Ghana’s Informal Business Sector Remains Dominant, New Survey Reveals

Accra, Ghana – A recent report from the Ghana Statistical Service (GSS) highlights the continued dominance of the informal sector in Ghana’s economy. The 2024 Integrated Business Establishment Survey (IBES I) reveals that 92.3% of business establishments in the country operate outside of formal regulatory structures [1].

Significant Growth in Business Numbers

Despite the prevalence of informality, the number of business establishments has tripled between 2014 and 2024, rising from 0.64 million to 1.87 million [1]. This growth underscores the dynamism of Ghana’s entrepreneurial landscape, even as formalization lags.

Characteristics of Open Space Businesses

The survey categorized businesses into “Open Space Businesses” – those operating in fixed locations without permanent structures – and “Mobile Businesses.” Approximately 700,000 businesses fall into the Open Space category, employing around 922,000 individuals nationwide. A significant 68.4% of these businesses are involved in the sale of food and beverages [1].

These businesses are overwhelmingly female-owned, with women owning 84.0% of them and comprising nearly 80% of the workforce. 99.2% of these establishments are owned by Ghanaian citizens [1].

Geographically, Open Space Businesses are concentrated in the Greater Accra (23.5%) and Ashanti (17.1%) regions, even as the Eastern and Bono East regions have the longest-running operations. Over 60% operate at least six days a week, and half of all operators work more than 49 hours weekly, demonstrating the labor-intensive nature of this sector. Although, over 56% of operators working between nine and twelve hours daily can accrue more than GH₵ 10,000 per day [1].

Mobile Business Landscape

The survey identified 82,920 mobile businesses across the nation, with 94.2% being Ghanaian-owned. These businesses are also heavily concentrated in the Greater Accra and Ashanti regions. Similar to Open Space Businesses, mobile businesses are largely female-led, with women comprising 77.5% of the total. A significant portion of operators (60%) are between 15 and 35 years old, highlighting youth involvement.

A concerning trend identified in the survey is the involvement of child labor, with 2,087 mobile business operators aged between 10 and 14 years. Approximately 80% of these children are female, and over 80% work for others rather than operating their own businesses [1].

The sector primarily focuses on the retail sale of food, accounting for 63.6% of all activities. Approximately three-quarters of female operators specialize in food retail, while about a quarter of their male counterparts do the same. Non-Ghanaian operators, numbering nearly 5,000, are more common in regions bordering other countries, such as the Upper West and Volta regions, and tend to engage in non-food retail compared to Ghanaian operators [1].

Calls for Formalization and Support

Government Statistician Professor Samuel Kobina Annim emphasized the need for formalizing businesses to improve economic planning, taxation, and social security contributions [1]. With only 7.7% of businesses operating within the formal sector, he stressed the importance of robust measures to encourage formalization.

Professor Annim recommended the establishment of microcredit schemes to help businesses scale up, the creation of market infrastructure and improved sanitation, and the enforcement of child labor laws to protect vulnerable populations [1]. He also called for youth entrepreneurship programs to support young traders and social protection programs to support families and retain children in school.

The 2024 IBES I was implemented by the GSS in partnership with the Ministry of Trade and Industry, the Association of Ghana Industries (AGI), the World Bank, and other stakeholders [4]. Phase I of the survey, a census, commenced on January 15, 2024, aiming to produce an updated Statistical Business Register and generate data for national development [4].