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Informal-formal linkages in market and street trading in Accra
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Anyidoho and Steel: Informal-formal linkages in market and street trading in Accra
African Review of Economics and Finance | ISSN 2042-1478 | Volume 8 | Issue 2 | December 2016
Informal-formal linkages in market and  
street trading in Accra
NaNa akua aNyidoho aNd William F. Steel
Institute of Statistical, Social and Economic Research, University of Ghana, 
P.O. Box 74, Legon, Ghana
Email: anyidoho@gmail.com and wsteel@steel2.net
Abstract
This paper investigates the ways in which linkages between the informal and 
formal segments of an economy may yield benefits to or impose costs upon 
informal workers, based on views of informal traders in Accra regarding their 
relationships with the formal economy and its institutions. The data are drawn 
from the Informal Economy Monitoring Study (IEMS), with a World Bank study 
of informal household enterprises providing context for the IEMS-Ghana study 
and a basis for interpretation of its findings. Data from 15 focus groups and 
a survey of 150 traders from both central and non-central locations of Accra, 
Ghana, are analysed in terms of traders’ relationship to the value chain, non-go-
vernment institutions, government and the macroeconomy. The last two are 
found to exert a strong, mostly negative influence on informal operators, offset 
to some extent by support from member-based organizations and non-govern-
mental organisations (NGOs). Access to loans from microfinance institutions 
was an important influence on traders’ work and was viewed both positively 
and negatively. Although there are few visible direct linkages between informal 
operators and formal firms, they are to some extent mutually interdependent 
as retailers and suppliers in the value chain. Taking advantage of the potential 
synergy in informal-formal linkages will require government and other actors to 
become more proactive in facilitating, rather than denying, infrastructure, sup-
port services and adequate space for informal traders. The probability of such 
an outcome depends on the ability of informal traders to organise themselves.
Keywords: Informal economy; Informal-formal linkages; Market traders; 
Street vendors; Ghana
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African Review of Economics and Finance
1. Introduction
Historically, informal activities have often been seen as disconnected from the 
formal economy, whether due to the nature of the structural relationship between 
the informal and formal sectors in a capitalist economy, a regulatory framework 
that disenfranchises informal activities, or the desire of informal workers to 
escape regulation. Currently, informal work is seen more as an integral part of 
successful economic growth in an economy such as Ghana’s, in which up to 80 
per cent of employment is informal (depending on definitions; see Twerefou, 
2008; Obeng-Odoom, 2011; Baah-Boateng and Ewusi, 2012). While there are 
still forces that marginalise informal enterprises and workers, whether within 
value chains or through contestation for public space, research has established 
that linkages exist between the formal and informal segments of an economy 
that may yield benefits to, or impose costs upon, informal workers. The litera-
ture establishing the numerous ways in which the informal and formal econo-
mies are linked indicates that ‘there are benefits and costs to both formality and 
informality’ (Chen, 2005, p. 2) and that ‘formal-informal linkages can improve 
but also worsen the distribution of costs and benefits’ (Meagher, 2013, p. 1).  
This paper adds to the understanding of the nature of informal-formal linkages 
as experienced by informal workers who are self-employed as market and street 
traders. Retailers selling in built markets are generally referred to as ‘market 
traders’ and those selling in public places other than a market (such as, in front 
of homes and by road sides) as ‘street vendors’ (Vanek, Chen and Raveendran, 
2012). We use ‘traders’ to refer to both categories of retailers, while recognising 
that our analysis may gloss over differences in how these groups interact with 
authorities. (The study does not, however, cover itinerant hawkers with no fixed 
selling location.) We investigate how traders perceive the benefits and costs of 
their interaction with the formal economy, and the roles that intermediary actors 
and institutions play in mitigating the risks and enhancing the benefits of these 
linkages. 
The paper draws on the findings for Ghana from two cross-country studies: the 
Informal Economy Monitoring Study (IEMS), conducted in 11 cities worldwide 
by the Women in Informal Employment: Globalizing and Organizing (WIEGO) 
network (Anyidoho, 2013; Roever, 2014); and the World Bank’s study of Rai-
sing Productivity and Reducing Risk of Household Enterprises, conducted in 
nine Sub-Saharan African countries (World Bank, 2011a and 2011b). Through 
analysis of data from a survey and from focus groups, the WIEGO study inves-
tigates ‘what drives working conditions in different segments of the street ven-
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Anyidoho and Steel: Informal-formal linkages in market and street trading in Accra
ding population - including the impact of macroeconomic conditions, specific 
urban policy drivers, and value chain dynamics’ (Roever, 2014, p. 7). Based on 
employment statistics as well as survey data and interviews, the World Bank 
study assesses the status of household enterprises (operated by self-employed 
individuals and their family members) and the effects of ‘relevant policies, pro-
grams and institutions’ on their productivity and risks (World Bank, 2011b, p. 1). 
Following this introduction, we discuss the theoretical basis of the relationship 
between the informal and formal economies, and provide context for understan-
ding informal trading in Ghana.  We then present the findings of the IEMS-Gha-
na study and conclude with recommendations for how informal-formal linkages 
can be strengthened and supported for the benefit of informal workers. 
2. Conceptions of the informal-formal relationship
The theoretical literature on informality includes very different perspectives on 
the relationship between the informal and formal sectors (Portes et al., 1989). 
Keith Hart (1973) initially observed informal economic activities as ‘what 
people really do for themselves beyond the reach of state regulation…- the ne-
gation of the central bureaucracy erected to manage national capitalism’ (Hart, 
2008, p. 6). Dualists (e.g., ILO, 1972) see the informal sector as a departure 
from the standard capitalist development model, resulting from the population 
having the wrong skill mix for the market or growing at a faster rate than formal 
structures can provide wage employment. The legalist school (e.g., de Soto, 
1989) presents informality as a way ‘to avoid the costs, time and effort of for-
mal registration’ (Chen 2012, p. 5). In these views, informal enterprises are the 
consequences of barriers to formal employment and legal status, and operate 
outside the formal economy and its regulations.    
As an alternative to the viewpoint that the informal and formal operate in se-
parate spheres, ‘the structuralist school sees the informal economy as subordi-
nated economic units (micro-enterprises) and workers that serve to reduce input 
and labour costs and, thereby, increase the competitiveness of large capitalist 
firms’ (Chen 2012, p. 5, italics in original). From this standpoint, the ‘informa-
lisation’ of jobs is inevitably driven by capitalist competitive pressures and glo-
balisation, with businesses outsourcing activities to private contractors instead 
of employing workers in-house. Although this perspective suggests linkages 
between informal workers and formal businesses, the former are, in practice, 
entirely dependent on formal businesses without enjoying any of the normal 
security or benefits of formal employment. 
