The informal economies are certainly here to stay, and present day African leaders are seeing the need to harness the indisputably huge role being played by self-employed individuals. At the just concluded World Economic Forum on Africa that held in South Africa, Kwesi Amissah-Arthur, Vice-President of Ghana stated that informal traders must no longer be
The informal economies are certainly here to stay, and present day African leaders are seeing the need to harness the indisputably huge role being played by self-employed individuals. At the just concluded World Economic Forum on Africa that held in South Africa, Kwesi Amissah-Arthur, Vice-President of Ghana stated that informal traders must no longer be regarded as illegitimate and marginalized, but their immense contribution to the GDP of African countries must be acknowledged and encouraged.
What this means is that as individual governments of African countries adopt this perspective, the small scale farmer, tomato seller, or beaded jewelry maker that doesn’t even have a business address will now receive fair considerations in policy decisions and government activities. However, the activities of informal business owners need to be legitimized and quantified to enable the government to make provisions for them.
More than 1,250 participants took part in the 25th WEFA from 3rd to 5th June 2015. The meeting was themed “Then and Now: Reimagining Africa’s Future”. Among the participants were leaders of countries, NGOs, researchers, and owners of corporations.
In 2014, the coordinator of the United Nations Development Programme (UNDP) in Nigeria had announced that Nigeria’s informal sector accounted for not less than 58 percent of the nation’s rebased Gross Domestic Product (GDP). This, after a pilot study on ‘Informal Sector and Economic Development in Nigeria’ in collaboration with the National Planning Commission and other local agencies.
Five African leaders sat in on a BBC-televised session to discuss how to alleviate youth unemployment in Africa through the informal sector; the session was titled: ‘Informal is the new normal’. Amissah-Arthur said that informal producers and traders are, in fact, the mainstream of many economies throughout the continent, and governments must respond with policies that recognize this fact. Ghana has already taken the gauntlet by setting up a pension system for rural farmers with convenient bank accounts that do not require such requirements as utility bills and employment letters. The youth are been equipped with training initiatives, and easier credit access is being enabled for small companies. According to the Ghanaian vice-president, these small but progressive steps are aimed at closing the gap between the formal and informal sectors.
Mandla Sibeko, Mineonline Africa chairperson and founder of Seed Capital Investments SA identified that the informal sector is dominated by the youth due to insufficient employment opportunities in the formal sector. “The future of Africa is self-employment and creativity. The young are forced to be in the informal sector, so their future has to be self-creation” said Sibeko, noting that Africa needs to create 80 million jobs each year to keep up with the numbers of young people reaching working age. Sibeko also urged that young people and small enterprises should be given more space and incentive to be creative so that their businesses can evolve.
The global chairman of KPMG International, USA, John B. Veihmeyer, also observed that many young people in Africa have a formal-sector job by day and a second, informal, job at night. “Policy initiatives to grow economies cannot differentiate between these two elements; it’s not either-or. Growth should be about lifting all boats in the sea,” he said.
Also present at the session, were Winnie Byanyima, Executive Director of Oxfam International and Lerato Mbele, a BBC Africa business correspondent.