Why many don’t have jobs in Ghana

THE economic welfare of any country depends on its rate of economic growth. There are several determinants for the economic development of a country. Some of these are industrialization, agriculture, population and employment. 

One of the major indicators for a country’s economic growth rate is its employment rate. Whenever there is a high degree of employment, the productivity is likely to improve thereby, increasing the standard of living (provided employees are efficient and competent). Therefore, a high unemployment rate in a country can have serious implications on the economy.

Unemployment refers to individuals who are employable and seeking a job but are unable to find a job. Furthermore, it is those people in the workforce or pool of people who are available for work but do not have an appropriate job. Unemployment is one of the indicators of a country’s economic status. A country’s unemployment rate is a percentage and it is calculated by dividing the number of unemployed people by the total number of the labour force and multiplying by 100.

High unemployment rate in a country leads to social and economic problems in communities and in the country at large. Unemployment is the lack of utilization of resources which eats up the production of the economy. Unemployment reduces the long term growth potential of the economy.

One main type of unemployment is frictional unemployment, which basically occurs from the inevitable time delays in finding employment. For example, a university graduate newly entering the work force would have to spend some time searching, applying, attending interviews among others. The second type of unemployment is structural unemployment, which occurs due to a mismatch of skills in the labour market. The third type is demand deficient unemployment which happens when there is a reduction in demand. Finally, there is voluntary unemployment.

The global unemployment rate in 2019 was 4.94%. According to the International Labour Organisation (ILO), there are more than 188 million unemployed youth and 145 million young workers living in poverty. Globally, the highest and lowest unemployment rates vary dramatically, even amongst the world’s largest economies.

According to the United Nations Statistical Yearbook 2019, the world’s highest unemployment rates at the end of 2019 were in Sub-Saharan Africa and Palestine. Lesotho had the highest rate with 28.2%, followed by Eswatini: 26.5%, Palestine: 26.4% and Mozambique: 24.8%. On the other hand, Qatar currently has the lowest unemployment rate of 0.1%, followed by Cambodia with 0.3%, Niger:  0.4%, Belarus: 0.5% and Laos: 0.7%. According to the ILO, the global unemployment rate remained relatively stable during the 2010s. But it is expected to rise by 2.5 million in 2020. Thus, from 188 million to 190.5 million people.

Unemployment rates vary relatively in the world’s largest economies.  For instance, the unemployment rate in the United States is 4.1%, United Kingdom: 3.9%, China: 4.8%, Japan: 2.4%, Canada: 5.9%, France: 8.6%, Italy: 10.4% and Germany: 3.6%.

Having a low unemployment rate does not mean a country’s economy is strong. For instance, Myanmar had only 0.8% unemployment in 2019, but its GDP per capita was $1,326, according to the World Bank. Niger on the other hand had 0.4% unemployment in 2019, but has a GDP per capita of $414, making it one of the lowest.

Even though unemployment affects advanced countries, its impact on developing countries, especially those in Sub-Saharan Africa is more severe. The history of insecurity in Africa is associated with high youth unemployment including other situations of instability on the continent. Compared to other parts of the world, Africa remains a relatively young continent endowed with more natural resources with less experience of industrialization. Many African countries have more of their youth working in the agricultural sectors instead of the formal sectors. This results in the low unemployment rate with low GDP per capita income. The unemployment rate in the African region is about 6.11%.

Africa’s unemployment statistics exclude those who are under-employed. Many young people in Africa find work but not in places that give good salaries, skills development or job security. Under-employment is also a serious situation because it masks the situation in countries which record low unemployment rates.

According to the World Bank, Africa has the largest population of young people in the world and the youth accounts for more than 60% of Africa’s unemployed population. Hence, young women feel the sting of unemployment sharply than men.

In 2019, the unemployment rate in Ghana was approximately 6.78% of the total labour force. Ghana’s unemployment rate is above the global unemployment rate but is on an average as compared to the African region. Due to the nature of Ghana’s economy and its population of about 31 million people, Ghana’s GDP per capita amounts to $2,223.

