Informal Business Sector Research Articles

Intertwining lives and logics: Household and informal economies in Cape Town

Enabling households to make ends meet, the practices of small, informal businesses are not simple, but bound up in the struggles of households and the social and economic relationships that weave local economies together. This paper draws on stories of local businesses in an impoverished Cape Town township to situate these diverse logics and strategies, the histories and aspirations that shape small business success and struggle. Drawing on interviews and mapping every informal sector business in the neighbourhood, I reflect on the specific difficulties of running a business in the context of poverty, including unreliable and inadequate incomes, difficulties of credit, as well as the challenges of operating business on a small scale. This material demonstrates the community-based, as well as livelihood, logics that motivate local business owners as well as sustain their livelihoods. The paper concludes with an argument that the neighbourhood economy, instead of a vehicle driven primarily to maximize profit, forms an intimate part of peoples’ lives. This more multifaceted and embedded analysis stretches overly narrow notions of the informal economy, its limits and logics.

Unpacking business tourism mobilities in sub-Saharan Africa

As considerable numbers of people in emergent world tourism regions engage in independent business travel, meeting, incentives, conferences and exhibitions tourism or practices of informal business tourism the theme of business mobilities merits greater attention in the evolving tourism scholarship of these regions. This article interrogates existing scholarship and research issues pertaining to understanding evolving tourism mobilities specifically in the emerging tourism region of sub-Saharan Africa, where, arguably, more than in any other region of the global tourism economy, the topic of business mobilities merits high priority attention. For sub-Saharan Africa as a whole a growing weight of evidence suggests that business tourism flows – domestic and intraregional – account for a larger share of tourism movements than leisure tourism. In interpreting the complex flows of business mobilities in the African continent it is necessary to go beyond dominant Northern conceptions of what constitutes a business tourist and in particular to understand the activities of the informal-sector business tourist. A useful start point for unpacking business tourism mobilities is to differentiate and apply a typology of international formal-sector tourism, international informal-sector tourism, domestic formal-sector tourism and domestic informal-sector tourism.

Vocational Skills Development for Youths in the Informal Sector of the Economy in Africa

It is generally recognised that the development of relevant skills is an important instrument for improving productivity and working conditions, and the promotion of decent work in the informal economy, which represents the major employer in Africa. The increasing recognition that higher technical and vocational skills are crucial in enhancing competitiveness and contributing to social inclusion, decent employment, and poverty reduction has been a strong incentive for reform. African countries are therefore working towards improving the quality and skills levels of their labour forces. This is being facilitated through the Technical and Vocational Training Institutes. Education and skills can open doors to economically and socially rewarding jobs and can help the development of small informal-sector businesses, allow the re-insertion of displaced workers and support the transition from school to work for school drop-outs and graduates. Ultimately, developing job-related competencies among the poor, the youth and the vulnerable is recognised as crucial to progress in economic development and reducing poverty. The challenge is now to scale-up on the basis of successful pilot programmes. The number of enterprises capable of offering work-place training opportunities is limited, while many training institutions have poor delivery capacity and commonly lack funding. In turn, training programmes do not produce skilled graduates because training is of poor quality and the equipment obsolete. Many youths cannot access formal TVET, and few countries have training policies which emphasise skills development in the informal sector. Other obstacles include the low prestige of formal TVET in the eyes of the general public and parents who consider it to be an option suitable only for pupils who perform poorly in general education. This paper aims at providing a picture of technical and vocational skills development in African countries, exploring challenges and bottlenecks, highlighting good practices, and identifying priorities for further research. Specifically, the objectives will be to (a) update knowledge about the status of technical - vocational education and training in the African region, (b) explore issues and recent developments, and (c) distil a set of lessons and policy messages to guide skills development in the region. The focus of the analysis will be on the economics of skills development. Provision of financing of TVET will be examined through the lens of economic efficiency, balanced with attention to social equity.

Tax Law: Anti-Template and Laboratory for Formal Business Law in the Informal Sector

A substantial majority of non-agricultural workers in a developing country such as Cameroon engage in legal businesses below the governmental radar, that is, in the informal sector. Because the financial crisis has expanded the informal sector in the global North, developing economies’ experience with that sector is of world-wide relevance. A pilot study in five Cameroonian markets is thus of general interest when it reveals that entrepreneurs there do not benefit from formal business laws, which in turn limits their ability to borrow and their willingness to lend. Formal business laws do exist in the formal sector; however, trying to move informal-sector workers to the formal sector where these laws already offer some protection can disrupt the entrepreneurs’ ability to sustain themselves, and to contribute to the national economy. As to bringing the formal business laws to the workers in the informal sector: the one formal law that the interviewees appeared to experience was tax law. The interviewees described a government using power to extract payments, instead of deploying strategies of respectful reciprocity and providing public goods which, according to the tax-morale literature, would encourage compliance. The experience of Cameroon’s informal sector with formal tax law is thus not an appropriate template for introducing formal business laws into that sector. The pro-business strategy is, instead, to apply tax-morale learning to reinforcing formal business laws. For informal-sector businesses wherever located, the strategy calls for government authorities that are respectful, and focused on building basic infrastructure.

