Description
Unemployment remains a major development issue in many countries, and in Ghana, the rates are quite high especially among the youth.
FIRST DRAFT VERSION 4
THE REPUBLIC OF GHANA
THE NATIONAL
EMPLOYMENT POLICY
PREPARED BY
THE MINISTRY OF MANPOWER, YOUTH AND EMPLOYMENT
FOR USE AS WORKING PAPER ONLY
PREFACE
Background
Unemployment remains a major development issue in many countries, and in Ghana, the
rates are quite high especially among the youth. Recent improvements in Ghana’s
economic growth since 2001 have not translated adequately into employment. Evidence
indicates that there has been an increasing trend towards the expansion of urban informal
sector and a decline in opportunities for productive employment in the formal sector.
Consequently, the unemployment among the economically active population is still high.
Under-employment is also a major problem especially among women engaged in
agriculture in rural areas. In part, this situation has been attributed to weaknesses in the
employment environment including gaps in information on the labour market.
The National Development Challenges
Ghana’s Gross Domestic Product has shown steady and positive growth of an average 4
per cent per annum over the last decade. In fact the economy of Ghana grew at 6 per cent
in 2005 and it is projected to grow at 6.2 per cent by end 2006. Sectoral growth rates in
the major agricultural, industrial and services sectors remain reasonably high and have
added significantly to the overall GDP. Ghana’s impressive macroeconomic performance
has, however, not facilitated the needed structural transformation of the economy. The
limited diversification of the economy, including its dependence on primary commodity
exports, has changed very little since independence.
The lack of structural transformation of the Ghanaian economy has constrained the
development of new and better employment opportunities and a fuller utilization of the
labour force. As a result, the majority of employment opportunities continue to consist of
low-income agricultural and informal activities. Formal public and private sector jobs
have declined.
Reversing the unemployment trend will require that the macroeconomic situation
continues to be stable to propel the achievement of sustained high rates of economic
growth.
Unemployment and Poverty
Although poverty has declined over the last few years, it is still high at about 40 per cent.
This means that the absolute number of people in poverty remains high. Of the current
national population of about 21 million, about 8 million live in poverty and well over 5
million are in extreme poverty. There is a strong correlation between the employment
situation and poverty. Income poverty is the result of unemployment, under-employment
and very low income of the working poor in low productivity jobs.
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The informal sector has absorbed many of the new entrants. Non-farm self-employment
has risen steadily as a major source of household income, while farming has been
declining. In both activities income levels are often below the poverty threshold. With the
unemployment rate for the country estimated at 8.2 per cent, about 800,000 Ghanaians
are currently unemployed and a further 1.2 million are under-employed. It is recognized
that there are different sources of household incomes, but productive employment is the
main source that households could rely on for sustainable livelihood. The capacity to
provide productive employment to the unemployed persons among the economically
active population is, however, a daunting challenge. Yet the fact that our educational
system continues to pour unskilled, semi-skilled and unemployable young graduates into
a job market with comparably few job opportunities, there is need for sober reflection and
deeper thoughtfulness on the kind of policy interventions which will be needed to
overcome the challenges.
National and International Initiatives to Address the Challenge of Unemployment
and Poverty
The Millenium Development Goals address employment from the perspective of decent
and productive work for the youth. Supportive economic and social policies are needed to
ensure that the youth have adequate levels of employment, and that their rights are
respected. The GPRS II places employment at the center of poverty reduction efforts and
aims at development of human resources as one of its key strategies. This is consistent
with the objectives of the New Partnership for Africa’s Development (NEPAD) and the
ILO Decent Work Agenda.
At the recent African Union Summit on Employment and Poverty Alleviation in Africa
held in Ouagadougou in September 2004, the Heads of African States and government
underscored their conviction that the creation of decent employment was the most
effective means of reducing poverty and accordingly drew up an 11 point Plan of Action
to address the worsening employment situation.
Government has in accordance with this outlined the broad policy guidelines on
employment in GPRS II. Government has also taken specific initiatives to sustain
accelerated economic growth, wealth creation and poverty reduction. But since a
significant proportion of our people still live below the poverty line, every effort would
have to be made to enable them participate in the process of economic transformation
through their full participation. This means that the poor must have access to productive
employment opportunities if the process is to be meaningful to them.
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Significant progress has further been made with efforts to ensure democratic governance
which allows people’s participation through the decentralized system of District
assemblies for economic empowerment and sustainable development. Decentralised
systems of governance facilitate transparency and accountability. They also ensure that
people’s basic needs are met, including coherent decentralized programmes with an
increased focus on poverty eradication and employment creation.
Following the achievement of macroeconomic stability, and improvement in good
governance, Government is now set to deal with the employment challenge. A number of
efforts have therefore been initiated to tackle the serious employment and poverty
situation through the implementation of policy interventions, programmes and projects
under the GPRS I and II. Some of the initiatives have sought to make our production
processes and public investment programmes more employment intensive as direct ways
of generating employment in the country.
Government obviously cannot do all these alone and will have to collaborate effectively
with social partners, private sector, civil society and development partners to ensure that
the process for achieving increased productive employment opportunities is sustainable
and done with the participation of the poor.
This National Employment Policy is therefore a bold attempt of Government to provide
the needed policy response to the precarious employment situation and to assist the poor
and unemployed to take advantage of the opportunities to be gainfully employed and
contribute their quota to the national development process.
Achieving the goal of full, freely chosen productive employment is not an easy task for a
growing economy such as ours. Government has, however, taken the first bold steps and
is determined to overcome the structural impediments in the economy and make the
ultimate development goal of full employment attainable through the effective
implementation of this National Employment Policy.
Hon. Abubakar Saddique Boniface (MP)
Minister of Manpower, Youth and Employment
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TABLE OF CONTENTS
PREFACE
TABLE OF CONTENTS
LIST OF TABLES
LIST OF ACRONYMS
EXECUTIVE SUMMARY
CHAPTER ONE: BACKGROUND TO THE NATIONAL EMPLOYMENT
POLICY
1.1 THE MACROECONOMIC AND FINANCIAL POLICY ENVIRONMENT
1.2 THE LABOUR FORCE IN GHANA
1.3 EMPLOYMENT GROWTH BY ECONOMIC SECTOR
1.3.1 The Agricultural Sector
1.3.2 Non-Farm Activities and Rural Sector Employment
1.3.3 Industry Trade and Investment
1.3.4 The services Sector
1.3.5 Public Sector Employment
CHAPTER TWO: THE EMPLOYMENT CRISIS AND NATIONAL
EMPLOYMENT POLICY CHALLENGES
2.1 THE EMPLOYMENT SITUATION
2.2 EMPLOYMENT POLICY CHALLENGES
2.2.1 Unemployment and Poverty
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2.2.2 Labour Market Information
2.2.3 Private Sector Growth and Competition
2.2.4 Education and Training
2.2.5 Productivity, Wages and Income
2.2.6 Industrial Unrest
2.2.7 Employment of Vulnerable Groups
2.2.8 Child Labour
2.2.9 Occupational Safety and Health
2.2.10 HIV and AIDS at the Work Place
CHAPTER THREE: LEGAL AND INSTITUTIONAL FRAMEWORK FOR
LABOUR ADMINISTRATION
3.1 LEGAL FRAMEWORK AND APPLICATION OF STANDARDS
3.2 THE LABOUR ACT AND INDUSTRIAL RELATIONS
CHAPTER FOUR: POLICY OBJECTIVES AND PRINCIPLES OF THE
NATIONAL EMPLOYMENT POLICY
4.1 THE RATIONALE OF THE NATIONAL EMPLOYMENT POLICY
4.2 THE POLICY OBJ ECTIVES
4.3 PRINCIPLES OF THE POLICY
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CHAPTER FIVE: STRATEGIES OF THE NATIONAL EMPLOYMENT POLICY
5.1 ENABLING MACRO AND SECTORAL POLICIES
5.2 EMPLOYMENT INTENSIVE GROWTH STRATEGIES AND SPECIAL
EMPLOYMENT INTENSIVE SCHEMES
5.3 ENSURING SUPPORTIVE POPULATION, MIGRATION AND REGIONAL
DEVELOPMENT
5.4 IMPROVING LABOUR MARKET INFORMATION
5.5 ACCELERATING PRIVATE SECTOR GROWTH AND DEVELOPMENT
5.6 DEVELOPMENT OF MICRO, SMALL AND MEDIUM ENTERPRISES
5.7 IMPROVING LEGAL AND REGULATORY ENVIRONMENT
5.8 ENHANCING TECHNICAL AND VOCATIONAL EDUCATION AND
TRAINING
5.9 ENHANCING BUSINESS DEVELOPMENT AND MANAGEMENT THROUGH
ENTREPRENEURSHIP TRAINING
5.10 PROMOTION OF FARM AND NON-FARM RURAL EMPLOYMENT
5.11 INCORPORATION AND FORMALISATION OF INFORMAL SECTOR
OPERATIONS AND EMPLOYMENT
5.12 MAINSTREMING OF VULNERABLE GROUPS
5.12.1 The Youth
5.12.2 Women
5.12.3 Persons with Disability
5.13 PROTECTION OF CHILDREN AGAINST CHILD LABOUR
5.14 IMPROVING WORKING CONDITIONS, OCCUPATIONAL SAFETY AND
HEALTH
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5.15 PREVENTING HIV AND AIDS AT THE WORKPLACE
5.16 PROTECTING THE ENVIRONMENT
CHAPTER SIX: INSTITUTIONAL ARRANGEMENTS FOR POLICY
IMPLEMENTATION
6.1 THE ROLE OF GOVERNMENT
6.1.1 The National Development Planning Commission
6.1.2 The Ministry of Finance and Economic Planning
6.1.3 The Ministry of Manpower, Youth and Employment
6.1.4 Ghana Statistical Service
6.1.5 Ministry of Information and National Orientation
6.1.6 Other Government Ministries and Policy Making Institutions
6.2 THE ROLE OF EMPLOYERS AND WORKERS ORGANISATIONS
6.3 DONOR CONTRIBUTION AND COORDINATION
6.4 THE ROLE OF NGOs AND CIVIL SOCIETY
6.5 NATIONAL EMPLOYMENT COORDINATING COUNCIL
6.6 THE METHOD OF IMPLEMENTATION
6.7 MONITORING AND EVALUATION
6.8 REVIEW AND REVISION OF THE NATIONAL EMPLOYMENT POLICY
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LIST OF ACRONYMS
AGI Association of Ghana Industries
APRM African Peer Review Mechanism
BAC Business Advisory Centre
CBA Collective Bargaining Agreement
DACF District Assembly Common Fund
DWP Decent Work Programme
EIB Employment Information Bureau
EMR Employment Market Information
EPA Environmental Protection Agency
ERP Economic Recovery Programme
ESG Expert Sector Group
FCUBE Free Compulsory Universal Basic Education
FDI Foreign Direct Investment
GDP Gross Domestic Product
GEA Ghana Employers Association
GFZB Ghana Free Zones Board
GEPC Ghana Export Promotion Council
GIMPA Ghana Institute of Management and Public Administration
GIPC Ghana Investment Promotion Centre
GLSS Ghana Living Standards Survey
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GNCC Ghana National Commission on Children
GPRS Ghana Poverty Reduction Strategy
GRATIS Ghana Regional Appropriate Technology and Industrial Service
GSS Ghana Statistical Service
HIPC Highly Indebted Poor Country
ICT Information Communications Technology
ILO International Labour Organisation
IMF International Monetary Fund
LMI Labour Market Information
LMIS Labour Market Information System
J SS J unior Secondary School
MDA Ministries, Departments and Agencies
MDCI Multilateral Debt Cancellation Initiative
MDG Millenium Development Goal
MDPI Management Development and Productivity Institute
M & E Monitoring and Evaluation
MLGRD&E Ministry of Local Government, Rural Development and Environment
MMDA Metropolitan, Municipal and District Assemblies
MMYE Ministry of Manpower, Youth and Employment
MOFEP Ministry of Finance and Economic Planning
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MOWAC Ministry of Women and Children Affairs
NACL National Advisory Committee on Labour
NBSSI National Board for Small Scale Industries
NDPC National Development Planning Commission
NECC National Employment Coordinating Council
NEPAD New Partnership for Africa’s Development
NEPF National Employment Policy Framework
NGO Non-Governmental Organisation
NLC National Labour Commission
NLCD National Liberation Council Decree
NYC National Youth Council
NYF National Youth Fund
NTC National Tripartite Committee
NTE Non-Traditional Export
OSH Occupational Safety and Health
PACFCG Pan- African Consultative Forum on Corporate Governance
PEC Public Employment Centres
PEF Private Enterprises Foundation
PNDC Provisional National Defence Council
PPMED Policy Planning, Monitoring and Evaluation Division
SOE State-Owned Enterprises
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SSS Senior Secondary School
STEP Skills Training and Employment Placement
TUC Trade Union Congress
VALCO Volta Aluminium Company
WTO World Trade Organisation
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EXECUTIVE SUMMARY
1.0 BACKGROUND TO THE NATIONAL EMPLOYMENT POLICY
The Macro-Economic and Financial Policy Environment
The post-independence economy of Ghana was relatively prosperous with all major
macroeconomic and financial indicators showing positive trends. This is mainly
attributed to high prices of its exports (cocoa, gold, etc.), large foreign exchange reserves
that were made available at independence and a fairly stable political and macroeconomic
environment
The 1970s and early 1980s, however, witnessed a decline in the macroeconomic situation
as a result of weak fiscal and monetary policies, and other exogenous shocks. Output and
employment declined whilst the population growth rate increased from 2.6 to 3.1 per cent
resulting in a fall in GDP per head. The erratic performance of the economy resulted in
mass exodus of both skilled and unskilled Ghanaians out of the country.
