Innovation meets Growth? Navigating the Digital Landscape in Ghana

Digitalization is the “use of digital technologies to change a business model and provide new revenue and value-producing opportunities”. Digital technologies now permeate all aspects of the economic and social fabric of both developed and emerging economies. At the micro level, digitalization allows firms to lower transaction and operational costs, improve productivity, enhance data collection capabilities, modernize existing legacy processes, improve operational agility, provide better customer experience, and increase market share and profits.

At the macro level, digitalization has positively impacted financial inclusion, access to public services, health outcomes, food security, education and more. As African countries seek to transform their economies, policymakers need to know how digitalization fits into their current strategies and how can they leverage its benefits to drive transformation.

Ghana’s digital economy is currently valued at about USD 1 billion and may reach USD 5 billion by 2030. Digitalization in Ghana is primarily fueled by the service sector, with minimal contributions from the industrial and agricultural sectors. The service sector is currently the largest contributor to Ghana’s GDP, contributing to 45.9 per cent of total GDP (2021). The industrial sector is the next largest – contributing 30 per cent of GDP, followed by the agricultural sector at roughly 21 per cent in 2021. Growth in the service sector was fueled partly by robust digital transformation in five key areas: administration, finance, health, transport and storage as well as whole sale and retail trade.

The question is whether the government of Ghana can leverage digitalization to effectively support this economic transformation. The use by some European and Asian firms of modern digital technologies5 has impacted positively on their bottom lines, their sustainability, and on their competitiveness in the global market. These include tools to improve manufacturing throughput, quality assurance and preventive maintenance, inventory control, safety, quality, real-time monitoring of plant operations, real-time decision-making, cost control, business process efficiency, and customer experience.

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