Namibia: Half of Namibians Employed in Informal Sector

Namibia's informal economy is providing 418 674 people with employment, which is 57.7% of the total employment in the country.

A diagnostic report on informality in Namibia shows that the majority of those jobs are in the agriculture, forestry and fishing sectors (87.7%), followed by accomodation and food service activities (68.6%).

"Informal employment includes an employer that does not provide at least a pension scheme, medical aid and/or social security," the report states.

Executive director of finance Michael Humavindu says several challenges prevent businesses from moving into the formal economy.

He says the sector, however, remains a key contributor to the country's overall economy.

"The informal economy is contributing more than 24% to the country's gross domestic product," Humavindu says.

Bank of Namibia deputy governor Ebson Uanguta says those in the informal economy will not be forced to transition to the formal economy, but it will be a gradual process.

"We have seen the contribution the sector makes to the country, therefore, no one will be forced to go formal.

It will be a gradual transition, and by formalising, the businesses will actually benefit from other resources," he says.

He says formalisation does not mean paying taxes as thresholds are put in place for small and medium enterprises.

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