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Ghana - Labour Market Profile 2013

Executive Summary

Main Issues on the Labour Market

- Ghana is often considered a model African

country, with a vibrant and accountable democracy and effective bureaucracy. Economic performance is also better, with a well educated population, higher GPD per capita, fewer working poor, relatively low un- and underemployment, larger middle class and the second highest growth rate in the world. However large segments of the population have not gained from the development: Many have no education at all and live as subsistence farmers. The size of the informal sector, the level of child labour as well as the minimum and average wage are comparable to many other Sub-Saharan African countries.

- The public pay structure has been reformed into the Single Spine Pay Policy (SSPP) in 2009, in order to ensure that public employees are given similar wages for similar skill levels. It is a 25-level grading structure, with a base pay reflecting the minimum wage. Some public employees are yet to transfer into the SSPP. The SSPP is not uncontested by workers and several strikes by public employees have been held concerning the SSPP.

- Ghana has a rather unified trade union movement, and relatively large shares of the labour force are members of trade unions. The labour act of 2003 introduced trade union pluralism. Until then, all trade unions had to be affiliated to Ghana TUC. Most trade unionists are still members of TUC.

Labour Market Developments

- Large off-shore oil reserves have been

discovered. Extraction started in 2010 and is the main reason for Ghana’s high growth rates. The oil industry is capital intensive and will produce few direct jobs compared to investment and contributions to GDP. Extraction of natural resources with high yields has been the source for corruption and conflict in many neighbouring and developing nations. Ghana’s oil extraction is therefore a continued source of concern and debate, and strict revenue-managing rules have been set up.

- The informal economy is growing, which has received increased attention. Several unions are working to extend their services to workers in the informal sector, an informal sector association in collaboration with TUC has been established, and the Ministry of Labour and Social Affairs has established a Committee on the Informal Economy in which TUC is represented.

- The national pension system has been reformed into a three-tier system, and was fully implemented in 2012. The first two tiers are mandatory for formal and public workers, whereas the third is voluntary and open for informal sector workers. Many informal workers have joined. The trade union movement has been involved in information campaigns and advocacy concerning the pension reform.

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Contents

Trade Unions ......................................................................................................................................... 3

Trade Unions in Ghana .................................................................................................................................. 4

Employers’ Organisations ....................................................................................................................... 5

Central Tripartite Structures ................................................................................................................... 5

National Labour Legislation .................................................................................................................... 6

ILO Conventions ..................................................................................................................................... 7

Trade Union Rights Violations ................................................................................................................ 8

Working Conditions................................................................................................................................ 9

Workforce ........................................................................................................................................... 10

Unemployment and underemployment ..................................................................................................... 11

Sectoral employment .................................................................................................................................. 11

Migration ..................................................................................................................................................... 12

Informal Economy ....................................................................................................................................... 13

Child Labour ................................................................................................................................................. 14

Gender ......................................................................................................................................................... 14

Characteristics of the Working Age Population ..................................................................................... 15

Social Protection .................................................................................................................................. 17

General Economic Performance ............................................................................................................ 18

Trade ................................................................................................................................................... 19

Trade agreements ....................................................................................................................................... 19

Export Processing Zones .............................................................................................................................. 19

References ........................................................................................................................................... 20

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Trade Unions

Trade unions in Ghana (2012) Number of trade unions 25

Dues (standard) 1-2% of basic

salary

Members of trade unions1 800,000

Trade union members share of labour force 7.5 %

Trade union members to waged workers 48 %

Female member share of trade unions N/A

Number of CBAs N/A

Workers covered by CBAs N/A

Share of workers covered by CBA N/A

Labour force (2011)2 10.7 million

Workers employed in unionised enterprises (2005/6)

3 Industry / Gender

Agriculture 31.1 %

Mining and Quarrying 64.8 %

Manufacture 28.7 %

Utilities 75 %

Construction 6.6 %

Trade and Commerce 11.1 %

Transport, Communication & Storage 41.6 %

Finance and Real Estate 54.8 %

Community, Social & Personal Services 51.2 %

Male 39.5 %

Female 34.6 %

Total 37.5 %

With an estimated 800,000 Trade Union members in 2012, an employed labour force of 10.2 million in 2011 and 20% of the labour force in waged employment in 2006, that constitutes an estimated 46% trade union members to waged workers.

Another estimation of trade union density in Ghana is from Ghana TUC’s analysis of the Ghana Living Standard Survey of 2005/6. It showed that 37.5% of the working age population who had a job during the reference period, indicated that they have trade unions at their workplaces. There were considerable differences between industries, ranging from 6.6% - 75%. In Ghana, work places with unions have comparatively better employment and working

conditions compared with workplaces where there are not unions. This is because unions are able to negotiate for improved conditions and monitor compliance with labour standards. On average unionized workplaces have higher proportion of workers with signed contracts, access to social

protection and higher average wages.3

Unions in Ghana can be grouped into five cathegories: (1) Members of TUC, (2) members of GFL, (3) non-affiliated unions national unions, (4) non-affiliated sector-based unions, and (5) enterprise based unions. The TUC has 18 affiliated national unions (Group 1). GFL has 9 affiliated unions (Group 2). There are six non-affiliated national/industrial unions (Group 3), 14 sector-based non-affiliated unions (Group 4), and 25 enterprise-based unions. 5 of 14 sector based unions in group 4 do not have a bargaining certificate, whereas 18 of the 25 enterprise based unions do not

have a bargaining certificate.1

(TUC) Ghana Trade Union Congress4

The Trades Union Congress (TUC) was founded in 1945 and is the centre of 18 member national unions and 9 associate members in the informal economy with a membership of about half a million people. The membership has been declining in recent years, following the decrease in formal sector employment. With the decision to affiliate associated members among informal economy workers, it has, however, increased slightly again.

The TUC has its own organs, which administer, cooperate and develop initiatives and policies. The TUC structure consists of the following bodies: The Congress, General Council, Steering Committee, Executive Committee, Finance Board, Secretariat, Regional Councils of Labour and District Councils of Labour. The TUC is led by Mr. Kofi Asamoah.

