Youth unemployment remains stuck at 30% despite Ghana’s economic recovery, IMF warns

Ghana’s macroeconomic stabilisation has begun to restore investor confidence and improve headline economic indicators, but the recovery has yet to resolve one of the country’s most pressing structural challenges: persistent youth unemployment.

According to the International Monetary Fund (IMF), unemployment among Ghanaians aged between 15 and 24 has remained stubbornly high at around 30%, highlighting the disconnect between economic growth and labour market outcomes.

The assessment, contained in the IMF’s latest country report on Ghana, suggests that while inflation has moderated, economic activity has strengthened and poverty has eased modestly, these gains have not translated into broad-based employment opportunities for the country’s rapidly growing youthful population.

For policymakers, the findings reinforce a long-standing concern that macroeconomic stability alone is insufficient to address Ghana’s employment challenge without deeper structural reforms capable of generating labour-intensive growth.

The IMF noted that social conditions remain challenging despite existing safeguards, reflecting the uneven distribution of the benefits from Ghana’s economic recovery.

The report cited World Bank estimates showing that the proportion of Ghanaians living below the international poverty line of US$3 per day declined modestly to 37.1% in 2025, from 38.9% in 2022.

The improvement, according to the Fund, largely reflects declining inflation together with stronger performance in agriculture and services, sectors that have helped cushion household incomes following the country’s macroeconomic crisis.

However, the Fund stressed that the pace of poverty reduction remains modest relative to the scale of the country’s development challenges.

Recognising the employment deficit, the IMF said the government’s Medium-Term National Development Policy Framework (2026–2029) places significant emphasis on expanding labour-intensive sectors capable of generating jobs for young people entering the workforce.

The strategy reflects growing recognition that sustained economic growth must be accompanied by employment creation if Ghana is to fully realise its demographic dividend.

Beyond employment, the IMF warned that Ghana continues to face significant weaknesses in its social protection system.

According to the report, “Ghana faces substantial social protection gaps that require a sustained scaling up of allocations and improvements in programme effectiveness. While social spending has increased modestly under the ECF, coverage and benefit levels remain low relative to needs and regional comparators.”

The Fund observed that although government spending on social programmes has risen under the Extended Credit Facility (ECF) programme, existing interventions remain insufficient to meet the needs of vulnerable households.

Particular attention was drawn to the Livelihood Empowerment Against Poverty (LEAP) programme.

The IMF noted that LEAP coverage, even after the planned expansion, will reach only a fraction of the almost 40% of Ghanaians living below the international poverty line, indicating that many vulnerable households remain outside the formal social protection system.

Education also remains an area requiring continued policy attention.

While acknowledging improvements in educational outcomes over recent years, the Fund said secondary school enrolment continues to fall short of the Sustainable Development Goals (SDGs), while education quality indicators continue to lag behind those of comparable economies.

The report argues that improving educational attainment and skills development will be essential if Ghana is to reduce structural unemployment and improve labour productivity over the medium term.

The IMF further cautioned that maintaining social cohesion will become increasingly important as the government continues implementing fiscal consolidation measures under its economic reform programme.

According to the Fund, “In the context of ongoing fiscal discipline, global uncertainty, and ongoing utility tariff adjustments, strengthening social safety nets and implementing well-targeted social policies is essential to protect the most vulnerable from the adverse impacts of macroeconomic shocks.”

From an economic policy perspective, the findings suggest Ghana’s next phase of reform may increasingly shift from restoring macroeconomic stability towards ensuring that growth becomes more inclusive.

While inflation, fiscal balances and investor confidence have shown encouraging improvements over the past year, sustained reductions in youth unemployment will likely require stronger private-sector investment, expanded industrial activity, improved vocational training, enhanced digital skills development and greater support for small and medium-sized enterprises that account for the bulk of employment creation.

For investors, the report presents a nuanced picture. Macroeconomic fundamentals are improving, but labour market weaknesses and social protection gaps remain significant structural risks that could influence long-term productivity, domestic demand and the pace of inclusive economic growth. Successfully translating macroeconomic stability into employment creation may ultimately determine the durability of Ghana’s economic recovery.