Informal workers and poverty in Ghana

It is true that majority of informal workers who are mainly necessity driven are poor especially in Sub-Saharan Africa (SSA). It is also true that there are few opportunity driven informal workers who even earn more from their activities than their formal counterparts. Again, there is a near universal belief of working informally and being poor. However, the ILO categorically believes, there is no direct relationship between working informally and being poor or working formally and escaping poverty. There are still grey areas when it comes to defining poverty or a poor person. The reality is that most informal workers earn very low income compared to their counterparts in the formal economy as confirmed by several studies. The living and working conditions of most informal workers are very poor and have seen little change over the past decade or so especially in Ghana. Similarly, some formal workers live in appalling situations, which reinforce the ILO perspective of informal work and poverty.

In terms of relationship between formal and informal economy in Ghana, it is still dualistic where the formal is seen as distinct from the informal economy. The relationship between informal work and poverty is complex and contentious and is continuously being contested. However, it is believed that the majority of the informal workers, in developing countries especially, are low-income earners. The situation is no different in Ghana: where the majority (over 80%) earns a living in the informal economy and are considered being poor. Given that the informal economy is deeply rooted and street vending is not going to disappear easily, what needs to be done is to adopt a fitting policy response to the issue of poverty that encourages a more unbiased linkage between formal and informal economy.

Policy makers (in Ghana) have to recognize the informal participants and consider their needs and at some stage involve them in the formulation of certain policies that may directly or indirectly affect them. For example, the head porter (locally called “kayayo” or “kayaye” in Ga and “paa-o-paa” in Akan) is an informal worker who provides a vital source of transportation for carrying travellers’ luggage and other belongings from one car park (station) to the other and sometimes to their homes. Nevertheless, these people are seen as a nuisance and are rarely considered in national policy debates affecting the informal economy, with some even calling for their eradication from the cities.

The fact is that it may well be difficult, if not impossible, to eliminate this activity within the informal transportation network. To avoid reckless dissipation of limited resources, a more positive and friendly approach is required to inculcate in informal workers the need to observe health, safety and environmental sanitation in conducting their activities. They need recognition and support so that they can go about their activity in a more welcoming environment – without any form of harassment. There should be training for these people who are mainly women and who tend also to have very little or no formal education. They are mostly migrants and therefore may have no proper accommodation near to where they are conducting their activities. They take time to integrate into the urban economy, as most of them are originally from rural areas. In Accra, Kumasi and other cities it is believed that some of these people sleep on the street, in front of stores, in kiosks, uncompleted houses, slums and shantytowns and so on. They are mostly exposed to the vagaries of the weather, and in the night to mosquitoes (which may cause malaria), and are at the mercy of criminals and other social deviants.

This is one form of informal work which is dominated by child labour, and many other informal workers, mostly young male migrants in the hawking business, are in a similar situation, as discussed above. Most of the social vices (e.g. criminal activities such as burglary, armed robbery activities, rape, prostitution and so on) in the cities are alleged to be committed by some of these people, of whom some are believed to have been born and bred on the street. The key question that has to be answered is ‘how to deal with these people’. First, there must be widespread recognition of these people as part of the wider society and an integral part of the Ghana’s national economy.

The logical next stage, in the interests of social justice, would be to assess their urgent basic needs and prioritise them accordingly. There could be registration of these people to keep track of them. A special savings scheme could be offered in order to inculcate the habit of saving. The present belief is that most of these workers entrust their hard-earned daily income to friends (normally older friends or family members), who sometimes may squander it; others keep their money on them and this makes them vulnerable to attacks by robbers from outside and within their communities.

This needs assessment must be done in a more participatory way so that the beneficiaries feel part of the process and are prepared to accept the recommendations thereafter. The outcome of the needs assessment may offer clues as to how to tackle this problem in terms of urban management.

There is evidence that not all informal workers in Ghana are poor. The fact is, however, that the poor majority has surpassed the rich minority. Any policy aimed at addressing poverty in the informal economy should not only look at the poor people, but also at how the so-called rich can sustain their income earning ability. This may put them in a position to expand their businesses and maybe employ others. The government’s poverty reduction strategy must not only focus on the poor in the informal economy, but also the rest of the low income group throughout the national economy as a whole.

Poverty exists in India, in general...informal economy as well as formal economy. The number of low income households are significantly high in the country. Is there a direct relationship between poverty and informality, I dont think so. Causes of poverty cannot be directly attributed to informality or vice versa. I think one is just part of the other, and not initiate or trigger each other.