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Additionally, there are the following TUC departments: Administration, International Affairs, Education, Social Protection and Labour Relations, Organization which comprises the Informal Economy, Gender and Youth desks and the Labour Research and Policy Institute.

TUC has a staff of about 20 people. TUC has regional offices in the 10 administrative regions of Ghana. TUC also embodies labour councils that are operative in over 100 districts around the country.

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Trade union membership subscription is currently 1-2% of the basic salary of each union member. Organised as a check-off system, the members’ dues are deducted at source and paid directly to the national unions to which the workers belong. By constitutional arrangement, 20% of the dues are paid back to the local unions. Another 30% are paid to the TUC as its main income to run its activities. The national unions retain 50% of their members’ dues. Additionally, the TUC, and to a lesser extent some unions, receive funds from international trade unions and other organisations.

TUC Ghana has a membership of around 500,000 persons. TUC estimates a membership of 300,000 for

unions outside TUC.1

(GFL) Ghana Federation of Labour4

In 1998 the Ghana Federation of Labour (GFL) was established as a new national centre. The founding organisations were the Ghana National Association of Teachers, the Ghana Registered Nurses’ Association, the Textiles, Garment and Leather Employees’ Union and the Lotto Receivers’ Association. Subsequently, the Ghana National Association of Teachers withdrew from GFL, is now a non-affiliated union, and with 178,000 members it is also by far the largest union in Ghana.

Trade Unions in Ghana

Members, Dues, Collective Bargaining Agreements (CBA) and Occupational Safety and Health committees

Trade Union / Trade Union Centre

Affiliation To national trade union

centre

Total Members

(2009)

Female Members

(2009) Dues

Number of CBAs

Workers covered by CBAs

Number of OSH com-mittees at

workplaces

Ghana Trades Union Congress (TUC) 500,000 (2012)

Ghana Federation of Labour (GFL) 178,000 (2012)

GAWU General Agricultural Workers’ Union

TUC 44,000

GMWU Ghana Mine Workers’ Union TUC 2,000

PSWU Public Services Workers’ Union TUC 42,000

MDU Maritime and Dock-workers’ Union

TUC 6,000

CBWU Construction and Building Materials Workers’ Union

TUC 21,000

TWU Timber and Wood-workers’ Union

TUC 36,000

RWU Railway Workers’ Union TUC 11,000

PUWU Public Utility Workers’ Union TUC 29,000

GTPCWU Gen. Transp., Petro. and Chem. Workers’ Union

TUC 5,000

TEWU Teachers and Educational Workers’ Union

TUC 42,000

REU Railway Engine-men’s Union TUC 1,000

CWU Communications Workers’ Union

TUC 18,000

LGWU Local Government Workers’ Union

TUC 21,000

NUS National Union of Seamen TUC 1,000

HSWU Health Services Workers’ Union

TUC 29,000

GPRTU Ghana Private Road Transport Union

TUC 44,000

UNICOF Union of Industry, Commerce TUC 39,000

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and Finance

FUSSAG Federation of Universities Snr. Staff Association of Ghana

TUC -

GNAT Ghana National Association of Teachers

- 178,0006

GRNA Ghana Registered Nurses Association

- 12,0007

CSA Civil Servants Association - 70,0007

TEGLEU Textile, Garments and Leather Workers’ Union

- -

JUSSAG Judicial Services Association of Ghana

- -

Employers’ Organisations

(GEA) Ghana Employers' Association8

The Ghana Employers' Association was formed in 1959, two years after Ghana’s independence. GEA is led by Managing Director Mr. Terence Dark, and is structured into the Annual General Meeting, the Council, the Executive Committee, the Advisory Committee, the Administrative and Finance Committee, the Education and Training Committee and the Secretariat.

The functions of GEA are to consolidate employers into one effective body and to represent, promote and defend their interests in their dealings with organised labour and Government and its agents. It seeks to promote good working relations between employers and their employees and assists employers in negotiating collective bargaining agreements with organised labour.

Central Tripartite Structures

The National Tripartite Committee10

The Committee is composed of the minister of labour and five representatives each of the government, employers´ organisations and trade unions. The Committee sets the minimum wage, and gives advice on employment and labour matters including labour laws, labour standards, industrial relations and occupational safety and health. National Labour Commission

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The Commission is composed of a chairperson and two representatives each of the government, employers´ organisations and trade unions. The commission settles industrial disputes, investigates

labour complaints and promotes effective labour cooperation. If settlement fails the commission can appoint a mediator and if that fails an arbitration panel, both with the consent of the involved parties.

Other bi/tripartite organs4

- SSNIT - Social Security and National Insurance Trust

- National Vocational Training Institute (NVTI) - Member of various committees on development

and regulation - National Development planning commission

(NDPC)

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National Labour Legislation

Constitution9

The constitution of 1992 establishes the right to satisfactory, safe and healthy work, equal pay for equal work, adequate resting periods, maternity leave and protection from child labour. Freedom of association is guaranteed, and workers are free to join and form union. Special incentives for firms employing significant numbers of disabled people are to be instituted. The constitution also encourages participation of workers at workplaces

Labour Act10

The Labour Act of 2003 introduced trade union pluralism in Ghana. The act regulates various working conditions including the right to strike, freedom of association, prohibits anti-union discrimination and recognises the right to collective bargaining. It regulates trade unions and employers’ organisations and collective bargaining agreements. The act also establishes the Labour Inspection, the National Tripartite Committee and the National Labour Commission.

Other laws regulate the labour market such as the Free Zone Act of 1995, the Minimum Wage Regulation of 1999 etc.

