According to the World Bank, to successfully transform Ghana’s economy and boost labor market performance, the government must take a multi-stakeholder approach and implement well-programmed development policy actions and multi-sector interventions.
As a result, the Bank has recommended six strategic interventions to strengthen the country’s economy and labor market, including identifying and nurturing economic activities and enterprises that have the potential to increase product complexity and strengthen enterprises’ participation in global value chains.
The recommendations were included in the 5th Ghana Economic Update Report, which was released in Accra under the title “Structural Transformation and Labor Market Performance: Challenges and Opportunities.”
The Ghana Economic Update is part of a series on Ghana’s economy produced by World Bank Advisory Services and Analytics. The report gives an overview of recent economic developments as well as medium-term prospects.
Every edition contains a broad overview of the country’s macroeconomic and structural dynamics, as well as a special topic on a current policy issue.
In presenting the recommendations, Mr Mpumelelo Nxumalo, an Economic Consultant with the World Bank Group, said the government could also harness the potential of digital technologies to proactively adapt to the changing world of work and increase and enhance the participation of women, youth, the poor, and vulnerable in the labor market.
He believes the country can improve human capital in its current and future workforces, and that systems and interventions should be designed to be resilient and responsive enough to protect the economy and labor market from disasters and shocks.
He stated that the COVID-19 crisis had significantly harmed Ghana’s growth prospects, that short-term prospects had worsened rapidly, and that there was considerable doubt about the recovery’s speed in the medium term.
He predicted that the magnitude of the recession will be determined not only by the extent and length of the domestic epidemic, but also by the global economy’s post-crisis development direction.
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The Economic Consultant predicted that a drop in external demand, a drop in commodity prices, especially oil, and lower foreign direct investment and tourism receipts would have a short-term negative effect on the economy.
Mr Kwabena G. Kwakye, a World Bank economist, said the country’s institutional transition and labor market had undergone solid and sustainable economic growth over the last three decades, leading to a significant decline in poverty and a rise in mutual prosperity.
He said that the country’s success in reducing poverty was largely attributed to structural changes, such as increased overall production within industries and worker educational attainment.
However, he said that the rate of poverty reduction has slowed in recent years, and that Ghana has lacked growth-enhancing institutional change.
He said that value-added activities and jobs had moved away from agriculture and toward manufacturing and services, a trend he said had been noticed in many other countries.
“Construction and mining have driven the shift toward manufacturing, while trade has driven the shift toward services,” he added.
He said that manufacturing’s contribution to value added, employment, and exports had “declined over time” and that “there were signs that Ghana had started to prematurely deindustrialize.”
He said that public investments in a variety of industries would necessitate concerted actions from a variety of government ministries and agencies.
He added that maintaining successful private sector and civil society involvement in the planning, execution, supervision, and assessment of policies and initiatives would also be important. He went on to say, “A complex collection of approaches is needed.”
The initiatives, according to Mr Kwakye, provide funding and incentives for foreign and domestic private investors to join particular industries, places, and value chains, as well as produce and deliver specific products and services for domestic and international markets in a labor-intensive and socially inclusive manner.
He added that private and public providers needed resources to improve the talents of existing and potential workers, who were valuable for jobs and would boost productivity and earnings. Vocational and technological skills, as well as multimedia and business administration skills, as well as social and socioemotional skills, are also included.
In terms of the macroeconomic outlook and risks, Ghana’s economic growth momentum is expected to wane, and inflation will break the Bank of Ghana’s target of 82 (plus negative 2) percent in 2020, but it is expected to stay within the target range in the medium term.
Mr. Pierre Laporte, the World Bank’s Country Director, reaffirmed the Bank’s contribution to assisting Ghana’s growth and development agenda as it moves toward economic transition.
He congratulated the government for moving effectively to mitigate and contain the COVID-19 pandemic’s effect on Ghanaians’ wellbeing and livelihoods since it started.
SOURCE: ATLFMONLINE
