- Eight in 10 Ghanaian Jobs Remain Informal Despite Three Decades of Productivity Gains
Ghanaian workers are producing more than three times as much as they did three decades ago, but the gains have not translated proportionately into higher wages or better-quality employment, according to the Ghana Statistical Service.
Government Statistician Dr Alhassan Iddrisu said output per worker increased by about 240.00% between 1991 and 2022, while pay in most sectors rose more slowly than productivity. “If we are producing so much more, why doesn’t every worker feel it in their pockets?” he asked.
The findings were presented from the Ghana Statistical Service’s Productivity, Employment and Growth Report, developed with the International Labour Organization using three decades of national data.
Dr Iddrisu said the study was designed to provide Ghana with a clearer national picture of productivity and its relationship with jobs, wages and household welfare. “Until this work by Ghana Statistical Service, Ghana never had a clear national picture of how productively our country works and what that means for jobs, wages and the lives of ordinary Ghanaians,” he said.
The report measures productivity through output per worker and a broader assessment of how efficiently labour and capital are used together. Dr Iddrisu explained the concept through a simple comparison: “Think of a baker. If she makes more bread from the same flour, the same oven, and the same hours, she’s more productive.”
At national level, such improvements matter because sustained productivity growth can support higher incomes, poverty reduction and rising living standards.
The headline numbers point to substantial economic progress. Over the three decades covered by the study, poverty more than halved, incomes increased and Ghana’s economy expanded faster than the sub-Saharan African average for extended periods.
“This is real, hard-won progress, and we should be proud of it,” Dr Iddrisu said, while cautioning that the composition and distribution of those gains present a more difficult picture.
A central finding is that much of Ghana’s economic expansion came from adding more capital, including investment and machinery, rather than using existing resources significantly more efficiently.
According to Dr Iddrisu, Ghana broadly kept pace with lower-middle-income economies but fell behind upper-middle-income countries that achieved stronger gains from efficiency and innovation. “Most of the growth came from adding more money, more machines, not from using what we already have more wisely,” he said.
That distinction matters because capital accumulation can raise output without necessarily producing sustained improvements in productivity across the economy. Countries that extract more value from the same labour, capital and technology can generate stronger growth without continuously depending on additional inputs.
Ghana’s next phase of development, the report suggests, will therefore require a greater emphasis on efficiency, technology, skills and the movement of workers into more productive activities.
The labour market remains one of the clearest weaknesses. Dr Iddrisu said about eight in 10 jobs in Ghana are informal, yet informal activities account for only about a quarter of total output.
“Too many workers are moving into lower productivity work, not higher,” he said, highlighting a structural problem in which employment growth is not always occurring in sectors capable of generating higher incomes and stronger productivity.
The wage-productivity gap adds another layer to the challenge. In most sectors, compensation has increased more slowly than output per worker, meaning workers have not captured the full benefit of rising productivity.
“The gap between what workers produce and what they earn keeps widening,” Dr Iddrisu said, raising questions about wage-setting, labour bargaining, firm profitability and how productivity gains are distributed between workers, businesses and the wider economy.
The report identifies manufacturing, utilities and commercial agriculture among the stronger areas where productivity and employment have been growing together. Dr Iddrisu argued that government policy should increasingly direct investment towards sectors capable of creating both better jobs and higher output, while helping informal businesses transition into the formal economy.
“The bright spots are already there: manufacturing, utilities and commercial agriculture are growing jobs and productivity at the same time. We simply need more of that,” he said.
Employers also have a role in converting productivity improvements into better livelihoods. Dr Iddrisu said businesses need to invest in skills and technology, create decent jobs and ensure that productivity gains are reflected fairly in compensation.
Organised labour, meanwhile, should increasingly anchor wage negotiations in evidence around productivity and fairness while continuing to advocate for secure and decent employment.
The policy challenge is therefore broader than simply raising wages or expanding employment. Ghana needs more workers moving into sectors where productivity is high enough to sustain better pay, stronger firms and higher tax revenues, while investment must increasingly improve efficiency rather than merely expand the stock of capital.
Without that transformation, the country risks recording respectable headline growth while large numbers of workers remain concentrated in low-productivity, low-income activities.
Dr Iddrisu said the Ghana Statistical Service would continue producing evidence to help policymakers, employers and labour organisations understand those trade-offs more clearly, with key findings from a second edition of the productivity report expected to be released subsequently.
“Our duty is to give this nation timely, accurate, relevant and credible statistics, so that every decision shaping Ghana’s future rests on solid evidence, not guesswork,” he said. His conclusion captures the central message of the report: “Ghana already works hard. The next step is to work smarter and to make sure every worker shares in the rewards.”