In 1983, the Government of Ghana assisted by the International Monetary Fund (IMF)
and the World Bank adopted the Economic Recovery Programme (ERP) and the
Structural Adjustment Programme (SAP) primarily to achieve economic liberalisation
and privatisation of inefficient state and quasi-governmental businesses and commerce.
These policy reforms resulted in the attainment of steady growth in real GDP averaging
about 5 per cent per annum.
Maintaining macroeconomic stability became illusive once again during most of the
period in the 1990s up to 2001. Government in response introduced sweeping reforms in
1997 to stabilise the economy but this was short-lived. The terms of trade deteriorated
and fiscal loosening leading up to the 2000 elections aggravated the scale of the
economic crises. The difficulty in maintaining macroeconomic stability was further
compounded by the failure of previous adjustment reforms to revitalise the basic
foundations of the productive sectors of the economy that hold the greatest potential for
employment generation and poverty reduction. The Ghanaian economy, however, made a
turnaround in 2001 with real GDP growth registering 4.2 per cent from the decade low
average of 3.8 per cent.
The Ghana Poverty Reduction Strategy I (GPRS I) was adopted as Ghana’s development
framework in 2003. The policy thrust was mainly to promote macroeconomic stability.
The successful implementation of the GPRS I led to the stabilisation of the
macroeconomic situation with all major economic indicators showing positive trends and
GDP growing at an average of 5.1 per cent during the four-year period (2001-2004).
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The period 2005-2006 witnessed further economic growth and significant improvement
in the structure, accountability and transparency of government finances. The GDP
growth rate recorded in 2005 was 6.0 per cent and the provisional projection based on
actual data through September, 2006 is 6.2 per cent. Revenue generation has been robust
as a result, and government borrowing has been reduced thereby creating more resources
for the private sector at reduced interest rates. By end 2005, Government became current
on its statutory obligations with respect to the Road Maintenance Fund, Ghana Education
Trust Fund and District Assembly Common Fund clearing all arrears that had previously
been a common feature of budgetary outcomes.
The Growth and Poverty Reduction Strategy II (GPRS II) which is the current
development framework covering the period 2006-2009 seeks to build on what has
already been achieved and to further improve the macroeconomic environment. Its
overall objective is to double the size of the Ghana economy in terms of real production
within the next decade and increase the per capita income of the average Ghanaian to that
of middle income status by 2015. The framework also emphasises the acceleration of
economic growth and poverty reduction through private sector-led wealth creation and
employment generation. In accordance with this, growth targets have been established to
operationalise Ghana’s international commitments under the United Nations Millennium
Development Goals (MDGs) and New Partnership for Africa’s Development (NEPAD).
The impressive record of macroeconomic stability and good governance has attracted
international recognition and assistance. Ghana has benefited from debt relief from the
World Bank and IMF as well as most of other bilateral creditors as part of the HIPC debt
relief initiative. Ghana has also been assigned a B+rating by Standard and Poors, and
Fitch and Ratings. Additionally, United States of America has given Ghana an amount of
over $547 million as grant under the Millennium Challenge Compact Agreement to help
in the modernisation of Ghana’s agricultural sector.
The Labour Force in Ghana
Labour statistics in Ghana suffer from a great degree of under-coverage. The Ghana
National Population Censuses conducted in 1960, 1970, 1984 and 2000 by the GSS,
however, provides comprehensive data on population, labour force, employment and
unemployment. The evident problem associated with these data is the lack of consistency
in the census periods. Current available statistics are accordingly obtained by using
growth trends, patterns and basic composition that may be discerned from past historical
data as well as the intermittent labour surveys.
The population of Ghana is estimated to be 18.9 million in 2000 and 21.13 million in
2005 with an annual growth rate of about 2.7 per cent. Over 56 per cent of the population
live in rural areas while nearly 44 per cent live in urban areas.
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The rapid growth of Ghana’s population has been ascribed to its youthful nature and
declining mortality rate. Life expectancy is estimated at about 57 years with women
averaging 58.4 per cent and men averaging 54.2 per cent
Recent estimates suggest that projected labour supply is expected to increase from 10.1
million in 2000 to 12.8 million by 2009. Thus with an estimated growth rate of 2.7 per
cent per annum, the correspondent supply of incremental labour to Ghana’s labour
market is expected to be about 350,000 per annum over the forecast period.
The demand for labour emanates from both the private and government sectors.
Generally, the economically active population (EAP) comprise the employed (those who
work and those who had jobs but did not work) and the unemployed (those who are
without work, are currently available for work and are seeking work during a defined
period). The employed population formed 94 per cent and 97.2 per cent of the EAP in
1970 and 1984 respectively. The bulk of the EAP, 61.1 per cent of the employed
population was engaged in agricultural activities in 1984
The key source of demand for labour emanates from the productive sectors of the
economy, namely, agriculture, industry and service, both public and private. But public
sector employment has dwindled over the period due to its policies of retrenchment and
redeployment. Formal private sector employment opportunities have also contracted.
Currently the bulk of employment comes from informal sector activities whose
productivity and sustainability pose major developmental challenges to the country.
Employment growth by economic sector
Agriculture
Agriculture is currently the highest contributor to GDP and provides employment to over
60 per cent of the population. In 2005, agriculture grew at 4.1 per cent and its share of
GDP was 36 per cent.
Agricultural production faces a number of challenges. Ghana’s agriculture is still rain-fed
which is unreliable and hence could disrupt crop production. Limited attempts to
implement policies aimed at conserving and utilising rainfall to improve agriculture have
been frustrated by the choice of inappropriate technology. Land acquisition for large
scale commercial farming is still difficult. Other constraints include lack of affordable
credit for agricultural development, rampant bushfires, post-harvest losses, lack of
storage facilities, high transportation costs and marketing problems.
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The GPRS II aims at modernising agriculture through applications of science technology
and research, improving linkages with industry and improving management practices of
farmers. The average trend of agricultural activities relating to food security, fisheries,
crops and livestock have shown positive adjustment between 2001and 2005. Agricultural
mechanisation and the proportion of arable land under irrigation have also increased
though marginally.
The overall picture for the forestry sub-sector is mixed. While the hectares of degraded
forest reserve planted increased significantly, the hectares of urban area planted did not
make any progress. Significant employment was however generated. The average number
of jobs generated over the past four years amounts to 101,396 per annum. In terms of
employment creation, this sub-sector seem to be doing well but the key issues of non-
sustainability and low productivity which had continuously undermined the agricultural
sector would have to be addressed.
Land administration is still a major problem confronting investors in all sectors of the
economy. Problems of poor land use practices, multiple sales, multiple ownership, delays
in processing of documents, etc. are serious constraints that hinder investment in
particularly the productive sectors thereby constraining employment generation. A review
of progress of GPRS I on land administration indicate that progress at reforms is slow
and interventions put in place to remove constraints in the land sub-sector including those
contained in the land administration project are still at their preparatory stages.
If agriculture is to play its economic role effectively and continue to provide quality raw
materials to industry to support increased productive employment generation then it is
imperative that the constraints and impediments are removed and the sector modernised.
Non-farm Activities and Rural Sector Employment
The rural environment is characterised by relatively higher levels of economically active
female population compared to males, widespread illiteracy, and poor state of economic
and social infrastructure including education and health facilities, road and transportation,
electricity, water supply, housing, markets, and banking services.
xv
A high majority of the economically active rural population is engaged in agricultural
activities, notably farming. The per capita incomes earned from these activities are
significantly lower than the average national income resulting in a high incidence of rural
poverty. The unattractive rural environment has been a major cause of the educated rural
youth increasingly migrating as they come out of school to urban centres, leaving behind
aged and illiterate labour force.
Rain-fed crop farming does not provide full employment for farmers all year round due
to slack and peak periods and seasonality in farming. The absence of irrigation
technology for farmers in rural areas makes farming activities virtually come to a halt
during intervening dry periods. Consequently, many of the economically active rural
farm labour turns attention to non-farm activities to gainfully use their time and
supplement their incomes. Also due to the overwhelmingly small scale of farm
enterprises in the country many of the members of the farm households are usually under-
employed and tend to undertake some non-farm activities. This is clearly one area that
requires intervention through the provision of incentives and education to improve
farmers’ productivity and incomes.
