Ghana's digital revolution could finally unlock economic growth
From smart IDs to AI hubs, digitisation can fast-track growth and close the gap with global peers like South Korea.
Ghana and South Korea gained independence around the same period, and their developmental trajectories are often compared. For five centuries, Ghana has been part of the Gold Coast, and the mineral is still the country’s most valuable export. But South Korea, initially the poorer country, now has an income level nearly nine times that of Ghana. What prompted their divergent paths?
At independence, South Korea had few natural resources. After the 1950-53 Korean War, the poverty-stricken country focused on food self-sufficiency, basic education, family planning and healthcare. Fertility rates dropped, and the number of working-age people to dependants steadily rose. The ratio of working-age people to dependants (children and the elderly) increased from around 1.2 to one in the 1950s to almost 2.8 in 2016.
Since labour is the most important contributor to growth for low-income countries, South Korea’s economy grew rapidly, with a focus on manufacturing. With fewer mouths to feed and schools to build, the government could invest in its youthful population to contribute to increased productivity.
Compared to South Korea, Ghana’s development has been constrained by high population growth and limited technological advancement. By African standards, Ghana has a medium-sized population (around 33.9 million in 2023). It is more urbanised than most African countries (about 60% – a rate South Korea achieved in 1982), allowing for a quicker transition to digital services. Urbanisation also facilitates the provision of water, sanitation and other services.
By 2050, 71% of Ghanaians will reside in urban areas. This demographic shift will accelerate economic growth and potentially enable Ghana to graduate from its lower-middle-income status to upper-middle-income.
Ghana’s relatively high urbanisation rate has contributed to a drop in fertility (now 3.4 children per woman). It should enter its demographic dividend window of opportunity by 2033, earlier than most West African countries.
This transition presents a critical opportunity for accelerated growth. With a ready supply of labour, the right policies and technology, Ghana could flourish.
However, success will hinge on how Ghana harnesses digital technologies to modernise governance, services, and economic systems. To capitalise on the demographic shift, Ghana must strengthen governance and digital systems, offering a more participatory alternative to the authoritarian model South Korea once used, and replacing South Korean industrial smokestacks with modern services.
In 2008, Ghana launched a smart national identification system, which uses biometrics. The card was rolled out from 2018, giving each citizen a personal identification number (PIN).
The success of Ghana’s democratic dividend hinges on how it harnesses digital technologies
According to the National Identification Authority (NIA), 18.7 million Ghanaians were enrolled and 17.6 million cards issued by May 2025. The cards enable their owners to open bank accounts, apply for a passport or driver’s licence, register a SIM card, buy property, register a business and enrol children in school. They are also the primary source for the biometric voter register, introduced in 2012.
With its paperless port system, exports or imports are directly linked to the PIN to eliminate fraud and theft at harbours. The PIN is also used to verify one’s identity during job searches and applications, for airline e-tickets, at border crossings, police checkpoints, etc. It will eventually become mandatory to validate payments, especially those done electronically.
Most importantly, a PIN allows much of the informal sector to be brought into the formal economy, especially given the country’s advancement in mobile banking.
In addition, the GhanaPostGPS provides a unique digital address for each 5m2 of land area. Previously, there was no formal system for finding a specific location without local knowledge. Armed with a digital address, small and informal businesses can now register for a bank account, access credit and get deliveries by drone.
Besides other benefits, these innovations will improve tax collection, as informal and formal businesses use electronic payment systems. The 2019 United Nations Commission for Africa report reveals that African government revenue can increase by 12%-20% of GDP through rigorously pursuing tax and non-tax income collection, which is possible through digitisation.
Ghana also has a fully digital platform to pay for all government services, including driver’s licences and car registrations. Digitisation of land ownership is also progressing. The aim is for a new base map survey to use blockchain technology to secure and verify land ownership.
And with World Bank support, the Ministry of Education is adopting modern technology for e-learning. The government also launched the One Million Coders initiative to train a million Ghanaians, especially youth, in essential digital skills.
In recognition of these efforts, Google opened its first African artificial intelligence (AI) research centre in Accra, bringing together top machine learning researchers and engineers. And Ghana signed a US$1 billion memorandum of understanding with the United Arab Emirates to build an AI and tech hub hosting Microsoft and Meta by 2027.
Modern technology also allows for better enforcement of mining licences. Illegal mining, rife in many African countries, is often practised by desperate migrants in dangerous conditions. Some 150 drone pilots have been trained to monitor illicit mining across Ghana in a Minerals Commission-led initiative.
Ghana’s smart ID card allows much of the informal sector to be brought into the formal economy
Challenges remain, including the tendency to rush into spending public money before elections on projects that are never completed. The National Development Planning Commission and Ghana Statistical Service have teamed up with the Copenhagen Consensus Center to create Ghana Priorities. The project uses evidence to assess the return on each cedi spent.
There have also been mistakes. Ghana’s 2017 One District One Factory (1D1F) initiative sought to change the nature of its economy from raw material export dependence to manufacturing, value addition and export of processed goods. In March 2025, 1D1F was terminated in validation of traditional approaches aimed at attracting foreign companies and clustering infrastructure and incentives in specialised industrial zones.
Looking ahead, Ghana’s economic prospects appear cautiously optimistic. Continued investment in key sectors, coupled with governance reforms and prudent fiscal management, is essential for sustaining growth.
Closing the gap with South Korea could take decades, but Ghana now has the demographic trends, digital infrastructure, and innovation momentum to begin shifting its trajectory.
This article was first published in Africa Tomorrow, the blog of the ISS’ African Futures and Innovation programme.
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