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23.01.2006 Business & Finance

PSI making waves: 13,000 extra expected in 2006

By Statesman
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Kwamena Bartels, Minister for Private Sector Development and President's Special Initiatives, will this morning hand over a cheque of $1.5 million – equivalent to ¢13.8bn – to buy a 14.1 acre factory complex in Tema from the Ghana Textiles and Manufacturing Company.

The complex is to be refurbished in 6 months into high-tech factories capable of producing garments that meet international quality standards. It will be rented to ten new indigenous medium scale garments and textiles companies, each of which will employ between 300 to 500 skilled labourers.

This purchase is part of a series of initiatives under the PSI – Garment and Textiles to accelerate exports by providing local businesses with the inputs they need to grow, including access to credit and training.

So far, under the PSI, a clothing technology and training centre has been established in Accra's North Industrial Area to provide skills and technical training for 350 people a month. The free four-week programme has trained 10,000 potential employees for the industry.

Some of these skilled labourers are employed in the three garment and textiles companies operating in the Adjabeng Kaneshie Industrial Area in Accra. By the end of the year, two more companies will be operational in the area and will employ these skilled labourers.

There are also moves to extend the PSI on garments and textiles to other parts of the country. This year, two new clothing technology and training centeres will open in Kumasi and Takoradi. They will provide skilled labour for 14 new companies who will begin export production by December 2006. 7,700 new jobs will be created.

The creation of new jobs, as well as the availability of jobs in the country, suggests many more jobs are being created than are being lost through the folding up of companies in the private sector. The findings of a recently released study on the employment situation in the country seem to support this. The findings of the study, conducted by the Bank of Ghana, indicate that the job market recorded a high turnout for recruitment, with a total of 8,067 job vacancies advertised in one newspaper alone in 2005.

Again, the assertion that there were 'no jobs' for qualified graduates seems to have fallen flat: professionals and technicians, largely workers with tertiary-level education and those with other professional qualifications, were the most sought-after workers – with 3,457 of the total, representing 42.9 percent. 83.4 percent of the total job vacancies advertised in the Daily Graphic, arguably Ghana's biggest selling paper, for the twelve-month period ending December 2005, was for jobs in the services sector.

An average of 672 new jobs was advertised in the paper per month, according to Ernest Addison, Head of the central bank's Research Department.

“The exercise tried to avoid repeat advertisements and so used only one newspaper, and the data was cleaned up to ensure accuracy.”

Job vacancies provide an indication of employers' intensions to engage new staff, and thus serve as a useful tool to gauge possible employment growth and job turnover.

Although it is the first time such a research has been conducted in Ghana, the 8,067 figure is considered high by any standard. The United States, a much bigger economy with almost no informal sector, is said to be recording about 200,000 vacancy announcements per month, compared to Ghana's 672 in the Graphic alone.

In an earlier interview with this paper, Trade and Industry Minister Alan Kyerematen said all the indicators show, “Government is creating and will create more [jobs]”

He said companies fold and start up all the time; “But, I'm absolutely confident that there are many more companies being established than closing down.”

He cited the growth in the banking sector, telephony and agro-processing as clear indicators of a giant revival of the Ghanaian economy.

According to the central bank, the results were a good indicator of formal employment trends. The bank believed it was a first step in building a comprehensive database of employment trends in the country. The estimates represented a minimum indication of actual vacancies, it explained, as many new formal sector jobs were filled without advertisements.

The central bank said it also recognised that the majority of jobs in the country were created in the informal sector and that the sector provided opportunities for the livelihood of many Ghanaians.

Of the 8,067 advertised, the services sector led demand for labour with 6,729 or 83.4 percent of the total, and on a monthly basis showed an average 80 percent share. Within the sector, education was the most expanding sub-sector with 1,300 new job vacancies announced, representing 16.6 percent of total openings declared and 19.9 percent of the total vacancies coming from the services sector.

Finance, insurance and real estate accounted for more than 8.8 percent of total vacancies and 10.6 percent of the total services sector vacancies.

The services sector has shown consistent growth, coming second to agriculture. It grew 28.82 percent in 2000, 29.16 in 2001; it grew 29.21 in 2002, 28.94 in 2003, while in 2004 it grew 28.65 percent.

The growing demand for private domestic security officers accounted for more than 16.7 percent of total job vacancies and 19.2 percent of vacancies in the services sector, the report said.

The industrial sector, led by manufacturing with 9.7 percent, accounted for 16.0 percent of total jobs advertised. Less than one percent of the vacancies were from the agricultural sector, the report said.

Professionals and technicians, and those with other professional qualifications, were the most sought-after workers, 42.9 percent. About 80 percent of the number was to be engaged in the services sector.

Also highly sought after were security men, drivers, and house-helps; sales and other services workers; artisans and machine operators; and secretarial and clericals.

Executive and top professionals accounted for 5.5 percent of total vacancies with over 80 percent of them being demanded by the services sector. Previous experience for most of the vacancies was not required. The report showed that post qualification experience did not matter most as 62.4 percent of the total vacancies did not specify any post qualification experience requirements.

The bank concluded that 2005 was a good year for recruitment in the formal sector, but said the findings raised several key research questions such as “is the service sector the most dynamic growth pole in the economy” and “is there more room for Ghana to take advantage of the out-sourcing strategy of major international companies?”

Since its inception in August 2001, the PSI has identified and is working to assist 100 small and medium scale factories with technical and managerial skills as well as the access to finance they need to expand their businesses. Ten local companies have been supported to enhance their skills, increase productivity and to meet international garment quality standards.

Ghana is one of the 37 countries eligible since October 2000 under the Africa Growth and Opportunity Act to export garments and textiles duty free to the lucrative US market. To date, $4 million worth of manufactured goods has been exported from Ghana.

The new factory complex in Tema will provide small and medium scale garment and manufacturing companies with the high tech facilities they need to improve their exports.

Tema is already home to three thriving garment manufacturing companies. The largest – California Link, a US based company – has sourced markets in the US and has sub-contracted its work to two local companies – Oakbrook Ltd and Premier Quality.