Informal Sectors

This is a page on informal sectors.

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Eswatini

Municipalities such as Mbabane Council shared posts on work undertaken to ensure safety of market vendors (mostly women) through awareness creation of COVID-19 and handing out sanitizers and safety equipment. The Lab has already began mapping the economic impacts of COVID-19 on the informal sector given the decrease in mobility, access and disrupted supply chain. These issues among others are affecting livelihoods and prospects of businesses surviving beyond the pandemic. The predicted ripple effect on families and communities is predictably grave. The Acc Lab has started exploring existing solutions with private sector partners that can address issues of access to finance, to assist the informal sector’s recovery post COVID-19.  

Source: AccLab Blog

The Acc Lab contributed in crafting the UNDP country office rapid response, by contributing interventions for informal sector. This was informed by research that the lab conducted which identified challenges and potential socio-economic solutions for the informal sector.  

Source: AccLab Blog

Ethiopia

The biggest role in recycling and reusing in the city is played by the informal sector. A very common example is what is called a “korale”, men who canvas neighbourhoods buying peoples’ waste like old shoes, broken appliances, large jerrycans, or even old pots and pans, that they can fix up or use to make other things they can sell. 

Source: AccLab Blog

The accelerator lab’s portfolio on waste management looks to generate learning and introduce innovative solutions at various stages of the waste value chain. Over the past few months, we have looked at the current waste management system, the role of the informal sector and how waste is recycled and reused. From our explorations, we saw the importance of proper waste collection and transportation for an effective system. Therefore, the team embarked on a deep dive and solutions cocreation exercise for solid waste collection and transport in Bahir Dar. 

Source: AccLab Blog

We sensed an informal system of waste collecting, recycling, upcycling and reusing that has one of the highest recycling rates in the east and central Africa. This exploration uncovered some interesting value chains for different waste types, so we wanted to dive deeper and map companies, entrepreneurs and individuals who are creating innovative ways of using waste. This would give us a better understanding of the waste value chain, bring light to the less recognized informal sector and make connections to straighten the market.  

Source: AccLab Blog

Ghana

The Challenge will cover technological and social innovations across public and private organisations including businesses, non-governmental organisations (NGO’s), the creative industry and the informal sector. The objective is to explore innovative and sustainable solutions that will help Ghana’s recovery from the pandemic. The Ghana Accelerator Lab will support winning solutions and initiatives to scale up.

Source: AccLab Blog

Extending Social Insurance to Informal Sector Workers through Circular Economy: this is adopting a digital system of waste collection from subscribed individuals, households, facility owners and waste pickers through text messages/USSD for recycling and composting.

Source: AccLab Blog

This excerpt is also potentially relevant to: Informal Safety Nets, Informal Workers

By Allen Anie, Head of Experimentation, UNDP Accelerator Lab GhanaThis blog discusses lessons from a 3-month project to clean up an inner-city community in Accra, which was grappling with problems of indiscriminate dumping of waste. It was led by local government (the Municipal Assembly), community representatives and the outsourced waste-services company for the area (Jekora Ventures Limited). The AccLab conducted 30 interviews with the community and stakeholders. To improve waste-management, different interventions were tested on 405 households and businesses including: mapping the locations of households and businesses and studying their patterns of waste generation; encouraging them to register for waste-collection; raising awareness; reducing waste-collection charges and developing partnerships between the formal and informal sectors. This community is situated around a busy commercial center, with an often-congested main road and open-air markets where traders sell fresh food. There are many low-income households living on Ghana’s minimum daily wage (11.8 GHC or ~US$ 2).  During peak business hours when markets are busiest, population density can be very high (~3000 people per hectare).

Source: AccLab Blog

In common with other parts of Accra, this community’s waste collection is overseen by local government, with day-to-day operations outsourced to a private company (the formal sector). However, a large informal sector operates alongside the formal (some stakeholders estimate that about 30% of collection in parts of Accra involves the informal sector). Under current arrangements, once waste is collected within the community, it is meant to be brought to transit points along the main road to be carried away by compaction trucks.

