12 September 2017

Namibia: Informal Labour Sector Overlooked

Labour researcher and educator Herbert Jauch says the informal economy and the agricultural subsistence sector are often overlooked.

He states that experts who talk about the economy mostly refer to the formal sector. He, however, feels that there is a missing link between the development of the formal economy, subsistence agriculture and the informal economic sector.

Jauch said these three sections combined make up the economy as a whole, but policymakers (not only in Namibia) tend to focus almost exclusively on the formal economy.

"Thus, funding, policies and interventions tend to be directed towards the formal economy, while the informal economy and subsistence agriculture are overlooked. This approach has resulted in what the late Guy Mhone described as Africa's 'enclave economy', where a small formal economy operates as an island, surrounded by a sea of poverty in the informal and subsistence economy," Jauch said.

In terms of not seeing much academic research done in the informal sector to assist those who are unable to get into the mainstream, he said this is because the informal economy is hardly recognised by economists and policymakers, and there are few academics and research organisations which have undertaken research in this sector.

Looking at what can be done to further the development of the informal sector and the laws in place to strengthen that sector, Jauch said it is not a matter of law, as national laws apply to both the formal and informal economy.

He stressed that it is a question of which interventions are needed to strengthen and improve the conditions of those working in the informal economy.

"Informal businesses experience many problems with municipal regulations, affordable premises, and so forth, while employees in the informal economy often experience long hours of work, low wages, low benefits, etc," Jauch stressed.

He explained that it is for this reason that almost all workers prefer a job in the formal sector. Therefore, the informal economy needs support for the business operators there, and also far better working conditions for employees.

The informal businesses themselves also need to identify the kind of support they need, and government programmes need to respond to those needs, while direct linkages between informal and formal businesses could also be useful.

Jauch added that the informal economy in Namibia is already an important contributor in terms of employment, although the quality of jobs is often very poor.

The informal economy is dominant in almost all African countries, and in Namibia it employs about the same number of people as the formal economy.

Moreover, Jauch said the informal economy tends to grow when the formal economy shrinks or collapses, as people are then forced into the informal economy as a matter of survival.

"This is not a matter of choice. During my time at the Labour Resource and Research Institute, we conducted a study into Namibia's informal economy, and we found that most people are working there because they could not find a job in the formal economy," he noted.

In order for labour unions to assist informal employment in the country, Jauch said the Namibia Informal Sector Organisation and the National Union of Namibian Workers a few years ago signed an agreement as a basis for working with each other.

"Namibia's second trade union federation, the Trade Union Congress of Namibia, plans to focus more strongly on the informal economy to improve working conditions there. It remains to be seen what the unions can achieve in the years to come, but it is certainly important for them to intervene in the informal economy," he added.


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