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Ghana’s informal sector employs nearly 80% of the workforce but contributes only 27% of the country’s Gross Domestic Product (GDP), exposing a significant productivity gap. This finding is highlighted in the first edition of the National Report on Productivity, Employment, and Growth, published by the Ghana Statistical Service (GSS).
Despite being the main source of employment for most Ghanaians, the informal sector struggles with low productivity, underemployment, and stagnant wages. The report warns that these challenges pose a major obstacle to the country’s economic growth.
Between 1991 and 2019, labour productivity in Ghana grew at an annual average rate of 3.2%, with the highest gains observed in capital-intensive sectors such as mining and finance. The manufacturing sector, for instance, saw a 14% increase in productivity between 2013 and 2022. However, employment in the sector grew by just 2.5% within the same period, indicating slow industrial expansion.
Similarly, the mining sector recorded high productivity growth but created few jobs, underscoring Ghana’s dependence on industries that do not generate widespread employment opportunities.
The report also highlights a growing disconnect between productivity and wages. While workers in finance, insurance, and professional services have experienced stronger wage growth, those in household agriculture, trade, and repair services continue to face stagnant or slow wage increases, even in the face of productivity improvements.
A sectoral analysis identifies commercial agriculture, transportation, utilities, and manufacturing as industries contributing to both job creation and productivity gains. However, Ghana’s economic transformation remains sluggish, as many workers shift from traditional trades to low-productivity urban services, limiting overall economic progress.
To bridge the productivity gap, the report advocates for increased investment in industrialization, the expansion of commercial agriculture, and policies aimed at integrating informal businesses into the formal economy. It also stresses the importance of technology adoption, workforce upskilling, and targeted fiscal measures to enhance productivity.
With Ghana at a critical economic crossroads, analysts caution that without bold policy interventions, the country risks worsening income inequality, slowing productivity growth, and failing to generate sustainable employment for its workforce.
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