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African Review of Economics and Finance
Chen (2005, p. 6) suggests a more integrated approach appropriate to the 
heterogeneity of informality: ‘some survival activities [have] very few links 
to the formal economy;…some microentrepreneurs choose to avoid taxes and 
regulations…some face excessive government regulation; other units…are su-
bordinated to larger firms; [and] most informal enterprises…contribute to eco-
nomic growth.’ The concept of the informal economy thus subsumes both the 
informal enterprises that are the focus of the dualistic and legalistic views and 
informal employment, which includes ‘all employment arrangements that do not 
provide individuals with legal or social protection through their work…whether 
or not the economic units they work for or operate in are formal enterprises, 
informal enterprises or households’ (ILO and WIEGO, 2013, p. 3). In the infor-
mal economy, ‘production, distribution and employment relations tend to fall 
at some point on a continuum between pure “formal” relations (i.e., regulated 
and protected) at one pole and pure “informal” relations (i.e., unregulated and 
unprotected) at the other..,[with] the formal and informal ends of the economic 
continuum often dynamically linked’ (Chen, 2005, p. 8). Indeed, Fox and Soh-
neson (2012, p. ii) argue that ‘household enterprises should be seen as part of 
an integrated job and development strategy,’ and Ojong (2011, p. 11) recognises 
that formality is a continuum ‘with workers and units living along the conti-
nuum in varying degrees and often operating simultaneously at different points.’ 
In this integrated approach, not only the behaviours of informal actors but 
their outcomes are conditioned by the formal economic, policy and institutional 
environments and actors with which they are linked, whether directly or indi-
rectly (see Meagher 2013 for a useful review of the literature on these linkages). 
Research on informality in Accra shows explicitly or implicitly that there is 
considerable interdependence (Adaawen and Jørgensen, 2012; Oteng-Ababio 
and Amankwaa, 2014), but there is little evidence on the implications of these 
linkages.
Our study analyses the implications of the situation summarised by Anyidoho 
(2013, p. 5): ‘informal workers are…linked to the formal economy…[as] part 
of modern chains of production, distribution and services’ (Anyidoho, 2013, 
p. 5). In addition to the focus of the structuralist and integrated viewpoints 
on direct employment and input-output linkages, we also consider less direct 
linkages through the distribution chain and the consumers that are served. This 
connection is important because recent literature on the ‘bottom of the pyramid’ 
suggests that ‘integration of the poor as producers and distributors…using mul-
ti-stakeholder partnerships to share the costs and risks’ can better enable them 
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Anyidoho and Steel: Informal-formal linkages in market and street trading in Accra
to benefit from integration into local and global value chains (London and Hart, 
2011, cited in Meagher, 2013, p. 16). Our study examines the validity of this 
claim by examining how traders in Accra perceive the benefits and costs arising 
from linkages to the formal economy. The linkages that are analysed include 
positive and negative driving forces in interactions with: national macroeco-
nomic conditions; formal actors in the value chains within which they operate; 
local governments; and non-governmental agents, including associations and 
financial institutions.
3. Context of market and street trading in Accra
Globally, informal employment accounts for over half of non-agricultural 
employment in half of 47 countries for which data are available, and over 
two-thirds of non-agricultural employment in a third of the countries. For Sub-
Saharan African countries, the share of informal employment ranges from 33 to 
82 per cent and accounts for 35 to 62 per cent of non-agricultural gross value 
added (ILO and WIEGO, 2013, pp. xi, 22). Household survey data for Ghana 
indicate that the overwhelming majority of micro and small enterprises consist 
of household enterprises; that is, a self-employed individual working alone (72 
per cent) or with a family member or casual workers (21 per cent) (Ghana Living 
Standards Survey 5 [GLSS5], cited in World Bank 2011b, table 1).
Retail trade dominates informal employment, followed by manufacturing, 
although there has been some shift toward other services, especially in urban 
areas (World Bank 2011a). Traders (persons selling goods along streets or in 
public places, including markets) provide a major source of urban informal 
employment, ranging from 12 to 24 per cent in Sub-Saharan Africa, though 
somewhat less in other regions (ILO and WIEGO, 2013, p. 47).
Data from GLSS5 show that informal employment has risen slightly in 
Ghana from 84 per cent in 2000 to 86 per cent in 2010, with a higher share for 
women than for men (91 and 81 per cent, respectively; for all sectors including 
agriculture) (Baah-Boateng and Ewusi, 2013, pp. 198 and 202).  Specifically, 
women make up 88 per cent of traders (Budlender, 2011). 
The activities of informal traders are affected by macroeconomic factors, as 
well as by local conditions, policies and institutions. For nearly three decades, 
Ghana has experienced sustained growth in gross domestic product (GDP) and 
income, accompanied by steady reduction in poverty. Informal self-employment 
has made an important contribution, providing an estimated 1 million out of 2.8 
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African Review of Economics and Finance
million jobs created from 1991 to 2006 and earning income for nearly half of 
Ghana’s households (World Bank, 2011b). Africa-wide data indicate that having 
a nonfarm enterprise leads to ‘greater nonfarm income diversification [and] 
more rapid growth in earnings and consumption,’ as well as household welfare 
(Barrett et al., 2009). 
Ghana’s steady GDP and income growth has been associated with substantial 
financial deepening from 1997 to 2012 (Quartey and Afful-Mensah, 2013). With 
41 per cent of the population having an account at a formal financial institution, 
Ghana has a relatively high rate of financial inclusion among Sub-Saharan 
African countries, and the number of clients of microfinance institutions 
(informal as well as formal) grew at 16 per cent per annum over 2001-2012, 
reaching 6.5 million (GHAMFIN, 2014).  Despite growth in real GDP, inflation 
has fluctuated, exceeding 30 per cent per annum in 2000 and 2003 and falling 
below 10 per cent only in 2010-2012 before returning to double digits (Quartey 
and Afful-Mensah, 2013, p. 65; Felino, 2013). In part because of persistent high 
inflation relative to the rest of the world, the Ghanaian cedi has depreciated 
steadily over time, but particularly steeply in 2013-2014 (Trading Economics, 
2014). This situation has had considerable impact on the retail sector, which 
depends heavily on the sale of imported goods. 
