Understanding Ghana’s economy: Key to sustainable growth (2)

One of the key factors why Ghana's economy is struggling is the high level of corruption in the country.

Corruption leads to the allocation of unnecessary funds to ghost projects, draining resources that could have been used for essential development.

For example, the alleged National Service Scheme scandal involved approximately 81,885 ghost names, with funds being allocated to them.

These funds could have been used to develop key sectors such as education, health care or infrastructure.

Another well-known case is the National Cathedral project, which has cost over $58 million, all from taxpayers' money.

According to the Ghana Integrity Initiative, Ghana loses an estimated $3 billion annually to corruption, which is a significant portion of the national budget.

This money, if properly allocated, could improve public services, reduce debt dependency, and stabilise the economy.

The misallocation of funds contributes to poor infrastructure, lack of proper health care, and inadequate investment in industrial growth, which are crucial for economic development.

Beyond the direct financial loss, corruption also affects investor confidence.

When businesses perceive high levels of corruption, they become hesitant to invest due to uncertainties in contract enforcement, bribery demands, and bureaucratic inefficiencies.

This results in lower foreign direct investment (FDI), stifling economic expansion and job creation.

Leveraging human resources

One of the key drivers of growth in large economies is the ability to tap into human resources. Countries such as the United States, the United Kingdom (UK), and some other countries in Europe maintain open-border immigration policies to attract skilled workers from around the world.

By bringing in a diverse and talented workforce, these nations increase their productive capacity, which is essential for competing in the global market.

This influx of human capital helps drive innovation, boosts productivity, and stimulates economic growth.

In contrast, Ghana’s policies on immigration and human capital development have not been as open or focused on attracting global talent.

While the country boasts a young and growing population, there is a significant lack of investment in education, skills development, and industrial training.

This shortfall limits the workforce's ability to drive the economy forward.

Moreover, many of our educated, talented and hardworking youth are seeking opportunities abroad in pursuit of better life prospects and education.

This brain drain results in a substantial loss of our most valued resources, contributing to the country's economic stagnation.

Without a skilled and diverse labour force, Ghana cannot compete with larger economies that are effectively leveraging human resources to increase production and trade.

Economic Independence

Despite being the first Sub-Saharan African country to gain independence, Ghana still struggles with economic challenges that hinder its growth.

Efforts towards achieving economic independence have been elusive, highlighting the need for focused and effective policies that can foster sustainable development and reduce dependence on external assistance.

Economic performance

Ghana's economy has shown remarkable growth in recent quarters. For example, in the third quarter of 2024, Ghana recorded an impressive average real GDP growth rate of 6.3 per cent, driven by significant expansions in the industry and non-oil sectors.

This growth reflects the potential of the Ghanaian economy if structural challenges are addressed and opportunities are seized.

Revenue from natural resources

Ghana is not fully benefiting from its vast natural resources.

There is a need for urgent reforms in fiscal policies governing the extractive sector to maximise revenue and reduce dependence on external financing.

By ensuring transparency and accountability in the management of natural resources, Ghana can enhance its revenue base and invest in critical sectors to drive economic growth.

Need for economic transformation

Countries that lead the global economy have created strong infrastructures for education, innovation and industry.

They are able to produce goods and services that not only meet domestic demand but are also competitive in global markets.

These economies have built a foundation on knowledge, technology and diversification.

Ghana, on the other hand, needs to prioritise these areas and focus on creating a more robust and diversified economy.

Until then, the country will continue to struggle to meet global economic standards.

The way forward
In the President’s recent State of the Nation Address, he pledged to reset the economy and set it on a path of growth and prosperity.

This means implementing measures such as those mentioned above and ensuring that our systems and sectors are efficient enough to meet global standards.

By doing so, Ghana can generate more revenue and achieve sustainable growth.

Another pledge His Excellency made was to fight corruption.

As an initial step towards fulfilling that promise, the ORAL (Operation Recover All Loot) team was established.

The team is actively investigating corruption cases, questioning those involved, and working to bring justice to our looted nation.

With such a committee in place, Ghana has the potential to address the corruption problem at its root.

Conclusion

Fellow citizens, in these crucial times I feel like we have been given an opportunity to start again as a nation, with a visionary and listening President.

Under his governance and guidance, and through our collective effort as Ghanaians, we still have a chance to become the greatest nation in Africa, if not the world.

The writer is with the Istanbul Commerce University, Istanbul, Turkey