Informal Sector Operators Research Articles

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.

Investigating the E-Readiness of Informal Sector Operators to Utilize Web Technology Portal

Information and Communication Technology (ICT) has been acknowledged to be an enabler of small businesses, including those in the informal sector. However, determining the relationship between the perception of technology by informal service providers and the readiness to use technology is critical. By adopting a survey research design, this study investigates how the perception of a web technology portal (WTP) by informal sector service providers in the Cape Town metropolitan area in South Africa affects their readiness to use WTP to support their businesses. The study involved a sampled population of 419 informal sector service providers within the Cape Town metropolis. A conceptual framework consisting of constructs from the self-efficacy theory (SET), the unified theory of acceptance and use of technology (UTAUT) and the technology readiness index (TRI) was used as the theoretical reference for the study. We used a semi-structured questionnaire based on a five-point Likert scale to collect data, which we analyzed using partial least squares structural equation modelling (PLS-SEM). The results showed that discomfort (p = 0.330), effort expectancy (p = 0.630), innovativeness (p = 0.620), optimism (p = 0.740), insecurity (p = 0.110), facilitating conditions (p = 0.160), and internal factors (p = 0.180) all had a non-significant positive influence on e-readiness. On the other hand, self-efficacy (p < 0.001), performance expectancy (p < 0.030), social influence (p < 0.001), and external factors (p < 0.001) had a significant positive influence on e-readiness. Gender and business type, the moderating variables for respondents’ e-readiness, were found to be insignificant (p > 0.005) for e-readiness for web portal technology utilization. This study identifies the key variables that could influence the readiness of informal sector operators to utilize web portal technology. It also provides a guide for designers and developers of digital platforms and government policymakers on critical factors germane to providing technology support for the informal business sector.

Vocational Training and Youth Empowerment in Nigeria: Evidence from Informal Sector Operators’ Activity in Gombe Metropolis

This study was conducted to empirically examine the role of the informal sector in youths’ empowerment in Gombe metropolis. A structured questionnaire was used to gather first-hand information on variables of interest and both descriptive statistic and ordered logistic regression analysis were conducted to achieve the major and specific objectives of the study. The primary objectives of the study include to examine (i) how does Vocational training among informal sector operators influence youth empowerment in Gombe metropolis; (ii) how does customers' patronage of the informal sector's services influence youth empowerment in Gombe metropolis; and (iii) how does capital requirement among informal sector operators influence youth empowerment in Gombe metropolis. Empirical results obtained from the study indicated that Vocational training among informal sector operators has a positive and significant influence on the likelihood of youths empowerment in Gombe metropolis of Gombe state; customers' patronage, as well as capital requirements, were also found to have a positive and significant influence on youths’ empowerment in Gombe metropolis; and all the control variables included in the model (except gender) also have positive and significant probability on youth empowerment in Gombe metropolis. We conclude by presenting concluding remarks and policy implications for decision-making toward repositioning technical and vocational education in Nigeria to effectively curb incessant overdependence on the government for job creation in Nigeria.

UNDERSTANDING THE INTERNAL AND EXTERNAL CONSTRAINTS TO GROWTH OF MICROENTERPRISE ENTREPRENEURSHIP IN A SOUTH AFRICAN PROVINCIAL CONTEXT: A CASE OF MPUMALANGA-MKHONDO

Although post-apartheid South Africa has introduced various policies and institutions to support small and micro businesses, these efforts have not delivered expected results; many such firms are not growing and are failing. Hence, this study investigates the constraints holding back the development of micro ventures and recommends what can be done to assist them. It is based on a sample of microenterprise informal sector operators in the South African province of Mpumalanga. Using Principal Component Analysis (PCA), a set of fourteen external and another of fifteen internal environmental constraints on growth were examined. The results indicate each set explains almost two-thirds of the total variation in growth limitations, with growth as an integrated component of sale, asset, labor and profit. The regression analyses confirmed that internal factors were significantly heavier hurdles in limiting the growth of the microenterprise operators than the external ones. The internal constraints were ‘education and training,’ ‘entrepreneurial factors’ and ‘storage and infrastructure,’ and the external constraints related to market factors. Because the external constraint is mainly exogenous, more efforts have to be placed on addressing internal entrepreneurial limitations for microenterprise to experience growth.

