Over the years, Ghana’s economic growth has been substantially attributed to growth in GDP. Despite using GDP as the macroeconomic indicator for positive economic growth, the benefits of growth do not reflect in the micro economy. Thus, the ordinary Ghanaian did not feel the impact of the recovered macroeconomic indicators because severe business regulatory barriers prevent local enterprises from scaling and creating jobs for majority of youth. This situation causes a large proportion of Ghanaians to continually experience poverty and economic insecurity.
The latest warning from the World Bank puts the contradiction into stark perspective. At the launch of the World Bank’s 10th Ghana Economic Update on August 26, 2026, it was said that 56.4% of Ghanaians remain in poverty, despite the economy growing by 6% in 2025, and expanding by 6.4% in the first quarter of 2026.
The World Bank also warned that the benefits of headline economic growth have not reached enough households, and that spatial disparities are widening.
This raises a fundamental question: What is the value of macroeconomic growth if it does not translate into jobs, rising household incomes, expanding businesses, and improved living standards?
Why GDP Failed as a Measure of Human Dignity?
In 2025, the African Business reported that AUDA-NEPAD CEO Nardos Bekele-Thomas, “acknowledged the value of historic growth models but argued that traditional indicators like Gross Domestic Product (GDP) fail to capture the full story of African societies. In particular, they overlook the value embedded in informal economies, community networks and indigenous knowledge systems. To Bekele-Thomas, GDP alone cannot define the richness of societies or the aspirations of the people,”
Arguably, Niskanen Center, in establishing the correlation between personal freedom and economic freedom, argued that …” the Human Freedom Index consists of two parts. One is the Economic Freedom Index (EFI) from the Fraser Institute, which includes measures of the size of government, protection of property rights, sound money, freedom of international trade, and regulation.
The other is Cato’s own Personal Freedom Index (PFI), which includes measures of rule of law, freedom of movement and assembly, personal safety and security, freedom of information, and freedom of personal relationships. The Cato and Fraser links provide detailed descriptions of the two indexes.
Drawing on the driving synthesis of both indexes, the center further explored how freedom influences other aspects of human well-being, emphasizing the Legatum Prosperity Index (LPI) from the Legatum Institute. The LPI focuses on nine “pillars” of prosperity, including the economy, business environment, governance, personal freedom, health, safety and security, education, social capital, and environmental quality.”
If a country really wants to be truthful and fully measure its growth, indicators that reveal the progress of human dignity must be the center of focus and not GDP.
As stated by the former First Lady of Ghana, Nana Konadu Agyeman Rawlings at the Thunderbird School of Global Management in the United States on the theme, “Development, Politics and National Government- impact on African Women”, “GDP should not be the only source of measuring a country’s wellbeing because it does not reflect the life and wellbeing of its people”.
GDP was never designed to measure human well-being. It was designed to measure economic output. It measures the monetary value of all final goods and services produced in a country during a given period.
It does not measure income distribution, environmental health, excessive regulations, unpaid work, leisure, or quality of life. The two are not the same, and should not be intertwined as growth of a country when the human dignity of the country (citizens' well-being) is still poor. A country can grow its GDP while its citizens become poorer. That is not development but rather mockery of human dignity.
The fallacy of growth by GDP is long overdue when a growing economy that does not generate sufficient employment for its expanding working-age population can produce impressive macroeconomic numbers while leaving and pushing citizens into poverty.
Notwithstanding, the focus must change to facilitating a business regulatory environment that enables businesses to transition, employ, increase households’ income, and improve the dignity of citizens.
As established in the Institute for Liberty and Policy Innovation's (ILAPI) latest research, Removing Business Regulatory Barriers for Economic Prosperity in Ghana, an important explanation for why economic growth may fail to translate into broad-based prosperity was critically examined. The study found that businesses face lengthy registration processes, multiple regulatory requirements, high compliance costs, overlapping institutional mandates and limited digital accessibility. These challenges affect business growth.
Again, the study stipulated that only 28.2% of micro-enterprises transitioned from micro to medium-sized enterprises with more than 10 years in active operation. This shows that when a small enterprise cannot grow, it cannot employ more people, and the burden will definitely be on the government.
The challenge is not a lack of government awareness of the situation, but rather implementation and political commitment to regulatory reforms.
Ghana, other African countries, and the world system must begin to look beyond GDP growth and examine the structure of the economy, particularly the environment in which businesses operate. Growth must create economic opportunities where growth in living condition is a focal point.
Macroeconomic stability, lower inflation, fiscal discipline, investment, and rising production provide the foundation for development. But growth becomes meaningless to ordinary citizens when it generates no to less economic opportunities. For most Ghanaians, the most direct pathway out of poverty is not a GDP statistic. It is a productive job, a growing business, a reliable source of income, or an opportunity to build an enterprise.
Specifically, Business facilitation should become a poverty-reduction strategy. Ghana therefore needs to reposition business facilitation from a narrow investment policy to a central component of its poverty-reduction strategy. I
f the objective is to make growth inclusive, policymakers must deliberately create an environment where businesses can move from micro to small, small to medium, and medium to large. That requires a regulatory framework that recognises an important economic reality that businesses are the vehicles for employment, economic growth, and poverty reduction.
Interestingly, the government is calling for a-24-hour economy, but have failed to deliberately implement policies that create friendly regulatory environment for private enterprise to develop and grow beyond its vision.
Until we start to see entrepreneurs not merely as taxpayers or entities to be regulated, but as partners in national development and poverty reduction, policies will continue to curtail transition and employment.
A prosperous Ghana will not be built by macroeconomic numbers alone. It will be built when those numbers translate into business growth, transition, jobs and income rise.
Reference
Institute for Liberty and Policy Innovation's (ILAPI) (2025), Removing Business Regulatory Barriers for Economic Prosperity in Ghana.
World Bank’s (2026), 10th Ghana Economic Update on August 26, 2026.
https://www.niskanencenter.org/freedom-government-part-one/
https://www.modernghana.com/news/505159/gdp-alone-cant-be-the-blanket-measure-of-well-being-mrs.html
https://theaccradailymail.com/2026/08/25/why-we-need-to-stop-measuring-success-only-by-gdp/
https://leadership.ng/gdp-growth-doesnt-mean-prosperity/
Author:
Stephen Dansu
Senior Research and Policy Analyst at ILAPI
