Deloitte, a global professional services firm, forecasts a boost in jobs, wages, and community infrastructure following a significant 6.8% expansion in Ghana’s industry sector during the first quarter of 2024.
This robust growth, a notable improvement after the contraction in 2023 and minimal growth in preceding years, is expected to have widespread economic benefits.
Mining and quarrying drive job creation
The “Snapshot of Ghana’s 2024 Mid-Year Budget,” released by Deloitte, reveals that the mining and quarrying subsectors played a pivotal role in the industry’s resurgence, registering a 12.9% growth.
This increase is attributed to a rise in global commodity prices, which has revitalized these sectors and is likely to lead to more job opportunities and higher wages in the coming months.
Govt confidence and investor impact
The mid-year budget statement emphasized tracking the progress of the 2024 budget and outlined the Government’s revised economic projections.
According to Deloitte, the Finance Minister’s report indicates that the economy is on the path to recovery, which has boosted government confidence.
This renewed optimism is expected to positively influence investor sentiment, potentially leading to increased capital inflows that could further stimulate job creation and wage growth.
Increased capital expenditure on social infrastructure
The Government of Ghana projects an increase in capital expenditure from 2.5% of GDP in 2023 to 2.8% in 2024, with a focus on improving social infrastructure and key amenities.
This investment is anticipated to create numerous jobs in the construction and related sectors, while also contributing to long-term economic stability and higher wages.
Stability in tax rates to support employment
The mid-year budget review’s decision to maintain existing tax rates provides some relief for businesses and individuals, as additional tax burdens could have hampered productivity.
In a business environment already challenged by high inflation and exchange rate depreciation, this decision is seen as a measure to preserve jobs and support wage growth, particularly in the private sector.
Revised economic projections signal growth
Government revised its revenue and expenditure projections for 2024.
Total Revenue & Grants are now expected to reach GH₵177.2 billion, a slight increase from the original estimate, while Total Expenditure has been adjusted downward to GH₵219.7 billion. These revisions reflect a cautious yet optimistic approach to managing the economy, with the expectation that savings on interest payments will free up resources for job creation and wage improvements.
Improving economic indicators and job market prospects
Overall GDP growth for 2024 is now projected at 3.1%, up from an initial 2.8%.
Non-oil GDP growth has also been revised upward to 2.8%.
This positive outlook is underpinned by the strong performance of the industry sector in early 2024, which is likely to result in a more vibrant job market and better wages across various sectors.
Looking back at 2023 and ahead to 2024
Ghana’s economy grew by 2.9% in 2023, surpassing the revised target of 2.3%, with the service and agriculture sectors contributing significantly.
However, the industry sector faced challenges, contracting by 1.2%.
The turnaround seen in the first quarter of 2024, with a 4.7% GDP growth rate driven by the industry sector, suggests that the job market and wages could see substantial improvements throughout the year.
As Ghana continues on this path of recovery and growth, the focus on industrial expansion, capital investment, and maintaining a stable tax environment is expected to yield tangible benefits for workers and communities across the country.