Informal Sector Business Tourism in the Global South: Evidence from Maseru, Lesotho

Domestic tourism is a neglected theme within tourism scholarship about the global South. This article addresses informal sector domestic tourism and is anchored upon the typology of tourism by Gladstone (2005) in which distinctions are drawn between international and domestic tourism and formal and informal sector tourism. The specific focus is informal sector business tourism, the nature of which challenges Western definitions of business tourism. The study reports findings from 52 interviews conducted with informal business tourists and accommodation providers in Maseru, Lesotho’s capital city. It is revealed the nature of low-income informal sector business tourism in the global South is radically different to that of conventional business tourism in terms of its organisation, characteristics of business tourists, and impacts. Arguably, informal sector business tourism is inherently pro-poor in its local impacts. Further comparative research work is required concerning these forms of ‘invisible’ tourists in African cities.

Informal Sector Business Proliferation: Harnessing Potentials for Development in Ghana

The rapid and enormous growth of the informal sector, in spite of its erratic and muddling characterization, provides immeasurable backing for the nation’s economy. This implies that the development of the nation may leapfrog to a boastful height if available resources and opportunities are converged, organized, coordinated and regulated. This study focused on how potential skills within the sector could be harnessed toward the achievement of the first Millennium Development Goal (MDG) in Ghana. The paper was purely based on the review of literature, summarizing and giving a critical and evaluative account of existing knowledge related to the area of study. The trends of the informal sector is considered and seen from various studies to be growing and supportive of the economy. Unrelenting efforts to get organized and coordinate the activities of the sector are on-going. Concurrently, several other studies imply the need to revamp the sector (reinforcements, and changes in focus and strategies) in order to achieve the MDGs. The study reveals that development needs keep increasing, bringing along the need for augmented support. Challenges leading to failure in achieving success in the informal sector are slow employment-generating growth, absence of structural economic transformation, high demographic pressure, inappropriate education and training policies, failed labour regulations, no enabling environment for investment, economic choices motivated by politics, and brain drain. Recommendations made to extricate the confusion and guide policy-making for organized informal sector activities include lower-level collaborative partnership (LLCP), clustering and networking, just to mention a few. Key words: Informal sector; Informal sector employees; Lower-level collaborative partnership (LLCP)

The rise of informal entrepreneurs in Zimbabwe: evidence of economic growth or failure of economic policies?

This paper investigates whether the rise in the number of informal entrepreneurs in Zimbabwe is linked to economic growth or failed government policies. It argues that for the past 30 years informal economic activities have proliferated at an unprecedented rate as a response to socio-political and economic challenges and thus became a default position, for many to escape debilitating poverty. It draws from the literature, the experiences of one of the authors who is a Zimbabwean and views of interviewees. The major finding is that the contribution of informal traders in Zimbabwe cannot result in sustainable development nor can it significantly increase economic growth. The paper concludes that the rise in informal sector business is rather indicative of a lack of accountability for the plunder of resources and its attended consequences and failure of government economic policies. Finally, it proposes the adoption of social entrepreneurship approaches to address social problems.

Entrepreneurship and the Business Environment in Africa: An Application to Ethiopia

Since mid-2000s, Ethiopia has been one of the fastest growing countries in the world. However, productive entrepreneurship in high-value added activities has made limited contributions to this growth, in part because of a weak business environment. Moreover, the low-productive firms in the informal sector still account for a large share of employment. Reflecting these facts, this paper presents a model of costly entrepreneurial start-ups in an economy with a large informal sector and rigid business environment where an equilibrium outcome can be a low-skill, low-productivity trap. By fostering productive start-ups and skilled employment, creation of an enabling business environment could help move the Ethiopian economy into high-productivity equilibrium.

The growth of artistic nationalism in Senegal

ABSTRACT. In the 1960s, Senegal's first national leaders narrowly defined how artists should practise nationalism through their work, particularly in the weaving craft, and enforced this definition through selective state patronage. This ideological and stylistic control echoed state control over economic markets. As subsequent administrations have restructured the economy, leading to a powerful informal business sector, so have independent contemporary weavers redefined artistic nationalism. Using ethnographic and archival interviews, this article examines nationalism in Senegalese weaving, placing the perspectives of contemporary weavers alongside those of two arts administrators who helped to develop state‐sponsored programmes in the 1960s and 1970s. I argue that contemporary weavers find inspiration from Senegalese nationalism of the mid‐twentieth century, yet have modified it to encompass individual expression. Because definitions of artistic nationalism in Senegal have shifted, it remains a significant ideology within the national arts scene.

