The impact of structural adjustment on the urban informal sector in ...

More documents

Recommendations

Info

Table 58: Nature <strong>of</strong> formal sector competition 74 Table 59: Average sales value by activity 75 Table 60: Post-ESAP monthly revenue by enterprise age group 76 Table 61: Post-ESAP monthly net pr<strong>of</strong>it by enterprise age group 76 Table 62: Post-ESAP monthly net pr<strong>of</strong>it by primary activity 77 Table 63: Monthly cash wages by activity 78 Table 64: Average monthly wages 78 Table 65: Extent <strong>of</strong> harassment from city government in the pre-ESAP and post-ESAP period 80 Table 66: Informal sector's response to city/government regulations 82 Table 67: Future plans <strong>of</strong> the owners <strong>of</strong> informal sector enterprises 83 Table 68: Types <strong>of</strong> assistance sought by the informal sector 83 vi
Preface One <strong>of</strong> the major development concerns in recent years, particularly in sub-Saharan African countries, has been the rapid growth <strong>of</strong> urban population - in excess <strong>of</strong> 5 per cent per year. Much <strong>of</strong> the growth in urban labour force is currently being absorbed in what is known as the urban informal sector. Perhaps two thirds or more <strong>of</strong> urban employment in these countries is in the informal sector. With the introduction <strong>of</strong> <strong>structural</strong> <strong>adjustment</strong> programmes during the 1980s its <strong>impact</strong> on employment and conditions <strong>of</strong> work in this sector is not clear. It is generally believed that one major outcome <strong>of</strong> these programmes has been a significant reduction in wage employment in both the public and private sectors. It is further believed that most <strong>of</strong> the workers retrenched entered the informal sector, starting their own small business. If this is true was the increase in employment in this sector accompanied by improved incomes and conditions <strong>of</strong> work? Though there are no hard evidence on this question it is generally believed that one <strong>of</strong> the major <strong>impact</strong>s <strong>of</strong> the <strong>structural</strong> <strong>adjustment</strong> programmes in sub- Saharan Africa has been a significant reduction in the aggregate income and demand in the whole economy. According to one view the reduction in real incomes <strong>of</strong> households led to higher demand for informal sector goods and services. Even if a restructuring <strong>of</strong> demand did take place it is not evident that the informal sector benefited from the <strong>structural</strong> <strong>adjustment</strong> programmes; the net result depends on the extent <strong>of</strong> decline in aggregate demand. Besides the macroeconomic effects above the <strong>structural</strong> <strong>adjustment</strong> programmes are expected to affect the cost and revenues <strong>of</strong> informal sector businesses both directly and indirectly. To the extent the informal sector depends heavily on the modern sectors and external trade the influence <strong>of</strong> SAP on the former could be positive or negative depending on the nature <strong>of</strong> linkages. <strong>The</strong> direct effect <strong>of</strong> SAP consists <strong>of</strong> changes in the structure <strong>of</strong> costs and revenues on the informal businesses resulting from various reforms including fiscal, monetary, privatization, deregulation and so on. In order to determine whether the <strong>structural</strong> <strong>adjustment</strong> programmes in Africa had a beneficial <strong>impact</strong> on employment, incomes and conditions <strong>of</strong> work in the urban informal sector clearly there is a need to collect relevant data through surveys and analyse them. <strong>The</strong> ILO, under the sub-programme on the urban informal sector, therefore decided to carry out some exploratory studies to assess the nature and magnitude <strong>of</strong> the <strong>impact</strong> <strong>of</strong> SAP on this sector. <strong>The</strong> first study was carried out in Nigeria in 1992, which collected and analysed the data on informal sector in two cities - Lagos and Zaria. This study by Guy Mhone on Zimbabwe is the second in the series and focuses on three cities - Harare, Bulawayo and Gweru. It analyses the data collected through sample surveys <strong>of</strong> informal enterprises in 1993 and draws policy conclusions. <strong>The</strong> findings <strong>of</strong> the study suggest that the overall <strong>impact</strong> <strong>of</strong> SAP has not been favourable to the informal sector. Besides significant decline in aggregate demand, the SAP seems to have had a negative <strong>impact</strong> on modern private sector which in turn was transmitted to the informal sector since it depends on the modern sector for its raw materials and intermediate inputs requirements. Increase in real price <strong>of</strong> food and increased cost <strong>of</strong> social services including health and education appear to have depressed the demand for non-food items, especially those precluded in the informal sector. Also a large majority <strong>of</strong> the 25,000 retrenched workers appears to have entered this sector. <strong>The</strong> net result, according to the study, appears to have been involutionary; increase in employment was accompanied by decrease in production at the enterprise level and higher competition among informal enterprises. Samir Radwan Director Development and Technical Cooperation Department vii
Page 1 and 2: ISSUES IN DEVELOPMENT Discussion Pa
Page 3 and 4: Content Preface Executive summary v
Page 5: List of tables Tab
Page 9 and 10: Executive summary This study analys
Page 11 and 12: policy interventions that impart to
Page 13 and 14: dependency of Afri
Page 15 and 16: establishments. And finally the Ret
Page 17 and 18: considerations as provision <strong
Page 19 and 20: supply of informal
Page 21 and 22: 1. The concentrati
Page 23 and 24: Table 1. Population, labour force,
Page 25 and 26: ecalling events that occurred two t
Page 27 and 28: It may be suggested here, therefore
Page 29 and 30: specifically, regulations which com
Page 31 and 32: (ii) (iii) (iv) (v) (vi) 20 informa
Page 33 and 34: Table 3. Distribution of</s
Page 35 and 36: Table 5. Age of en
Page 37 and 38: Table 7. Distribution of</s
Page 39 and 40: Table 10. Reason for choosing the s
Page 41 and 42: Table 12. Age of o
Page 43 and 44: Table 14. Age distribution
Page 45: 5.3 Household characteristics <stro
Page 48 and 49: Table 17 shows that the majority <s
Page 51 and 52: Table 18. Selected characteristics
Page 53: households is only a portion <stron
Page 56 and 57:
Table 21. Average household expendi
Page 58:
Table 24 shows that when the respon
Page 62:
5.4 Employment characteristics Tabl
Page 68 and 69:
Table 26. Change in employment, bef
Page 70 and 71:
Table 29. Mode of
Page 72 and 73:
proportion of resp
Page 74 and 75:
Table 32. Change in responsibilitie
Page 77 and 78:
Table 35. Sources of</stron
Page 79 and 80:
5.8 Inputs: Fixed and intermediate/
Page 82 and 83:
is a gateway city in this regard. I
Page 85 and 86:
Consumer price index, 1990 = 100 Fo
Page 87 and 88:
Table 41. Present trend in availabi
Page 90 and 91:
Table 43. Reaction to temporary and
Page 92 and 93:
(b) Raw materials/intermediate inpu
Page 96:
informal sector activity with "impr
Page 99 and 100:
Table 47. Reasons why customers pur
Page 101:
5.9 Customers Table 46 shows the re
Page 106:
Table 50. Distribution of</
Page 110 and 111:
Table 52. Type of
Page 112 and 113:
Table 54 shows the purchasers' reas
Page 114 and 115:
Table 54. Type of
Page 116 and 117:
5.10 Degree of com
Page 118 and 119:
Table 55. Competition within and ar
Page 120 and 121:
The foregoing resu
Page 122 and 123:
The study attempte
Page 124 and 125:
intermediate goods to the whole ran
Page 126 and 127:
Tables 62 to 64 shed more light on
Page 128 and 129:
Table 62. Post ESAP monthly net pr<
Page 130 and 131:
119
Page 132 and 133:
5.12 Harassment by public o
Page 134 and 135:
Table 65(a). Extent of</str
Page 136 and 137:
Table 66. Informal sector's respons
Page 138 and 139:
Table 67. Future plans of</
Page 140 and 141:
129
Page 142 and 143:
131
Page 144 and 145:
Liberalization of
Page 146 and 147:
commodities so controlled and the p
Page 148 and 149:
of reduced demand,
Page 150 and 151:
Thus the study on Nigeria by Dawson
Page 152 and 153:
sector has not demonstrated a tende
Page 154:
Mhone, G.C.Z. and G.A. Aryee. Emplo
show all

The impact of structural adjustment on the urban informal sector in ...

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?