Female Entrepreneurship and Ghana’s Informal Economy: Prospects and Challenges

This study found that female entrepreneurs dominate the informal business sector, but not the manufacturing sector. Female businesses in the manufacturing sector remained largely at the micro level and failed to transition into the formal sector. The study adopted a quasi-experimental design to purposively sample and interview female entrepreneurs at a Trade Fair organised by the SNV/EU Green Project in the Takoradi Metropolis (from 4 th to 10 th October 2022) for its supported female entrepreneurs in the Western of Region of Ghana. The study interviewed a total of forty-two respondents (8 of whom were male). The male respondents opted to respond to the same questionnaire as the females, in solidarity with the female SMEs. The study identified barriers to female entrepreneurs in the manufacturing sector including the absence of start-up capital, the absence of cheap long-term credit, challenges with business and product registration, the absence of capacity development in entrepreneurship and business development and the lack of general planned support by the government. The study proposes policy recommendations to include start-up support for female manufacturers; entrepreneurship and business development support; purchase of the products of female manufacturers by state agencies as a matter of policy; and the promotion of exposure trips in-country and abroad for female manufacturers to network with others and to learn of new ways to effectively conduct their operations.


INTRODUCTION
This paper examines female entrepreneurship in Ghana's manufacturing sector in the context of a large informal economy. It looks at the challenges female entrepreneurs face and the prospects of transitioning them from the informal to the formal economy. Formal businesses that are prosperous are sustainable sources of wealth creation, but women are mostly unable to participate in the formal business sector in Africa, due to longstanding inequities in Africa's social and economic structure. Patriarchy is at the root of the gender divide and the source of inequality thereof. It is a social and cultural ideology that tends to elevate the needs and wants of men over those of women. This includes giving males positions of power that exclude women. The existing gender divide cuts across all facets of life -economic, educational, land tenure system, legal rights, political participation, health rights, among others. Reversing this state of affairs in the business sector requires deliberate efforts. Achieving this entails promoting women's wealth creation systems, providing them with capacity, and eliminating the bottlenecks which hamper their growth and expansion prospects (Kavaarpuo, 2020).
Empowering female entrepreneurs could be the panacea to sustainable wealth creation for women and to reduce women's vulnerabilities and poverty. It will also bridge the gender inequality gap and reverse existing gender inequities in Ghana.
The paper contends that beyond commercebuying and sellingwhere female entrepreneurs predominate in Ghana, venturing into the real sector of manufacturing as well as the provision of certain essential services could transform female businesses. This entails supporting women entrepreneurs to develop sustainable businesses that can grow and expand to employ other women. An investment in sectors that offer strong potential for job creation (the manufacturing sector) for young women will help provide livelihoods for many more people and reduce the vulnerabilities of women.
An investment in female manufacturers will address gender inequality by helping to increase the number of formal businesses owned by Ghanaian women. Such businesses will increase their potential to expand, grow and employ many more women because of their associated value chains. It will potentially increase the wealth creation potential of women to help match male economic dominance in Africa.

PURPOSE OF THE STUDY
The purpose of this paper is to highlight the importance of mobilising and empowering female-led manufacturers to transition from the informal to the formal economy of Ghana. The paper specifically aims to: 1. Examine women's participation in the informal economy of Ghana with an emphasis on manufacturing; 2. Propose strategies to support female-led/owned manufacturing businesses by transitioning them into the formal economy; 3. Make recommendations for policymakers to pay attention to supporting female entrepreneurs in the manufacturing sector.

