Urban Informality in Sub-Saharan Africa: Profiling Workers and Firms in an Urban Context

Type Working Paper - World Bank Group Policy Research Working Paper
Title Urban Informality in Sub-Saharan Africa: Profiling Workers and Firms in an Urban Context
Publication (Day/Month/Year) 2024
URL https://documents1.worldbank.org/curated/en/099417402142413528/pdf/IDU1e9d2d68a110ad14aaa1af9a110e90​bd603f1.pdf
This paper describes the state of informal sector work in
urban Sub-Saharan Africa, using household surveys from
26 countries representing 61 percent of the population of
Sub-Saharan Africa and firm surveys from three countries.
Five main conclusions emerge. First, the urban informal
sector is large and persistent in Sub-Saharan Africa. Approximately
56 to 65 percent of urban workers are informal, half
of whom are self-employed. Data from five countries suggest
little systematic reduction in the prevalence of informality
during the 2010s. Second, heterogeneity in the African
informal sector cuts along demographic lines. Women are
overrepresented in informal self-employment, men in informal
wage work, and youth in unpaid employment. Third,
while the urban informal workers are, on average, poorer
and in less-skilled occupations than formal sector workers,
the majority are not extremely poor and are in mid-skilled
occupations. Fourth, informal enterprises are small and are
challenged to survive and grow into job-creating firms. Few
find much benefit from registration given the costs, both
monetary (taxes) and transactional (information about the
registration process). Fifth, access to urban public services
(utilities) is weakly associated with the probability of working
in an informal job, although access to mobile phones
is high across all job types. If thriving urban jobs are to
contribute to economic and social development in Africa,
it will be crucial for policies and programs to take into consideration
the heterogeneity in jobs, the profile of workers,
and the urban context.

Related studies