Professor Patrick Asuming, an economist and Senior Lecturer at the University of Ghana Business School (UGBS), has raised concerns about the productivity gap between Ghana’s formal and informal sectors.
Speaking at the Old Mutual Financial Service Monitoring Debriefing Meeting in Accra on Wednesday, March 12, 2025, Professor Asuming emphasised the need to address the disparities in output and employment contributions between the two sectors.
According to him, the informal sector, which includes small-scale traders, artisans, and unregistered businesses, plays a critical role in providing livelihoods for millions of Ghanaians.
However, its low productivity levels could hinder broader economic growth and development.
“For the last couple of weeks, there have been a lot of discussions about productivity in the formal and informal sector. In general and in terms of contribution to output in GDP, the informal sector, currently accounts for about a quarter of the economy, and yet in terms of contribution to employment, it accounts for 80%.
“There are two explanations for this, it can be that because it is informal, the information from there is very difficult to capture. So, perhaps we are under-capturing their contribution. Another potential explanation is that they are not very productive. Because if 80% of employment is accounting for only a quarter of output, it tells you that the productivity there is quite low,” he stated.
