Author name: Dr Maxwell Ampong

Ghanaians see the evidence of economic wear-and-tear every day. Potholes often appear soon after a road project is commissioned. Power plants operate below capacity within a decade. Irrigation projects are abandoned after only a few seasons. They are signs of an economy where capital depreciates quickly, slowing the path to long-term growth.  Economists have long studied this problem through the Solow growth model, a framework that explains how capital, labour, population growth, and technology interact to shape economic outcomes. I’ll try to explain the Solow model in accessible terms and explore what it means for Ghana. We will examine how depreciation, capital and labour shares, population growth, and technology influence growth trajectories. Although the model can seem abstract, its lessons are highly practical: Ghana’s future prosperity depends not only on building more but also on ensuring what we build lasts, is inclusive, and is complemented by productivity gains. The Solow Model in Plain Language The Solow model, developed in the 1950s by Robert Solow, remains a fundamental part of growth economics. It explains how output in an economy is produced using capital (machines, infrastructure, buildings), labour (workers), and technology (the know-how that makes both productivity). A key idea is the concept of the steady state, which is a point where investment in new capital is just enough to replace the capital that depreciates each year. In simple terms, think of a farmer with a set of tools. Each season, the farmer can save some harvest to buy or repair tools. But tools also rust and break down. If the farmer saves enough, they can maintain or expand their toolkit and produce more in the future. If not, output stagnates or even declines. Ghana’s economy operates on the same principle. The Solow model helps us see three critical dynamics: With this framework, we can examine Ghana’s growth challenges. Depreciation and Ghana’s Infrastructure Challenge Depreciation is arguably the most visible issue in Ghana’s economy. In the Solow model, a higher δ (depreciation rate) raises the break-even line. This indicates that more of today’s investment is used solely to replace worn-out capital, leaving less room for expanding capital per worker. Consequently, the steady-state level of output per worker decreases. In Ghana, depreciation is evident everywhere, from roads to transmission losses in the national grid to water and irrigation projects in decline. High depreciation weakens fiscal planning. The government borrows heavily to fund new projects, but without proper maintenance, the growth benefits are short-lived. Instead of reinvesting in capital (machines, buildings, land, financial assets), Ghana finds itself in a cycle of rebuilding. The Solow model warns us that without reducing δ (depreciation rate), our economy risks stagnation. Capital and Labour in the Solow Framework The Solow model also reminds us that growth is not only about how much we produce, but about how the rewards are shared between those who own machines and money (capital) and those who do the work (labour). In simple terms, part of the economic pie goes to investors and part goes to workers. If more goes to capital, investors benefit more; if more goes to labour, wages improve. In Ghana this balance matters. In sectors like mining or oil, much of the profit flows to capital owners, often abroad, while workers see relatively little. In the informal sector, many people work but earn very low and unstable wages. If the share going to labour keeps shrinking, inequality grows, and the wider society feels the strain. The lesson is that Ghana needs growth that improves both capital and labour. Investment in machines and infrastructure should make workers more productive and better paid, not replace them or leave them behind. Population Growth and Ghana’s Demographic Path Population growth enters the Solow model through the break-even investment line: (δ + n)k. A higher population growth rate means more workers, but also more capital dilution. Investment must stretch further to maintain capital per worker. Ghana’s population is growing at around 2% annually. This creates both opportunity and risk: The Solow model demonstrates that when ‘n’ (population growth) falls, steady-state capital per worker increases, meaning each worker has more capital to utilise. In countries with declining populations like Japan, this has led to higher capital intensity but also ageing challenges. For Ghana, the question is whether we can leverage our demographic trend through education, job creation, and urban planning, or if it will surpass the current capital stock. To put it more simply: if 10 workers share 10 tractors, each worker gets one. If 20 workers share the same 10 tractors, each worker gets half. Population growth without corresponding investment risks overwhelming the available tractors, machinery, and