Retheorising The Motives Of Informal Entrepreneurs In Ghana Business Essay

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For many years entrepreneurs in the informal economy have been widely viewed as marginalized and conduct such activity as a last resort. However, from the middle of the 20th century to the start of the millennium, there has been rising recognition that not every entrepreneur starting up enterprise in the informal economy is doing so because of his or her marginalization from the formal economy and due to a lack of choice. Rather, it has been argued that some of these informal entrepreneurs choose to walk out from the formal economy and operate in the informal economy more as a matter of preference. Until now, however, the majority of the existing body of literature representing this has been concentrated in advanced western and post-socialist economies. Little has been written on whether this is also the case in third (majority) world countries. The main aim of this paper is to start filling this gap by analyzing the motives of informal entrepreneurs in sub-Saharan Africa. Reporting a 2007 survey involving face-to-face structured interviews with 80 informal entrepreneurs in Ghana, the finding confirms that the majority, especially the women informal entrepreneurs, is predominantly marginalized from the formal economy whilst those who predominantly decide to exit the formal economy are regarded, as deliberate participants in informal entrepreneurship are men. Several women who first and foremost entered informal entrepreneurship out of necessity, nevertheless, have over time developed into more opportunity-driven entrepreneurs. The result is a call for wider research in other global regions on informal entrepreneurs' motives and whether comparable gender differences exist.

Keywords: entrepreneurship; informal economy; Sub-Saharan Africa; Ghana.

Introduction

There has been growing acknowledgment that the informal economy is not becoming extinct From the middle of the 20th Century to the beginning of the millennium. Instead, the common finding across the globe is that the informal economy is widespread and even growing (Debrah, 2007; ILO, 2002a, 2002b; Jütting, Parlevliet, & Xenogiani, 2008; Jutting & Laiglesia, 2009; Palmer, 2007a; Potts, 2008; Rodgers & Williams, 2009). As Jütting & Laiglesia (2009) explain, some two-thirds (1.8 billion) of the world's 3 billion workers are in informal economy. Most of these informal workers, as it is now known, operate on a self-employed basis; 70 per cent in sub-Saharan Africa, 62 per cent in North Africa, 60 per cent in Latin America and 59 per cent in Asia. The outcome is that the informal economy has begun to be re-read as a 'hidden enterprise culture' (Williams, 2006) and the self-employed working in the informal economy as engaged in entrepreneurial endeavor. For the ILO (2002a: 54), the informal economy acts as "an incubator for business potential and … transitional base for accessibility and graduation to the formal economy" and many informal workers show "real business acumen, creativity, dynamism and innovation".

Yet, the enduring belief is that entrepreneurs operating in the informal economy engage in such endeavor out of economic necessity as a survival strategy because of their exclusion from the formal economy (Cross, 1997, 2000; McElwee, 2009). However, this view has started to change in current years,. It has started to be documented how many entrepreneurs working wholly or partially in the informal economy do so on a voluntary basis as a deliberate way of exiting the formal economy (Williams, 2006; Williams & Round, 2007). Until now, however, most of the existing body of literature demonstrating this has been concentrated in advanced western and post-socialist economies. Little has been written on whether this is also the case in third (majority) world countries. The main aim of this paper is to start filling this gap by theorizing the motives of informal entrepreneurs in sub-Saharan Africa country of Ghana.

To do so, section 2 reviews the literature on what is known about the motives of informal entrepreneurs. Section 3 then briefly outlines the methodology used to study informal entrepreneurs' motives in Ghana whilst section 4 presents the findings in relation to the ratio of necessity-to-willing informal entrepreneurs in Koforidua in the eastern region of Ghana. Section 5 then draws some conclusions. This will display how measuring the ratio necessity-to-willing informal entrepreneurs in Ghana obfuscates the complex mix of both necessity and opportunity motives underpinning the decision of many entrepreneurs to operate in the informal economy, thus reinforcing the previous findings in western and post-socialist transition economies not only about the presence of willingness in informal entrepreneurs' motives in this third world country but also the need to recognize how necessity and opportunity are often interwoven and entwined in individual informal entrepreneurs' motives.

