Images of Southern Africa - Informal sector

The informal sector

Geographers use the term 'informal sector' to refer to work carried out outside the 'formal' sector. It includes work such as petty (small-scale) trading, self-employment, casual and irregular work. It is unregulated, relatively labour intensive, exists outside the tax system and is often illegal. Such work is increasing throughout the world.

There are problems associated with using this term: it suggests that all work can be neatly subdivided into either 'formal' or 'informal', and its use has also encouraged governments and planners to look down on the informal sector thus undervaluing its contribution to a nation's economy. A less value-laden term, such as parallel traders, is preferred when referring to activities such as that carried out in this photo.

Three aspects of the informal sector in South Africa make it unusual. Firstly, it is relatively small when compared with many other developing countries; estimates by the United Nation’s International Labour Organisation suggest that globally percentages vary from 20% to 70%. For example, in Kumasi, Ghana, the sector is estimated to be as high as 70% of the workforce; in Lagos, Nigeria, 50% and in Nairobi, Kenya, 44%. The figure for South Africa is around 12%.

Secondly, the South African informal sector is predominantly made up of women. This is a direct consequence of the migration of males into the formal sector, which includes mining. There is also marked gender division in informal activity; with women concentrated in low-profit activities (such as street trading, food preparation, childcare and dressmaking) while more profitable work (such as metal production, wood processing and transport enterprises) tends to have male proprietors.

Thirdly, with the rapid increase in unemployment in South Africa (now estimated to be around 40% of the workforce), informal sector work is increasing as individuals and families struggle to survive.

Ideas for further exploration:

  • An informal sector exists in every country. Make a list of examples of possible informal sector employment in the UK and compare it with those described above.
  • Arguments can be made both for and against informal sector employment. In a group, set up a role play in which two of you play the woman in the photograph and two others take the role of the Chief of Urban Planning for a city. Argue the case from your own viewpoints and reach a decision as to the value or otherwise of the informal sector to the economy of the city.

 

Photo courtesy of Flickr user Eric Parker.

 

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