Ghana’s cross-border trade landscape has undergone a significant shift in 2025, with informal trade emerging as the dominant force, eclipsing formal trade for the first time in the first three quarters of the year. The Ghana Statistical Service (GSS) released a detailed report on Wednesday, revealing that informal cross-border commerce with neighbouring countries—Togo, Burkina Faso, and Côte d’Ivoire—exceeded formal trade by a substantial margin, underscoring its critical role in the nation’s economic dynamics.
Key Findings from the GSS Report
The Informal Cross-Border Trade: Q1-Q3 2025 report highlighted that the total value of informal cross-border trade reached 31 billion Ghana cedis (approximately $2.69 billion USD), while formal trade amounted to 20.1 billion cedis ($1.74 billion USD). This marked a major reversal from previous trends, where formal trade had traditionally held a stronger position.
Government Statistician Alhassan Iddrisu addressed the findings during the report’s launch, emphasising that informal trade now constitutes around 6% of Ghana’s total trade volume, a figure that has grown steadily over recent years. He stressed the need for policymakers to closely monitor and strategically leverage this sector to enhance job creation, livelihood improvement, and economic growth in border communities.
Regional Breakdown: Informal Trade Dominates
The report provided a detailed regional analysis, revealing how informal trade operates differently across Ghana’s three key trading partners:
1. Trade with Togo (Eastern Neighbour)
- Informal trade dominance was evident, with its share rising from 70.5% in Q1 to a peak of 77.8% in Q3.
- Formal trade saw a temporary increase to 33.8% in Q2, but this declined to 22.2% by Q3, reinforcing the prevalence of informal channels.
- The data suggests that Togo remains Ghana’s largest informal trade partner, with cross-border activities thriving despite regulatory challenges.
2. Trade with Côte d’Ivoire (Western Neighbour)
- Informal trade consistently accounted for more than 60% of total cross-border trade throughout the three quarters.
- The report noted that formal trade mechanisms (such as official border posts and customs procedures) remain less utilised compared to informal networks, which often operate through unregulated markets, informal checkpoints, and private trade agreements.
3. Trade with Burkina Faso (Northern Neighbour)
- Initially, formal trade led in Q1, with 57.8% of transactions occurring through official channels.
- However, by Q2 and Q3, informal trade overtook formal trade, accounting for over 52% of total cross-border activity.
- This shift indicates a growing reliance on informal networks, possibly due to logistical inefficiencies, bureaucratic hurdles, or economic incentives favouring unofficial trade routes.
Economic and Social Implications
The rise of informal trade has far-reaching consequences for Ghana’s economy:
- Job Creation & Livelihoods
- Informal trade is a major employer, particularly in border towns such as Ho, Kpalime, and Busua, where small-scale traders, transporters, and middlemen thrive.
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The sector provides livelihood opportunities for youth and women, who often dominate informal commerce due to lower entry barriers compared to formal business registration.
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Wealth Distribution in Border Communities
- While formal trade tends to concentrate wealth among large corporations and registered businesses, informal trade distributes economic benefits more broadly.
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However, this also means lower tax revenues for the government, as many informal traders operate outside regulatory oversight.
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Challenges & Policy Considerations
- Regulatory Gaps: The lack of standardised trade protocols between Ghana and its neighbours facilitates informal trade but also exposes goods to quality control risks.
- Tax Evasion: Since many informal traders avoid official declarations, the government loses potential revenue from customs duties and VAT.
- Need for Structured Engagement: Policymakers must balance regulation with facilitation—perhaps by formalising key informal trade hubs while ensuring fair competition with formal businesses.
Government Response & Future Outlook
Alhassan Iddrisu urged authorities to adopt a data-driven approach in shaping trade policies, ensuring that informal trade is harnessed for national development rather than left to operate in a vacuum of regulation.
Possible policy interventions could include:
– Simplifying cross-border trade procedures to reduce bureaucratic delays.
– Establishing semi-formal trade zones where informal traders can operate under light regulation.
– Strengthening regional economic integration (e.g., through ECOWAS frameworks) to formalise cross-border commerce while protecting small-scale traders.
Conclusion
The dominance of informal trade in Ghana’s cross-border economy underscores its vital role in sustaining regional commerce. While formal trade mechanisms remain essential for large-scale economic activities, the informal sector’s resilience and adaptability highlight the need for more inclusive policy approaches.
As Ghana continues to navigate economic challenges, understanding and strategically engaging with informal trade could be key to fostering sustainable growth in border regions and beyond. The GSS report serves as a critical benchmark, calling for urgent attention from policymakers to maximise the benefits while mitigating risks associated with this dominant yet underregulated economic force.