After nearly a decade of strong growthfueled by the boom in commodity prices, Ghana’s economyremains undiversified and vulnerable to external shocks.Thisreport strives to analyze the main challenges for economicdiversification from a productivity angle.In looking at aset of high-growth economies of the past, the Growth Report2008 identified common characteristics of successfullyapplied growth models—the “ingredients of growth”—to informpolicy formulation around the world.However, sinceindependence in 1957, Ghana’s long-term growth dynamics havebeen mixed and can be divided into three distinctperiods.Drivers of the economic expansion of Ghana changedsignificantly over the years; currently, the service andnatural resources sectors provide the main sources ofgrowth.As a consequence of the change in input factors forgrowth, the contribution of total factor productivity togrowth is on a declining path.The structural shift of theGhanaian economy into services and natural resource sectorscomes with two key economic management challenges. First ,Ghana’s shift to services sectors only marginallycontributes to labor productivity growth.Second,concentration of economic activity in natural resourcesincrease economic volatility and complicatemacro-management.The provision of basic public servicesremains a challenge according to private sector executivesurveys.Economic diversification is a key element ofeconomic development in which a country moves to a morediverse production and trade structure.
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