RELEVANCE OF THE STUDY
This paper recognises that informal women-led manufacturing businesses in Ghana cannot be left on their own to formalise and compete with others. There is a need to create linkages between women micro businesses and state regulatory agencies to enhance compliance in respect of business registration, taxation, social security, environmental protection and allied standard operating procedures to ensure sustainable business models. Women businesses, especially manufacturers require technical support and business development skills to improve upon their production processes. They require support in inputoutput market linkages to enable them become investor-ready to grow and expand their operations. They will need to improve upon their management, record-keeping and marketing skills to sustain their operations.
A significant number of female-led/owned micro businesses in Ghana are into commercebuying and selling -of finished products. These businesses offer little prospects of wealth and employment creation, while extremely few female entrepreneurs venture into manufacturing. This is often because of the challenges associated with the manufacturing sector. Nevertheless, businesses in the manufacturing sector are much more likely to attract investment, expand, become sustainable, and create significant wealth for their owners. They also are the businesses that create substantial employment and ultimately contribute significantly to economic growth because of the value chains associated with their production processes.
Removing the barriers for women manufacturers would help reduce existing inequalities between men and women, largely determined by the type of business one sets up, manages and controls. An increased number of formalised female-owned/led manufacturing businesses would help contribute to employment and wealth creation opportunities for many other women in search of jobs in Ghana.

LITERATURE REVIEW The informal sector
The concept of the informal sector originated from Keith Hart, who coined the term "informal sector" during his study of economic activities among rural migrants in Ghana in 1973. Since then, several definitions of the informal economy have emerged worldwide. According to Farrel et al (2000) cited by (Osei-Boateng & Ampratwum, 2011), there are two approaches to defining the informal sector. One is the definitional approach and the other, is behavioural. According to the definitional approach, the informal sector refers to economic activities that are unrecorded in the official statistics such as Gross Domestic Product (GDP) and or in national income accounts. The behavioural approach describes the informal sector to be one based on whether or not the activities comply with established judicial, regulatory, and institutional framework (Osei-Boateng & Ampratwum, 2011).
Other scholars have variously described the informal economy as the "black economy", the "shadow economy", the "unrecorded economy", the "underground or "hidden economy", the "second economy" or simply the economy where economic activities take place without records, regulation and protection. Others say the informal economy is about the measured size of the economy and the true size of the economy (Akuoko, Aggrey, & Amoako-Arhen, 2021); (Bob-Milliar & Obeng-Odoom, 2011); (Ocran, 2018).
The informal sector tends to characterize the lion's share of most economies of Sub-Saharan Africa (SSA). SSA governments have over the years focused more on the illegality of the informal sector to the detriment of its capacity to contribute to economic development. Others have attributed the existence of a large informal sector to the unwillingness of governments to invest in infrastructure and social services to support urban dwellers as well as create an enabling environment for businesses to thrive. The growth of urban cities in SSA has attracted migrants from rural settings. These have had to survive by exploiting business opportunities and their survival and coping strategies have contributed to birthing the growing informal sector (Dovi, 2006 Micro, Small and Medium-sized Enterprises (MSMEs) are largely unable to expand because of the lack of properly coordinated support, absence of cheap and long-term credit and insufficient access to new technologies. They further face poor infrastructure provisioning, low capacity and are sometimes in conflict with government policies of SSA (Dovi, 2006).

Ghanaian context
The informal sector in Ghana can be categorized into "organized" and "unorganized" business entities. The organized ones are largely registered with offices and paid staff, whilst the unorganized ones operate from temporary structures and from homes with no paid workers. There are just about 9.5 percent of businesses in Ghana that are in a formal state. The remaining 90.5 percent are informal. Of the informal economy, about 79.8 percent are micro-sized businesses, with women dominating entrepreneurs (over 46%) in the Ghanaian economy. However, the majority (80%) of women-led/owned businesses remain perpetually stuck at the micro level (Government of Ghana, 2021).
The SMEs that are into manufacturing are in sectors ranging from food processing, textiles, and garments, wood products and furniture, metal products and machinery to detergents (Abegaz & Nene, 2018).
It is important to note that 48. Unemployment and underemployment have increasingly become threats to the survival and growth of the Ghanaian economy. Existing data reveals that the proportion of unemployed youth has been higher for females than males over the past forty years. The World Bank in its latest report on jobs in Ghana has revealed that about 48 percent of youth in the country, who are between 15-24 years, do not have jobs. The situation has been worsened by the Covid-19 pandemic with its ramifications of job losses, general economic meltdown, and financial crises.

