Urban Informality in Sub-Saharan Africa : Profiling Workers and Firms in an Urban Context

This paper describes the state of informal sector work in urban Sub-Saharan Africa, using household surveys from 26 countries representing 61 percent of the population of Sub-Saharan Africa and firm surveys from three countries. Five main conclusions emerge. First, the urban informal sector is large and persistent in Sub-Saharan Africa. Approximately 56 to 65 percent of urban workers are informal, half of whom are self-employed. Data from five countries suggest little systematic reduction in the prevalence of informality during the 2010s. Second, heterogeneity in the African informal sector cuts along demographic lines. Women are overrepresented in informal self-employment, men in informal wage work, and youth in unpaid employment. Third, while the urban informal workers are, on average, poorer and in less-skilled occupations than formal sector workers, the majority are not extremely poor and are in mid-skilled occupations. Fourth, informal enterprises are small and are challenged to survive and grow into job-creating firms. Few find much benefit from registration given the costs, both monetary (taxes) and transactional (information about the registration process). Fifth, access to urban public services (utilities) is weakly associated with the probability of working in an informal job, although access to mobile phones is high across all job types. If thriving urban jobs are to contribute to economic and social development in Africa, it will be crucial for policies and programs to take into consideration the heterogeneity in jobs, the profile of workers, and the urban context.