08August2010

...i’ve just finished reading a book ...a professorial thesis ..on the “Informal Sector in the Ghanaian Economy”. It’s not a new book ..published more then ten years ago but it seems still very true and very relevant.

What’s the ‘Informal Sector’

It is that segment of the working or working age population who fail to find employment or lose employment in the wage or salaried sector of the workforce and who then resort to self-employment, doing what ever they can, to eke out a subsistence.

In Ghana, the ‘petty trader’ is the of epitome this sector....a petty trader will buy or make (cook, perhaps) a number of items to sell on a daily basis and will survive on the mark-up, selling from a makeshift stand at the side of the road or carrying her/his stock around on her/his head...normally this is the territory of women or young girls.

Because of the deliberate policies of the colonial government prior to independence in 1957 and the actions of successive Ghanaian governments thereafter, ably abetted by such as the World Bank and the IMF, no substantial job-producing industrial or manufacturing sector has ever been created in Ghana. Both before and after independence the Ghanaian economy has been based on the export of raw materials..cocoa, gold, manganese..and the import from the mother country of all the consumer goods ..from shoes to cars..that the population required. This is an equation that now goes back almost two hundred years in Ghana ..and explains why there are so many olde-counntrie consumer goods, like biscuits, for example, that still exist for sale in Ghana!

OK..very interesting, you might say...if you’re still reading that is!

Well, it is and it isn’t...it is in a vacuum, i suppose, but here’s what makes it really interesting..and sad and frustrating and all these other despairing feelings!

THE INFORMAL SECTOR IN GHANA REPRESENTS BETWEEN 70 AND 80% OF THE GHANAIAN WORKFORCE/WORKING AGE POPULATION.

And once one sinks into the Informal Sector, one never or only very rarely gets out!

Most people leaving school at whatever age have never and will never have a wage or salaried job. There simply aren’t enough new jobs being created and there is very little vocational or job training carried on in Ghana..and Ghana is one of the best of the Sub-Sahara countries!

By its nature, too, it is a closed sector...who buys from the informal sector...why, mostly it is the people in the Informal Sector!

And don’t look to any welfare or social services safety net to help either! There basically isn’t any, apart from the Ghanaian Health Service ..which i don’t completely understand yet. And since those who fall into the Informal Sector rarely escape from it then they never accrue any state pension contributions, etc, etc. And so they are doomed to try to eke out an existence in the Informal Sector for the rest of their lives!

I already understand that the ‘development’ of the Informal Sector is not how economies like this one will grow and it is not the answer to the country’s poverty. It is indeed a trap and only through better education and job training programs for high-school age students and beyond will the economy be transformed.

Wouldn’t it be nice if all the revenues from the new oil fields in the Gulf of Guinea were put into transforming the Ghanaian Education System!

Sigh..that isn’t going to happen. Education and Job Training will probably be last to get any oil bonanza hand-outs.