Fix business climate to tackle youth unemployment – GNCCI urges gov’t
The Ghana National Chamber of Commerce and Industry (GNCCI) has reacted to the current unemployment crisis in the country, arguing that the situation is not one that can be fixed by simply absorbing the unemployed youth.
According to the Chamber, the current crisis is a result of an unfriendly business environment that must be urgently addressed if the country is to absorb the “growing pool of unemployed citizens.”
Speaking on Joy News’ PM Express on Monday, GNCCI Chief Executive Mark Badu Aboagye argued that the current job creation problem in the country is tied directly to businesses that are “stagnant, making losses, or simply cannot expand.”
“Nobody sets up a business just because they want to employ people,” he said. “They set up business to make profit, and in making profit they need people to work with. So as and when they expand, or they have bankable projects and are able to get interest rates and all the things at more affordable rates, then they will employ more people.”
He noted that some businesses are currently operating at a loss but have workers who are “virtually doing nothing,” with no room to add more employees, warning that when output drops in the industry, unemployment “goes the other direction.”
“If you are not doing well, you are not making profit or you are already making losses and you have already employed a number of people doing nothing, then obviously you cannot employ more people,” he said. “You cannot just employ people to come and sit down and pay them. Once you pay them, they become a cost that affects your bottom line.”
According to data from the Ghana Statistical Service, the overall unemployment rate currently stands at about 13%, with youth unemployment (15 to 24 years) hovering around 32.5%, while the total number of unemployed Ghanaians is estimated at around 2 million.
Mark Badu Aboagye explained that these figures, together with a slowdown in growth across the Industry sector, effectively “kills any expectation that the private sector can absorb new workers without a fundamental change in economic conditions.”
“If you create the environment for the private sector, they are then in a position to employ way more people,” he added, “Government should not be directly employing people. It shouldn’t be the main centre of employment.”
The GNCCI Chief Executive further noted pointed to the cost of borrowing as one of the key obstacles to business expansion, arguing that there is a gap between the policy rates and commercial lending rates.
He called on the government to make loans “genuinely accessible” and suggested what he described as “18-month initial moratoria periods” before repayment starts. This, he said, will give business some “breathing space” to grow into profitability to start creating jobs.
“When credit is expensive, businesses do not invest, they do not expand and therefore do not hire. If government makes loans accessible to businesses, some of these issues can be solved, because government alone cannot create all the jobs,” he maintained.
“We, as Ghanaians, would have loved to employ more people to avoid all the issues of unemployment that we are seeing. But if you cannot employ, you cannot just employ people,’ he added.
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