Productivity Ecosystems for Decent Work Programme Ghana

Background

Ghana is one of the fastest growing economies in Sub-Saharan Africa and West Africa’s second largest economy, with a GDP of US$ 77.6 billion and a GDP per capita of US$ 2,445 in 2021. Political stability along with a range of reforms in private sector development and macroeconomic management has supported the country’s economic growth. Extractive industries, dominated by the production of crude petroleum, gold and cocoa, drive the economic growth of Ghana. Although manufacturing has grown in the last year, both the share of employment in the sector and the share of GDP have barely varied over the past decade.

The volatility in prices of its main export products (petroleum, gold, and cocoa) is also reflected in the strong fluctuations in its average GDP growth rate, going from a peak value of 14% in 2011 to a low of 2.12% in 2015. The export of primarily unprocessed commodities does not allow to boost manufacturing activities and generate added value activities. The heavy reliance on a limited number of raw materials exacerbates the impact of external shocks on the Ghanaian economy.

Micro, Small and Medium Enterprises (MSMEs) employ roughly 85 % of the population in Ghana. Most of these enterprises operate in the informal sector, which deprives them from accessing external markets and credits, hampering their growth and their capacity to innovate. Informal employment is the norm.

Considering all these aspects, the economic perspectives for Ghana are challenging. The main problem that needs to be addressed is the low productivity growth, which is linked to a stalled structural transformation. Given the heavy dependence on raw commodities, economic diversification and use of locally available inputs needs to be encouraged. This can be achieved by strengthening the manufacturing and agro-processing sector to absorb low-skilled workers, while encouraging national and regional vertical integration of value chains. Government policy also needs to be reformed to formalize enterprises and employment in parallel so that newly created jobs provide better protection and incomes for workers.

© ILO

Approach

To address constraints to productivity growth and decent job creation, the ILO has launched the Productivity Ecosystems for Decent Work Programme, built on the recognition that productivity growth is determined by a myriad of interfacing dynamics. It uses an ecosystems approach to improve productivity and working conditions. This means addressing productivity in an integrated way – across enterprise, sector and national-level (see “Conceptual Framework” below) – rather than intervening at just a single level.

The Programme aims to address the root causes of why low productivity and high informality exist – and not just to treat the symptoms. Put another way, it means looking at the issues that create the problem in the first place. Low firm productivity, for example, is not just caused by a lack of knowledge and know-how in individual firms, much is often related to structural factors such as policies, access to capital, skilled labour, support and information.

An ecosystem approach enhances productivity drivers at the enterprise, sector and policy-level.

Key implementation partners include:

• Ministry of Employment and Labour Relations (MELR)
• Ghana Trade Union Congress (GTUC)
• Ghana Employers’ Association (GEA)
• Ministry of Trade and Industry (MoTI)
• Ghana Statistical Service (GSS)
• Industry partners in the garment and textile and agro-processing/shea sectors

Launch of ILO Productivity Ecosystems For Decent Work Programme in Ghana