Industry, Trade and Investment
The industrial sector is the vanguard of structural change with the expectation that its
share in GDP will be increased from the current 25.1 per cent in 2005 to 37 per cent by
2007 and beyond. The sector also registers the highest level of labour productivity
indicating greater potential for job creation and employment. This notwithstanding the
sector faced serious operational and management difficulties in the 1970’s and early
1980’s mainly as a result of instability in the macroeconomic environment.
Though the ERP succeeded to a large extent to liberalise the economy, the anticipated
expansion in the industrial sector particularly manufacturing, and private sector
investment could not be achieved because the constraints facing the sector were still
persistent.
Ghana relies heavily on Foreign Direct Investment (FDI) for significant changes in the
industrial sector and a lot of attention is paid to foreign investment campaigns at the
highest levels of government. Nevertheless, the records reveal sluggish inflows of FDI
with dire implications for employment creation particularly in industry
Shifting the balance from the age-old promotion of FDI enclaves to models linking FDI
to in-country business alliances, forging relationships with local suppliers of materials,
components and value-added services, through sub-contracting, partnership exchanges
and other arrangements will lead to significant value retention in-country which will have
a phenomenal impact on employment generation country-wide.
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The Services Sector
The services sector is the largest source of employment after agriculture, employing 33
per cent of the economically active population in 2000.
The services sector is also the second largest contributor to GDP at about 30 per cent of
total contribution in 2005. Sectoral growth in 2005 was 6.9 per cent indicating a positive
trend from 4.7 per cent in 2003 and 4.9 per cent in 2004.
Immense opportunities for economic growth and employment generation exist in the
services sector. These include tourism, ICT, light industrialisation based on textiles,
garments and value addition to metallic and non-metallic minerals. Presently, most of
these activities are gradually being developed within the framework of the selected
Special Initiatives.
A strategic redefinition of the services sector to target Trade in Services will uncover
new directions for economic growth and employment generation.
From a trade promotion perspective, services exports fall into five general categories:
• Infrastructure services, including architecture, engineering, construction,
transportation, distribution and financial services
• Information technology and related services, including computer consultancy,
software development, data processing, data management and call centres
• Business services such as research and development, equipment leasing and
maintenance, market research, management consulting, translation, investigation
and security
• Professional services, including licensed professions such as accounting, law,
medicine, dentistry, etc.
• Quality-of-life services, such as education and training, health related services,
entertainment, culture, recreation and sports.
However, Information Technology/Business Process Outsourcing (IT/BPO) firms are
the fastest employment generators in Ghana today. Affiliated Computer Services (ACS)
which was established in the country in November 2000 with 85 workers employed 1400
persons in early 2004 with an end of year 2004 projection of 2000 persons.
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National advantages being exploited here derive from geographic location which confers
a four to five hour working time advantage to companies located in Ghana from U.S.A.
and a common language English. Geographic location can also be exploited to full
advantage in exporting transport and logistics services to sahelien land-locked countries
in the West Africa region, using the ports of Tema and Takoradi and well developed
road, water and rail transport corridors to ship transit cargo. Similar prospects exist for
passengers and cargo by air transport. Common language advantage can also be more
fully exploited in training health care providers for the United States and United
Kingdom markets in response to demand and opportunities.
Tourism is one economic sub-sector with a recognised high potential for growth and
employment generation in Ghana. Gross foreign exchange earnings from tourism rose by
8.2 per cent from 2003 to 2004. Tourism contributes 3.7 per cent to GDP with a 3.4
points multiplier effect on income. Direct employment from tourism increased from
26,000 to 33,094 in 2002, with indirect and induced employment rising from 64,000 to
82,129 over the same period, recording an employment multiplier effect of 3.5.
Tourism is also a service export, mostly dependent on Private sector initiatives, with the
majority of operators being small and medium-sized enterprises. This will create value,
contribute to value-addition and improve levels of value retention in the country which
meet the national development objectives of employment creation and poverty reduction
in defined economic zones around tourism sites.
Analysis of the employment generation potential of the three broad economic sectors
indicates that agricultural sector income employment elasticity has been very low for all
periods ranging between 0.31 and 0.57. This low elasticity indicates that the agricultural
sector is saturated with labour and that expansion of employment opportunities is limited.
Meanwhile, income employment elasticity in both industry and service exceed unity, 2.12
for industry and1.22 for service indicating that there are greater opportunities for job
expansion in industry and service sectors.
Public Sector Employment
The public sector of Ghana is currently made up of 650,000 employees. The public sector
serves as buyer of goods and services, provider of services and employer thereby
influencing output and employment.
Prior to 1983, several public sector institutions were established to generate employment
opportunities resulting in phenomenal increase in the annual growth rate of employment
by 14 per cent in the government sector while the overall rate of increase (government
and private) increased by 4.2 per cent.
xviii
Since the adoption of the ERP in 1983, conscious effort has been made to address
employment policy in the public sector focussing on restructuring of the workforce and
compensation. Several development programmes introduced at the time to boost
economic infrastructure development had high employment content
These efforts though commendable at the time had little effect on the total employment
situation because government employs less than 12 per cent of the total labour force.
Public sector employment policy must therefore among other things focus on problems of
labour turnover especially among qualified and experienced staff, the inability to attract
and retain professionals, low labour productivity and limited labour-intensive
programmes for the different vulnerable groups.
2.0 THE EMPLOYMENT CRISIS AND NATIONAL EMPLOYMENT POLICY
CHALLENGES
The employment situation
Since 1983, Ghana has implemented economic reforms with far reaching social
consequences including redeployment of several thousands of workers from both the
public and private sectors.
The lack of structural transformation of the Ghanaian economy has further constrained
the development of new and productive employment opportunities and a fuller utilisation
of the labour force. The bulk of employment opportunities continue to consist of low-
income agricultural and informal activities. Formal public and private sector jobs have
declined. Persistent unemployment, underemployment and growth of precarious forms of
employment remain central features of the economy. Close to 68 per cent of employed
population are self-employed with no employees.
This means that the majority of the working population work in their own small
enterprises and have no other employees apart from themselves. With the economy
dominated by the self-employed who do not have the capacity to employ others, the
prospects for generating additional jobs or employment opportunities for a growing
young population is very low.
Employment Policy Challenges
The major employment policy challenges facing the country include:
• Unemplyment and poverty
• Poor labour statistics and ineffective labour market information system
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• Non-competitiveness of the private sector as a result of micro- and macro-
economic rigidities
• low professional, technical and managerial human resource base of the economy
to support rapid private sector development, industrial expansion and the creation
of more productive job avenues
• Vicious cycle of low productivity and low wages and incomes
• Negative impact of industrial unrests on the economy, loss of productive working
time, incomes and private new investments
• High unemployment and under-employment rates among vulnerable groups
including the youth, women and persons with disability, and challenges for
mainstreaming the vulnerable and excluded to make them productive
• Persistence of child labour against provisions of the 1992 Constitution of Ghana
and international conventions
• Effects of globalisation on labour standards, the environment and public health,
and the capacity inadequacies to address occupational safety and health issues
• Loss of valuable workforce, productivity and income through HIV infection and
AIDS
.3.0 LEGAL AND INSTITUTIONAL FRAMEWORK FOR LABOUR
ADMINISTRATION
The role of labour standards as an instrument for social inclusion of the working class in
the social, political and economic development of Ghana was recognised in the early
period of Ghana’s independence. Ghana has since independence in 1957 ratified 46 ILO
Conventions. In addition, Ghana has an elaborate legal framework that regulates
employment, working conditions and labour relations.
Through the ratification of labour standards and the enactment of laws, social dialogue
was made an important part of the development process. Various institutions and
structures have been created at the national and enterprise levels to coordinate and
discuss labour matters, promote social dialogue and prevent industrial disputes but the
real test is the effect these institutions have on the application of labour standards.
xx
In spite of the relatively strong legal and institutional frameworks including the 1992
Constitution, the Labour Act, and ratification of ILO Conventions for the right to
freedom of association there have been some gross violations of this fundamental right of
workers both at the national level and at the enterprise level. Furthermore, out of the over
10 million Ghanaian workforce only a minority 10 per cent in the formal economy
comply with these standards. The larger majority of the workforce found in the informal
sector do not comply with the standards. There is evidence of discrimination against
women. There is also widespread discrimination against workers, on the basis of whether
one is a permanent or casual employee.
The promulgation of the Labour Act has strengthened social partnerships in Ghana. The
law spells out clearly the rights and responsibilities of workers and employers thereby
seeking to prevent industrial conflicts. The law promotes collective bargaining and makes
adequate provision for tripartism.
The problem however is the poor compliance and enforcement that has characterised
Ghana’s labour legislation. The law is only enforceable in the formal sector which
employs a little over a million out a workforce of over 10 million. The capacity of
institutions of the industrial relations system is weak.
Labour administration also suffers from limited coverage of trade unions. Currently, the
total membership of all labour organisations in Ghana is less than one million out of over
10 million workforce The limited coverage of unions could be a hindrance to a broad-
based all inclusive agreement on important industrial relations issues. The employers
associations also face similar problems of limited coverage at both the national and sector
levels. The Ghana Employers Association (which operates at the national level) and
associations such as association of Ghana Industries (AGI) and Chamber of Mines do not
cover majority of employers particularly owners of small and medium scale enterprises.
This may lead to difficulty in the implementation of decisions taken at the tripartite level
as these associations may be deemed not to be representative enough.
The effective application of the provisions of the Labour Act has the potential of
significantly improving the industrial relations atmosphere for existing businesses to
expand and for investments into new businesses to grow to increase the job stock of the
country. The challenge is, however, the enforcement of the provisions of the law, the
massive education that is required by employers and employees, and the strengthening of
the institutional and logistical capacity of institutions responsible for ensuring that the
law is implemented.
xxi
4.0 POLICY OBJECTIVES AND PRINCIPLES OF THE NATIONAL
EMPLOYMENT POLICY
The implications of the employment policy challenges to the eradication of poverty and
Ghana’s development effort had been recognised by government as issues that require
urgent attention, and whose resolution will contribute immensely to propel the country to
a middle-income status by 2015.
The broad policy guidelines outlined in GPRS II include:
• The adoption of a national policy for enhancing productivity, incomes and wages
with equal opportunities for men and women in all sectors of the economy
• Ensuring the implementation of a coherent employment policy on the youth,
vulnerable and excluded
• Needs-oriented human resource development, including technical, vocational
education and training
• The adoption of a comprehensive policy for monitoring and evaluation of
employment information, and
• Improving existing policy on social protection and social dialogue at the
workplace
The main objectives of the National Employment Policy are to:
i. Promote the goal of full employment in national economic and social policy, and to
enable all men and women who are available and willing to work, to attain secured and
sustainable livelihood through full productive and freely chosen employment and work;
ii Secure improvement in the productivity of the labour force to improve private sector
competitiveness and enhance employability to the extent that labour is afforded quality
and well-remunerated employment consistent with productivity;
iii Provide the fullest possible opportunity to each worker to qualify for, and to use
his/her skills and endowments in a job for which he/she is well suited, irrespective of
race, sex, religion, political opinion, national extraction, ethnic or social origin;
iv Safeguard the basic rights and interests of workers, and to that end, promote respect for
relevant International Labour Standards, including those on Forced Labour, Freedom of
Association, the Right to Organise and Bargain Collectively, the Principle of Non-
Discrimination and Equality of Treatment and Opportunities and elimination of the most
extreme forms of Child Labour;
xxii
v Secure maximum cooperation from, and participation by, the Ghana Employers
Association (GEA), the Trades Union Congress and other interested parties in decisions
relating to national employment policy, so as to ensure industrial peace and harmony and
minimise productivity and job losses through industrial unrest; and
vi Stimulate economic growth and development, eradicate poverty and improve the
standards of living by minimising the rates of unemployment and underemployment, and
optimising the utilisation of labour and human resources.
