COVID-19, Lockdowns, and Africa’s Informal Sector: Lessons from Ghana

Using unique survey data on informal enterprises, we draw inferences about the potential effects of COVID-19 on informal enterprises in Ghana, beyond the anecdotes which currently dominate the discourse. We draw important lessons on how the lockdown may affect the performance of female- and male-owned informal enterprises in two urban areas of Ghana, Accra and Tema. The following results emerge from the multivariate decomposition regression: first, we find an unexplained spatial gap in sales between informal owners who reside in Accra and Tema. Second, we find no gender gap in sales or innovation, however, there are explained and unexplained gender-gaps in how size affects current sales of informal enterprises. Hence, given that the lockdown affects business performance, we conjecture that the COVID-19 pandemic is likely to increase or introduce gender- and spatial-gaps in the performance of informal enterprises.

JEL Classification: D72, O55, J16, P16, R12

Keywords: COVID-19, Gender, Informal enterprises, Urban areas, sub-Saharan Africa, Ghana