Accra, Ghana//-Ghana, the first country in Sub-Saharan Africa to throw off the yoke of imperialism on 6th March 1957, has skilled and unskilled labour in abundance.
The country’s over 30 million population and political stability also makes it a fertile ground for sub-regional regional, continental and global trade.
Recognising its pioneering contribution to the struggle for the liberation of the African continent and black race world, African Union (AU) has decided to host the Secretariat of the African Continental Free Trade Area ( AfCFTA) in Ghana.
Additionally, Ghana is rich in mineral and oil and gas resources. It is Africa’s largest producer of gold since 2019, and the world’s 7th leading producer.
Agriculturally, it is the world’s second producer of cocoa after Ivory Coast. More than 60 percent of its land is agrarian.
Also, its human resource is top-notch in Africa. For instance, Ghana produced the seventh Secretary-General of the United Nations (UN) from January 1997 to December 2006. Kofi Annan and the UN were the co-recipients of the 2001 Nobel Peace Prize.
These endowments should have made Ghana one of the key destinations for global trade. And with its vast wealth in mineral, oil and gas and natural resources as well as its vast agricultural potential, Ghana should have by now become Africa’s economic superpower.
However, Ghana which is marking its 66 years of independence today is like a rickety vehicle struggling to climb a hilly road.
Apart from holding eight successful democratic elections and peaceful transfers of power from one political to another, the country is yet to achieve its fully potential.
THE CHALLENGES
Youth unemployment
The country’s population is becoming a source of its weakness and not its strength like its big brother-Nigeria.
Ghana’s 2015 Labour Force Report, the overall unemployment rate in Ghana is an estimated 11.9 percent (Ghana Statistical Service 2016).
Persons with a secondary school education have the highest rate of unemployment (24.4 percent), while those with a postsecondary education or more have recorded the lowest rate (13 percent).
With respect to youth, it is estimated that 59.6 percent are employed, 12.1 percent are unemployed, and the rest are not in the labor force (Ghana Statistical Service 2016).
More males (62.8 percent) than females (57.2 percent) are employed, and the majority (90 percent) of employed youth are engaged by the private sector.
The proportion of unemployed youth is higher in urban (13.6 percent) than in rural (10.4 percent) areas.
The civil and public services together employ 8.4 percent of youth. The labour force participation rate of youth is 71.7 percent, and it is higher among males (75.1 percent) than females (69.2 percent) and higher in rural areas than in urban areas.
In terms of the number of hours worked per week, only 18.5 percent of employed youth work between 30 and 39 hours per week, whereas 45.5 percent work less than 30 hours per week.
The rest (17.5 percent) works more than 49 hours per week. More than one-fifth of employed youth (22.4 percent) work 20–29 hours per week.
Macroeconomic challenges
The basic structure of Ghana’s economy has not changed from colonial times. The country’s economy was designed by the colonial masters to be exporters of raw material and importers of finished goods.
This is what best served their needs and purposes. After independence, Ghana’s first President Osagyefo Dr Kwame Nkrumah of blessed memory sought to break this vicious cycle by establishing numerous state-owned industries to produce consumable products for the domestic market as an import substitution measure.
Unfortunately, the management of these enterprises became a challenge and soon turned into very huge expenses on the state.
A decision was made to divest these enterprises to the private sector. Unfortunately, in many cases, the domestic private sector was unable to leverage the financing needed to revamp these industries and bring them back into production.
The result, the former Minister of Finance Seth Terkper said, is that they are still largely dependent on the export of raw material, including gold, cocoa, timber, oil and mineral exports, and on the import of finished goods. That is still the basic structure of the Ghanaian economy.
Given this reality, Ghanaian entrepreneurs cannot do anything but look helplessly because the economy is structured in a way to benefit foreign countries, especially Ghana’s colonial masters.
It is important to note that since 2020, Ghana’s economy which is second largest in West Africa has experienced several pressures which continue to pose challenges to the attainment of the government’s economic goals.
The year 2022 particularly went down as one of the most difficult and eventful years in the economic history of Ghana, according to the country’s Minister of Finance, Ken Ofori-Atta.
The country continues to deal with the devastating impact of the COVID-19 pandemic which led to significant reduction in the country’s revenues and increased government expenditures enormously.
It also has had to contend with the double jeopardy of the Russian-Ukraine war. What has resulted in unprecedented global crises ravaging all currencies and historic living and inflation levels.
In 2021, the government took significant revenue measures to tackle its fiscal difficulties, finance the transformative agenda of government and sustain the post COVID-19 recovery.
However, what started as a political disagreement over revenue measures in Parliament, triggered a series of events that significantly undermined the credibility of the 2021 budget, consequently leading to serious economic challenges, as investor confidence hit a new low.
This manifested in credit rating downgrades which triggered the closure of Ghana’s access to the International Capital Market; tightening domestic financing conditions; and increasing cost of borrowing.
The combined effects of the developments contributed to the rapid depreciation of the cedi and compounded the high debt service levels.
The government’s inability to access the International Capital Markets meant that, for the first time in its administration, “we did not have the needed foreign currency to complement our forex earnings”, according to the Minister of Finance, Ken Ofori-Atta.
“We have had to make strenuous efforts to meet our import bill, which exceeds US$10.0 billion annually. Considering our low foreign earnings, it has been difficult to meet our import requirements including crude oil and petroleum products of about US$400m (GHc4.80 billion) a month”.