The principles of the National Employment Policy are:
i. Employment will be coordinated and implemented within the framework of
national economic and social policy underpinned by deepening good
governance and civic responsibility. In this regard, this National Employment
Policy is consistent with the overall development strategies as outlined in the
1992 Constitution of the Republic of Ghana, the Growth and Poverty
Reduction Strategy II and the Sector-Wide development Programmes;
ii. Government policy on employment generation will emphasise the provision
of a favourable environment for private investment and job creation.
Government will continue to maintain stable and favourable macroeconomic
policies, pursue vigorous human resource development, provide basic
infrastructure and additional incentives to support a vibrant private sector as
the engine of economic growth and job creation in Ghana;
iii. The private sector therefore, should take on the role of the major investor in
the productive enterprises that will provide increased employment and
generate incomes. This calls for the promotion of enterprise culture that will
induce self-reliance, risk taking, and a national environment that rewards
effort and initiative;
iv. Individuals groups and the community at large, including those at the
grassroots level and in line with decentralisation and participatory
development, also bear an important responsibility for employment creation;
v. The principles of collective bargaining, workers education and adjustment in
wages linked to price and productivity changes will be promoted;
xxiii
vi. While providing for a greater role for the private sector in employment and
job creation, caution shall be taken to the well-known paradox that the
operation of the market system may lead to the marginalisation of some
sections of the population including women, in rural areas and the informal
sector, the youth, elderly persons, those with disabilities and the unemployed.
Since these people are vulnerable and must be provided for through adequate
safety-nets, Government undertakes to protect and assist these groups with
special compensatory and well-targeted programmes, including those
envisaged under the Growth and Poverty Reduction Strategy and the National
Social Protection Strategy; and
vii. To meet the employment challenge through well targeted policies and
programmes, government will provide detailed and frequently updated
information which is accurate and reliable on the size and structure of the
labour force and disseminate it for purposes of labour market projections and
development planning.
5.0 STRATEGIES OF THE NATIONAL EMPLOYMENT POLICY
The strategies for achieving the policy objectives and addressing the employment policy
challenges include the following:
• Ensuring enabling macro and sectoral policies through prudent macroeconomic
management, removal of constraints to growth of productive sectors,
implementation of policy interventions to promote the private sector,
transformation of the structure of the economy, and maximisation of productive
employment opportunities.
• Integrating employment intensive growth strategies in the country’s development
plans and programmes including national development plans, sectoral
development programmes and the budget statement and financial policies, and
introducing special employment intensive schemes
• Ensuring supportive population, migration and regional development policies
through improved population management, spatial distribution of population to
promote balanced growth of the economy, dynamic human resource development
strategy, structured arrangements for development of skills for export to take
advantage of international migration and globalisation.
xxiv
• Improving labour market information through reforms targeting the structures,
systems, processes, human capacity and equipment and logistics which are critical
to the effective functioning of institutions involved in the management of labour
market information system.
• Accelerating private sector growth and development through removal of critical
bottlenecks, enhancing private sector competitiveness, achieving good corporate
governance, provision of adequate incentives to expand private investment in
strategic sub-sectors with high employment generation potential, encouraging
adequate investment in ICT, promoting made-in- Ghana goods and ensuring
regular Government-private sector dialogue.
• Development of micro, small and medium enterprises through removal of barriers
that impede enterprise growth, corporatisation of informal sector enterprises,
provision of growth enhancing incentives and business advisory services,
provision of adequate credit schemes and non-financial assistance including
training, technology and markets, development of women entrepreneurship and
strengthening of trade and business associations.
• Improving the legal and regulatory environment through streamlining of business
licensing and registration procedures, reduction of administrative bureaucracy
relating to investment procedures, reducing delays in court settlement of
commercial cases, providing legal assistance to micro and small enterprises and
strengthening the capacity of institutions that offer regulatory and legal services to
businesses.
• Enhancing technical and vocational education and training to support employment
creation through skills development programmes for the unemployed youth, and
skills upgrading for those in employment, improvement in the quality, quantity
and financing of technical and vocational education and training including the
provision of guidance and counselling services, strengthening the structures
responsible for governing and delivery of vocational and technical education, and
promoting a national system of apprenticeship in partnership with the private
sector.
• Enhancing business development and management through entrepreneurship
training through capacity building for corporate leadership, improving the
organisation of entrepreneurship training in pre-tertiary, vocational and technical,
and tertiary institutions, encouraging entrepreneurship training for public servants
to encourage them to go into business once they exit the service, promoting the
development of women entrepreneurship and capacity strengthening for support
institutions.
xxv
• Promotion of farm and non-farm rural employment through modernisation of
agriculture, improving the productivity of farmers and contract farming
arrangements, promoting effective linkages between farm and non-farm activities,
promoting value-added activities to improve backwards integration, providing
credit support and non-financial assistance including business services, marketing
outlets and appropriate processing technologies, and encouraging district
assemblies to improve social and economic infrastructure to attract private
investments in the local economy.
• Corporatisation and formalisation of informal sector operations to facilitate the
structural transformation of the economy through arrangements for resource
pooling in enterprise networks, clusters, cooperatives, etc. with the objective of
achieving increased efficiency and to attract business support services to expand
operations, provision of adequate incentives and training for informal sector
businesses to encourage them to formalise their businesses, and encouraging
regular dialogue and interaction between the registrar general’s department,
NBSSI, and trade and business associations on the registration of informal sector
businesses.
• Mainstreaming of vulnerable groups including youth, women and persons with
disability in the national development process to increase their productivity and
employability through the implementation of adequate policy interventions and
the introduction of special employment schemes and programmes, and a
comprehensive database and labour market information on vulnerable groups to
facilitate policy planning and programming.
• Protection of children against child labour through awareness creation on the
rights of the child, withdrawal of children from hazardous and exploitative work,
providing children and their families with alternative income earning activities
and developing a database on children at work to facilitate planning and decision-
making.
• Improving working conditions, and occupational safety and health by
strengthening the OSH system through effective coordination mechanisms,
adopting adequate preventive OSH strategies to reduce industrial fatalities,
improving training and disseminating OSH information to workers and
employers, developing database on person-hours lost on ailments and injuries for
planning purposes, protecting the vulnerable at the work place and especially
adopting standards that are protective of the health of women during pregnancy,
after child birth and while breastfeeding, updating existing legislation and
enhancing the capacity of labour officers to perform their duties efficiently.
xxvi
• Preventing HIV infection and AIDS in the work place through educational
campaigns, dissemination of information on AIDS in the work place, providing
protection to people with HIV and AIDS from discrimination in the workplace,
and encouraging employers to make available protective devices at their
workplaces to prevent HIV and other sexually infected diseases.
• Protecting the environment from degradation through sustainable implementation
of the National Employment Policy and effective collaboration of agencies
responsible for monitoring and carrying out inspection activities.
6.0 INSTITUTIONAL ARRANGEMENTS FOR POLICY IMPLEMENTATION
The Role of Government
The multifaceted and multidimensional nature of the employment policies and strategies
contained in this document require well coordinated effort and commitment of all
government agencies. It is the responsibility of government to create the environment
conducive for growth and investment.
In this context, implementation of the National Employment Policy would require that all
government agencies will consciously integrate in their policies and programmes, the
relevant policy initiatives, guidelines and strategies that maximise productive
employment and the improvement of the general working conditions of labour. This
requires concerted effort for the coordination and implementation of sectoral policies and
programmes that gives priority to the creation of employment in both the public and
private sectors. Public institutions that will play a key role include NDPC,
MOFEP,MMYE, MLGRD&E, GSS, Ministry of Information and National Orientation
and other policy making bodies.
The Role of Employers and Workers’ Organisations
The social partners represented mainly by the Ghana Employers Association (GEA) and
organised labour will be expected to cooperate closely with the MMYE and other
relevant bodies in the implementation, monitoring and evaluation of this policy and the
attainment of established objectives. They will be expected to play significant role in
policy dialogue that promotes industrial harmony, productivity improvement, economic
growth and consequently productive employment.
xxvii
Donor Contribution and coordination
. The donor community will be expected to continue its support to Government in the
design and implementation of the country’s development programmes that are aimed at
achieving accelerated economic growth, poverty reduction and productive employment
generation. Government also expects donors to take cognisance of the elements of the
National Employment Policy and make the necessary adjustments to their country
assistance and cooperation programmes in favour of productive employment generation
strategies and activities to support accelerated poverty reduction.
The Role of NGOs and Civil Society
In recent times, civil society organisations have assumed greater responsibility in
providing policy inputs to shape government development policies and have effectively
engaged government on a number of topical national issues through policy dialogue.
Government expects NGOs and civil society to even expand their roles and refocus
actions and priorities to help in the achievement of the objectives of the National
Employment Policy.
National Employment Coordinating Council
Given the multi-sectoral nature of employment promotion policies, there is the need to
establish a coordinating body to oversee the networking arrangements and coordinate
institutional commitments required for the successful implementation of the National
Employment policy. Accordingly, the existing Steering Committee on the development
of employment policy and labour market information system will be transformed into a
National Employment Coordinating Council (NECC). The NECC will be a national body
that will guide the implementation of the National Employment Policy
The Method of Implementation
In implementing the national Employment Policy it will be necessary to undertake a
nation-wide sensitisation exercise to explain the rational for the policy, benefits that the
population should expect, and the real opportunities that exist in the various sectors of the
economy, what the unemployed or the underemployed should do to take advantage of the
opportunities being offered by the policy. Specific target groups for the sensitisation
exercise will include Government ministries and departments, Private sector business
associations, social partners, district assemblies and NGOs.
xxviii
Monitoring and Evaluation
Monitoring and evaluation (M & E) of the National Employment Policy will be
undertaken at various levels and through the collaboration of Government, private sector,
NGOs and civil society organisations. The MMYE will, however, have overall
responsibility for monitoring and evaluating the implementation of the policy. The
PPMED of the ministry will be reorganised and strengthened to establish the required
structures, processes, systems and human resource base to enable it perform its role
efficiently and effectively and issue the appropriate M & E reports.
Review and Revision of the National Employment Policy
The National Employment Policy will be reviewed periodically to make information
available for the national budget. The Programmes and projects which will be developed
and implemented from the policy will however be reviewed regularly taking cognisance
of the feedback from monitoring and evaluation reports, and the development of sector
strategic and business plans and programmes.
xxviv
doc_501420249.pdf
Unemployment remains a major development issue in many countries, and in Ghana, the rates are quite high especially among the youth.