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ILO Conventions

Ratified ILO Conventions12

Subject and/or right Convention Ratification date

Fundamental Conventions

Freedom of association and collective bargaining

C087 - Freedom of Association and Protection of the Right to Organise, 1948 1965

C098 - Right to Organise and Collective Bargaining Convention, 1949 1959

Elimination of all forms of forced labour

C029 - Forced Labour Convention, 1930 1957

C105 - Abolition of Forced Labour Convention, 1957 1958

Effective abolition of child labour

C138 - Minimum Age Convention, 1973 2011

C182 - Worst Forms of Child Labour Convention, 1999 2000

Elimination of discri-mination in employment

C100 - Equal Remuneration Convention, 1951 1968

C111 - Discrimination (Employment and Occupation) Convention, 1958 1961

Governance Conventions

Labour inspection C081 - Labour Inspection Convention, 1947 1959

C129 - Labour Inspection (Agriculture) Convention, 1969 Not ratified

Employment policy C122 - Employment Policy Convention, 1964 Not ratified

Tripartism C144 - Tripartite Consultation (International Labour Standards) Convention, 1976 2011

Up-to-date Conventions

Working time C014 - Weekly Rest (Industry) Convention, 1921 1960

C106 - Weekly Rest (Commerce and Offices) Convention, 1957 1958

Wages C094 - Labour Clauses (Public Contracts) Convention, 1949 1961

Occupational Safety and Health

C115 - Radiation Protection Convention, 1960 1961

C120 - Hygiene (Commerce and Offices) Convention, 1964 1966 C148 - Working Environment (Air, Noise and Vibration) Convention, 1977 1986 C184 - Safety and Health in Agriculture Convention, 2001 2011

Seafarers C147 - Merchant Shipping (Minimum Standards) Convention, 1976 2005

Labour administration C150 - Labour Administration Convention, 1978 1986

Industrial relations C151 - Labour Relations (Public Service) Convention, 1978 1986

Specific categories of workers

C149 - Nursing Personnel Convention, 1977 1986

Fundamental Conventions are the eight most important ILO conventions that cover four fundamental principles and rights at work. Equivalent to basic human rights at work.

Governance Conventions are four conventions that the ILO has designated as important to building national institutions and capacities that serve to promote employment. In other words, conventions that promotes a well-regulated and well-functioning labour market.

In addition, there are 71 conventions, which ILO considers “up-to-date" and actively promotes.

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Trade Union Rights Violations

According to ITUC:13

Trade unionists who tried to protest about the poor performance of their employer found themselves victimised. Police used excessive force against protesting teachers. Unionisation in the export processing zones (EPZ) remains complicated mainly due to employers’ resistance. The labour legislation does not sufficiently secure trade union rights, and the authorities retain some discretionary powers over unions.

Many categories of workers are also excluded from the Labour Act, including managerial workers. The Act provides that the determination of the class of workers which are precluded from forming or joining a union must be arrived at through consultation between management and the workers. If there are multiple unions at a workplace, the law requires that the collective bargaining certificate is given to the most representative union. The collective bargaining “certificate” needed to negotiate with the employer. Albeit the right to strike is guaranteed in the Labour Act, it can be limited in private enterprises if the workers’ services are deemed essential to the enterprise’s survival, and in essential services, which includes many sectors that fall outside the ILO definition.

Although employment security is protected in law, in practice this is undermined by a 2008 decision of the Accra High Court to the effect that employers could hire and fire without giving any reasons for the termination of employment.

Other violations included police force used against a march by the teachers union NAGRAT, poor working conditions at a Chinese construction firm working on a road project, and that several companies are use various anti-union discrimination methods.

According to the U.S. Annual Human Rights Report:14

The government generally protected the right to form and join independent unions and conduct legal strikes and bargain collectively, and workers exercised these rights in practice. Worker organizations were independent of the government and political parties, and there were no instances of government interference in union activities during the year. There were no reports on violence, threats, or other abuses targeting union leaders and members by government or employers. While there were no instances of employers who refused to bargain, bargained with unions not chosen by workers, or hired workers without bargaining rights, some instances of employer interference in union activities were subtle. Since many unions also did not fully understand the labour laws, they normally did not follow approved processes for dealing with disputes. Due to lack of awareness about the National Labour Commission’s role, it faced challenges in enforcing the necessary sanctions against both the unions and employers.

Trade unions engaged in collective bargaining for wages and benefits with both private and state-owned enterprises without government interference. No union had ever gone through the complete dispute resolution process involving arbitration, and there were numerous unsanctioned strikes during the year. Some employers continued to fire employees for union activity.

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Working Conditions

Wages and earnings Monthly average and legal minimum wages

Source Current

Cedi (new)

2011 US

Dollar

Average wages (2005/6)

Global Wage Database15

95.3 121

Minimum wage (2012)

Government of Ghana16

101 65

Average wages (2005/6)

TUC analysis of

5th GLSS3

119 151

Male average wages (2005/6)

132 168

Female average wages (2005/6)

108 138

% minimum wage to value added per worker (2012)

Doing Business55

1.5 %

Growth of real minimum wage (2000-2011)

Global Wage Database15

90 %

% of minimum wage to value added per worker denotes the minimum wage share of labour productivity. Reported as ratio of minimum wage to value added per worker in the Doing Business Report.55

The minimum wage was increased to 4.48 cedi in February 2012, accounting for inflation this is an increase of 90% from 2000 to 2012. The minimum wage is however still only around $67 per month, which is not enough to support basic living conditions in Ghana. Doing Business reports the minimum wage at $29.7 for an unskilled worker equivalent to 1.5% of labour productivity.

The national minimum wage applies to all sectors, and therefore also the informal sector.

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Workers who earn less than 1,800 cedi per year are

exempt from tax.4

The 5th Ghana Living Standards Survey, reported that in 2006, 1.4% worked in Public Administration and 2.9% worked in Education. Of the 2011 employed

labour force at 10.2 million,2 it would be equivalent to

440.707 employed in the public sector.18

The survey also revealed working hours for different occupations: Low skilled sectors such as agriculture and elementary occupation tended to work less than 40 hours per week, whereas higher skilled occupations such legislators/managers or clerks tended to work more than 40 hours per week. 58% of security personal, 53% Plant & machine operators, and 38% of service/sales workers worked more than 60 hours a

week. 18% of the employed worked less than 20 hours

in their main job.3 55% of those employed had no

written contract.

The proportions of no written contract were highest in the sectors of Trade and Commerce (81%), Agriculture (77%), Transport, Communications & Storage (77%) and Manufacturing (70%) whereas it was lowest for Utilities (25%) and Finance & Real Estate (22.6%).

