Paper short abstract:

Using new survey data on informal workers in Accra, Ghana, this paper examines the extent to which they have access to social protection and COVID-19 relief. It explores their tax burdens and the degree to which they are able to make additional contributions to social protection or taxes.

Paper long abstract:

In Ghana and across much of Africa, the conflation of two crises - the Covid-19 pandemic and an escalating public debt crisis - have highlighted the importance of expanding social protection and spurred new conversations about how this can be funded. Informal workers have stood at the centre of these discussions: they are often not covered by social protection and are increasingly targeted by attempts to shore up new revenue through contributory social protection or taxes.

Using novel and representative survey data on informal workers in Accra, Ghana, this paper examines the extent to which informal workers in Accra have access to social protection and benefitted from COVID-19 relief programmes. Furthermore, it explores the tax burdens of informal workers and the degree to which they are able to make additional contributions through taxes or contributions to social protection schemes. It investigates the equity, redistributive, and gendered impacts of informal workers’ fiscal burdens and access to social protection and COVID-19 relief programmes.

The paper finds that most informal sector operators in Accra are not covered by social protection, with the exception of the National Health Insurance. In contrast to a number of claims, the paper finds that informal sector operators in Accra pay a range of taxes, permits, levies and fees. Informal sector tax burdens are highly regressive, with a disproportionate burden falling on the lowest earning segments of the informal sector. The evidence therefore suggests that for substantial proportions of the informal sector there is little room for further contributions.