Source: AccLab Blog

It costs local businesses about 2 GHC ($0.40) daily to have waste collected by the formal sector - the informal sector charges about 50 pesewas ($0.10). Unsurprisingly, informal collection is a very popular option for waste disposal. A frequent narrative is that high unemployment and the relatively low start-up costs of informal waste-collection attract the unemployed to waste-collection – a positive outcome for employment. Competition among waste-collectors then drives costs to residents down – also a positive outcome for the community, but with unintended consequences. Where income (from collection) cannot cover costs (of transport to transit points and then landfills) some collectors may resort to dumping.

Source: AccLab Blog

This excerpt is also potentially relevant to: Informal Waste Collection

Kenya

A lack of social protection was also a common area of concern. Concepta told us of her struggle to pay her husband’s medical bills while also taking care of the family: with no health insurance, an operation exhausted the family’s savings and she was forced to prioritize payment of the medical bills over higher education for her daughter. Social insurance targeted at those in the informal sector would provide a layer of protection and a new lease of freedom to Concepta and the millions of others who may lack the means to handle unexpected costs or an economic downturn, such as that the country currently faces.[4]The women revealed that they had all worked hard to educate their children and said that seeing their children through secondary school was a proud achievement. However, they shared that their children were among the many unemployed youth in Kenya, and that their spouses were often also out of work. Being the sole consistent breadwinner in their families means that the women feel that they are left with little other choice than to continue working, come what may.

Source: AccLab Blog

The impact of the COVID-19 pandemic on jobs and livelihoods in Kenya has been nothing less than drastic.  Less than two months after the first reported domestic case of COVID-19, a report from the Kenya Private Sector Alliance (KEPSA) indicated that 133,657 people, mainly in the formal sector, had already been rendered jobless across the country; these figures are now likely much higher. Many more within the informal sector, typically afforded less social protection than those in the formal sector, have also been impacted.

Source: AccLab Blog

Kenya’s informal sector represents an important part of the economy and plays a major role in employment creation, production and income generation. Covering mainly small-scale activities that are normaly semi-organized, unregulated and are not technology intensive, this sector is growing steadily: in 2019 alone, the number of persons estimated to have been engaged in the informal sector went up by 5.4% to 15.1 million.[1] Less high-profile than those working for large companies and in professional industries, we can think of these millions of Kenyans as real faces of the world of work.

Source: AccLab Blog

The economic crisis brought on by COVID-19 is nowhere more visible than in the informal sector. Quarantines, social distancing measures, restrictions on of movement and closures of businesses occasioned by the pandemic have disproportionately affected those whose livelihoods depend on informal activities, particularly women[2]. Worryingly, this may exacerbate existing inequalities faced by those in the informal sector, who often lack the social protections afforded to those in formal jobs.[3]

Source: AccLab Blog

Emerging digital concepts such as the Internet of Things and the 4th Industrial Revolution, whilst game-changing in their own right, can seem unaffordable luxuries in the Global South against a backdrop of hunger, poverty and health challenges for millions of people for whom advances in technology may not reach. Due to the COVID-19 pandemic and measures instigated to stop its spread, thousands of Kenyans have lost their jobs and the livelihoods of many millions of Kenyans in the large and growing informal sector have been severely disrupted. This is why measures to address the pandemic and to recovery the economy have to be relevant and responsive to the needs and realities of the most vulnerable.

Source: AccLab Blog

Mauritius (& Seychelles)

Mauritius has committed to achieving a low-carbon economy as part of its Nationally Determined Contributions under the Paris Agreement. UNDP’s Climate Promise Initiative has committed to providing technical assistance to 118 countries to review their commitments ahead of COP26. The country’s decarbonization plans have the potential to not only secure energy security and reduce greenhouse gas emissions but to create jobs in an emerging sector. However, as workers lose jobs, transition, reskill or upskill, they will need much more than wage subsidies and social assistance. This is especially so for those workers in the informal sector who do not have ready access to these facilities.