Ghana has reformed its public pay structures into the Single Spine Pay Policy (SSPP), adopted in 2009. The SSPP set the salary structure for public employees in Ghana, seeking to make sure that public employees are given a standardised salary for similar jobs. The SSPP is implemented by the presidentially appointed Fair Wages and Salary Commission, but not all public employees have transferred into the SSPP. The base pay in the 25-level grading structure were 3.42 cedi per day in 2010, but has been increased to reflect the increases in minimum wage.

19 Workers in the public

sector have held several strikes concerning the SSPP. The objective of Ghana TUC is to ensure that the SSPP wages are increased to a level that can sustain basic living conditions.

20

Ghana TUC analysis of the living standards survey revealed average monthly wages at 119 Cedi. The average wage varied between industries, with the lowest for agriculture at 88 Cedi per month and the highest for Financial Services at 332 Cedi per month. On average women earned 108 Cedi per month and men earned 132 Cedi, equivalent of women earning 30% less than men. Though there is a somewhat correlation between higher average wages and a higher the proportional gender wage gap, the largest wage gaps are found in traditional male industries such as industry and mining, which does not have particular high wages.

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According to the U.S. Annual Human Rights Report:14

The law sets the maximum workweek at 40 hours. The Ministry of Employment and Social Welfare was unable to effectively enforce the wage law. There was widespread violation of the minimum wage law in the formal economy across all sectors. The minimum wage law was not enforced in the informal sector. Legislation governing working hours was largely followed in the formal sector but widely flouted and not enforced in the informal sector. Occupational Safety and Health regulations are set by the

government. Safety inspectors were few and poorly trained, and they lacked the resources to effectively respond to violations. Inspectors did not impose sanctions or otherwise respond to violations during the year. There were no reports of specific government action taken during the year to prevent violations and improve wages and working conditions. Widespread violations were reported of human rights in mining areas.

Workforce

Ghana has considerably fewer working poor than the rest of Sub-Saharan Africa, with 26% of the working population living for under $1.25 a day and 48% for $2 a day. Though the data is from 2006, it is still a large share of the population, especially considering Ghana’s otherwise well developed economy and stability.

Relative to Sub-Saharan Africa, Ghana had a much higher middle class. In 2010, 27% of Ghanaian lived for $2-4 a day and 20% for $4-20 a day, compared to Sub-Saharan Africa where 14% lived for $2-4 a day and 10% for $4-20 a day.

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To boost local employment creation the Ghana government aims to have 90% local content and local participation by 2020 in the newly started extraction of off-shore oil reserves, which were discovered in 2007.

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Working Poor2

Age 15+

Share of workers

in total employment

Region 1.25 USD

a day 2 USD a day

Ghana (2006) 26 % 48 %

Sub-Saharan Africa (2006)

48 % 71 %

Sub-Saharan Africa (2011)

44 % 67 %

Working poor measures employed people living for less than US$1.25 and US$2 a day, as proportion of total employment in that group

Employment rates2

(2011), Age and Sex distribution

Sex Age Employment

rate

Male & female

Total 15+ 67 %

Youth 15-24 36 %

Adult 25+ 81 %

Male Total 15+ 69 %

Youth 15-24 36 %

Adult 25+ 85 %

Female Total 15+ 64 %

Youth 15-24 36 %

Adult 25+ 78 %

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

15+

15-24

25+

Male and female Female Male

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Unemployment and underemployment

Unemployment stands at 3.6% in Ghana, whereas underemployment is at 5.1%. Both are medium to low relative to other African countries with comparable data and suggest that the Ghana labour market does create jobs. There are no major gender differences in unemployment or underemployment. But where unemployment is very much an urban phenomenon, underemployment is a rural phenomenon. The concept of underemployment does sometimes also include those who are employed below their skill-level, whereas the measure for Ghana is confined to time-related underemployment. Anecdotal evidence suggests the existence of skill related underemployment.

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According to the African Development Bank,23

unemployment figures are somewhat different: 25.6% of young people aged 15-24 are unemployed, twice that of the 25-44 age group and three times that of the 45-64 age group.

Interpretation of the open unemployment and employment rates as indicators of a well-functioning labour market is problematic in developing countries. When unemployment is not an option where a person can survive, work of some sort has to be found, often

casual and informal work. Unemployment should therefore be understood in relation to the strength of social safety nets, the prevalence of informal employment and how much of informal employment is underemployment due to few formal employment possibilities. See Kucera & Roncolate (2008) for a discussion on unemployment and informal employment in developing countries.

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Unemployment and underemployment18

(2005/06) Age 15+

Region Unemployment Underemployment

Total 3.6 % 5.1 %

Urban 6.3 % 3.3 %

Rural 1.6 % 6.4 %

Male 3.5 % 4.6 %

Female 3.6 % 5.6 %

Underemployment is the proportion of those who work less than 35 hours a week and want to work more. The estimates are slightly higher for those who work 40 hours or less.

Sectoral employment

Employment (2010)25

& GDP share (2010)23

Sector & Sex distribution – (Graph without Agriculture)

Sector Male

employment Female

employment GDP share per sector

Mining and quarrying 92,353 21,852 1.8 %

Manufacturing 449,826 670,296 6.8 %

Electricity, gas and water 27,690 13,141 1.5 %

Construction 308,527 8,998 8.6 %

Trade, restaurants and hotels

687,439 1,836,662 12.3 %

Transport and communication

348,788 18,506 12.5 %

Finance, real estate and business services

137,880 77,704 9.7 %

Public administration, education & health

447,624 304,005 7.0 %

Other services 253,581 357,071 9.9 %

Agriculture 2,303,140 2,008,595 29.9 %

0% 4% 8% 12% 16% 20% 24%

,0 415000,0 830000,0 1245000,0 1660000,0 2075000,0 2490000,0

Male Female GDP share by Sector

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Agriculture is by far the largest employment sector in Ghana, employing around 42% of the labour force, and contributing with around 30% to GDP. Ghana has a more developed agricultural sector, as Sub-Saharan and African countries often employs has an agricultural employment over 70%, with a GDP contribution around 25%. Though in general, Ghana has a dual labour market split between a pre-industrialised agricultural sector and a modern sector. The sector also has a higher employment of men than women, which is unusual for the agricultural sector in Sub-Saharan Africa. Women find employment in several other sectors, but predominantly in Manufacturing and Trade, Restaurants and Hotels.