Given the importance of the informal economy to employment and 
livelihoods, Keith Hart (2008, p. 4) argues that ‘Ghana’s economic future 
depends significantly on what [small] traders are up to.’ Nevertheless, traders 
in African urban areas such as Accra face considerable obstacles to taking 
advantage of income-earning opportunities, due in large part to the continuation 
of the colonial ‘conventional approach of creating Central Business Districts 
(CBDs) with concentrated work/business functions at a central point [which] 
often results in congestion problems’ (Adanu, 2004, p. 1). With the centralised 
concentration of office workers and consumers, ‘traders locate in strategic areas 
where there is heavy human and vehicular traffic and thus come into conflict 
with urban authorities, whose focus on formalizing the use of public spaces 
leads to recurrent evictions’ (Steel et al., 2014, p. 53). In its efforts to exert 
control over public space, the Accra Metropolitan Assembly’s bylaws make it 
illegal to sell (or even buy) on the streets—making trading illegal not as an 
activity, but because of the location. The result is periodic, short-lived attempts 
at eviction—sometimes including destruction of ‘illegal’ kiosks, as well as 
confiscation of goods from itinerant hawkers—even though local officials may 
have been collecting fees from them the week before. Local authorities have 
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Anyidoho and Steel: Informal-formal linkages in market and street trading in Accra
generally been slow to build sufficient market areas to keep pace with urban 
growth. But even when they attempt to provide designated markets, ‘traders 
remain reluctant to move…outside the CBD for fear of inadequate clientele and 
reduction in volume of sales, especially when allocation of sites is uncertain and 
non-transparent, or provisions are inadequate to ensure that all move at the same 
time’ (Steel et al. 2014, p. 57). An attempt by the AMA to move traders into a 
special ‘Hawkers Market’ floundered on poor design that made it invisible and 
inaccessible to passers-by, insecure, susceptible to flooding and poor sanitation, 
and allegedly subject to politics in allocation (Adaawen and Jørgensen, 2012).
The geography literature suggests that markets are relocated from central ur-
ban spaces to the periphery as land becomes more commercialised and expen-
sive, resulting in the exclusion of informal enterprises and workers (e.g., Öz and 
Eder, 2012). In Ghana, the increasing commercialisation of land in and outside 
of the capital city leads both to the impulse by officials to confine traders in 
the CBD into smaller and more controlled spaces, and also to the lack of allo-
cated spaces for markets in newly-developing residential areas outside of the 
city centre. Traders in non-central locations are more likely to operate outside of 
built markets, which can have both positive and negative implications for their 
work. However, compared to the local government in the CBD, smaller local 
governments outside large metropolitan areas in Ghana have proven more ame-
nable to working with informal operators, who represent an important source of 
revenue as well as employment (MEL Consulting, 2011).  Thus, a variable of 
interest in this study is the question of location; the paper compares the percep-
tions and conditions of traders in the central market areas with those of traders 
in non-central locations.
4. Data and methods
The data for the World Bank study (2011a, 2011b) were based on the Ghana 
Living Standards Survey for 2005/06 (GLSS5) and on a nationwide sample 
of 45 focus groups and 220 structured interviews with operators of household 
enterprises in all sectors during 2010. (Trading was underrepresented relative to 
its large share in informal employment; manufacturing and services were over-
represented in part because the survey was carried out through associations and 
in part because they were more suited to investigating issues of apprenticeship, 
infrastructure and investment.) These were supplemented through interviews 
with trade associations, Business Advisory Centres, and officials (both local and 
national), and validated in two stakeholder workshops.
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African Review of Economics and Finance
A detailed description of the objectives, research sites and sampling design 
of the Ghana country study of WIEGO’s Informal Economy Monitoring Study 
(IEMS) can be found in Anyidoho (2013). From July to November 2012, the 
project conducted 15 focus groups with 75 traders and administered question-
naires to 150 traders who belonged to member-based traders’ associations in 
six markets in the Greater Accra metropolitan area -- three in the CBD (‘cen-
tral’ location) under the Accra Metropolitan Assembly and three in residential 
communities in the Ga East District Assembly, outside of downtown Accra 
(‘non-central’ location). All the traders were in fixed locations (whether selling 
in a market stall, or in a kiosk or off a table), but whereas all the ‘central’ traders 
were located within designated markets, the ‘non-central’ respondents traded 
both within and outside built markets. (Thus, in addition to the differences 
in central versus outlying locations, to an extent the differences in responses 
between the two groups reflect differences in market trading as against street 
vending. However, this variable of type of trading was not specifically elicited 
in the survey.) The traders mostly sold manufactured goods such as clothing and 
construction material, but some provided services such as carpentry and dress-
making or added value through food preparation, for example. 
Focus groups were used to elicit from participants their perceptions and ex-
periences of the economic, political and other forces that help or hinder their 
work.  Focus groups are distinct from focus group discussions; rather than a 
set of questions, focus groups are organised around tools, including mapping, 
listing, ranking, drawing of causal diagrams and matrices. A focus group is one 
of several urban participatory appraisal methods in which participants’ voices 
are privileged and their ownership over the process is signified by the resear-
cher (facilitator) ‘handing over the stick [or pen]’ to participants to produce 
visual accounts of their experiences (Moser & Stein, 2011). The focus groups 
for the IEMS-Ghana study were put together with the assistance of the leaders 
of the various market associations who helped identify participants who were 
diverse in regards to sex, types of goods sold, and size of businesses. Four to 
six traders took part in each focus group, which were conducted in or near their 
places of work. For the most part, the focus groups were composed of traders in 
a specific location (central and non-central), but two focus groups had a mix of 
participants from both types of location. They were also made up of all-male, 
all-female and mixed groups. The discussions in the focus groups were summa-
rised into reports, which included reproductions of the maps, lists, and matrices 
created by the groups. These products were coded and then quantified in order 
to derive descriptive statistics such as frequencies and rankings.  
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Anyidoho and Steel: Informal-formal linkages in market and street trading in Accra
The survey sampled 99 women and 51 men in the six markets: 74 respondents 
in the central locations and 76 in the non-central markets. The responses from 
the questionnaires were then entered, cleaned and analysed.
Data collection and analysis were organised around the forces that affect 
the outcomes of the traders’ work. In this paper, these are presented in four 
categories:
a) Macroeconomy (reflecting government monetary and fiscal policy 
framework);
b) The value chain and the actors within it;
c) Government institutions, both local and national; and
d) Non-governmental institutions, including financial institutions and 
member-based traders associations.
5. Findings
5.1. The macroeconomy
Table 1 summarises a list of negative factors generated and then ranked by tra-
ders.  The results displayed in this table (as well as in tables 2 and 6) are based 
on focus group data. In each focus group, participants were asked to generate a 
list of positive or negative factors affecting their work.  They were then asked 
to select and rank the three most important factors. The tables thus show the 
top-ranked factors across all focus groups. (Note that the lower frequencies re-
corded in tables 2 and 6 reflect the fact that some focus groups did not complete 
all the tools, due primarily to lack of time.)
In table 1, we see that participants considered the depreciation of the Gha-
naian cedi to be  the number one negative macroeconomic force in five focus 
groups, and overall this was ranked in the top three in eight focus groups. Tra-
ders generally described the macroeconomy in negative terms (e.g., ‘bad’ or 
‘worsening’) as it related to their work. They identified in particular the depre-
ciation of the Ghanaian cedi against key currencies (the US dollar, the CFA and 
the Nigerian naira) as having a detrimental impact on their business through 
increase in the cost of inputs and supplies, leading to a reduction in the value 
of their working capital.  The traders said they had difficulty passing on these 
costs fully to customers (because of the risk of contracting demand), resulting 
in declining profits. 
