Ghana's unemployment rate declining

Ghana’s unemployment rate has declined from 75.9% to 71.6% according to the World Bank, which says the drop is because of rapid population growth over the last couple of years.

Details of the 2006 Country Economic Memorandum report of the Bank however shows that while urban areas such as Accra saw very little increase in unemployment rates, rural areas witnessed a huge decline from 83.6% to 77.5%.

The World Bank report said a multivariate, micro-analysis suggests that the important declines in poverty in both urban and rural areas was not explained due to a higher labour supply but from higher returns from education, physical capital and higher land productivity.

It however indicated that the capital Accra is having a more worrying unemployment problem with close to 10% of the active population being available for work even if only 50% of them are actively looking for a job.

According to the report the country’s unemployment situation is largely concentrated in the youth segment and in most urban areas.

Again, the report mentioned high economic growth and a fairly flexible labour market as responsible for the control of the country’s unemployment levels. A shift of employment from the public to the informal private sector was also recorded in the report with the last 15 years seeing the percentage of public workers declining from about 13% between 1991 and 1992 to 9.4% towards the end of 1999 to 9.0% in 2005 and 2006.

The report also mentioned a relative decline in the public employment sector, but the situation has been fully compensated by an increase in both the formal and informal private sectors as wage employees rose from 7.8% in 1991-1992 to 14.5% in 2005-2006.