Opportunities and Constraints in Ghana’s Informal Sector (A Case Study of Ho Township)

Aims: To determine the opportunities, and constraints in Ghana’s informal sector by examining the structure of the informal sector, identifying the factors influencing people to work in the sector and to determine the salient factors constraining the growth of the informal sector.

Study Design: A descriptive research design

Place and Duration of Study: Ho Municipal, Volta Region Ghana, between September 2014 and June 2015.

Methodology: This study employed both probabilistic and non-probabilistic sampling techniques to select 310 informal sector workers in Ho township, a self-administered close-ended questionnaire was used as the instrument of data collection. Exploratory factor analysis (EFA) was the main statistical tool used in the study.

Results: The EFA showed that five salient factors accounted for about 70.2% of the total variation in the 12 original constraining indicators, when it comes to the structure, about 71% of businesses are practiced on a microscale sole proprietorship level.

Conclusion: Evidence from the study suggests that; The desire to make more money and the freedom associated with being in the informal sector are the most alluring opportunities found to motivate people to work in the sector. Five main challenges are encountered by workers in Ghana’s informal sector, and they are; lack of resources and business viability, constraining government regulations/policies, inadequate entrepreneurial skills, lack of start-up capital and lack of job security.