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African Review of Economics and Finance
table 1: Negative macroecoNomic driviNg ForceS  (FrequeNcy)
Rank Total Frequency
#1 #2 #3
Currency depreciation 5 3 0 8
High prices of inputs/supplies 3 3 1 7
Bad economy 0 0 2 2
High interest rates 1 0 0 1
Unemployment 1 0 0 1
Unavailable supplies 0 0 1 1
Source: Accra IEMS focus group data (2012)
When traders were prompted to identify positive driving forces related to the 
macroeconomy, they ranked credit as the most important, as seen in table 2 
where ‘availability of loans’ was ranked as the number one force in two fo-
cus groups and number three in one focus group. However, it must be noted 
that credit was important primarily as a counter to the generally bad economic 
conditions described previously. That is, traders valued loans as a response to 
decreases in capital and revenue, which were in turn the result of the depre-
ciation of the Ghanaian currency.  In the focus groups, ‘money in the system’ 
was mentioned as the indicator of a stronger economy, which would result in 
greater purchasing power among customers, and consequently greater income 
for traders.  
table 2: PoSitive macroecoNomic driviNg ForceS(FrequeNcy)
Rank Total Frequency
#1 #2 #3
Availability of loans 2 0 1 3
Money in the system 1 1 0 2
Development projects 0 1 1 2
Fall in price of inputs 0 0 1 1
Source: Accra IEMS focus group data (2012)
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Anyidoho and Steel: Informal-formal linkages in market and street trading in Accra
5.2.Linkages in the value chain
Vendors reported links to the formal economy through their sources of supply 
on one end of the value chain, and the customers to whom they sell goods on 
the other. 
  table 3: maiN WayS goodS are acquired, by locatioN (%)
Central Non-Central Total
Buy them from an informal enterprise 82.4 56.0 69.1
Make or grow them myself 16.2 37.3 26.9
Buy them from another street vendor 0.0 2.7 1.3
Buy them from a formal enterprise 0.0 0.0 0.0
Acquire them from a formal supplier to sell on 0.0 0.0 0.0
commission
Acquire them for free 0.0 0.0 0.0
Other 1.4 4.0 2.7
Total 100.0 100.0 100.0
N 74 75 149
 Source: Accra IEMS survey data (2012)
The primary source of goods for 70 per cent of traders was other informal enter-
prises (table 3). Although none of the vendors surveyed reported that their main 
supplier was a formal enterprise, information collected from the focus groups 
suggests some indirect links. The types of goods purchased and sold by many 
of the traders—such as used clothing, cosmetics, linen, books, and non-peri-
shable food products—indicate that these were originally imported by bigger 
enterprises or manufactured in-country. These are then sold to middlemen from 
whom the traders purchase their stock. This means that there are intermediaries 
between large formal importer/wholesalers and the informal retailers who mar-
ket their goods. Besides de-bulking intermediate wholesalers, informal retai-
lers buy some supplies directly from supermarkets and large retailers—cited by 
about 18 per cent of men and 4 per cent of women as ‘helpful’ to their businesses 
(see table 9). Similarly, the telecommunications sector in Ghana, as in many 
other African countries, depends heavily on vendors to make small purchases 
of airtime widely and conveniently available (Kottoh, 2008). This connection to 
formal import businesses and local manufacturers has real implications for the 
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African Review of Economics and Finance
traders’ work, such as when import taxes and currency exchange rates change, 
as discussed in the section on the macroeconomy. 
There was, however, a difference observed in how traders in different loca-
tions spoke about these macroeconomic conditions, which is related to the ques-
tion of linkages to the formal businesses. When the non-central groups spoke of 
the falling value of the currency, they were describing the problem of inflation 
(that is, rising prices of goods in the economy as a whole). The central traders, 
on the other hand, specifically mentioned the increased cost of importing their 
products as a result of the cedi’s depreciation against the dollar and other forei-
gn currencies. This reflects the fact that central traders were more likely to sell 
imported goods and were therefore more attuned to changes in import duties 
as a result of changes in exchange rates. Non-central traders generally traded 
in Ghanaian goods and produce; even when they sold imported goods, these 
were often purchased from the central traders. Non-central traders were thus far 
enough down the retail chain that the effect of exchange rates on import taxes, 
and the knock-on effect on prices, was less obvious to them. Not surprisingly, 
therefore, while the focus groups in the central locations mentioned import duty 
rates as a driving force, this factor was not brought up in any of the focus groups 
with non-central traders.
Further, it appears that intermediaries between the importers and the informal 
retailers were able to pass most of the costs on to the retailers, but the latter 
were unable to pass on these costs completely to consumers because of market 
saturation and the failure of wages to keep pace with inflation. This came up in 
one focus group with male traders (quotations in the focus group reports use 
pseudonyms and are translated from local languages): 
Ampene noted that the depreciation of the cedi ‘leads to increases in the cost of inputs lea-
ding to increase in the cost of products.’ Kobina added, ‘Because the dollar is going up, people 
who import the movies (DVDs) have to increase their prices, but we cannot increases our prices 
too because then people won’t buy from us….People are aware of what the prices of the movies 
should be, and if we increase the price we’ll lose their sales.’ 
[Focus Group Report, FG 3, Non-central men, 5 July 2012]
The second way in which the traders were linked in the value chain to actors in 
formal businesses was through customers. In the surveys, traders referred to the 
‘the general public’ and ‘private individuals’ as their main customer base (table 
4), elaborating in the focus groups that these categories consisted primarily of 
‘workers in offices’ as well as students in educational institutions. In addition, a 
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Anyidoho and Steel: Informal-formal linkages in market and street trading in Accra
small proportion of the surveyed traders (about 5 per cent) identified formal bu-
sinesses as their main customers, which is another way in which street traders’ 
activities are linked to the formal economy.  Thus, considering informal traders 
as part of the distribution chain brings balance to the structuralist approach to 
informal-formal interdependence with its focus on employment and production.
table 4: maiN cuStomerS by locatioN
(% of respondents; multiple responses permitted)
Central Non-Central Total
General public 91.9 82.9 87.3
Private individuals 78.4 47.4 62.7
Personal family/Friends 47.3 35.5 41.3
Other informal workers 10.8 10.5 10.7
Informal businesses 8.1 9.2 8.7
Formal businesses 2.7 7.9 5.3
Other 0.0 9.2 4.7
N 74 76 150
Source: Accra IEMS survey data (2012)
5.3.Government institutions and services
As previously noted, the literature on the bottom of the economic pyramid po-
sits a role for intermediary institutions, both non-governmental and governmen-
tal agencies, in facilitating the ability of informal actors to benefit from connec-
tions to the formal economy. In the IEMS study, traders were asked to list and 
then rank institutions and actors whose actions had a significant impact on their 
work, whether positive or negative.
In table 5, local government received the highest mentions, indicating that 
these institutions loomed large in the everyday lives of traders. The Accra Me-
tropolitan Assembly (AMA) was singled out as having a great deal of influence. 