Women's participation
Women dominate Ghana's informal sector. Indeed, the rate of women-owned businesses in Ghana is ranked the highest globally at 46 percent (Mastercard Foundation; Bridget Boakye (Crunch base), 2019). This stems from a positive perception of women enterprises in Ghana, with a labour force participation of 96.1 percent (Bridget Boakye, 2019). It is also because in the absence of a well-developed labour market that provides a living wage, resorting to operating a small business or hawking goods in public spaces becomes a coping strategy for securing a livelihood. The proverbial "market woman" in the Ghanaian context thus emanates from the necessity of trading goods in the informal market as a primary occupation, which also partly stems from the fewer years of education of women compared to men, and inadequate skills of women. Low-skilled women are highly concentrated in informal and unpaid work in the service and agricultural sectors (Agyemang, 2017).
However, the seemingly perpetual microstate of female businesses in Ghana can be said to result from market failure. There are no functional legal instruments that sanction support for start-up businesses, let alone solely for female-led businesses. The business ecosystem in Ghana is one that assumes that market forces will always establish businesses in the productive sector of the economy to propel economic growth.
A deeper reflection of this assumption reveals why there are so many businesses in commerce and fewer within the productive sector of the economy, a principal reason for female dominance in commerce in Ghana. Investing in the buying and selling business (commerce) requires little to no capital requirements and this makes it easy for females, who mostly lack the capital to venture into such businesses (Duncan, 2004); (Ocran, 2018) Women The informality of women-led businesses denies them access to interventions aimed at supporting their growth. For instance, government support for Micro, Small, and Medium-sized Enterprises (MSMEs)with loans in 2019 had 55.9 percent of women beneficiaries who received only 45.9 percent of the total amount granted. A similar situation was replicated with the GHS600 million Coronavirus Alleviation Programme Business Support Scheme (CAPBuSS) specifically targeted at MSMEs in 2020. The reason for the little benefits to women-led businesses from targeted support is their rather informal micro level of operations.

METHODOLOGY
The study adopted a quasi-experimental design and purposive sampling approach to study female entrepreneurship and Ghana's informal economy. The choice of the research design allowed for some control over the unit of study and helped deepen understanding of the state of female entrepreneurship and its relationship with Ghana's informal economy. A purposive sampling approach was used to collect qualitative data from female entrepreneurs at a Trade Fair event organised by the SNV/EU Green Project at the Takoradi Mall from 4 th -9 th October 2022. The Trade Fair event assembled a significant number of female businesses which made data collection easy and less expensive. A survey method was used to collect data through oral and written questioning. The tool for data collection was a semi-structured questionnaire. Access to respondents at a defined location made it possible for them to both self-administer or self-complete the questionnaire as well as orally respond to the open-ended aspects of the questionnaire.
The survey approach to data gathering helped to provide much more accurate inferences about the underlying issues of female entrepreneurs in Ghana. The approach considered ethics by ensuring the anonymity and confidentiality of individual respondents (Bordens & Abbot, 2002); (Bhattacherjee, 2012); (Nikolopoulou, 2022).
The disadvantage of the choice of the quasi-experimental design and the purposive sampling approach is that, apart from little control over the sample units by the researcher, the sample size cannot be said to be representative and therefore amount to an under-coverage and selection bias of the study. Nevertheless, inferences from the contacted female entrepreneurs whose operations could be verified by virtue of their products on display at the event helped to strengthen the case of this study (Sarantakos, 2005); (Bhattacherjee, 2012); (Bordens & Abbot, 2002); (Nikolopoulou, 2022).
The data analysis software used was excel. The data gathered was entered into the software for analysis in accordance with the structure (themes) of the data collection instrument. The type of data organised for analysis included the age categories of the female SMEs, the type of businesses they are engaged in, the challenges faced in their businesses, as well as possible solutions to those challenges. Since the study was focused on understanding the female entrepreneur and Ghana's informal economy, the data helped to explain the common challenges female businesses face and what was required to transform and transition them into the formal economy.