At the outset, however, it is necessary to define what is here meant by the informal economy. As a working definition for this paper, the informal economy here refers to the paid production and sale of goods and services that are unregistered by, or hidden from the state for tax and/or benefit purposes but which are legal in all other respects (European Commission, 1998; ILO, 2002a; Williams, 2006). As such, only paid work that is illegal because of its non-declaration to the state for tax and/or social security purposes is included. Paid work in which the good and/or service itself is illegal (e.g., drug trafficking) is excluded, as is unpaid work. It is also important to highlight that in Ghana, informal entrepreneurs do pay some form of a "flat tax" not based on incomes but this is just an imposition by the state. However, the informal entrepreneurs willingly do not declare their income to the tax agencies. This economic sphere, like all others, nevertheless, possesses blurred edges. Some include work where gifts are given. Moreover, illegal services in some nations are legal in others such as prostitution; the implication is that what constitutes the informal economy can differ considerably across nations. Here, therefore, only monetized exchange is included, and solely exchanges of legal goods and services in the country under consideration, namely Ghana.

Motivations for informal entrepreneurship: a literature review

All through the literature on entrepreneurs' motives, and developing out of the work of Bögenhold (1987) who divides entrepreneurs into those motivated by economic needs and those seeking self-realization, it has become common to differentiate between "necessity" entrepreneurs pushed into entrepreneurship due to the lack of alternatives and "opportunity" entrepreneurs doing so out of choice such as due to their wish for independence or to own a business (Aidis et al, 2006; Harding et al, 2006; Maritz, 2004; Minniti et al, 2006; Perunović, 2005; Reynolds et al, 2001, 2002; Smallbone and Welter, 2004). This structure/agency dualism of entrepreneurs' motives has recently moved ever more center-stage, not least due to its adoption in the Global Entrepreneurship Monitor, a principal worldwide data-bank on entrepreneurship (Minniti et al, 2006).

This dualistic depiction of entrepreneurs' motives has also moved ever more center-stage when explaining the motives of entrepreneurs operating in the informal economy. That is, entrepreneurs working in the informal economy, such as street hawkers, were conventionally seen as driven out of necessity into such endeavor as a last resort (Castells and Portes, 1989; Gallin, 2001; Sassen, 1997) and represented as 'involuntary', 'forced', 'reluctant' or 'survivalist' (Boyle, 1994; Hughes, 2006; Singh and De Noble, 2003; Travers, 2002).

Since the turn of the millennium, however, especially in a western and post-socialist context, but also in Latin America, some scholars have begun to argue the inverse (Cross, 1997, 2000; Gerxhani, 2004; Maloney, 2004; Snyder, 2004). As Gerxhani (2004: 274) asserts, many "choose to participate in the informal economy because they find more autonomy, flexibility and freedom in this sector than in the formal one". Likewise, Snyder (2004) in her study of 50 informal entrepreneurs in New York City's East Village asserts that all the informal entrepreneurs she studied did so out of choice, such as to set their careers on a new path, to transform their work identity or to reveal their true selves. From this perspective, therefore, the depiction of informal entrepreneurs as universally necessity-driven was replaced with a representation of them as universally doing so out of choice.

However, rather than portray informal entrepreneurs as either universally necessity- or opportunity-driven, recent years have seen the emergence of a more nuanced third school of thought, especially in western and post-socialist nations but also Latin America, which evaluates the ratio of necessity-to-opportunity entrepreneurs, akin to the literature on formal entrepreneurship (e.g., Harding, 2003; Harding et al, 2006; Maritz, 2004; Minniti et al, 2006; Perunović, 2005). One of the pioneering studies to do so was a study of 50 dealers at flea markets in Northern California (Lozano, 1989). She reveals that 80 per cent were involuntary entrants and the remaining 20 per cent voluntary entrants. This search for the ratio of necessity-to-opportunity informal entrepreneurs has been subsequently pursued both in rural and urban North America (Edcomb and Thetford, 2004; Valenzuela, 2001), the UK (Williams, 2010) and Latin America (Perry and Maloney, 2007).