Source: AccLab Blog

Namibia

I have transitioned from being the Deputy Resident Representative who approves concepts into a user of the Tambula Online shop, and I must admit, it is a wonderful opportunity on many fronts. It supports the local informal retail sector and those participating in it to maintain viable business ventures; it supports a technological start-up that is oriented towards social entrepreneurship, and it satisfies consumer demand. Right from my office, I was able to place an order for carrots, onions, eggs, and pears.  Whilst I faced some initial glitches to get myself registered on the platform, my experience was a great one.  I did not have to jump into a car, drive miles, consume harmful fossil fuels, find parking, and expose myself to the coronavirus.  All within 30 minutes, I was able to register on the platform, place an order and have my supplies delivered to my residence. 

Source: AccLab Blog

This excerpt is also potentially relevant to: Informal Trade

In Namibia, COVIDー19 lockdowns have negatively impacted the informal sector, especially street vendors who depend on a daily income. The UNDP Namibia Accelerator Lab partnered with Tambula, a local online shop to provide informal traders with a digital commercial platform to reach more clients. The platform launched on 18 May 2020 is connecting the local informal market to a digital platform.  

Source: AccLab Blog

This excerpt is also potentially relevant to: Informal Trade, Digitization, Informal Workers

Nepal

3 out of 5 SMEs have lost their jobs due to COVID19 which is a huge problem for a country like Nepal where almost 75% of the economy is in the informal sector. Taking this into account, the lab has partnered with SAARC Business Association of Home-Based Workers (SABAH) on integrating 150 most marginalized women by providing them opportunity in making 40,000 cloth face-masks, complimentary to the WHO guidelines by optimally utilizing available natural resources and indigenous skills and supporting them in streamlining the supply chain by underpinning the backward and forward linkages.

Source: AccLab Blog

Saudi Arabia

Third, gender equality- women are disproportionately impacted by COVID and are already disadvantaged globally. They are over-represented in the health sector, are a majority in the informal sector, and are more often victims of violence and exploitation. Moreover, they are often excluded in the design and implementation phases of research as well as product development.

Source: AccLab Blog

Tanzania

Grassroots innovation is an innovation from unaided, unqualified, untrained individuals’ innovator from informal sector, who has developed a solution to technical, environmental and social-economic problem.”As a Tanzanian myself, I like this even simpler definition: grassroots innovations are community-led solutions for sustainability. 

Source: AccLab Blog

Vietnam

Through a collective intelligence approach to GIS mapping visualization, it is clear that informal waste workers not only thoroughly cover waste collection in the city (estimated >80% of geographical area coverage) but play a significant role in the overall recovery of recyclable waste, with an estimated total collection between 7.5-9% (taking both IWWs and collection centers into consideration) compared to the total volume brought to the landfill per day (approximately 1000 tons per day) during low volume COVID-19 times (up to 10% more during normalized times).  Da Nang city has set a target of reaching a 15% waste recycling rate by 2025, from our rough estimate the informal waste sector is already contributing significantly to the city’s overall goal, but this contribution is not always recognized in the current policies. If the estimate holds true, these figures have a major impact on municipal waste management, and cities around the globe with an informal waste sector should take notice. The waste that is being recovered would either likely end in the City’s landfill or the environment (including the oceans). But the informal sector workers often face ostracization in society due to the stigma of working with waste. In our research, we found great examples around the world of how informal workers were integrated as an asset to the municipal authority such as our sister Lab in Paraguay, the catadore model in Brazil, or the ENDA model of Independent Waste Collectors in Ho Chi Minh City. We hope to see more emergent models like these that integrate and recognize informal sector workers' true values -- our city’s heroes in the fight against waste pollution.

Source: AccLab Blog

This excerpt is also potentially relevant to: Informal Waste Management, Informal Workers

Q&A: Demystifying the informal sectorThe current waste value chain in Viet Nam has three main endpoints for trash: landfill, environment, or recycling. There is still no official, consistent and scientifically-based data regarding the recycling rate of any kind of waste at a national level in Viet Nam. A National Environment Report published in 2011 estimated the recycling rate of municipal solid waste is approximately 8-12% and mainly taking place by the informal sector in craft villages. Recycling activities within craft villages are manual, outdated, and causing serious environmental and health issues. 

