Why the hawkers are returning to the pavements...

I would like to thank you for taking time off your busy schedules to be here with us today. I will begin with a brief background to how we got here, followed by some reflections on the current state and “causes” of the informal economy in Ghana, and then end with our collective expectations of this historic body – the National Committee on the Informal Economy.

Mr. Chairman, as far back as 2002, worker and employer representatives, along with government officials from around the world, met at the annual labour congress in Geneva and adopted a number of resolutions to promote “decent work”. Ghana was represented at the congress.

basic necessities of life
By decent work, we mean work that is done in a safe and healthy environment, work that offers legal and social protection to labour, work that pays enough to afford the worker the basic necessities of life.

Among the resolutions was one that proposed the term “informal economy” in place of the broader term “informal sector” to accommodate “all activities that are – in law and practice – not covered or sufficiently covered by formal arrangements.” This typically comprises a spectrum of petty traders involved in survivalist activities to small and medium-scale enterprises involved in various industrial and mercantile activities.

The conference recommended that each member state set up a national body to address issues of particular concern to the informal economy. On March 30, 2007, the then Ministry of Manpower, Youth and Employment, with the assistance of the ILO, convened the first meeting to explore the formation of such a body

In February 2009, the ILO, in collaboration with the Ministry of Employment and Social Welfare, the Ghana Employers' Association the Trade Union Congress, and other constituents and partners renewed the efforts commenced in 2007. The result is the National Committee on the Informal Economy that we are about to inaugurate today. The introduction of such a committee on the policy landscape of Ghana constitutes nothing short of a paradigm shift in our development struggles. Mr. Chairman, there can be no successful national development where the concerns of the informal economy, which constitutes over 80% of the labour force, are marginalized or even ignored. Too often we formulate development policies that reflect not our own societies but others, where the informal economy is the exception rather than the norm. This Committee's work should help us right this wrong and set us on the path to relevant and effective public policy.

An informal economy committee should also help us address, in a more focused way, the social and economic problems of women, who make up over 90% of the informal economy – far in excess of their share of the general population of about 51%.

Mr. Chairman, we can't talk about the informal economy without also talking about the popular phenomenon of “decongestion” and re-congestion and “decongestion”, which has become an all too familiar exercise in futility, a vicious cycle that consumes so much of our resources and emotions but yields little or no lasting results. When you do something time and time again, and time and time again you get the same undesirable results, it is time to step back and consider the underlying causes of the problem.

Permit me, Mr. Chairman, to share with you the observations of a British reporter who visited Accra in 1874:

The principal street of Accra is an amusing sight: Some effort appears to be made to keep it clean and the sales people sit upon little mats, or upon low stools which are used all over this country. They line both sides of the street, and expose for sale every sort of article prized by the natives, and the goods being contained in wooden trays everywhere in use here.

And then what the Daily Graphic said on June 20, 2009, under the headline, Dealing with Congestion, Filth. Referring to what it called a “losing [of] the war against street hawking and mounting garbage,” the Daily Graphic reported that the “situation has worsened traffic, which has obviously been created by the traders who have now taken over two of the three-lane street…”

One hundred and thirty-five years of street hawking, Mr. Chairman. It cannot all be due to the stubbornness of a recalcitrant few. Certainly, we need a more scientific understanding of the reasons for the persistence of this problem to be able to deal with it effectively.

Heavy-handedness, such as we have seen over so many decades, has proven to be repeatedly ineffective and at considerable financial, economic, and social costs to all of us.

scientific approach
Promoting the adoption of a scientific approach to dealing with our development problems is going to be one of the major tasks of this Committee. But even before the committee sits down to work, we can identify at least three reasons why this problem has persisted and why successive decongestion exercises have failed woefully, and, given the predictability of scientific principles, will continue to fail – until we change the way we do things:

1. The structure of our national economy has remained virtually unchanged for over a century, resulting in diminished employment opportunities in the formal economy.

2. Lack of proper planning by local authorities as local populations have grown exponentially, creating chaos rather than order, even within the public bureaucracy that is always so eager to undertake decongestion exercises, and

3. Failure of local authorities, due to their dysfunctional institutions, to enforce even the minimum regulations that they put in place, until minor transgressions fester into major social and economic crises.

Mr. Chairman, in 1920, cocoa, a primary commodity, accounted for 83% of Ghana's exports. Today, cocoa and gold, along with other primary commodities, account for roughly the same share of our merchandise exports as they did in 1920.

There has been virtually no structural transformation of the economy to create “decent work”. Structural adjustment, yes, but never structural transformation. Indeed, we have moved backwards over the years, as the share of manufacturing, for example, has declined from a historical high of 14% of GDP in 1975 to as low as 8.0% in 2009.

Whatever is left of our industrial activities is concentrated in a few urban centers; the industries that once dotted the national landscape have all died off, leading to the inevitable movement of people from rural to urban areas – a logical response to an illogical contraction in economic opportunities, which we seem not to fully understand.

A more specific cause of “congestion” has been the lack of proper planning by city and town authorities. When you concentrate all major economic activities in one place and call it a “central business district”, do not be surprised – or, worse, angry – when that place gets congested to the point of lawlessness.

A few years ago when I was looking for shoe laces to buy, the only place I could find them was the Central Business District of Accra. Why couldn't I just walk to a neighborhood store in Achimota and buy a simple thing like shoe laces? Development economists would tell you that economic and social organization is the key to the efficient management of a society's resources, including time, space and people.

Lastly, the city and town authorities themselves cannot escape blame for the problems of congestion. When they put up signs that say, “No Hawking”, for example, one expects them to enforce the law when the first person breaks it.

But for whatever reason, they look the other way until the second and third and fourth and ultimately hundreds, perhaps thousands, of people break the law and then suddenly one morning they form what they call a “task force” with “macho men” to go and inflict misery on people struggling to make the best of an unforgiving environment. In many instances, the wares of petty traders are seized or, worse, destroyed, with glee by these macho men.

violence against the poor
To the degree that the victims of such exercises live on the margins of society, the exercises effectively constitute violence against the poor – the very anti-thesis to our national development aspirations.

The time has clearly come for us to use more scientific – and dare I say, compassionate - approaches to resolving our social and economic problems. The National Committee on the Informal Economy is expected to play a major role in this salutary paradigm shift. We expect it to share its findings not only with the national government but also with every local government in the country to help guide their policies and make them more effective and fruitful.

Our own experience in the districts that we currently work in under the Local Economic Development (LED) Initiative shows that collaboration, rather than confrontation, between local governments and informal economy operators is not only possible but mutually beneficial. In these districts, it has led to increased formalization, such as registration and the payment of taxes, and a consequent increase in revenue for local and national governments.

Lastly, I must thank the Ministry of Employment and Social Welfare for offering to house the Committee's secretariat on its premises. And I am happy to announce that the ILO has offered to provide furniture and equipment for the secretariat as well as training for its staff.

We look forward to a fruitful collaboration with the Committee, the Ministry, and all our social and project partners. We especially look forward to the Committee's first major collaborative research work titled, Raising Productivity and Reducing Risks of Informal Household Enterprises, which shall commence within the next month or two.

Note: the writer delivered this address at the Inauguration of the National Committee on the Informal Economy ILO Project Offices, Accra