Structural Transformation in Rural Ghana: The Trends and Drivers

Structural transformation in rural spaces in developing economies remains elusive. Although the agricultural sector in Africa has often been viewed as a critical sector with the potential to provide productive employment to spur sustained growth, the sector is yet to experience the much-needed boost required to propel the transformation of rural areas. Ghana’s extensive historical data makes it ideal for understanding transformation within developing country contexts. Using various waves of the Ghana Living Standard Surveys (GLSS) covering a period of close to three decades, the explores the trends, and drivers of transformation in rural Ghana. We further explore the role of generalpurpose technologies-electricity and mobile phone coverage-in the transformation trajectory of rural Ghana. Our findings point to a modest decline in the share of labour in the agricultural sector with heterogeneity at the regional levels, suggesting that although some rural transformation has taken place, it is not to the extent that may have previously been perceived. Furthermore, we note a predominant presence of young individuals (both male and female) leading the transition away from agricultural-related activities, accompanied by a noticeable rise in higher education's association with the agricultural sector. We also observe growing labour shares in the services sector, while labour share in manufacturing declines over time. Our analyses suggest that access to electricity has been key to the transformation of rural spaces in Ghana by enabling the transition from farming to non-farm employment.