DEVELOPMENT-SOUTHERN AFRICA: Surviving Informal Work – and Politics

By IPS Correspondents Reprint | | Print |

Analysis by Christi van der Westhuizen

CAPE TOWN, Apr 6 2007 (IPS) - While informal work is insecure and low-paying, it has become the primary way in which most Southern Africans earn a living. Without such work, the meagre livelihood options in the region dwindle even further, as shown by a number of recent studies.

The situation in Kinshasa, the capital of the Democratic Republic of Congo (DRC), is a case in point.

The collapse of the copper market has made Kinshasa the hub of economic activity in the DRC. The city has grown dramatically and now hosts seven million inhabitants. In the past decades, a high percentage of Kinshasa’s residents have been forced into the informal sector to make a living.

Levels of poverty and inequality in the city have been analysed by Tom de Herdt and Wim Marivoet from the Institute of Development Policy and Management at the University of Antwerp in Belgium; they compared two income and expenditure surveys which were conducted in 1975 and 2004.

The DRC’s per capita gross domestic product currently stands at one-fifth of what it was in 1974 due to successive economic setbacks and civil war. These events also changed household expenditure patterns in significant ways between 1975 and 2004.

The average household spent 0.8 percent of its budget on education in 1975. This has gone up to 5.6 percent by 2004, which reflects the de facto privatisation of schools during the 1990s. Schools have been turned into places where the government levies “taxes to finance the department of education” according to De Herdt and Marivoet.

Similarly, the state’s withdrawal from housing and transport provision has led to increased private spending on these items. The result is that households spend less on food: from 62.8 percent in 1975 to 57.8 percent of the average household’s budget in 2004.

But a comparison of calorie consumption only shows a five percent decrease among households during the same period. De Herdt and Marivoet contribute this to a switch to food stuffs that are more nutritious. Cassava has been replaced with maize and rice, which are cheaper and have more nutritional value.

De Herdt and Marivoet also found a slight decrease in levels of inequality when comparing the Gini coefficient of 1975 with that of 2004. This index of economic inequality has moved from 0.43 to 0.41. Zero indicates absolute equality and one absolute inequality. Moreover, the percentage of poor people has only grown slightly, from 60.7 to 60.8 percent.

The percentage of affluent people has increased from 16.7 percent in 1975 to 19.8 in 2004, according to De Herdt and Marivoet. The growth in affluence is due to the shrinking of the middle income group.

These changes happened against the backdrop of increasing numbers of Congolese people working informally. Only 12 percent of households in Kinshasa earn their income in formal occupations.

A further 11 percent derive income from formal and informal work, while the rest (76 percent) are engaged in informal work for their income. The majority of poor people (66 percent) are in the informal economy, compared to 16 percent of the affluent.

A gender analysis shows that the informal economy has taken a toll on women, this as female-headed households nearly doubled from 11 to 20 percent between 1975 and 2004, according to De Herdt and Marivoet.

In the DRC, a class of women known as “femmes libres” (“free women”) have historically been active in the informal production and trade networks. Some 40 percent of them were affluent in 1975. But, this group has dwindled as female-headed households on average had lower incomes than male-headed households in 2004.

Female-headed households were “over-represented among the poor and under-represented among the affluent”, suggesting that while the shift to informal work has pulled more women into the labour market, it has “pushed them towards the lower layers”, De Herdt and Marivoet pointed out.

Moving to a different scenario, studies have found political interventions in the informal economy destructive to livelihoods.

When Malawi’s government declared minibus “callboys” illegal in January 2006, for instance, many were forced into destitution. Previously, their work of recruiting passengers by calling out to them had earned the callboys about 107 dollars a month. By comparison, a mid-career teacher earns 43 dollars per month, according to Richard Tambulasi and Happy Kayuni from the University of Malawi.

The two researchers note that callboys are not “boys in the strict sense of the word as they have families and responsibilities”.

Most callboys in a study by Tambulasi and Kayuni had finished primary school, but did not attain a higher level of education. They were unable to find formal employment in a country where only 25 percent of school leavers are absorbed by the formal economy, Tambulasi and Kayuni pointed out.

The government banned callboy activity amidst accusations that callboys were criminals. According to Tambulasi and Kayuni, callboys are mostly not criminals and frequently help passengers to get to their destinations. Pleas to the government to scrap the ban have been ignored.

As a result, many callboys have sunk into poverty, unable to find other ways to make a living. Some have even resorted to crime to stay afloat, Tambulasi and Kayuni’s study observed.

These and other findings were discussed at a conference on the informal economy held last week (Mar. 26-28) near the coastal city of Cape Town, South Africa.

The conference was arranged by the Programme for Land and Agrarian Studies, a research organisation attached to the University of the Western Cape, and the Isandla Institute, a non-governmental organisation that studies urban settlements. Both are based in Cape Town.