infrastructure. Technology and the Missing Piece Even if Ghana saves more, invests better, and manages its population well, long-term growth still depends on technology. Without new ideas and better ways of working, economies only climb to a certain level and then stall. In Ghana, technology is both the weakest point and the greatest opportunity for progress. Mobile money has already transformed how people access banking services. In agriculture, simple tools like weather apps or small machines could increase crop yields. In industry, adopting cleaner energy sources and modern equipment could make factories more efficient. The Solow model’s clear message is that without consistent improvements in productivity, Ghana risks becoming stagnant. Therefore, making technology adoption and innovation a national priority is vital. Policy Lessons for Ghana The Solow model offers Ghana some practical lessons.  First, we must take care of our roads, power plants, and schools so they last, because repeatedly rebuilding them wastes resources. Second, growth should boost workers’ wages along with investors’ returns. Otherwise, inequality will get worse. Third, our young population can be a strength if education and job creation keep up, but a burden if neglected. Fourth, more of our savings should fund our own growth to reduce reliance on external debt. Fifth, technology must go beyond being just a buzzword and be felt in everyday farming, trading, and industry. Sixth, better governance is

There is a well-known saying in international finance: “When the United States sneezes, the world catches a cold”. For Ghana, this is not just a metaphor. Movements in the U.S. economy influence exchange rates, borrowing costs, export demand, and even the purchasing power of ordinary households in Accra. Understanding the rhythm of the U.S. economy has therefore been more than an academic exercise for me while I study at the University of Missouri. It is a survival strategy for myself, my team, and Maxwell Investments Group. My roles outside MIG also make this relevant to policymakers, businesses, entrepreneurs, and the broader Ghanaian citizenry. This article is my first share of my takeaways from the Macroeconomics Theory classes. We will explore how the U.S. economy performed over the past year, using the key macroeconomic indicators economists rely on to assess growth, inflation, jobs, and trade. More importantly, we will connect those signals to Ghana’s own vulnerabilities and opportunities, showing why U.S. economic shifts are felt directly in our markets. READING THE DASHBOARD: ECONOMIC INDICATORS EXPLAINED Economic indicators are like dashboard lights in a car. They warn us of overheating, display our speed, and hint at what lies ahead. For Ghanaian readers, think of it like this: when traders at Makola Market cut back on stock orders, it acts as a leading indicator. When unemployment figures later rise, that is a lagging indicator. When cocoa export revenues appear in Bank of Ghana reports, that is a coincident indicator. Each type offers a different perspective on the same journey. THE U.S. ECONOMY IN 2024–2025: A YEAR IN REVIEW The past year for the U.S. economy has been a story of resilience after uncertainty. Here is what the data tells us: GDP Growth Real GDP, the broadest measure of output, contracted slightly in early 2025 but rebounded strongly in Q2 with 3.3% growth. The rebound came from resilient consumer spending and a reduction in imports. For Ghana, this matters because strong U.S. demand supports global commodity prices, including cocoa and gold. Domestic Demand (Final Sales) Private final sales measure U.S. household and business expenditure. It increased by 1.9% in Q2, indicating strong domestic confidence. For Ghana, this suggests a continued demand for imported consumer goods, but it also presents a challenge as U.S. spending patterns influence global shipping and supply chains. Incomes (GDI) Gross Domestic Income increased by 4.8% in Q2 2025. Rising wages and profits indicate strong household finances. This indirectly supports remittances sent to countries like Ghana, where U.S.-based diaspora communities are vital sources of household income. Corporate Profits Profits from current production increased by $65.5 billion in Q2 after a sharp decline in Q1. Stronger U.S. profits boost global investment flows, which can spill into African markets via ESG funds and emerging market portfolios. Inflation and Prices The price index for gross domestic purchases increased by just 1.8%. The Federal Reserve’s preferred measure, the PCE price index, remained steady at 2.0%, with core inflation at 2.5%. This stability reassures global investors. For Ghana, where imported inflation is a constant threat, U.S. price stability helps by alleviating global food and fuel cost pressures. Labour Market Unemployment remained between 4.0% and 4.2%. Nonfarm payroll growth slowed in mid-2025 but stayed positive. This indicates