Full text: AfDB report on ‘Driving Ghana’s Transformation’: The reform of the global financial architecture
A report released by the African Development Bank (AfDB) has said that since the 1990s, Ghana has experienced sustainable economic growth, but this growth has been associated with weak structural transformation and recently has become unstable.
Ghana moved from low-income to lower middle-income country status in 2010, thanks to oil production and sound and stable policies. The post-COVID-19 economic recovery was weak, with real GDP growth moderating to 3.8 percent in 2022, from 5.1 percent in 2021, and estimated at 2.9 percent in 2023, primarily due to macroeconomic instability, tightening global financial conditions, and the spillover effects of multiple shocks. These shocks led to a sharp depreciation of the Cedi and a debt crisis in December 2022.
Three factors explain the low level of structural transformation in Ghana’s economy. First, jobs in Ghana are concentrated and moving to the least productive sectors (personal services, agriculture, wholesale and retail, and manufacturing). Second, Ghana underexploits the factors favorable to structural transformation: the quality of institutions is deteriorating, the low diversification of exports limits the benefits of trade openness, the country lacks infrastructure, human capital is moderately developed, and urbanization has failed to bring about the expected structural transformation. Third, the country faces bottlenecks linked to the predominance of the informal sector, the high vulnerability to climate change, the limited access and high cost of credit, and the high share of young Not in Education, Employment, or Training (NEET).
Read the full report here
