Creating jobs: Several initiatives are under way to generate more employment

With employment a perennial political hot potato, the authorities have been undertaking a number of schemes to boost job prospects in the country. These include training initiatives, backed by international donors, as well as policies targeted at maximising the number of positions to be awarded to Ghanaians, especially within the energy sector.

The Fifth Round of the Ghana Living Standards Survey, published in 2008, put unemployment at 3.6%, down from a figure of 10.4% given by the 2000 census. However, in a comparatively poor country in which some 37% of the population is estimated to be 14 years old or younger in 2011, and with the population growing at around 1.8% a year (Ghana ranks 66th in the world in terms of population growth), job creation is a key challenge. It is also an important political issue, with debate raging over the fact that commodity-fuelled rapid GDP growth has failed to translate into new employment opportunities.

EFFORTS: Mindful of such concerns, the authorities have been taking steps to try to boost employment. For example, the government has allocated GHS84m ($49.8m) for skills training for unemployed young people under the 2012 budget and is targeting the creation of 40,000 new businesses in 2012 under its Local Enterprises Skills Development Programme. The initiative, which has 170 offices throughout the country, provides both free vocational training and equipment to participants for use in professions such as IT, phone and computer repairs, clothing, jewellery and beauty care, farming, welding, and transport.

International actors are also providing assistance. In June 2012 multilateral and European donors signed an agreement to provide $70m in assistance for another initiative, the Skills Development Fund, which the government launched in 2010 to provide technical and educational training. Under the agreement the World Bank is providing the fund with $50m. In addition to $10m being provided by Denmark (over a period of five years) and a further €10m from Germany.

LOCAL RECRUITMENT: The government is also making efforts to ensure that as many jobs as possible created by recent economic growth and commodity windfalls go to Ghanaians, rather than foreigners. In line with this effort, it has prepared the Local Content Policy Bill, though this has yet to be passed. It also envisages that 90% of jobs in the oil and gas value chain should be taken on by Ghanaians by 2020, in accordance with a policy framework issued by the Ministry of Energy in 2010. Under the policy, all oil and gas projects are required to have an annual local content plan, and operators are required to submit annual programmes to the Petroleum Regulatory Agency for the recruitment and training of Ghanaians in all fields. Half of management staff are required to be Ghanaians at the start of activities, rising to 80% within five years, while 30% of core technical staff are initially required to be locals, increasing to 80% after five years and 90% after 10 years. All other staff must be Ghanaians.

While affected companies can find such policies restrictive, they have been driving opportunities for foreign firms in the education segment. “Education and vocational training is a big area for British firms given plans for local content requirements in the oil and gas sector; training in welding, for example, is seeing lots of activity,” Alasdair Hamilton, the head of UK Trade and Investment Ghana, told OBG.

In summer 2012 the government also stated its intention to enforce the Ghana Investment Promotion Centre Act, which requires that foreign traders invest a minimum of $300,000 and employ at least 10 Ghanaians in their business in order to operate in the country. This would in practice imply the expulsion of tens or even hundreds of thousands of foreign merchants. The act is intended to prevent foreign traders, particularly Nigerians, from crowding out Ghanaians in domestic markets; however, the government has threatened – and failed – to enforce the act before, and at the time of writing, Ghana and Nigeria were reportedly discussing the requirements of the act.

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The Report: Ghana 2012

Economy chapter from The Report: Ghana 2012

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