6.1 The informal sector: Gender Entrepreneurship and Competitiveness in Africa 2007
6.1 The informal sector: Gender Entrepreneurship and Competitiveness in Africa 2007
percentage of the population, according to household
survey data. Almost everywhere, less than 1 percent of all
women of working age (15 to 65 years old) are
“employers”—that is, women who own a business in
which they employ hired labor. In Africa, most working
women are not “formal” entrepreneurs but are rather
self-employed and own-account workers in the informal
sector.
The informal sector is particularly important in
Africa, and is often an entry point for broadening
participation in the private sector. International Labour
Organization (ILO) data indicate that the informal
sector represents 48 percent of nonagricultural employment
in North Africa, and 72 percent of nonagricultural
employment in sub-Saharan Africa.19 Informal employment
is generally a larger source of employment for
women, though not in North Africa.
For example, the recently completed Gender and
Growth Assessment (GGA) for Tanzania confirmed the
importance of the informal sector in the economy, noting
that the vast majority of businesses in the country
are outside the formal legal system.
It is estimated that
the number of women entrepreneurs ranges from
730,000 to 1.2 million, and are particularly found in
the micro, small, and medium-sized enterprise (MSME)
sector where they make up 43 percent of the total.
Barriers to the formalization of a business—particularly
lengthy and complex business registration, incorporation,
and licensing practices—have a disproportionately
negative effect on women, in some cases making it
impossible for them to formalize their businesses.20
Women’s participation in the informal economy may
help in understanding their participation in the formal
sector. It has been argued, for example, that women
running informal enterprises value the higher flexibility
offered by the informal sector.This is confirmed by
women entrepreneurs in both Kenya and Tanzania.21
One of the important reasons that women may
prefer the flexibility of informal arrangements is that
this flexibility makes it easier for women to manage
their “double workday.” Because women usually have to
assume by far the greater burden of domestic tasks, as
revealed in time allocation data in Africa, their capacity
to engage in economic, including entrepreneurial, activity
is much more constrained.22 Moreover, the boundary
between economic and household activity is less well
drawn in Africa than in other regions,23 and conventional
labor force data capture a much more limited share of
women’s total workload than men’s.
This additional
workload means that women can essentially carry out
economic activities only in conjunction with or after
fulfilling their domestic responsibilities.This may help to
explain why, as indicated earlier, women are more likely
to be involved in family enterprises that are more compatible
with combining both domestic and economic
activity.
61 The informal sector Gender Entrepreneurship and Competitiveness in Africa 2007 - To learn more about this author, visit World Economic Forum's Website.
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Entrepreneurs—male or female—constitute a very small
percentage of the population, according to household
survey data. Almost everywhere, less than 1 percent of all
women of working age (15 to 65 years old) are
“employers”—that is, women who own a business in
which they employ hired labor. In Africa, most working
women are not “formal” entrepreneurs but are rather
self-employed and own-account workers in the informal
sector.
The informal sector is particularly important in
Africa, and is often an entry point for broadening
participation in the private sector. International Labour
Organization (ILO) data indicate that the informal
sector represents 48 percent of nonagricultural employment
in North Africa, and 72 percent of nonagricultural
employment in sub-Saharan Africa.19 Informal employment
is generally a larger source of employment for
women, though not in North Africa.
For example, the recently completed Gender and
Growth Assessment (GGA) for Tanzania confirmed the
importance of the informal sector in the economy, noting
that the vast majority of businesses in the country
are outside the formal legal system.
It is estimated that
the number of women entrepreneurs ranges from
730,000 to 1.2 million, and are particularly found in
the micro, small, and medium-sized enterprise (MSME)
sector where they make up 43 percent of the total.
Barriers to the formalization of a business—particularly
lengthy and complex business registration, incorporation,
and licensing practices—have a disproportionately
negative effect on women, in some cases making it
impossible for them to formalize their businesses.20
Women’s participation in the informal economy may
help in understanding their participation in the formal
sector. It has been argued, for example, that women
running informal enterprises value the higher flexibility
offered by the informal sector.This is confirmed by
women entrepreneurs in both Kenya and Tanzania.21
One of the important reasons that women may
prefer the flexibility of informal arrangements is that
this flexibility makes it easier for women to manage
their “double workday.” Because women usually have to
assume by far the greater burden of domestic tasks, as
revealed in time allocation data in Africa, their capacity
to engage in economic, including entrepreneurial, activity
is much more constrained.22 Moreover, the boundary
between economic and household activity is less well
drawn in Africa than in other regions,23 and conventional
labor force data capture a much more limited share of
women’s total workload than men’s.
This additional
workload means that women can essentially carry out
economic activities only in conjunction with or after
fulfilling their domestic responsibilities.This may help to
explain why, as indicated earlier, women are more likely
to be involved in family enterprises that are more compatible
with combining both domestic and economic
activity.
61 The informal sector Gender Entrepreneurship and Competitiveness in Africa 2007 - To learn more about this author, visit World Economic Forum's Website.
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