Analyst urges shift from oil to inclusive growth

By Samuella Antwi

Economic growth across developing economies is increasingly being driven by sectors outside oil and gas.

According to analysts, this shift presents both opportunities and challenges for sustainable development.

Speaking on the Business Breakfast Show on Zed 101.9 FM, Economic Analyst Emmanuel Boateng highlighted trends in Ghana to underscore the importance of structural diversification, agriculture and technology-led expansion.

Mr Boateng noted that while Ghana’s industry is showing mixed performance, electricity and construction are proving to be the backbone of growth.

“Electricity is doing 6.7 per cent year-on-year, and construction is at 6.5 per cent. These are the true muscles driving industry,” he explained.

However, the economic analyst cautioned that mining and quarrying, as well as oil and gas, are in decline.

They recorded negative 1.8 per cent and negative 22.5 per cent respectively, dragging overall industrial growth down to 2.3 per cent.

Despite this, services remain the strongest engine. ICT services alone expanded by 21.3 per cent, followed by education at 16.6 per cent and health and social work at 14.6 per cent.

“What this tells us is that growth is being engineered around services rather than the traditional drivers that create mass jobs and income. The challenge is to ensure these numbers translate into better living standards,” Mr Boateng observed.

Away from services, the economic analyst stressed that agriculture remains the country’s largest employer. Any growth in the sector, he said, has wide-reaching societal impact.

“Agriculture employs a large share of our workforce. Even a modest growth has implications for poverty reduction and inclusive development,” he indicated.

Mr Boateng expressed concern over persistent challenges, including inadequate storage facilities, post-harvest losses and low mechanisation.

“Seasonality continues to affect output. One moment there’s a glut of tomatoes, the next there’s scarcity,” he lamented.

Drawing parallels with the United States, he explained that automation is the key.

“In the US, agriculture contributes significantly to GDP but employs less than 5 per cent of the population. That is because of technology and automation. Ghana must embrace similar transformations to harness the sector’s full potential,” he urged

Mr Boateng further emphasised the significance of Ghana’s non-oil growth, which currently stands at 7.8 per cent compared to the overall GDP growth rate of 6.3 per cent. This, he argued, signals a structural shift away from oil dependence.

“Services alone now account for 40 per cent of GDP, with ICT, education, health and financial services driving the expansion. Agriculture is also making steady contributions, particularly in livestock and crop production,” the economic analyst explained.

Mr Boateng cautioned against complacency. He warned that an oil-dominated model exposes Ghana to external shocks such as the global price collapses witnessed in 2015 and 2020.

“Non-oil growth is a good sign, but the fact that oil and gas, a traditionally strong driver, is now dragging down the aggregate numbers is also a concern,” he stressed.

To truly anchor growth in ways that improve living standards, Mr Boateng recommended targeted interventions in agriculture, structural reforms in industry and sustained investment in resilient sectors like ICT and education.

“It’s not enough to celebrate growth figures. What matters is whether they translate into jobs, incomes and poverty reduction. That is where policy must focus, on equitable distribution of wealth and specialised interventions to sustain inclusive development,” he added.