RESULTS AND DISCUSSION
The study contacted and interviewed female entrepreneurs who were sighted at the SNV/EU-organised Trade Fair event at Takoradi. Eight (8) males, who were present at the event volunteered to respond to the survey questionnaire, even though not the subjects of the study. In responding to the same questionnaire as the females, their views and experiences tended to solidarize with the subjects of the study. The numbers of male respondents complemented that of the thirty-four (34) females interviewed, leading to a total of forty-two respondents as presented in figure 1. In focusing on female entrepreneurs in the informal sector, the study was mindful of which sector of SMEs could expand to create decent and sustainable jobs. The real sector, with a focus on agro-processing and manufacturing, was thus the focus of the study. This focus coincided with that of the SNV Green project whose beneficiaries, especially female entrepreneurs, was mainly manufacturing of local products using organic processes referred to as the circular economy. The strategy of the SNV Green project was found to add value to manufacturing in that, green businesses were defined to be those that adopt environmentally friendly procedures and practices in the manufacture of and provision of services. Such ways of production help to protect and restore the environment, whilst generating profits for the business owners. The circular economy concept of business modeling is a departure from the well-known linear economy of make, use and dispose of. The circular economy business model emphasizes production in closed loops or cycles where inputs and resources are put to use for as long as possible, making it possible to extract the maximum value from them, ensuring recovery and regeneration of products and materials at the end of each product or service life.

