Far from being peripheral, Africa’s informal sector stands as the cornerstone of socioeconomic resilience, serving as the primary engine of employment and livelihood for an overwhelming majority of the continent’s workforce.
In Sub-Saharan Africa, the informal sector employs a staggering 90% of the labor force and contributes up to 62% of GDP, effectively forming the backbone of economic activity. This sector’s significance extends beyond mere employment statistics, as it accounts for 30-40% of regional trade through informal cross-border transactions. The sector’s pervasive nature is further underscored by its dominance in urban areas, where it accounts for 80.8% of jobs, with even higher participation rates among youth (95.8% for ages 15-24) and women (92.1%).
This expansive reach positions the informal sector as a critical buffer against economic shocks and a vital contributor to poverty alleviation. However, the sector’s centrality to social well-being is often underappreciated due to its unregulated nature and exclusion from official economic metrics. This misperception overlooks the sector’s role in providing essential goods and services, ensuring food security through street vending, maintaining urban mobility via informal transport, and offering a social safety net where formal systems are lacking.
This expansive reach positions the informal sector as a critical buffer against economic shocks and a vital contributor to poverty alleviation. However, the sector’s centrality to social well-being is often underappreciated due to its unregulated nature and exclusion from official economic metrics. This misperception overlooks the sector’s role in providing essential goods and services, ensuring food security through street vending, maintaining urban mobility via informal transport, and offering a social safety net where formal systems are lacking.
