Progressive Alliance for Ghana (PAG) policy Brief on Youth Employment

Fellow Citizens,
By 2050 Africa will have about 2.4 billion people, half of whom will be 25 years old or less. It is estimated that about 60% of Africa’s youth between 6 and 18 years old will not be enrolled in school and a similar proportion, another 60% of youth, will be unemployed.

Most will be female. This means they will have little income, less wealth by way of assets and essentially will be unemployed and poor.

Ghana’s projected population for 2050 will be about 50,000,000 and three out of five will be living in an urban area, which raises numerous social and policy challenges. The currently published unemployment figures do not begin to reflect the gravity of the situation and the worsening prospects ahead. Clearly thought-out plans for addressing youth unemployment are not in place.

Urban poverty, slum conditions, drug abuse, crime and unwanted pregnancies are all potential consequences of the large proportion of youth not in employment, education or training. The current mid- and long-term development policies of the country advanced by successive NDC and NPP governments don’t consider population variables and the challenges they portend. Growing and chronic youth unemployment is a national security threat.

Unemployment is also related to the misalignment between the curriculum of the education system and the diminutive job market as it exists for youth. Unemployment rates are higher among secondary school graduates than those with basic education. Tertiary education graduates show more unemployment among graduates of the humanities and the arts. STEM graduates have less unemployment but their training and their competitiveness for private sector jobs is questionable.

Ninety-two (92) % of employed youth are in the private sector with a large segment (85%) being in the informal sector, which is characterized by vulnerable employment, irregular pay, and low job security.

Job growth simply has not kept up with economic growth, and when the economy grows, the extractive sector (that is, mining and oil) along with commercial agriculture. i.e. Cocoa, are the major drivers, and these do not have jobs for large numbers of young people.

Over the last 20 years agriculture has diminished as a source of jobs for youth in favor of services and a diminished manufacturing sector.

An unhealthy, deteriorating macroeconomic environment has been the hallmark of 32 years of NPP and NDC governance in the Fourth Republic. Erratic power supply, high cost of credit and massive infrastructural challenges, a rapidly depreciating currency, a myriad of taxes and levies, all hamper the ability of the private sector to lead in employment creation. There is no reliable labour market information system (LMIS), matching workers to jobs. The quality of workers and their preparedness for the labour markets is poor. They often have unrealistic expectations of the marketplace and have a poor work ethic in general.

Given this grim background, PAG proposes to increase labor absorption by the agricultural sector through well organized, supported and monitored cooperatives. Secondary cooperatives in sectors such as small engine technology, information technology, tourism, and manufacturing as it relates to agriculture will be the key pathway out of this endemic problem for which no previous government since the first Republic, has offered a sustainable solution through cooperatives at the ministerial level.

Cooperatives can provide employment if groups of people organize themselves into different types of democratically managed associations or businesses.

First, Procurement Cooperatives bring together people to buy, or better manufacture, their inputs in bulk and improve their incomes. The Indian Farmers Fertilizer Cooperative, the largest such cooperative in the world, reaches around 50 million farmers, and generated annual revenues of around US$8bn in 2023.

Second, Marketing Cooperatives bring people together to sell their produce, and secure a better price and raise incomes. Ghana’s own Kuapaa Koko is a good example.

Third, Consumer Cooperatives can also help to create employment. Credit unions – a consumer (Financial) Cooperative – bring together savers to pool their resources, so that they can lend to one another, either for consumption or for production. If they lend for production, their members can grow their businesses faster than using the traditional financial system. Kenyan Credit Unions or Savings And Cooperative Credit Organizations (SACCOs) are the largest in Africa and have assets in the region of US$16.2bn.

Fourth, Producer Cooperatives bring together people to own their own businesses and to manage them according to one-person one-vote, rather than one-share one-vote, as investor-owned businesses do. Such companies have been very successful in many parts of the world most notably in Spain, Italy, Yugoslavia, and India. The most successful such cooperative in India, the Uralungal Labour Contract Cooperative, was started by 14 “untouchable” labourers building roads, buildings, and bridges in Kerala State in 1925.

To succeed in these approaches, formal linkages between private sector employers, and the education sector from its earliest years are necessary for producing a curriculum which among other things, is aligned to the labour market and teaches workplace ethics, problem solving, critical thinking and proper workplace behaviour from the earliest years. The TVET programs should likewise be closely linked to employers, so that appropriate internships can be fashioned for students long before they graduate from such programs to facilitate their success in the workplace.

We propose a National Council of Employment and Education to facilitate this important, culturally integrative transformation in both the educational and business sectors.

PAG - Forward Together! June 3, 2024
www.proalliancegh.org https://www.facebook.com/Nkrumaist/ Twitter: @cn_northamerica; [email protected] phone: 404-259-8095 (USA) phone +233-57-614-0000(GH)