Unveiling the Hidden Economy Exploring the Root Causes of Informal Economy in Accra, Ghana

Abstract

This paper investigates the persistent growth of the informal sector in Ghana, a phenomenon that contrasts with the expected trend of diminishing informality alongside rising GDP per capita. Through a case study of Agbogbloshie, Accra, it examines the interplay of informal settlements, poverty, labor regulations, and economic crises as key drivers. Depart-ing from traditional views that advocate for formalization as the sole path to economic development, this research argues for a nuanced approach that acknowledges the significance of informal settlements and their role in sustaining liveli-hoods. It highlights the limitations of forced demolition policies and proposes a regulatory framework that recognizes these settlements, grants property rights, provides essential public services, and ensures environmental and public health safety. By integrating the informal sector into policy-making processes, this paper aims to contribute to the development of sustainable and economically viable solutions that improve the living standards of informal workers in Ghana.