The Informal Sector In Sub-Saharan Africa: Out Of The Shadows To Foster Sustainable Employment And Equity?

Abstract

Over the past twenty years or so, there has been a debate that basically asks “…whether the informal sector should really be seen as a marginalized, ‘survival’ sector, which mops up excess or entrenched workers, or as a vibrant, entrepreneurial part of the economy which can stimulate economic growth and job creation.” (African Union 2008). This paper argues the latter. Further, this paper argues that employment in the informal sector is no longer a journey, but has become the destination of many. If the aim is to create jobs and reduce poverty, the informal sector must be included in the debate. Indeed, this paper recommends that the debate about the advantages of formal sector vs. the informal sector needs to end. Governments need to unequivocally recognize and admit the importance of the informal sector and finds ways to encourage its growth. They also need, at the same time, to decide how to strengthen the formal sector and extend benefits to those in the informal sector, while removing barriers to the formal sector to allow more to participate. Specifically, there are at least five major areas where changes need to be made: 1) Establish an enabling environment and supportive regulatory framework, 2) Provide access to appropriate training, 3) Improve basic facilities and amenities and infrastructure, 4) Increase ability to obtain property title and access to credit, and 5) Improve national databases and establish uniform standards.