We are getting accustomed to the words “trade in the informal sector” whenever we are discussing the economies in developing countries; or shall we say underdeveloped countries or perhaps emerging economies.
There are a myriad ways of trying to describe economies on the African continent.
The African Development Bank, through the words of Zimbabwean-born Professor Mthuli Ncube, reported that the informal sector contributes about 55% of Sub-Saharan Africa’s GDP, 80% of the labour force and 90% of rural and urban workers, most of whom are women and youth, have informal jobs in Africa.
The original use of the term informal sector is attributed to the economic development model put forward by Sir William Arthur Lewis (January 23, 1915 – June 15, 1991) who was a Saint Lucian economist well known for his contributions in the field of economic development; in 1979 he won the Nobel Memorial Prize in Economics.
He used informal sector to describe employment or livelihood generation primarily within the developing world. The term was used to describe a type of employment that was viewed as falling outside of the modern industrial sector.
What is interesting is that governments are always trying to regulate their economies through different policies and regulations in areas such as taxation.
Hernando de Soto Polar, a Peruvian economist known for his work on the informal economy and on the importance of business and property rights, in his book El Otro Sendero (1986) (published in English in 1989 as The Other Path) argues that excessive regulation in the Peruvian (and other Latin American) countries forced a large part of the economies into informality and thus stifling economic development.
While accusing the ruling class of the 20th century mercantilism; an economic theory and practice that focuses on governmental regulation of a nation’s economy, de Soto admires the entrepreneurial spirit of the informal economy.
In a widely cited experiment, de Soto’s team tried to legally register a small garment factory in Lima. This took more than 100 administrative steps and almost a year of full-time work.
In the second half of the 1990s many scholars have started to consciously use the term “informal economy” instead of “informal sector” to refer to a broader concept that includes enterprises as well as employment in developing, transition, and advanced industrialised economies.
Let us look at what the informal economy looks like closer home. Check how many shops are selling clothing that are run by individuals procuring their stock from South Africa, China and Dubai among other places.
The procurement and selling of electronic gadgets and furniture is part of their business. These individuals are allowed by the authorities to carry out their business on a daily basis, apparently on the basis that they are running their business in formal settings.
There are other layers in the informal sector who are constantly in running battles with the law enforcers.
The question that we should pose is where does the informal economy start and stop. Do we have a “formal” informal economy that is tolerated by the authorities and another “informal” informal economy that has to be squashed? In the formal economy we have multinational conglomerates, national companies and small enterprises.
These are different players that are differentiated according to their sizes.
Would it be out of place to assume that the informal economy is inherently structured according to the size of the players, just like the formal economy?
Just scanning the local environment one could see that those that are labelled as vane zvinhu zvavo (the ones with their own means); the Established Crew who operate a few outlets of their enterprises across a geographic area, selling a multiplicity of different commodities.
Then there would be the zvavo zvirikuita (their things are stabilising); the Upcoming Crew who are finding their feet running, running business in shared floor spaces.
There is the lot that is vulnerable to the jaws of poverty, the struggling lot, vari kukiya kiya (the ones who are improvising to put the next meal together).
The Kiya Kiya crew are the ones who are at the mercy of the law enforcers.
In the “Kiya Kiya” crew, there is a mixture of those selling illicit merchandise and others who are selling genuinely procured items, I am not advocating for the protection of those selling illicit stuff.
The Kiya Kiya crew sells their goods in the most of informal manners of doing business; walking around offices, residential premises, vending on the streets, selling in public places such as commuter omnibus ranks.
There is an African proverb that says “It is from a small seed that the giant Iroko tree has its beginning”. The “Kiya Kiya” crew will hopefully someday grow into the Upcoming Crew then graduate to the Established Crew.
The circle of poverty is what forces the Kiya Kiya crew to brave the constant battles with authorities to still continue in business.
These people are on the fringes of destitution, they are hanging on the cliffs of starvation; should they fail to recoup the little they would have invested in the items they would have bought for resale.
The authorities argue that these people are breaking the law by selling in undesignated areas and do not have the necessary trading licences.
Let me hasten to pose this question to the municipal and other relevant authorities. How many pick-pockets do exist on the street of the vast African cities?
Do they operate in designated areas? Yeah could be so; suppose they allocate each other terrotories. Can they be identified? Is it not true that we only identify their work when a mobile device, wallet or cash “vanishes” from someone’s pocket or handbag?
Are these pick pockets not worse than the Kiya Kiya young men selling shoes, belts, wallets along the street, or the widowed mothers hawking tomatoes next to the commuter omnibus ranks.
When the authorities are on the trail of young men trying to earn an honest living through entrepreneurship; are we not forcing them to go underground as pickpockets. People will always have families to feed and extended families that need assistance.
That will not change whether there is low or high unemployment. If we push the widows from selling fruits, we may then be pushing them into prostitution for their children need to be looked after.
Why would developing countries adopt developed world policies of thwarting informal economy small traders when these developing countries can neither create formal employment nor provide social financial support for these poor folk?
Providing stalls for people to sell fruits and vegetables in more hygienic conditions is better for the consumer and for the struggling vendor trying to make a living. Municipalities’ levies to prospective vendors should be minimal levies.
If the streets of developing countries are to be lined by organised vendors then that should not be seen as an anomaly just because the street in the developed world show little sign of any of the poor struggling to make a living. Guess what, maybe vendor stalls lining our streets and numerous organised flea markets could be the developing countries’ tourist attractions.
Maybe authorities need to heed the late musician Tongai Moyo, who in most of his songs appreciated the Kiya Kiya crew, he would hail the Hwindis (touts), Makorokoza (gold panners), Tongai says in one song “even a tout gets to wed one day” (as translated from Shona).
Let us reform the municipal laws and regulations that are detached from plight of society. Were these instruments drafted with full appreciation of the present state of rampant poverty? I guess not. So when are the legislators going to take time to contextualise these seemingly irrelevant rules? The informal economy is feeding families that could easily be starving. There is a need to organise the sector, not frustrate its operations with medieval regulations.
We are Africans, we are unique in terms of our culture, economy, history and our people.
Our economies are informal to a large extent yet we seem to put in place systems to crash the informal economy. Remember vendors or touts are job roles whose incumbents are citizens trying to make a living without turning into beggars.
Here is a challenge to the journalists, next time you decide to publish a picture of a tout or vendor who is busy with their daily business, remember your story is incomplete.
The story is only complete when we are shown other pictures of the tout’s family getting down to a meal, their children in school (with school fees fully paid).
The police officer who stands next to the tout and is seemingly doing nothing about the tout who is supposed to be breaking some law may not be wrong. The officer realises that the tout is better off ‘touting” than pickpocketing; that is better for the society at large. We are in Africa, let us recognise that the informal economy is a reality and here to stay. Touting and vending is genuine work.
Africa Day is upon us; lets thinks like Africans, for the benefit of Africans in Africa.
Sam Hlabati is a Senior Professional in Human Resources (SPHR®), a Certified Compensation Professional (CCP®) and a Global Remuneration Professional (GRP®). Email: firstname.lastname@example.org; twitter handle; @samhlabati.