92.3% of businesses informal – IBES I report

A recent report shows a significant increase in business establishments. The number rose from 0.64 million in 2014 to 1.87 million in 2024.

Despite this growth, informality remains a major issue. An overwhelming 92.3 percent of enterprises operate informally.

Older businesses, those over 50 years old, are more informal than younger ones. Over time, more businesses are choosing informality instead of formalizing.

Regionally, Greater Accra, Upper East, and Upper West have seen increased informality. In contrast, Central and Northern Regions are gradually moving towards formal operations.

These trends reflect changes in business structures across the country. Government Statistician Professor Samuel Kobina Annim emphasized the need for formalizing businesses.

He noted that only 7.7 percent of businesses are formal and follow regulations. Strong measures are needed to change this situation.

Informal businesses often lack registration, limiting their access to support services. This restricts their financial opportunities and legal protections.

Professor Annim described the informal sector as a double-edged sword. It provides jobs but also limits economic efficiency and national revenue generation.

The report indicates that the services sector drives the economy at 76.7 percent of businesses. However, its share has declined over the past decade.

Industry accounts for 21.1 percent while agriculture is at 2.2 percent. Although business numbers have surged, employment growth has been slower.

The workforce grew from 3.28 million in 2014 to 6.90 million in 2024. This suggests many new businesses are micro-sized and employ one to five people.

Micro-sized businesses now make up 90.4 percent of all enterprises, up from 16.6 percent in 2014. Medium-sized enterprises have significantly decreased from their previous share of 25.9 percent.

Small businesses represent only 8.5 percent of total enterprises; medium and large firms are rare at just 0.8 percent and 0.3 percent respectively.

Micro enterprises employ about 2.89 million people—nearly double that of large firms—but face financial stability challenges.

During his keynote address, Raphael Ayitey highlighted the importance of IBES findings for future strategies.

He stated there is a growing demand for reliable business data among policymakers and partners.

Without such data, contributions to GDP may be underestimated over time.

Insights from the IBES report will help planners understand both sectors better for improved operations in the future.

The Ghana Statistical Service (GSS) has updated its Business database with the Integrated Business Establishment Survey (IBES I) for 2024.

This report includes several volumes with detailed statistics on business growth and employment trends since the last census in 2014.