Albeit, this is a significant advance in understanding the motives underpinning informal entrepreneurship and one that transcends the universal hues of previous approaches, it continues to depict informal entrepreneurs as either necessity- or opportunity-driven; necessity and opportunity motives are viewed as separate categories constituted via their negation to each other (i.e., doing so out of choice means that an informal entrepreneur is not doing so out of necessity). Mirroring pioneering studies on formal entrepreneurs' motives (Aidis et al, 2006; Smallbone and Welter, 2004), however, this separateness of opportunity- and necessity-drivers in the motives of individual informal entrepreneurs has started to be questioned in a fourth and final school of thought. It has been argued that both necessity and opportunity can be co-present in the rationales of individual informal entrepreneurs and also that the drivers underpinning informal entrepreneurship can change over time, often from more necessity- to opportunity-driven (Snyder, 2004; Williams, 2007a, 2008a, 2009b,e,f; Williams et al, 2009). The clear implication, therefore, is that it would be mistaken for economic and enterprise development practitioners to write-off necessity entrepreneurs operating informally as unworthy of support since many appear to become more opportunity-driven over time.

Until now, this re-reading of informal entrepreneurship has been largely confined either to western and post-socialist economies, or to Latin America. It has not so far gained widespread purchase in other third world regions, especially Africa in general and sub-Saharan Africa more particularly. Instead, in this global region, the depiction of informal entrepreneurship remains largely entrenched in either a necessity-driven view of informal entrepreneurship or else a depiction of informal entrepreneurship as reflecting a desire to exit the costs and difficulties of operating in the formal economy (ref). To see this, we here turn to a review of the literature on entrepreneurship in the informal economy in Ghana.

Representing informal entrepreneurship in Ghana

In Ghana, there is emerging a significant amount of literature on entrepreneurship in the informal economy, especially women's informal entrepreneurship (see, Boachie-Mensah & Marfo-Yiadom, 2005; Chamlee-Wright, 1997; Chu, Cynthia, & Charles, 2007; Dovi, 2006; Dzisi, 2008; Korantemaa, 2006; Singh & Belwal, 2008). Indeed, the ILO (2007) has argued that tackling women's informal entrepreneurship is the major way of achieving "decent work" and its millennium development goals.

This is because of the heavy dependence of the working population in Ghana on entrepreneurial endeavor rather than waged employment. As Chu et al (2007) highlight, in Ghana, some 70 per cent of business ventures are micro enterprises employing less than five persons and some 70 per cent of the labor force work in micro, small and medium sized enterprises (GoG, 2003). Most of the literature on entrepreneurship in Ghana, however, depicts such entrepreneurs as necessity-driven and doing so because their exclusion from the formal economy and/or there are limited opportunities available elsewhere in the economic landscape (Chamlee-Wright, 1997). For Bewayo (1999), for example, the main motivational factor for informal entrepreneurship is survival. In other words, it is to make a living and provide for one's family; it is "living maximization" rather than "profit maximization".

In recent years, however, there has been a re-reading of informal entrepreneurs as doing so more out of choice than necessity. An example is when the Kwahus from the eastern region of Ghana have been depicted as "born" entrepreneurs. With limited formal education and little training in entrepreneurship, they have been portrayed as the most successful entrepreneurs in Ghana and doing so out of choice (Fredua-Kwarteng, 2007). Others such as Chu et al (2007) and Shapero (1985) similarly argue that entrepreneurs choose to operate in the informal economy due to the bureaucratic business environment in general, and the excessively complicated registration and tax systems for private enterprise in this country, as does Elkan (1988).

The notion that informal entrepreneurs in Ghana might not be universally either necessity- or opportunity-driven has not been widely discussed. As such, the ratio of necessity-to-opportunity driven informal entrepreneurship has not been evaluated. Neither has the notion that necessity and opportunity factors can be co-present in individual informal entrepreneurs' motives, nor the idea that informal entrepreneurs' motives might change over time. In 2009, therefore, a survey was conducted of informal entrepreneurs' motives in the eastern region of Ghana so as to begin to evaluate whether the advances in understanding informal entrepreneurs' motives in western, post-socialist and Latin American nations are similarly valid in sub-Saharan Africa.

