Skip to main content

Ghana’s informal sector holds 80% of jobs; contributes just 27% to GDP – GSS


 Ghana’s informal sector employs nearly 80% of the workforce but contributes only 27% of GDP, highlighting a major productivity gap, according to the first edition of the National Report on Productivity, Employment, and Growth, released by the Ghana Statistical Service (GSS).

The report warns that despite providing livelihoods for the majority of workers, the informal sector remains plagued by low productivity, underemployment, and stagnant wages, posing a significant challenge to economic growth.

According to the report, labour productivity grew by an average of 3.2% annually between 1991 and 2019, with key gains concentrated in capital-intensive sectors such as mining and finance.

The manufacturing sector recorded a 14% productivity increase between 2013 and 2022, yet employment grew by only 2.5% in the same period, reflecting slow industrial expansion.

Similarly, the mining sector saw high productivity growth but little job creation, highlighting Ghana’s reliance on industries that do not generate widespread employment opportunities.

The report also reveals a widening gap between productivity and wages. While sectors such as finance, insurance, and professional services have seen stronger wage growth, industries like household agriculture, trade, and repair services have recorded slow or stagnant wage increases despite productivity improvements.

A sectoral breakdown shows that commercial agriculture, transportation, utilities, and manufacturing are among the industries contributing to both job creation and productivity gains.

However, Ghana’s economic transformation remains slow, with many workers transitioning from traditional trades to low-productivity urban services, limiting overall economic benefits.

To address these challenges, the report calls for greater investment in industrialization, expansion of commercial agriculture, and policies to integrate informal businesses into the formal economy.

It also emphasizes the need for technology adoption, workforce upskilling, and targeted fiscal measures to boost productivity.

With Ghana at a crucial economic turning point, analysts warn that without bold policy reforms, the country risks deepening income inequality, slowing productivity growth, and failing to create sustainable jobs for its workforce.

Labels:

Comments

Post a Comment

Popular posts from this blog

Fitch Solutions retains 2025 growth rate projection at 4.2%

 Fitch Solutions has reaffirmed its projection that Ghana’s economy will expand by 4.2% in 2025. This estimate slightly exceeds the International Monetary Fund’s forecast of 4% and the World Bank’s projection of 3.9%. The UK-based research firm attributes its outlook to historically high gold prices, which are expected to cushion the Ghanaian economy against a global slowdown triggered by rising tariffs. Higher gold prices are anticipated to strengthen government revenue, enhance foreign exchange earnings, and help sustain currency stability. The report also highlights that Ghana is relatively less vulnerable to increasing trade restrictions from the United States, given that its primary exports—gold and crude oil—are not directly affected by the tariffs introduced by President Trump’s administration. Moreover, the US constitutes only about 4% to 5% of Ghana’s total exports. In contrast, Ghana’s trade relations are more heavily oriented toward China and European countries, particul...
Post a Comment
Read more

BoG injects $20m into FX market to support 11 BDCs

  The Bank of Ghana (BoG) has injected $20 million into the foreign exchange market in the latest round of its forward FX auction targeted at Bulk Oil Distribution Companies (BDCs). The intervention, which benefited eleven BDCs, is part of the central bank’s broader strategy to stabilise the cedi and ensure price stability in the petroleum downstream sector. Held on Tuesday, April 29, the auction was priced at a locked exchange rate of GHS 14.28 to the US dollar, with bid offers ranging from GHS 13.85 to GHS 15.55. This move reflects the BoG’s continued effort to deepen forex liquidity and safeguard the domestic fuel supply chain against volatility in global energy markets. By directly supplying FX to BDCs, the central bank seeks to ease pressure on the interbank market, guarantee the uninterrupted flow of petroleum products, and mitigate the pass-through effects of exchange rate fluctuations on fuel prices. The $20 million disbursement forms part of a $120 million programme for th...
Post a Comment
Read more

Kenpong Travel & Tours Champions Breast Cancer Awareness During Customer Week

  As part of activities to mark Customer Week, Kenpong Travel & Tours, a leading travel agency in Ghana, is joining the global fight against breast cancer. October is Breast Cancer Awareness Month, and the company is passionate about spreading hope and support to those affected. At Kenpong Travel & Tours, we believe that travel and exploration can be therapeutic and empowering. That's why we're committed to supporting our customers and the broader community in the fight against breast cancer. We're proud to stand in solidarity with breast cancer warriors and survivors. At Kenpong Travel & Tours, we believe that everyone deserves a chance to explore the world and create unforgettable memories. Let's prioritize health, support one another, and fight against breast cancer," said Kennedy Agyapong, CEO of Kenpong Travel & Tours. Our efforts are focused on raising awareness, promoting early detection, and supporting those affected by breast cancer. We urg...
Post a Comment
Read more