An informal market scene                         P. Courtesy

World Bank estimates show that 25% of the gross domestic product in developing nations is from the informal sector. In Nigeria, for instance, the informal sector accounts for about 65% to 70% of the economy, although it is difficult to ascertain the exact contribution of the informal sector due to paucity of data. The informal sector cuts across agricultural production, mining and quarrying, small-scale building and construction and machine-shop manufacturing. Traditional crafts in clothing and furniture, Services in the area of rural and urban services involving education, health, counselling, labour, vehicle and mechanical repair, utility services, midwifery, Esusu, which gives loans via its contributory fund and it is rotational.

However, if West Africa must achieve MDGs by 2015, and also transform its economy, it must reposition and encourage the informal sector and support entrepreneurial ventures. Hopefully, the Nigerian state has realised this as it established a special initiative in 2003 known as the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) to solely support Nigeria’s MSME sector.

The agency was mandated to put in place arrangements and proficient models for enterprise development. The agency has the prime responsibility for accelerating the development and modernization of MSME operations, promoting rural industrialization as well as ensuring poverty reduction and job creation. Recently, the Central Bank of Nigeria (CBN) concluded plans for a three-year programme for empowering women bankers in the financial system and also women economic empowerment scheme which will make it possible for female entrepreneurs to obtain credit from banks at single-digit rates of interest.

In Ghana, for appropriate support of the informal sector, the Presidential Commission on Pensions held a forum with various sections of informal sector operators, among them the Council of Indigenous Business Association (CIBA), Ghana Union of Traders’ Association (GUTA), Ghana Cocoa, Coffee and Sheanut Farmers Association, the Ghana Private Road Transport Union of TUC (GPRTU), the Greater Accra Markets Associations (GAMA) and the Ghana National Association of Garages. Informal sector groups such as Cocoa Farmers, Makola Market Women, Koforidua barbers, Hohoe drivers, and Moree fishermen are working out plan to put in place Group Personal Pension Scheme too.

Ghana has set up the Ghana Skills Development Initiative (GSDI) to enhance the capability of Trade Associations and the Informal Sector in a broader scope. As part of the project, females are being enticed to take part in auto mechanics, electronics, carpentry, and welding training. The project is to be executed in the Northern, Volta and Greater Accra regions for a two-and-half-year time. This is in partnership between the Governments of Ghana and Germany.

Also Women in Informal Employment Globalising and Organising (WIEGO) in 2012 had commenced the Focal City Initiative in Accra, to put in place a foundation that will make it possible for women in the informal sector to have improved working conditions and services in their engagement in the informal sector.

Gambia also gives support to the informal sector. The Tourism Challenge Fund (TCF) project is designed to enhance entrance of the informal sector to market opportunities in tourism. The strategy centres on the use of a multi stakeholder approach for solving challenges that shows what can be attained by collaboration strategists between the formal and informal sectors such as ‘bumsters,’ fruit and juice sellers, craft market stallholders, the taxi drivers, ground handlers and hoteliers, among others.

Apparently, governments in West Africa cannot provide jobs for the teeming youth. Supporting the informal sector and entrepreneurial development is one of the workable approaches to job creation.  As ECOWAS pursues its goal for ECOWAS of people in 2020 support for informal sector should be prioritize if most people will be lifted out of poverty. ECOWAS must deepen and broaden financial service availability to informal sector, put in place sustainable markets for its products and services and eliminate infrastructure challenges and trade barriers that cripple informal sector growth.

However, across West African states, support for the informal sector must go beyond just policy directives, but a pragmatic approach and effective strategy to mobilize and uphold small businesses. Obviously, if governments across the region do not give adequate support to the informal sector, challenges of youth unemployment will persist. Conversely, if the informal sector gets the required support, the number of cottage industries will surely grow and youth unemployment is likely to be reduced in the year 2020.

By Audu Liberty Oseni.