Week 24: Unpacking the "informal" identity for Nairobi’s low income worker

What's in a name? Turns out quite a bit beyond identity if the experience of the "informal" traders and "informal" workers who account for 80% of employment opportunities in Africa [1] is anything to go by.The identity of informal often means disruption, crackdown, criminalization and lock out from access to financing that can be the crucial ladder in enabling social mobility.

But where did this informal identity come from? 

Under the apartheid colonial regime, the imperialist inevitably held the power of ontology - determining what was the nature of reality - simply put deciding what existed and what did not exist.

Think of ontology this way - a child raised on the mountain slopes will likely define height very differently from a child nurtured in the Savannah plains. 

For the colonial imperialist, then, the economic activities aligned to the overall desire of the colony by the British empire accounted for what was, to them, a proper activity. Everything else was likely a misnomer.

When the African traders made the voyage to the new railway town of the new colony - Kenya in the early 20th century (predominantly coastal traders seeking to exchange goods with interior communities), the imperialist observed their trade as

unsophisticated, traditional and of no meaningful value to the economy as designed. There was therefore no need to formally recognize and support it.

Early economists studying the development in the industrializing societies theorized likewise. Of note (Lewis, 1954) essay presented the "two - sector surplus labor theory" characterizing the exchange activities outside the purvey of what was perceived to contribute to the development as traditional sectors aggregating surplus low skilled workers. In this lens, therefore, these unrecognized activities were a timing problem, and as the industries and agricultural concerns absorbed the surplus labor these activities would wither away.

However, when conducting a study the economic activities of rural migrants in Ghana British anthropologist Keith Hart concluded that these unrecognized activities had not only persisted but grown (Hart, 1970). It was Keith Hart that first coined the term "informal sector".

Despite a common term, the characterizations of the informal sector varied significantly with terms such as irregular economy (Ferman et al, 1973), underground economy (Simon et al, 1982) or as an invisible, hidden, shadowy enterprise not well recorded in the formal systems (Abumere et al, 1988).

Some of these characterizations precipitated the insinuation of informal activities as illegal activities.

Even with the realization that these "informal activities" were not going away, the dominant thinking was that these activities lacked a place in the course of development and once the workers/ traders got something better to do they would abandon the informal sector ship for the "formal"

An International Labor Organization's study disproved the survivalist theory (Rado, 1973) making note that these informal sector activities included profitable enterprises and further adding that the "informal sector" was not only a source of labor but also productivity and entrepreneurship concluding this sector was pervasive and integral to understanding country level and global level economies [2] .

A couple of theories have been advanced over time of why the "informal" sector exists, persists and grows; and in the post colonial African reality accounts over 80% of jobs in Urban Africa [1]. 

Beyond the Lewis two - factor labor theory of economic development Hernando De Soto advanced the argument that the informal economy was a rebellion against the formal bureaucratic legislation imported and favoring the capitalist elite and not adapted to the local needs. Another perspective presented by (Portes, 1994) hypothesizes that the formal establishment needs and keeps the informal economy to exploit the low skilled workers who are often subcontracted with exploitative working relationships such as commission selling or dependent working.

Whatever may be the theory, the tag of informality today subjects the low income trader or worker to occasional crackdowns, a charge of non-compliance with a great variety of obscure laws, codes, and regulations invoked to justify displacements, confiscation or arrest” (Broomley, 2000)

[1] https://blogs.worldbank.org/africacan/supporting-africas-urban-informal-sector-coordinated-policies-social-protection-core

[2] ILO: Report of the Committee on the Informal Economy, resolution and conclusions concerning decent work and the informal economy, adopted on 19 June 2002, ILC, 90th Session, Geneva, 2002, http://www.ilo.org/public/english/standards/relm/ilc/ilc90/pdf/pr-25.pdf

Abumere, S.I, Arimah, B.F., Jerome, T.A. (1988). The Informal Sector in Nigeria Development Process (Research Report No.1). Development Policy Center, Ibadan

Bromley, R. (2000). Street vending and public policy: A global review. International Journal of Sociology and Social Policy.

Ferman,P .Ferman, L, (1973) .The Structural Underpinning of the irregular Economy. Poverty & Human Resources Abstracts,(8) 3-17

Hart, K. (1970). 8. Small‐scale entrepreneurs in Ghana and development planning. The Journal of Development Studies, 6(4), 104-120.

Lewis, W. A. (1954). Economic development with unlimited supplies of labour.

Portes, A, (1994) ‘The Informal Economy and Its Paradoxes’ In N.J.Smelser and R.Swedbery (eds). The Hand book of Economic Sociology .Princeton, NJ . Princeton University Press.

Rado, E. (1973). Employment, incomes and equality. A strategy for increasing productive employment in Kenya.

Simon, C. P., Witte, A. D., Eakin, K., Schoettler, R. G., & Ziegert, A. L. (1982). Beating the system: The underground economy. Boston, MA: Auburn House Publishing Company.