Economic Development and Trade Division

The association works with the Ministry of Finance and the Fiscal Council on fiscal policy, analysing revenues, government spending and tax policies to influence economic conditions, especially macroeconomic conditions. These include aggregate demand for goods and services, employment, inflation, deficits and economic growth, always within the context of the overall economy.

The division holds that during a recession the government may lower tax rates or increase spending to encourage demand and spur economic activity, and conversely that to combat inflation it may raise rates or cut spending to cool the economy down. Public investments such as education, public health and infrastructure are a fundamental element of any pro-growth budget, and the association seeks to address the problems of slow growth, stagnant wages, and a lack of consistent full employment.

Growing the economy, creating jobs and lifting stagnant wages are among the most important goals for the association's economic policy work. The central government budget is the embodiment of the nation's priorities, but the division recognizes that a budget balance is a tool to meet larger economic goals, not an end in itself.

Economic growth describes a rise in the production of goods and services in a country or region over a particular period. It is the increase in the value of a country's economic output, best reflected by an increase in gross domestic product, and it is primarily caused by an increase in aggregate demand and aggregate supply. Aggregate demand refers to the total amount of goods and services bought at an average price level across the entire economy.

One cause of economic growth is an increased workforce size, which raises economic productivity and leads to a rise in gross domestic product. Economic growth is crucial for all business stakeholders, including political parties, policymakers, industrialists, entrepreneurs and the public in general, and all of them invest their efforts in crafting impactful ways to achieve higher and sustainable growth.

Economic growth is the most powerful instrument for reducing poverty and improving quality of life in Ghana and other developing countries. The association's researchers provide evidence that rapid and sustained growth is critical to making faster progress towards development goals, and assess how policymaking and economic institutions either help or hinder efforts to ensure the economy operates at full employment and to generate sustainable growth in average living standards as rapidly as possible.

There is widespread concern that economic growth has not been fairly shared, and that economic crisis has only widened the gap between rich and poor.

The poor are more likely to be malnourished, have less access to services such as education, electricity, sanitation and healthcare, and are more vulnerable to conflict, kidnapping, terrorism, banditry and climate change. Understanding poverty is thus fundamental to understanding how society can progress.

The overall persistent high level of poverty suggests that poverty is primarily the consequence of the way society is organized and resources are allocated. Decisions over how to eradicate poverty are in the end political choices about the kind of society we want. Inequality affects how you see those around you and your level of happiness: people in less equal societies are less likely to trust each other, less likely to engage in social or civic participation, and less likely to say they are happy.

There is a growing body of evidence indicating that high levels of income inequality increase instability, debt and inflation, which are damaging for an economy in the long term. Although poverty is often thought of as a lack of material resources, it correlates closely with all aspects of a person's life.

The association's researchers examine the trends and patterns in inequality and poverty, and work with policymakers to analyse the multiple causes linked to growing inequalities, such as globalisation, technological change and changes in redistribution policies, and how to solve them. The researchers work in the area of poverty reduction, ending extreme poverty and promoting shared prosperity in a sustainable manner.

Unemployment among young people begins when they become eligible to work. The sharp increase in youth unemployment and underemployment is rooted in long-standing structural obstacles that prevent many young people in developing countries and emerging economies from making a successful transition from school to work.

Quantitatively, the employment of young people appears to be one of the most sensitive variables in the labour market, rising substantially during boom periods and falling substantially during less active periods. The most frequently used measure of unemployment is the unemployment rate, calculated by dividing the number of unemployed people by the number of people in the labour force.

Older workers' unemployment is mainly characterized by difficulty in finding a new job after losing one. The losses to society and to individuals are substantial, because life expectancy is increasing, the retirement age is rising in many countries, and people are generally in good health. The difficulty adults have reintegrating into the labour market after losing their jobs is more severe than that of the younger unemployed: studies show that as workers get older the duration of their unemployment lengthens and the chances of finding a job decline.

Every year tertiary, vocational and technical institutions produce thousands of graduates, which is a measure to reduce illiteracy, but the core challenge undermining this effort is unemployment, as there are few industries at the private and public level. Unemployment continues to be one of the most burning macroeconomic challenges facing developing countries today, and as population growth continues to outpace output expansion, the number of people seeking jobs keeps rising.

The alarming rate of unemployment has brought about a rapid increase in rural-urban migration, a decline in national output, a high rate of poverty and an increased crime rate.

The association's work includes changes in industrial techniques, policies regarding seasonal unemployment, changes in the education system, expansion of employment exchanges, more assistance to self-employed people, emphasis on full and more productive employment, an increase in the production rate, and greater importance given to employment programmes. Its research focuses on understanding the intricacies and impact of slow recovery in the labour market, including persistent high unemployment, near-record long-term unemployment, mass underemployment and weak labour force participation.

The minimum wage has long been a controversial subject, especially given concerns that employers could exploit workers by paying them less than a fair wage. In the past couple of years the push to increase the minimum wage has been highlighted by many workers who were deemed essential during the pandemic but whose pay was effectively the minimum wage. There are many arguments for and against increases, and there are also prevailing economic theories that explain the effect of the minimum wage on unemployment.

For scale, Ghana's Gross National Income per capita stands at approximately $2,630 on the nominal Atlas method, or about $7,730 adjusted for Purchasing Power Parity. The national daily minimum wage is a separate and much smaller measure, and the two should not be read against one another.

