Ghana’s Growth Stalled by Low Productivity, Says Former Central Bank Deputy Governor

Key Takeaways

• Economic expansion has relied on labor, capital and extractives rather than efficiency gains.
• Agriculture’s share of GDP hovered around 20% from 2013 to 2024, while industry showed volatility tied to mining.
• Borrowed funds intended for infrastructure often funded recurrent spending, squeezing private‑sector credit.
• Persistent fiscal imbalances create a debt‑overhang that weakens medium‑term growth prospects.

Dr. Maxwell Opoku‑Afari, former First Deputy Governor of the Bank of Ghana, warned that the country’s recent headline growth masks a chronic decline in productivity. His analysis links the pattern to an economy that has accumulated inputs without translating them into higher‑value output.

The lack of a decisive shift toward export‑oriented manufacturing, he noted, leaves Ghana vulnerable to fiscal strain and external shocks, despite periods of robust GDP growth.

Background & Context

Between 2013 and 2024, agriculture consistently contributed roughly one‑fifth of national output, reflecting limited modernization in the sector. Industry’s contribution fluctuated sharply, driven largely by mining and oil extraction rather than diversified manufacturing. Services remained the dominant component, underscoring an economy reliant on low‑skill labor and consumption‑based activities.

This structural composition diverges from the growth models of peers that have leveraged productivity gains to broaden tax bases and improve export baskets. Ghana’s trajectory, therefore, raises questions about the durability of its growth strategy.

Productivity and Structural Shifts

Factor accumulation—additional labor, capital equipment, and natural resource exploitation—has propelled nominal growth, yet efficiency metrics have slipped. The absence of a manufacturing renaissance means that value added per worker remains stagnant, limiting wage growth and reducing competitiveness in global markets.

Without a transition to higher‑productivity sectors, the economy cannot generate the surplus needed to fund public services sustainably or to absorb external shocks. The pattern also constrains the development of a robust tax net, keeping fiscal buffers thin.

Fiscal Dynamics and Private‑Sector Impact

Government borrowing has been framed as financing for flagship infrastructure projects, but a sizable portion has been reallocated to recurrent expenditures and debt service. Cost overruns and weak project appraisal have further diluted growth returns.

Petroleum revenues earmarked for priority works have similarly been diverted, intensifying fiscal pressure. As public borrowing rose, domestic yields climbed, raising the cost of capital and crowding out private‑sector credit. The resulting slowdown in private lending hampers investment and erodes potential output.

Looking Ahead

Addressing the productivity gap will require policies that incentivize innovation, improve manufacturing capabilities, and strengthen project evaluation frameworks. Enhancing fiscal discipline and protecting infrastructure funds from recurrent use could restore confidence in the private sector.

If these reforms take hold, Ghana may transition from a factor‑driven growth model to one anchored in efficiency, diversified exports, and resilient public finances.