Across many African cities, the informal economy continues to expand amid persistent challenges in generating formal employment opportunities. Workers operating outside government regulation, taxation, and social protections are a common feature on the streets and in residential areas from Abidjan to Dakar and Abuja. Faced with limited options due to poverty, high unemployment, and bureaucratic obstacles, millions of Africans sustain themselves through small-scale, unregistered business activities.
In the Nigerian capital Abuja, 35-year-old Lohbip El-Pius Binyir runs a money transfer point alongside a pavement stall selling bread, biscuits, and drinks. Despite informal businesses typically being relegated to poorer neighborhoods, he has established his setup in a more affluent district, attributing this in part to the orderly manner in which he operates. His portable bench, umbrella, card reader, and folding table are efficiently managed and removed each evening, helping him avoid confrontation with authorities.
In Abidjan, Côte d’Ivoire’s economic hub, municipal officers frequently target informal vendors occupying sidewalks and roadways. This scenario is typical across many large African cities where street kiosks, carts, and stalls form an integral part of the urban commercial landscape. Mechanic Yacouba Sylla, 44, reports being forced repeatedly to relocate his informal garage due to demolition drives, yet he continues to restart his business elsewhere. Sylla aspires to own a formal, fully equipped workshop on which he could pay taxes and bid on official contracts but cites the lack of resources and state support as barriers to such advancement.
The International Labour Organization estimates that informal employment in Africa has grown from around 60% in the early 1970s to nearly 83% today. In countries including Ivory Coast, Senegal, Mali, and Nigeria, the figure surpasses 90%. The United Nations Development Programme (UNDP) highlights the informal sector as a constraint on economic growth and development, noting the scarcity of scalable enterprises and insufficient decent job creation opportunities.
Governments across the continent have implemented a range of measures to address the informal sector. These efforts include enforcement actions such as demolitions and merchandise seizures, and initiatives aimed at supporting workers through training or digital services. However, these interventions have not halted the sector’s expansion. Yaya Doumbia, first deputy mayor of Yopougon in Abidjan—an area known for its vibrant informal economy—concedes that curbing informal activities remains an “not easy task.”
Economist Guillaume Liby critiques the approach taken by many African countries, arguing they focus too heavily on coercion and enforcement rather than structural reforms. He points to burdensome taxes and complex administrative requirements as significant obstacles for informal workers seeking legal recognition. For many, including vendors like Dakar’s Lobe Sarr, the informal economy remains the only viable source of income amid limited employment options.
The informal sector encompasses not only small traders but also large numbers of workers without contracts or social security in sectors such as artisanal trades, security, restaurants, and cleaning services, often facing precarious livelihoods. According to the International Monetary Fund, this sector contributes up to 65% of Africa’s gross domestic product. However, its untaxed nature results in substantial revenue losses for governments.
Experts suggest that policies encouraging registration with tax authorities, improving access to finance, and building infrastructure catering to small entrepreneurs are necessary to foster the formalization of informal activities. In Ivory Coast, a national development plan unveiled in July explicitly aims to reduce the sector’s significant size by introducing a specific status for small entrepreneurs, reflecting a broader strategy to integrate informal workers into the formal economy.