By Kofi Anokye Owusu-Darko (Dr)
Ghana’s unemployment crisis is a structural one, stemming from an economy that inherently lacks the capacity to create sufficient employment opportunities to absorb the large number of people entering the labour force each year.
An analysis of the labour market, based on the 2017 Ghana Living Standards Survey (GLSS) and the 2023 Annual Household Income and Expenditure Survey (AHIES), indicates that between 2017 and 2023, the economy could, on average, absorb less than 45% of new labour market entrants annually.
This means that over 55% of those joining the labour market each year became unemployed, causing the number of unemployed individuals to rise from 1 million in 2017 to more than 2 million in 2023. This structural problem requires a structural solution and underscores the urgent need for a transformative job creation strategy.
Figure 1: The unemployment crisis in Ghana (source: GSS Annual Household Income & Expenditure Survey – Q3 2023)
Figure 1 illustrates the severity of Ghana’s unemployment crisis, as reported by the Ghana Statistical Service in 2023. It highlights a twin problem of high unemployment and vulnerable employment.
So beyond the 2.1million people that are unemployed, there are about 8.2million people in vulnerable employment, the working poor, are in precarious conditions without stable income, social protections, or job security.
Beyond this, there are significant inequities in labour outcomes for the youth, women and persons with disability. Youth unemployment rates go up to 29.7%, nearly double the national average of 14.7%, and women make up almost 70% of the unemployed population.
Also worrying is the fact that 27% of the working-age population is not active in the labour force, with 1.3 million young people categorised as Not in Employment, Education or Training (NEET), reflecting a rising phenomenon of young people giving up on looking for employment.
To address these challenges, the National Democratic Congress (NDC) has proposed the National Employment Trust (NET) as a transformative solution within its MAN-UP-C job creation strategy.
Effective job creation in Ghana demands more than just increasing employment opportunities; it requires establishing sustainable, decent jobs that uplift economic conditions nationwide.
Despite efforts by initiatives like the Ghana Enterprises Agency (GEA) and the National Entrepreneurship and Innovation Programme (NEIP), challenges such as inefficiencies, fund misallocations, and limited long-term impact persist.
NET represents a visionary approach to tackling unemployment by consolidating the strengths of GEA and NEIP, streamlining operations, and focusing on strategic investments. By offering essential financial and technical support, NET aims to de-risk high-potential sectors and empower small and medium-sized enterprises (SMEs) to generate sustainable and well-paying jobs.
In addition to the unemployment crisis, a June 2024 report by the Ghana Statistical Services (GSS) reveals that 24% of Ghanaians—equivalent to 7,317,555 people—are multidimensionally poor. This means they experience deprivations in at least one of the following areas: education, health, living conditions, or employment.
The report also underscores significant disparities between rural and urban areas, with 64.6% of rural populations experiencing multidimensional poverty. These stark differences highlight the urgent need for comprehensive and inclusive economic policies for job creation such the National Democratic Congress’s (NDC) MAN-UP-C job creation strategy, that is intended to address regional inequalities and provide equitable opportunities.
This article explores the structure, objectives, and strategic significance of the National Employment Trust. As Ghana stands at a crossroads, NET holds the promise of economic stability and empowerment, especially for the youth. With strategic implementation and collective effort, NET can catalyse a wave of economic activity, transforming livelihoods and securing a prosperous future for all Ghanaians.
WHAT IS THE NATIONAL EMPLOYMENT TRUST (NET)?
The National Employment Trust (NET) is envisioned as a cornerstone of the National Democratic Congress (NDC)’s ambitious MAN-UP-C strategy, aimed at transforming Ghana’s employment landscape.
Although NET is not yet operational, it is a critical part of the NDC’s forward-thinking approach to tackling unemployment and driving sustainable economic growth.
Definition and Objective: The National Employment Trust is an NDC government-backed initiative designed to support and empower small and medium-sized enterprises (SMEs), which are recognized as the backbone of Ghana’s economy. By focusing on SMEs, NET seeks to address one of the most significant barriers to economic development: the lack of access to capital and resources that can stimulate business growth and job creation.
