THE International Labour Organisation (ILO) has found that 56% of the country’s workforce is in the informal sector, despite the minister of labour, industrial relations and employment creation, Utoni Nujoma, saying the sector is hard to measure.
Nujoma was speaking at an informal economy stakeholders’ workshop yesterday morning in Windhoek.
The minister, whose statement was read on his behalf yesterday, said the ministry is unable to measure the sector, because its activities cannot be directly observed, and for the most part, operators in the informal economy do not want to be accounted for.
“This scenario makes it difficult for planners and lawmakers to engage in proper planning and decision-making, and to implement policies of service delivery,” he said.
The ILO says about two billion workers, or 60% of the world’s employed population aged 15 and older spend at least part of their time in the informal sector.
“Today, the informal sector still accounts for about 35% of gross domestic product in low- and middle-income countries versus 15% in advanced economies,” the minister said.
Despite acknowledging the contribution the sector makes to the country’s economy, Nujoma said informal firms currently do not contribute to the tax base and tend to remain small, with low productivity and limited access to finance and other technical support.
“As a result, economic growth in countries with large informal sectors remains below potential. Informal workers are more likely to be poor than workers in the formal sector, because they lack job security, a representation voice, income security, and all other decent work indicators,” he said.
The recently established Dynamic Informal Traders’ Association (Dita) previously said the informal sector is the fastest-growing employment sector in the country, given massive retrenchments and lay-offs, growing at a rate of 5% annually.
This was also expressed by the National Union of Namibian Workers (NUNW), which stated that the formal economy is shrinking rapidly, which is not good for the national economy.
“Informal traders do not contribute to the economy through income taxes, a source of revenue so vital to our gross domestic product.
“We are largely an importing nation when we should be exporting our manufactured products to the rest of the world,” said NUNW representative Bianca van der Westhuizen.
She called on all politicians and policymakers to pay urgent attention to the real problems that ordinary citizens are faced with on a daily basis.
“When we pay attention to the basics, we build a solid foundation that will take us forward as a nation and deliver to us the dream of dignity, prosperity and security,” she said.
Van der Westhuizen said new strategies for Growth-at-Home were needed promptly.
“Too many of our brothers and sisters do not know where their next plate of food will come from.
“Too many graduates cannot find secure and safe employment, if they can find anything at all,” she said.
Van der Westhuizen said many citizens have turned to entrepreneurial endeavours and remain frustrated by financial systems that do not understand their circumstances and are not willing to fund their activities.
A study conducted by the United Nations Development Programme (UNDP) revealed that revenue for men who own businesses in the informal sector decreased to N$2 770 per month, while women’s monthly income dropped to N$1350,53 after Covid-19 restrictions were lifted.
Before the pandemic, businesses owned by men made about N$6 873,25 per month, and women-headed enterprises earned average revenue of N$3 254,71.
