Informal economy is growing: study

THE informal economic sector in Namibia should not be ignored, as it provides income for at least 133 000 people, most of them self-employed, says a new study.

More than half are women, who comprised 53,1 per cent of the 488 people in six regions interviewed by the Labour Resource and Research Institute (LaRRi). Young Namibians between the ages of 19 and 29 account for 63,8 per cent of this sector, the highest percentage.”Namibia’s informal economy is structured in such a way that it has more operators (82 302) than workers, which comes to 47 305 of the total figure,” said Ntwala Mwilima, a researcher at LaRRi, said when the study was presented on Thursday.”Most of the people in the informal sector concentrate on the wholesale and retail sector and mostly operate in open spaces.”She cited retrenchment, lack of alternatives and unemployment as the main reasons for the situation.”People try to survive and thus the informal sector in the country has survivalist characteristics,” Mwilima added.Most of the self-employed people in the sector were not registered and did not pay taxes, Mwilima said.As a result, no benefits like social security and medical aid were available to them.Loans from financial institutions were not available either, for lack of collateral.Income averaged between N$375 a month for workers employed by informal operators, while the latter earned about N$1 450 a month.About one third of the workers earned wages as low as N$100 to N$150 a month.The most common benefits provided to workers in the informal economy are accommodation, food rations and transport, the 66-page study revealed.Only 10,6 per cent of the 488 informal sector operators and workers interviewed received any support from organisations.Compared to other sub-Saharan African countries, Namibia’s informal economic sector is small, the study found, citing Ghana as an example, where it accounted for 90 per cent of the total economy in that country.Veripi Kandenge, President of the Namibia Small Traders Association (Namsta), said Namibia’s informal sector was not of a temporary nature and would not disappear one day.Kandenge, who also leads an organisation of shebeen owners, said at the launch of the LaRRi study, that the challenge was to blend the informal sector into the mainstream economy.According to Labour Minister Alfeus Naruseb, many hard-working Namibians, be it those in the informal or shadow economy, lived in poverty and without any social protection.”The challenge to the Government and society as a whole is to afford them opportunities for decent work and protection.Trade unions will have to undertake information campaigns and prove their worth to gain recognition and trust within the informal economy,” Naruseb said.Research and interviews were conducted in the Khomas, Karas, Omusati, Oshana, Ohangwena and Oshikoto regions.The industries covered were agriculture, manufacturing, wholesale and retail trade.Young Namibians between the ages of 19 and 29 account for 63,8 per cent of this sector, the highest percentage.”Namibia’s informal economy is structured in such a way that it has more operators (82 302) than workers, which comes to 47 305 of the total figure,” said Ntwala Mwilima, a researcher at LaRRi, said when the study was presented on Thursday.”Most of the people in the informal sector concentrate on the wholesale and retail sector and mostly operate in open spaces.”She cited retrenchment, lack of alternatives and unemployment as the main reasons for the situation.”People try to survive and thus the informal sector in the country has survivalist characteristics,” Mwilima added.Most of the self-employed people in the sector were not registered and did not pay taxes, Mwilima said.As a result, no benefits like social security and medical aid were available to them.Loans from financial institutions were not available either, for lack of collateral.Income averaged between N$375 a month for workers employed by informal operators, while the latter earned about N$1 450 a month.About one third of the workers earned wages as low as N$100 to N$150 a month.The most common benefits provided to workers in the informal economy are accommodation, food rations and transport, the 66-page study revealed.Only 10,6 per cent of the 488 informal sector operators and workers interviewed received any support from organisations.Compared to other sub-Saharan African countries, Namibia’s informal economic sector is small, the study found, citing Ghana as an example, where it accounted for 90 per cent of the total economy in that country.Veripi Kandenge, President of the Namibia Small Traders Association (Namsta), said Namibia’s informal sector was not of a temporary nature and would not disappear one day.Kandenge, who also leads an organisation of shebeen owners, said at the launch of the LaRRi study, that the challenge was to blend the informal sector into the mainstream economy.According to Labour Minister Alfeus Naruseb, many hard-working Namibians, be it those in the informal or shadow economy, lived in poverty and without any social protection.”The challenge to the Government and society as a whole is to afford them opportunities for decent work and protection.Trade unions will have to undertake information campaigns and prove their worth to gain recognition and trust within the informal economy,” Naruseb said.Research and interviews were conducted in the Khomas, Karas, Omusati, Oshana, Ohangwena and Oshikoto regions.The industries covered were agriculture, manufacturing, wholesale and retail trade.