UNDP calls for policies to support informal sector’s resilience, performance

Source: UNDP calls for policies to support informal sector’s resilience, performance | Herald (Business)

Oliver Kazunga 

Senior Business Reporter 

THE United Nations Development Programme (UNDP) has called on African countries to adopt transformative policies to improve the informal sector’s resilience and performance that remains vulnerable to various shocks.

For example, the Covid-19 pandemic has haemorrhaged the sustainability of the informal economy whose official figures show that nearly 83 percent of employment in Africa and 85 percent in Sub-Saharan Africa is informal.

In his opening remarks in Victoria Falls on Tuesday during a two-day policy dialogue on the informal economy in Africa, UNDP Zimbabwe country office senior economist, Mr Ojijo Odhiambo said: 

“The Covid-19 pandemic has brought to the fore the vulnerability of workers and enterprises in the informal economy and the significant contribution the informal economy makes to income, and employment in Africa, and how extricably it is linked to the rest of the whole economy. 

“We must, therefore, begin to think of counter policy narratives that challenge the status quo and unleash the immense potential of the informal economy.”

Such transformative policy narratives can be implemented by collectively learning and building intelligence on how to sustainably support the informal economy – including through an enabling environment for transition to formality and decent work  so it can play a formidable role in Africa’s inclusive, sustainable, resilient and prosperous future with a special focus on people-centred recovery from the Covid-19 crisis.

Mr Odhiambo said in light of the numerous challenges and opportunities facing workers in the informal economy, UNDP and ILO have developed a global partnership to jointly deliver support to member States.

He said the global partnership has been cascaded to regional and national levels.

“At regional level, we are excited about the level of engagement between our two agencies and are confident that our partnership will lead to impactful actions. This event is one of the outcomes of this collaboration at the regional level,” he said.

The UNDP official said his organisation was excited to be part of such a path-breaking dialogue as it brings together informal actors, representatives from governments, employers and workers organisations as well as development partners to share ideas and devise unique solutions to challenges facing Africa as a region.

Mr Odhiambo said through collective intelligence gathering, more concrete and robust policy solutions will emerge.

“We remain hopeful that this will be the first of many similar events in the coming years.

“More importantly, we hope the conversation will spur all of us towards action.

“Here in Zimbabwe, UNDP and ILO are increasingly working in close collaboration in many areas to promote a better understanding of informality,” he said.

For instance, Mr Odhiambo said they were currently supporting Zimbabwe to develop its first ever national strategy to support the transition from informality to formality.

Beyond the above-mentioned strategy, he said the two development partners were also exploring vast possible interventions and programmes around which they could collaborate in support of the development of the informal economy even as the economy transitions, over time, from largely informal to formal.

“As UNDP Zimbabwe, our work portfolio on the informal economy has grown over the past few years. 

“Our efforts are dedicated at empowering communities to ensure they can benefit from and can contribute to inclusive, job-rich and green recovery and development pathways,” he said. 

“Through our multidisciplinary programmatic work, we go beyond the narrow economic dimension of informality to assess and devise mechanisms for addressing the multiple drivers that sustain patterns of informality, including assessing the political economy of informality and potential trade-offs and synergies between different policy options.” 

In so doing, UNDP and ILO have adopted a human-centred and rights-based approach.

Presently, the two institutions’ initiatives include supporting policy development, strengthening resilience and business continuity, such as work on safe markets and Covid-19 compliant markets for MSMEs in the informal economy and supporting digital solutions to strengthen food supply chains.

In the evolving aftermath of the impacts of the Covid-19 pandemic, African governments were now looking towards an era of recovery and building back better.

Speaking at the same occasion, ILO assistant director general Ms Cynthia Samuel Olonjuwon, who is also the regional director for Africa, said informal economy was rampant in Africa.

“The informal economy is the reality of the world of work in Africa, where informal economy accounts for 83 percent of total employment compared with a world average of 61 percent,” she said.

Ms Samuel-Olonjuwon highlighted that the growing recognition of the informal economy as an obstacle to structural transformation in Africa is based on multi-dimensional analysis, which show how actors in the informal economy have to cope with various vulnerability factors, low productivity and lack of access to credit, among others.

“And the Covid-19 crisis has underscored the worrying consequences of insufficient public policy interventions for workers and economic units in the informal economy,” she said.

African Union Commission head of labour employment and migration in the department of health, humanitarian affairs and social development, Mr Sabelo Mbokazi said although the pandemic was new, the social and economic inequalities exacerbating Covid-19’s impact on informal economy actors are not new.

“The Covid-19 response and recovery process provides us with a chance to work on existing inequalities to ensure that no one is left behind. 

“The African Union is cognizant of the fact that economic recovery alone will not suffice where the drivers of informality are not sufficiently addressed.

“Just as the importance of addressing decent work deficits in the informal economy precedes the ongoing crisis, the response must be both backward and forward-looking,” he said.

In Africa, he said, this entails unrelenting pursuit of the relevant targets of the AU Agenda 2063 and its social agenda and UN Agenda 2030.

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