Informal Sector Activities Research Articles

Insurance Services, Sustainability, and Transformation of Businesses in the Nigerian Informal Sector: A Conceptual Review

ABSTRACT This study explores the impact of insurance services and the sustainability of businesses in the Nigerian informal sector. The analysis relies on extant literature sourced from various sources to develop an understanding of the current trends of insurance services in the Nigerian informal sector and develop a suggested model for improved insurance service delivery in the Nigerian informal sector. Findings show that stakeholder commitment is necessary for better impact of insurance services in the sector. The conclusion emphasizes the possibility of business sustainability through consolidated insurance services among stakeholders in the sector. Part of the suggestion for further research is the need for a wider focus on insurance practices both in the formal and informal sectors of the Nigerian economy. This is coupled with an exploratory view on the impact of policy development on insurance support to business activities in the Nigerian informal sector.

The Problems of Management of Informal Sector Activities: A Case Study of Ikwo Local Government, Ebonyi State, Nigeria

There have been growing concerns about the persistent rise in the size of the informal sector given the troubles and difficulties it presents the government in keeping an actual record of all economic activities in the state. This study investigated the reason behind this continuous rise and how this continuous rise has affected the management of informal activities in Ikwo Local Government. Adopting the Binary Logistics Regression (BLR) model, the study analysed a cross sectional dataset obtained from 200 informal sector operators. Based on the result of the empirical findings, the study discovered that government policies was a major factor that pushed individuals into the informal sector and that the persistent rise in the size informal sector was a strong factor that have made managing the sector difficult for the government. Therefore, the study established that if the government can reduce its tax rates, cut down a bit on the bureaucratic protocols in the formal sector, many informal operators will be encouraged to operate in the formal sector and thus contribute maximally to the overall economy of the state.

The Unequal Economic and Livelihood Impacts of COVID-19 Lockdowns: Qualitative Evidence from Uganda.

Lockdowns were a key policy response to the COVID-19 pandemic. While they were viewed as a necessary intervention, concerns were raised about their potential for harmful economic and livelihood impacts. However, few studies have addressed the unequal economic and livelihood impacts of lockdowns. Our article reports findings from a qualitative study conducted in Uganda on economic and livelihood impacts of COVID-19 lockdowns in urban and rural settings. This study used 14 focus group discussions, 40 household, and 31 key informant interviews in both urban (Kampala district) and rural (Wakiso district) areas in central Uganda. Data analysis was conducted thematically with NVivo 2020 (QSR International). The findings emphasize the unequal impacts of the COVID-19 lockdowns across a range of dimensions: informal sector activities, formal employment, fluctuating prices alongside scarcity and surpluses, food insecurity, and government interventions. Wealthier households in urban areas were least affected, with urban households reliant on informal sector activities experiencing the most significant impacts. Our findings also suggest that longer-term development strategies, such as increased food self-sufficiency and informal sector interventions can support future pandemic preparedness and response. To address these impacts, policymakers should provide targeted support, alongside protecting key productive sectors, and supply chains.

Informal Sector, Vulnerability and Social Protection in the COVID-19 Era: Issues, Challenges, Prospects and Lessons Learnt

The paper considers the plight of vulnerable groups operating in the informal sector in Botswana during the COVID -19 Era, and further explores the pragmatic initial responses to these challenges, by the Government authorities in Botswana. The purpose is to highlight lessons that other countries in the SADC region and beyond can glean from Botswana’s commendable initial responses to the impact of the COVID-19 induced measures on vulnerable groups, particularly those who derive their livelihoods from informal sector activities.