Source: AccLab Blog

The informal sector is Viet Nam’s largest contributor towards recycling and reuse of waste in the entire country. Stories just like Ms. Hien’s are common and as one of the top five contributors to plastic waste entering the ocean, Viet Nam needs innovative ways to tackle waste pollution. The informal sector is an active, yet under-used, often misunderstood part of the waste value chain. Toward this end, our UNDP Accelerator Lab teamed up with Evergreen Labs, a solution-driven, project development organization to perform an in-depth study aiming to better understand the informal waste ecosystem with the hope to shed light on their roles and impact. Taking inspiration from Dietmar Offenhuber’s research uncovering Brazil's informal waste system through GPS data, we conducted two mapping exercises in Hoa Vang (rural district) and Ngu Hanh Son (urban district) as an experiment to gather ethnographic, geospatial and socio-economic data, ultimately help to unpack the nuanced of people working in this sector. During this research, 40 informal waste worker surveys were conducted, 9 routes tracked via GPS, and 39 coverage maps drawn across two districts in Da Nang. The aim was to tap into the collective intelligence of the waste workers guided by NESTA’s Collective Intelligence Playbook to shed light on the informal waste sector.The current waste streams, collection, and disposal mechanisms in Viet Nam involve various players from both the formal and informal sectors. Household waste is not source-separated, meaning recyclable waste is mixed with organic waste and other contaminants. Typically this waste is left on the curbside in front of businesses or households directly for collection or placed at a designated dumpsite (which can either be municipally managed or not).  The informal waste workers (IWWs) are at the front line of recovery and are often seen rummaging through waste to collect all tradeable items like cardboard, metal, and plastic bottles. Once their bike is full, they bring their waste to their nearest collection point, just like Ms. Hien’s, to do their daily trading. Collection centers then consolidate and trade with larger aggregators before the waste gets pre-processed and ready for recycling. This research not only confirmed this value chain but made some interesting discoveries along the way. 

Source: AccLab Blog

This excerpt is also potentially relevant to: Informal Ecosystems, Hybrid Models, Informal Waste Management

Zambia

In a bid to mitigate long term impact on the small informal business sector and provide for business continuity during the COVID-19 outbreak, the UNDP Accelerator Lab and UNDP Gender teams in partnership with the Lusaka City Council (LCC), Ministry of Health (MoH) and working closely with market committees from the three residential areas of Nyumba Yanga, Chilenje and Lilanda designed and developed a model market that promises to help businesses in the community markets to continue operating while minimising the risk of contracting the virus.

Source: AccLab Blog

This excerpt is also potentially relevant to: Informal Businesses

Zimbabwe

In response to challenges being faced in the informal sector with the closure of food markets, UNDP through its Urban Resilience Initiative has partnered with UNICEF, the Government of Zimbabwe and implenting partners Oxfam, CARE International and Dan Church Aid to refurbish markets with infrastructure which can endure the impact of current and future shocks such as the COVID19 pandemic.

Source: AccLab Blog

Read - Building a better post-COVID19 future for Zimbabwe’s Informal TradersAnalysis of Food Supply Chains and the Informal Sector The Accelerator Lab has engaged in a solution mapping excercise exploring of the effect of COVID19 on the informal sector with a focus on the interruption to food supply chain as a result of the lockdown and loss of livelihoods to thousands of vulnerable women.Reimagining a post COVID19 Society

Source: AccLab Blog

The Accelerator Lab has engaged in a solution mapping excercise exploring of the effect of COVID19 on the informal sector with a focus on the interruption to food supply chain as a result of the lockdown and loss of livelihoods to thousands of vulnerable women.Reimagining a post COVID19 Society

Source: AccLab Blog

The Reimagining a post COVID19 Society Campaign forms part of several activities being conducted by the Accelerator Lab focused on the impact of the coronavirus. As part of its work to understand the impact of COVID19 in the informal sector, the Accelerator Lab is collecting data on the country’s food supply chains and informal markets to assess how vendors, farmers and consumers have been affected over the past 7 months.-----

