Address High Unemployment – IFS

The Institute of Fiscal Studies (IFS), an economic think tank, has cited the rapid increase in urbanization, lack of job opportunities, rapid growth of the labour force and the mismatch between skills and jobs as the major cause of extremely high unemployment in the country.

According to the Institute, the high rate of unemployment was due to a myriad of factors which include low economic growth, concentration of growth in low job-creating sectors like highly automated services and capital intensive extractives.

It said agriculture and manufacturing, which have the high potential to create jobs, have been stagnating.

“Not too long ago, the Ghanaian economy was one of Africa's strongest economies. However, the economy has witnessed a sharp decline in growth in the last three years. The economy has remained vulnerable due largely to the over-dependence on primary commodities which have been subject to price volatilities on international markets with serious implications for export receipts and budget revenues.

“The industrial base of the country has almost diminished due to a stagnating manufacturing sector, while private businesses have been suffocating under the weight of several obstacles.

“Deficits in energy, transportation and other infrastructure have remained large, a situation that has stifled economic growth. Unemployment has become a ticking time-bomb, posing a threat to social cohesion and national security,” an IFS January report revealed.

To deal with the situation, the Institute has, among others, appealed to government to support agriculture to boost economic growth and employment by giving priority to the implementation of well-designed programmes of public investment in agriculture, continued progress on regulatory reform and specific measures such as a 'school to land programme' to engage young people in agriculture.

It also recommended the development and implementation of a Public Works Programme (PWP) aimed at providing work opportunities, coupled with training and the delivery of public works, such as labour-intensive construction and community services by the youth and unemployed graduates.

“Expand the rural enterprises programme through which household enterprises are promoted to cover all districts in the country; implement the national strategy and action plan for informal enterprises already developed by the Ministry of Employment and Labour Relations,” it declared.

Furthermore, it called for the support of the initiation of business ideas, mobilization of human, financial and physical resources for establishing and expanding enterprises.

According to a World Bank report, last year about 48 percent of the youth in the country, aged between 15 and 24, were without jobs.

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By Samuel Boadi