Ghanaian workers' productivity increased by approximately 240% between 1991 and 2022. However, 80% of jobs in Ghana remain informal, failing to translate these gains into higher wages or better-quality employment for most citizens. This stark finding comes from a new report by the Ghana Statistical Service (GSS).
The GSS, in collaboration with the International Labour Organization, released its Productivity, Employment and Growth Report. Government Statistician Dr. Alhassan Iddrisu highlighted that pay in most sectors rose more slowly than productivity. This creates a significant gap between what workers produce and what they earn, raising questions about economic equity.
This situation fits into a broader Ghanaian economic narrative of growth without sufficient structural transformation. While poverty more than halved and the economy expanded faster than the sub-Saharan African average for extended periods, the benefits have not been evenly distributed. Much of Ghana's economic expansion came from adding more capital, such as investments and machinery, rather than improving efficiency.
Dr. Iddrisu questioned why workers do not feel the benefits of increased productivity in their pockets. He stated, "If we are producing so much more, why doesn’t every worker feel it in their pockets?" This sentiment underscores the report's central concern regarding the distribution of economic gains.
Looking ahead, decision-makers must address the structural issues preventing productivity gains from reaching the majority of the workforce. The report suggests Ghana's next development phase requires a greater emphasis on efficiency, technology, and skills. Policy should also encourage the movement of workers into more productive activities and help informal businesses formalize.
The labour market's persistent informality represents a clear weakness. Informal activities account for only about a quarter of total output, despite employing 8 out of 10 workers. This means too many workers are moving into lower productivity work, not higher. This structural problem hinders the creation of higher incomes and stronger productivity across the economy.
The widening wage-productivity gap adds another layer of complexity to Ghana's economic challenges. Workers are not capturing the full benefit of rising productivity, impacting household welfare. This situation raises important questions about wage-setting mechanisms, labour bargaining power, and how productivity gains are shared among workers, businesses, and the wider economy.
The report identifies manufacturing, utilities, and commercial agriculture as sectors showing promise. These areas have seen both productivity and employment grow together. Dr. Iddrisu argued that government policy should direct investment towards such sectors. This strategic focus can create both better jobs and higher output simultaneously. Helping informal businesses transition into the formal economy is also crucial for sustainable development.
Ghana broadly kept pace with lower-middle-income economies in terms of growth. However, it fell behind upper-middle-income countries that achieved stronger gains from efficiency and innovation. This distinction is vital because capital accumulation alone does not guarantee sustained improvements in economy-wide productivity. Countries that extract more value from existing labour, capital, and technology generate stronger, more equitable growth.
The GSS report provides Ghana with its first clear national picture of productivity and its relationship with jobs, wages, and household welfare. This comprehensive data is essential for informed policymaking. It highlights the urgent need for strategies that ensure economic progress translates into tangible improvements for all Ghanaian workers.