Small is Great

In Tanzania the popular Kiswahili concept is miradi midogo midogo, which literally means “small projects.” This follows the ILO (1972) classification of the informal sector. However, in attempting to analyze what people do in these “small projects,” especially those related to women’s activities or small entrepreneurship, I have concluded that these are not only miradi midogo midogo but miradi midogo muhimu - “small but important or essential projects” - for they make people survive when the formal sector can no longer provide or meet peoples basic needs. The sector’s contribution to the household economy and the community at large is substantial. According to Tripp (1985:5), activities included in the informal sector are:

Commercial and small scale manufacturing enterprises which the state has no jurisdiction over, does not control, and/or has deemed illegal, regardless of whether the state is actually seeking to curtail these particular activities.

This definition includes a very wide spectrum of activities. But since Tripp aimed at studying the informal business in relation to the state machinery breakdown, she put more focus on the areas in which the state had some interest or those which related to its function.

Unlike in the 1970s, nowadays one can talk about the informal sector and be understood. Yet one wonders how many areas can be covered under this sector. However, it should be noted that any meaningful definition will have to include the small scale industry activities. These activities include the production of intermediate goods for the informal sector, which are generally purchased by others, including middlemen either for middle or upper class households. In this way, a network of households supporting each other may emerge. They can also be for export purposes. A good example is the women’s viondo activities in Kenya, where locally produced baskets (kiondo) are sold internationally through middlemen or cooperative societies.

It could also include retail trade, transport and personal services such as tailoring, hair saloons, barber, open air or construction site food preparation grounds popularly known as mama ntilie and children selling cakes and groundnuts. It could also include traditional healers and medicinmen/women who render important services to the people and the community as a whole. The Aparukuru women who sell herbs at Kariakoo area render such services.

Names associated with the informal sector may vary from one place to another. The following names are common in East Africa: second economy, parallel market (magendo and ulanguzi), underground market, black market, shadow economy or unofficial economy and clandestine economy (Alessandrin and Dallago Bruno (eds) 1987). All these names show the relationship between the government or state run economy and the informal sector. They imply the existence of an antagonistic relationship between the informal sector and the formal sector. I would suggest that the inform sector be looked at more positively, as having a symbiotic relationship with the formal sector. The informal sector should be understood as economic activities characterized by levels of operation and capital investments that are less bureaucratic with simple and manageable technology. Other names which are a little positive are: small scale business (miradi midogo midogo, shughuli ndogo ndogo), jua kali of Kenya and open air garages in Dar es Salaam.

The following section of this lecture reviews some of the studies on the informal sector, which have contributed to the confusion of the concept. But as we go along reading the paper, the major question is: how do you formalize the activities operating in this sector so that they get a good name?