Working in Ghana?
Ghana: Economic Challenges
Unemployment and the Informal Sector
While a lot of the information we have presented to you in part one of this article may be very positive, Ghana also experiences numerous problems. One of the most pressing is certainly unemployment. The growing rate of urbanization without the creation of an adequate or proportional number of jobs, coupled with the relatively high growth rate of the population, has caused unemployment to be extremely high. Young people are oftentimes off worst, with some estimates suggesting that only as few as two percent being able to find employment, with the rest frequently engaging in activities in the informal sector to make ends meet. The official government definition of this part of the population includes those of 18 to 35 years of age — about a quarter of the population. The problem, however, also affects younger teenagers. The government has, however, undertaken a number of countermeasures, most notably the National Youth Employment Program spearheaded by the Ministry of Youth and Sports, in order to see to the alleviation of this pressing issue.
As is the nature of the informal sector (a term that first popped up in the early 1970s in research papers on Ghana), there are very little official sources documenting its value generation or the number of people engaging in businesses within the sector. However, it is estimated that up to 80% of the workforce of more than 11 million find employment in the informal sector. The range of activities is very wide; typical ones include unskilled labor, small shops and vendors, and similar lines of work, often related to the services sector. The problems this astounding fact poses are obvious. Not only is informal employment fairly inefficient — four fifths of the population contribute a mere 40% of the GDP, according to estimates — but they also rarely contribute to the national budget by paying taxes (see below). Furthermore, with no official recognition of their jobs, Ghanaians in the informal sector rarely have any pension fund or other social security benefits.
Ghana, while being one of the most powerful nations in the region in economic terms, was not quite able to adjust their infrastructure to accommodate the needs of its booming economies. Shortages of electricity and water are possibly the most pressing here, with blackouts being experienced on a fairly regular basis — sometimes for prolonged stretches of time and all across the nation. Addressing these issues is among the main responsibilities of the Ghanaian government so as to keep the growth rate positive and the nation prosperous.
Ghana’s leading economic position in West Africa, its stable government and history of peace among the various ethnic communities of the country have made it one of the more obvious choices for people of neighboring nations looking for a better future their home countries cannot provide for various reasons. Many of these people, whose numbers are sizeable to say the least, enter Ghana illegally, often working as unskilled labor. In an effort to reduce the influx of illegal immigrants and to ensure employment possibilities for the large portion of the Ghanaian population without a job, the government has tightened entry and work permit regulations for foreigners. The slogan of the Ghana Immigration Service — “Friendship with Vigilance” — is probably testament enough. We have taken a closer look into this topic in our article on moving to Ghana — after all, residency in the country is impossible without a work permit.
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