The role of skills mismatch in the productivity challenge: Bridging the gap between education and industry needs

By Solomon Nyantakyi( PhD)

There are two opposing sides to Ghana’s 2024 economic recovery story. On the one hand, the nation’s GDP grew by an astounding 5.7% (The World Bank, Ghana Statistical Service), much above forecasts and a major improvement over 2023’s 2.9% growth.

However, labour productivity fell 0.45% year over year in December 2023 (according to CEIC Data), and youth unemployment for those between the ages of 15 and 24 is still stubbornly high at over 32% (Ghana Statistical Service’s labor reports).

The growing skills gap between what our educational institutions churn-out and what our sectors urgently require is the root cause of this conundrum, which is a major bottleneck or canker facing our economy.

The Scale of the Challenge

A grim picture is painted by the data. The Ghana Statistical Service estimates that approximately 1.3 million people between the ages of 15 and 35 make up 77.4% of the country’s unemployment population (Ghana Statistical Service Labour Bulletins for 2023). This is a skills crisis that could jeopardize Ghana’s long-term competitiveness and productivity, not just an unemployment issue.

The situation is even more concerning in the northern areas. Youth unemployment rates are 39% in the Upper East region, and similarly high in other northern regions (Ghanaian Press and Labour Reports). As firms struggle to locate skilled labour and human capital stays underutilized, these numbers reflect not only individual tragedies but also societal economic waste.

The Productivity Paradox

Construction and the extractives industry have been the main drivers of Ghana’s recent economic growth, although labour productivity is still falling. This apparent paradox points to a serious flaw: our expansion isn’t converting into higher productivity because we don’t have the qualified labour force to spur innovation and efficiency across industries.

According to recent data, average incomes in Ghana have grown more slowly than productivity growth in some industries, and the difference has widened over time. The largest pay growth in relation to productivity is seen in subsectors including utilities, construction, and tourism, indicating that a lack of skilled workers is raising labour prices without increasing efficiency.

The Education-Industry Disconnect

Our educational system continues to produce graduates with credentials that don’t meet market expectations, especially at the postsecondary level. Universities produce thousands of graduates in traditional fields, but businesses are in dire need of qualified technicians, digital experts, and professionals with real-world, hands-on experience.

The field of Technical and Vocational Education and Training (TVET), which ought to serve as a link between academia and business, is still stigmatized and undeveloped. Inadequate funding, out-of-date curricula, and shaky industrial collaborations continue to plague the sector despite recent attempts by UNICEF and Ghana TVET to carry out skills studies and the close gaps.

International Best Practices: Learning from Success Stories

Ghana can learn a lot from Singapore’s SkillsFuture program. Singapore’s SkillsFuture program is a national initiative aimed at promoting lifelong learning and skills development. It’s designed to support individuals in acquiring new skills, upgrading their knowledge, and staying relevant in an ever-changing job market.

The nation works closely with industry to identify new skill needs and offers credits to all citizens for lifelong learning and skill upgrading. One of the most competitive economies in the world with continuously strong productivity growth is the end outcome.

Another useful example is the dual education system in Germany. Germany’s dual education system combines theoretical learning with practical training, providing students with hands-on experience and industry-specific skills.

By integrating classroom instruction with industry apprenticeships, the nation creates a highly qualified workforce that propels manufacturing excellence while keeping youth unemployment rates below 10%.
Nearer to home, Rwanda’s emphasis on ICT education and digital skills has established the nation as a regional technology hub, illustrating how deliberate skill development may change economic prospects even in settings with little resources.

MDPI’s Role in Bridging the Gap

Being the leading productivity and management development organization in Ghana, MDPI is in a unique position to tackle this issue by implementing focused interventions:

Skills Auditing and Mapping: MDPI provides data-driven insights into specific competency deficiencies by conducting thorough skills gap evaluations across major sectors. Critical deficiencies in technical skills, project management, and digital literacy are seen in the manufacturing, agricultural, and service sectors, according to our most recent assessments.

Industry-Education Partnerships: By facilitating collaborations between academic institutions and business leaders, MDPI’s consulting services aid in bringing curricula into line with practical demands. Through skill-matched placements, MDPI is reliable in terms of training programs to help place more graduates in fulfilling jobs.

Customized Training Solutions: The training programs offered by MDPI enhance long-term capability while addressing current industry needs. Through focused skill development, participatory, competency-based, and practical programs, this state-owned institution has enhanced the capabilities of several SMEs, large-scale enterprises, and government organizations, resulting in improved output and operational efficiency.

Research and Policy Advisory: Our study findings ensure evidence-based strategies for resolving the skills mismatch by informing national policy on productivity improvement, human capital optimization, and skill development.

A Multi-Stakeholder Solution Framework

Addressing Ghana’s skills mismatch requires coordinated action across five key areas:

Curriculum Reform: To guarantee that graduates have applicable, marketable skills, educational institutions must collaborate closely with industry to update curricula on a regular basis. This entails incorporating critical thinking, digital literacy, and real-world problem-solving into every curriculum.

TVET Revitalization: TVET must be given top priority by the government through enhanced financing, new machinery, and industry collaborations. Awareness campaigns showcasing accomplished TVET graduates are necessary to combat the stigma associated with technical education.

Lifelong Learning Systems: Ghana, like Singapore, needs national structures for ongoing skill development so that employees can adjust to shifting market and technological demands throughout the course of their careers.

Industry Engagement: Players in the private sector need to stop whining about a lack of skilled workers and start actively fostering skill development through internships, apprenticeships, and cooperative training initiatives.

Digital Infrastructure: Ensuring that everyone has access to training in digital skills is essential for enhancing productivity and promoting economic inclusion as the economy becomes more digitally integrated.

The Economic Imperative

Inaction comes at a high cost. Each year that skilled jobs go unfilled is a loss of economic opportunity, decreased competitiveness, and lost productivity. According to conservative estimates, resolving the skills mismatch might increase Ghana’s productivity growth by two to three percentage points each year, resulting in billions of cedis more in economic output.
Furthermore, having a competent workforce becomes essential for successfully competing in regional and international markets as Ghana prepares itself to gain from the African Continental Free Trade Area (AfCFTA).

The Path Forward

Ghana is at a turning point. We have two options: we can keep growing at the same rate without increasing productivity, or we can make the calculated investments required to match our people’s resources with business prospects.

Institutional change and mindset reorientation, private sector dedication, and political determination are all necessary for the answer. It requires us to see skill development as the most important investment in our economic future rather than as a cost.

MDPI is better positioned to assist with this transition by providing ongoing training, research, and advisory services. To achieve success, though, all parties involved—the public and business sectors, academic institutions, and civil society—must cooperate to create a workforce that is capable of propelling Ghana’s sustainable growth.

Now is the moment to act. Our kids deserve the chance to make a significant contribution to Ghana’s prosperity by developing skills that meet market demands and spur productivity growth, as our economic future depends on it.

The author is a Senior Management Consultant at the Management Development and Productivity Institute (MDPI), Ghana. MDPI is the country’s leading institution for productivity enhancement, management training, research, and consultancy services. For more information about MDPI’s programmes and services, visit www.mdpi.gov.gh or contact 1^st Freetown Link, East Legon, GPS-379-5705. Tel. 0302252323

 [email protected] or [email protected]

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