Who should lead job creation? …………..the State or the private sector

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Apart from ensuring citizens live in peace, happiness and prosperity, the absence of jobs for the people, popularly referred to as youth unemployment, is recognized globally as a national security threat and latent catastrophe.

It’s the preoccupation of every nation’s leader to contain youth unemployment to its barest minimum, to ensure a healthy balance on the labour force to deepen national peace and security.

However, our development partners, specifically, the Bretton Wood institutions from time to time since Ghana’s economic recovery programme and structural adjustment days in the 80’s and 90 have continued to prescribe conditionalities for our economy.

These include cutting down on our nation’s public sector wage bill and also ensure full cost recovery in the provision of social services.

The recent renewal of this constitutionality was contained in the erstwhile government’s emergency bailout request to the IMF.  

One may not disagree entirely in supporting some of these austere measures or strict functionalities by these necessary friends, cognizance of the fact that about 75% taxes generated locally are expended on government’s payroll as salaries, on yearly basis.

This is hitting hard on our fortunes as a country because the colossal percentage from the taxes expended on the public wage bill is not able to drive the required productivity from the sector needed sufficiently to transform the Ghanaian economy.

Asking the government to create more jobs will increase our already bloated wage bill and stress the treasury which also lacks the capacity to sufficiently finance the growth trajectory needed for sustainable economic turnaround for Ghana.

The low productivity in the public sector is not commensurate with the tax money expended on wage bills.Therefore, why should the government lead the creation of  job? In the ordinary parlance, this may sound offensive to the ears of a young unemployed graduate or a desperate job seeker.

But the reality is that whenever the government creates a job the likelihood of its sustainability over a longtime is hanged, aside the fact that most government jobs may not be well paid due to its input and output measurements.

It’s obviously imperative to look at some factors that make or unmake government jobs more unsustainable or uncompetitive when designing solutions to our nation’s youth unemployment.

This will provide grounds for stakeholders to holistically debate the need for sustainable job creation efforts for our teeming unemployed youth in the country.

Evidently, since independence, the government of Ghana has led the job creation efforts as the bigger employer.

However, unemployment figures in Ghana increased from 5.54 percent in 2015to 5.77 percent in 2016. In 2017, the unemployment rate in Ghana stood at approximately 5.8 percent. For decades 2006   recorded the lowest at 3.60%. After his inauguration in 2017 the president of Ghana made youth unemployment the epicenter of his youth policy. 

In his second State of the Nation address president Akuffo-Addo acknowledged, “The number of young people who cannot find jobs in Ghana is staggering, every major policy made in the last year has been about the youth”.

The president emphasized that the changing economy requires an educated and skilled workforce to make the Ghanaian economy more globally competitive. There is no doubt that job creation was one of the central pivots of the 2016 campaigns.

This is evident in the president’s determination to see to the reduction of these staggering figures.

With the creation of NABco, an important initiative was put in place to reduce the soaring figures of unemployment in Ghana.

We must be reminded that one fundamental source of sustainable jobs is the private sector. Aside increased sustainability prospects, jobs created by the private sector have multiple effects across the economic spectrum including easing the public wage bill, increasing taxes for the state and increasing productivity to spur rapid economic growth.

The present government, and its forebearers, recognises the private sector as the engine for growth.

This is evident in the policies of NPP including support for distressed companies and stimulus packages, under both presidents Kufour and Akuffo-Addo.

I do believe the NDC governments in office (1992-2000 & 2008-2016) might have had also created some Special Purpose Vehicle (SPV) for private sector growth, like one of these mentioned NPP schemes, to spur private sector-led job creation efforts.

Even if the answer is in the negative, I am still convinced that the NDC also believe that the private sector is the pinnacle for sustainable jobs.

The contention of many is that if these two dominant political parties had ruled Ghana for the 25years past with known belief that the private sector holds the key to sustainable job creation, how come the country’s unemployment figures are still soaring?

The simple answer is that our leaders, both past and present, must accept blames for the poor showing of the economy and the worsening unemployment in the country by not placing the private sector right in the efforts to lead our nation’s job creation.

Even in retirement, President Kufour continues to demonstrate his avowed faith and support for the private sector as the panacea for jobs and economic growth and admonished the state to support efforts to create local billionaires in Ghana.

The lack of real private sector participation anchored on real support for indigenous businesses by the state, and the latent suspicion between public officials and business men and women in the private sector is the bane of our lack of more successful private sector actors capable of addressing the country’s unemployment, despite their striving efforts.

Most Ghanaian businesses and entrepreneurs are not happy with their governments yet for fear of being tagged  or victimized they remained silent.

For 27 years of running a free market economy, why are we still lacking in producing real successful business men and women in Ghana?

All governments whether NPP or NDC must confine itself to policies that create the necessary conducive environments for private sector to thrive including consciously supporting local business men and women to become billionaires through tax exemptions, special waivers, competitive credit lines, grants for companies with high job creation prospects and discriminating tariffs among others.

Before these initiatives bear fruits, governments must place the right people who know the real efforts involved in running private businesses, in decision making process that supports private sector growth.

Ease of doing business means good prospects for job creation and poverty reduction in Ghana.

State officials and regulatory agencies must not see private business owners as competitors or adversaries because the private sector holds the key to sustainable jobs, and certainly NOT the government, as every single job created by the state would not be sustainable and have no long term effect on the economy.

The author is the Executive Secretary of NDI Ghana, formerly NOGAID Ghana, a forefront Tamale-based development organization. He chairs the Board of four private companies in Ghana.

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