Youth Employment and Unemployment Trends In Ghana

Accra, Ghana, October 18, 2020//-According to 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 labor 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.

The employment status of youth is presented in figure 2.1. 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.

SITUATION ANALYSIS: DEMAND- AND SUPPLY-SIDE CHALLENGES

As noted, Ghana has faced macroeconomic challenges, particularly related to its dependence on natural resources for economic growth, which also have contributed to stagnation of its manufacturing sector.

Growth in manufacturing declined for a range of reasons, including rising interest rates, higher production and distribution costs, aging or obsolete equipment, inefficient infrastructure services, and low productivity.

So far, neither the oil nor the manufacturing sector has produced as many jobs as expected. Under this growth model, most of the new jobs created have been in low-earning, low-productivity trade services, with 25 percent of the population working in this sector (Honorati and Johansson de Silva 2016).

Ghana is currently categorized as a high-potential, lower-middle-income country.

One of the factors contributing to the current unemployment challenge in Ghana is the lack of job opportunities in the formal sector.

Private sector formal employment accounts for about 2 percent of total employment, whereas informal firms and household enterprises account for 54 percent (Honorati and Johansson de Silva 2016).

Alongside the challenges posed by the economic environment, the outcomes of interventions aimed at creating jobs in microenterprises and small and medium enterprises have been mixed.

Many interventions have provided financial and technical support for household enterprises as a job creation strategy.

However, research shows that these enterprises often tend to not grow and rarely employ additional workers; nor do they grow into large firms because of various constraints, including (1) lack of the technical and business knowledge needed to effectively manage their business and expand; (2) limited access to financing; and (3) limited access to large markets (Buba and Reyes 2019).

According to the World Bank’s 2013 Enterprise Survey, in Ghana an inadequately educated labor force ranks higher as a constraint to hiring than labor regulations.

Another major constraint identified during consultations with industry experts is the skills mismatch—that is, the skills of potential employees are mostly irrelevant to industry needs.

The government of Ghana’s medium-term development policy framework document, “An Agenda for Jobs: Creating Prosperity and Equal Opportunity for All,” also identifies the skills mismatch as a key challenge for reducing unemployment (Ghana National Development Planning Commission 2017).

The government intends to address this issue through its strategic plans for education and for technical and vocational education and training (TVET).

The country’s educational system sends about 210,000 unemployable unskilled and semiskilled young Ghanaians (including about 60 percent of graduates at various education levels and those who exit early) into the labor market each year (Ghana Ministry of Employment and Labour Relations 2014).

The quality of education in Ghana and the weak link between the education sector and the productive sectors of the economy remain major challenges.

Academic training in Ghana is generally not aligned with labor market dynamics, which constantly call for new and different skill sets.

In addition, the usage and application of technology are limited, but those tools are critical, given the changing nature of work.

Pre-employment support services are minimal, and most of the existing services are ineffective, particularly those offered by public training academic institutions.

Over the years, this situation has resulted in a large pool of unemployed youth who are ill prepared for the job market.

Ghana’s TVET sector needs major reforms as well. Service delivery in this sector is fragmented, and coordination among key stakeholders is minimal.

Challenges confronting the sector include: poor links between training institutions and industry;  a deeply fragmented landscape and lack of coordination among TVET delivery agencies; a multiplicity of standards, testing, and certification systems; low-quality instruction due to inadequate instructor training and lack of instructional support and infrastructure; an informal TVET system that has been neglected and detached from the formal sector; and poor public perceptions of technical and vocational programs, which are viewed as a track for academically weak students (Ghana Ministry of Education 2018).

The government has produced a strategic plan for the transformation of the sector (2018–22) to guide the implementation of TVET reforms.

CONSTRAINTS FACED BY YOUTH

Youth make up about 36 percent of Ghana’s population. Of these, about 54 percent live in urban areas (Ghana Statistical Service 2018).

More females (56.2 percent) live in urban areas than males (54.9 percent). To effectively address the needs of youth, the government has classified them in seven categories: (1) male and female; (2) rural and urban; (3) adolescence and adult; (4) physically challenged and able-bodied; (5) educated and uneducated; (6) skilled and unskilled; and (7) in school and out of school (Ghana Ministry of Youth and Sports 2010).

The 2015 Labour Force Report estimates that 40 percent of Ghanaian youth have no education, and only 3.8 percent have acquired a tertiary education qualification (Ghana Statistical Service 2016).

Education empowers people to live healthier lives and attain more productive livelihoods and can break the poverty cycle. The level of education attained can also influence people’s aspirations in life.

