Unemployment at 5.8%?

The unemployment rate in Ghana in the week before census night on September 26, 2010 was 5.8%, according to data published by the Ghana Statistical Service (GSS).

While the figure may appear to underestimate the degree of the problem, the GSS said it is consistent with the International Labour Organisation’s (ILO) definition of unemployment for a short reference period, which was used in the census questionnaire.


“The figure may seem low, but to understand it you have to find out what question was asked during the census,” said Ebo Duncan, head of economic statistics at the GSS.


He said the 2010 population census counted as employed anybody 15 or older “who had worked for pay or profit or family gain for at least one hour within the seven days preceding census night.” This included persons who were in paid employment, self-employed or contributing family workers. It also included persons who did not work in the reference period (for various reasons) but had a job to go back to.


Unemployment, according to the ILO, is among the biggest threats to social stability in many countries including Ghana, where the economy has been expanding very fast but creating very few jobs.


The sadder aspect is that until the recent publication based on the 2010 census, there were no up-to-date data on unemployment and the characteristics of people who were employed -- including in which sectors they were working.

Mr. Duncan said the low unemployment figure is because most people without permanent jobs do not idle but try to eke out a living doing one form of work or another.


He said the figure on its own would not be a useful guide to policymaking, adding that it would require a labour force survey that employs the “Gainful Worker Approach” to appreciate the depth of the problem.


“It’s not a particularly useful figure,” agreed Dr. Joe Abbey, Executive Director of the Centre for Policy Analysis (CEPA). “There ought to be more regularly-published labour statistics that would reveal trends that are meaningful and can help policymaking,” he said.


Yet while the census figure seems to raise more questions than answers, a few aspects of it hint at the nature of the problem. Of the people who were unemployed, for instance, only 20.6% had worked before. The rest -- 79.4% -- were seeking work for the first time.


Unemployment Statistics by Regions

This supports the view that new entrants to the labour force, including schoo-leavers and recent graduates, are often disproportionately affected by the unemployment scourge. It is reckoned about one-fifth of university graduates don’t find any employment in the three years after national service.


The data also showed that unemployment was higher among females (6.3%) than males (5.4%), and that women constituted a bigger share (51.4%) of the labour force. This indicates that the gender gap that is seen in other indicators such as school participation and literacy is reflected in the unemployment profile of the population.


Greater Accra’s 8.3% unemployment rate, the highest of all the regions, also hints at the impact of rural-urban migration and the high population density of the region.


The GSS’s data on employment distribution across economic sectors showed that 41.6% were employed in agriculture (which includes forestry and fishing), 18.9% in wholesale and retail trade, and 10.8% in manufacturing. Agriculture therefore remains the biggest employer, albeit with a smaller percentage than in previous years.

Employment policies could be informed by these statistics, but Mr. Duncan said it is important to distinguish between job-creation and employment-creation.


“If you ask a plumber to come to your home to fix a fault, you have given him a job but not employment,” he said. “Our problem is more underemployment than unemployment,” said Dr. Abbey. “The people who sell on the streets are employed; but the question is, ‘what kind of work are they are doing?’”


He said growth and unemployment could in fact worsen if the economy does not ward off the approach of Dutch Disease, a situation characterised by the dominance of the oil sector over other industries, particularly agriculture and manufacturing.