At the same time, Ministry of Finance still needs to find about US$1.0 billion annually to keep lights in homes and workplaces.
The demand for foreign exchange to support the country’s unbridled demand for imports undermines and weakens the value of the cedi.
This contributed to the depreciation of the cedi, which has lost about 53.8 percent of its value since the beginning of the year.
Compared to the average 7 percent average annual depreciation of the Cedi between 2017 and 2021, the current year’s depreciation, which is driving the high costs of goods and services for everyone, is clearly an aberration – a very expensive one.
“The increases in fuel prices (Diesel currently GHS20.5 and Petrol GHS16.8) has led to increases in prices of most goods and services. Inflation which we managed to bring down from 15.4 percent at the end of 2016 to 7.9 percent at the end of 2019 and remained in single digits till the pandemic hit in March 2020 is now 40.4 percent.
It is not only the individuals and households who are adversely affected by the depreciation of the cedi. For us at the Ministry of Finance, the depreciation of the cedi seriously affects our ability to effectively manage our debt”.
Indeed, country’s stock of debt has increased by GHc93 billion this year alone due to the depreciation of the cedi since the beginning of 2022.
Even as the State struggles to raise sufficient revenues, high inflation rates continue to eat away the already meagre wages of the average Ghanaian, according to Mr Ofori-Atta.
As we speak, the country is at the door of the International Monetary Fund (IMF) seeking for a $3 billion bailout to enhance its serves and boost its credibility in the eyes of the international investors.
Siphoning of resource wealth
Ghana which is currently categorised as a high-potential, lower-middle-income country, allows big corporations from industrialised and wealthy countries in Europe, U.S, Asia, and others to siphon its petroleum, mineral and other natural resources away through dubious deals.
Ghana which is endowed with mineral resources such as gold, diamonds and manganese, oil and gas has benefited significantly less from the resources.
Although they boosted the country’s economic growth over the years, citizens in these resource-rich communities are not benefiting enough from the resources.
Some of their elite brothers and sisters who are connected to power are swimming in the wealth of the resources while their counterparts in the resource communities are struggling to cope with the negative impacts of the resource extractions.
These debates are usually characterised by comparisons between Johannesburg of South Africa and that of Obuasi in Ghana.
They normally argue that South Africa which was dethroned by Ghana in 2019 as the largest producer of gold in Africa used its gold resource to develop Johannesburg into a world class city.
Paradoxically, while Ghana which was onetime known as Gold Coast because of the huge endowment of gold did not invest in its gold city-Obuasi in the Ashanti Region.
It is not only Obuasi which suffered this non-investment. Gold mining cities including Tarkwa, Prestea, Bogoso and Akwatia all in the Western, Western North and Eastern Region also faced the same challenge.
Also, the environment, wildlife, aquatic lives and water bodies of these cities and other mining communities in the country have been affected by the activities of giant and small mining companies.
Ghana was a giant nation
At independence, all eyes were on the first black country on earth to gain freedom from the British. For good reasons, Dr Kwame Nkrumah who led the country into independence had become the toss of the world.
He embarked on numerous road building projects, mass education of adults and children, and health services, as well as the construction of the Akosombo Dam which is still the leading generator of electricity to the Ghanaian people.
During his time, Ghana set up several factories that were producing and assembling vehicles, TV sets, glasses, production of jute bags for coca, among others. You can say that the country at time was self-depended.
According to Dr Nkrumah, his government, which represented the first black African nation to win Independence, had an important role to play in the struggle against capitalist interests on the continent.[184]
As he put it, “the independence of Ghana would be meaningless unless it was tied to the total liberation of Africa.”
It was important, then, he said, for Ghanaian’s to “seek first the political kingdom.” Economic benefits associated with independence were to be enjoyed later, proponents of Nkrumah’s position argued. But Nkrumah needed strategies to pursue his goals.[181]
On the continental level, Nkrumah sought to unite Africa so that it could defend its international economic interests and stand up against the political pressures from East and West that were a result of the Cold War.[182] His dream for Africa was a continuation of the pan-Africanist dream as expressed at the Manchester conference.[185]
The initial strategy was to encourage revolutionary political movements in Africa. The CIA believed that Nkrumah’s government provided money and training for pro-socialist guerrillas in Ghana, aided after 1964 by the Chinese Communist government.
Several hundred trainees passed through this program, administered by Nkrumah’s Bureau of African Affairs, and were sent on to countries such as Rhodesia, Angola, Mozambique, Niger and Congo.[186]
Politically, Dr Nkrumah believed that a Ghana, Guinea, and Mali union would serve as the psychological and political impetus for the formation of a United States of Africa.
When Nkrumah was criticized for paying little attention to Ghana or for wasting national resources in supporting external programmes, he reversed the argument and accused his opponents of being short-sighted.[181]
Failing
The litany of problems cited by many as the remote causes of the falling of Ghana include coups in the past; poor governance; poorly implemented structural adjustment programmes in the past; over-bearing executive; weak parliament; poor security agencies; weak media; bureaucracy in public sector; corruption; and over liberalization of the Ghanaian economy.
A lack of commitment by leaders and the people to the Ghana project – a united, stable, developed, and prosperous country where resources will be distributed equitably.
Most projects started by previous governments do not complete by the government in power. This means that taxpayer monies are being wasted.
Bottom line
It seems the aspirations of the founding fathers of the Ghanaian nation are yet to be met. And when they will be met is still unknown.
