Employment Effects of Different Development Policy Instruments: The Case of Ghana

r4d Working Paper 2015/1 by Agyapomaa Gyeke-Dako, Abena D. Oduro, Festus Ebo Turkson, Priscilla Twumasi Baffour

ABSTRACT: Ghana, located in western Africa along the coastline of the Gulf of Guinea with an approximate population of 25 million and land size of approximately 239,000 square kilometres has undergone economic reforms since 1983 against the background of over a decade of economic stagnation and decline in the mid-1970s to 1983. Since 1993 when the country was ushered into a democratic rule, Ghana has maintained a relatively stable political climate, under which good governance, the rule of law and respect to human rights have been paramount.Together with the stable political environment, the abundance of rich natural resources under economic reforms have contributed to attracting foreign investment and strong economic growth. In the last four years since Ghana commenced production of oil, income per capita has increased to US$1600 placing it among the ranks of low middle income countries, a feat which was expected to be achieved by end of 2015. In addition Ghana’s Human Development indicators such as access to education and health have also improved markedly leading to its classification by the United Nations as one of the few "medium human development" countries in sub-Saharan Africa, with a ranking of 135 in the world in the latest Human Development Index Report. This country report presents an overview of developments in the Ghanaian economy over the last two decades with the intention to provide background information for further studies on technological upgrading and foreign direct investment on one hand and connecting local firms to the global economy on the other and consequently the link between each of these issues to employment. Specifically, the report discusses among other issues: macroeconomic trends; sectoral performance; firm landscape; infrastructural development and overview of microfinance. In addition, we examine the educational system and its relation to employment; social protection; national development policy; technological upgrading and productivity; labour market restructuring and the connection between local enterprises to the global market.