The Production of Space in the Informal Waste Economy

This study explores the dynamics of the informal waste economy in an informal settlement in Tondo, Manila, highlighting its role in shaping urban form. While waste pickers significantly contribute to solid waste management (SWM) through the recovery, recycling, and diversion of waste, they are constantly exposed to harmful environments and substandard living conditions that remain unaddressed by formal systems and urban planning. Additionally, their impact on urban form is frequently sidelined, despite operating within SWM – an urban system that is inherently spatial. To examine the spatial outcomes of informal waste sector (IWS) activities, the research examines the historical and geographic context of the Vitas Temporary Housing Facility in Tondo, the agency and networks of its waste pickers, and the spatial outcomes of their activities. Findings reveal that the waste-picking community functions as an agglomerated informal economy operating as an informal materials recovery facility (MRF), with decentralized waste management activities integrated into residential and commercial spaces. This integration creates a unique urban landscape that highlights the need for sustainable, inclusive, and adaptive SWM solutions and urban planning strategies that consider the agency of waste pickers, the distribution of informal SWM functions within their networks, and the spatial organization of the urban environment they co-create within their communities.

Factors influencing road setbacks and urban open space encroachment by traders in Nigeria: A narrative review

In many developing countries, especially Nigeria, informal sector activities such as roadside trading, hawking as well as roadside squatting has become increasingly prevalent. Although these activities are often seen as survival strategies for the low-income population with no other means of earning a living, nonetheless, they have negative impacts on the environment and traffic flow and can also compromise the safety and security of the traders. This study aims to explore the factors that contribute to the growth of this phenomenon on encroached highways, urban roads, and open spaces, and to examine its effects on both the environment and the traders. Using a narrative review approach, the research analysed relevant books, journals, conference papers, reports, and policy documents extracted from Scopus, Web of Science and Google Scholars databases. The study findings revealed that economic crises and high levels of unemployment in developing countries have led to an increase in street trading and roadside vending. In addition, the lack of effective urban planning and enforcement of development control laws has also played a significant role in the proliferation of these activities on encroached urban roads and green spaces. Consequently, on highways, the absence of organized and standardized Rest and Service Areas (RSA) at regular intervals in developing countries, especially Nigeria, has facilitated the emergence of roadside markets. Furthermore, this situation is compounded by the location of agrarian settlements along the highways. Thus, to address these issues, the research recommends that the government reorganize, integrate, and upscale the activities of street traders, while also improving urban planning and enforcing road right-of-way barriers to protect urban green spaces and conclusively, the introduction of standard RSA at regular intervals along highways would provide motorists with necessary rest and services, discouraging them from stopping indiscriminately on transits, which often leads to the emergence of roadside markets.

Asymmetric role of the informal sector on economic growth: Empirical investigation on a developing country

The role of the informal sector in economic growth still remains an issue of debate. This study contributes to resolving this by taking into account the asymmetric effect of the informal sector on economic growth. The study applies the Non-linear Autoregressive Distributed Lag (N-ARDL) model to capture the asymmetric relationship between the informal sector activity and economic growth for the period 1982–2018 in Bangladesh. The estimation of the N-ARDL model reveals that the informal sector asymmetrically affects the domestic output and economic growth in Bangladesh for both the short-run and the long run. The study has observed an asymmetrically larger effect on output and economic growth from the falling contribution of the informal sector. Urbanization and capital growth also contribute to an increase in economic growth. Therefore, proper incentives and careful policy measures are suggested to effectively diminish the prevalence of informality and promote its transition towards a more formalized framework.

Potential demand for National Health Insurance in Zimbabwe: Evidence from selected urban informal sector clusters in Harare.

