Construction sector could create 1m new jobs in Ghana in 2015-20

 

A 2014 World Bank report on Ghana’s demand and supply of labour estimated that over 1m jobs could become available in the country’s developing construction sector between 2015-20, particularly given the expected growth in the residential real estate market and the severe shortage in affordable housing. This employment is estimated to generate approximately $400-500m. However, if Ghana is to take advantage of the uptick in construction hiring, it will need to expand the base of skilled labour, and cultivate homegrown skills.

Youth

Figures from a 2016 report authored by the Overseas Development Institute (ODI) and its partners indicate that Ghana’s construction sector employs 320,000 people, approximately 2% of whom are categorised as young people in the report.

The sector has been a reliable source of job creation, year-on-year, regularly outstripping the broader economy: for instance, in 2013, the construction sector growth rate was 8.4%, three percentage points above the growth rate of 5.4% in the economy overall.

Given that the World Bank estimated Ghana’s youth unemployment rate for 15-24-year-olds at 11.8% in 2017, providing jobs to young people in growing sectors is critical. The ODI report also notes that construction provides more training opportunities than any other sector as specialised construction skills are not typically learned at home, as might be the case with agriculture. This focus on more skilled work could, in turn, also address Ghana’s chronic underemployment issue; as noted in a 2017 paper by US think tank Brookings, Ghana’s underemployment rate is 47%, with nearly half of Ghanaians unable to make full use of their skillsets.

Local Training

Of the likely construction employment opportunities leading up to 2020, the World Bank estimates that 250,000 positions will be for skilled artisans and tradesmen. However, demand is not currently matched by supply, leaving an estimated deficit of 60,000-70,000 workers. This makes it difficult for contractors to fulfil local content criteria for sector-specific projects. Currently, the government has a policy in place mandating the hire of locals working on projects related to the petroleum sector. “Local content is a great policy that I support, but when you put it in place, educating your people becomes a government responsibility that must be a joint effort with the private sector in providing education to obtain and maintain a skilled workforce,” Harm Ploeger, president for Africa at Saudi Arabia-based Red Sea Housing Services told OBG.

Understanding of this need was reflected to some extent in the 2017 budget, which highlighted plans to align the more than 200 public technical and vocational training institutions under the Ministry of Education to improve coordination and the effective use of resources. Specific objectives for 2017 included training 15,500 youth in vocational trades.

International Expertise

Some sector leaders in Ghana point to improvement in skillsets, particularly from the presence of international talent in the construction industry over the past decade. “Looking back over the past 10 years, the skills of the Ghanaian workforce have improved 100%,” Clovis Abi Nader, Area general manager in Ghana for international construction company MAN Enterprise told OBG. “This is due largely to the technology transfer phenomenon, as many foreign companies with high-calibre workers have come to work in Ghana and taught Ghanaians how to produce better construction products.”

With new construction projects and international companies operating in Ghana, there should be employment and skills transfer opportunities to grow talent in the industry. One challenge the sector will face in the near future is reforming the attractiveness of construction work, which is still negative due to safety risks, as well as the fact that it is not associated with a high social status. If this can be overcome through the provision of advanced training and competitive, well-paid opportunities, construction could prove to be a promising labour space, especially for Ghana’s youth.

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The Report: Ghana 2018

Construction & Real Estate chapter from The Report: Ghana 2018

The Report: Ghana 2018

The Report

This article is from the Construction & Real Estate chapter of The Report: Ghana 2018. Explore other chapters from this report.

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