Perceptions of Costs and Benefits of Informal-Formal Linkages: Market and Street Vendors in Accra, Ghana

Abstract

This working paper examines the relationships between informal market and street vendors in Accra and the formal economy, asking how these connections can create both benefits and costs for informal workers.

Drawing on the WIEGO Informal Economy Monitoring Study, the analysis combines evidence from 15 focus groups and a survey of 150 vendors operating in central and non-central areas of Accra. It considers vendors’ relationships with the value chain, government institutions, non-governmental organisations, financial institutions and the wider economy.

The findings show that government policies and broader economic conditions often exert a strong negative influence on informal traders, although membership-based organisations and non-governmental organisations can provide important forms of support. Access to microfinance is experienced in mixed ways, offering opportunities for some workers while creating additional pressures for others.

The paper also demonstrates that formal and informal economic activities are more interconnected than they may initially appear, particularly through supply and retail relationships. It argues that government and other institutions should adopt a more supportive approach by improving infrastructure, services and access to appropriate trading space for informal workers.