Ghana’s informal sector employs nearly 80% of the workforce yet contributes only 27% of GDP, exposing a significant productivity gap, according to the first edition of the National Report on Productivity, Employment, and Growth, released by the Ghana Statistical Service (GSS).
Despite sustaining millions of livelihoods, the report highlights that the informal sector struggles with low productivity, underemployment, and stagnant wages, challenges that hinder economic growth.
Labour productivity grew at an average of 3.2% annually between 1991 and 2019, but the most significant gains occurred in capital-intensive sectors such as mining and finance.
The manufacturing sector recorded a 14% productivity increase between 2013 and 2022, yet employment in the industry grew by only 2.5% in the same period, signalling slow industrial expansion.
Likewise, the mining sector demonstrated high productivity growth but generated few new jobs, reflecting Ghana’s dependence on industries that do not create widespread employment.
A key concern raised in the report is the widening gap between productivity and wages. While employees in finance, insurance, and professional services have seen notable wage growth, workers in sectors such as household agriculture, trade, and repair services continue to experience stagnant earnings despite productivity improvements.
Sectoral analysis shows that commercial agriculture, transportation, utilities, and manufacturing contribute to both job creation and productivity growth.
However, Ghana’s economic transformation remains sluggish, as many workers transition from traditional trades to low-productivity urban services, limiting overall economic benefits.
At the report’s launch, Government Statistician Professor Samuel Kobina Annim emphasized the importance of using statistical data to drive policy decisions.
“We are gathered here in pursuance of the new focus we have adopted as a Service—presenting statistics in a manner that is policy relevant,” he stated.
He explained that labour productivity measures how efficiently workers produce goods and services, while total productivity reflects how effectively multiple inputs, such as labour, capital, and materials, are used to drive economic growth.
The report indicates that Ghana saw accelerated productivity growth between 2010 and 2016, coinciding with the commencement of oil extraction. While the country has outperformed the average for lower-middle-income nations in terms of annual labour productivity, it still lags behind higher-middle-income countries.
More critically, productivity gains have remained concentrated in a few sectors, such as mining, rather than benefiting the broader economy.
Findings further reveal that job losses have occurred in household agriculture and trade as workers shift into lower-productivity roles in urban services and construction.
However, commercial agriculture, manufacturing, transportation, and utilities have shown promise in both productivity and job creation, underscoring the need for investment in these sectors.
The report also sheds light on wage disparities. Average earnings in Ghana have increased at a slower pace than productivity, with the gap widening over time. While utilities, construction, and tourism have seen relatively strong wage growth, earnings in household agriculture, trade, and repair services continue to lag.
The event included a series of presentations and a panel discussion where key stakeholders shared insights on Ghana’s productivity landscape. Participants commended the Government Statistician for his efforts in transforming the GSS and making data more accessible to policymakers.
By publishing this report, the GSS and its partners aim to spark national dialogue on productivity trends, helping businesses and policymakers make informed decisions.
The findings serve as a roadmap for developing strategies that improve efficiency, set performance targets, and allocate resources effectively.
As Ghana stands at a critical economic crossroads, the report underscores the urgent need for bold policy reforms.
Investing in industrialization, expanding commercial agriculture, integrating informal businesses into the formal economy, and promoting technology adoption and workforce upskilling will be crucial in driving productivity growth, reducing income inequality, and creating sustainable jobs for the country’s workforce.