Informal Sector and Tax Compliance in Nigeria- Challenges and Opportunities

Taxing the Informal Sector (IS) and its taxpayers’ compliance level has become a focus of attention in recent times by scholars and policy makers because of IS contribution to the country. IS seems difficult to tax because of administrative problems, human capital and personnel shortage, lack of record keeping, nature of its economic activities and cost implications. Therefore, there is need for better understanding of the concept, challenges, and methods of taxing, and of promoting tax compliance (TC) in the IS. It is against this background that the study examined IS and TC in Nigeria with its challenges and opportunities. Exploratory research design was adopted for the study with focus on literatures in the area of taxation, accounting and finance. The study concluded that taxing the IS is very important to any developing country as this achieved three things: revenue, growth and governance. Government needs to expand its tax net with much focus on the IS as any further neglect of this sector might dampen the moral of some individual taxpayers especially those in the formal sector who had been voluntarily paying tax. However, there is need for simplification of tax laws and establishment of tax courts, tax education and enlightenment, inter-agency collaboration and provision of Tax Identification Number (TIN), government should also exhibit accountability and transparency in order to build trust in the informal sector operators for tax compliance.

Determinants of energy use in the informal food sector

ABSTRACTAlthough enterprises in the informal food sector require energy to transform, cook and process food, energy-use patterns in this sector are not well understood by policymakers and the local-level authorities who regulate their trading activities. This paper reviews relevant literature and presents empirical data collected in Rwanda, Senegal and South Africa on the use of traditional and modern energy sources by informal food sector operators. Our sample includes male- and female-operated enterprises in the urban centres of three African countries where the informal food sector is important, not only for providing the convenience of affordable and readily prepared meals, but also as a source of income for women and men in developing countries. Multiple fuel-use and energy-stacking strategies are common among informal food enterprises and policy needs to acknowledge this if it is to intervene in ways that will benefit both enterprises and regulators.

Informal sector taxes and equity: Evidence from presumptive taxation in Zimbabwe

AbstractUsing a mixed‐methods approach, this article evaluates the equity implications of Zimbabwe's presumptive tax system, introduced in 2005 to raise revenue from the country's growing informal sector. The representative taxpayer method, which compares the hypothetical tax burdens of formal and informal sector taxpayers at varying income levels, shows that the presumptive tax regime undermines both vertical and horizontal equity. In addition, interviews with key informants from the tax authorities, other relevant organizations and informal sector operators were conducted to probe issues around collection, compliance and perceptions of fairness. The qualitative data suggest that weak enforcement, with more visible informal activities bearing the brunt of the tax burden, and selective (and sometimes politically motivated) application of the legislation, compromise equity further.

Informal sector and urban unemployment: small businesses contribution to large livelihood improvements

Based on quantitative data collected from 450 informal sector operators and in-depth interviews with stakeholders in Hawassa City, Ethiopia, this study assesses the improvement in the livelihood of informal sector operators. Our findings show that the majority of operators (about 90%) have improved their livelihood. Operators who are native, educated, experienced, profitable, and economical are more likely to improve their livelihood than their counterparts. However, operators face challenges such as a shortage of working capital, lack of working premises, shortage of raw materials, and narrow local market base. Given the considerable impact of the informal sector on the livelihood of the operators, the government needs to seriously consider the role of the informal sector in combating growing urban unemployment.

Analysis of the Relationship between Informal Financial Institutions and Poverty Alleviation in Nigeria: A Multivariate Panel Data Approach.

The concept of Economic growth can be accompanied by an increase in informal employment. Informality may support growth by reducing labor cost and improving competitiveness. However, a well-functioning and regulated informal economy will be a critical prerequisite to achieve sustainable growth. And also, a widespread informality with regard to employment, enterprise and productive activities is frequently perceived as a barrier to full participation in the economy and as a hindrance to long-run economic development and poverty alleviation. This is because the link between, informality, poverty alleviation and growth is not fully understood. This paper seeks to investigate the Relationship between informal financial sector activities and poverty alleviation in Nigeria. A multivariate panel data approach was used with data from 150 informal sector operators in Gwagwalada area council-FCT. Data was collected using structured questionnaire and analyzed with appropriate technique in order to identify the perception of socio-economic impact of Informal sectors on poverty alleviation in Nigeria. The findings revealed that informal financial sector operators has a positive and significant impact on poverty alleviation in Nigeria; while poverty-mentality, illiteracy, high inflation, low infrastructure, access to credit, social safety nets and information dissemination are the major problems encountered by these institutions. The paper recommends among other things the education of the rural poor to embark on viable projects, infrastructural development and favorable government policies so as to make the sector becomes relevant.