FIRST DRAFT VERSION 4
THE REPUBLIC OF GHANA
THE NATIONAL
EMPLOYMENT POLICY
PREPARED BY
THE MINISTRY OF MANPOWER, YOUTH AND EMPLOYMENT
FOR USE AS WORKING PAPER ONLY
PREFACE
Background
Unemployment remains a major development issue in many countries, and in Ghana, the
rates are quite high especially among the youth. Recent improvements in Ghana’s
economic growth since 2001 have not translated adequately into employment. Evidence
indicates that there has been an increasing trend towards the expansion of urban informal
sector and a decline in opportunities for productive employment in the formal sector.
Consequently, the unemployment among the economically active population is still high.
Under-employment is also a major problem especially among women engaged in
agriculture in rural areas. In part, this situation has been attributed to weaknesses in the
employment environment including gaps in information on the labour market.
The National Development Challenges
Ghana’s Gross Domestic Product has shown steady and positive growth of an average 4
per cent per annum over the last decade. In fact the economy of Ghana grew at 6 per cent
in 2005 and it is projected to grow at 6.2 per cent by end 2006. Sectoral growth rates in
the major agricultural, industrial and services sectors remain reasonably high and have
added significantly to the overall GDP. Ghana’s impressive macroeconomic performance
has, however, not facilitated the needed structural transformation of the economy. The
limited diversification of the economy, including its dependence on primary commodity
exports, has changed very little since independence.
The lack of structural transformation of the Ghanaian economy has constrained the
development of new and better employment opportunities and a fuller utilization of the
labour force. As a result, the majority of employment opportunities continue to consist of
low-income agricultural and informal activities. Formal public and private sector jobs
have declined.
Reversing the unemployment trend will require that the macroeconomic situation
continues to be stable to propel the achievement of sustained high rates of economic
growth.
Unemployment and Poverty
Although poverty has declined over the last few years, it is still high at about 40 per cent.
This means that the absolute number of people in poverty remains high. Of the current
national population of about 21 million, about 8 million live in poverty and well over 5
million are in extreme poverty. There is a strong correlation between the employment
situation and poverty. Income poverty is the result of unemployment, under-employment
and very low income of the working poor in low productivity jobs.
i
The informal sector has absorbed many of the new entrants. Non-farm self-employment
has risen steadily as a major source of household income, while farming has been
declining. In both activities income levels are often below the poverty threshold. With the
unemployment rate for the country estimated at 8.2 per cent, about 800,000 Ghanaians
are currently unemployed and a further 1.2 million are under-employed. It is recognized
that there are different sources of household incomes, but productive employment is the
main source that households could rely on for sustainable livelihood. The capacity to
provide productive employment to the unemployed persons among the economically
active population is, however, a daunting challenge. Yet the fact that our educational
system continues to pour unskilled, semi-skilled and unemployable young graduates into
a job market with comparably few job opportunities, there is need for sober reflection and
deeper thoughtfulness on the kind of policy interventions which will be needed to
overcome the challenges.
National and International Initiatives to Address the Challenge of Unemployment
and Poverty
The Millenium Development Goals address employment from the perspective of decent
and productive work for the youth. Supportive economic and social policies are needed to
ensure that the youth have adequate levels of employment, and that their rights are
respected. The GPRS II places employment at the center of poverty reduction efforts and
aims at development of human resources as one of its key strategies. This is consistent
with the objectives of the New Partnership for Africa’s Development (NEPAD) and the
ILO Decent Work Agenda.
At the recent African Union Summit on Employment and Poverty Alleviation in Africa
held in Ouagadougou in September 2004, the Heads of African States and government
underscored their conviction that the creation of decent employment was the most
effective means of reducing poverty and accordingly drew up an 11 point Plan of Action
to address the worsening employment situation.
Government has in accordance with this outlined the broad policy guidelines on
employment in GPRS II. Government has also taken specific initiatives to sustain
accelerated economic growth, wealth creation and poverty reduction. But since a
significant proportion of our people still live below the poverty line, every effort would
have to be made to enable them participate in the process of economic transformation
through their full participation. This means that the poor must have access to productive
employment opportunities if the process is to be meaningful to them.
ii
Significant progress has further been made with efforts to ensure democratic governance
which allows people’s participation through the decentralized system of District
assemblies for economic empowerment and sustainable development. Decentralised
systems of governance facilitate transparency and accountability. They also ensure that
people’s basic needs are met, including coherent decentralized programmes with an
increased focus on poverty eradication and employment creation.
Following the achievement of macroeconomic stability, and improvement in good
governance, Government is now set to deal with the employment challenge. A number of
efforts have therefore been initiated to tackle the serious employment and poverty
situation through the implementation of policy interventions, programmes and projects
under the GPRS I and II. Some of the initiatives have sought to make our production
processes and public investment programmes more employment intensive as direct ways
of generating employment in the country.
Government obviously cannot do all these alone and will have to collaborate effectively
with social partners, private sector, civil society and development partners to ensure that
the process for achieving increased productive employment opportunities is sustainable
and done with the participation of the poor.
This National Employment Policy is therefore a bold attempt of Government to provide
the needed policy response to the precarious employment situation and to assist the poor
and unemployed to take advantage of the opportunities to be gainfully employed and
contribute their quota to the national development process.
Achieving the goal of full, freely chosen productive employment is not an easy task for a
growing economy such as ours. Government has, however, taken the first bold steps and
is determined to overcome the structural impediments in the economy and make the
ultimate development goal of full employment attainable through the effective
implementation of this National Employment Policy.
Hon. Abubakar Saddique Boniface (MP)
Minister of Manpower, Youth and Employment
iii
TABLE OF CONTENTS
PREFACE
TABLE OF CONTENTS
LIST OF TABLES
LIST OF ACRONYMS
EXECUTIVE SUMMARY
CHAPTER ONE: BACKGROUND TO THE NATIONAL EMPLOYMENT
POLICY
1.1 THE MACROECONOMIC AND FINANCIAL POLICY ENVIRONMENT
1.2 THE LABOUR FORCE IN GHANA
1.3 EMPLOYMENT GROWTH BY ECONOMIC SECTOR
1.3.1 The Agricultural Sector
1.3.2 Non-Farm Activities and Rural Sector Employment
1.3.3 Industry Trade and Investment
1.3.4 The services Sector
1.3.5 Public Sector Employment
CHAPTER TWO: THE EMPLOYMENT CRISIS AND NATIONAL
EMPLOYMENT POLICY CHALLENGES
2.1 THE EMPLOYMENT SITUATION
2.2 EMPLOYMENT POLICY CHALLENGES
2.2.1 Unemployment and Poverty
iv
2.2.2 Labour Market Information
2.2.3 Private Sector Growth and Competition
2.2.4 Education and Training
2.2.5 Productivity, Wages and Income
2.2.6 Industrial Unrest
2.2.7 Employment of Vulnerable Groups
2.2.8 Child Labour
2.2.9 Occupational Safety and Health
2.2.10 HIV and AIDS at the Work Place
CHAPTER THREE: LEGAL AND INSTITUTIONAL FRAMEWORK FOR
LABOUR ADMINISTRATION
3.1 LEGAL FRAMEWORK AND APPLICATION OF STANDARDS
3.2 THE LABOUR ACT AND INDUSTRIAL RELATIONS
CHAPTER FOUR: POLICY OBJECTIVES AND PRINCIPLES OF THE
NATIONAL EMPLOYMENT POLICY
4.1 THE RATIONALE OF THE NATIONAL EMPLOYMENT POLICY
4.2 THE POLICY OBJ ECTIVES
4.3 PRINCIPLES OF THE POLICY
v
CHAPTER FIVE: STRATEGIES OF THE NATIONAL EMPLOYMENT POLICY
5.1 ENABLING MACRO AND SECTORAL POLICIES
5.2 EMPLOYMENT INTENSIVE GROWTH STRATEGIES AND SPECIAL
EMPLOYMENT INTENSIVE SCHEMES
5.3 ENSURING SUPPORTIVE POPULATION, MIGRATION AND REGIONAL
DEVELOPMENT
5.4 IMPROVING LABOUR MARKET INFORMATION
5.5 ACCELERATING PRIVATE SECTOR GROWTH AND DEVELOPMENT
5.6 DEVELOPMENT OF MICRO, SMALL AND MEDIUM ENTERPRISES
5.7 IMPROVING LEGAL AND REGULATORY ENVIRONMENT
5.8 ENHANCING TECHNICAL AND VOCATIONAL EDUCATION AND
TRAINING
5.9 ENHANCING BUSINESS DEVELOPMENT AND MANAGEMENT THROUGH
ENTREPRENEURSHIP TRAINING
5.10 PROMOTION OF FARM AND NON-FARM RURAL EMPLOYMENT
5.11 INCORPORATION AND FORMALISATION OF INFORMAL SECTOR
OPERATIONS AND EMPLOYMENT
5.12 MAINSTREMING OF VULNERABLE GROUPS
5.12.1 The Youth
5.12.2 Women
5.12.3 Persons with Disability
5.13 PROTECTION OF CHILDREN AGAINST CHILD LABOUR
5.14 IMPROVING WORKING CONDITIONS, OCCUPATIONAL SAFETY AND
HEALTH
vi
5.15 PREVENTING HIV AND AIDS AT THE WORKPLACE
5.16 PROTECTING THE ENVIRONMENT
CHAPTER SIX: INSTITUTIONAL ARRANGEMENTS FOR POLICY
IMPLEMENTATION
6.1 THE ROLE OF GOVERNMENT
6.1.1 The National Development Planning Commission
6.1.2 The Ministry of Finance and Economic Planning
6.1.3 The Ministry of Manpower, Youth and Employment
6.1.4 Ghana Statistical Service
6.1.5 Ministry of Information and National Orientation
6.1.6 Other Government Ministries and Policy Making Institutions
6.2 THE ROLE OF EMPLOYERS AND WORKERS ORGANISATIONS
6.3 DONOR CONTRIBUTION AND COORDINATION
6.4 THE ROLE OF NGOs AND CIVIL SOCIETY
6.5 NATIONAL EMPLOYMENT COORDINATING COUNCIL
6.6 THE METHOD OF IMPLEMENTATION
6.7 MONITORING AND EVALUATION
6.8 REVIEW AND REVISION OF THE NATIONAL EMPLOYMENT POLICY
vii
LIST OF ACRONYMS
AGI Association of Ghana Industries
APRM African Peer Review Mechanism
BAC Business Advisory Centre
CBA Collective Bargaining Agreement
DACF District Assembly Common Fund
DWP Decent Work Programme
EIB Employment Information Bureau
EMR Employment Market Information
EPA Environmental Protection Agency
ERP Economic Recovery Programme
ESG Expert Sector Group
FCUBE Free Compulsory Universal Basic Education
FDI Foreign Direct Investment
GDP Gross Domestic Product
GEA Ghana Employers Association
GFZB Ghana Free Zones Board
GEPC Ghana Export Promotion Council
GIMPA Ghana Institute of Management and Public Administration
GIPC Ghana Investment Promotion Centre
GLSS Ghana Living Standards Survey
viii
GNCC Ghana National Commission on Children
GPRS Ghana Poverty Reduction Strategy
GRATIS Ghana Regional Appropriate Technology and Industrial Service
GSS Ghana Statistical Service
HIPC Highly Indebted Poor Country
ICT Information Communications Technology
ILO International Labour Organisation
IMF International Monetary Fund
LMI Labour Market Information
LMIS Labour Market Information System
J SS J unior Secondary School
MDA Ministries, Departments and Agencies
MDCI Multilateral Debt Cancellation Initiative
MDG Millenium Development Goal
MDPI Management Development and Productivity Institute
M & E Monitoring and Evaluation
MLGRD&E Ministry of Local Government, Rural Development and Environment
MMDA Metropolitan, Municipal and District Assemblies
MMYE Ministry of Manpower, Youth and Employment
MOFEP Ministry of Finance and Economic Planning
ix
MOWAC Ministry of Women and Children Affairs
NACL National Advisory Committee on Labour
NBSSI National Board for Small Scale Industries
NDPC National Development Planning Commission
NECC National Employment Coordinating Council
NEPAD New Partnership for Africa’s Development
NEPF National Employment Policy Framework
NGO Non-Governmental Organisation
NLC National Labour Commission
NLCD National Liberation Council Decree
NYC National Youth Council
NYF National Youth Fund
NTC National Tripartite Committee
NTE Non-Traditional Export
OSH Occupational Safety and Health
PACFCG Pan- African Consultative Forum on Corporate Governance
PEC Public Employment Centres
PEF Private Enterprises Foundation
PNDC Provisional National Defence Council
PPMED Policy Planning, Monitoring and Evaluation Division
SOE State-Owned Enterprises
x
SSS Senior Secondary School
STEP Skills Training and Employment Placement
TUC Trade Union Congress
VALCO Volta Aluminium Company
WTO World Trade Organisation
xi
EXECUTIVE SUMMARY
1.0 BACKGROUND TO THE NATIONAL EMPLOYMENT POLICY
The Macro-Economic and Financial Policy Environment
The post-independence economy of Ghana was relatively prosperous with all major
macroeconomic and financial indicators showing positive trends. This is mainly
attributed to high prices of its exports (cocoa, gold, etc.), large foreign exchange reserves
that were made available at independence and a fairly stable political and macroeconomic
environment
The 1970s and early 1980s, however, witnessed a decline in the macroeconomic situation
as a result of weak fiscal and monetary policies, and other exogenous shocks. Output and
employment declined whilst the population growth rate increased from 2.6 to 3.1 per cent
resulting in a fall in GDP per head. The erratic performance of the economy resulted in
mass exodus of both skilled and unskilled Ghanaians out of the country.