The AMA is the district-level government under whose jurisdiction the markets 
in central Accra fall. However, so great was its perceived influence that some 
traders in the non-central locations (who were in the contiguous and smaller Ga 
District East Assembly) mistakenly assumed that they were under the AMA’s 
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African Review of Economics and Finance
authority. Others mentioned that, indirectly, they were affected by the AMA be-
cause they bought goods wholesale from traders in the AMA-controlled CBD. 
By contrast, the central government and other governmental bodies (such as the 
Food and Drugs Board and the Internal Revenue Service), the police and pu-
blic utility companies did not have much perceived impact on traders’ everyday 
work. 
When respondents were asked specifically to explain the negative driving 
forces related to state institutions (table 6), their responses suggested that the 
negative perception of government authorities was related to non-fulfilment of 
their obligation to provide market infrastructure for traders, the imposition of 
perceived high levies, taxes and fees, ‘harassment’ of traders, demolition of 
kiosks, and the city’s unwillingness to provide enough publicity about newly-
built markets to attract the public to them. This dissatisfaction with the derived 
benefits from taxes and fees corresponds to findings in other studies of informa-
lity in Accra (Adaawen and Jørgensen, 2012; Bob-Milliar and Obeng-Odoom, 
2011; Steel et al., 2014). Moreover, a study by Atuguba (2006, p. 29) on Gha-
na’s tax culture, which surveyed Ghanaian tax payers generally, found that 45 
per cent of respondents considered their tax burden to be too high because they 
‘doubted the real benefits of paying taxes’, but 60 per cent expressed willin-
gness to pay taxes if authorities would improve their services.
table 5: iNStitutioNS haviNg SigNiFicaNt imPact 
(frequency of mention across focus groups, by negative or positive perception)
Institutions Freq (+) Freq (-) Freq (±) Total  
Frequency
Financial institutions 2 2 10 14
AMA  11 1 12
Suppliers 3 2 1 6
Ghana Trades Union Congress 2 1 2 5
Local government  (besides  5  5
AMA)
Utilities (water & electricity) 1  2 3
Central government  3  3
Market associations 2   2
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Anyidoho and Steel: Informal-formal linkages in market and street trading in Accra
Table 5 continued
Regulatory bodies (e.g., Food  1 1 2
and Drugs Board)
Internal Revenue Service  1 1 2
Police  1 1 2
Foreign businesses   1 1 2
(competition)
Schools 1   1
Hospitals 1   1
StreetNet1 1   1
WIEGO 1   1
Accra Chiefs 1   1
Church 1   1
Market queens   1 1
TV & radio  1  1
Middlemen  1  1
16 30 21 67
Source: Accra IEMS focus group data (2012)
Likewise, the World Bank study found that local authorities play a critical role 
in determining the environment for informal traders, since they are ‘responsible 
for zoning and other regulations which determine whether they have access to 
workplaces, as well as infrastructure and support structures. This includes the 
provision of roads, water, electricity, and markets, among others’ (World Bank, 
2011b, p. v).  Furthermore, ‘urban bylaws tend to restrict the location and ope-
rations of household enterprises, often leading to conflict when local authorities 
attempt to evict informal enterprises from central business districts, especially 
hawkers’ (ibid.). 
The question of the taxes and fees that traders pay to the government is an 
important issue because of the conventional assumption discussed in the in-
troduction (which pervades public and policy discourse in Ghana) that wor-
kers in informal enterprises are prone to illegality by omission or commission, 
and in particular that they choose to remain informal in order to avoid taxes. 
Local authorities also tend to have a negative perception of informal traders and 
household enterprises, whom they see ‘as reluctant to pay taxes and fees or obey 
planning regulations’ (World Bank, 2011b, p. v).
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African Review of Economics and Finance
table 6: Negative goverNmeNt driviNg ForceS
(raNkiNg aNd FrequeNcy)
Rank Total  
#1 #2 #3 Frequency
Infrastructure/work environment (city) 1 1 1 3
Taxes and duties (national) and city 1 1 1 3
levies
Harassment from government  0 0 2 2
authorities (city and national)
Lack of publicity (city) 0 0 1 1
Source: Accra IEMS focus group data (2012) 
The findings from both the IEMS and World Bank studies undermine this ste-
reotype. The World Bank study found that household enterprises actually tend 
to be registered, but often with the local Assembly rather than the national Re-
gistrar–General, and that the local authorities generate important revenues from 
these and other fees: ‘many…HEs [household enterprises] also pay regular mar-
ket fees, presumptive income tax, and other fees for specialized licenses, as well 
as Value Added Tax on their inputs’ (World Bank, 2011b, p. 8). 
Analysis of both survey and focus group data from the IEMS indicates that lo-
cal authorities do levy various forms of fees on street traders, particularly in the 
markets in the CBD. Survey respondents reported paying an average of nearly 4 
per cent of gross turnover in fees and taxes, with a much higher burden relative 
to income in non-central locations. Those in the CBD paid less in fees (though 
more in national taxes), but also received little support from these government 
actors and perceived the AMA as a significant negative force in their operations. 
This situation fuels the negative perception street traders hold of these institu-
tions that make financial demands on them and yet neglect them: 
Aba said, ‘They [AMA] don’t help us in any way…They don’t come to take the refuse from 
the market. We don’t even know whether they are supposed to clean the market or not. I’m a bit 
elderly and remember the Kwame Nkrumah era; the AMA people were very efficient in cleaning 
the markets. All they do now is to come and take their levies and ticket money from us.’
[Focus group report, FG 12, Central women, 13 August 2012]
On the AMA, Kaseem said, ‘The AMA takes income tax and licenses. They take too much 
money from us and what we expect them to do, they don’t do.’ Alvin also commented on the 
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Anyidoho and Steel: Informal-formal linkages in market and street trading in Accra
monies AMA takes from the traders, ‘Previously, they took a license [fee] of 0.70 cedis [per 
year] but now it’s gone up to 10 cedis.’ Kaseem came in again to say, ‘The drainage system is 
bad - they are all choked and the AMA is doing nothing about it.’ Paul however had something 
positive to say about the AMA:  ‘We sometimes work late into the evening and the AMA pro-
vides us with security.’ 
[Focus Group Report, FG 6, Central men, 20 July 2012]
Regarding the Ga East District Assembly (GEDA), the participants agreed with Godfred’s 
statement: ‘They come and demand high payments of fees and when you can’t pay it, they come 
and close your shop. And they don’t provide us with some of the facilities that they should, such 
as running water.’  
