In recent years, several major institutions have deemed Ghana to be one of the world’s fastest-growing economies.
This accolade has been given to the country by institutions as diverse as the World Bank and the Brookings Institution – and with various structural, political and social factors pointing towards growth over the long term, there are plenty of reasons to be cheerful about Ghana’s potential.
Commodities and exporting
In part, Ghana’s astronomical economic growth in recent years is to do with oil. As is often the case in sub-Saharan African economies, Ghana is a prime example of an exporter selling a product that is in demand across the globe. Ghana is forecast to produce over 400,000 barrels of oil per day by 2023. But there are other reasons why this country has seen such growth – other commodities that Ghana produces are also popular around the world: cocoa, for example, is a major international export.
When commodity prices are high, a country often then goes on to experience other benefits: increased wages and higher employment rates from the export industry in question create demand for smaller services such as leisure, retail and more. This activity attracts global capital, too, with banks and other financial services institutions beginning to consider the country in question as a place in which to do business – which in turn offers the country a layer of protection in the event of a dip in oil prices.
Politics also plays a role in Ghana’s economic stability. Unlike many other African nations that have fallen victim to corrupt political and business leaders who siphon off the profits of oil exports, there is optimism that Ghana’s relatively stable political system could prevent this from happening. Nana Akufo-Addo, who is the country’s president, has publicly stated that he wants to see earnings from oil re-routed into more sustainable avenues, such as teaching and learning. Given the experience of other countries in the region (such as Angola, which suffered from corruption and an economic decline in relation to oil prices), it’s prudent for him to take this approach – and clearly something that has reassured global banks and other investment-providing institutions.
He has also called for the oil sector in the country to be professionalised wherever possible. In one recent statement, he said that it was important to make sure that workers in Ghana were the first to benefit. “The resources are here in our country,” he was quoted as saying. “…our responsibility is to make sure that we are the principal beneficiaries not just in terms of the exploitation but also in terms of the human resources that are responsible for developing it.”
The role of technology
Technology is perhaps not the first industry that many observers would think of when they consider Ghana’s capacity for economic growth. But the reality is that Ghana has a thriving technology scene, and there are plenty of reasons to believe that it’s this industry that is pushing the country towards such rapid growth. The digitalisation of online casinos is one example, as recent studies have shown that casino gambling in general has shot up by over 10% in just a few years. The arrival of tech-powered gambling as a leisure activity is a clear sign that the people of Ghana at least perceive themselves to be experiencing a rise in disposable income, which they want to spend on burgeoning technology.
Another example is tech giant Google’s move to open its first Artificial Intelligence Lab right in Africa in the heart of Ghana’s capital city of Accra last year. Needless to say this was an extremely important and significant move, not only because there is very little representation of African AI researchers, engineers and talent in this field, but also because of the great benefits that come with it. This is because according to Google, this lab will provide African researchers with the necessary tools to and knowledge to build products that improve the lives of Africans, mostly in the health and agriculture fields.
Ghana is one of the most interesting examples of an economy that is speeding up its economic growth even despite a range of challenges. The country could have, and still may, find itself besieged by the so-called “resource curse” that has challenged countries such as Angola. But with a relatively stable political system, a forward-facing tech sector and more, the cards are in fact stacked in Ghana’s favour – and it will come as no surprise to most observers if this West African nation becomes even more prominent in the years to come.