Methodology

To evaluate the motives of the informal entrepreneurs in Ghana, in 2009, a survey was conducted in Koforidua, the regional capital of the eastern region of Ghana, located in the New Juaben municipality. This lies some 86 km north of Accra, the capital of Ghana. According to the 2000 Census of Population, Koforidua has a population of 87,315. Within this regional capital, maximum variation sampling was used to select five contrasting neighborhood-types ranging from very affluent through to very deprived communities. Within each of these five communities, a spatially stratified sampling technique was then applied (Kitchen & Tate, 2001) to select 16 households in each neighborhood to survey, meaning that a total of 80 households were surveyed within the town. The respondents were head of their respective households

All the interviews were conducted face-to-face and comprised a structured questionnaire which included both closed- and open-ended questions. First of all, background data was gathered on gross household income, the employment status of household members, their employment histories, ages and gender, and they were asked about the forms of work they most relied on to maintain their living standard. Secondly, open-ended questions were asked about whether they had engaged in self-employment and/or started-up some enterprise and if so, how long ago they had commenced this venture, whether they conducted some or all of their transactions in the informal economy and various questions on why they had decided to start-up this business. Respondents were also asked their opinions on the extent of the informal economy. Below, the results are reported.

Motives of informal entrepreneurs in Ghana

For many years, the view was that informal entrepreneurs in third world nations were necessity-driven. Indeed, in third world nations, informal entrepreneurship has been widely depicted as conducted by marginalized populations out of necessity and a last resort in the absence of alternative sources of livelihood (Chen, Jhabvala, & Lund, 2002; Hanson, 2005; Palmer, 2007a). The view that informal entrepreneurs sometimes conduct such endeavor out of choice has been confined in a third world context to a few studies in Latin American nations (Cross, 1997, 2000; Perry and Maloney, 2007).

To understand informal entrepreneurs' motivations in Koforidua, therefore, those who had started-up business ventures were asked in an open-ended manner, 'why did you decide to start up your informal enterprise?'. The interviews with the 80 informal entrepreneurs in Koforidua reveals that although the majority work in this manner because they have no choice, some informal entrepreneurs choose to operate in this manner as a matter of choice because they enjoy independence, flexibility, the potential for making more money and the like. In Ukraine, Williams & Round (2008) find that 53 per cent of informal entrepreneurs did so out of economic necessity and 47 per cent out of choice.

The finding in Koforidua is that only some one-third (35 per cent) do so as a matter of choice and due to a desire to exit the formal economy, and some two-thirds (65 per cent) of informal entrepreneurs work in this manner primarily due to the difficulties in getting a formal job which presumes that they are marginalized from the formal economy and doing such work out of necessity. In other words, for every two necessity-driven informal entrepreneurs, one does so for opportunity-driven reasons. The reason for so many informal entrepreneurs being necessity-driven is in part due to the small size of the formal economy and in part because formal private businesses in Ghana tend to sub-contract many stages in the production process to the informal economy, as has been identified elsewhere (Chen, 2004; Williams & Windebank, 1998; Williams, 2006, 2007).

This is particularly the case in the construction industry in Ghana where formal private sector enterprises especially sub-contract part or all of their work to sub-contractors operating in the informal economy, who in turn employ informal laborers on a daily basis to undertake the work. As a carpenter put it,

I work as a carpenter for a road construction company. I'm not a permanent worker for this company but I'm paid anytime I work for the company. This is what is known locally as "by-day" work. I have been working for this firm for some time now but I am sure they would never make me permanent.

Before reaching the conclusion that the majority of informal entrepreneurship in Koforidua is necessity entrepreneurship, however, it is important to analyze the responses to two further questions that followed this initial question. These firstly repeated the answer given by the respondent with an inflexion (e.g., 'to earn money to survive?') and secondly, asked in an open ended manner 'any other reasons?'. When the responses are analyzed, it quickly becomes apparent that it is difficult to squeeze all informal entrepreneurs into one side or the other of the necessity/opportunity dichotomy.

As Table 1 reveals, when their fuller motivations for informal entrepreneurship following these additional probes are analyzed, just 25 per cent of informal entrepreneurs cited solely economic necessity. The majority (70 per cent) cited a mixture of both push and pull motivations. Some 50 per cent emphasized mostly economic necessity but also some opportunity motives such as that they wanted 'greater independence' or had identified 'a gap in the market'. A further 20 per cent focused on opportunity motives but also put some emphasis on necessity. Just 5 per cent cited solely opportunity-driven motives.

