Why economic growth has no delivered enough jobs

By Francis Ato CONDUAH

Over the past decade, Ghana has experienced periods of economic growth and improvements in key macroeconomic indicators. Economic output has expanded, inflation has been brought under control at various points, and significant investments have been made in sectors such as financial services, telecommunications, mining, and oil production. Yet unemployment and underemployment remain pressing concerns for many Ghanaians, particularly young people and graduates entering the labour market.

According to labour force surveys conducted by the Ghana Statistical Service, unemployment remains a significant challenge despite improvements in economic performance. This apparent contradiction raises an important question: why is economic growth not translating into sufficient job creation?

One way of understanding the issue is to examine the relationship between economic growth and unemployment over time.

Figure 1: Ghana’s Economic Growth and Unemployment Trends (2015–2025)

Source: World Bank World Development Indicators (WDI), 2015–2025. Unemployment figures are based on International Labour Organization (ILO) modelled estimates.

The graph shows that while Ghana’s GDP growth has fluctuated over the years, unemployment has not declined in a manner that suggests broad-based job creation. Between 2015 and 2025, Ghana’s GDP growth recovered from 2.1% to an estimated 6.0%, while unemployment based on World Bank/ILO estimates declined from 6.8% to about 3.0%.

Yet labour market concerns persist, suggesting that the issue extends beyond unemployment statistics alone. Although international estimates such as those from the World Bank and the International Labour Organization indicate relatively low unemployment rates, many Ghanaians continue to experience difficulties securing stable and productive employment. This highlights the importance of looking beyond headline figures to understand the true nature of Ghana’s labour market.

A major reason for this disconnects is the structure of economic growth. Much of Ghana’s recent growth has been driven by sectors such as mining, oil and gas, telecommunications, and financial services. These sectors contribute significantly to Gross Domestic Product (GDP), but they are largely capital-intensive. In other words, they rely more on technology, equipment, and capital investment than on large numbers of workers.

For example, advances in digital banking have enabled financial institutions to serve more customers without a proportional increase in staff. Similarly, modern mining operations use sophisticated machinery that reduces the need for large labour forces. As a result, these sectors can expand rapidly and contribute strongly to economic growth while generating relatively few jobs.

Another important factor is the continued dominance of low-productivity employment. Agriculture remains one of the largest employers in Ghana, yet many agricultural workers operate in small-scale and subsistence activities with limited access to technology, finance, and markets. While these activities provide livelihoods, they often do not generate the income levels associated with meaningful improvements in living standards.

The challenge is therefore not only unemployment but also underemployment and low-productivity employment. Many individuals may technically be employed but are unable to earn sufficient income or fully utilize their skills.

The labour market is also facing increasing competition from a growing number of educated job seekers. Every year, universities and colleges produce thousands of graduates. In response to competitive labour market conditions, many individuals pursue Master’s degrees and professional certifications to improve their prospects.

The issue, however, is not that employers universally require postgraduate qualifications or professional certifications. Rather, the supply of qualified candidates has grown faster than the availability of quality jobs. Consequently, higher qualifications increasingly serve as a means of distinguishing candidates in a crowded job market rather than guaranteeing employment.

This situation reflects what economists often describe as “jobless growth”—a phenomenon in which economic output expands without generating a corresponding increase in employment opportunities. Economic growth remains important, but the type of growth matters just as much as the pace of growth.

For Ghana to create more jobs, greater attention must be given to sectors with strong employment potential. Manufacturing, agro-processing, construction, tourism, and small and medium-sized enterprises have the capacity to absorb larger numbers of workers while creating value across the economy.

Furthermore, education and training systems must be aligned more closely with labour market needs. Technical and vocational education should be strengthened to equip young people with practical skills that are in demand. Support for entrepreneurship and small businesses should also be expanded, as these enterprises remain important sources of employment creation.

Ultimately, Ghana’s challenge is not simply to grow the economy but to ensure that growth is inclusive and employment-generating. Rising GDP figures are encouraging, but economic success should also be measured by the extent to which citizens can find productive and rewarding work.

If economic growth is to improve living standards for the majority of Ghanaians, future growth must be accompanied by stronger job creation, higher productivity, and broader opportunities across all sectors of the economy. Only then will the benefits of growth be felt more widely throughout society.

Post Views: 3