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Ernest Aryeetey

The expressions, “informal economy,” “informal sector,” and “informal employment” reflect statistical terms and definitions used to describe various aspects of informality. They are the result of several decades of work to develop a framework that adequately represents the multifaceted nature of informality as it applies not only to developing countries, but also to other transition and developed economies. The informal sector is generally viewed as the set of activities of small unregistered enterprises, while informal employment refers to employment within the formal or informal sector that lacks any form of protection, whether legal or social.1 The informal economy is a broader concept that encompasses all of these elements in their different forms, including their outputs and outcomes. The many different views about the drivers and composition of the informal economy in Africa have influenced various prescriptions and policy responses. On the one hand, some have viewed informality as being inimical to investment and growth, given that the activities undertaken usually fall outside of official regulation and control. The policy response has, therefore, often been to clamp down on or formalize the activities and relationships within the informal economy. On the other hand, informality is sometimes viewed as critical for growth and poverty reduction, given that the informal economy is inextricably linked to the formal economy while also serving as an important source of livelihood for millions of people. As a result of this, some effort has recently gone into providing a more supportive environment to enhance productivity within the informal economy and minimize its inherent vulnerabilities in the last decade. In the face of increasing globalization and access to new technologies that will drive the future of work, there is concern about the future of informal economic activities. Whether new technologies lead to a decline or upscaling of the informal economy in Africa will depend on several elements. Technology will not only shape how informality in Africa is viewed, but will influence the kind of activities undertaken, its links with the formal economy, and ultimately, the public policy response, which will itself be shaped by advances in technology.


Jane I. Guyer and Karin Pallaver

African peoples have managed multiple currencies, for all the classic four functions of money, for at least a thousand years: within each society’s own circuits, in regional exchange, and across the continent’s borders with the rest of the world. Given the materials of some of these currencies, and the general absence of formalized denominations until the colonial period, some early European accounts defined certain transactions as barter. The management of multiplicity is traced through four eras: a) the precolonial period, with some monies locally produced and acquired, and others imported through intercontinental trades, such as the Atlantic slave trade, and eventually under the expansion of capitalism to Africa; b) the colonial period, when precolonial monies, in some places, still circulated with official monies; c) postcolonial national monies for the new African states; and d) the most recent phase of multiplicity in use, due to migration and sales across borders as well as to the use of new technologies, such as mobile money. The management of multiplicity thereby has a long history and continues to be an inventive frontier. History and ethnography meet on common ground to address these dynamics through empirical study of money in practice, and broader scholarship has drawn on a large variety of original sources.


This paper concerns the long-term evolution of labor in East Africa up to the twenty-first century. While it considers the classic themes of labor history, trade unions, strikes and politics, it is concerned with the broader question of how people relate to their environment, how their work is organized and what the economic consequences are. Taking 1500 as a bottom line, it proceeds to look at changes before and with the coming of imperialism and colonialism and the contradictions of colonial labor policy. It also considers how labor conditions have altered since independence. Mau Mau in Kenya and the institution of villagization in Tanzania, which both shed a light on labor conditions, receive particular attention. Since the majority of the population even in the twenty-first century are rural dwellers, there is much concern with agricultural and pastoral activities. If the greatest concentration is on Tanzania and Kenya, East Africa is defined broadly in part for purposes of comparison.