In 1983, the Government of Ghana assisted by the International Monetary Fund (IMF)
and the World Bank adopted the Economic Recovery Programme (ERP) and the
Structural Adjustment Programme (SAP) primarily to achieve economic liberalisation
and privatisation of inefficient state and quasi-governmental businesses and commerce.
These policy reforms resulted in the attainment of steady growth in real GDP averaging
about 5 per cent per annum.
Maintaining macroeconomic stability became illusive once again during most of the
period in the 1990s up to 2001. Government in response introduced sweeping reforms in
1997 to stabilise the economy but this was short-lived. The terms of trade deteriorated
and fiscal loosening leading up to the 2000 elections aggravated the scale of the
economic crises. The difficulty in maintaining macroeconomic stability was further
compounded by the failure of previous adjustment reforms to revitalise the basic
foundations of the productive sectors of the economy that hold the greatest potential for
employment generation and poverty reduction. The Ghanaian economy, however, made a
turnaround in 2001 with real GDP growth registering 4.2 per cent from the decade low
average of 3.8 per cent.
The Ghana Poverty Reduction Strategy I (GPRS I) was adopted as Ghana’s development
framework in 2003. The policy thrust was mainly to promote macroeconomic stability.
The successful implementation of the GPRS I led to the stabilisation of the
macroeconomic situation with all major economic indicators showing positive trends and
GDP growing at an average of 5.1 per cent during the four-year period (2001-2004).
xii
The period 2005-2006 witnessed further economic growth and significant improvement
in the structure, accountability and transparency of government finances. The GDP
growth rate recorded in 2005 was 6.0 per cent and the provisional projection based on
actual data through September, 2006 is 6.2 per cent. Revenue generation has been robust
as a result, and government borrowing has been reduced thereby creating more resources
for the private sector at reduced interest rates. By end 2005, Government became current
on its statutory obligations with respect to the Road Maintenance Fund, Ghana Education
Trust Fund and District Assembly Common Fund clearing all arrears that had previously
been a common feature of budgetary outcomes.
The Growth and Poverty Reduction Strategy II (GPRS II) which is the current
development framework covering the period 2006-2009 seeks to build on what has
already been achieved and to further improve the macroeconomic environment. Its
overall objective is to double the size of the Ghana economy in terms of real production
within the next decade and increase the per capita income of the average Ghanaian to that
of middle income status by 2015. The framework also emphasises the acceleration of
economic growth and poverty reduction through private sector-led wealth creation and
employment generation. In accordance with this, growth targets have been established to
operationalise Ghana’s international commitments under the United Nations Millennium
Development Goals (MDGs) and New Partnership for Africa’s Development (NEPAD).
The impressive record of macroeconomic stability and good governance has attracted
international recognition and assistance. Ghana has benefited from debt relief from the
World Bank and IMF as well as most of other bilateral creditors as part of the HIPC debt
relief initiative. Ghana has also been assigned a B+rating by Standard and Poors, and
Fitch and Ratings. Additionally, United States of America has given Ghana an amount of
over $547 million as grant under the Millennium Challenge Compact Agreement to help
in the modernisation of Ghana’s agricultural sector.
The Labour Force in Ghana
Labour statistics in Ghana suffer from a great degree of under-coverage. The Ghana
National Population Censuses conducted in 1960, 1970, 1984 and 2000 by the GSS,
however, provides comprehensive data on population, labour force, employment and
unemployment. The evident problem associated with these data is the lack of consistency
in the census periods. Current available statistics are accordingly obtained by using
growth trends, patterns and basic composition that may be discerned from past historical
data as well as the intermittent labour surveys.
The population of Ghana is estimated to be 18.9 million in 2000 and 21.13 million in
2005 with an annual growth rate of about 2.7 per cent. Over 56 per cent of the population
live in rural areas while nearly 44 per cent live in urban areas.
xiii
The rapid growth of Ghana’s population has been ascribed to its youthful nature and
declining mortality rate. Life expectancy is estimated at about 57 years with women
averaging 58.4 per cent and men averaging 54.2 per cent
Recent estimates suggest that projected labour supply is expected to increase from 10.1
million in 2000 to 12.8 million by 2009. Thus with an estimated growth rate of 2.7 per
cent per annum, the correspondent supply of incremental labour to Ghana’s labour
market is expected to be about 350,000 per annum over the forecast period.
The demand for labour emanates from both the private and government sectors.
Generally, the economically active population (EAP) comprise the employed (those who
work and those who had jobs but did not work) and the unemployed (those who are
without work, are currently available for work and are seeking work during a defined
period). The employed population formed 94 per cent and 97.2 per cent of the EAP in
1970 and 1984 respectively. The bulk of the EAP, 61.1 per cent of the employed
population was engaged in agricultural activities in 1984
The key source of demand for labour emanates from the productive sectors of the
economy, namely, agriculture, industry and service, both public and private. But public
sector employment has dwindled over the period due to its policies of retrenchment and
redeployment. Formal private sector employment opportunities have also contracted.
Currently the bulk of employment comes from informal sector activities whose
productivity and sustainability pose major developmental challenges to the country.
Employment growth by economic sector
Agriculture
Agriculture is currently the highest contributor to GDP and provides employment to over
60 per cent of the population. In 2005, agriculture grew at 4.1 per cent and its share of
GDP was 36 per cent.
Agricultural production faces a number of challenges. Ghana’s agriculture is still rain-fed
which is unreliable and hence could disrupt crop production. Limited attempts to
implement policies aimed at conserving and utilising rainfall to improve agriculture have
been frustrated by the choice of inappropriate technology. Land acquisition for large
scale commercial farming is still difficult. Other constraints include lack of affordable
credit for agricultural development, rampant bushfires, post-harvest losses, lack of
storage facilities, high transportation costs and marketing problems.
xiv
The GPRS II aims at modernising agriculture through applications of science technology
and research, improving linkages with industry and improving management practices of
farmers. The average trend of agricultural activities relating to food security, fisheries,
crops and livestock have shown positive adjustment between 2001and 2005. Agricultural
mechanisation and the proportion of arable land under irrigation have also increased
though marginally.
The overall picture for the forestry sub-sector is mixed. While the hectares of degraded
forest reserve planted increased significantly, the hectares of urban area planted did not
make any progress. Significant employment was however generated. The average number
of jobs generated over the past four years amounts to 101,396 per annum. In terms of
employment creation, this sub-sector seem to be doing well but the key issues of non-
sustainability and low productivity which had continuously undermined the agricultural
sector would have to be addressed.
Land administration is still a major problem confronting investors in all sectors of the
economy. Problems of poor land use practices, multiple sales, multiple ownership, delays
in processing of documents, etc. are serious constraints that hinder investment in
particularly the productive sectors thereby constraining employment generation. A review
of progress of GPRS I on land administration indicate that progress at reforms is slow
and interventions put in place to remove constraints in the land sub-sector including those
contained in the land administration project are still at their preparatory stages.
If agriculture is to play its economic role effectively and continue to provide quality raw
materials to industry to support increased productive employment generation then it is
imperative that the constraints and impediments are removed and the sector modernised.
Non-farm Activities and Rural Sector Employment
The rural environment is characterised by relatively higher levels of economically active
female population compared to males, widespread illiteracy, and poor state of economic
and social infrastructure including education and health facilities, road and transportation,
electricity, water supply, housing, markets, and banking services.
xv
A high majority of the economically active rural population is engaged in agricultural
activities, notably farming. The per capita incomes earned from these activities are
significantly lower than the average national income resulting in a high incidence of rural
poverty. The unattractive rural environment has been a major cause of the educated rural
youth increasingly migrating as they come out of school to urban centres, leaving behind
aged and illiterate labour force.
Rain-fed crop farming does not provide full employment for farmers all year round due
to slack and peak periods and seasonality in farming. The absence of irrigation
technology for farmers in rural areas makes farming activities virtually come to a halt
during intervening dry periods. Consequently, many of the economically active rural
farm labour turns attention to non-farm activities to gainfully use their time and
supplement their incomes. Also due to the overwhelmingly small scale of farm
enterprises in the country many of the members of the farm households are usually under-
employed and tend to undertake some non-farm activities. This is clearly one area that
requires intervention through the provision of incentives and education to improve
farmers’ productivity and incomes.
