…Navigating economic crisis and climate change through education and entrepreneurship
Ghana, a developing nation, is grappling with global crises, including the economic fallout from the Russia-Ukraine war, the COVID-19 pandemic, and the looming threat of climate change. These crises have amplified existing economic challenges and threaten to reverse years of developmental progress. The Ghanaian economy, which relies heavily on the export of cocoa, gold and oil, has been significantly affected. In 2022, Ghana was the world’s second-largest cocoa producer, contributing about 20 percent of the global cocoa supply. It is also the largest gold producer in Africa and has substantial oil and gas reserves. However, these crucial sectors are now threatened by economic instability and climate change.
Climate change presents a significant risk to Ghana, making the country susceptible to droughts, coastal erosion, floods and landslides. Current developmental trends and demographic shifts in Ghana have increased the vulnerability of its population to these disasters. Factors – such as rising rural poverty, rapid urbanisation, growth of informal settlements, poor urban governance, and deteriorating ecosystem and land conditions – contribute to this vulnerability. Given that a large portion of the population relies on agriculture, the impacts of localised disasters could have increasingly severe cumulative effects on rural livelihoods over time due to climate change.
A report by the African Development Bank Group warns that by 2050, climate risks could cause damage worth US$3.9billion in Ghana’s transport sector. This potential damage is thrice the investment of US$1.3billion made in the sector in 2019. The report also estimates that increased drought threatens the future energy availability of about a quarter of a million people in rural Ghana, owing to a reliance on wood fuel for household use. Climate risks also threaten major components of electricity generation and transmission due to droughts and flooding.
The Minerals Income Investment Fund (MIIF) reported a significant growth of 87.4 percent in its Assets under Management (AUM) in 2022, reaching GH¢3.2billion from GH¢1.7billion in the previous year. The fund has set a target to reach GH¢5billion by the end of 2023, with planned investments in lithium and salt. In 2022, MIIF made strategic investments, including a US$20million stake in Asante Gold Corporation and a GH¢25million deal in a Ghana/Africa SME-focused fund. It also announced plans to invest US$60million in Atlantic Lithium and Electrochem Limited. Despite challenging market conditions, MIIF outperformed global benchmarks with an annualised end-year return of 6.13 percent in 2022.
As Ghana navigates this rising storm of global crises, the role of institutions like MIIF becomes even more crucial. Their work in managing and investing in the country’s mineral income is not just about generating returns, but also about ensuring the sustainable development of Ghana’s economy. Amid the storm, MIIF stands as a beacon of hope, demonstrating that with strategic investments and a commitment to sustainable development, Ghana can weather the storm and emerge stronger.
The climate change conundrum
The World Bank’s Country Environmental Analysis warns that environmental unsustainability could hinder Ghana’s economic growth, particularly given the country’s high population growth. The Country Climate and Development Report (CCDR) for Ghana predicts that without urgent climate action, at least one million more people could fall into poverty due to climate shocks, and income for poor households could decrease by up to 40 percent by 2050.
Climate change also poses physical threats to the country. On average, flooding affects around 45,000 Ghanaians annually, and half of Ghana’s coastline is at risk of erosion and flooding due to sea-level rise. Higher temperatures and heat stress could impact crop and labour productivity, erratic rainfall patterns could damage buildings and infrastructure, and issues – such as land degradation, water insecurity, and local air pollution – could further hamper human capital and productivity.
However, the report also highlights the potential benefits of climate action. Adopting a climate resilient and low-carbon pathway could yield more than US$26billion in economic benefits by 2040. The cost of such action is estimated at around US$2billion per year (in present term value) until 2050, equivalent to 2 to 3 percent of cumulative GDP over the same period. These statistics underscore the urgency of addressing climate change in Ghana and the potential benefits of decisive action.
The economic crisis: a double-edged sword
The economic crisis, while a significant challenge, also presents an opportunity for transformation. The Ghana Country Economic Memorandum by the World Bank underscores the potential for economic transformation through the movement of workers and resources from lower to higher productivity activities. According to the World Bank, Ghana’s GDP was approximately US$67billion in 2022. The economy experienced a growth rate of 4.6 percent in 2022, rebounding from a contraction in 2020 due to the COVID-19 pandemic. The service sector is the largest contributor to the country’s GDP, followed by industry and agriculture.