Insert Table about here

There are, nevertheless, some distinct gender variations in informal entrepreneurs' motives. Women informal entrepreneurs tend to be more necessity-driven and men informal entrepreneurs more opportunity-driven in their motives. Indeed, some 90 per cent of women informal entrepreneurs are towards the necessity-driven end of the continuum of rationales whilst some 50 per cent of men are towards the opportunity-driven end of the spectrum. The important point, however, is that the vast majority (70 per cent) of informal entrepreneurs tend to cite both necessity- and opportunity-drivers when explaining their rationales for participating in informal entrepreneurship. This is the case whether one examines men or women, with 75 per cent and 67 per cent respectively citing both opportunity- and necessity- drivers in their motives for engagement in informal entrepreneurship.

Below, in consequence, a series of case studies are presented of individual informal entrepreneurs to provide a more nuanced and textured understanding of the complexity of their motives. Before doing so, however, it is necessary to raise one further important point. Much of the conventional literature has depicted informal entrepreneurs' motives in a static manner, not least because most surveys simply provide a snapshot of their motives at a specific moment in time. The in-depth narratives of individual informal entrepreneurs below, however, reveal how there is fluidity in their motives over time. This shows the need for a much more dynamic portrayal of informal entrepreneurs' motives than has often been the case in many third world nations. Indeed, examining the direction of change, and as will become apparent in the case studies, many informal entrepreneurs who when starting-up their business ventures are more necessity-oriented motives tend to become more towards opportunity-driven over time. Indeed, some three-quarters of those who begin as solely or mostly necessity-driven become more opportunity-driven over time. This dynamism in their motives, as will become apparent, has important implications. It is widely believed that opportunity-driven entrepreneurs will make a more positive contribution to economic development and growth than necessity-driven entrepreneurs (e.g., Harding et el, 2006; Minniti et al, 2006; Reynolds et al, 2001, 2002). This finding therefore intimates that necessity-driven informal entrepreneurship in Koforidua appears to provide a seedbed out of which opportunity-driven entrepreneurship emerges and therefore needs to be nurtured. To begin to see this, as well as the multifarious motives of informal entrepreneurs, case studies of the motives of individual informal entrepreneurs are here presented.

From singular to multifarious motives: case studies of individual informal entrepreneurs in Koforidua

The case of a hardware shop owner

Paddy is a middle-aged man married with three children. He and his wife are self-employed and operate their own fast-growing building materials shop (locally called "hardware" shops). Their shop is located in the central business district, which is part of Srodae, one of the selected semi-affluent areas in this study. According to Paddy, he used to live and work in Accra for a state-owned enterprise (SOE), which was privatized during the era of Structural Adjustment and Economic Recovery Programmes in the early 1990s. He became redundant as a result but was given some money as his end of service benefit (ESB) or severance award. According to him, life after redundancy became unbearable and living in Accra was also becoming ever more expensive. Although his wife was earning some income from her informal activity, the money was not enough for them to rely on to maintain an appropriate standard of living. It was just helping them as a family to subsist. The situation got worse with each passing day he lamented.

Culturally, furthermore, he was losing his status as the head of the family as he was no longer the breadwinner of the household. He said "this made me to think twice and one day I decided to go back home (Koforidua) leaving my wife and children in Accra". With his redundancy payout, he started a table-top ('bodwabodwa') business in order to avoid being unemployed and also to maintain his status as a responsible father and husband and head of the family. So for Paddy, his redundancy from his formal job forced him to pursue informal entrepreneurship as a survival strategy. Initially, trade was difficult but after some years, the business started picking up. After five years in the retail (bodwabodwa) business, he identified an opportunity in terms of a gap in the market in the building and construction sector. With help from his wife, they decided to open up their "hardware" business. He converted part of the family house in the central business district into a store to start the business.

This was in the late 1990s. Paddy started mainly with the sale of cement and a few other building materials. In these initial stages, he was selling very limited quantities at a time because of his limited capital and also the lack of credit he had to make major purchases from his suppliers. He was buying from within Koforidua and thus the profit margin was not big. As the business grew, however, he was able to buy direct from the manufacturers or large wholesalers in larger quantities, who gave him some trade discount and also credit. Today, his business is one of the leading hardware enterprises in Koforidua employing five people and he also employs two contributing family members. As the store in the central business district had limited space to accommodate further expansion and no parking facilities for customers, he has also built his own warehouse outside the central business district so that those buying in bulk can pay at the main store and collect the materials at the warehouse. As he proclaims in local language "edwa no ye" which literally means, "business is good".