[Focus Group Report, FG 8, Non-central men, 29 July 2012]
Aggregating responses from all the 15 focus groups to the question ‘What do 
you consider to be your contributions to your city?’, ‘taxes’ were by far the most 
frequently mentioned contribution (table 7). 
table 7: coNtributioN oF Sector to city/NatioN (FrequeNcy)
Item Category Location Total
Central Non-Central Mixed Central 
& Non-Central 
Tax revenue 21 9 27 57
Provide for people’s 1 7 1 9
needs
Make goods accessible 1 5 1 7
Provide income and  6 0 0 6
employment
Promote development/ 0 4 0 4
help economy
Clean the market/city 1 0 1 2
Source:  Accra IEMS focus groups (2012)
Vendors used the term ‘taxes’ in the focus groups loosely to refer to various 
monies paid out to the local governments (or their agents).  In one focus group, 
the word was applied to fees paid to a non-governmental institution, with the 
rationale that the government would indirectly benefit:
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African Review of Economics and Finance
Juliet said she paid about 50 cedis a year to the school as a type of rent.  ‘And there are a lot 
of us selling in this school, so that is a lot of “tax” (revenue) to the school.’  There was some 
discussion about whether the ‘tax’ to the school should be separated from the fees to the city 
authorities, but they decided that the school would eventually pay some taxes to the city, so it 
all amounted to the same thing.
[Focus Group Report, FG 2, Non-central women, 1 July 2012]
The survey data provide a useful breakdown of these various payments, 
which include license fees and permits for space and operations, as well as in-
come taxes (table 8). 
table 8:  meaN moNthly exPeNditure oN liceNSeS aNd PermitS,  
by locatioN (ghaNacediS) 
Central Non-Central Average
Income tax 19.6 4.8 12.2
Fee to secure the space used for your activities 18.7 41.8 25.7
Formal permit to operate 14.4 7.4 11.9
License fees 3.2 9.4 4.4
Other tax 2.5 4.2 3.0
Total 58.4 67.6 57.2
As percentage of gross monthly turnover* 2.0% 5.6% 3.8%
N = 144
Source: Accra IEMS survey data (2012)
On average and across locations, traders reported spending 12 cedis for the na-
tional income tax and 45 cedis1 on all other payments, which are made the local 
government (table 8).2 Non-central respondents paid much more for their space 
1 The cedi-dollar exchange rate at the time of fieldwork in August 2013 was approximately 
US$1 = GH¢1.86.
2 If these traders had an average profit margin of 20 per cent, then the overall tax burden on 
value added would be 19 per cent, similar to the Value Added Tax and National Health Insur-
ance levy paid by formal sector firms. In addition, they pay Value Added Tax on their inputs 
(including goods purchased to sell), whereas formal firms can credit such levies against taxes 
owed on their sales. 
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Anyidoho and Steel: Informal-formal linkages in market and street trading in Accra
than those in the CBD, resulting in a higher total. They also paid a much higher 
percentage of their gross monthly turnover in such fees and taxes (5.6 per cent 
as against 2.0 per cent for those in the CBD, whose turnover was 2.4 times as 
high). These differences may reflect the more repressive stance taken by the 
AMA, leading many traders to evade dealing with the authorities, whereas the 
more cooperative stance of the non-central authorities may yield greater willin-
gness to comply. This is consistent with the results of an experiment in Entebbe, 
Uganda, in which simplifying registration procedures and lowering fees yielded 
a 40 per cent increase in compliance and revenues, with a fourfold increase in 
the number of businesses registering (Sander, 2003). For those in the central 
location, the highest expenditure was for the national income tax, which the 
non-central respondents were more likely to evade.
5.4. Non-government institutions: financial
Of the non-government entities that the traders perceived had influence (whether 
positive or negative) over their work, financial institutions received the most 
mentions in the focus groups (see table 5).  The traders mentioned that non-bank 
lending institutions were their preferred source of capital, needed especially to 
make up the shortfall when trading capital was diverted into consumption needs 
or when capital depreciated in value as a result of the falling currency. This is 
consistent with the literature on financial inclusion, which suggests that greater 
access to microfinance can help the poor to cope with ‘irregular and uncertain 
incomes’ and other vulnerabilities (Rosenberg, 2010, p. 2; CGAP, 2006).  
In Ghana, as worldwide, informal entrepreneurs cite capital as their primary 
constraint on establishing or expanding business. But it is not clear to what 
extent the problem is access or low profitability or cash flow. According to the 
World Bank’s analysis of GLSS5 data, ‘only 11 per cent of HEs [household 
enterprises] had applied for formal credit in 2006, of whom half were success-
ful,’ even though a third of them had savings accounts; ‘rather, the problem is 
rooted in the lack of business skills and/or financial literacy among operators of 
household enterprises, as well as their lack of confidence in their ability to pay 
back a loan’ (World Bank, 2011a, p. 6).   
Even though access to finance is appreciated as a coping mechanism, the 
issue of inability to repay costly loans, in particular, is consistent with emer-
ging literature about the risks to business success of over-indebtedness through 
high-interest loans pushed by proliferating lenders in peri-urban areas of Ghana, 
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African Review of Economics and Finance
as elsewhere (Owusu-Nuamah, 2013; Bateman, 2010). The advent of for-profit 
‘Microfinance Companies’ with little concern for poverty reduction has made 
it easier for consumers and traders to obtain high-cost loans, whose weekly re-
payments and lack of grace periods may not conform to the cash flows of small 
businesses (Steel, 2015). Combined with the stress on cash flow resulting from 
inflation and exchange rate depreciation, as well as factors such as loss of stock 
due to confiscations, or loss of revenue due to the seasonality of demand, being 
able to access high-cost microcredit may actually have worked to the detriment 
of some. 
As table 5 (above) shows, traders had deep ambivalence about the benefits 
of non-banking financial institutions, citing them equally as positive and nega-
tive forces. On the one hand, they had access to capital that was not as easily 
available to them through other sources, including commercial banks. On the 
other hand, they complained about the terms of these loans; in particular, the 
collateral required and the payment schedules were perceived as unfavourable. 
The facilitator [asked], ‘… Are there any [institutions] that are hindering your business?’ 
Joyce answered, ‘The banks charge high interest rates so that by the time you finish paying off 
your loan, your business has gone under.’ Another woman added, ‘They know that we are in a 
village, so they cheat us by charging us high interests and then they make you fill this paper, and 
that paper’… The facilitator asked, ‘So do the banks help at all?’  ‘No, just with the loan,’ Joyce 
answered. ‘But that is help, isn’t it?’ the facilitator said. The women virtually chorused, ‘But 
they charge us high interest rates! So they are not helping us!’
[Focus Group Report, FG 1, Non-Central women, 26 June 2012]
‘I know a woman who took a loan of 2000 cedis and she’s being asked to pay 2900 cedis,’ 
Samuel said. ‘Taking a loan doesn’t really help us. I used to save with a bank for many years. 
About three years ago, I needed 1000 cedis and when I went to the bank, they said they would 
need to have one of the bank officials go to my home to inspect it before they could give me the 
loan. Can you imagine? And this is a bank that I have an account with. In the end I just gave it 
up. Plus, the banks seize the goods of people who default on their loans’.
[Focus Group Report, FG 9, Central men, 2 August 2012]
In one focus group, participants gave anecdotes of traders who had lost their 
businesses when they were unable to pay back the loans, which served as cau-
tionary tales for others about the dangers of loans from financial institutions. 
