A recent report shed light on the financial struggles faced by workers in Ghana, particularly those in informal sectors like head porters (known as Kayayeis), street vendors, waste pickers, and market traders.
According to the report titled ‘Navigating Inflation: Impacts of the Cost-of-Living Crisis on Workers in Informal Employment in Accra, Ghana,’ conducted by Women in Informal Employment: Globalizing and Organizing (WIEGO), Ghana’s average monthly wage sits at GH¢2,922.
Despite this average, workers in the informal sector are earning much less. For instance, Kayayeis typically earn around GH¢500 monthly, while street vendors, waste pickers, and market traders earn between GH¢1,250 and GH¢2,200 monthly. Many of these workers are the main breadwinners in their households.
“A monthly living wage in Ghana averaged GH¢ 2,922 in 2023 (Global Living Wage Coalition, 2023). This is the living wage required by workers in peri-urban areas to be able to afford a basic but decent living standard. A typical worker in the focus groups was working six days per week and earning GH¢ 1,500 monthly.”
WIEGO report
The report centered on the challenges faced by informal workers. It highlighted that the soaring inflationary pressures rendered the monthly wages earned by these groups inadequate, failing to provide any meaningful relief to their economic struggles.
“While the Ghanaian government implemented policies to mitigate cost-of-living pressures, these interventions were ineffective in reaching and supporting the informal workforce. In mid-2022, when inflation hit a two-decade high, the government approved a 15 percent Cost-of-Living Allowance. The measure, which expired in December 2022, was limited to public sector workers.”
WIEGO report
The report pointed out that the 10 percent increase to the minimum wage in January 2023 also “proved insufficient to counter the rapid inflation and failed to provide any relief to workers in informal employment, who remain outside its scope (World Bank, 2023).”
According to the WIEGO report titled ‘Informal Workers in Ghana: A Statistical Snapshot’, Employment in Ghana is overwhelmingly informal. This type of employment represents 89 percent of employment nationally and 83 percent in urban areas.
The stark reality facing workers in Ghana’s informal sectors cannot be overstated, particularly when a staggering 89 percent of employment in the country falls within this category.
Despite this overwhelming majority, recent government policies have fallen short of adequately addressing the needs of these workers.
Poorly Targeted Policies
Take, for instance, the Cost-of-Living Allowance implemented in mid-2022, which exclusively benefited public sector workers. This policy, however well-intentioned, failed to provide support to the vast majority of informal workers, leaving them to navigate rising living costs without any additional assistance.
Similarly, the recent increase in the minimum wage, while a step in the right direction, remains insufficient to alleviate the financial strain experienced by those in the informal sector. Consider someone earning GH¢ 1500 monthly in these informal jobs.
If they spend GH¢ 30 on food each day, that amounts to GH¢ 900 on food alone per month. Yet, this doesn’t even scratch the surface of other essential expenses such as rent, utilities, transportation, and healthcare.
Now, let’s examine the dire situation facing those who earn even less, such as the individuals bringing in GH¢ 500 or less per month. The math becomes increasingly impossible, especially when considering the needs of dependents who rely on these meager earnings.
In essence, the current state of affairs paints a bleak picture for Ghana’s informal workers. Despite their vital contributions to the economy, they continue to struggle to make ends meet under the weight of insufficient wages and a lack of targeted government support.
If Ghana truly aims to uplift all its citizens, urgent and meaningful action is needed to address the dire conditions facing those in the informal sector.
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