A new informal economy in Africa: The case of Ghana

Abstract

This paper reveals a new informal economy in Ghana, Africa – the ‘in formal informal economy’ – where the actors are highly educated and skilled, and neither migrants nor ‘dropouts’ from the formal sector. Cast in the same setting where the concept of the informal economy was born, this paper shows that there are informalisation dynamics and moments within the process of professionalisation. This informal economy is not only different from existing informal economies, it is also differentiated internally and externally – differentiated relative to existing informal economies and differentiated regarding its own sub-sectors. The paper shows that in addition to the cohort of informal workers who fail to get formal jobs because they are not qualified, there is a cohort of informal workers who fail to get formal jobs even though they are qualified. As a result, there is a segment of temporary informal workers who are educated and certified in a queue for formal jobs, but who are unlikely to obtain them because the ‘solution’ to their condition is simultaneously the cause of their experience.

Keywords:

• Africa
• Ghana
• urban economic development
• informal economy
• employment

JEL classification:

• E26
• E24
• N97

Acknowledgements

We gratefully acknowledge the feedback of the two anonymous reviewers of AJSTID. The additional comments offered by the editors, especially Dr. Saradindu Bhaduri, have also helped to strengthen the paper, for which we are most thankful. We take responsibility for any remaining concerns.