The risk of no jobs and idleness of the youth in Ghana still hits hard in social, physical, psychological, and mental conversations, as many professionals suggest ‘own businesses’ as the country’s salvation.
Unemployment has always been an issue in Ghana, and it appears to be worsening as the years unfold. Successive governments have ridden on the promise to create jobs for the youth, but it remains a dream. The foremost challenge of the economy has been the idleness of its most significant and abundant resources.
The recent incident at the military recruitments reflects the tension and desperation of the youth. Year-on-year, graduates are added to the job searching pool, while just a few get the opportunity to be absorbed into the government sector. All eyes remain on the government to provide jobs for the graduates, but the promises seem not to materialise.
“Unemployment is a result of overreliance on the government to create jobs for everyone.”
Dr Abdul-Rashid Pelpuo, Minister for Labour, Jobs and Employment
The Government is Expected to Create Jobs
Ghanaians may have gotten it wrong in expecting the government to expand the government sector to employ more people. The government spends a chunk of its allocated resources for a financial year on employee compensation, leaving limited funds for capital investment.
Between 2010 and 2023, public sector wages, debt interest payments, and statutory transfers together accounted for approximately 70% of government spending. In the 2024 Budget Statement, compensation of employees (public sector wages) is accounted for roughly 28.1% of the total government expenditure for the financial year, i.e. GH¢63.7 billion.
In the 2025 Budget, a projected amount of GH¢76.6 billion was earmarked for employee compensation, which accounted for about 40 percent of the government’s domestic revenue. The government in the 2026 Budget has estimated GH¢90.8 billion to spend on employee compensation, which is estimated to be 5.7 percent of GDP and approximately 30 percent of total expected spending in 2026, i.e. GH¢302.5 billion.
The employee compensation includes wages, salaries, pensions, gratuities, and social security contributions. While the 2025 Budget allocation to employee compensation covered a base pay increase of 10 percent for public sector workers, the 2026 allocation covers a 9 percent base pay increase.
This situation harms the economy because the resources that are supposed to be directed to the productive sectors to engineer growth are directed to the public sector workers, of whom most do not contribute to productivity, and are characterised by a lot of wastage. Increasing jobs in the government sector may not be the way forward for the country.
Ghanaians who are of the view that the government is to create an enabling and conducive environment for the private sector to expand, create more jobs, and absorb the graduates at home and those coming out of school may be right.
Preferences of Ghanaians
According to the 2024 Afrobarometer survey report, 61 percent of Ghanaians between the ages of 18-35 years responded that they would rather create their own business than be employed by an entity. 65 percent of Ghanaians between 36 and 45 years also share the same preference for owning their own business rather than working for an entity. Only 20 percent on average for these two groups showed interest in public sector jobs.
The government must channel its resources and efforts into creating the right environment for the 63 percent, on average, of Ghanaians between the ages of 18 and 45 years who want to own their own businesses.
Business owners today tell the story of how challenging owning a business in Ghana is, mainly due to the unpredictability and instability of the economy.
With the current stability of the macroeconomic indicators and confidence in the economy, the next few months should reflect the growth and achievements of the Ghanaian economy to assist Ghanaians who own businesses to thrive, while serving as incentives for more Ghanaians to join the entrepreneurial sector.
Government Procurements Retards Job Growth
Government procurements in recent times have raised a lot of eyebrows, with a significant portion going contrary to the Public Procurement Act. A scan through the years reveals that government procurements have disadvantaged the economy and promoted leakages and wastage.
Most of the government procurements do not stimulate growth in the private sector or promote competitiveness in the sector. This, professionals believe, is an epidemic that citizens and experts should be talking about.
When the government spends right, the right changes are seen and all benefit.
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