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Victoria Makalima, assistant Director for the Johnson and Johnson Burn Treatment Centre (left) and Roger Crawford, Executive Director, Worldwide Government Affairs and Policy for Johnson & Johnson (back right) happily assisted Nurse Ester Manson and clinical officer William Kalua from Kamuzu Central Hospital in Lilongwe, Malawi throughout their two-week specialised training session at the Burn Treatment Centre at Chris Hani Baragwanath Hospital. The training took place as a result of a public private partnership between the Chris Hani Baragwanath Hospital, Johnson & Johnson, and the University of North Carolina in USA. The hospital in Malawi recently opened a burn unit and the hands-on training Ester and William received at the leading burn treatment centre in Africa, will no doubt make a huge difference in the lives of those in need.

Released: 9 November 2011

The Informal Sector must be included in the development of Africa, according to the independent monitoring agency, African Monitor.

In its latest Development Support Monitor (DSM) report released today in Sandton, African Monitor says that this will help increase economic participation and enhance the capability of these communities to independently sustain their own livelihoods.

However, the organisation said that the Informal Sector must be recognised as a legitimate profitable activity which provides economic opportunities for the majority of Africans. 

“African governments must put in place policies that indicate the prioritisation of the Informal Sector and they need to pledge direct financial support to it to develop facilitative infrastructure, provide financing and to create a conducive legislative environment for informal traders to operate,” says the report.

 It adds that ruling governments in Africa need to work with their development partners to invest in economic infrastructure that will support the Informal Sector activated initiatives that will introduce new technologies to the formal and informal sectors. Governments and their partners should also vigorously support grassroots communities to develop capabilities to diversify and sustain their participation in the sector.

The African Monitor study examines and keeps track of commitments made by African governments and their development partners. Its main purpose is to promote greater accountability by making the commitments more widely known through assessing the extent to which these commitments are being met in real terms as well as the impact on the relevant communities.

“The sector faces a variety of constraints, such as limited access to technology, credit, capital, skills, education and training,” it says. “It is also largely excluded from economic infrastructure and services provision and other development initiatives.”

“Strengthening the capabilities of Informal Sector operators, by improving their access to technology and investing in economic infrastructure, will spur the dynamism of this sector. That way it will become what Dr Wolfgang Schneider-Barthold, from the Ifo Institute for Economic Research at the University of Munich, calls ‘organic industrial development’.”

Archbishop Njongonkulu Ndungane, President of African Monitor, notes that data that tracks delivery to the Informal Sector does not exist. This in itself is a significant indication of the extent to which this sector is excluded in budgetary allocations and development interventions.

One of the emphases made by the monitoring organisation’s report is that the average size of the Informal Sector in Africa as a percentage of GDP was 42% in 2000 and accounted for 48% of the official labour force on the continent.

While Zimbabwe, Tanzania and Nigeria had by far the largest informal economies, with 59.4%, 58.3% and 57.9% respectively, South Africa was at the lower end with 28.4%.

“Given the methodological difficulties in measuring this sector, these estimates merely give insight into the size of the informal sector in some parts of Africa,” said Archbishop Ndungane. “The Informal Sector provides 78% of non-agricultural employment and 61% of urban employment. 

Citing the report, he said that this sector creates 93% of new jobs and that attempts to measure the size and contribution of the Informal Sector are useful in understanding the demands for service delivery and resource allocation. 

“It is a fact that this sector does not receive the proportional allocation of resources needed and services relative to its size,” says the report.

“The informal zone is generally small-scale, labour intensive and employs low-skilled and semi-skilled workers. As a result, most of the sector’s operators depend on their own personal savings or equity as their primary source of start-up capital.”

The African Monitor report maintains that through the Action Plan for the Accelerated Industrial Development of Africa (AIDA), African governments have shown their support for the informal sector. The plan calls on national industrial policies to prioritize the development of small-scale and rural industries, including the informal sector.

The report says that the Labour and Social Affairs Commission of the African Union pays much more attention to the Informal Sector, and it has adopted the Social Protection Plan for the Informal Economy and Rural Workers 2011-2015.

However, the African Union has not adopted any direct or stand-alone plan, or commitments towards recognising the Informal Sector as a legitimate economic activity.

Furthermore, no tangible commitments have been made by African governments on how this sector will be supported.

 ENDS.

African Monitor was established in 2006 as an independent continental body to monitor development funding commitments, funding delivery as well as the impact on grassroots communities. It also works towards bringing strong additional African voices to the development agenda.

The Development Support Monitor 2011 is a first in a series of publications that will look at various questions to promote an inclusive agenda to achieve the African Moment for grassroots communities.  Over a period of time, the DSM will seek to answer the following questions:

·    What are the structural economic, social and political fundamentals that will facilitate the inclusion of grassroots communities in Africa’s development path?

·         What policies, approaches and practice changes need to be made for sustainable development?

·     How should development resources be generated and allocated to meet the imperatives for an inclusive development agenda for grassroots communities?

Last changed: Nov 09 2011 at 2:09 PM