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Poverty, red tape push millions of Africans into informal economy

AFP
By AFP
September 15, 2026 01:44 PM GMT+03:00

Across the sidewalks, residential areas and public spaces of African cities, the informal economy is thriving under the noses of authorities, who often lack the power to stop it.

AFP
By AFP

Poverty, unemployment and bureaucratic red tape push tens of millions of Africans into work that goes unregulated, untaxed or unprotected by the government.

AFP
By AFP

From Abidjan to Dakar and Abuja, mechanics, scrap dealers, motorcycle taxi drivers and street vendors squeeze into the tiniest corners to run their businesses.

AFP
By AFP

"Life starts somewhere, so I've started here," said Lohbip El-Pius Binyir, who operates a money transfer point and also sells bread, biscuits and drinks from a small pavement stall in the Nigerian capital, Abuja. The 35-year-old has managed to set himself up in a fashionable district, even though informal businesses like his remain largely confined to poorer neighborhoods.

AFP
By AFP

He attributes the authorities' leniency partly to the tidy, minimal way he operates his business: a bench, umbrella, card reader and table he folds up and carts away each evening.

AFP
By AFP

On a street in Abidjan, Ivory Coast's economic capital, municipal officers chased down informal vendors who had set up stalls on the pavements and, in some cases, the roads. 

AFP
By AFP

This is a common scene in megacities across the continent, where kiosks, carts, containers, tables and stalls laid out on the ground form part of the urban landscape.

AFP
By AFP

In the early 1970s, informal employment in Africa stood at an estimated 60%, but that figure has climbed to nearly 83% in recent years, according to the International Labor Organization. In Ivory Coast, Senegal, Mali and Nigeria, it now exceeds 90% of the active population.

AFP
By AFP

Beyond small vendors, the informal sector also includes large numbers of people working without a contract or social security coverage in artisanal trades, security, the restaurant industry or cleaning, who face precarious livelihoods.

AFP
By AFP

"It's a survival economy, the only door left open for many Africans," said economist Guillaume Liby, pointing to a failing institutional environment and strong population growth.

AFP
By AFP

The informal sector forms a major part of the economy, accounting for up to 65% of the continent's gross domestic product, according to the International Monetary Fund. Yet, while the sector remains untaxed, it represents a considerable loss of revenue for African governments, economists say.

AFP
By AFP

Governments are often urged to adopt policies that encourage informal-sector workers to register with tax authorities, ease access to financing, and create infrastructure needed to accommodate small entrepreneurs.

AFP
By AFP

In Ivory Coast, reducing the "significant weight" of the informal sector, notably through the creation of a status for small entrepreneurs, forms one pillar of an ambitious national development plan, unveiled in July.

AFP
By AFP

Benin's efforts are already bearing fruit after the country introduced a policy centered on building new, modern markets and reorganizing large commercial areas. Formerly accounting for 97% of employment, the informal economy now represents 85% of jobs. Beninese authorities tout a strategy that has allowed the state to boost tax revenues while providing better working conditions and combating unsanitary practices.