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Sole proprietorship created majority jobs in 2014

 By: Fred Yaw Sarpong

The phase I Integrated Business Establishment Survey (IBES) report on job creation by the Ghana Statistical Survey (GSS) has revealed that sole proprietorship created majority of jobs in 2014.

This means that about 126,772 businesses registered in the country in 2014 are owned by individual Ghanaians. Out of 126,772 businesses, about 110,567 (87.2%) were skilled jobs. 

The first phase of the IBES covered all non-household establishments either engaged in economic activities or are non-profit institutions.

According to the GSS, non-household establishments are establishments that can be located at a specific place including churches and mosques that have a permanent place of location and especially those that can be traced. Table top businesses are not included as well as churches operated in classrooms.

Per the report, the number of jobs created by state institutions such as public limited companies (1,887) and institutions owned or controlled wholly or partly by the government (1,592) are quite low compared to private institutions.

Similar to the observation for establishment operated as sole proprietorships, the report stated that most of the jobs created by state institutions are skilled.

Partnership businesses created 24,986; Private Limited Company by Guarantee 20,394; Statutory 3,430; Other Governmental Institutions (MDAs) 16,104; Quasi Government 2,507; Non-Governmental Organization (NGO) which includes permanent churches and mosques 4,100; Cooperative 719; and Association Groups 5,051.

On sector and size of the job creation, the report indicated that agricultural establishments with less than 10 persons engaged created a total of 428 jobs in 2014, while agricultural establishments engaging 200 or more persons recorded a total of 506 new jobs during the same period.

Meanwhile, establishments engaging 1-4 persons created 46.7 percent (11,253) of net jobs in the industrial sector while larger industrial establishments with 200 or more workers recorded 8,419 new jobs (34.9) in the sector.

The report noted that in all, 3,240 unskilled jobs were lost in the industrial sector while those establishments with 10-14 persons engaged created the least number of jobs (140).

In the service sector, it noted that establishments engaging 1-4 persons created the highest number of jobs of 104,516, representing 57.5 percent of total net new jobs in the sector.

“Small establishments created most of the unskilled jobs, with 20,210 (66%) new unskilled jobs recorded by establishments engaging 1-4 persons in the services sector,” the report revealed.

On year of commencement of establishment and job creation, the 2014 job creation report revealed that establishment that commenced operations before 1975 created a total of 8,167 new jobs while establishments that commenced operations from 2005 to 2014 accounted for the largest number of jobs created (166,316), representing 80.2 percent of net job creation.

It further added that establishments that started business between 1995 and 2004 also created 11,872 net jobs representing 3.9 percent of total net jobs. “It is important to note that these establishments that commenced business between 1995 and 2004 lost 1,717 jobs. This could be as a result of expansion of production capacities of newer firms that have to strive to remain in business in order to create more jobs,” the emphasized.

Dr. William Baah-Boateng, a senior lecturer at the Department of Economics, of University of Ghana said “we need to encourage individual businesses to partner other individual businesses in order to be able to expand.  This will make them more profitable ventures than been sole entity.”

  


  

   

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