David said, ‘There are so many people who have had to run away because they have defaulted 
on their loans.’ ‘They just leave their businesses?’ the facilitator asked. ‘Yes, they run away.’
[Focus Group Report, FG 11, Central and Non-Central men, 5 August 2012]
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Anyidoho and Steel: Informal-formal linkages in market and street trading in Accra
5.5. Non-government institutions: associations and NGOs
Given the generally negative perception of the role of government institutions, 
the question arises as to whether the associations of informal operators are per-
ceived to be helpful to street traders. The focus groups viewed positively the 
roles of their market associations and the Trades Union Congress, the umbrella 
organization for unions which has also embraced informal workers’ associations 
(see table 5). 
In the survey, member-based organizations ranked as the most helpful insti-
tutions, cited by at least two-thirds of respondents in each category, especially 
in the non-central locations (table 9).  (Note: As discussed, financial institutions 
were cited in the focus groups as being particularly important, in both helpful 
and negative ways, to the vendors’ work. However, they were not included in 
the survey.)
table 9: tyPeS oF orgaNizatioNS that are ideNtiFied  
aS beiNg ‘helPFul’, by Sex aNd locatioN 
(% of respondents; multiple responses permitted)
Central Non-Central
Men Women Men Women
Member-based organizations 70.4 66.0 83.3 84.3
[including market associations]
NGOs 33.3 29.8 50.0 43.1
Other workers 59.3 38.3 20.8 25.5
Trade union 14.8 27.7 33.3 27.5
Local government 3.7 8.5 25.0 17.7
Supermarkets or large retailers 18.5 2.1 16.7 5.9
Worker’s co-op 7.4 2.1 12.5 13.7
Police 7.4 14.9 8.3 3.9
National government 7.4 6.4 8.3 5.9
N 27 47 24 51
Source: Accra IEMS survey data (2012)
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African Review of Economics and Finance
Given these results from the survey, it is surprising that market associations 
were only mentioned in two focus groups (see table 5), in one instance possibly 
because the Chair of the association was sitting in on the focus group:
The Madina Traders Association was mentioned by one of the female traders as an institution 
that helped traders.  Kwaku was skeptical. ‘They don’t help. In what way do they help?’
‘If you need some help, they can give it to you,’ another participant replied. ‘If you need a 
loan, they can give you a loan from your dues. And then if you have some misfortune befall you 
– like the death of a parent of close relative – they’ll give a donation and help you in other ways 
through that.’  Augustina added that they also gave business advice.
[Focus Group Report, FG 4, Non-central men and women, 8 July 2012]
Other non-governmental organizations (NGOs) were perceived to be helpful 
by 30 to 50 per cent of survey respondents—again, higher in non-central than 
central locations (table 9).  
After ‘other workers,’ the Ghana Trades Union Congress (TUC) came out 
as the next most helpful type of organisation, although it featured in only 5 of 
15 focus groups (see table 5).  TUC has been an international leader in also 
accepting membership of associations of informal workers, particularly market 
traders. Nonetheless, it is far less active with the informal segment of the labour 
force than with the formal, and its advocacy is generally at the national rather 
than local level. This might explain why respondents did not rank it especially 
high as a helpful institution and why there was some ambivalence about its role:
Christina said, ‘I feel the TUC should do something to influence the government, because 
they have voice.’
‘That’s what you would like them to do. But right now, are they helping your work?’ the 
facilitator asked.
‘They are not helping,’ Christina answered, ‘because to my mind we are all under TUC – they 
are like our parent, all of us traders. For example, with the increase of the dollars and rents, the 
TUC should rise up to say, “No!” so that the traders can run their businesses, but they are not 
doing that.’ 
[Focus Group Report, FG 10, Central men and women, 3 August 2012]
The TUC, according to participants, was unable to help them in times of trouble; the traders 
specifically mentioned times when the police confiscate goods. Cecilia said, ‘TUC does not 
really help us. We have made a lot of complaints to them and they promised to help but nothing 
has come out of that... We don’t feel the importance of TUC.’
[Focus Group Report, FG 5, Central women, 13 July 2012]
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Anyidoho and Steel: Informal-formal linkages in market and street trading in Accra
6. Conclusions and recommendations
Market and street traders are strongly affected by trends in the macroeconomy. 
Respondents were adversely affected by the rising rate of currency depreciation 
and inflation in cost of inputs and supplies, which squeezed their profits because 
customers resisted corresponding increases in retail prices. Worsening econo-
mic trends, and in particular the depreciation of the cedi against major trading 
currencies, are also likely to increase competition among street traders on the 
supply side, as more people undertake informal retailing to replace or supple-
ment income.
There was little evidence of direct input-output linkages between informal 
street traders and formal firms, either as suppliers or buyers. This lack of visible 
direct contact may explain the common perception of dualism, which suggests 
that informal activities operate independently of formal businesses. On deeper 
analysis, however, there appears to be greater interdependence, in that the goods 
that street traders sell mostly originate from formal importers or manufactu-
rers, who in turn often rely on decentralised, informal retailers to market their 
products. Moreover, the traders’ customers include workers in formal employ-
ment. Thus, the findings of this study indicate a broader interdependence of the 
informal and formal economies than is allowed for in the structuralist perspec-
tive, and are consistent with the findings of Adaawen and Jørgensen (2012) and 
Oteng-Ababio and Amankwaa (2014). But there is no indication that the inter-
mediaries between the large importers/manufacturers and the informal retailers 
provide any buffer from negative macroeconomic trends. On the contrary, the 
informal traders appear to bear the brunt of the costs and risks of inflation, cur-
rency depreciation and stagnating real wages-which often impairs their ability 
to repay loans.  
Government is an overwhelming presence in the operations of informal street 
traders- predominantly in a negative way, especially in the CBD. Contrary to the 
view that informal enterprises operate underground or outside the purview of 
officials, they perceive themselves as regularly paying fees and taxes but recei-
ving little in return other than harassment (see Adaawen and Jørgensen, 2012; 
Obeng-Odoom, 2011). Respondents in non-central locations were more likely 
to regard local government positively, whereas those in the CBD were more 
subject to inadequate infrastructure and demolition or relocation exercises. 
The greatest impact of formal institutions on street traders was the availability 
of loans from microfinance and other non-bank financial institutions-especially 
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African Review of Economics and Finance
as a means of coping with the squeeze on working capital and profits. However, 
the high cost and difficult terms of such loans were often burdensome, resulting 
in mixed opinions about the utility of these financial institutions. As in the case 
of the macroeconomy, the costs and risks of finance appear to be passed on to 
the microfinance institutions and, in turn, to their clients.
Member-based organisations, including trade associations, were the most 
uniformly helpful type of institutions for street traders, especially those in non- 
central locations. Not only are these associations registered, some are members 
of the Trades Union Congress, which plays a positive role by giving voice to 
concerns of workers at the national level, but does much less in terms of orga-
nising and advocacy for informal workers than for those in formal employment. 