He is an example of an informal entrepreneur who started as a necessity-entrepreneur due to no other livelihood options being available and has become more opportunity-driven over time, enjoying the benefits of the niche he had identified some years ago. Currently, more entrepreneurs in the informal economy people are now moving into the hardware business, as many believe that this industry is a potential "cash cow". In Ghana, that is, the common practice has been that most informal entrepreneurs tend to be risk averse and only start a business venture which requires investment if they can find success stories in that particular business sector. For many informal entrepreneurs in Koforidua, Paddy as a successful informal entrepreneur has become a role model and a local hero who others are now attempting to emulate.

Paddy, therefore, is somebody who started out as a necessity-driven informal entrepreneur whose redundancy from his formal job forced him into informal entrepreneurship as a survival strategy. After some years, however, and once he discovered a gap in the market, he has slowly become more opportunity-driven.

The case of a migrant woman entrepreneur

Asibi is a single mother of two from the northern region of Ghana who migrated to Koforidua in the eastern region some five years ago. At the age of 23, she had two children but not a husband/partner and at the time of the interview, she was 28 years old. Asibi's decision to migrate was influenced by the 'success' of one woman from her community who had migrated from the northern to the eastern region some years ago and who had occasionally returned to her home community where Asibi lived. The local women had viewed her as a role model and wanted to emulate her. According to Asibi, she migrated to this area after a conversation with this local heroine. She came to Koforidua about five years ago leaving her two children with her mother in search. We first met her during one of the household interviews in Betom, one of the semi-affluent study areas. During the interview, it was observed that she was a little uncomfortable answering certain questions such as her educational level and marital status. When further probes were used, she started to tell her story from the time she had decided to move to Koforidua and why:

I came to Koforidua with no knowledge of where I was going to stay, what kind of job I would do and so on. After a few weeks I found someone who was willing to offer me a job and accommodation. I started as an iced water (locally known as "Nsu" or "pure water") seller. Since I had no money to do this on my own, I was doing it for a certain woman who offered me accommodation, food and a little commission. This woman had already three girls who were doing the same business for her. At my age, I did not consider it to be anything but carried on to do this for some time in order for me to survive and pursue my dream.

She did this for one and half years and was able to mobilize some initial capital to start her own business. With her initial capital of ¢200,000, now GH¢20 after the redenomination which is currently equivalent to about US$15, she started selling oranges. She roams around the lorry parks selling oranges during the daytime and in front of the house she lives in during the evenings, which is a common practice in Koforidua and across the country.

At the time of the interview, she had acquired her own small kiosk in which she sells an assorted range of products from food, detergent/soaps, provisions, confectionary and many more items. It has to be said that she still sells the oranges but now from her kiosk. The story of Asibi mimics that of a necessity-driven informal worker who had no options other than to engage herself in 'any' business just to make a living for herself and her family. Over time, however, she has become more opportunity-driven and now fends for herself and manages to send regular remittances to her family back in her hometown.

Even though she was reluctant to disclose how much she earns, it can be deduced from the discussion that she earns more than the commission when she was selling the "nsu". There are many similar women informal entrepreneurs in Koforidua who have shifted from more necessity-driven to opportunity-driven over time (Dzisi, 2008). She also concluded by saying that people like her need some form of financial support to grow their business.

The case of a business owner in the construction sector

A further example of somebody who has voluntarily chosen to operate in the informal economy as an entrepreneur is Jamal, a civil engineer from Kwame Nkrumah University of Science and Technology in Kumasi the second largest city in Ghana. After completing his studies, he entered formal employment in a formal road construction company in the private sector. According to him, his desire was to establish his own business but the start-up capital required pushed him into formal sector employment so that he could accumulate the capital required to set up his own enterprise.

Having worked for four years, he was able to raise enough capital to enable him to start his own informal enterprise in the construction sector, specifically building construction. According to him, he started with no employees and was hiring workers whenever he got a contract. By the time of the interview, he had six permanent employees and depending on the scale of the contract, he hires other temporary workers (locally called "by-day") to complete the job.

