Ghana’s Path to Upper Middle-Income Status Could Take 26 Years Without Bold Economic Reforms, Warns ISSER Director

At the launch of the World Bank’s 2024 World Development Report, Professor Peter Quartey, Director of the Institute of Statistical, Social and Economic Research (ISSER), highlighted the significant challenge Ghana faces in breaking free from the middle-income trap.

Ghana became a middle-income country in 2010 with a capital base of $1,337. By 2023, this figure had increased to about

Read full article$2,365. However, to achieve upper middle-income status, Ghana would need to reach $4,560 per capita, a milestone that could take 26 years at the current growth rate.

During a panel discussion at the event, Professor Quartey stressed that transforming Ghana’s economy requires targeted interventions, particularly in supporting the middle sectors.

He noted that beyond offering credit, efforts should focus on developing the processing and service sectors and fostering value accumulation. For this transformation to be effective, he called for greater coordination between the government and the private sector.

The World Development Report raised similar concerns for the 108 middle-income countries (MICs) globally, many of which are struggling to advance to high-income status.

The report outlined a three-stage path that countries must navigate to achieve high-income classification: "1i" (investment), "2i" (integration and dissemination of foreign technologies), and "3i" (innovation).

South Korea was highlighted as a success story, having raised its per capita income from $1,200 in 1960 to $33,000 by 2023. The country’s focus on heavy investment and industrial policies, especially the adoption of foreign technologies in the 1970s, played a critical role in its transformation.

However, for most middle-income countries, progress has been slow. While many have escaped low-income status since the 1990s, only 34 out of 108 MICs have transitioned to high-income economies over the past three decades.

Achieving this goal requires not only maintaining growth but also accelerating it by balancing investment, technology adoption, and innovation to avoid getting stuck in the middle-income bracket indefinitely.