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Opinion - Support informal sectors

2021-10-19  Staff Reporter

Opinion - Support informal sectors
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Street vendors are quite an important part of urban economies around the world, offering simple access to different kinds of goods and services in public spaces. 

The results of the 2018 Namibian labour force survey shows that over 57% of employed people in the country are from the informal sectors. The sector is diverse and consists of all industries such as construction, retail trade and services – but also in manufacturing and communication. 

What is amazing about the informal sectors is the poverty-reducing outcome of employment. The loss of 1 000 informal sector jobs has almost the same poverty-increasing impact as losing 1 000 formal-sector jobs – but in most cases, the government is only concerned about job loss in formal sectors. 

Informal sectors cannot be ignored because they meet government halfway in employment creation and sustainability. Therefore, policymakers should not be overconfident about losing or abolishing informal sectors.

The informal sectors provide sources of income for many people – just like formal sectors. 

I met a fruit vendor on the streets of China, who considers himself self-employed, he wakes up early in the morning before sunrise to sell his fruits on the streets, this is a clue that even though China is the second world largest and diverse economy, informal sectors still employ large numbers of people. Informal sectors give us access to a variety of goods and services and increase in purchasing power, which leads to more money in circulation and boosts economic growth. Informal sectors have strong connections to formal sectors because they get goods from formal sectors. 

Most of us, who have become university graduates come from that upbringing where families are sustained by money from informal activities, yet we forget this once we secure a formal job, this is a wrong mindset that we need to change. Some laws make it extremely impossible for start-ups, yet people have to start somewhere to acquire skills, knowledge, and grow so that they can transit from informal to formal. 

The government should constantly improve the several barriers to the informal sectors. These include training opportunities, poor infrastructure that make it hard to start a business lack of credit, insurance, and being the target of crime as well as harassment by local government.  It’s vital for the policymaker to focus on employing policies that aid informal sectors. Specific measure includes simplifying business registrations and regulatory requirements for new firms.

About 85% of all informal workers are in hazardous employment, not through choice, but due to the lack of opportunities in the formal sectors. The government should vigorously provide workspaces and special support to enhance entrepreneurship skills and guide small informal firms on growth approaches. These incentives will assist in their long-term growth, sustainability and successful transition to the formal sectors. The regional and local government should educate the street workers on the significance of hygiene and abide by laws that will help them operate freely. Destroying goods, beating, and arresting them driven by the opinions that they are unhygienic, and bad mannered will be catastrophic to the economy, which is bad for everyone. 


2021-10-19  Staff Reporter

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