Financial services employs about 0.7% of the workforce. Ghana has recently experienced an influx

of large banks from Nigeria and elsewhere,3 but still

the sector only employs about 72,000 workers according to the 2010 population and housing census.

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Sector Share of GDP53

Migration

Slightly fewer migrate out of Ghana than the Sub Saharan average. But remittances share of GDP are less than a fifth of other Sub- Saharan African countries.

Most Ghanaian emigrants go to West African nations, but a growing proportion is migrating outside the region. Emigration has been increasing faster than immigration, but Ghana remains an important immigration country as well, especially from other ECOWAS countries.

27

Like most other African and developing countries, Ghana experiences shortages of workers with certain skills, due to emigration of high-skilled labour. In the health care and the education sector this is particular common. In 2002 57% of posts for registered nurses were unfilled in Ghana.

28 Faculty positions

polytechnics and public universities were also often unfilled.

29

A survey of nurses and midwives in 2011 indicated that the factors that influence migration decisions include low levels of pay, poor working conditions, difficult working environments, inadequate opportunities for career development and promotion, low motivation, overstretched and stressed staff and low value given to care work.

30

Migration53

Net migration (2006-2010)

Ghana - 51,258

Net migration to average population per year (2006-2010)

Ghana - 1 : 2270

inhabitants

Sub-Saharan Africa

- 1 : 2,048 inhabitants

Personal Transfers i.e. remittances received, % of GDP (2011)

Ghana 0.4 %

Sub-Saharan Africa

2.7 %

0%

10%

20%

30%

40%

50%

60%

2005 2006 2007 2008 2009 2010

Services

Industry

Agriculture

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Informal Economy

Employment in the informal economy

Share of persons employed in the informal sector

Ghana (2006)31

86 %

Share of persons employed in the non-agricultural informal sector

Ghana (2006)32

79 %

Sub-Saharan Africa (2001)

33

78 %

The informal economy is the largest employer in Ghana, with estimates from 2006 at 86% of the total labour force and 79% of the non-agricultural labour force, and it has likely grown since then. The informal sector is mainly in manufacturing, repair services and other services.

34

According to an ILO Working Paper,35

a combination of a growing young population, low productivity, removal of subsidies and lowering of import tariffs on agricultural products, led to increased rural-urban migration of the young. Foreign investment shifted from production to banking and finance, which only created few jobs. With urban areas not being able to create the number of formal jobs needed to meet the increased supply of labour, the informal economy grew. The informal economy created an estimated ten times more jobs than the formal economy since the 1980s and contributes 20% to 40% to the GDP of Ghana.

About 250,000 young people enter the labour market each year, and only around 2% find job in the formal

sector.4 At 57%, the informal sector also mostly

employs women.31

A survey by WageIndicator.org conducted in April 2012 rated workers on an informality scale from 1-5, with 1 being workers not entitled to social benefits, who do not contribute to social security and with no contract. It shows 19% in the most informal category and 50% in the most formal. The survey also showed that the informality index correlates age, with more young people in informal employment. The survey was

conducted in urban areas, likely among the slightly better of segment of the labour force, as the median wage was about $200 2011 USD among the surveyed, somewhat higher than average wage of $151 2011 USD, which the 5th Ghana Living Standard Survey showed.

In Ghana TUC’s analysis of the Ghana Living Standard

Survey of 2005/6,3 55% of employed workers in

Ghana had no written contract. The proportions of no written contract were highest in the sectors of for Trade and Commerce (81%), Agriculture (77%), Transport, Communications & Storage (77%) and Manufacturing (70%) whereas it was lowest for Utilities (25%) and Finance & Real Estate (22.6%).

An Enterprise Survey from the World Bank in 2007 showed that 59% of firms reported less than 100% of sales for tax purposes, slightly less than the Sub-Saharan average at 62%.

36

According to a FES study form 2011, most forms of working conditions are worse for informal sector workers in Ghana.

37

Several unions are actively working to extend their services to the informal sector, or are organising workers in the informal sector. These include the Construction and Building Materials Workers Union, which has signed a Collective Bargaining Agreement to cover both formal and informal construction workers, the General Agricultural Workers’ Union organizes informal workers in the rural sector, the Ghana Private Road Transport Union, the Local Government Workers’ Union, the Industrial and Commercial Workers Union, the Maritime and Dock Workers Union, and the Timber and Wood Workers Union.

38 10

informal economy organisations are associated to the Ghanaian trade union movement. Ghana TUC has recently received 13,000 new members from the

informal economy associations or unions.4

The Ghana Employers Association has assisted small and informal businesses with the establishment of associations, and helped broker agreements between them and local government on issues such as tax levels.

39

All in all, informal sector is the dominant source of employment in Ghana. However, the informal sector is likely both smaller and better developed in Ghana, than in the West African region, since Ghana is a better developed nation. The better data availability of Ghana gives a more detailed insight into the informal sector in Ghana.

5 = Very formal

4 3

2

1 = Very informal

Employment status on

informality-index

14

Child Labour

Child labour is often found in cocoa production, cattle herding and fishing.

40 According to ITUC, economic

hardship in rural areas has made it more common for children to migrate to urban areas to seek employment.

41

UNICEF’s Multi Indicator Cluster Surveys of Ghana,42

indicate that child labour is common in Ghana and considerably higher than the Sub-Saharan average. Methodological differences might account for some of the differences. The survey of 2006 show that child labour is more than three times as common among the poorest quintile of households (48%) compared to the richest (14%), that the rural areas have twice as much child labour (43%) as urban (20%), and that child labour is more than twice as common in the far northern provinces than in the coastal areas. Relatively few children (9.5%) work outside their own household. A newer survey from 2011 of densely populated areas in the Accra region, indicate that 35% of children are child labourers and 24% of children

work outside their own household. Since the Greater Accra region had 22% child labour in 2006 and since urban areas had less child labour than rural, the survey indicates that child labour has greatly increased.