In Ghana, the building of residential houses is a fast-growing sector. As Jamal explained, in Ghana a person normally builds their own house and houses are usually built in an incremental manner. Few have traditionally taken out mortgages to do so. However, this is changing. In recent years, some financial institutions, especially the Home Finance Company (HFC), have moved into the mortgage business helping workers especially formal workers who have secured job and perceived regular and sustained income to take a mortgage to build or buy a house. As a result, building contractors are being increasingly used to undertake some stages of the building work. Jamal concentrates on building residential houses for such clients. He has now employed an architect, has connections with an electrician and a plumber making his business a one-stop shop for prospective clients. He also supervises the building projects of people who live outside Koforidua, especially those living abroad (Europe, North America and United Kingdom) mainly for a fee.

He is thus a good example of an opportunity driven entrepreneur who foresaw the emerging gap in the market and a growth sector and decided to leave his formal job and establish an informal enterprise in this growth sector. We first came across him during a visit to Adweso (the most affluent area studied). It was upon interviewing him that it became established that he had a degree in civil engineering when asked about his level of education. When asked why he was doing informal work he said

'the merits are enormous but permit me to mention just a few, I found autonomy, plan my business life around my life and family, I make more money than when I was working for someone in the formal sector and many more benefits which maybe time will not permit me to tell you. The future looks bright'.

He is now hoping to employ more permanent workers (on an informal basis) as the business is growing. With the current conducive and enabling environment created by the successive governments to support individuals such as himself (GoG, 2003, 2005), he is expecting his business to flourish in future years.

The case of a self-employed woman dressmaker

Auntie Adwoa is a dressmaker who has been doing this for well over a decade. She lives and works in Ada, the most deprived area studied. After completing her basic education, she was sent to a well-known dressmaker in her locality as an apprentice. Like most girls in Koforidua, further education beyond basic level was a preserve for boys in those days as Auntie Adwoa informed us. She was trained as an apprentice for three years. After completing her apprenticeship, her parents opened her own dressmaking shop for her. As a result of the contacts she made whilst an apprentice, she was able to get a few customers initially, although it was not encouraging according to her. What motivated her most was that the only skill available to her was her dressmaking and therefore she had to continue if she was to secure a livelihood for herself. After one year she also got her first apprentice.

At the time of the interview, she had six apprentices and four paid workers who were trained by her. She explained that these were "work and pay" informal workers. These are previous apprentices who have successfully undergone and completed their apprenticeship training but have no money to establish their own businesses so they normally take up a "work and pay" position to mobilize some capital to set up their own business in the future. For Auntie Adwoa, she is operating an informal enterprise because she is excluded from the formal economy and formal jobs. She is using her skills acquired as an apprentice to create work and income for herself.

However, she is also one of the beneficiaries of the Assembly's workshops for entrepreneurs in Koforidua to help formalize their operations. The meaning of formalization in this context is that she is being helped to accept the need to record her activities and given basic accounting skills. The success of Auntie Adwoa's business speaks for itself when you visit her business premise, which is attached to her home. As she proclaims,

this is a very good business where the youth especially girls can go into to make their life better rather than relying on the government to give them jobs when there are none. Even though higher education is good, in this modern Ghana, government work ('Aban Adwuma') is hard to come by regardless of one's qualification and thus the informal economy is the best option for everyone.

For Auntie Adwoa, therefore, the decision to operate an informal enterprise has been not only a mix of both necessity- and opportunity-driven motives but over time, she has become more opportunity-driven and is slowly moving down the road towards greater formalization.

The case of a street vendor

The final case study of informal entrepreneurship is Ms Skankani, a 24-year-old woman who lives in Old Estate, a semi-affluent area. She is engaged in the street food vending business. Specifically, she sells a fast-food commonly called in Ghana "fried rice" or "checkcheck". She got this business idea whilst she was training as a catering student at the Koforidua Polytechnic. She has two locations for her business; one where she lives (Old Estate) and the other at the private university in Koforidua. Her experience whilst a student at the Polytechnic helped her to create this business since she recognized that students more often than not prefer already made foods to preparing their own food. Her trade reaches its peak during examination periods when students may be busy preparing for their exams and may have little or no time to prepare their own food. I asked her whether she has any plans to expand and she responded,

"I don't intend to expand because expansion may call for additional hands but this business is a bit seasonal; when students are in school it is 'busy' but when they are on holidays I only concentrate on the small one at where I live. I have had some discussions with the university authorities about a permanent location, possibly a store within the university premises, so that I can provide full restaurant services. If it happens, then I may need a helping hand."

