An Unexpected Economic Boom Brings Questions About Who Benefits

Accra | 01/07/2013 3:34pm
Sharon Benzoni | Informal City Dialogues

The chronic traffic jam ringing Kwame Nkrumah Circle revolves around a statue of Ghana’s first president, modernity orbiting the past in an endless loop. A major truck station and market teeming with people sits on one corner, and a wide, gracefully curving pedestrian bridge plays host to dozens of traders who spread their wares — shoes, used clothing, belts, electronics, plastic mesh used for scrubbing — across the concrete until only inches of space are left for walking. Called simply “Circle” by most Accra residents, the traffic rotary forms a literal hub in Accra’s sprawling informal sector, the city’s longtime economic propellant.

Aside from all the cars (traffic jams being the most conspicuous modern-day symbol of urban ascendance), you would never guess that this is the capital of one of the world’s fastest growing economies. But it is — Ghana’s double-digit growth rates, fueled largely by the recent discovery of oil off the coast several hours to the west, has made it the envy of Africa. And Accra is changing accordingly. Glittering high-rises spring up seemingly overnight. Traffic patterns shift constantly as new roads are opened and old ones are paved. But in the poor neighborhoods, and even many middle-income ones, basic sanitation, water and electricity infrastructure have failed to keep up. Instead, informal businesses flourish in these neighborhoods, serving needs that the government can’t or won’t.

Circle’s namesake, Kwame Nkrumah, was the father of Pan-Africanism and major force behind the country’s liberation from colonial rule. Today, his name recalls the history that created Accra’s “dual personality,” a term Victoria Okoye, an urban planning expert currently working on a water and sanitation project in Ghana, uses to describe the legacy of the city’s colonial past. The British poured money into developing the European sections of the city, while neglecting its pre-existing African enclaves and informal settlements. The result of this “bifurcated development,” Okoye says, is that a large majority of Accra’s estimated 2.3 million residents ended up in crowded, underdeveloped neighborhoods while a small percentage of wealthy Ghanaians and expatriates enjoy the more spacious, fully serviced areas like Airport Residential and East Legon.

But the informal economy permeates the lives of even those wealthy residents: This is the capital of a country where the informal sector is responsible for 90 percent of goods and services. Street hawkers sell sachets of water, mobile phone top-up cards, fried plantain chips and pirated DVDs at busy intersections where traffic moves at an excruciating crawl during the rush hour. Tailors and barbers work out of tiny shops, many made from converted shipping containers — not only in low-income, high-density neighborhoods like Nima or Madina, where informal businesses dominate, but also in affluent ones like East Legon or Cantonments. Private minibuses called trotros provide transit for 70 percent of the population. Affluent residents roll down their car windows to buy snacks and stop to get their shoes polished on street corners.

Relying heavily on the service sector, Accra’s economy is about $3 billion, or 10 percent of Ghana’s GDP overall. And with most of Accra’s residents engaged with the informal sector, these activities comprise a crucial portion of the overall economy. The swiftly growing telecommunications companies, for example, rely almost exclusively on an informal network of vendors to retail their mobile phone cards. And this immense informal economy is stronger and more orderly than its apparent chaos would suggest. Attempts by the Accra Metropolitan Assembly to relocate vendors in large informal markets are often ignored or vehemently opposed by organizations like the Makola Market Women’s Association. And when the AMA launched a campaign in 2012 to remove street vendors’ unauthorized buildings, it was met by protests and intervention by Ghana’s Human Rights Advocacy Centre.

But as large, powerful and organized as Accra’s informal sector is, the oil boom, with all its attendant formal-economy side effects, has thrust the city into a period of uncertainty. In 2011, Ghana’s economy grew by an incredible 14.5 percent, and the World Bank officially changed Ghana’s economic classification from low income to lower-middle income. That same year, foreign investors poured $7 billion into the country. Development — the formal kind — is suddenly everywhere. Since the city’s professional classes are themselves so immersed in the informal economy, it stands to reason that their increasing wealth should benefit everyone: More belts sold, more shoes shined, more trotro fares collected.

But for those who don’t make their living selling commercial real estate or trading stocks by the thousands, such a seismic economic shift can be disorienting. The cost of living in Accra began rising even before the oil discovery, “pricing middle and lower income groups out of the housing market,” according to a recent report. And as real estate becomes an increasingly profitable industry, the city will need to find ways to protect informal workers. Incorporating their remarkable contributions into the city’s new economic vitality is Accra’s long-term challenge, and a worthy goal.