Informal-Sector Entrepreneurs, Development and Formal Law: A Functional Understanding of Business Law

The informal sector represents 40-60% of Sub-Saharan Africa’s GDP, and employs as much as 93% of non-agricultural workers in Sub-Saharan Africa. Given the importance of this sector, and given the understanding that formal law does not penetrate easily or predictably there, classic business law alone cannot create for informal-sector nano-entrepreneurs an environment comparable to that enjoyed by a business person in the global North.Reform of business law must focus on functionality: how to assist informal-sector businesses by increasing the predictability of transactions while limiting government abuse, all in connection with the formation, operation, and, ultimately, termination of businesses. The attack is two-pronged. Formal law can constrain formal-sector actors, such as some landlords transacting with informal-sector businesses, and mandate that formal-sector actors provide pro-business realities that Northern businesses enjoy, including sanitary work environments. With respect to the informal-sector nano-entrepreneurs, who tend not to be directly affected by formal business laws, but who do have a legal a quasi-traditional legal regime that affects businesses, formal laws that reinforce existing business norms will be the most effective in supporting North-style predictability. Further, a modern legal study focused on the formal sector suggests that, in Sub-Saharan Africa where the legal regimes tend to be highly centralized, formal law can be most effective for nano-entrepreneurs if it assists them in coordinating and, ultimately, in creating or negotiating for basic protections taken for granted by businesses in the global North.

Heading Households and Heading Businesses: Women in the Urban Informal Sector in Southern Ethiopia

The study was aimed at assessing female labour force participation in the urban informal sector with a view to reflecting on their roles in heading households and heading businesses. The target groups were women entrepreneurs running informal sector businesses in two towns of Gedeo Zonei in SNNPRii. Using a multi-stage sampling procedure relevant information was collected from owners of 150 (90 from Dilla town and 60 from Yirgacheffe town) informal sector premises. The methods used to obtain the data included household surveys, personal observations and book and document reviews. The results of the study reveal that female -headed households are challenged by the dual role of heading households and heading businesses. Poor business premises, unstable and inadequate income, and other constraints related to access to credit facilities, equipment, market and inputs were observed. The empirical analysis on the determinants of level of living and earnings identified some factors of policy relevance. Most of the variables are statistically significant. The study urges the need to develop strategies that empower women with regard to their economic rights, assigning a value to their productive roles and subsistence activities. Keywords: gender, informal sector participation, productive roles and household securityEthiopian Journal of Development Research Vol. 29 (1) 2007: pp. 71-98

Measuring Business Skills Cognition: The Case of Informal Sector Entrepreneurs in Kenya

There has been an increased interest in informal sector business activities. One of the major concerns has been the cognitive abilities of the participants of this sector, especially in view of the liberalised and highly competitive nature of business operations today. This paper presents and discusses findings of a study on measuring Business Skills Cognition among informal sector business owners. Data were collected from 208 respondents distributed over nine trading centres in both urban and rural Kenya. Business Skills Cognition was measured using three instruments to yield a continuum of scores ranging from 45 to 265 points. It was found that informal sector business owners differ in the various dimensions of business and in Business Skills Cognition. The findings are important in evaluating the usefulness of the informal sector in employment creation and the ability of the participants to earn a comparative advantage in an increasingly complex and competitive free market system.

Colonial secondary education in a global age: Economic

Retaining a secondary education structure designed during British colonial times has resulted in a secondary education system ill suited to serve the labor market needs of Bangladesh. As the country enters an era when increasing numbers of people move away from subsistence farming lifestyles into the informal and small business sector, Bangladesh requires a system that provides large number of people with basic skills for such activities. The economic distortions caused by a secondary sector mismatched with the realities of the labor market result in ongoing income inequalities, unnecessary demand for secondary education growth, and expenditures for private tutors by parents who can ill-afford such services.

ISTARN – an approach to informal sector business support in Zimbabwe

There is renewed interest in ways to support small businesses using a broader range of activities than the now traditional credit programmes. This article looks at a project which is developing a range of integrated development services for informal sector businesses in Zimbabwe.

Business English for black adults in Cape Town's Khayelitsha and Nyanga

The Second Language course in business English was especially designed to integrate the teaching of basic language skills, business skills and thinking skills. The article provides brief background details of the educational needs of black South Africans. It describes the methodology used in the course, namely modern communicative methods and the accelerative learning techniques of Georgi Lozanov; the reactions of the students to the various teaching techniques; and the results attained in pre- and post-tests. The course in business English forms part of the Entrepreneurial Skills Development Programme which was developed by the University of Stellenbosch to help unemployed black South Africans with little or no education or training to become self-employed in the informal business sector.