Zimbabwe's tax-based healthcare financing model has been characterised by perennial financing deficits and widespread application of user fees and has thus been socially exclusive. The country's urban informal sector population is not spared from these challenges. The study explored the potential demand for National Health Insurance (NHI) among respondents from selected urban informal sector clusters of Harare. The following clusters were targeted: Glenview furniture complex, Harare home industries, Mupedzanhamo flea market, Mbare new wholesale market and Mbare retail market. A cross-sectional survey was administered to 388 respondents from the selected clusters, and data on the determinants of Willingness to Join (WTJ) and Willingness to Pay (WTP) was gathered. Respondents were recruited via a multi-stage sampling procedure. In the first stage, the five informal sector clusters were purposely selected. The second stage involved a proportional allocation of respondents by cluster size. Finally, based on the stalls allocated by municipal authorities in each area, respondents were selected using systematic sampling. The sampling interval (k) was determined by dividing the total number of allocated stalls in a cluster (N) by the sample size proportionate to that cluster (n). For each cluster, the first stall (respondent) was randomly chosen, and thereafter, a respondent from every 10th stall was selected and interviewed at their workplace. Contingent valuation was adopted to elicit WTP. Logit models and interval regression were applied for the econometric analyses. A total of 388 respondents participated in the survey. The dominant informal sector activity among the surveyed clusters was the sale of clothing and shoes (39.2%), followed by the sale of agricultural products (27.1%). Concerning employment status, the majority were own-account workers (73.1%). Most of the respondents (84.8%) completed secondary school. On monthly income from informal sector activities, the highest frequency (37.1%) was observed in the Zw$(1000 to <3000) or US$(28.57 to <85.71) category. The mean age of respondents was 36 years. Out of the 388 respondents, 325 (83.8%) were willing to join the proposed NHI scheme. WTJ was influenced by the following factors: health insurance awareness, health insurance perception, membership to a resource-pooling scheme, solidarity with the sick, and household recently experiencing difficulties paying for healthcare. On average, respondents were willing to pay Zw$72.13 (approximately US$2.06) per person per month. The key determinants of WTP were household size, respondent's education level, income, and health insurance perception. Since the majority of respondents from the sampled clusters were willing to join and pay for the contributory NHI scheme, it follows that there is potential to implement the scheme for the urban informal sector workers from the clusters studied. However, some issues require careful consideration. The informal sector workers need to be educated on the concept of risk pooling and the benefits of being members of an NHI scheme. Household size and income are factors that require special attention when deciding on the premiums for the scheme. Moreover, given that price instability hurts financial products such as health insurance, there is a need for ensuring macroeconomic stability.

Informal Saving Groups and Its Effect on Monetary Activities Of Nepal

The informal sector activities account for a significant proportion of production, consumption, and employment in the country. However, informal firms tend to be small and are unable to provide basic goods and services to the entire population. Additionally, informal workers are more likely to be poor and earn lower wages compared to their formal sector counterparts. The government of Nepal is actively working to address these issues, including the enforcement of anti-money laundering (AML) regulations in the banking, finance, and cooperative sectors. However, the enforcement of AML regulations should be approached cautiously to prevent the potential transfer of informal money to other sectors and to avoid security problems. The study aims to explore the relationship between various economic indicators and informal monetary activities in Nepal, with a focus on finding ways to regulate and formalize these activities. Large samples of 385 were surveyed through structured questionnaire. The informal economy in Nepal has important macroeconomic consequences, and the government is working to address the challenges it poses. However, the enforcement of AML regulations should be approached cautiously to prevent the potential transfer of informal money to other sectors and to avoid security problems. The study aims to explore the relationship between various economic indicators and informal monetary activities in Nepal, with a focus on finding ways to regulate and formalize these activities. Keywords: Informal monetary activities, Hidden economy, AML regulations, Small saving groups, Remittance

Urban mining versus Artisanal and Small-Scale Mining (ASM): An interrogation of their contribution to sustainable livelihoods in sub-Saharan Africa

Electronic waste (e-waste) recycling and artisanal and small-scale mining (ASM) are activities that are increasingly finding uptake as a means of providing livelihoods in the face of high unemployment, especially in the developing world. Informal e-waste recycling is typically practiced by individuals or groups of people who collect end-of-use and end-of-life electronic and electrical equipment which they can repair or refurbish and resell as well as break down to sell valuable components. E-waste recycling is a form of urban mining; thus, the intention of the paper is to draw parallels between this form of mining and artisanal gold mining. Artisanal miners extract virgin minerals while ‘urban miners’ reclaim metals from various waste streams. Both sectors are characterized by high levels of informality and their activities are largely practiced as a means of livelihood. We used the sustainable livelihoods framework (SLF) as a tool to draw this comparison based on available literature on the two sectors, complemented by anecdotal field data. It was found that the livelihood capitals are similar between the two sectors and that there are strong similarities in the vulnerability contexts, with a notable difference being that informal ASM, which has a more significant interaction with the natural environment, places higher demands on natural and physical capital such as land and water pollution and limited access to transport. Recommendations are made on how to strengthen the different capitals of sustainable livelihoods in the hope that these will inform policy decisions on informal sector activities.

