YOU ARE HERE: LAT HomeCollections

Regional Outlook : Making Money Under Africa's Fierce Sun : The continent's elusive informal economy is growing in importance, adding billions to the gross domestic product.


NAIROBI, Kenya — Overhead, a military training plane in olive camouflage seemed to coast silently to a nearby landing strip. Silently, because on the ground beneath it the unearthly din of a hundred open-air blacksmith shops drowned out its clatter.

Over the polyrhythmic percussion of a hundred hammers striking sheets of tin, molding them into frying pans and soup ladles, strongboxes and charcoal stoves, John Ngumba shouted out his life story.

He had come to Nairobi 25 years ago to find work as a push boy, muscling vegetable carts from depot to market for three shillings a day. A couple of years later he met a man who taught him how to fashion tiny kerosene lamps, about the size of a man's hand, out of sheets of scrap metal.

A few years after that he had saved and borrowed enough money to set out on his own. That required laying in some scrap sheets, tools and solder. Eventually, he had enough to build some stock, which was set out in orderly rows behind him in the huge market of Kamukunji, on the outskirts of Nairobi's downtown: kitchenware, metal trunks and the ubiquitous little lamps, which he still makes by hand and sells to local shops for a profit of about 20 cents each.

In Kenya they call it jua kali , from the Swahili for "fierce sun," because for the most part this business is not conducted under a roof. On the continent as a whole, activities like Ngumba's, which require no fixed place of work and minimal starting investment--and characteristically remain out of reach of tax collectors, licensing departments and often the police--fall under the general category of the "informal sector."

In any fully industrialized nation it would be hard to view a legion of tinsmiths, carpenters and itinerant vegetable hawkers as being very important economically. But in Africa's under-mechanized and over-regulated economies, the informal sector accounts for an immense share of economic activity, and even those who used to sneer are now re-evaluating its present and possible future role.

One recent study by the U.N. International Labor Organization estimated that the informal sector employs 59% of sub-Saharan Africa's urban labor force. A second ILO survey of 17 countries in the region estimated that this force contributed an average of $15 billion a year to each country's gross domestic product--20% of the total. In some countries, surveys suggest, the contribution is as much as 30% or even 50%.

The importance of this activity has only recently become recognized by African governments, which in the past have viewed informal workers as tax evaders or derelicts, and the venues in which they ply their trade as unhygienic eyesores. At the same time, the potential of the informal sector to nourish entrepreneurship and create jobs has provoked a great debate among development professionals over how best to protect and encourage it.

One reason for the confusion in policy is that, by its very nature, the informal sector in Africa is impossible to define in terms of its component trades. In almost any African city, it includes children who earn coins by keeping guard over parked cars. In Zaire, there are blacksmiths who fashion hoes and spades from metal stripped off wrecked trucks (a leading source of raw material in that crumbling country).

Whole sections of Accra, Ghana, shelter open-air vehicle repair shops. In Lagos, Nigeria, traffic jams on the main highways are so fearsome that mobs of youths swarm around the "go-slows" offering becalmed motorists everything from rabbit-ear antennas to throat lozenges and schematic diagrams of the human digestive system.

There is a full range of sophistication. Among the charter members of the informal economy are Africa's legendary market women, some of them such advanced tradespeople that they can be seen disembarking en masse from international flights carrying imported goods to sell on the streets. At the other end of the scale are the destitute boys who buy cigarettes by the pack and then sell them--one by one--on street corners in Khartoum, Sudan.

One of the sector's attractive aspects is its ease of entry. In Africa, it does not take much to convert an economic black hole into a thriving informal marketplace, as can be illustrated by the experience of Kitui Pumwani, until a few years ago a hopeless slum of tin and cardboard shanties on the edge of Nairobi.

The village was a textbook case of a location where all of Africa's urban pathologies had come to settle. Its growth had been fueled by a standard post-independence malady, the migration of people from farms to cities in search of work. Today it houses 30,000 residents, almost none of them employed in the formal sector. Three-quarters of them are single mothers; most are illiterate.

Los Angeles Times Articles