A new report by the Ghana Statistical Service (GSS) has shown that even though every eight out of 10 employed people are in the informal sector, their productivity contribution to the country’s (Gross Domestic Product) GDP is only 27.4 percent.
By this, 80 percent of Ghana’s workforce found in the informal sector contribute less to the GDP, compared to the remaining 20 percent operating in the formal economy.
The report pointed out that informal employment has remained highly pervasive in Ghana, with no substantial reduction over the past decades.
“Eight out of 10 employed persons are engaged in informal activities (Table 1.3). Informal sector activities are dominated by own account work where earnings are typically low and irregular. Paid employment (most of which are in the formal sector), with clearly defined employer-employee relationships subject to national labour standards, constitutes between 20.2% and 27.4% in the Ghanaian labour market”, the “National Report on Productivity, Employment, and Growth” released by the GSS noted.
It revealed that the incidence of productive employment remains low, between 25.3% and 34.1% of total employment.
“For workers and business owners, the consequences of informality can be significant. They impede the full exercise of rights and limit access to social security systems, notably social insurance”.
The report cautioned that when workers operate under precarious circumstances, it affects their full contribution to productivity and enterprise growth.
It stressed that the relationship between productivity and decent work goes both ways – productivity allows wages and working conditions to improve, but better wages and working conditions also contribute to productivity growth.
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