Economist Dr Sam Ankrah has offered a measured assessment of Ghana’s mid-year budget, arguing that while recent macroeconomic gains are encouraging, they are not enough to solve the country’s employment challenges.
According to Dr Ankrah, the public discussion surrounding the budget has focused heavily on interest rate reductions and improved economic indicators. However, he believes these achievements should not be mistaken for a direct solution to unemployment.
“Cheaper credit clears a blockage. It does not, on its own, build a factory or fill it with workers.”
He noted that businesses across Ghana have struggled over the past several years for reasons extending beyond high borrowing costs. In his view, reliable electricity, affordable energy and improved access to finance remain the real drivers of sustainable job creation.
Reliable Power More Important Than Interest Rates
Dr Ankrah explained that a tailor in Kumasi or a food processing business in Tema is unlikely to hire additional workers simply because commercial lending rates have fallen.
Instead, businesses expand when they can rely on stable electricity supplies at affordable prices.
He therefore described government investments in gas-to-power infrastructure as potentially more significant for employment than recent monetary policy adjustments.
Access to Credit Remains a Major Challenge
The economist also highlighted that the issue is not merely the cost of borrowing but whether businesses can actually obtain financing.
For years, many banks have preferred investing in government securities rather than lending to small and medium-sized enterprises due to lower risk.
He further pointed out that nearly 80 percent of Ghana’s workforce operates within the informal sector, meaning many workers and entrepreneurs remain outside the formal banking system and benefit little from lower lending rates.
Growth Must Create Jobs
While acknowledging recent economic growth, Dr Ankrah argued that the nature of that growth matters.
Expansion driven largely by gold and oil production typically generates limited employment because these sectors are highly capital-intensive.
Instead, he believes Ghana should prioritise sectors capable of absorbing large numbers of workers, including:
- Agro-processing
- Manufacturing
- Construction
- Tourism
According to him, these industries require deliberate government support and industrial policies rather than relying solely on macroeconomic stability.
Public Investment Also Matters
Dr Ankrah warned that fiscal discipline can have unintended consequences.
He observed that capital expenditure execution reportedly contracted significantly, reducing opportunities for businesses that depend on government contracts and public infrastructure projects.
Without strong investment activity, private firms may delay hiring despite improvements in inflation and interest rates.
Lessons from Vietnam and Rwanda
Drawing international comparisons, Dr Ankrah referenced Vietnam and Rwanda as examples of countries that combined macroeconomic stability with clear industrial strategies.
He argued that these nations succeeded by developing export industries, strengthening production capacity and integrating into global value chains rather than depending solely on lower interest rates.
The Real Test Ahead
Dr Ankrah concluded that the success of Ghana’s economic programme will ultimately depend on whether initiatives such as the proposed 24-Hour Economy and ongoing energy investments translate into meaningful employment opportunities.
He maintained that macroeconomic stability provides an important foundation, but lasting prosperity will depend on building productive industries capable of creating jobs at scale.
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