy – with the latter recording a growth of 4.3% in the 2018 budget statement.

In contrast, the extractive sector (mining, oil and gas) and financial intermediation – considered to have low absorption – have been the key drivers of growth, culminating in low employment response to economic growth in the country.

Oil, in particular, accounted for 3.8% of overall Gross Domestic Product (GDP) growth between January and June 2017.

Professor Baa-Boateng said, for the situation to improve, there needs to be a proper assessment of government’s job-creation initiatives – Planting for Food and Jobs; 1 District, 1 Factory; and 1 Village 1 Dam – to promote growth in those sectors of the economy which have the propensity to create many job opportunities for the youth.

Dr. Kwabena Otoo, Director General at the Ghana Labour College of the Trade Union Congress, added that present economic policies in the agric sector are not structured to promote job-creation. He charged government to focus on policies and regulation of the sector rather than rolling out programmes.

Disconnect between academia and industry

Another reason for the increasing graduate unemployment identified, was the disconnect between academia and industry – whereby skill-sets of graduates do not match those required by industry.

Prof. William Baah-Boateng said: “The supply side is where we have the skills mismatch. If you create the job and the skills the person has are inappropriate to allow them take that opportunity, then you haven’t done anything – and that is why the supply side also needs to respond.

“Of course, we need to revamp our training system and focus on making sure that we train people to think, to be creative and innovative.”

He said this is the only way we will be able to meet the changing global job market, such that graduates will be able to adapt and fit in wherever they find themselves – regardless of their area of practice.

“Now things are changing so fast. What people need is to be able to adapt when there is a change – not to train them for a specific kind of job, so when they leave school and that job is no more there, then they become jobless,” Professor Baah-Boateng added.