Source: AccLab Blog

This excerpt is also potentially relevant to: Informal Trade

On the morning of the 30th March 2020, Zimbabwean cities woke up like ghost towns, due to the Government of Zimbabwe’s decision to place the nation on a 21-day lockdown, as a means of preventing the spread of COVID-19. The decision led to Zimbabweans retreating to their homes and cities being virtually empty, surprisingly to some even informal vendor markets complied. Like many cities around the world, all measures to slow the spread of the coronavirus from national quarantines to school closures, have been taken.The biggest question being asked globally is whether a lockdown and social distancing measures will work in Africa, given the characteristics of many African cities. For example, it is estimated that about 2/3rds of Nairobi’s population lives on just 6% of its land. In Kampala, 71% of households sleep in a single room, and in Zimbabwe the informal sector contributes significantly to the development of the Zimbabwean economy (estimated over 60% of GDP and 85% of jobs). Understandably vendors need to take to the streets for their livelihood, farmers need to make sure their product moves on a daily basis and Zimbabwean citizens rely on both these supply groups for goods as a more affordable alternative. As a result, it took a mere 24 hours for Zimbabweans to get back the streets to move products (tomatoes, potatoes etc) and to sell, through markets and vending spots which posed an urgent question on health and safety. The question many were asking was how sustainable it would be for the supply chain to completely locked down, especially as people require uninterrupted food supply during the lockdown period. The President of Zimbabwe went on to announce that all farmers and traders must continue to deliver produce to food markets, including those markets that supply our cities, towns, and growth points. This would help preserve jobs, livelihoods, and access to food especially during the lockdown.

Source: AccLab Blog

This excerpt is also potentially relevant to: Informal Trade

How does one begin to categorize the actors and stakeholders of the second largest informal sector in the world? According to the Zimbabwe 2014 Labour Force Survey, 94.5% of employment in the country is informalized. Our entry point as the Zimbabwe AccLab to understand this colossal sector was to focus on the section of the informal sector that has affected urban cities in Zimbabwe the most: Street Vending. Street vending accounts for 15 to 25% of total informal employment in Africa’s cities. According to the Assessment of the Contribution of Street Vending to the Zimbabwe Economy 2018, 86.6% of street vendors depend entirely on street vending as their source of income.

Source: AccLab Blog

This excerpt is also potentially relevant to: Other

Nomadic vendors have no designated selling spot, but rather move from place to place during the day according to the fluctuation of foot or vehicle traffic in an area. Of the 19 vendors interviewed during our solution safari, 6 were classified as nomadic vendors. There is a need for us to understand the relationship between nomadic tendencies and access to a conducive environment to trade. If there is vehicle and foot traffic present in designated market areas, will this influence a vendor’s ability to settle and trade in that market? An alternative way of understanding this nomadic behaviour could be innovating around street vending and mobility. This needs further investigation because most nomadic vendors have no trading licenses and local municipalities are struggling to track the movement of vendors and regulate their trade. Nomadic vendors greatly contribute to the congestion of central business district of most cities, and their proliferation has exacerbated the state of disorder in Zimbabwe’s capital city Harare and the increase of criminalization in the informal sector. Legal or illegal vendors

Source: AccLab Blog

79% of the vendors we interviewed stated that vending was a temporary income generating measure they engaged in to feed themselves from day to day. Should Zimbabwe have an economic turnaround, these street vendors would leave vending completely. Street vending, for most, is a coping mechanism, and a means of survival in an economy under transition and monetary reform. Because of the desire to survive, the avenues to generate income are therefore fluid between legal and illegal trade. A similar trend has been identified in South Africa, during a study on exploring how early school dropouts cope as survivalist entrepreneurs. They found that “for many millions of people, particularly poor black South Africans who form part of the informal sector as survivalist entrepreneurs experience hard times and their way of living is not easy as they have to be satisfied with whatever amount they are able to make after a long day’s work. For them there is simple no visible alternatives.” The key word in this statement is ALTERNATIVES. Are there ways we can explore and expand a population’s perception on alternative revenue streams in the environment they live in? The transition from survivalists to entrepreneurs in street vending may require investment in educational programs and business training to shift the mindset of vendors from temporary interventions to sustainable long-term ventures.

Source: AccLab Blog

This excerpt is also potentially relevant to: Survivalist Entrepreneurs