Millennials and the gender wage gap: do millennial women face a glass ceiling?

PurposeThis study aims to measure the gender wage gap among millennial workers in Colombia and determine if there is a marked wage difference between millennial women and men. Furthermore, this study analyzes whether millennial women face a glass ceiling, that is, whether there is a larger gender wage gap among workers earning relatively high wages.Design/methodology/approachThe study data included a sample of 2,144 millennial workers employed in 11 organizations located in the five main cities of Colombia. Oaxaca–Blinder econometric methods of wage decomposition were used to calculate both raw and adjusted gender wage gaps. The latter results in estimating the gender wage gap while controlling for observable characteristics related to individual, family, and labor. In addition, wage decompositions by education levels were carried out to approximate the extent of the glass ceiling among young workers.FindingsThe results show that millennial workers in Colombia face gender inequality in the labor market and that professional millennial women experience a distinct glass ceiling. The adjusted gender wage gap is 9.5%, and this gap increases with education level, increasing to nearly 14% among college-educated workers.Research limitations/implicationsThe empirical results are supported by a self-report survey of millennial workers. An important limitation is that the data include millennial workers employed in the formal sector and exclude the informal sector (activities not regulated or protected by the state), which represents an important part of the economy in developing countries.Originality/valueThis paper contributes to the empirical literature on gender wage inequality for younger workers. This paper is original in reviewing the gender pay gap in Colombia using a primary dataset. Most of the work in this area has been done in developed countries and this research adds to the findings that have had focused on those nations.

Sustainable activities for the informal sector traders in the post-covid-19 in the public space around the Manahan Sport Stadium Area Surakarta City

The activity supports as one of the elements of urban designs which grow and develop because there are the main activities there are informal sector traders that can provide job opportunities for the jobless people due to the pandemic. However, those particular objects places in the public space are often considered to interfere with other activities around it, so finally, it becomes an element out of place. In addition, the condition of disturbing others done by informal sector traders also occurred in Surakarta City, which much disrupted, whereas actually their informal sector trader activities were basically needed to support their own needs. It is a real urban activity that must be accommodated, so it can turn into an in-place element and impact sustainable activities even during the pandemic. In supporting the sustainable activities of informal sector traders in the post-Covid-19, it was done research aimed to explain sustainable activities for informal sector traders in the post-Covid-19 public spaces. The method used was a quantitative method through questionnaires, observations, and cross-tabulation to analyze the characteristics of sustainable activity for informal sector traders in the post-Covid-19 public spaces. The results showed that the characteristics of sustainable activities for informal sector traders include the main activities based on the area, the type of products, trading facilities, a trading time, a spare pattern, hawker units’ informal sector traders’ activities during the Covid-19 pandemic and informal sector activities in the post-Covid-19.

Spatial ordering of informal sector activities in African cities: perspectives and lessons from the development of informal sector in Nigeria

ABSTRACT Informal Sector Activities (ISAs) dominate the economy in most African cities, and they continue to proliferate without consideration for environmental sustainability. This study analysed spatial ordering of ISAs in four Nigerian cities, selected for their differential urban forms and social practices. The study assessed the conformity of the spatial ordering of ISAs with industrial location principles, the implications of urban spatial form and government/policy makers’ awareness of environmental consequences of ISAs spatial ordering. The ISAs were identified, classified and sampled, and their GPS coordinates were used in mapping the ISAs on Landsat images in an ArcGIS environment. Findings show that the existing ISAs do not conform to locational principles. Poor governance and environmental awareness of policy/decision makers explains the poor spatial ordering of ISAs.

