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close this bookWomen in Informal Sector (Dar Es Salaam University Press, 1995, 46 p.)
close this folderINTRODUCTION
View the documentWhat is an Informal Sector?
View the documentThe Jua Kali Concept
View the documentSmall is Great

What is an Informal Sector?


indicates that the people who are engaged in informal sector activities have a certain level of ability. This could be a kind of informal (educational) qualifications or capital acquisition involving accessibility to the sources of capital.

In the World Bank definition there is an implicit notion of class position of those who are involved in the business and the household institution itself. The definition was not only based on the social status of the people or groups involved in the business, but also on the basis of the function or role the informal sector plays in the society. Thus, there was a clear demarcation between “service” oriented informal sector activities and “manufacturing” oriented informal sector activities. Because of this demarcation the discussion centered on the “linkage”, with the “manufacturing” aspect (Leys 1974, Gerry 1974; Hirchman 1958). In Tanzania, the Small Industries Development Organization (SIDO) is trying to combine the two.

The “service” orientation of the informal sector was purposely left out because service oriented businesses which are predominately women owned/managed are considered to be of marginal significance to the national economy. In this sense, one may argue that the World Bank’s definition of the informal sector has an inbuilt gender bias. Indeed, some people devalue the informal sector because they negatively associate it with prostitution which is categorized as a type of informal business in some literature (Bromley 1978, Bujra 1975). But such conclusions, as we shall see, are based on an inadequate understanding of the causal factors which lead people to participate in informal business activities.

The multiplicity of the economic activities that are carried out by the people, either as individuals or groups, have also contributed to the multiplicity of the definitions and terminologies. But as Alessandrin and B. Dallango (1987:9) in their study on the informal sector have cautioned us, we should not look at informal economic activities as “unofficial” since they exist in both capitalist and socialist economies - although the degree and scope may differ between the two types of economies. Clearly then, the term used to describe and explain informal businesses tell us much about the social experiences as lived by the people who deal or are involved in this sector.

The Jua Kali Concept

In East Africa, especially in Kenya and Tanzania, the Kiswahili definitions show the nature of such groups of people and the economic activities they are engaged in. In Kenya the informal sector is called Jua Kali, literally meaning “intense or hot sun,” indicating that the people involved in this sector do their business in open spaces.

Writing on the need to rethink about the formal education and training as a way to get into “gainful employment” and into the formal sector, Dore (1976:74), characterized the jua kali people as:

...the roadside and empty lot mechanics who will weld on a Dourneville cocoa tin to mend the exhaust pipe of the civil servant’s Mercedes, the leather workers making hand-made bags for the tourist trade, the furniture-makers, the men who collect empty essolube cans from garages twice a day and have them processed into serviceable oil lamps by sunset.

This quotation shows the link between the classes and the interdependency that exists between the two sectors. People who have studied this sector know its importance to the macro-economy inspite of the fact that it has taken too long for many governments and development institutions to recognized and support it (Omari 1989).

The jua kali concept evokes some socially accepted images of the people who have been working in open spaces for a long time. The presumption behind such a concept is that people working in the informal sector have no sheds or shelters. Any place can become the operational site. If we take into consideration the kinds of activities undertaken in this manner, especially those which are done by women, this presumption may be misleading however. Furthermore, the term is related to the economic activities undertaken in urban areas dealing with non-agricultural products and activities only. But as we know, there are several agricultural activities which are carried out in the sun and belong to the informal sector. There are also non-agricultural activities belonging to this sector, which are carried out in the shades. So the jua kali concept has an inbuilt negative meaning and may not tell us the whole story about informal sector.

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?