A new study by a team of Ghanaian economists in collaboration with the Brookings Institution has identified agro-processing and tourism as two of the sectors that could be relied on to potentially address Ghana’s worrying unemployment numbers and enhance competitiveness and productivity of small and medium-sized firms.
The team comprised Professor Ernest Aryeetey of Africa Research Universities Alliance (ARUA); Dr Priscilla Twumasi Baffour and Dr Ebo Turkson, both of the Department of Economics, University of Ghana.
The study, titled: “Industries Without Smokestacks (IWOSS) in Africa- Ghana Country Case Study”, was disseminated by Institute of Statistical, Social and Economic Research (ISSER) - University of Ghana.
The study demonstrates that both agro-processing and tourism sectors have several characteristics that make them unique to turn the situation around for the country.
Industries without smokestacks’ (IWOSS) are emerging sectors that share similar characteristics as manufacturing and are beginning to play a role similar to manufacturing in some developing countries.
IWOSS sectors include horticulture and high-value agri-businesses, tourism, ICT-based services, business services, transport and logistics.
Speaking at a dissemination workshop in Accra on Wednesday, January 20, 2021, a Senior Lecturer at the Department of Economics of the University of Ghana, Dr Priscilla Twumasi Baffour, explained that IWOSS sectors offer an alternative development strategy for the country.
She noted that although technology used by agro-processing and tourism in the country are mostly labour intensive, some complementary digitalisation would be required to enhance their relevance to the changing nature of work globally.
“Attention is however required to address existing skill gap, especially in terms of systems, technical and problem solving skills,” Dr Priscilla Baffour noted, adding that “Agro-processing and tourism sectors are typically labour intensive, requiring secondary education and this level of education is characteristic of the unemployment pool in the country.”
She explained that although non-IWOSS sectors such as traditional manufacturing have had high growth and export potential, the increasing contribution of the IWOSS sector to employment remains a unique characteristic to addressing the country’s jobless growth situation.
For Dr Priscilla Baffour, the issue of jobless growth and the poor performance of manufacturing had become a major concern in the country and many parts of Africa, hence the need for the country to redirect attention towards identifying and supporting sectors with more significant employment potentials, in the quest to provide decent employment for a rapidly growing population, particularly the youth.
“Indeed, the challenge of jobless growth in Ghana has brought to the fore the need to diversify the economy away from mineral dependence through industrial transformation, mindful of the new technological developments,” she pointed out.
Explaining why agro-processing and tourism have the potential to solve the country’s unemployment problems, Dr Baffour said “there is an improved regulatory environment for both sectors, and this is supported by various public policies to improve related infrastructure and unearth the potential in the two sectors.”
Why agro-processing and tourism?
For her, both sectors offer critical employment avenues for the youth with at least secondary education, saying “…this pool can be found among the relatively large unemployed individuals.”
Dr Baffour noted that agro-processing and tourism have a huge export capacity, and this is critical in enhancing competition; noting that technology used in both sectors are labour intensive, and this has prospect in addressing the country’s unemployment challenge.
She, however, identified the lack of adequately skilled labour, lack of access to credit facilities, inadequate infrastructure, cost of electricity, limited capacity to export and restrictive or cumbersome regulatory environment, as some of the major challenges agro-processing and tourism sectors face in the country.
She has therefore called on educational institutions, particularly Technical and Vocational training institutes not to focus only on literal education but to improve on technical skills, system skills and technology.
Chairman for the occasion, Professor Peter Quartey, said the study was important because it addressed the problem of youth unemployment in the country.
For him, industrialisation was key to resolving the unemployment situation in the country, lamenting the many vibrant industries in the country which had been converted into warehouses and places for church activities.
Giving the background to the research, the Secretary-General of the African Research Universities Alliance (ARUA), Professor Ernest Aryeetey, said the research was driven by the need to drive employment without following the path pursued by other industrialised nations.
He noted that there was the need to go for industrial advancement that was also sensitive to the need to protect the environment.
“Could we find African activities that behaved like manufacturing which would provide jobs and decent living? We therefore set out to find out the activities that will do the trick,” he quizzed.