Ghana’s economic growth path: Are we skipping the factory floor?

By Emmanuel Boateng

Ghana’s economy is growing, but the composition of that growth is raising questions about its long-term sustainability. The latest GDP figures from the Ghana Statistical Service show a 5.3 percent expansion in the first quarter of 2025, with agriculture and services driving the majority of the growth. But the industrial sector, the historical engine of job creation and productivity in most developed economies, continues to lag behind. This pattern suggests Ghana may be skipping the industrial stage of economic development.
In many advanced and emerging economies, growth has followed a well-documented trajectory: from agriculture to industry to services. This transition allowed countries to first achieve food security, then build factories that employed large segments of the population, before eventually expanding into services like finance, education, and IT. In Ghana, however, the growth story is skipping the second chapter.
The Ghana Statistical Service reports that while agriculture grew by 6.6 percent and services by over 5 percent, industry barely managed a 2.3 percent increase. Within industry, construction and mining performed below expectations, and though manufacturing showed signs of resilience, its scale remains too small to lift the sector. This imbalance has raised alarms among economists and development practitioners who view industry as essential to structural transformation.
In line with Economic theory, we at ZED Multimedia asserts that, “you cannot build a middle-income economy on raw production and services alone.” “Without a robust manufacturing sector, job creation will remain informal, vulnerable, and low-paying; as is the case in Ghana now.”
The implications are serious. Industry, particularly manufacturing, has the capacity to absorb large numbers of semi-skilled workers, foster export diversification, and deepen local value chains. Its absence from Ghana’s growth formula risks reinforcing a dual economy: vibrant services in urban areas and subsistence agriculture in rural zones, with little in between to connect the two.
Government initiatives like One District One Factory (1D1F) were designed to fill this industrial void. While the programme has launched several factories across the country, critics argue that it has yet to scale effectively or deliver widespread industrial revival. Many of the 1D1F projects remain undercapitalized, lack market access, or suffer from poor infrastructure support.
A key barrier remains the business environment. Manufacturing in Ghana faces high production costs due to unreliable electricity, limited transport infrastructure, and expensive credit. In addition, the lack of technology transfer and skilled labour constrains productivity and competitiveness.
Comparisons with peers in Asia and North Africa offer a useful lens. Vietnam, for example, built a strong manufacturing base by attracting FDI in textiles and electronics. Morocco developed integrated industrial clusters for automotive and aerospace production. These models benefited from long-term planning, policy consistency, and strong coordination between government and private sector.
For Ghana to pivot, several interventions are essential:
Lower the cost of doing business for industrial firms through tax incentives, logistics support, and energy reforms
Invest in vocational training and apprenticeship programmes aligned with industrial needs
Strengthen linkages between agriculture and industry, particularly in agro-processing, pharmaceuticals and food manufacturing
Modernize industrial parks and create export-processing zones tied to AfCFTA objectives
The goal is not to abandon agriculture or curb the growth of services. Rather, it is to balance the economic structure, ensuring that industry plays its part in creating decent jobs, transforming raw materials, and increasing resilience.
In a world of shifting global trade patterns and rapid automation, Ghana must carve its niche. Skipping the factory floor may appear efficient in the short term, but without it, the foundation for sustainable development will remain incomplete.