An amount of GHS 13.96 billion has been earmarked for NET, making it the largest allocation within the MAN-UP-C strategy, which totals GHS 16.3 billion (USD 1 billion). This substantial investment highlights the government’s commitment to ensuring NET becomes a powerful catalyst for economic transformation.
Core Mission: At the heart of NET is the mission to create a vibrant ecosystem for SMEs, unlocking their potential to become engines of job creation. The initiative aims to facilitate the growth of businesses across strategic sectors such as technology, agriculture, renewable energy, pharmaceuticals, construction, and manufacturing.
By de-risking investments and offering technical support, NET will enable these enterprises to scale up operations, improve productivity, and generate quality employment opportunities for Ghanaians.
Target Audience: The primary beneficiaries of the National Employment Trust are young entrepreneurs and existing SMEs that have demonstrated high potential for growth but lack the resources to expand.
Additionally, NET will place special emphasis on sectors that align with global economic trends, such as green technology and digital innovation, to future-proof Ghana’s workforce. This inclusive approach ensures that opportunities are spread across the country, empowering businesses from both urban and rural areas to contribute to national economic development.
HOW WILL NET FUNCTION?
The National Employment Trust (NET) is designed to operate efficiently and effectively, leveraging both financial and technical resources to achieve its ambitious job creation goals. A critical aspect of NET’s structure is its establishment as a Trust, ensuring a high level of accountability and integrity. Trustees will hold fiduciary duties to act in the best interest of NET’s beneficiaries, with personal, financial, and legal liability imposed for any mismanagement.
This strong governance framework is complemented by a comprehensive monitoring and evaluation system to track performance, assess investment impact, and provide data-driven insights for continuous improvement. By embedding these measures, NET aims to maximize resource efficiency, operate transparently, and deliver meaningful, long-term benefits to the Ghanaian workforce and economy.
- Integrating Existing Structures for Efficiency:
The National Employment Trust (NET) will strategically integrate the GEA and NEIP to streamline operations and maximize efficiency. By consolidating these agencies, NET will reduce redundancy and create a cohesive support system for small and medium-sized enterprises (SMEs).
GEA’s extensive network and experience in providing financial and business development services will complement NEIP’s strengths in nurturing innovation and early-stage entrepreneurship. This unified approach will ensure efficient resource allocation, comprehensive financial and technical assistance, and a significant impact on sustainable job creation.
- Funding Mechanism:
The National Employment Trust (NET) will receive a total funding commitment of GHS 13.63 billion, sourced from development finance institutions, development banking sources, multilateral lending and grant institutions, as well as annual budgetary allocations from the Government.
This significant financial backing will support SMEs and attract private investment by reducing risks in key sectors. Managed professionally, the fund aims to make these sectors more appealing to banks and venture capitalists, creating a conducive environment for economic growth and job creation.
- Support Framework:
NET will offer tailored financial assistance, including loans, grants, and equity investments, with a dedicated USD50 million FinTech Growth Fund to foster the digital economy. Investments will target key sectors like agriculture, manufacturing, and renewable energy to maximize economic benefits.
Beyond financing, NET will provide technical resources such as mentoring, capacity-building workshops, and access to support organizations, ensuring SMEs have both the funding and expertise to grow sustainably.
- Stakeholder Collaboration:
NET will form strategic partnerships with both public and private sector stakeholders. The Trust will work closely with enterprise support organizations, industry associations, and development partners for efficient resource allocation. Even as NET remains a proposal, stakeholders can prepare by assessing how their expertise and resources align with NET’s objectives. For example:
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- Policymakers can identify regulatory adjustments that may support NET’s future operations and improve the business climate for SMEs.
- Private sector investors can explore high-potential sectors, like technology and renewable energy, to identify early opportunities for collaboration.
- Enterprise support organizations and industry associations can develop or adapt programs to provide technical training or mentorship, ensuring readiness to contribute once NET is operational.
- Community leaders and local organizations can map out local needs and potential projects that align with NET’s goals for widespread job creation.