Working children Proportion of all children aged 5-14 Region Year Type Proportion

Ghana42 2006

Child labourers

33.9 %

Greater Accra42 21.6 %

Accra city42 2011 35.4 %

Sub-Saharan Africa43

2008

Children in employment

28 %

Child labourers 25.4 %

Hazardous work 12.7 %

Children in employment includes all children who conduct some kind of work, whereas child labourers is a narrower term without mild forms of work. Hazardous work is the worst from of child labour as defined in ILO C182.

Gender

As noted elsewhere in this report: 47% of agricultural workers are women. Women find employment in several other sectors, but predominantly in Manufacturing and Trade, Restaurants and Hotels. Underemployment is higher for women, but unemployment is about the same. The majority of workers in the informal economy are women.

Women in general are also less educated than men. Net primary enrolment is the same for men and but women lack behind in enrolment into universities. On average women earn 108 Cedi per month and men earn 132 Cedi, equivalent of women earning 30% less than men. The largest wage gaps are found in

traditional male industries such as industry and mining, which does not have particular high wages.

An Enterprise Survey from the World Bank in 2007 reported that 44% if firms had female participation in ownership, higher than the Sub-Saharan average at 32%, and that 35% of full time employees were women, which was more than the Sub-Saharan average at 24%.

36

According to a study from 2009,44

Ghana has a relatively low female labour force participation, and that the women with higher education or fewer children have higher labour participation.

15

Characteristics of the Working Age Population

The Ghanaians have an average of 7 years of schooling in total, about the same level as Kenya. The number of people who have some sort of secondary education is rather high, and most of those educated have had more than primary education.

Considering that Ghana is one of the better functioning African countries, and that Ghana has a high level of education, there are still many without any schooling. So the otherwise well developed

Ghanaian education system does not reach a third of the population, which is also reflected in the educational GINI. Women in general are also less educated than men, and with 10% more having no education. The graph above shows the educational attainment of all Ghanaians above 25 years, therefore gives a glance of the human capital of the labour force.

Highest level attained and years of schooling in the population45

(2010), Population 25+, Total and Female

Highest Level Attained Total Female

No Schooling 32.2 % 42.8 %

Primary Begun 5.8 % 4.8 %

Completed 8.1 % 6.7 %

Secondary Begun 33.0 % 28.8 %

Completed 17.6 % 14.5 %

Tertiary Begun 1.2 % 0.9 %

Completed 2.0 % 1.5 %

Average year of total schooling 7 years 5.9 years

Educational Gini Coefficient 0.43 0.51

Primary, secondary and tertiary is the internationally defined distinction of education. In Denmark these corresponds to grundskole, gymnasium & university.

The educational Gini Coefficient is similar to the Gini Coefficient, but instead of measuring the distribution of income in a population, it measures the distribution of education measured as years of schooling among the population.46

0% 20% 40% 60% 80% 100%

Total

Female

No Schooling Primary - Begun Primary - CompletedSecondary - Begun Secondary - Completed Tertiary - BegunTertiary - Completed

16

Enrolment in Primary, Secondary and Tertiary schools (2000-2011)53

Total and Female, Ghana and Sub-Saharan Africa

Net enrolment is the ratio of children of official school age, who are enrolled in school to the population of the corresponding official school age. Gross enrolment is the ratio of total enrolment, regardless of age, to the population of the corresponding official school age. Gross primary enrolment is therefore sometimes higher than 100 %.

Enrolment is in general higher in Ghana than the Sub-Saharan average. Enrolment in secondary schools has steadily been higher since 2000, though it slightly decreased after 2009, and enrolment in universities has increased drastically since 2005.

The amount of students in vocational training is slightly lower for Ghanaians than the rest of Sub-Saharan Africa, and this appears to be an area where the Ghanaian education system is lacking behind.

According to the African Development Bank:23

Ghana’s educational system has been identified as inadequately equipped to provide young people with the skills required by the private sector, creating a mismatch of skills among the youth in the labour market. A significant proportion of the youth (14.31 %) have never been to school. Over 65.68% of the youth have only primary level education and only 1.99%

have attained vocational level training. In order to address this challenge, the government has embarked on several policy initiatives to increase access to basic education, expand and enhance technical and vocational education, and support employment creation through skills development programmes for unemployed youth.

Vocational Training

53

Pupils in vocational training (2005)

Ghana 71,848

Ratio of pupils in vocational student to all pupils in secondary education (Average 2005-2009)

Ghana 3.30 %

Sub-Saharan Africa

7.16 %

Ratio of pupils in vocational training out of 15-24 year olds (Average 2005-2009)

Ghana 1.42 %

Sub-Saharan Africa

1.72 %

50%

60%

70%

80%

90%

100%

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

Net primary school enrolment

0%

10%

20%

30%

40%

50%

60%

70%

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

Gross secondary school enrolment

0%

2%

4%

6%

8%

10%

12%

14%

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

Gross tertiary school enrolment

Ghana ,Totalenrolment

Ghana ,Femaleenrolment

SSA , Totalenrolment

SSA ,Femaleenrolment

17

Social Protection

Pensions for old age, disability, survivors and occupational injury were reformed in 2008, to include self-employed and informal sector workers. The schemes are mandatory for formal sector workers, where 5.5% of earnings are paid by the employee and 13% by the employer. Self-employed and informal sector workers can voluntarily join by paying 18.5% of declared income.

The pensions are a three-tier scheme, where the mandatory first-tier social insurance scheme is run by the public Social Security and National Insurance Trust (SSNIT), which has a tripartite board. The second-tier mandatory occupational pension scheme gives contributors higher lump sum benefits. The third-tier is the voluntary provident fund and personal pension scheme. Both the second and third-tier scheme is managed by private trustees. The entire scheme is overseen by the National Pension Regulatory Authority (NPRA). The pension scheme was fully implemented in 2012.