Education: the catalyst for change
Addressing the multi-faceted challenges of our time requires a comprehensive education system that incorporates both formal and informal learning. This includes promoting STEM education, environmental studies, and integrating sustainable development principles into the curriculum. Entrepreneurship education, in particular, plays a crucial role in fostering the skills needed to innovate and adapt in the face of these challenges.
According to the World Bank, entrepreneurship education can increase the likelihood of start-up success by 20 percent. Furthermore, a study conducted in Ghana, Kenya and Mozambique revealed that entrepreneurship education and training programmes have a significant impact on the entrepreneurial mindset and skills of individuals, leading to more sustainable businesses and job creation.
In the context of the Sustainable Development Goals (SDGs) and the Millennium Development Goals (MDGs), entrepreneurship education contributes to achieving targets related to economic growth, employment and innovation. It aligns with SDG 4, which emphasises inclusive and equitable quality education and promotes life-long learning opportunities for all, and SDG 8, which encourages sustained, inclusive and sustainable economic growth, full and productive employment, and decent work for all.
Therefore, the integration of entrepreneurship education into our learning systems is not just a necessity, but a data-backed strategy for sustainable development and economic resilience.
A call to action: the way forward for Ghana
The road ahead is challenging, but not insurmountable. By investing in education and entrepreneurship, Ghana can navigate the economic crises and mitigate the impacts of climate change. But this is not just Ghana’s fight. It’s a global fight. As a global community, we must rally behind developing nations like Ghana, providing the support they need to overcome these challenges. Ghana’s future looks promising, with the World Bank projecting a growth rate of 4.2 percent for 2023. The growth is expected to be driven by the recovery of the services sector, increased oil production, and strong performance in the agriculture sector.
The stakes are high. If these challenges are not addressed, the consequences could be dire. But if we act now, we can change the course of the future. So, let’s stand together for Ghana, for our planet, and for our future. As per Focus Economics, Ghana’s inflation rate was 8.5 percent in 2022. The Bank of Ghana aims to maintain inflation within a target range of 6-10 percent. The World Bank data indicates that Ghana’s unemployment rate was around 4.5 percent in 2022. However, underemployment remains a significant issue, particularly among the youth. Ghana’s public debt stood at approximately 76.1 percent of GDP in 2022, according to the World Bank. The high debt levels are a result of increased public spending during the COVID-19 pandemic and the cost of servicing the debt. Ghana attracted about US$3billion in FDI in 2022, according to the World Bank. The country’s stable political environment, abundant natural resources, and strategic location make it an attractive destination for foreign investors.
Conclusion: The dawn after the storm
As we stand on the precipice of a new era, Ghana’s story serves as a stark reminder of the interconnectedness of our global challenges and the collective responsibility we bear in addressing them. The economic crisis and climate change are not isolated phenomena but intertwined threads in the tapestry of our shared future. They are the storm that tests our resilience, the crucible that forges our resolve.
In the face of these challenges, Ghana is charting a path of resilience and transformation, navigating the storm through strategic investments, comprehensive education, and entrepreneurial innovation. The nation’s journey is a testament to the power of education and entrepreneurship as catalysts for change, as engines of economic recovery and sustainable development.
Yet, this is not just Ghana’s fight. It is a global call to action, a rallying cry for unity and cooperation. As renowned environmentalist Rachel Carson once said: “In nature, nothing exists alone”. Our fates are intertwined, our destinies interlinked. The storm that engulfs Ghana today could be at our doorstep tomorrow.
Therefore, let us heed Ghana’s call to action. Let us stand together in the face of the storm, united by a shared commitment to education, entrepreneurship and sustainable development. Let us remember that every crisis presents an opportunity for transformation, every challenge a chance for innovation.
In the words of Kofi Annan, the former UN Secretary-General and a proud son of Ghana: “We may have different religions, different languages, different colored skin, but we all belong to one human race. We all share the same basic values”. It is these shared values that will guide us through the storm and illuminate our path toward a sustainable and inclusive future.
So, let’s stand together for Ghana, for our planet, and for our future. Because together, we can weather any storm. Together, we can usher in the dawn after the storm.