The 2015 Ghana labor force survey estimates that more males (5.4 percent) have a tertiary-level education than females (2.6 percent), and more than half (57.0 percent) of youth living in rural areas have no education compared with 26.3 percent of their urban counterparts (Ghana Statistical Service 2016).

Only 1.7 percent of youth in rural areas have a tertiary education compared with 5.6 percent of their urban counterparts. Until recently, education in public schools in Ghana had been compulsory and free through junior high school.

In September 2017, the Ghanaian government expanded this policy to the senior high school level. The country has seen gains in enrollment over the years, but transition rates from the junior secondary level to the senior secondary level and from the senior secondary level to the tertiary level still require some attention.

The transition rate from junior high to senior high school is 67 percent, and the completion rate is 46 percent.

Total enrollment for 2014/15 at the senior high school level is estimated to have been 804,974 students, whereas enrollment for the same school year at the tertiary level totaled 320,746 students, meaning that more than half of senior high school graduates did not go to a university (Ghana Ministry of Education 2016).

Another challenge involves the quality of education from the basic to the tertiary levels, with as many as two-thirds of children who complete basic education estimated to be functionally illiterate and innumerate (Ghana Ministry of Education 2013).

At the tertiary level, the major issue is the employability of students, as expressed during the stakeholder consultations.

Many graduates of vocational and technical schools and universities lack the skills desired by employers, such as analytical and critical reasoning, communications skills, information and communications technology (ICT) competencies, a strong work ethic, and entrepreneurship.

Youth who choose to venture into entrepreneurship face additional constraints. These include the current weak support systems for entrepreneurship and small-scale business development for self-employment (Ghana Ministry of Employment and Labour Relations 2014).

Stakeholder consultations confirm limitations in accessing physical resources such as land, equipment, and financial capital, especially by youth.

Other challenges encountered by youth (similar to the challenges faced by those starting businesses) include lack of technology, high transport costs, an unattractive business environment, lack of relevant experience, lack of and inaccessible skilled labor, high registration costs, high costs to obtain licenses to operate formally, and lack of networking opportunities.

The broader environment can influence how young people develop aspirations and work toward realizing these aspirations.

A study by the Youth Forward Initiative in 2018 of the aspirations of young people in Ghana and their thoughts about work reveals differences in the aspirations of young people in rural and urban settings. Poverty influences young people’s hopes.

Young people in rural areas have limited role models and experiences from which to develop aspirations compared with their urban counterparts, who are exposed to a much wider range of professions and options, including the social message that “office work” is more respectable.

Instead of considering longer-term goals, most young people in rural areas prefer work with a daily income, instead of weekly or monthly wages, to meet their short-term survival needs.

As in other parts of the world, the rapidly changing requirements of the world of work due to technology disruptions are likely to affect the job readiness of Ghanaian youth.

It is estimated that globally, the number of jobs requiring digital skills will grow by 12 percent by 2024 (Robinson et al. 2018). As more firms adopt technology, automation is likely to increase, creating temporary displacements.

The McKinsey Global Institute estimates that by 2030 half of all current work activities could be automated, and that in roughly 60 percent of jobs at least onethird of duties could be automated.

These projections will mean significant changes for workers and workplaces, and competition for low-skilled jobs may increase for those who do not have the expertise to compete for higher-skilled ones.

Employers are already focusing on new skill sets and core competencies—such as teamwork, problem solving, communication, and analytical skills—and they have made these key selection criteria for job applicants.

A critical step would be to assess the readiness of the Ghanaian youth population to take advantage of this new reality and the rise of the gig economy (Bughin et al. 2018).

Stakeholder consultations revealed that elements of pre-employment support services exist across the country in the form of internships and guidance and counseling units in schools.

However, Ghana lacks a structured policy guiding internships and work-based learning (WBL) that would result in a systematic approach to implementing preemployment support services.

Most youth lack the right work ethic and attitudes that would enable them to secure jobs and to sustain their employability.

Existing programs often do not offer basic services, such as guidance on how to write résumés and application letters and how to sit for a job interview.

The country also has few online job platforms offering job search and placement assistance. Soft skills training on values and work attitudes should be integrated into the regular curricula of educational institutions.

It should contribute toward preparing youth to transition smoothly from school to work and make available to them resources that will boost their employability and sustain them in productive jobs.

Curled from a report titled: ‘Youth Employment Programs in Ghana Options for Effective Policy Making and Implementation’

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