Ghana's national daily minimum wage is GH¢21.77, which amounts to a monthly minimum wage of approximately GH¢587.80. However, economists remain uncertain as to the long-term impact of these policies on the welfare of workers. Some studies suggest that raising the minimum wage has a small negative effect on employment rates, while others find no such adverse effect. If the market wage is low, a binding minimum wage can make employment more attractive to workers, strengthening their search efforts and so reducing unemployment; if the market wage is high, a binding minimum wage might discourage workers from looking for a job because there are fewer vacancies.

Raising the minimum wage does not automatically guarantee workers higher income, employment and welfare in the long run. Part of what makes it so tricky to quantify the impact is that minimum wage policies can influence firms' behaviour in a variety of complex, interrelated ways. If an increase requires a firm to double the wages it pays to a worker, it may decide not to hire that worker any more and instead carry out its production with another worker, though it will take time for firms to reorganize their production practices.

The association's researchers have examined how the minimum wage affects workers and the economy, who benefits from it, and how the declining value of the national minimum wage over time has contributed to growth in income inequality. Their studies suggest that firms may respond strategically to minimum wage increases by changing their approach in other areas, such as downsizing the workforce or worker schedules, thereby resulting in unemployment and underemployment.

The researchers note that minimum wage increases are accompanied by a host of other external factors and policies, making it difficult to identify test environments that enable a true like-for-like comparison of before and after. Their evidence shows that responses to a key labour market institution such as the minimum wage are influenced by the structure of the labour market, which further underscores the role of employer concentration.

When it comes to assessing the impact of the minimum wage on worker welfare, economists and policymakers tend to emphasize employment rates alone. The association's research shows that other factors, such as benefits and worker schedules, can make a major difference: even if overall employment rates remain constant, increasing the minimum wage can lead firms to make strategic shifts in labour scheduling practices that ultimately have a substantial negative effect on the welfare of the very workers these policies aim to protect.

Retirement refers to that part of a person's life when they choose to leave their working life behind permanently. Many people decide to leave the workforce when they are old or unwell enough that they can no longer contribute. Some retire when they reach a certain age and become eligible for private or public pensions.

Retirement planning involves determining retirement income goals and what is needed to achieve them. It includes identifying income sources, sizing up expenses, implementing a savings programme, and managing assets and risk, with future cash flows estimated to gauge whether the retirement income goal is possible. Planning can start at any time, but it works best when factored into financial planning as early as possible.

The association's retirement programme examines the inequities in the current system and promotes initiatives that protect entitlements and lead to universal, secure and adequate retirement policies. The association also trains retirees to become employers of labour, with a special focus on the competence and innovative skills for entrepreneurship development in diverse areas, so they can remain active and have a reliable source of income in retirement.

Strong unions are independent, membership-based organisations of workers that represent and negotiate on behalf of working people. They give advice when their members have problems at work, represent members in discussions with employers, and help improve wages and working conditions by negotiating with employers.

Unions and employee organizing rights foster a vibrant middle class because they build trust among the workforce, ensure workplaces are safe, audit non-compliance with labour codes, improve staff retention, support better business decisions, and promote equality. The protections, rights and wages that unions secure affect union and non-union workers alike.

Unions also make sure their members' legal rights are enforced, provide and broker education and learning opportunities, promote equal opportunities at work, fight against discrimination and help ensure a healthy and safe working environment. Many unions provide services for their members such as welfare benefits, personal legal help and financial services.

Unions promote economic equality and build worker power, helping workers to win increases in pay, better benefits and safer working conditions, and they also have powerful effects on workers' lives outside work. Eroded labour standards, weakening unions, changing norms, guest worker policies that undercut wages, and monetary policies that prioritize controlling inflation over lowering unemployment have all helped depress wages and erode living standards for all workers.

The association monitors factors that affect working lives, including unpaid overtime, wage theft, the minimum wage, immigration laws and collective bargaining rights. Its researchers observe that a lack of committed leadership, a lack of internal democracy, government intervention, tribalism and nepotism, internal factionalism, an apathetic attitude, a poor economic climate and non-affiliation with foreign unions are the major challenges that trade unions currently face, and the association suggests among other things that trade unions should imbibe the tenets of democracy in their internal administration.

Ensuring that economic growth benefits hard-working people in the form of higher wages and rising living standards is the central economic challenge of our time.

Women make up about 58% of the rural labour force in Ghana, and approximately 45% of those working women are primarily employed in the agricultural sector. In rural areas women rely heavily on small-scale subsistence farming, food processing and off-farm informal enterprises to support their households. According to the World Inequality Database on Education, approximately 26% of the poorest females aged 7 to 16 in Ghana have never been to school.

Wages for most workers have grown exceptionally slowly despite productivity, which essentially measures the economy's potential for providing rising living standards for all. In other words, most people, even those with college degrees, are treading water despite working more productively, and being better educated, than ever.

The association's research demonstrates that wage stagnation, weak income growth and wealth disparities can be traced to policy decisions that have eroded the bargaining power of low- and middle-wage workers. Its surveys ask people from across the socio-economic spectrum about their financial wellbeing, informing a wealth of policy, programme and personal decisions.

The association's researchers are skilful at exploring both the reality and the perception of wealth, and the research includes questions on topics such as wealth, income and identity.

The division conducts applied and policy research focusing on the economies, trade and regional cooperation of Ghana and the developing countries, monitoring economic management and performance, providing evidence-based economic policy analysis, and engaging in local and regional dialogue to inform policymaking.

Its research agenda spans economic development with a focus on sustainability and inclusion; trade and state cooperation; private sector development with a focus on small and medium enterprises; employment and employability with a cross-cutting theme on gender and youth; and international economics, political economy, property rights and data for research and development.