Pemberdayaan Sektor Informal di Kabupaten Ponorogo

The informal sector in Ponorogo is a controversial daily phenomenon. On the one hand, the district authorities often are not friendly to them. But, on the other hand they are used as a source of revenue for local governments through the collection of the levy and to solve the problems of employment in urban areas. However, the issue of the informal sector can not be left alone, because the day their numbers grew in number and will result in public space disruption. Based on research that has been conducted shows that the informal sector players want their empowerment so that its business can be more advanced and keep it running. Several alternative development activities expected by informal sector operators are: the procurement of wagons for businesses, entrepreneurship training, the establishment of an informal group of business operators and the ease of obtaining credit. While the research conducted related to the empowerment of the informal sector seen their empowerment by forming a group / community. The formation of a group/community is based on the desire to maintain their existence in the informal sectors. Besides, the existence of this community are expected as a forum to resolve the problems related to the informal sector. Another reason, the establishment of the community is expected to be the bridge between informal sector players and government.

Securing safe food, order in cities and protected urban livelihoods: Modelling of preference for regulations of informal street food trade in Kumasi

Inability to isolate and target informal food trader priorities in compliance behaviour, in the face of multi-attribute regulations, has made food control in developing countries ineffective (low food quality and disorderly urban-space usage persist) and costly (high time and money cost to vendors). Using systematically sampled informal street food vendors in Ghana’s second largest urban space, we assess preference patterns and dynamics of informal sector operators for regulatory aspects/scenarios through Discrete Choice Experiment. We unearthed contrasting preferences for aspects of improved regulation such that vendors gravitated towards improved siting regulations but abhorred improved health certification. Preference patterns were mainly explained by economic stature of enterprises, profiteering motives of operation, distrust of Local Assemblies and abuse of discretional power among food control officers. Our study implies that, informal sector is, less likely to accept mandatory licensing with costly preconditions/higher monetary commitments. Also, cost-effective improvements in siting regulations are primers of improved regulatory regime with vendor associations as essential entry point. Specific to street food trade, holistic approach rather than improved perceptions and relations among vendors and food control officers is more likely to ensure implementation of higher street food safety standards.

Mobilizing Informal Sector Operators to the Islamic Banking Products in Nigeria

Mobilizing Informal Sector Operators to the Islamic Banking Products in Nigeria Ibrahim Hussaini Aliero PhD, Mohammed Bashir Achida Abstract his paper analyses how Islamic banks could mobilize the informal sector operators to their banking products and services. The informal sector operators are known to suffer from lack of access to formal financial services. One of the reasons for this lack of access is the lack of understanding of the banking products and services by the operators. The paper argued that there might be some common financing values and norms between the informal sector operators and the Islamic banks. The common values and norms may serve as a link for mobilizing the informal sector operators by the Islamic banks. The paper supports its argument with evidence from existing literature and personal interaction with the informal sector operators. What Islamic banks need to do is to educate the operators on their products and services and invite them to patronize the products of the banks. Full Text: PDF DOI: 10.15640/jibf.v4n2a2

Socio-Economic Impact of Informal Financial Sector and Inclusive Growth: Empirical Evidence from North Central-Nigeria

