Of the 10 areas ranked by the World Bank’s Doing Business initiative, Ghana’s lowest rank is in the area of Employing Workers. Its ranking of 145th falls in the lowest quintile of those countries assessed, signaling that the country’s labor and employment policies are among the least business-friendly in the world.
[1] Rigid restrictions on worker hiring, firing, wages, and hours discourage companies from taking on more workers through formal employment.
The World Bank’s ranking is a key piece of data with respect to understanding the environment for employing workers in Ghana, but, for the purpose of understanding employment in Ghana’s agricultural sector, it reveals only a small part of the story. Namely, Doing Business focuses on the law as it applies to medium-to-large-scale, formally established enterprises located in urban and peri-urban areas. This fact misses the majority of the country’s workers who toil in rural areas and on a smaller and less-sophisticated scale. These are the farming families who hold small plots – often leased from tribal authorities and worked by highly islolated, poorly educated people using the most primitive of resources. On these small plots, workers typically grow food for their own consumption, for cash at the local marketplace, and, in some cases, for sale to commercial enterprises, such as local nut or fruit-processing companies. Most individuals are not employed in the traditional sense that they are formally “hired” by a registered company and are entitled to all benefits, including a minimum wage and Social Security. Rather, they work casually for themselves and their families and, periodically, for others. They may have some allegiance to an FBO in which other members produce the same items, but, as discussed elsewhere in this report, FBOs often go unregistered or underused.
Roughly 90% of Ghana’s farm holdings are less than two acres in size. Considering that nearly two-thirds of Ghanaian households receive some income from agricultural activity, the Doing Business diagnosis of the environment for employing workers largely overlooks this level of enterprise.
Ghana’s high degree of informality also complicates the task of assessing the influence of labor and employment policies in the agriculture sector and on the economy as a whole. In Ghana, 88% of the working population is occupied in the informal sector.
[2] In rural areas, this number climbs to well over 90%. Thus, referring to “employment” in traditional terms is quite difficult.
This chapter aims to bring to light certain issues pertaining to agriculture workers who are often overlooked and therefore do not find their way into the promulgation of public policy. Significantly, Ghana has reduced its poverty rate from roughly 51.7% in 1991–1992 to 28.5% as of 2005–2006. Ghana is poised to reach the Millenium Development Goal of 25.8% well ahead of schedule in 2015.
[3] These are remarkable achievements that place Ghana as an important model for all of West Africa. These improvements are not, however, uniform by sector or by region (and the two tend to go hand in hand.) Specifically, as of 2005–2006, while the poverty rate everywhere else in Ghana had dropped to 20%, the poverty rate in the rural northern zone was 62.7%. Thus, although overall poverty in Ghana is decreasing, the pace of poverty reduction in the northern regions, where agriculture is the principal source of employment, has been much weaker.
[1]See generally
World Bank, Doing Business 2009
(2008), and accompanying literature, available at
www.DoingBusiness.org.
[2] World Bank, Ghana: Meeting the Challenge of Accelerated and Shared Growth
(Report No. 40934, November 28, 2007) (hereinafter Meeting the Challenge of Accelerated and Shared Growth
).
