Origins of the Informal Economy (African Perspective)

The historical context of the informal economy is drawn from neo-liberalism in which colonialism was deeply rooted.

Origins of the Informal Economy (African Perspective)

The informal economy has been a permanent feature of the sub Saharan Africa. Concerted debate has been triggered by the incessant existance of this feature in our economy . The historical context of the informal economy is drawn from neo-liberalism in which colonialism was deeply rooted.

When the settlers came to Africa and to Zimbabwe in particular, they established towns, farms, factories and mines which became the commercialized/former sector. Those who were not absorbed in the commercialized sector established informal economy as a means of survival. Initially this was a preserve of cheap labour in waiting to enter the industrialized/commercialized sector. The two economies separated by laws enacted then like “The Indusrial Disputes Ordinance of 1920, and the Industrial Conciliation Act of 1934. These were followed by the Industrial Conciliation Act of 1959.

This waters down the argument used by governments that the informal economy was a response to unemployment and it provided jobs that the formal econoy coulld no-longer provide. In fact some governments continue to see it as an option and hence have maintained the dual system and accept that there are two worlds in one country. Consequently policies and programmes based on charity have been instituted and very little has been done to rectify the continued exclusion. Guy Muhone’s empirical study recomended and correctly sothat only by getting the legal and institutional frameworks right will the needs of the vulnerable and the marginalised be addressed on a scale suficient to make a difference. It is also our view that there is need to focus on the relationship between law and marginalized workers as in the end it is law and governance which are the tools capable of addressing the situation of many millions of marginalized workers than the horizontal view which see to lock the infromal economy workers in a permanent social welfare state.

In her writing for the 2002 fr or the ILO conference of 2002 Christina Nathan noted that, 72% of Sub-Sahara, 65% of Asia and 51% of Latin America is in the informal economy. In Europe 15% and in the US just under 20% are undocumented workers.

The International Labour Organization (ILO), has taken the social effects of the declining economies seriously especially in Africa, particularly with respect to the informal economy workers. This led to the signing and adoption of ILO Convention 122, 142 and recommendations 169 of 1984 and 189 of 1998. These talk about the rights of the Informal Economy workers and conditions under which they are to operate.

In addition, the ILO’s The Decent Work Agenda was adopted in Zimbabwe by a tripartite meeting of 1997 which agreed that the concept of Decent Work can only be achieved through poverty reduction. This concept can be enhanced by good policy framework through fair labour standards, decent employment creation, social dialogue and social protection.


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