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World Bank, Washington, DC
Africa | Ghana
2019-12-23T17:32:55Z | 2019-12-23T17:32:55Z | 2019-06-29

After nearly a decade of strong growth fueled by the boom in commodity prices, Ghana’s economy remains undiversified and vulnerable to external shocks.This report strives to analyze the main challenges for economic diversification from a productivity angle.In looking at a set of high-growth economies of the past, the Growth Report 2008 identified common characteristics of successfully applied growth models—the “ingredients of growth”—to inform policy formulation around the world.However, since independence in 1957, Ghana’s long-term growth dynamics have been mixed and can be divided into three distinct periods.Drivers of the economic expansion of Ghana changed significantly over the years; currently, the service and natural resources sectors provide the main sources of growth.As a consequence of the change in input factors for growth, the contribution of total factor productivity to growth is on a declining path.The structural shift of the Ghanaian economy into services and natural resource sectors comes with two key economic management challenges. First , Ghana’s shift to services sectors only marginally contributes to labor productivity growth.Second, concentration of economic activity in natural resources increase economic volatility and complicate macro-management.The provision of basic public services remains a challenge according to private sector executive surveys.Economic diversification is a key element of economic development in which a country moves to a more diverse production and trade structure.


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