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Report, 2013

Labour market analysis and business process outsourcing in Ghana

Domfe, George; Osei-Akoto, Isaac; Amuakwa-Mensah, Franklin; Owusu, George


While both unemployment and underemployment are the two main forms of underutilisation of human resources in Ghana, much of the policy attention has always been focused on unemployment. Ironically, unemployment rates (for both the youth and the elderly) in Ghana appear among the lowest in the world. For youth aged 19-24 years, the unemployment rate is highest at 9.15% in this age group compared to the unemployment rate of Ghana's total working age population which averages at 3.6%. Out of all the unemployed working age persons, youth do make up a high unemployed proportion at 40% (under the strict definition). That is about 280,000 youth between the ages of 15-24 out of approximately 700,000 working age persons who are economically active and who were unemployed in 2006. In further analysis of employment industries, one finds Ghana's largest employer remains the agricultural sector. Within this agricultural sector, the majority, particularly the working youth (15-24 year olds), are absorbed under the informal sector. Youth identified as employed are also found helping unpaid in the household and the „older youth‟ (ages 19-24) over time rise to become their own-account worker. This therefore renders underemployment the main form of labour absorption especially for the youth in Ghana. Many youth are found without any formal written contract before starting work with employers. Of the youth who are identified as working, 10.33% between ages 15-18 have no formal education. Nevertheless, the majority of youth, nearly 2.3 million in 20061, are identified as economically inactive, which includes many young people who stay in school to gain some form of formal education including some secondary schooling. Apart from the major employer being the agricultural sector, the next major employer for youth is the services sector followed by manufacturing. The services sector includes: sales and retail and community, social and personal services. A greater proportion of young women than men were found in the manufacturing and wholesale and retail sectors. It is against this background that many development experts see the emerging business process outsourcing (BPO) sector as a potential source of gainful employment for youth. Ghana's BPO subsector is growing rapidly due to Ghana's steps through the government to partner in the e-Ghana programme. This programme intends to improve the enabling infrastructure for BPO and create visibility and public awareness for its BPO industry. There are also government training facilities to provide upskilling of potential workers who will be prepared for Ghana's BPO sector. Ghana's rising adoption of mobile phones and internet is also an encouraging sign towards opening an ICT sector of employment which can absorb some of the underemployed youth of Ghana. Better monitoring of the progress of the BPO sector in Ghana is suggested to understand how the industry absorbs underemployed youth. Policy: In a population with high, unpaid youth employment in the agricultural sector, the transition from the agricultural to the services-based sector may need further thought. Will agricultural households have their unpaid youth household members transit into services sector work and if so, how will they cope? Adequate bridging training

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Publisher: University of KwaZulu-Natal

Authors' information

Domfe, George
University of Ghana
Osei-Akoto, Isaac
University of Ghana
Amuakwa-Mensah, Franklin (Amuakwa-Mensah, Franklin)
University of Ghana
Owusu, George
University of Ghana

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