- Sector-Specific Focus:
NET’s investment strategy will prioritize sectors with high job creation potential, including:
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- Technology: Boosting tech start-ups and digital enterprises to make Ghana a hub for innovation.
- Agri-Business: Creating jobs across the agricultural value chain, from production to marketing.
- Renewable Energy: Supporting clean energy projects that generate employment and sustainable power.
- Construction & Infrastructure: Funding projects that offer immediate jobs and long-term growth.
- Pharmaceuticals & Manufacturing: Strengthening industries critical for self-sufficiency and exports.
- Small-scale Mining: Improving safety and environmental standards while creating local jobs.
WHY NET IS CRITICAL FOR JOB CREATION
- Economic Impact: Small and medium-sized enterprises (SMEs) are the backbone of most economies, including Ghana’s. They account for a substantial portion of employment and economic output, yet they often face significant challenges in accessing financial and technical resources. By channeling GHS 11.76 billion into supporting high-potential SMEs, NET will unleash a wave of economic activity that directly translates into job opportunities. Each successful SME expansion means more jobs for young people, higher productivity, and a more vibrant private sector capable of sustaining economic growth. NET’s strategic investments will not only create jobs but also stimulate ancillary industries, boosting the overall economy.
- Long-term Benefits: Unlike temporary job creation schemes, NET focuses on building a sustainable employment ecosystem. By prioritizing sectors like technology, renewable energy, and agriculture, the Trust aims to future-proof the workforce. This forward-looking strategy ensures that jobs created today will remain relevant and well-paying in the future. Furthermore, NET’s commitment to continuous support, through mentoring and technical assistance, will help businesses not just survive but thrive. This emphasis on sustainability positions NET as a transformative force in reshaping Ghana’s labor market and fostering a culture of innovation and resilience.
- Addressing Historical Barriers: One of the reasons for persistent unemployment in Ghana is the lack of access to affordable financing and professional business support. Traditional banks and investors often shy away from SMEs due to perceived risks and limited collateral. NET addresses this by providing de-risked, targeted financial assistance and comprehensive technical support, making it easier for SMEs to secure additional funding from private sector sources. Additionally, the Trust’s integration of the Ghana Enterprises Agency (GEA) and the National Entrepreneurship and Innovation Programme (NEIP) ensures a streamlined and efficient approach, reducing bureaucratic hurdles
CONCLUSION
Embedded within the comprehensive MAN-UP-C job creation strategy, the National Employment Trust (NET) represents a forward-thinking and well-structured plan designed to create sustainable, high-quality employment opportunities for millions of Ghanaians.
By integrating the strengths of the Ghana Enterprises Agency (GEA) and the National Entrepreneurship and Innovation Programme (NEIP), NET streamlines operations and maximizes efficiency.
The National Employment Trust (NET) stands poised to drive Ghana’s economic future by unlocking the potential of SMEs and catalysing sustainable growth. With a strategic injection of GHS 11.76 billion, NET aims to de-risk high-potential sectors and attract significant private investment, ensuring robust economic returns. This initiative not only addresses the urgent need for job creation but also lays a foundation for a resilient, innovation-driven economy.
In addition to reducing unemployment, NET’s comprehensive approach has the potential to address multidimensional poverty significantly. By creating decent jobs in key sectors like agriculture, technology, and renewable energy, NET will empower individuals to improve their living conditions, access better healthcare, and invest in education. Furthermore, the focus on rural development addresses regional disparities, offering economic opportunities that uplift entire communities.
The success of the National Employment Trust (NET) will require the active engagement of all stakeholders. Policymakers, private sector investors, young entrepreneurs, and community leaders will play a crucial role in bringing this transformative plan to life.
This initiative envisions a future where youth employment rates improve, SMEs contribute significantly to innovation, and economic growth benefits communities nationwide. With a focus on sustainable job creation and economic empowerment, NET aims to foster lasting stability and shared prosperity across Ghana.
The author is a Chartered Banker and holds a Post Graduate Diploma in Financial Management (DipFM-ACCA) (Contact: [email protected])(Blog:kofianokye.blogspot.com;kofidarko2.blogspot.com)
