Unlocking the Potential of Non-Farm Enterprises to Reduce Rural Unemployment in Ghana

Abstract

The non-farm enterprise sector plays an important role in the rural economy in Ghana. It constitutes about 35 per cent of rural incomes and engages around 21.2 per cent of the national labour force. In rural areas it employs about 13.8 per cent. Non-farm enterprises have been viewed as one of the surest ways of reducing rural youth unemployment in the country. However, despite their potential, limited understanding of the diverse nature of the non-farm enterprise sector has led to policies that do not fully exploit its potential to reduce rural unemployment in Ghana. The sector is characterised by a large degree of differentiation which makes it relatively difficult for a one-size-fits-all policy to address the issues and perhaps adequately take advantage of the potential the sector offers to reducing unemployment. Recognising the motive for young people to be involved in non-farm enterprises, whether as a coping mechanism or a livelihood strategy, is imperative to ensure effective and coherent policymaking across all the relevant players in the industry.