Ghana has witnessed a threefold rise in the number of business entities over the past ten years, reaching 1.87 million in 2024, compared to 638,235 in 2014, according to recent data published by the Ghana Statistical Service (GSS).
Yet, employment growth has not kept pace, raising issues about the long-term stability and structure of the country’s business sector.
The 2024 edition of the Integrated Business Establishment Survey (IBES I), made public on April 3, offers a detailed overview of the nation’s business environment, including trends in employment, industry sectors, and levels of formalization.
Though the rapid rise in businesses is encouraging, the report identifies major concerns, including the dominance of informal operations, financial barriers, and slow employment expansion.
Micro Enterprises on the Rise, Empowering Women with Skills
A key insight from the report is the overwhelming presence of micro businesses, which now make up 90.4% of all enterprises—a sharp jump from 16.6% a decade ago.
These small-scale companies, typically consisting of 1–5 people, have largely driven the rise in total business numbers. However, this increase hasn’t been matched by job growth: employment rose from 3.28 million in 2014 to 6.90 million in 2024, a slower pace than the growth in business numbers.
Meanwhile, the proportion of medium-sized businesses has dropped significantly, with small businesses accounting for 8.5% of all firms. Large companies are still rare, comprising just 0.3%. Even with their limited size, micro-enterprises employ 2.89 million people, almost twice as many as large firms.
Ongoing Financial Challenges and Informal Operations
Sustaining financial growth continues to be a major issue for Ghanaian businesses. The report states that 70% of companies earn less than GHS 10,000 annually, while only 0.01% generate over GHS 1 million, pointing to widespread income disparity and vulnerability, especially in the informal sector.
Informality dominates the market, with 92.3% of businesses operating outside formal regulatory systems. Older enterprises—those more than 50 years old—are more likely to be informal, and recent patterns suggest that more businesses are becoming informal rather than registering formally.
Greater Accra, Upper East, and Upper West regions have seen increases in informal firms, while Central and Northern regions show a gradual trend toward formalization.
Uptake in Digital Payments and Eco-Friendly Business Practices
Despite existing obstacles, there are positive shifts underway. The use of digital financial tools is growing, with 37.2% of companies now using digital payment platforms. Greater Accra leads in adoption at 50.9%, while Savannah Region has the lowest rate at 18.9%.
Additionally, more companies are incorporating environmentally conscious practices. The IBES I report notes that 28.5% of agricultural businesses and 20.6% of those in the industrial sector have embraced green initiatives, indicating a slow move toward environmental sustainability.
Policy Direction and Future Action
During the report’s unveiling, Raphael Ayitey, Treasurer of the Association of Ghana Industries, stressed the need for policy grounded in accurate data.
"There’s increasing demand for dependable and up-to-date business information, especially from policymakers and development partners. Without such data, we risk undervaluing the informal sector’s GDP contribution and misrepresenting productivity and manufacturing dynamics," Ayitey explained.
With the release of IBES I, both the formal and informal sectors are better understood, offering a roadmap for enhancing business structures nationwide.
Speakers at the launch, including Prof. Samuel Kobina Annim, Government Statistician, and Dr. Faustina Frempong-Ainguah, Deputy Government Statistician, emphasized the importance of prioritizing:
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Infrastructure upgrades
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Wider adoption of digital finance
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Formalizing businesses
These strategic efforts, they noted, are vital to overcoming the issues spotlighted in the report and fostering more inclusive economic progress.
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