Collaboration between formal and informal enterprises in the construction sector in Tanzania

Abstract

The construction industry in developing countries comprises a regulated formal part and unregulated informal part. This paper discusses the linkages between the formal and informal parts (or sectors) of the construction industry in Tanzania, based on information gathered from structured interviews with both registered and unregistered contractors undertaken in 1999/2000. It is shown that there is a symbiotic relationship between the two groups of contractors, with registered contractors providing an important source of work and income for the unregistered contractors and the latter being an important supplier of labour to the former. Despite this, the informal part of the construction industry is generally ignored and receives little support from the government. It is argued that policies to develop the construction industries of developing countries should address the needs of the informal sector, where the bulk of the labour force is found, as well as those of the formal sector. A classification system for informal contractors is proposed as a basis for formulating programmes for the development of the informal construction sector.