Feature Article of Thursday, 19 January 2012

Columnist: Debrah, Frank S.

Ghana’s Jobless Growth: Does Anyone Care?

By Frank S. Debrah

Statistics is like a bikini on a sexy woman. It shows you a lot of interesting stuff but it does not show you everything. Such is the nature of Ghana’s impressive but uninspiring growth data. At 13.6%, the country is one of the fastest growing economies in the world. Last year, it was elevated to lower middle-income status after a recalculation of GDP figures. Not a bad record, except that underneath the stratospheric growth numbers lays serious trouble – unemployment.

What do I mean? As the nation’s population grows, citizens require employment opportunities in order to secure work so that they can support themselves and their family. Economic growth is necessary to create such opportunities for those seeking employment. However, in a jobless growth economy like ours, high unemployment persists even though the economy continues to grow at dizzying rates. Large numbers of people, especially recent graduates and individuals with employable skills, are unable to find a decent work in the formal sector.

Nonetheless, government officials and international bureaucrats alike never tire of whipping up such impressive but inspiring economic data to justify why they think they are doing a fine job as stewards of the economy. Asked why he deserves a second term in office during his latest interaction with the Ghanaian media, President Mills was quick to cite GDP growth amongst his top three reasons. Ghana remains a star pupil of the IMF and the World Bank largely because of its impressive growth indicators.

Yes, growth matters. But we must remember that people don’t eat GDP figures nor do “growth rates” provide salaries. They may indicate economic boom; however, the reality on the ground in Gha is very different. Apart from the President and his technocrats at the Bank of Ghana and the Ministry of Finance who are bustling in their glory, common folks wonder and often ask; where exactly do these figures come from? If Ghana’s economy is on such an inspiring growth path, should it not be creating jobs, raising standards of living, and improving the welfare of its people?

These are questions worthy of asking but yet again the Ghana Statistical Service provides another bikini figure for answers. Officially, they have pegged the unemployment rate in Ghana to 6.5% of the total population. Meaning, of all people in Ghana between the ages of 15-65 looking for jobs, only 6.5% are unemployed. Yes, you heard me right! By this figure, unemployment is lower in Ghana than the U.S, UK, and Canada.

The truth is, despite the upward growth rates, Ghana’s economy has been unable to provide enough jobs for the endless stream of graduates emerging from the universities, colleges, polytechnics and the secondary schools. The cocoa industry, the backbone of the economy for the past 100 hundred years, has failed to attract new farmers, especially the educated. The mining sector is largely controlled by foreign interest. It employs very few people and most of the profits are repatriated abroad. Manufacturing is largely stagnant, contributing only 9% of GDP. And oil production is unlikely to generate direct large scale employment despite the high expectations.

If the reality on the ground is anything to go by, the country’s unemployment rate probably stands at about 40%, and that may even be a conservative estimate. The official unemployment rate not only makes a mockery of the incessant complaint about inadequate job opportunities in Ghana but it also confuse ordinary folks when government officials readily pour out what has been fed to them by technocrats. There is an old story of a politician on a campaign tour who reeled out impressive GDP growth figures in order to convince voters as to why the economy is doing well compared to the US and Europe who are in “recession”. An innocent peasant in the crowd raised his hand and asked the politician a simple question “when will our economy start having ‘recession’ so that I can feed my family and live like the Americans I see on TV?”

A jobless growth economy has serious ramifications for everyone. To continue quoting growth rates as a sign of economic progress does not only mislead the people but it also provides policymakers a false sense of comfort. Such a combination is a recipe for enhanced social tension and political unrest. Recent experience across North Africa reinforce the notion that economic growth is not enough unless it is accompanied by significant job growth and improvements in living standards. Let the lesson be learned by Ghanaian policymakers that the chief reason behind the unrest in North Africa was not merely because of lack of political freedoms but growing economies that were failing to produce jobs for young graduates.

More than ever before, Ghana’s fortunes depend not on its impressive growth rates but the ability of the economy to stimulate employment creation. We must not aspire to become Equatorial Guinea, a country with one of the largest per capita incomes in the world, but whose people live a wretched life. We must leave the lofty indicators in the bosom of the technocrats and measure our progress by the number of graduates who find decent employment; by the number of young men who are not selling dog chains in the streets; by the number of hawkers who are not carrying heavy loads on their head under the sweltering sun; and by the number of young women who do not have to sleep their way into the offices of corporate Ghana.