a labour market that is cooling, not collapsing. For Ghana, stable U.S. employment supports remittance flows and bolsters dollar strength. Manufacturing PMI, or Manufacturing Purchasing Managers’ Index The PMI increased from below 50, indicating contraction, to 53.3 by August 2025, signalling a manufacturing rebound. For Ghanaian exporters of raw materials and semi-finished goods, rising U.S. factory activity could lead to higher demand. Exchange Rates The U.S. dollar weakened slightly against the euro and the pound, but gained strength against the yen and the yuan. The overall dollar index fell modestly. For Ghana, this is significant. When the dollar weakens, the cedi experiences less pressure. However, when the dollar strengthens, the cost of imports increases, and inflationary effects are felt by consumers. Interest Rates The Federal Reserve kept the Fed Funds rate at 4.25%–4.50%. This cautious approach signals stability, but for Ghana, high U.S. interest rates can increase our borrowing costs and diminish investor appetite for riskier frontier-market debt. WHY THIS MATTERS FOR GHANA Each of these U.S. signals transmits to Ghana in concrete ways: The phrase ‘when the U.S. sneezes, Ghana catches a cold’ highlights this reliance. For an open, arguably import-dependent economy like Ghana, the U.S. economy functions almost like an external central bank whose signals influence our monetary and fiscal systems whether we like it or not. LESSONS FOR GHANAIAN POLICYMAKERS AND BUSINESSES FOR NOW, THE COLD IS INEVITABLE. The U.S. economy’s performance over the past year has demonstrated resilience, maintaining steady growth, moderate inflation, and cautious monetary policy. For Ghana, each of these signals is significant. From the strength of the dollar to the rate of U.S. job creation, America’s economic health is directly connected to Ghana’s stability. The lesson is clear: Ghana cannot afford to ignore U.S. economic signals. Policymakers, businesses, and even households must keep an eye on America’s “dashboard lights,” because when the U.S. sneezes, Ghana really does catch a cold. It is, for the time being, inevitable. Yes, the inspiration for that line is Thanos. I hope you found this article both insightful and enjoyable. Subscribe to the ‘Entrepreneur In You’ newsletter here: https://lnkd.in/d-hgCVPy. I wish you a highly productive and successful week ahead!  ♕ —- ♕ —- ♕ —- ♕ —- ♕ Disclaimer: The views, thoughts, and opinions expressed in this article are solely those of the author, Dr. Maxwell Ampong, and do not necessarily reflect the official policy, position, or beliefs of Maxwell Investments Group or any of its affiliates. Any references to policy or regulation reflect the author’s interpretation and are not intended to represent the formal stance of Maxwell Investments Group. This content is provided for informational purposes only and does not constitute legal, financial, or investment advice. Readers should seek independent advice before making any decisions based on this material. Maxwell Investments Group assumes no responsibility

In light of my appointment as Eminent Member and Subject Matter Expert on Innovations & Business Development with the Chartered Institute of Supply Chain Management (CISCM), I am pleased to share with my readers an important contribution from the Institute. Supply chains are often discussed in fragments, procurement here, logistics there. Yet the real power lies in viewing them as integrated systems that sustain businesses, nations, and global trade. In truth, supply chains are present in virtually every commercial activity. The shopkeeper depends on wholesalers and distributors. A barber depends on the makers of clippers, electricity providers, and suppliers of creams and oils. A software company, which seems purely digital, is still tied to a chain of servers, cables, devices, and cloud providers that make their service possible. Every one of these examples illustrates a simple truth: supply chains are everywhere. They underpin how we work, how we trade, and even how we live. This is why the subject matter of supply chain management is everybody’s business. If you think supply chain isn’t your business, you could be missing a key part of the bigger picture. I’ll lastly add that leadership in supply chains matters. Not just at the government or multinational level, but within SMEs, cooperatives, and even start-ups. Leaders set the tone for reliability, transparency, and accountability. The ability of a small cooperative to store grain properly, or of a transport manager to honour delivery commitments, can determine whether an entire chain holds or breaks. Leadership is the hidden driver of supply chain resilience. This is why CISCM’s work resonates so strongly with me. The article that follows, prepared by CISCM, goes deeper into this subject, and I encourage every reader, whether entrepreneur, policymaker, or consumer, to see themselves as part of the supply