Two Sides of the Coin: the Informal Economy behind Ghana’s Success

2013 Angela Slater 100x150

By Angela Slater

I have now spent long enough in Ghana to begin to piece together some of the cultural, legal and economic fabric that weaves Ghana together. Although Ghana was colonized by the Portugese, Dutch and later the British, Ghana was never a settler colony. Rather, this country was known as ‘the gold coast’ and over the years its vast mineral resources made its colonizers rich. Giant castles remain dotted along the coast line, places where slaves suffered and gold and ivory were traded out into the western world. Now these castles (and their dungeons), purported to be the oldest standing buildings in Africa, serve as tourist attractions and Ghana is known as a peaceful and stable democracy with modern institutions.

But this story of Ghana is incomplete. On the ground I find that there is another story to be told. Above all it is clear that there is a dichotomy in Ghana between its formal and informal institutions. This is most evident in Ghana’s economic structure. To say that the informal economy is important to Ghana would be an understatement. Some estimates peg the informal economy’s contribution to Ghana’s GDP as high as 80 percent. Even a casual observation of Ghana makes this estimate unsurprising. The evidence of the informal economy is everywhere, from the roadside hawkers offering to sell anything from water to thigh masters, to whimsically named sole proprietorships such as ‘Jesus is my Light Electric’ or ‘Blessings Plumbing ltd.’ Furthermore, it is clear that these workers make a difference. Ghana’s GDP has quadrupled over the past ten years.

Meat shop and bed frames

Meat shop and bed frames

Among those who make a living in the informal economy are domestic workers. My partner organization, Leadership and Advocacy for Women in Africa (Ghana) Alumnae Incorporated focuses on gathering information and advocating on behalf of this population. These are the legions of mostly women who make Ghana tick. From cooking, cleaning and sewing, to caring for elders and children these workers toil unseen in the homes of millions of Ghanaians. They work at various levels of informality. Some workers are considered almost as relatives or foster children while others may approach the status of an employee. Whatever their status, these workers do not benefit from the familiar looking Labour Act Ghana passed in 2003 or the Social Security regime passed in 1991. While both Acts should apply to domestic workers, customarily domestic workers workers do not benefit from these laws. Indeed, section 44 of the Labour act explicitly excludes domestic workers from the hours of work provisions. Domestic workers are therefore doubly disadvantaged. Even if they were able to access the benefit from formal labour provisions, they are excluded from important parts of the Act.

The plight of domestic workers demonstrates the problem at the heart of Ghana’s institutions. While the vibrant (and loud) road side stands, zooming tro-tros and conveniently placed water girls are fascinating aspects of travelling here, it cannot be forgotten that modern Ghana is quite literally built on the backs of these informal workers. Perhaps bearing the largest burden are the women working behind the scenes, toiling to ensure that Ghana keeps moving forward.

www.lawaghana.org

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