Ghana’s Informal Sector Faces Productivity Gap, Contributes Only 27% to GDP – GSS Report
Accra, February 25, 2025
A new report by the Ghana Statistical Service (GSS) has revealed that while Ghana’s informal sector employs nearly 80% of the workforce, it contributes only 27% to the country’s Gross Domestic Product (GDP). This highlights a major productivity gap that threatens economic growth and employment quality.
Key Findings of the National Report on Productivity, Employment, and Growth
The report, the first of its kind, warns that the informal sector remains hindered by low productivity, underemployment, and stagnant wages, despite serving as the backbone of employment for millions of Ghanaians.
Labour Productivity Trends
- Ghana’s labour productivity grew at an average of 3.2% annually between 1991 and 2019, but gains were concentrated in capital-intensive industries such as mining and finance.
- The manufacturing sector recorded 14% productivity growth from 2013 to 2022, yet employment expanded by only 2.5%, indicating slow industrial expansion.
- Similarly, the mining sector experienced high productivity growth but failed to generate widespread job creation.
Wage Disparities and Employment Challenges
- A widening gap between productivity and wages was observed, with sectors like finance, insurance, and professional services enjoying higher wage growth, while industries such as household agriculture, trade, and repair services suffered from stagnant earnings.
- Commercial agriculture, transportation, utilities, and manufacturing were identified as key contributors to both job creation and productivity gains.
Policy Recommendations for Economic Transformation
To bridge the productivity gap and create sustainable employment, the report calls for:
✅ Increased investment in industrialization to accelerate economic transformation.
✅ Expansion of commercial agriculture to improve productivity and job creation.
✅ Formalization of informal businesses to integrate them into the broader economy.
✅ Technology adoption and workforce upskilling to boost efficiency and innovation.
✅ Targeted fiscal policies to encourage private sector growth and employment expansion.
Economic Implications
With Ghana at a crucial economic turning point, analysts caution that without bold reforms, the country risks rising income inequality, slowing productivity growth, and an inability to create sufficient jobs for its rapidly growing workforce.
The findings from the GSS report highlight the urgent need for government intervention and private sector collaboration to unlock Ghana’s full economic potential.
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