chain story. Because until we take supply chains seriously, we will continue to underestimate what truly drives prosperity. I trust readers will find this publication as timely and instructive as I did. __________________________________________________________ What is Supply Chain Management? At the most fundamental level, supply chain management (SCM) is management of the flow of goods, data, and finances related to a product or service, from the procurement of raw materials to the delivery of the product at its final destination. Although many people equate the supply chain with procurement or logistics, procurement or logistics is actually just one component of the supply chain. Supply Chain Management traditionally, comprises the following activities; material planning, procurement, inventory and material handling, operations or processing or manufacturing, transportation, logistics, suppliers, wholesalers, retailers, and consumers. Its also Includes information flow and applications of information for all parties involved in product or service creation, order fulfillment, and information tracking. Today’s digitally based Supply Chain Management systems include material handling and software for all parties involved in product or service creation, order fulfillment, and information tracking―such as suppliers, manufacturers and wholesalers. Supply chain activities span procurement, product lifecycle management, supply chain planning (including inventory planning and the maintenance of enterprise assets and production lines), logistics (including transportation and fleet management), and order management. Supply Chain Management can also extend to the activities around global trade, such as the management of global suppliers and multinational production processes. History of Supply Chain Integration Supply chains have existed since ancient times, beginning with the very first product or service created and sold. With the advent of industrialization, SCM has become more sophisticated, allowing companies to do a more efficient job of producing and delivering goods and services. For example, Henry Ford’s standardization of automobile parts was a game-changer that allowed for the mass production of goods to meet the demands of a growing customer base. Over time, incremental changes such as the invention of computers have brought additional levels of sophistication to SCM systems. However, for generations, SCM essentially remained a linear, silo-based function that was managed by supply chain specialists. The internet, technological innovation, and the explosion of the demand-driven global economy has changed all that. Today’s supply chain is no longer a linear entity. Rather, it’s a complex collection of disparate networks that can be accessed 24 hours a day. At the center of these networks are consumers expecting their orders to be fulfilled―when they want them, the way they want them and where they want them. We now live in a time of unprecedented global business and trade, not to mention continual technological innovation and rapidly changing customer taste and preferences and attendant expectations. Today’s best supply chain strategies call for a demand-driven operating model that can successfully bring people, processes, and technology together, around integrated capabilities to deliver goods and services with extraordinary speed and accuracy. Though SCM has always been an enterprise fundamental, the supply chain today is more vital than ever as a marker for business success. Companies that can effectively manage their supply chain to adapt to today’s volatile and ever-changing, technology-driven business environment are the ones that will survive and thrive. What is the conventional meaning of Supply Chain Integration? Supply chain integration can be defined as a close calibration and collaboration within a  supply chain, mostly with the application of shared management information systems. A  supply chain is made from all parties that participate in the completion of acquisition, like  the resources, raw materials, manufacturing of the product, shipping of completed products  and facilitating services. The concept of Conventional Supply Chain Management (SCM) is based on Five (5) core tenets: The Change Theory  The global socio-economic and business ecosystem is being driven by existential challenges of VOLATILITY, UNCERTAINTY, COMPLEXITY, and AMBIGUITY. These phenomena have influenced the tectonic shift from conventional Supply Chain Management, with the corresponding features mentioned above, to Integrated Supply Chain Management which is an enhanced position of Supply Chain Integrations called INTEGRATED SUPPLY CHAIN MANAGEMENT (ISCM).   At the World Economic Forum 2014, it became very clear that the concept of Integrated Supply Chain Management is the new paradigm that will provide sustainable and reliable solutions to the global economic and business challenges which confront many