Factors affecting the probability of formalizing informal sector activities in Sub Saharan Africa: evidence from World Bank enterprise surveys

PurposeThis study aims to investigate the factors that affect the likelihood of formalizing informal sector activities in 13 Sub-Saharan African countries, using World Bank enterprise survey data collected between the periods 2009 and 2018. Notwithstanding the great contribution of the informal economy in Africa, developing countries may stand to gain more if they make inroads in formalizing the informal sector.Design/methodology/approachSince the dependent variable is binary taking the value of one if the firm is willing to formalize and zero otherwise, the study will employ a discrete choice probit model.FindingsResults inter alia show that firms that are more likely to formalize are young, owned by individuals with high levels of education and, have registered before. Governments should therefore target firms that are young and provide them with information about the benefits of registration, and if these firms are owned by experienced and educated individuals, the likelihood for them to register would be high.Research limitations/implicationsThe study uses cross sectional data and therefore cannot capture time variant factors affecting the probability to register and also cannot correct effectively for endogeneity.Practical implicationsGovernments should therefore target firms that are young and provide them with as much information as possible about the benefits of registration, and if these firms are owned by experienced and educated individuals, the likelihood to convince them to register would be high. They should also reduce the cost of registration so as to improve net benefits in line with the rational exit view.Social implicationsFormalizing informal activities will help improve the performance of these firms, reduce vulnerable employment as well as crime, poverty and inequality. Providing decent operating and working conditions to informal players will reduce social and political unrest.Originality/valueThe African continent is home to many informal firms accounting for roughly 55% of economic activity with 90% of workers eking out a living in a sector that does not respect worker rights, provide decent working conditions and where changes in growth have done little to reduce its size. Regulatory reforms have also been implemented resulting in the number of start-up registration procedures falling from 11 in 2003 to seven in 2019. The uniqueness of Sub Saharan Africa in terms of entrepreneurial culture, political, institutional and economic conditions as well as lack of consensus in the extant empirical literature make this study pertinent.

An Exploratory Study of Crime: Examining Lived Experiences of Crime through Socioeconomic, Demographic, and Physical Characteristics

Debates in urban social research indicate that one of the most significant problems facing cities of the global south is the dilemma of crime. This study explores the research question: what is the level of influence of economic deprivation and residential mobility weights on criminal activities within vulnerable neighborhoods in urban centres? This research focuses on the urban social structural theory of social disorganization, to investigate how socioeconomic, demographic, and physical characteristics affect criminal behaviour. The study adopted a qualitative research approach that is cross-sectional. With the use of volunteer self-selection sampling techniques, in-depth interviews were conducted with heads of households via a semi-structured interview guide. The data were analyzed using thematic analysis. The study found that sociological factors such as economic deprivation and socioeconomic inequality lead to the gradual integration of delinquency in cities. The findings of this research build on the existing theory of social disorganization. To ensure safety, residents’ economic status must be standardized by supporting the provision of more regulated informal sector opportunities and activities for active engagement in supervising and controlling youth behaviour.

Urban Informal Sector Workers during the Covid- 19 Pandemic in Indonesia: Social Networking as a Strategy for Business Sustainability

Around 60,5% of workers in Indonesia rely on the informal sector, and in mid of 2020 almost half of them were in urban areas. The urban informal sector workers commonly are in small enterprises with low productivity, low liquidity, and negligible capital accumulation. They engage in street vending, home-based work, waste picking, domestic jobs, and other short-term contracts, and they do not enjoy workers’ benefis and social protection programs, thus they are vulnerable to shock, including Covid-19 pandemic. The pandemic does not only bring negative impact on the health sector, but it has also triggered an economic downturn. In terms of urban informal sector activities, various social policies (PSBB, Java-Bali PPKM, Emergency PPKM and Micro PPKM) sharply reduce the economic opportunities for informal economy workers who rely to a large extent on the personal contact with customers. Job losses and decreased income have been experienced by the majority of informal sector workers. This condition has to be overcome with various strategies to be able to maintain the continuity of their economic activities. This article discusses the strategies of urban informal sector workers to maintain sustainable livelihoods during the COVID-19 pandemic. The strategy carried out is focused on the use of social networks. The data used for writing this article is sourced from primary data. Data was collected using a qualitative approach in Bekasi Timur sub-district, Bekasi City, West Java Province. In addition, the article also uses the existing data related to the issued being studied.

