The report said the nation can achieve this through fostering greater global integration, technological transformation, macroeconomic stability, and financial sector development.
Ghana has an opportunity in the coming decades, to accelerate economic transformation and create more and better jobs, after navigating through the heights of the Covd-19 pandemic, the World Bank’s latest economic analysis for the country has revealed.
The report themed “Country Economic Memorandum, Ghana Rising – Accelerating Economic Transformation and Creating Higher Quality Jobs” said Ghana has all it takes to continue being an economic development star, if it takes the right steps to nurture growth and job creation.
Ghana faces an acute challenge of generating more and better jobs and has a ‘missing middle’ of employment in mid productivity sectors”, said Pierre Laporte, World Bank Country Director for Ghana, Liberia and Sierra Leone.
“This is the time for Ghana to fill that ‘missing middle’ by cultivating export-oriented activities in both manufacturing and services and harnessing the transformative potential of trade; it faces an historic opportunity to do so with the Africa Free Trade Continental Area (AfCFTA).”
The report highlights four main pillars for accelerating economic transformation and improving jobs outcomes.
They include to creating jobs, Ghana will need to drive sectoral transformation through the movement of workers into higher productivity firms and sectors and spatial transformation through trade, urbanization, and connectivity. ‘Global innovator’ services, in particular ICT and business services, could play a critical role.
Also, to deliver productivity, growth and boost innovation and entrepreneurship, government will need to drive technological transformation through the adoption of digital and complementary technologies in domestic firms. To enable this change, it will also be key to improve internet connectivity, invest in foundational skills and advanced digital skills, and facilitate technology adoption for firms.
Again, to support more inclusive private sector development, Ghana will need to leverage the financial sector to facilitate firm expansion, technology adoption and innovation.
Finally, to enable long-term inclusive growth, Ghana will need to double down on macro-fiscal stability, natural resources management and revenue mobilisation to generate the revenues to fund reforms for economic transformation). Environmental taxation can boost revenues while helping to minimize the impact of climate change on households and incentivize sustainable land-use.
“This report lays out three scenarios for an accelerated economic transformation for better jobs” David Elmaleh, World Bank Senior Economist, and co-author of the report added.
Without reforms, in a ‘business as usual’ scenario, Ghana’s economy is currently projected to reach upper middle-income status by 2037, while under a ‘bright horizons’ scenario, which includes the adoption of some key reforms to drive economic transformation, Ghana’s economy could reach upper-middle-income status by 2032. However, under a ‘pitfalls’ scenario, Ghana would have to wait until 2040. The greatest impact on GDP would be from reforms to raise the productivity of export-oriented global innovator services and manufacturing. This can start now, under the new budget.”
The report also said Ghana faces an urgent need to repair the link between growth and poverty reduction. This is because the impact of growth on poverty reduction has declined over the past three decades.
For instance, poverty reduction which used to be 2% annually between 1991 and 1998 now stands at 0.2% annually between 2012 and 2016.