Industry, Trade and Investment
The industrial sector is the vanguard of structural change with the expectation that its
share in GDP will be increased from the current 25.1 per cent in 2005 to 37 per cent by
2007 and beyond. The sector also registers the highest level of labour productivity
indicating greater potential for job creation and employment. This notwithstanding the
sector faced serious operational and management difficulties in the 1970’s and early
1980’s mainly as a result of instability in the macroeconomic environment.
Though the ERP succeeded to a large extent to liberalise the economy, the anticipated
expansion in the industrial sector particularly manufacturing, and private sector
investment could not be achieved because the constraints facing the sector were still
persistent.
Ghana relies heavily on Foreign Direct Investment (FDI) for significant changes in the
industrial sector and a lot of attention is paid to foreign investment campaigns at the
highest levels of government. Nevertheless, the records reveal sluggish inflows of FDI
with dire implications for employment creation particularly in industry
Shifting the balance from the age-old promotion of FDI enclaves to models linking FDI
to in-country business alliances, forging relationships with local suppliers of materials,
components and value-added services, through sub-contracting, partnership exchanges
and other arrangements will lead to significant value retention in-country which will have
a phenomenal impact on employment generation country-wide.
xvi
The Services Sector
The services sector is the largest source of employment after agriculture, employing 33
per cent of the economically active population in 2000.
The services sector is also the second largest contributor to GDP at about 30 per cent of
total contribution in 2005. Sectoral growth in 2005 was 6.9 per cent indicating a positive
trend from 4.7 per cent in 2003 and 4.9 per cent in 2004.
Immense opportunities for economic growth and employment generation exist in the
services sector. These include tourism, ICT, light industrialisation based on textiles,
garments and value addition to metallic and non-metallic minerals. Presently, most of
these activities are gradually being developed within the framework of the selected
Special Initiatives.
A strategic redefinition of the services sector to target Trade in Services will uncover
new directions for economic growth and employment generation.
From a trade promotion perspective, services exports fall into five general categories:
• Infrastructure services, including architecture, engineering, construction,
transportation, distribution and financial services
• Information technology and related services, including computer consultancy,
software development, data processing, data management and call centres
• Business services such as research and development, equipment leasing and
maintenance, market research, management consulting, translation, investigation
and security
• Professional services, including licensed professions such as accounting, law,
medicine, dentistry, etc.
• Quality-of-life services, such as education and training, health related services,
entertainment, culture, recreation and sports.
However, Information Technology/Business Process Outsourcing (IT/BPO) firms are
the fastest employment generators in Ghana today. Affiliated Computer Services (ACS)
which was established in the country in November 2000 with 85 workers employed 1400
persons in early 2004 with an end of year 2004 projection of 2000 persons.
xvii
National advantages being exploited here derive from geographic location which confers
a four to five hour working time advantage to companies located in Ghana from U.S.A.
and a common language English. Geographic location can also be exploited to full
advantage in exporting transport and logistics services to sahelien land-locked countries
in the West Africa region, using the ports of Tema and Takoradi and well developed
road, water and rail transport corridors to ship transit cargo. Similar prospects exist for
passengers and cargo by air transport. Common language advantage can also be more
fully exploited in training health care providers for the United States and United
Kingdom markets in response to demand and opportunities.
Tourism is one economic sub-sector with a recognised high potential for growth and
employment generation in Ghana. Gross foreign exchange earnings from tourism rose by
8.2 per cent from 2003 to 2004. Tourism contributes 3.7 per cent to GDP with a 3.4
points multiplier effect on income. Direct employment from tourism increased from
26,000 to 33,094 in 2002, with indirect and induced employment rising from 64,000 to
82,129 over the same period, recording an employment multiplier effect of 3.5.
Tourism is also a service export, mostly dependent on Private sector initiatives, with the
majority of operators being small and medium-sized enterprises. This will create value,
contribute to value-addition and improve levels of value retention in the country which
meet the national development objectives of employment creation and poverty reduction
in defined economic zones around tourism sites.
Analysis of the employment generation potential of the three broad economic sectors
indicates that agricultural sector income employment elasticity has been very low for all
periods ranging between 0.31 and 0.57. This low elasticity indicates that the agricultural
sector is saturated with labour and that expansion of employment opportunities is limited.
Meanwhile, income employment elasticity in both industry and service exceed unity, 2.12
for industry and1.22 for service indicating that there are greater opportunities for job
expansion in industry and service sectors.
Public Sector Employment
The public sector of Ghana is currently made up of 650,000 employees. The public sector
serves as buyer of goods and services, provider of services and employer thereby
influencing output and employment.
Prior to 1983, several public sector institutions were established to generate employment
opportunities resulting in phenomenal increase in the annual growth rate of employment
by 14 per cent in the government sector while the overall rate of increase (government
and private) increased by 4.2 per cent.
xviii
Since the adoption of the ERP in 1983, conscious effort has been made to address
employment policy in the public sector focussing on restructuring of the workforce and
compensation. Several development programmes introduced at the time to boost
economic infrastructure development had high employment content
These efforts though commendable at the time had little effect on the total employment
situation because government employs less than 12 per cent of the total labour force.
Public sector employment policy must therefore among other things focus on problems of
labour turnover especially among qualified and experienced staff, the inability to attract
and retain professionals, low labour productivity and limited labour-intensive
programmes for the different vulnerable groups.
2.0 THE EMPLOYMENT CRISIS AND NATIONAL EMPLOYMENT POLICY
CHALLENGES
The employment situation
Since 1983, Ghana has implemented economic reforms with far reaching social
consequences including redeployment of several thousands of workers from both the
public and private sectors.
The lack of structural transformation of the Ghanaian economy has further constrained
the development of new and productive employment opportunities and a fuller utilisation
of the labour force. The bulk of employment opportunities continue to consist of low-
income agricultural and informal activities. Formal public and private sector jobs have
declined. Persistent unemployment, underemployment and growth of precarious forms of
employment remain central features of the economy. Close to 68 per cent of employed
population are self-employed with no employees.
This means that the majority of the working population work in their own small
enterprises and have no other employees apart from themselves. With the economy
dominated by the self-employed who do not have the capacity to employ others, the
prospects for generating additional jobs or employment opportunities for a growing
young population is very low.
Employment Policy Challenges
The major employment policy challenges facing the country include:
• Unemplyment and poverty
• Poor labour statistics and ineffective labour market information system
xix
• Non-competitiveness of the private sector as a result of micro- and macro-
economic rigidities
• low professional, technical and managerial human resource base of the economy
to support rapid private sector development, industrial expansion and the creation
of more productive job avenues
• Vicious cycle of low productivity and low wages and incomes
• Negative impact of industrial unrests on the economy, loss of productive working
time, incomes and private new investments
• High unemployment and under-employment rates among vulnerable groups
including the youth, women and persons with disability, and challenges for
mainstreaming the vulnerable and excluded to make them productive
• Persistence of child labour against provisions of the 1992 Constitution of Ghana
and international conventions
• Effects of globalisation on labour standards, the environment and public health,
and the capacity inadequacies to address occupational safety and health issues
• Loss of valuable workforce, productivity and income through HIV infection and
AIDS
.3.0 LEGAL AND INSTITUTIONAL FRAMEWORK FOR LABOUR
ADMINISTRATION
The role of labour standards as an instrument for social inclusion of the working class in
the social, political and economic development of Ghana was recognised in the early
period of Ghana’s independence. Ghana has since independence in 1957 ratified 46 ILO
Conventions. In addition, Ghana has an elaborate legal framework that regulates
employment, working conditions and labour relations.
Through the ratification of labour standards and the enactment of laws, social dialogue
was made an important part of the development process. Various institutions and
structures have been created at the national and enterprise levels to coordinate and
discuss labour matters, promote social dialogue and prevent industrial disputes but the
real test is the effect these institutions have on the application of labour standards.
xx
In spite of the relatively strong legal and institutional frameworks including the 1992
Constitution, the Labour Act, and ratification of ILO Conventions for the right to
freedom of association there have been some gross violations of this fundamental right of
workers both at the national level and at the enterprise level. Furthermore, out of the over
10 million Ghanaian workforce only a minority 10 per cent in the formal economy
comply with these standards. The larger majority of the workforce found in the informal
sector do not comply with the standards. There is evidence of discrimination against
women. There is also widespread discrimination against workers, on the basis of whether
one is a permanent or casual employee.
The promulgation of the Labour Act has strengthened social partnerships in Ghana. The
law spells out clearly the rights and responsibilities of workers and employers thereby
seeking to prevent industrial conflicts. The law promotes collective bargaining and makes
adequate provision for tripartism.
The problem however is the poor compliance and enforcement that has characterised
Ghana’s labour legislation. The law is only enforceable in the formal sector which
employs a little over a million out a workforce of over 10 million. The capacity of
institutions of the industrial relations system is weak.
Labour administration also suffers from limited coverage of trade unions. Currently, the
total membership of all labour organisations in Ghana is less than one million out of over
10 million workforce The limited coverage of unions could be a hindrance to a broad-
based all inclusive agreement on important industrial relations issues. The employers
associations also face similar problems of limited coverage at both the national and sector
levels. The Ghana Employers Association (which operates at the national level) and
associations such as association of Ghana Industries (AGI) and Chamber of Mines do not
cover majority of employers particularly owners of small and medium scale enterprises.
This may lead to difficulty in the implementation of decisions taken at the tripartite level
as these associations may be deemed not to be representative enough.
The effective application of the provisions of the Labour Act has the potential of
significantly improving the industrial relations atmosphere for existing businesses to
expand and for investments into new businesses to grow to increase the job stock of the
country. The challenge is, however, the enforcement of the provisions of the law, the
massive education that is required by employers and employees, and the strengthening of
the institutional and logistical capacity of institutions responsible for ensuring that the
law is implemented.
xxi
4.0 POLICY OBJECTIVES AND PRINCIPLES OF THE NATIONAL
EMPLOYMENT POLICY
The implications of the employment policy challenges to the eradication of poverty and
Ghana’s development effort had been recognised by government as issues that require
urgent attention, and whose resolution will contribute immensely to propel the country to
a middle-income status by 2015.
The broad policy guidelines outlined in GPRS II include:
• The adoption of a national policy for enhancing productivity, incomes and wages
with equal opportunities for men and women in all sectors of the economy
• Ensuring the implementation of a coherent employment policy on the youth,
vulnerable and excluded
• Needs-oriented human resource development, including technical, vocational
education and training
• The adoption of a comprehensive policy for monitoring and evaluation of
employment information, and
• Improving existing policy on social protection and social dialogue at the
workplace
The main objectives of the National Employment Policy are to:
i. Promote the goal of full employment in national economic and social policy, and to
enable all men and women who are available and willing to work, to attain secured and
sustainable livelihood through full productive and freely chosen employment and work;
ii Secure improvement in the productivity of the labour force to improve private sector
competitiveness and enhance employability to the extent that labour is afforded quality
and well-remunerated employment consistent with productivity;
iii Provide the fullest possible opportunity to each worker to qualify for, and to use
his/her skills and endowments in a job for which he/she is well suited, irrespective of
race, sex, religion, political opinion, national extraction, ethnic or social origin;
iv Safeguard the basic rights and interests of workers, and to that end, promote respect for
relevant International Labour Standards, including those on Forced Labour, Freedom of
Association, the Right to Organise and Bargain Collectively, the Principle of Non-
Discrimination and Equality of Treatment and Opportunities and elimination of the most
extreme forms of Child Labour;
xxii
v Secure maximum cooperation from, and participation by, the Ghana Employers
Association (GEA), the Trades Union Congress and other interested parties in decisions
relating to national employment policy, so as to ensure industrial peace and harmony and
minimise productivity and job losses through industrial unrest; and
vi Stimulate economic growth and development, eradicate poverty and improve the
standards of living by minimising the rates of unemployment and underemployment, and
optimising the utilisation of labour and human resources.