Source: Female entrepreneurship in Ghana's informal economy field Survey 2023.
The study accounted for the ages of the respondents as presented in table 1. The ages of the respondents show that majority (78.5%) were within the youth category. This shows real potential for supporting the growth of SMEs, especially females who fall within Ghana's definition of youth -15 and 35 years of age. In order to understand the issues of female entrepreneurs, the type of businesses engaged in by the respondents were identified as presented in figure 2. Figure 2 shows that the majority of the respondents, (45%) were engaged in manufacturing and another 31% were in agro-processing. In terms of businesses engaged in the productive sector, 76% comprising manufacturing and agro-processing were identified. Those engaged in commercebuying and selling-were 14% and another 7% in services. There was also another 3% in blended or assorted businesses. This result was explained by the fact that the SNV Green Project had actually targeted female manufacturing businesses for support and hence their dominance at the Trade Fair.
In terms of the specific types of businesses, those into manufacturing produced soap and detergents using mainly plant-based inputs/ raw materials; paper and gift-wrapping bags were produced from waste paper, rice and maize husks and other plant waste; customized sandals were also produced as well as clothes from various fabrics. The agro-processors produced palm oil; gar, milled cereals and drinks from local raw materials. The services provided included product delivery services, hairdo and electrical services. Unfortunately, the neglect of the manufacturing sector has contributed to a shift from productive entrepreneurship to petty tradingbuying and sellingwhich, according to the World Bank, provides for about 70 percent of employment in Ghana. For instance, it is said that the Banks in Ghana prefer granting loans to importers, to manufacturers, in view of the capital-intensive input requirements of the latter (Dovi, 2006). Based on the different businesses engaged in by female entrepreneurs, the study proceeded to find out the state of female entrepreneurship in Ghana with a focus on the manufacturing sector. This amounted to learning of the key challenges of female SMEs in order of priority. The respondents were asked to list the 5 top challenges to their businesses as presented in Table 2. The most prioritized challenges as listed by the SMEs were the absence of start-up capital and closely linked to it was the absence of cheap long-term credit. These prioritized challenges were indicative of the barriers to female entrepreneurship within the productive sector in Ghana. The respondents affirmed the longstanding reasons women-led businesses are stuck at the micro level, unable to expand due to government inaction to their key challenges of the absence of capital for their businesses and the high interests on bank loans (Dovi, 2006).  The SMEs were asked to suggest ways they thought could help to address the challenges they faced in their businesses. Figure 3 presents the results of the respondents. They ranked the provision of start-up grants as the first priority solution if female entrepreneurs are to progress in their businesses. Next to the start-up support is subsidized business registration fees. Even though long-term credit is desirable, it was less prioritized since these would have to be paid back, and given the nature of start-up businesses, that could still be challenging. Indeed, the President of the Ghana Association of Women Entrepreneurs (GAWE) and General Secretary of the African Federation of Women Entrepreneurs has once suggested that what female manufacturers need is technology, long-term loans to invest in equipment, and working capital to purchase machines etc. This would enable them to adequately produce in order to make sales and pay back the loans (Dovi, 2006).  Business development capacity of female entrepreneurs Businesses within the informal economy require basic skills and knowledge to effectively manage their businesses. These include knowledge of business model development and growth paths, proper business management systems, business ethics, business recordkeeping, financial management and generally establishing strong systems and structures with strong organisation teams to manage the businesses.
One of the critical strategies for business expansion is input-output market linkages of the business, developing sustainable production processes and overall management capacity of the business. The inputs refer to all the raw materials, utilities, expertise (human resources), infrastructure, machinery etc that are required for production to take place. These are budgeted to enable planned purchases. Addressing the input requirement is key to a comprehensive business plan, one that shows the ambition of the business, and where the business aspires to grow to.
The business development interventions include a wide range of support services for female entrepreneurs as elaborated: • Good corporate governance: systems and structures needed to ensure structured and accountable operations of the business would promote sustainability and investment readiness. Some of the organizational level structures include instituting a board of advisors or governors for the business; establishing financial management systems and practices etc. • Sustainable business model development: SMEs should be introduced to resilient, eco-friendly and good manufacturing/production business practices that do not only guarantee good profits but also safeguard the environment. • Customer acquisition: this would enable SMEs to overcome one of the greatest banes of small businesses, by helping them understand their customer segments and markets in order to be competitive. • Access to markets: SMEs ought to be supported to clearly define their input-output market linkages to secure their operations in terms of guaranteed inputs and capacity to expand output on demand. • Financial management: strengthening record keeping, especially the financial side, will be needed to get SMEs sustain their operations by optimizing revenues to obtain profits and also be able to attract credit and investors. • Business plan development: SMEs require support to develop business plans to position their businesses for both grants and credit facilities.

Statutory Regulatory Compliance
Business regulatory compliance in a Ghanaian context starts with statutory registration of the business at the Registrar of Companies. The business must be registered with the Ghana Revenue Authority for tax compliance and must cater for the pension of its employees by registering with the Social Security and National Insurance Trust (SSNIT) to be able to pay for the pension (Tier 1 and 2). Depending on the type of business concern, registration with the Food and Drugs Authority (FDA) is mandatory for those that produce commodities or goods for human or animal use. The Ghana Standards Authority (GSA) requires that business operations, particularly manufacturers, meet certain laid down regulations that are verifiable, repeatable and replicable. To ensure environmental compliance, businesses have to obtain environmental operations permit from the Environmental Protection Agency (EPA), to be allowed to operate. For businesses that aim at exporting their products, registration with the Ghana Export Promotion Authority (GEPA) is mandatory.
Achieving regulatory compliance entails equipping the businesses with relevant information, skills and knowledge to achieve statutory regulatory compliance to enable them to expand and scale up their operations. A range of services are required to achieve this compliance as elaborated.
• Registration of products with Food and Drugs Authority (FDA) and Ghana Standards Authority (GSA): this would enable SMEs to understand the need to be registered and certified by FDA and GSA. • Annual renewal of business registration: this would highlight the new regulations of business registration, ensuring that SMEs comply with the annual renewal of their business registration. • Payment of SSNIT for business owners and staff: this is to enable SMEs to understand the essence of SSNIT for themselves and their staff as a critical anchor to their survival in old age. • Registration with GRA and payment of taxes: the need to pay tax as part of their contribution to national development and to advance their own businesses is required. • Business growth opportunities: to expose SMEs to government support systems/packages available for various segments of business operations.