47 To raise awareness of the

pension system, TUC conducted an information campaign in 2011, and membership in the Informal Economy Fund increased from 60,000 to 90,000 in a

few months.4

Health protection is largely done through the National Health Insurance System (NHIS). The system was originally modelled on the British universal and tax financed National Health Services, but co-payment had to be included in 1992, and in 2003 the system was reformed into the NHIS.

Over 60% of the NHIS is financed by a 2.5% health levy VAT on goods and services.

48 The rest was financed by

a 2.5% income tax on workers in the formal sector and an annual premiums paid by contributing members. The premium varies according to poverty groups,

where the poorest group is exempt from paying the premium.

According to the NHIS,49

in 2010 66,4% of the population was registered members, and 53.6% of the population was active contributing members.

The ILO convention 183 on maternity leave protection has not been ratified. Following the labour act of 2003, maternity leave is set at 12 weeks, fully paid by the employer.

50

Public spending on social protection schemes (2004)

Public social protection

expenditure, excl. health

2004 Cedi 152 million

2011 USD 200 million

% of GDP51 1.9 %

per capita 9.5

per worker 22.3

of government revenue 10.3 %

Public health expenditure

% of GDP51 2.3 %

Coverage of contributory schemes to potential demographic

52

Contributors to scheme (2008)

Life insurance 6.6 %

Disability 6.6 %

Sickness in employment 6.3 %

Old age pension 6.6 %

Old age pension recipient ratio 65+ 10.6 %

18

General Economic Performance

Key Facts (2011)

GDP53 GDP

per capita53 (PPP)

GNI53 Human

Development Index54

Gini Coefficient

(2006)53

39.2 billion USD

1,884 USD

37.9 billion USD

0.541 0.43

168 of 201 countries

135 of 187 countries

98 of 156 countries

Doing business55

Control of corruption56

Government effectiveness56

Rule of Law56

64 of 183 countries

0.13 -0.03 -0.06

81 of 212 countries

99 of 212 countries

98 of 212 countries

Ghana is often considered a model African country, in both democracy and economic development, and most indicators ranks Ghana as one of the better performing countries in Sub-Saharan Africa. In 2011 Ghana became a middle income country. Ghana’s GDP per capita is considerably higher than the rest of Sub-Saharan Africa and is projected to grow faster. There are however considerably regional differences in economic development between the overly rural north and the more industrialised south.

The growth rate in Ghana was reduced to 4% in 2009 by the financial crisis. It has since rebounded and reached impressive 14.4% in 2011, the second highest growth rate in the world, due to oil production and increased construction, transport and ICT. In the poorest regions in the north of Ghana, maize and rice production continued to grow. Oil production is expected to reach its maximum in 2012, and growth is therefore projected to reach 7.5% in 2012. Private investment tends to be in extractive industries and construction and exports.

57

Ghana started oil extraction in 2010. The unprecedented access to financial resources are a continued source of concern, as the discovery of high yield natural resources have been a source for corruption and conflict in many other developing nations. Ghana has therefore set up strict revenue-managing rules.

58

Inflation in Ghana has been relatively high, but has now decreased to a single digit and is projected to stay at that level.

The doing business indicator ranks Ghana rather high at 64 out of 183 countries. A high ranking means the regulatory environment is more conducive to the start-up and operation of a local firm. Ghana scores high on Registering Property, Enforcing Contracts, Getting Credit and Protecting investors, but scores low on Dealing with Construction Permits. On the three Governance indicators, Ghana also scores rather well at a medium level for each.

GDP per Capita (PPP), trend and forecast

Inflation, trend and forecast

Gross fixed capital formation (% of GDP)

0

1000

2000

3000

4000

5000

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

Cu

rren

t U

SD

Ghana Sub Saharan Africa (excl. South Africa)

0%

5%

10%

15%

20%

25%

30%

35%

20

00

20

01

20

02

20

03

20

04

20

05

200

6

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

Ghana Sub-Saharan Africa

0%

10%

20%

30%

40%

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

Ghana Sub-Saharan Africa

19

Trade

Ghana imports and exports are relatively well-balanced, and trade plays an important part of the economy. Cocoa production forms an important part of Ghana’s exports, as it employs many people in the agricultural sector, and Ghana is one of the largest cocoa exporters in the world. Gold formed the majority of Ghana’s exports in 2010, and the new oils exports are playing an increasing role for the economy. International increases in gold prices and increased production in cocoa, raised exports. This was partly counterbalanced by increased imports of non-oil products 2011. More oil products were imported than exported, so global increases in fuel prices had a negative impact on Ghana’s trade.

57

Foreign Direct Investment inflows are also slightly higher than most of Sub-Saharan Africa. Trade and investment is from China is growing, anecdotal evidence suggests that the working conditions are worse in Chinese owned workplaces.

Trade agreements

Ghana is part of the Economic Community of the West African States. The treaty from 1993, which was revised in 2005, contains labour provisions with cooperation regarding harmonization of labour law and social security, promotion of women’s, youth and professional organizations, and consultation of the social partners.

59

Ghana is in the 2000 Cotonou Agreement on development cooperation between EU and African, Caribbean and Pacific (ACP) countries, which reaffirms commitment to ILO’s Fundamental Conventions and includes provisions on cooperation on various labour and social issues.

60

Since 2000, Ghana has benefitted from the United States’ African Growth and Opportunity Act (AGOA), which is a Generalised System of Preferences. It allows duty and quota free access for some products. Ghana can be removed from AGOA, if the United States deems that Ghana among other human rights issues do not seek to uphold the ILO Core Labour Standards and have acceptable minimum wages, hours of work and occupational safety and health.

61

Export Processing Zones

Ghana established Export Processing Zones in 1995. Ghana has four EPZ, three of them situation close to the sea.

62 According to an ILO survey from 2007, the

EPZs had 9,828 workers, exported for 627 million USD, had 144 firms and exported mainly in ICT, textiles, food processing etc.