The paper examines the socio-economic impact of informal financial sector and inclusive growth in north central –Nigeria. The notion behind inclusive growth entails analysis how employment opportunities arise and change with growth process with time. Economic growth can be accompanied by an increase in informal sector employment. Informal financial sector may support growth by reducing cost of borrowing, collateral, bureaucratic process and improving competitiveness. However, a well-functioning and regulated informal financial economy will be a critical prerequisite to achieve sustainable growth in north central-Nigeria. And also, a widespread informal financial sector with regard to employment, enterprise, and productive activities is frequently perceived as a barrier to full participation in the economy and as a hindrance to long-run economic development and poverty alleviation in this region. This is because the link between, informal financial sector, growth and inclusiveness is not fully understood. Inclusive growth has been defined as growth that takes place in a context in which economic opportunities-including employment opportunities expand, the poor’s access to these opportunities improves, and inequalities are reduced. This paper seeks to investigate the socio-economic impact of informal financial sector activities, inclusiveness’ and economic growth in north central - Nigeria. A systematic random sampling method was used to collect data from 500 informal financial sector operators in Abuja, kogi and Niger states. A multivariate panel logit model statistic was used to analyze the data in order to identify the perception of socio-economic impact of Informal financial sectors on economic growth in north central- Nigeria. The findings revealed that informal sector operators has a positive and significant impact on growth in the region; while poverty-mentality, illiteracy, high inflation, low infrastructure, access to credit, social safety nets and information dissemination are the major problems encountered by these institutions. The paper recommends among other things the education of the rural poor to embark on viable projects, infrastructural development and favorable government policies so as to regulate the sector becomes relevant

Entrepreneurship in Transition Economies: Selected Characteristics and Relevant Lessons for Cuba

The experiences of the former socialist countries of Central and Eastern Europe, and the former Soviet Union demonstrate that entrepreneurs can make important contributions in transition economies. The most notable include employment creation, the efficient utilization of human capital, and positive externalities resulting from the entrepreneurial drive to experiment, innovate, and adapt. In these countries, as well as in China and Vietnam, the transition from the classical socialist system facilitated the emergence of four types of entrepreneurs (agricultural entrepreneurs, informal sector operators, cadre entrepreneurs, and professional entrepreneurs), which mainly engaged in three principal entrepreneurial strategies: prospecting, networking, and boundary-blurring. The experiences of the former socialist countries offer valuable lessons for Cuba, as it continues to rely on the reduction of the State sector and the expansion of small-scale private entrepreneurial activities in the emerging non-State sector as one of the principal policy measures to gradually "update" its socialist economy.

Informality, Inclusiveness and Economic Growth in Nigeria

The concept of inclusive growth requires analysis of how employment opportunities arise and change with growth process. Economic growth can be accompanied by an increase in informal employment. Informality may support growth by reducing labor cost and improving competitiveness. However, a well-functioning and regulated informal economy will be a critical prerequisite to achieve sustainable growth. In addition, a widespread informality with regard to employment, enterprise, and productive activities is frequently perceived as a barrier to full participation in the economy and as a hindrance to long-run economic development and poverty alleviation. This is because the link between, informality, growth and inclusiveness is not fully understood. Inclusive growth has been defined as growth that takes place in a context in which economic opportunities-including employment opportunities expand, the poor’s access to these opportunities improves, and inequalities are reduced. This paper seeks to investigate the impact of informal sector activities, inclusiveness and economic growth in Nigeria. A survey method will be use to collect data from 150 informal sector operators in Gwagwalada area council-FCT. Data will be collected using structured questionnaire and analyzed with multivariate Panel Logit model statistic in order to identify the perception of socio-economic impact of Informal sectors on economic growth in Nigeria. The findings revealed that informal sector operators has a positive and significant impact on growth in Nigeria; while poverty-mentality, illiteracy, high inflation, low infrastructure, access to credit, social safety nets and information dissemination are the major problems encountered by these institutions. The paper recommends among other things the education of the rural poor to embark on viable projects, infrastructural development and favorable government policies so as to regulate the sector becomes relevant

An Urban-Spatial Analysis of the Women in the Informal Sectors of Greater Guwahati City of Assam, India

This article reflects the use of urban space by women in urban informal sectors in the city of Guwahati located in North East India. The population influx from across the borders in the aftermath of the partition has huge implications both on polity and on economy of the northeastern states in general and Assam in particular. Importantly, the urban informal sectors have a sizeable share in terms of its significant contributions towards Gross Domestic Product (GDP) as well as generation of employment opportunities largely. Using a feminist perspective, the research is an attempt to investigate the engagement of women in the informal sector in greater Guwahati. Research findings reveal that the occupations of the women workers are location-specific, that is, the manufacturing sectors (textiles, food preparation, printing and skilled service) are mainly home/shop based production (fixed locations) whereas the service sectors (leisure, caring, elementary construction, elementary sales and cleaning occupation) operate at variable locations (construction sites, street pavements, marketplaces and other various locations). Further analysis shows that the informal sector is highly demand dependent and such demands are in the central business areas of the city, therefore informal sector services (skilled services and elementary services) are found to be located in and around the central areas of Guwahati city. Women operators in the informal sector are attracted to the central business district because of the many advantages that it enjoys relative to other parts of a city. The paper concludes by calling on policy makers and physical planning agencies to evolve more pragmatic strategies for urban development matters in order that urban informal sector activities can be integrated into urban development plans. Finally, further research is called for on how urban planners could redesign the urban space with appropriate consideration of the informal sector operators.

