Ghana’s informal sector accounts for nearly 80% of the country’s workforce, yet it contributes only 27% to the national GDP, revealing a significant productivity gap. This finding is highlighted in the first edition of the National Report on Productivity, Employment, and Growth, released by the Ghana Statistical Service (GSS).
The report underscores the fact that, although the informal sector provides employment for the majority of the population, it continues to suffer from low productivity, underemployment, and stagnant wages. These challenges present a substantial barrier to Ghana’s economic growth.
Between 1991 and 2019, labor productivity in the country grew at an average annual rate of 3.2%. However, the productivity gains were mainly concentrated in capital-intensive sectors such as mining and finance. The manufacturing sector, for example, experienced a 14% increase in productivity from 2013 to 2022, but employment in this sector grew by only 2.5% during the same period, pointing to a slow pace of industrial expansion. Similarly, although the mining sector saw high productivity growth, job creation remained limited, reflecting Ghana’s reliance on industries that do not provide widespread employment opportunities.
Furthermore, the report highlights the growing disparity between productivity and wages. Sectors like finance, insurance, and professional services have witnessed stronger wage growth, while industries such as household agriculture, trade, and repair services have seen sluggish or stagnant wage increases, despite improvements in productivity.
The report provides a sectoral breakdown, noting that industries such as commercial agriculture, transportation, utilities, and manufacturing have contributed to both job creation and productivity gains. However, Ghana’s overall economic transformation remains slow, with many workers shifting from traditional trades to low-productivity urban services, which limits the overall economic benefits.
To address these issues, the report calls for greater investments in industrialization, the expansion of commercial agriculture, and policies aimed at integrating informal businesses into the formal economy. It also emphasizes the importance of technology adoption, workforce upskilling, and targeted fiscal measures to enhance productivity.
As Ghana stands at a critical economic juncture, analysts warn that without bold and comprehensive policy reforms, the country risks exacerbating income inequality, slowing productivity growth, and failing to generate sustainable employment opportunities for its workforce.
Source; Citinewsroom
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