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March 2018

Understanding the informal economy in African cities: Recent evidence from Greater Kampala

Angus Morgan Kathage's picture
Informal metal worker in Katwe, Kampala. Photo: Angus Morgan Kathage/World Bank

The informal sector is a large part of employment in African cities. The International Labour Organization estimates that more than 66% of total employment in Sub-Saharan African is in the informal sector. With a pervasive informal sector, city governments have been struggling with how best to respond. On the one hand, a large informal sector often adds to city congestion, through informal vending and transport services, and does not contribute to city revenue. Furthermore, informal enterprises are typically characterized by low productivity, low wages and non-exportable goods and services. On the other hand, the informal sector provides crucial livelihoods to the most vulnerable of the urban poor.