Over three million Ghanaians have been affected by job losses in the country between 2017-2018, a study has revealed.

The study conducted by the Centre for Socioeconomic Studies (CSS) said its reports from 2017 to date suggest the job cuts span the industrial, banking and mining sectors as well as the media and services sectors.

The CSS said over a million individuals who contributed to Ghana’s workforce have suffered job losses and “the implication on the general economy implies that well over three million livelihoods have been adversely affected given that one job loser can be said to have two dependants, though the empirics could mean worse.”

CSS in its report said the status quo has disastrous social implications for crime and security.

The Centre has recommended to government to put social protection programmes in place to alleviate the suffering of the people.

PRESS RELEASE

JOB LOSSES IN GHANA: OVER THREE MILLION (3M) LIVELIHOODS AFFECTED BETWEEN 2017-2018
Background

The Centre for Socioeconomic Studies (CSS) takes a serious view of happenings on the employment scene in Ghana and the impact on livelihoods and the general economy. Ghana’s employment sector has been characterised by massive job cuts owing to economic meltdown, with several organizations downsizing their workforce to keep within efficient operational budgets. The youth remain the most affected by the job loss menace.

The CSS, from its study of the situation, found that over a million individuals who contributed significantly to Ghana’s workforce and also served as breadwinners in their families have had to suffer the misery of job loss. Reports from 2017 to date suggest the job cuts span the industrial, banking and mining sectors as well as the media and services sectors.

The situation is further compounded by the ever-growing ranks of unemployed graduates from Ghana’s tertiary institutions as well as young persons who have to terminate their education at the senior high school level. Reports indicate over 32,000 qualified health workers are battling government for their employment contracts. Another real threat to the (un)employment situation in Ghana is the case of averagely 90,000 graduates exiting the National Service Scheme yearly to face the perils of very low job opportunities in the country. These facts posit the employment sector as the worse performing, creating a serious case of human security crisis and the symptoms are already evident on the political landscape.

Socioeconomic Implications

The socioeconomic impact of these significant job losses on the general economy implies that well over three million (3M) livelihoods have been adversely affected given that one job loser can be said to have two dependants, though the empirics could mean worse. This also has serious implications for individuals or businesses that provide support services to sectors in which the job cuts are occurring. The overall effect is, aggregate demand is adversely affected, explaining the wave of hardship lamentations being expressed by individuals and businesses across the country. Government revenue performance targets cannot also be met on account of these facts.

The status quo has disastrous social implications for crime and security. As the legitimate expectations from expected long-term stable employment rapidly fades away, the level of frustration of the individuals increases. Further, as the expectation from government to take care of or lessen the impact of the situation increases and the failure of government to provide the needed social protection, individuals, especially the youth, as is often the case, are compelled to resort to crime and other illegitimate modes of registering their frustrations. Recent attacks and chasing away of government officials are a direct consequence of the stated crisis. If nothing is done to abate or reverse this vicious trend, such attacks may become the rule (rather than the exception).

Ineffective Government Actions Despite the precarious unemployment situation, government's spending on productive sectors that could generate jobs remains significantly low with capital expenditure to GDP ratio of 1.1% as at June 2018. Unfortunately, the government has resorted to passing off replacement job figures as newly created jobs. Sadly, this only worsens the situation. The Nation Builders Corps programme that is said to temporarily engage some unemployed graduates can best be described as plastering a bleeding wound. Sooner than later, the bleeding will resume. As explained above, the current economy is simply not supportive of job creation in any significant way.

The Way Forward

The CSS believes, among others,

1. Government spending should adequately respond to sustainable job creation, given the presently low levels of investment in productive capacity evidenced in the high recurrent expenditure trends against significantly low capital expenditure.

2. Government should reconsider its approach in the financial sector crisis management, by adopting a “Stakeholder Approach” that effectively meets the needs of potential job losers, shareholders/investors in indigenous and rural banks as well as the interests of depositors.

3. Government should review tax thresholds downwards in the 2019 budget to mitigate the hikes in prices resulting from excessive taxation of goods and services at the ports of entry and points of sale in the country.

4. Government should awaken itself to the reality that the attacks and assaults on government officials are serious national security threats arising from the current economic hardships outlined above and could see a nationwide escalation.

5. Whiles doing all these, the CSS urges the government, as a matter of urgency, to start putting social protection programmes in place to alleviate the serious suffering of the people.

SIGNED

Albert Wotorgbui

Research Fellow