Although she said there are other 'checkcheck' sellers at the university, she is satisfied with her current state of affairs and hopes that if she is able to secure the permanent location on the university campus, then she may become a leader in providing full catering services for students. Ms Skankani believes that her business is not just a survival activity because "my monthly profit is higher than my colleagues who are working at some hotels and restaurants". Notwithstanding this, she declined to disclose her monthly income and that of her colleagues.

To all intents and purposes, therefore, Ms Skankani appears to be an opportunity-driven informal entrepreneur. However, the fact that further probes revealed that she had little opportunity to find a formal job on graduation reveals that in reality, it was a mix of both necessity- and opportunity-drivers that originally led her to establish this informal enterprise. Over time, however, she has become ever more opportunity-driven in her motives. What is important here, nevertheless, is that similar to Latin America (Cross, 1997, 2000), it is a mistake to portray street vendors operating in the informal economy as always doing so out of economic necessity and as a survival strategy. For Ms Skankani, it has been largely opportunity-drivers that have led her to establish and operate as a street vendor.

Conclusions

Since the turn of the millennium, the entrepreneurship literature has begun to recognize that many entrepreneurs operate in the informal economy and that not all these informal entrepreneurs are doing so out of economic necessity and as a survival strategy. Instead, it has been asserted that some informal entrepreneurship is a result of people choosing to exit the formal economy and trading off-the-books as a matter of choice rather than due to a lack of choice. Until now, however, most research showing that this is the case has been on either advanced western economies or post-socialist transition economies. With the notable exception of Latin America, little has been written on whether this is also the case in third (majority) world countries. This paper has begun to fill this gap n the literature by evaluating informal entrepreneurs' motives in Ghana in sub-Saharan Africa. Reporting the results of face-to-face structured interviews with 80 informal entrepreneurs in Koforidua in the eastern region of Ghana, the finding is that although when examining their principal reason for engaging in informal entrepreneurship, it appears that the majority (65 per cent) are predominantly necessity-driven and only a minority (35 per cent) opportunity-driven, when further probes are integrated, richer and more textured accounts emerge that display how informal entrepreneurs often engage in such endeavor for a combination of both necessity- and opportunity-driven rationales. Women, nevertheless, tend to be more necessity-driven and men more opportunity-driven. Over time, however, there tends to be a shift in the drivers, usually from more necessity-driven to more opportunity-driven rationales.

These findings have important implications both for public policy towards informal entrepreneurship and for future research. So far as public policy towards informal entrepreneurship is concerned, this study reveals that not all informal entrepreneurs are purely necessity-driven and that many choose to exit the formal economy and to voluntarily engage in informal entrepreneurship. The consequence is that if governments continue to pursue a deterrence approach towards informal entrepreneurship in general, and necessity-driven informal entrepreneurs more particularly, they may well find themselves deterring with one hand precisely the entrepreneurship and enterprise that with another hand through their enterprise culture policies they are seeking to nurture, especially given that some three-quarters who start-out as necessity-driven turn into opportunity-driven entrepreneurs. Recognizing the complexity and dynamics of informal entrepreneurs' motives is thus more than a simple matter of academic interest. Unless a better understanding is gained of the motives, then little progress is likely to be made in nurturing an enterprise culture.

Until now, moreover, little research has been conducted in a third world context regarding the motives of informal entrepreneurs. Instead, it has been widely assumed that informal entrepreneurs are necessity-driven and doing so as a survival strategy in the absence of alternative sources of livelihood. This paper, however, reveals that in this part of sub-Saharan Africa, this is not always the case and that many informal entrepreneurs to varying degrees are not only partially or fully opportunity-driven but that push and pull factors are co-present in their rationales for participating in informal entrepreneurship. It also shows significant gender variations in the rationale for informal entrepreneurship. What is now required are further studies both in sub-Saharan Africa and other third world global regions to evaluate whether this is similarly the case elsewhere.

If this paper thus stimulates further research on whether informal entrepreneurs' motives display the same co-presence of push and pull factors and dynamism elsewhere, and greater discussion on what should be done about supposedly more necessity-driven informal entrepreneurs, then this paper will have fulfilled its objectives.

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