Thursday, May 17, 2018

Bid to empower informal sector gains momentum

A woman walks past an informal market at

A woman walks past an informal market at Buhongwa in Mwanza. PHOTO | FILE 

By Elias Msuya, @TheCitizenTZ

Dar es Salaam. Many Africans work in the informal sector without contracts and with limited protection.

According to the International Labour Organisation, 80 per cent of new jobs in Africa were informal in 2014.

Informal employment is a form of work without secure contracts or social production.

Access to formal social protection is extremely limited amongst informal workers who often face discrimination, exploitation and uncertain, precarious livelihoods without access to measures such as unemployment or health insurance or collective representation.

Experts define the informal sector as that which involves workers who are self-employed, or who work for those who are self-employed.

People who earn a living through self-employment in most cases are not on payrolls, and thus are not taxed. Many informal workers do their businesses in unprotected and unsecured places.

According to them, although the informal sector makes up a significant portion of the economies in developing countries, it is often stigmatised as troublesome and unmanageable. However, the informal sector provides critical economic opportunities for the poor and has been expanding rapidly since the 1960s. As such, integrating the informal economy into the formal sector is an important policy challenge.

However, many governments have begun to work on schemes and strategies aimed at informal workers. But their efforts are hampered by the lack of policy research and empirical evidence.

In Tanzania, only 11 per cent of workers are covered by social protection mechanisms.

Roskilde University, University of Nairobi and Mzumbe University are doing a joint research to generate new and needed knowledge on the ways in which informal workers are organised and how effectively to organized them.

The aim is to facilitate access to social protection in Kenya and Tanzania.

Mzumbe University lecturer Godbether Kinyondo told a recent workshop here that although the contribution of the informal sector was big it was unprotected socially.

“We are doing this research in construction, transportation and small-scale businesses, which contribute immensely to our economy, but they are forsaken,” Dr Kinyondo said.

University of Nairobi’s Prof Winnie Mutula said Kenya’s situation was similar to that of Tanzania.

“The majority people are not aware of the importance of social security. There is a need for the government to act.”

A National Social Security Fund operation officer on voluntary benefits, Mr Abbas Cothema, since the amendment of the Social Security Act empowers the fund also to serve the private sector around five million uncovered workers nationally would benefit. The chairman of operators of small-scale traders (Vibindo) chairman, Mr Gaston Kikuwi, faulted the Social Protection Policy of 2003 for excluding people without formal employment.

Vibindo has 66,000 members in Dar es Salaam, Lindi, Morogoro, Mtwara, Mara, Singida, Arusha and Mbeya.

However, the director of research, actuarial and policy development of Social Security Regulatory Authority, Mr Ansgar Mushi, insisted that the policy also recognised the informal sector.

The National Construction Council’s Ms Hyacintha Makileo spoke of the huge contribution of informal construction to socioeconomic development as a half of the number of residential houses in urban areas and 90 per cent in rural areas where about 80 per cent of the population resides are built informally.

“According to a survey, informal construction accounts for 32 per cent of the national gross domestic product.”

The chairman of bodaboda operators in Ilala District, Mr Athanas Kitime, there was a challenge of collecting contributions from members.

Mr Kitime is also the deputy secretary of the Association of Dar es Salaam Bodaboda Operators.

“We thought it could be better to introduce a Saccos. There are 11,000 informal bodaboda operators in Ilala District. There are over 100,000 of them in Dar es Salaam.

“We started the process of registering our Saccos, but later on we were told that, the government amended laws for the private sector to benefit. We are waiting to see how we could be accommodated.”