Ghana’s informal sector, which employs nearly 80% of the workforce, contributes only 27% to the country’s GDP, exposing a significant productivity gap, according to the inaugural National Report on Productivity, Employment, and Growth by the Ghana Statistical Service (GSS).

The report highlights the persistent challenges in the informal economy, including low productivity, underemployment, and stagnant wages, which continue to hinder broader economic progress despite the sector’s dominance in employment.

Between 1991 and 2019, labour productivity in Ghana increased at an average annual rate of 3.2%, with the highest gains recorded in capital-intensive industries such as mining and finance. However, these sectors have contributed little to widespread job creation, reflecting an economy that is growing unevenly across industries.

For instance, while the manufacturing sector saw a 14% rise in productivity between 2013 and 2022, employment within the industry expanded by only 2.5%, signaling slow industrial growth. Similarly, the mining sector demonstrated high productivity but limited job generation, emphasizing Ghana’s dependence on resource-based industries that do not significantly absorb labour.

The report further points to a widening disconnect between productivity growth and wages. While workers in finance, insurance, and professional services have experienced higher wage increases, those in household agriculture, trade, and repair services have seen minimal improvements in earnings despite productivity gains.

A sectoral analysis identifies commercial agriculture, manufacturing, transportation, and utilities as key industries driving both employment and productivity improvements. However, the overall pace of economic transformation remains slow, with many workers shifting from traditional occupations to low-productivity urban services, restricting broader economic advancement.

To tackle these issues, the report calls for increased investments in industrialization, the expansion of commercial agriculture, and policies that facilitate the transition of informal enterprises into the formal economy. It also stresses the importance of technology adoption, workforce skill development, and targeted fiscal policies to enhance productivity.

With Ghana at a pivotal economic juncture, experts caution that without bold policy interventions, the nation risks widening income inequality, sluggish productivity growth, and missed opportunities to create sustainable employment.