Conclusions
The study has established that female entrepreneurs, particularly manufacturers, are stuck at the micro level due to lack of planned support for them. From the experiences of female entrepreneurs in the manufacturing sector, the government ought to systematize support for them to enable them move out of their vulnerable businesses and employment situations. There is great potential for the manufacturing sector to employ many more people, especially females to reduce their vulnerabilities and create wealth for them and others (Adjei, Agarwal, & Doku, 2016).
The proposed support to female entrepreneurs should include start-up capital, decreasing the fees and charges on business and product registration, lowering interest rates, and providing long-term and cheap credit facilities, and financial aid to female entrepreneurs.
The study found that the green business concept or the use of the circular economy model added value to manufacturing in the following ways: 1. It promoted efficient and sustainable use of resources, such as energy and water; 2. It contributed to the protection of natural resources; 3. It helped to reduce what is often referred to as waste during manufacturing and helped to reduce business losses in general; 4. It contributed to reducing carbon emissions; and 5. Generally supported the development of climate-resilient businesses in the face of the adverse impact of climate change. The project approach contributed to a number of Sustainable Development Goals (SDGs) notably: • SDG 1: End Poverty in all its forms everywhere; • SDG 2: End Hunger, achieve food security and improved nutrition and promote sustainable Agriculture; • SDG 6: Ensure available and sustainable management of water and sanitation for all; • SDG 7: Ensure access to affordable, reliable, sustainable and modern energy for all; • SDG 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all; and • SDG 13: Take urgent action to combat climate change and its impacts.

1.
Business start-up support for female SMEs: financing is critical to starting a business, particularly in the manufacturing sector. This is because of the nature of the inputs and resources such as land, machinery and equipment as well as raw materials required to start and commence production. The provision of start-up capital in the form of grants/cheap long-term loans, technology, machinery etc to promising female entrepreneurs could become the catalyst to ending the frustrations of determined female entrepreneurs who decide to venture into manufacturing, the sector that portends to reduce female vulnerabilities through wealth and employment creation.

Entrepreneurship and Business Development Support:
providing structured capacitystrengthening support to female SMEs would embolden their capacity to make use of resources that may be provided as start-up capital. Such support could include guidance on effective business modeling, financial management, and record-keeping. The capacity to conduct market research and to understand the input-output market linkages of their products could enable female entrepreneurs to thrive as soon as they commence production. Linking producers to the statutory regulatory authorities could be ways to ensure that female-led manufacturing businesses are both compliant with regulatory requirements and have the opportunity to compete with others on the market. The planned support would also offer opportunities to transmit information to SMEs on tax reliefs targeted at promoting their business and to reduce the common fear of over-taxation by the state, a major reason most SMEs prefer to remain in the shadow economy.
3. Purchase of products of female entrepreneurs as a matter of policy: one sustainable strategy to both encourage manufacturing and promote the growth of manufacturing businesses, is for government to purchase the products of female entrepreneurs as a matter of policy. This policy could be linked to the provision of start-up capital and business development support services. The continuum of state support should justify a policy for the government to serve as the off-taker of products of female entrepreneurs to guarantee their success and growth and to justify government investment in their businesses.
4. Exposure trips in-country and abroad: opportunities to travel abroad to interact with other businesses and to learn of happenings on the international market scene could be ways to empower female entrepreneurs. Such exposure trips will not only provide new insights on how to be effective at what they do but also networking with others within the African continent and beyond.