The principles of the National Employment Policy are:
i. Employment will be coordinated and implemented within the framework of
national economic and social policy underpinned by deepening good
governance and civic responsibility. In this regard, this National Employment
Policy is consistent with the overall development strategies as outlined in the
1992 Constitution of the Republic of Ghana, the Growth and Poverty
Reduction Strategy II and the Sector-Wide development Programmes;
ii. Government policy on employment generation will emphasise the provision
of a favourable environment for private investment and job creation.
Government will continue to maintain stable and favourable macroeconomic
policies, pursue vigorous human resource development, provide basic
infrastructure and additional incentives to support a vibrant private sector as
the engine of economic growth and job creation in Ghana;
iii. The private sector therefore, should take on the role of the major investor in
the productive enterprises that will provide increased employment and
generate incomes. This calls for the promotion of enterprise culture that will
induce self-reliance, risk taking, and a national environment that rewards
effort and initiative;
iv. Individuals groups and the community at large, including those at the
grassroots level and in line with decentralisation and participatory
development, also bear an important responsibility for employment creation;
v. The principles of collective bargaining, workers education and adjustment in
wages linked to price and productivity changes will be promoted;
xxiii
vi. While providing for a greater role for the private sector in employment and
job creation, caution shall be taken to the well-known paradox that the
operation of the market system may lead to the marginalisation of some
sections of the population including women, in rural areas and the informal
sector, the youth, elderly persons, those with disabilities and the unemployed.
Since these people are vulnerable and must be provided for through adequate
safety-nets, Government undertakes to protect and assist these groups with
special compensatory and well-targeted programmes, including those
envisaged under the Growth and Poverty Reduction Strategy and the National
Social Protection Strategy; and
vii. To meet the employment challenge through well targeted policies and
programmes, government will provide detailed and frequently updated
information which is accurate and reliable on the size and structure of the
labour force and disseminate it for purposes of labour market projections and
development planning.
5.0 STRATEGIES OF THE NATIONAL EMPLOYMENT POLICY
The strategies for achieving the policy objectives and addressing the employment policy
challenges include the following:
• Ensuring enabling macro and sectoral policies through prudent macroeconomic
management, removal of constraints to growth of productive sectors,
implementation of policy interventions to promote the private sector,
transformation of the structure of the economy, and maximisation of productive
employment opportunities.
• Integrating employment intensive growth strategies in the country’s development
plans and programmes including national development plans, sectoral
development programmes and the budget statement and financial policies, and
introducing special employment intensive schemes
• Ensuring supportive population, migration and regional development policies
through improved population management, spatial distribution of population to
promote balanced growth of the economy, dynamic human resource development
strategy, structured arrangements for development of skills for export to take
advantage of international migration and globalisation.
xxiv
• Improving labour market information through reforms targeting the structures,
systems, processes, human capacity and equipment and logistics which are critical
to the effective functioning of institutions involved in the management of labour
market information system.
• Accelerating private sector growth and development through removal of critical
bottlenecks, enhancing private sector competitiveness, achieving good corporate
governance, provision of adequate incentives to expand private investment in
strategic sub-sectors with high employment generation potential, encouraging
adequate investment in ICT, promoting made-in- Ghana goods and ensuring
regular Government-private sector dialogue.
• Development of micro, small and medium enterprises through removal of barriers
that impede enterprise growth, corporatisation of informal sector enterprises,
provision of growth enhancing incentives and business advisory services,
provision of adequate credit schemes and non-financial assistance including
training, technology and markets, development of women entrepreneurship and
strengthening of trade and business associations.
• Improving the legal and regulatory environment through streamlining of business
licensing and registration procedures, reduction of administrative bureaucracy
relating to investment procedures, reducing delays in court settlement of
commercial cases, providing legal assistance to micro and small enterprises and
strengthening the capacity of institutions that offer regulatory and legal services to
businesses.
• Enhancing technical and vocational education and training to support employment
creation through skills development programmes for the unemployed youth, and
skills upgrading for those in employment, improvement in the quality, quantity
and financing of technical and vocational education and training including the
provision of guidance and counselling services, strengthening the structures
responsible for governing and delivery of vocational and technical education, and
promoting a national system of apprenticeship in partnership with the private
sector.
• Enhancing business development and management through entrepreneurship
training through capacity building for corporate leadership, improving the
organisation of entrepreneurship training in pre-tertiary, vocational and technical,
and tertiary institutions, encouraging entrepreneurship training for public servants
to encourage them to go into business once they exit the service, promoting the
development of women entrepreneurship and capacity strengthening for support
institutions.
xxv
• Promotion of farm and non-farm rural employment through modernisation of
agriculture, improving the productivity of farmers and contract farming
arrangements, promoting effective linkages between farm and non-farm activities,
promoting value-added activities to improve backwards integration, providing
credit support and non-financial assistance including business services, marketing
outlets and appropriate processing technologies, and encouraging district
assemblies to improve social and economic infrastructure to attract private
investments in the local economy.
• Corporatisation and formalisation of informal sector operations to facilitate the
structural transformation of the economy through arrangements for resource
pooling in enterprise networks, clusters, cooperatives, etc. with the objective of
achieving increased efficiency and to attract business support services to expand
operations, provision of adequate incentives and training for informal sector
businesses to encourage them to formalise their businesses, and encouraging
regular dialogue and interaction between the registrar general’s department,
NBSSI, and trade and business associations on the registration of informal sector
businesses.
• Mainstreaming of vulnerable groups including youth, women and persons with
disability in the national development process to increase their productivity and
employability through the implementation of adequate policy interventions and
the introduction of special employment schemes and programmes, and a
comprehensive database and labour market information on vulnerable groups to
facilitate policy planning and programming.
• Protection of children against child labour through awareness creation on the
rights of the child, withdrawal of children from hazardous and exploitative work,
providing children and their families with alternative income earning activities
and developing a database on children at work to facilitate planning and decision-
making.
• Improving working conditions, and occupational safety and health by
strengthening the OSH system through effective coordination mechanisms,
adopting adequate preventive OSH strategies to reduce industrial fatalities,
improving training and disseminating OSH information to workers and
employers, developing database on person-hours lost on ailments and injuries for
planning purposes, protecting the vulnerable at the work place and especially
adopting standards that are protective of the health of women during pregnancy,
after child birth and while breastfeeding, updating existing legislation and
enhancing the capacity of labour officers to perform their duties efficiently.
xxvi
• Preventing HIV infection and AIDS in the work place through educational
campaigns, dissemination of information on AIDS in the work place, providing
protection to people with HIV and AIDS from discrimination in the workplace,
and encouraging employers to make available protective devices at their
workplaces to prevent HIV and other sexually infected diseases.
• Protecting the environment from degradation through sustainable implementation
of the National Employment Policy and effective collaboration of agencies
responsible for monitoring and carrying out inspection activities.
6.0 INSTITUTIONAL ARRANGEMENTS FOR POLICY IMPLEMENTATION
The Role of Government
The multifaceted and multidimensional nature of the employment policies and strategies
contained in this document require well coordinated effort and commitment of all
government agencies. It is the responsibility of government to create the environment
conducive for growth and investment.
In this context, implementation of the National Employment Policy would require that all
government agencies will consciously integrate in their policies and programmes, the
relevant policy initiatives, guidelines and strategies that maximise productive
employment and the improvement of the general working conditions of labour. This
requires concerted effort for the coordination and implementation of sectoral policies and
programmes that gives priority to the creation of employment in both the public and
private sectors. Public institutions that will play a key role include NDPC,
MOFEP,MMYE, MLGRD&E, GSS, Ministry of Information and National Orientation
and other policy making bodies.
The Role of Employers and Workers’ Organisations
The social partners represented mainly by the Ghana Employers Association (GEA) and
organised labour will be expected to cooperate closely with the MMYE and other
relevant bodies in the implementation, monitoring and evaluation of this policy and the
attainment of established objectives. They will be expected to play significant role in
policy dialogue that promotes industrial harmony, productivity improvement, economic
growth and consequently productive employment.
xxvii
Donor Contribution and coordination
. The donor community will be expected to continue its support to Government in the
design and implementation of the country’s development programmes that are aimed at
achieving accelerated economic growth, poverty reduction and productive employment
generation. Government also expects donors to take cognisance of the elements of the
National Employment Policy and make the necessary adjustments to their country
assistance and cooperation programmes in favour of productive employment generation
strategies and activities to support accelerated poverty reduction.
The Role of NGOs and Civil Society
In recent times, civil society organisations have assumed greater responsibility in
providing policy inputs to shape government development policies and have effectively
engaged government on a number of topical national issues through policy dialogue.
Government expects NGOs and civil society to even expand their roles and refocus
actions and priorities to help in the achievement of the objectives of the National
Employment Policy.
National Employment Coordinating Council
Given the multi-sectoral nature of employment promotion policies, there is the need to
establish a coordinating body to oversee the networking arrangements and coordinate
institutional commitments required for the successful implementation of the National
Employment policy. Accordingly, the existing Steering Committee on the development
of employment policy and labour market information system will be transformed into a
National Employment Coordinating Council (NECC). The NECC will be a national body
that will guide the implementation of the National Employment Policy
The Method of Implementation
In implementing the national Employment Policy it will be necessary to undertake a
nation-wide sensitisation exercise to explain the rational for the policy, benefits that the
population should expect, and the real opportunities that exist in the various sectors of the
economy, what the unemployed or the underemployed should do to take advantage of the
opportunities being offered by the policy. Specific target groups for the sensitisation
exercise will include Government ministries and departments, Private sector business
associations, social partners, district assemblies and NGOs.
xxviii
Monitoring and Evaluation
Monitoring and evaluation (M & E) of the National Employment Policy will be
undertaken at various levels and through the collaboration of Government, private sector,
NGOs and civil society organisations. The MMYE will, however, have overall
responsibility for monitoring and evaluating the implementation of the policy. The
PPMED of the ministry will be reorganised and strengthened to establish the required
structures, processes, systems and human resource base to enable it perform its role
efficiently and effectively and issue the appropriate M & E reports.
Review and Revision of the National Employment Policy
The National Employment Policy will be reviewed periodically to make information
available for the national budget. The Programmes and projects which will be developed
and implemented from the policy will however be reviewed regularly taking cognisance
of the feedback from monitoring and evaluation reports, and the development of sector
strategic and business plans and programmes.
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