Ghana: Will new government plan break curse of failed employment programmes?

Ghana’s 2021 Population and Housing Census puts the youth unemployment rate at an all-time high of 13.4%, almost triple the 5.3% recorded in 2010. This translates to 1.55 million out of the 11.54 million economically active population.

Government efforts to tackle the consistent and gradual rise in youth unemployment in Ghana span more than two decades. Successive governments have invested more than a billion dollars in about 10 different youth job creation programmes, but the outcome has been largely unimpressive.

“These policies are put together, but the funding sources are not sustainable so along the line, the government starts running out of funds. Many of these programmes have been difficult to track thereby repeating the mistakes of the past ones,” Senyo Adjaben, a labour analyst, tells The Africa Report.

No lessons learnt

For most of the programmes, such as the Youth Employment Agency, Opportunities Industrialisation Centre Ghana, Youth in Agriculture Programme, Rural Enterprises Programme, and Nation Builders Corps, a World Bank report found that data to provide guidance on how to improve them was either limited or unavailable.

Most of these programmes are more like a quick fix reaction to a long-term problem.

The report identified limited and irregular government funding, weak monitoring and evaluation systems and no exit strategies as weaknesses of the programmes as the reasons that make them barely successful.

A different breed

Through the ‘YouStart’ programme, the government plans to disburse GHS1bn ($140,000) to young people annually for investment in entrepreneurial ventures, with a target of creating one million new jobs in the next three years.

Under the programme, young people will be able to access capital, training, technical skills and mentorship to enable them to operate and expand their businesses, as well as employ their counterparts.

However, the financial burden of running employment programmes, such as those that Ghana set up in the past, is enormous. This explains why the IMF – as part of conditions for bailing out Ghana’s economy in 2015 – instructed a freeze on new hires by the State.

No quick fixes

“Most of these programmes are more like a quick fix reaction to a long-term problem. [The] government tends to use short to medium term instruments to try to solve long-term problems and over time, it seems they don’t work. That is why we solve the problem today, it comes back tomorrow because we are not looking for sustainable solutions,” says Dr. Priscilla Twumasi Baffour, a senior lecturer at the Economics Department of the University of Ghana.

For Baffour, the government’s ‘YouStart’ initiative risks failure if emphasis is placed on service-oriented ventures instead of the manufacturing industry.

The problem with entrepreneurial interventions by government […] has been […] the recouping or recovery of the entrepreneurial loans.

“With the trajectory of development, it is the manufacturing and industrialisation areas that have the capacity to create meaningful jobs. But that sector is static if not shrinking; although it has the ability to absorb a lot of people with low to moderate skills, […] we are consistently struggling to create jobs,” she tells The Africa Report.

Private-Public Partnership

Private sector involvement in previous employment programmes has been limited, but the ‘YouStart’ initiative intends to put emphasis on private individuals privately managing their businesses.

“[This] historic intervention is a game-changer in social mobility, decent jobs and having dignity… This will go directly to expand the private sector to create more jobs for Ghanaians,” Ghana’s finance minister, Ken Ofori –Atta said in parliament while presenting the 2022 budget.

Following a pilot project that ended in March, the minister said the government is satisfied with the outcome and will roll out the programme next month.

Even so, Adjaben remains sceptical about the success of the initiative, citing – among other things – the imminent challenge of recovering loans granted to the beneficiary entrepreneurs.

“The problem with entrepreneurial interventions by [the] government so far has been mainly the recouping or recovery of the entrepreneurial loans. I don’t think this ‘You Start’ programme will get far. […] informed by the historical trends, I don’t think the programne will end up befitting the country so much…”

Besides the fact that youth unemployment is a major tool for political campaigns in Ghana, the reality of the situation presenting a security threat to the country has triggered a lot of public interest in the government’s planned initiative. What is certain is that the outcome of the programme will greatly influence the legacy of the Akufo-Addo government.