63

Trade and Foreign Direct Investment

Exports64 (2011)

Imports64 (2011)

FDI flow53 (average 2006-10)

FDI Stock64 (2011)

12.8 billion USD

16 billion USD

1.73 billion USD

N/A 17 % of GDP 21 % of GDP 2.3 % of GDP

Products share of exports (2010)65

Ghana's main export markets (2010)66

Animal products Vegetable products FoodstuffMineral products Chemicals, etc. Plastics / RubbersLeather & Furs Textiles FootwearWood products Stone / Glass MetalsMachinery / Electrical Transportation MiscellaneousServices

EU; 39%

US; 6%

Ukraine; 4% Turkey; 4% India; 3%

Others; 44%

20

References

1 Ghana TUC, Organising for Empowerment, Employment Security and Increased Productivity, 2012

2 ILO, Key Indicators of the Labour Market Database

3 Ghana TUC, Research Paper Number 2009/01, Otoo, Osei-Boateng & Asafu-Adjaye, THE LABOUR MARKET IN GHANA:

A Descriptive Analysis of the Labour Market Component of the Ghana Living Standards Survey (V) 4 LO/FTF Council

5 http://www.ghanatuc.org

6 http://www.ghanateachers.org

7 http://www.younionize.info

8 International Organisation of Employers, IOE Member, Ghana, GEA

9 ILO, NATLEX, Constitution of the Republic of Ghana (No. 282 of 1992)

10 ILO, NATLEX, Labour Act, 2003 (Act No. 651)

11 ILO, NATLEX, Country Profile Ghana, Basic Laws & ILO, DIALOGUE, National Labour Law Profile: Ghana, 2006

12 ILO, NORMLEX

13 ITUC, Annual Survey of violations of Trade Union Rights, 2012

14 U.S. Department of State, Annual Country Reports on Human Rights Practices, 2011

15 ILO, Global Wage Database 2012/13

16 Government of Ghana, Workers Get Improved Minimum Wage, 09 February 2012

17 Ghana TUC

18 Ghana Statistical Service, Ghana Living Standards Survey Report of the 5

th round (GLSS 5), September 2008

19 http://www.fairwages.gov.gh

20 Ghana TUC, Policy Bulletin Vol 7 No 3 October 2011

21 AfDB, The Middle of the Pyramid: Dynamics of the Middle Class in Africa, April 2010

22 ILO, News, Wanted: Local workers for the oil and gas industry, 12 December 2012

23 AfDB, African Economic Outlook, Ghana Country Note, 2012

24 Kucera D. & Roncolato L. (2008), Informal Employment: Two contested policy issues, International Labour Review,

Vol. 147 (2008). No. 4 25

Calculations from: Ghana Statistical Service, 2010 Population and Housing Census - summary report of final results, 2012 26

Ghana Statistical Service, 2010 Population and Housing Census - summary report of final results, 2012 27

IOM & EU, Migration in Ghana: A Country Profile 2009 28

ILO, INTEGRATION, Dejardin, “Gender (in)equality, globalization and governance”, Working Paper No. 92, 2009 29

FES, Asare, Labour Migraiton in Ghana, 2012 30

PSI, Pillinger, Quality health care and workers on the move, Ghana National Report, 2011 31

Ghana TUC, Anthony Baah, "Organizing the Informal Economy: Experiences and Lessons from Africa and Asia", 2006 32

Computed from ILO, Key Indicators of the Labour Market Database & Ghana TUC, Anthony Baah, "Organizing the Informal Economy: Experiences and Lessons from Africa and Asia", 2006 33

ILO, Employment Sector, Xaba Horn & Motala, The Informal Sector in Sub-Saharan Africa, 2002 34

European Commission, DG DEVCO, Ghana Country Strategy Paper 2008-2013 35

ILO, Tsikata, “Domestic work and domestic workers in Ghana: An overview of the legal regime and practice”, Conditions of Work and Employment Series No. 23, 2009 36

World Bank, Ghana Enterprise Survey - 2007 37

FES-Ghana, Osei-Boateng & Ampratwum, The Informal Sector in Ghana, 2011 38

Schurman & Eaton, Report to the Solidarity Center, “Trade Union Organizing in the Informal Economy: A Review of the Literature on Organizing in Africa, Asia, Latin America, North America and Western, Central and Eastern Europe”, 2012

21

39

ILO, Williams, “Participatory approaches for planning and construction-related assistance in settlement upgrading and expansion: The roles of tripartite actors and other stakeholders”, Working Paper, 2007 40

FAO & SLE, Zdunnek, Child Labour and Children’s Economic Activities in Agriculture in Ghana, 2008 41

ITUC, Report for the WTO General Council Review of Trade Policies of Ghana, 2008 42

UNICEF, Childinfo, Multiple Indicator Cluster Surveys, Available reports/datasets 43

ILO, Accelerating action against child labour, International Labour Conference, 99th

Session 2010 44

Ackha et al, Determinants of Female Labour Force Participation in Ghana, 2009 45

Barro, Robert and Jong-Wha Lee, April 2010, "A New Data Set of Educational Attainment in the World, 1950-

2010." NBER Working Paper No. 15902 46

Calculation from based on Thomas, Wang & Fan (2001), with data sets fromBarro-Lee (2010) and Psacharopoulos and Arriagada (1986). 47

http://npra.gov.gh 48

National Health Insurance Authority, Annual Report, 2009 49

http://www.nhis.gov.gh 50

ILO, TRAVAIL, legal database, 2011 51

ILO, GESS, World Social Security Report, 2010/2011 52

ILO, Social Security Department, Social Security Inquiry 53

World Bank World dataBank 54

Human Development Report, Global Report, Statistical Annex, 2011 55

World Bank, Ease of Doing Business Index 56

World Bank, Worldwide Governance Indicators 57

World Bank, Ghana Overview 58

The Economist, Democracy in Ghana: In Rude Health, 28 July 2012 59

ECOWAS, Treaty of the ECOWAS 60

Ebert & Posthuma, ILO, IILS, 2011, Labour provisions in trade agreements: current trends and provisions 61

http://www.agoa.gov 62

http://www.gfzb.com.gh 63

ILO database on export processing zones (Revised), 2007 64

CIA, World Fact Book, 2011 65

MIT, The Observatory of Economic complexity, What does Ghana Export? 66

European Commission, DG TRADE, Bilateral Relations, Statistics