The Contribution of Entrepreneurship Education Course in Enhancing Management Skills of Informal Entrepreneurs

The study was conducted to investigate the contribution of entrepreneurship education in technical training colleges in enhancing management skills of informal sector entrepreneurs in Kenya. A case study of informal sector operators in Nairobi was conducted. Qualitative data was collected using in-depth interviews and observations. The data was analyzed using the grounded theory. Findings of the study showed that the informal sector operators used skills they gained in entrepreneurship education in technical training colleges to gain access to the informal sector industry and to manage their business. Those with higher training in entrepreneurship education tended to excel in their operations. A closer look showed that there was still a need for further training of management skills to better their activities. The recommendations were that secondary schools in Kenya should include entrepreneurship in secondary education system curriculum so as to help the school leavers who fail to join tertiary education and end up in the informal sector.

Human Resource Practices in the Informal Sector in Cape Coast, Ghana

The human resource is of all resources the most productive, the most versatile, and the most resourceful. Thus an enterprise’s wealth does not depend on the financial and material resources available but rather on the people who make things work. It is therefore important for owners and managers of firms to understand how best to manage this most resourceful – human resource – of the firm. This study examined the human resource practices in the informal sector in Ghana, using the situation in the Cape Coast Metropolis as a case study. The main objective of the study was to find out how the human resources within the informal economy were being managed. Six major informal sector operators were randomly selected. A combination of cluster sampling and quota sampling techniques were applied to generate the sample for the study. The total sample for the study was one hundred and seventy. The results of the study show that human resource management practices within the informal sector enterprises are inadequate and therefore impede the development of the workforce which invariably affects the growth of the enterprises. The findings suggest that assistance programmes that encourage the efficient and effective human resource management practices in the informal sector should be provided. The main limitation of the study is that it could not cover all informal sector enterprises within the Metropolis due to time and financial constraints. In this respect, the interpretation of the results of the study should not be over-generalised.

Informal Financial Institutions and Poverty Reduction in the Informal Sector of Offa Town, Kwara State: A Case Study of Rotating Savings and Credit Associations (ROSCAs)

The paper is a report of an empirical study on the extent of poverty in the informal sector of Offa town, Kwara State, Nigeria and the role of an informal financial institution (Rotating Savings and Credit Associations ROSCAs) in reducing poverty among the people. Using a set of household data, P-alpha-class poverty measure and a multiple regression analysis. Questionnaire was administered to 500 informal sector operators, who are members of ROSCAs in Offa town. The study found that the infiormal financial institution plays an important role in reducing poverty among the people.

The Urban Resource Centre, Karachi

The Urban Resource Centre is a Karachi-based NGO founded by teachers, professionals, students, activists and community organizations from low-income settlements. It was set up in response to the recognition that the planning process for Karachi did not serve the interests of low- and lower-middle-income groups, small businesses and informal sector operators and was also creating adverse environmental and socioeconomic impacts. The Urban Resource Centre has sought to change this through creating an information base about Karachi's development on which everyone can draw; also through research and analysis of government plans (and their implications for Karachi's citizens), advocacy, mobilization of communities, and drawing key government staff into discussions. This has created a network of professionals and activists from civil society and government agencies who understand planning issues from the perspective of these communities and other less powerful interest groups. This network has successfully challenged many government plans that are ineffective, over-expensive and anti-poor and has promoted alternatives. It shows how the questioning of government plans in an informed manner by a large number of interest groups, community organizations, NGOs, academics, political parties and the media can force the government to listen and to make modifications to its plans, projects and investments. Comparable urban resource centres have also been set up in other cities in Pakistan and also in other nations.