Ghana’s informal sector employs nearly 80% of total workforce
A new report from the Ghana Statistical Service (GSS) reveals a significant productivity gap in Ghana’s informal sector, which employs nearly 80% of the country’s workforce yet contributes only 27% to the Gross Domestic Product (GDP).
The first-ever National Report on Productivity, Employment, and Growth warns that low productivity, underemployment, and stagnant wages in this vital sector pose a serious challenge to economic growth.
According to the report, between 1991 and 2019, Ghana’s labour productivity grew at an average of 3.2% annually, with gains largely confined to capital-intensive sectors such as mining and finance.
Although the manufacturing sector experienced a 14% increase in productivity from 2013 to 2022, its employment grew by a mere 2.5%, underscoring sluggish industrial expansion.
The report also highlights a growing disparity between productivity gains and wage growth.
While sectors like finance and insurance have seen substantial wage increases, industries such as agriculture, trade, and repair services have witnessed slow or stagnant wage growth, despite improvements in productivity.
Key contributors to job creation and productivity gains include commercial agriculture, transportation, utilities, and manufacturing.
However, Ghana’s overall economic transformation remains hindered as many workers transition from traditional trades to low-productivity urban services, limiting the broader benefits of growth.
To address the productivity gap, the report calls for:
Greater investment in industrialization and commercial agriculture Policies to integrate informal businesses into the formal economy Increased technology adoption and workforce upskilling targeted fiscal measures to boost productivity.
With Ghana at a critical economic juncture, experts warn that without bold policy reforms, the country risks deepening income inequality, slowing productivity growth, and failing to generate sustainable employment for its workforce.
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