The global youth unemployment rate is estimated at 13.1% according to the ILO’s Global Employment Trends for Youth 2015. Ghana on the other hand, is a youthful country with majority of its labour force working in the agricultural and services sectors. By Ghana’s definition of youth (15-35 years), only 59.6% are employed leaving 40.4% unemployed (Labour Force Report, 2015). This is a complete deviation from the global unemployment rate.

There are various causes of unemployment in countries like Ghana. The main cause is lack of relevant skills. The educational system in Ghana is mainly focused on reducing the illiteracy rate. It focuses more on theory rather than imparting the relevant practical and professional skills needed in the job market.

About 60,000 university graduates are produced annually in Ghana, but only a few of them are employed after graduation. Aside from that, the “white collar job” mentality is one of the causes of unemployment in Ghana. Graduates believe that, seeking jobs in well established companies in the formal sector is key to being successful. This makes the competition for the few vacancies in companies very fierce. This causes demand deficient unemployment since the number of graduates seeking jobs are more than the available jobs.

In addition, there is lack of vocational support and training facilities in the country. Vocational institutes are very helpful because they make the youth job creators instead of job seekers. Vocational institutes can easily produce professions like caterers, mechanics, electricians, plumbers, masons and potters. Providing such skills will create more entrepreneurs and reduce the fierce competition in the formal sector.

Corruption is another cause of unemployment in Ghana. Some government officials embezzle funds which are supposed to be allocated in developmental projects which will bring employment to communities. The funds meant for developmental purposes in various economic sectors end up in the pockets of politicians. This contributes to the high unemployment rate in the country.

Invention of technology has put a heavy toll on unemployment. Many jobs that were handled by humans are now done by machines and technology these days. New advancement has replaced both skilled and unskilled workers in many factories. This has resulted in more unemployed people in our society. Throughout history, job loss due to technology and automation has always threatened the workforce.

However, a study by the Center for Business and Economic Research at Ball State University says that, 85% of job losses in the United States of America during the 2000s and 2010s were due to advances in technology and automation. Bank tellers, Cashiers, toll collectors, fuel station attendants, railway ticket sellers, factory workers and telemarketers are examples of professions who have lost their jobs to technology and robotics. According to the ILO, high estimates show that, globally approximately 400 million jobs will be displaced globally.

Also, rising costs and bankruptcy have made it difficult for companies to pay employees. This situation compels them to reduce the number of employed staff so that they can afford salaries. This is a major factor that has increased the unemployment rate here. The instability in power supply, the unpredictability of macroeconomic indicators such as the exchange rate and other factors make it difficult for businesses to run smoothly.

High unemployment rates, especially amongst the youth, have devastating consequences for countries such as Ghana. High unemployment threatens the security and stability of the nation and has the potential to increase social vices.

Unemployment means, no income. This means people have low standards of living. This causes a large number of displaced persons and the increase of slums in our communities which is unhygienic and unsafe.

Unemployment in the country makes many skilled people to migrate out of the country in search for jobs. Citizens with skills provide their services in other countries other than their own, which cripples the home country’s economy. Some of these people include engineers, teachers and doctors.

Unemployment in Ghana can be classified as a crisis which needs to be addressed urgently.

The educational system in Ghana needs to be reviewed. Educational institutions especially, universities should not only teach students what is in the curriculum. Schools also need to teach students the basic skills they will need after graduation.

More attention must be put in vocational training. Vocational training will give the youth entrepreneurial skills that are not taught in schools. This will reduce joblessness, making them self-employed. This will reduce the unemployment rate in the country.

The government should try to invest more or create an enabling environment in the informal and manufacturing sectors. This will not only create income, but it will also boost investment, productivity and growth. This will result in the creation of jobs.

Finally, the government should curb corruption and invest money in relevant projects and sectors that will be beneficial to the nation.

Unemployment is a serious socio-economic burden on many countries’ and their economies but it is often overlooked. A stronger system of accessing unemployment should be put in place in order to address causes and how to address it better. Reducing the rate of unemployment in a country is a step closer to strengthening its economy.