Determinants of the level of informality amongst female street food vendors in sub-Saharan Africa: Evidence from two regions in Ghana

Abstract

This paper relied on data from the food service industry in Ghana to measure the extent of informality as well as to determine the motivations and challenges that influence selection into informal entrepreneurship. Because of the need to guarantee food safety and hygiene and protect the consuming public, enterprises in the food service industry are required to undergo some practices and procedures that limit the conventional measures of informality in describing them correctly. By varying this conventional definition, we showed that informality can more appropriately be measured in the food service industry. Using data from 406 female street food vendors in Ghana’s Greater Accra and Central regions, we show that approximately 62 % of enterprises in the food service industry tend to be wholly informal. We again found that higher levels of informalization tend to be associated with survivalist and opportunist motivations as well as some economic and spatial challenges, and this is similar to characteristics of informal firms measured using the well-known conventional definitions. One practical implication of our finding is that a sector-specific definition may be appropriate when measuring informality in the food service industry. Our findings show that by varying this definition, many of the known characteristics of informalization can still be realized.