Editorial: Businesses remain largely informal in Ghana

More than three-quarters of privately-owned businesses are in the services sector. Among these, non-Ghanaian owners have the highest proportion at 86.9%.

An earlier report from the Ghana Statistical Service (GSS) showed that eight out of ten employed people work in the informal sector. However, this sector only contributes 27.4% to the country's Gross Domestic Product (GDP).

Informal employment remains widespread in Ghana, with no significant reduction over recent decades. This trend is concerning for workers and business owners.

The consequences of informality can be severe. It limits rights and access to social security systems, especially social insurance.

Productivity and decent work are interconnected. Higher productivity leads to better wages and working conditions, which in turn boosts productivity.

While informal sectors offer job flexibility, they also bring challenges. These include low productivity, reduced tax revenues, poor governance, and increased poverty.

Addressing informality requires comprehensive policies tailored to specific country conditions. The informal economy often employs lower-skilled and less productive workers.

The informal economy includes all economic activities not adequately covered by formal arrangements. According to the International Labour Organisation (ILO), over half of the global workforce is engaged in informal work.

The IMF reports that 60% of all workers hold unregulated jobs. This equates to around two billion workers globally, with four out of five businesses not formally registered.