Social services provision and stakeholder engagement in the Nigerian informal sector: A systemic concept for transformation and business sustainability

AbstractThe informal business sector has made enormous contributions to Nigeria's economic growth and development, but this sector is not given the necessary attention to transforming these businesses toward sustainability. This study explores the depth of informal business sector practices in Nigeria. It underscores the inputs of stakeholders in the transformation of businesses in the Nigerian informal sector to increase tax remittances and employment generation for job security in the Nigerian economy. Also, it underpins value chain performances to transform the informal sector and rescue it from liquidation through voluntary company arrangements, administration, merger, takeover, and acquisition schemes. The study adopts a conceptual review. The research relies on extant literature relating to the antecedence of informal business sector activities in Nigeria. It relies on reports from tertiary data sources such as academic articles, books, newspapers, the Internet, and website sources. It further explores the views of researchers, covering the informal sector development and the support of the provisions of the social services in Nigeria. There is the absence of a model for the transformation and sustainability of the informal sector enterprises in Nigeria. This study recommends a model approach to address informal sector enterprises' issues and challenges necessary to transform the businesses into a formal status while supporting their sustainability and resilience.

Institutionalized democracy and the shadow economy in the short- and long-run: empirical analysis from Uganda

This paper investigates the relationship between institutionalized democracy and the shadow economy in both the long- and short-run. Using time series data from Uganda that cover the period from 1991 to 2015, this paper applies autoregressive distributed lag method to investigate this relationship. How democracy affects the shadow economy in less developed countries like Uganda is not well understood. This paper aims to fill the above knowledge gap. The findings show that the shadow economy and institutionalized democracy are negatively correlated in both the short- and long-run. This implies that improvement in institutionalized democracy significantly hinders the rise of shadow activities. This indicates that institutions regulate the conduct of economic agents and determine how entrepreneurs engage in economic activities. Moreover, institutions are crucial in resource allocation which in turn leads to welfare improvement. Improvement in welfare of citizens reduces their incentive to engage in informal sector activities since the formal sector provides the necessary support needed to operate legally. These findings are robust to alternative econometric methods. Two practical implications of these findings stand out. First, these findings indicate that reforming the governance system to facilitate efficient resource allocation could be one way of addressing widespread informality in developing economies. Second, these results also indicate that minimizing informality in the economy should gradually move away from emphasis on tackling proximate causes of informality to democratic reforms that change the authority patterns. In this case institutionalized democracy is another important channel of mitigating the rise of the shadow economy.

Improving the socio-economic welfare of women through informal sector activities in Ghana

Improving the socio-economic welfare of women through informal sector activities in Ghana

Child labour in the urban informal economy of a Latin American border region

The article describes the phenomenon of child labour in the informal urban economy of a region known as the Triple Frontier located between Argentina, Brazil and Paraguay, where some of the worst forms of child labour with distinctive regional features are present. At the Triple Frontier, tensions between global and local dimensions shape an interconnected and diverse space marked by inequality and asymmetries. For children and adolescents in vulnerable situations, border cities offer an opportunity to establish an income for themselves or their families through economic activities in the urban informal sector. However, the convergence of three national states, along with the sheer length and porousness of borders in the region, also allows the persistence of the worst forms of child labour, including trafficking for sexual or labour exploitation. Even though the Convention on the Rights of the Child has been ratified by almost every country in the world, the extent of their compliance varies greatly. Historically there have been (at least) two types of childhood: that with a guarantee of inclusion in traditional socialisation mechanisms and excluded childhood, where the rights of children are not guaranteed. In the latter case, children will have a different recognition of their rights depending on their socioeconomic background. In the Triple Frontier region, poverty is criminalised, and children from vulnerable backgrounds would be subject to criminal law enforcement to the detriment of the rights established in the Convention. The article focuses on how working children inhabit and appropriate urban space in order to maximise economic opportunity while at the same time minimising considerable risks. The voices of working children are also included, as they are fundamental for understanding child labour as a strategy to deal with social precariousness.