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Ghana’s Informal Sector Employs 80% but Contributes Only 27% of GDP – GSS Report
A new report by the Ghana Statistical Service (GSS) has revealed a significant productivity gap in Ghana’s informal sector, which employs nearly 80% of the workforce but contributes only 27% to the country’s Gross Domestic Product (GDP).
The National Report on Productivity, Employment, and Growth, the first of its kind, warns that despite being the backbone of employment, the informal sector is hindered by low productivity, underemployment, and stagnant wages, posing a challenge to economic growth.
Between 1991 and 2019, Ghana’s labour productivity grew at an average of 3.2% annually, with gains concentrated in capital-intensive sectors such as mining and finance. While the manufacturing sector recorded a 14% productivity increase from 2013 to 2022, employment in the sector grew by just 2.5%, reflecting sluggish industrial expansion.
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The report also highlights a growing disparity between productivity and wages. While industries such as finance and insurance have seen significant wage growth, sectors like agriculture, trade, and repair services have experienced slow or stagnant wage increases despite productivity improvements.
Commercial agriculture, transportation, utilities, and manufacturing were identified as key contributors to both job creation and productivity gains. However, Ghana’s economic transformation remains slow, as many workers move from traditional trades to low-productivity urban services, limiting overall economic benefits.
To bridge the productivity gap, the report calls for:
- Greater investment in industrialisation 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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