NGOs were also viewed as helpful, especially in non-central locations. Those 
in non-central locations had a greater tendency to rely on market associations, 
NGOs and local government for support. This is consistent with the conclusions 
of Bob-Milliar and Obeng-Odoom (2011) that when market traders are able to 
organise and mobilise support from the national government and civil society, 
they are better able to negotiate with and resist the actions of local authorities.
In sum, informal street traders are significantly integrated into the formal 
economy. They are especially, and mostly adversely, affected by the poli-
cies of local governments and by national economic trends, especially in the 
exchange rate and prices. They rely on support from formal financial institu-
tions, member-based organisations and NGOs. Those in non-central locations 
tend to pay a higher proportion of income as fees and taxes, and are relatively 
more likely to receive support from their associations, NGOs and even local 
government. Although directly visible links between informal and formal bu-
sinesses are few, a broader look (using focus group data) at the nature of the 
goods sold and the supply chains indicate interdependence: formal importers 
and manufacturers supply the goods that informal operators sell to consumers 
in both informal and formal employment.
The data discussed in this paper support the conclusions of the two larger stu-
dies on which this paper is based; namely, that ‘economic and urban policies are 
not supportive of urban informal livelihoods...Informal workers are critically 
dependent on urban infrastructure, but deficits in the quality and appropriate-
ness of infrastructure often undermine their livelihoods’ (Anyidoho, 2013, p. 5) 
and that ‘In general it’s a mixed track record with inadequate service provision 
and examples of new markets located at poor locations, leaving them unused’ 
(World Bank, 2011b, p. 9). One cannot assume that the potential benefits of 
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Anyidoho and Steel: Informal-formal linkages in market and street trading in Accra
integration of the informal with the formal economy will be realised without ex-
plicit policies, institutions and measures to help mitigate risks and ensure more 
equitable distribution of returns.
An important implication of the findings of this study is that stabilising the 
national economy- especially inflation and the exchange rate-has important be-
nefits for informal as well as formal operators. In turn, the growth of informal 
self-employment to absorb workers and generate incomes has contributed to 
Ghana’s long period of stability, economic growth and decreasing poverty. Yet 
tensions remain as a result of the generally negative mutual perceptions of the 
authorities and informal actors (Obeng-Odoom, 2011). Much of the literature 
on the informal economy notes that authorities at the local level tend to view 
informal workers negatively and to adopt bylaws and practices to evict them 
from urban business districts (Adaawen and Jørgensen, 2012; Obeng-Odoom, 
2011; Oteng-Ababio and Amankwaa, 2014; Steel et al., 2014) even while natio-
nal level strategies often recognise the importance of informal self-employment 
for employment generation and poverty reduction (MESW, 2012). The study 
confirms that traders perceive urban authorities as generally hostile to informal 
economic activities and recommends building more constructive engagements 
between traders and their districts and municipalities.
Improving the approach to the use of public space appears to be the most 
important avenue to building better relationships between informal traders and 
local authorities, as it addresses the main source of contention between the two 
parties, especially in the CBD of large cities. On the part of local (as well as 
national) governments, this would first involve greater recognition of the contri-
butions of informal operators to government income as well as to the liveliho-
ods of the bulk of the population, and of the government’s obligation to enable 
them to operate their businesses. The Local Government Act, 1993 (Act 462) 
gives local governments responsibility ‘for the development of their areas, and 
this includes the promotion and supporting of productive activities and social 
development in the district while removing any obstacles to initiatives and de-
velopment…[as well as] creating the enabling environment for informal enter-
prises…to thrive so as to boost local economic development’ (MESW 2012, 
p. 2). Indeed, some of the smaller district assemblies in Ghana have adopted 
a more collaborative approach, engaging small businesses through Micro and 
Small Enterprise Subcommittees, consulting their associations in setting fees 
and taxes each year, and sometimes providing mini industrial sites (World Bank 
2011b). 
Taking a more constructive approach to dialogue with informal operators is 
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African Review of Economics and Finance
consistent with the recommendation of the draft National Strategy and Action 
Plan for Informal Enterprises to ‘develop better methods of supporting and en-
gaging local associations in planning, taxing and carrying out relocation exer-
cises’ (MESW 2012, pp. 2-3). The Strategy goes on to recommend ‘setting up 
more industrial zones and markets with infrastructure and facilities suitable for 
informal enterprises…[and] developing a manual of guidelines for planning and 
implementation of industrial zones and markets.’ This approach would have to 
be complemented by capacity-building to strengthen the ability of associations 
to consult and negotiate more effectively.
With respect to financial institutions, Ghana has made substantial progress 
in improving the access of informal businesses to microfinance institutions. To 
help avoid the adverse effects of over-borrowing at high cost, the appropriate 
action would be to expand financial literacy training and consumer protection, 
especially aimed at informal traders, micro and small enterprises and their 
associations. At the same time, the microfinance institutions, especially the for-
profit companies, should be sensitised on the mutual benefits of adapting their 
lending terms and conditions to the needs and variable cash flows of their low-
income and small business clients.
Biographical Notes
Nana Akua Anyidoho is a Senior Research Fellow at the Institute of Statistical, 
Social and Economic Research (ISSER) at the University of Ghana. She has a 
PhD in Human Development and Social Policy from Northwestern University. 
She is interested in the intersection of policy processes with people’s everyday 
lives. Her current research focuses on the work aspirations and prospects of young 
people; policy discourses on women’s empowerment; and the informalisation of 
women’s work. 
William F. Steel is currently Adjunct Professor at the Institute of Statistical, 
Social and Economic Research (ISSER) at the University of Ghana, teaching 
microfinance and consulting for the World Bank and the International Fund 
for Agricultural Development on rural and micro finance, microenterprise and 
solar energy programs in Ghana and Uganda. He has a PhD in Economics from 
MIT. He retired in 2005 as Senior Adviser in the Africa Region Private Sector, 
World Bank. He previously taught economics at Vanderbilt University and 
the University of Ghana. He is a founder and Board member of the Women 
in Informal Employment: Globalizing and Organizing (WIEGO) network. 
He has published widely on small enterprise development, informal finance, 
microfinance regulation, employment, and industrial adjustment. 
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Anyidoho and Steel: Informal-formal linkages in market and street trading in Accra
Acknowledgments
The authors are grateful for the support of the Women in Informal Employment: 
Globalizing and Organizing’s Informal Economy Monitoring Study, which 
published an earlier draft of this paper as Perceptions of Costs and Benefits 
of Informal-Formal Linkages: Market and Street Vendors in Accra, Ghana 
(WIEGO Working Paper No. 35, Cambridge, MA, USA, 2015), and for helpful 
comments from Martha Chen, Sally Roever, and the editor and reviewers of 
AREF.
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(Footnotes) 
1  StreetNet Ghana Alliance is an alliance of membership-based organizations of traders.
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