These losses, which translate to lost jobs, income and enterprise opportunities to the over 1.2 billion people in Africa, have far and wide-reaching effects in compounding a very precarious socioeconomic scenario in the continent – from food insecurity, to youth unemployment, to inadequate health, to low, stagnated and declining economic productivity – which is the overarching consequence. The urgency to buffer economies against these impacts is at an alltime high. In Africa, this buffering is incomplete, without a deep dive into the informal sector and how it is coping. 

The informal sector accounts for over 80% of all employment in sub-Saharan Africa. This constitutes small-scale grocers, retailers, small scale traders in rural and urban areas. They are manufacturers and young entrepreneurs steeping into the scene. These are the people who supply household goods and services. These are a critical group without whom life in our cities would come to a stand-still. This group has been most vulnerable as COVID-19 has meant slowed down their small enterprises. For example, small retailers, groceries, open-air traders, stall owners, who trade under $150 daily, who are the fabric of the informal sector across Africa, have been hit hard. So how will this vulnerable group cope during such shutdowns? Since the first case of COVID 19 was confirmed in Africa in late February, numbers have grown to over 4,108 and 48 countries in just one month, with 108 fatalities. The impact on the economy continues to unfold. As at March 2020, a 1.4% decline in GDP equivalent to $29 billion has been reported.

These losses, which translate to lost jobs, income and enterprise opportunities to the over 1.2 billion people in Africa, have far and wide-reaching effects in compounding a very precarious scenario – where the region already needs to create about 13 million jobs every year. Africa’s informal sector accounts for over 80% of all employment in sub-Saharan Africa. This therefore means anything that that hard hits this informal sector needs to be taken with grave consideration. This is a sector that doesn’t understand the language of bank accounts, VAT, and many more but at the end of the day this is the sector that drives the realities of Africa’s economies. These are the unsung heroes and heroines of Africa’s growth and have been so for a long time. Over 90% of new jobs created in Africa during the 90s for instance were in the informal economy. This sector has also been described as the “present and future” of work in Africa. Under COVID-19 however, this informal sector has been hit hard. At local groceries, shortages in critical consumer goods – driven first by panic buying and second, by the slowing down of the global supply chain in replenishing what was consumed – are becoming common feature.

Across the G-20 and indeed globally, countries are framing policy responses to buffer their economies and populations against the repercussions of the COVID-19. The “stimulus package” has arisen as among most formidable policy measures to buffer economies, with some countries offering as high as 20% of GDP as emergency COVID 19 stimulus. The US for instance has announced a package of some $2 trillion. Germany has announced $800 billion. Canada has announced over $50 billion, and the list goes on. Africa has been estimated to need no less than $100 billion. Countries such as Kenya have taken the first step down this worthy road. But even more important for Africa, a continent whose productivity lags competitors in the global economy by up to 20times, is how such emergency measures can be maximized as investments to accelerate the ongoing charge towards unlocking globally competitive climate action enterprises in the continent under the changing climate. For example, Africa’s agro-market is estimated to be worth up to $150 billion each year in 5 years’ time. While it is open to global competition, empowering the local informal sector to take lead in developing competitive local products, that can compete for shelf-space with goods from elsewhere, offers an opportunity for developmental strides in the continent. Enabling this long-term perspective is the trajectory that stimulus packages in Africa should take. Not short-term cash transfers as is the traditional approach currently been used. And for this, the following policy measures can be taken; First, prioritize buffering informal sector players in the continent’s catalytic sectors. These are economically inclusive sectors – meaning they engage majority of the population. This implies that maximizing their productivity thorough value addition means putting more money in more pockets.

In addition, these sectors can meet both climate and socioeconomic priorities simultaneously. For example, decentralizing solar driers among cassava farmers – where cassava is converted into dried cassava chips that can be preserved for longer, sold to millers to be further processed into cassava flour or eaten as is / or fried into cassava chips, has seen incomes increase by 150% and reduce loss by 30%. Use of solar driers to dry rice has proven to be 48times faster than traditional open sun drying and result in better quality, cleaner, more hygienic rice that fetches more in the market. Decentralizing solar driers to farmers in local markets, to enable them to dehydrate and preserve their harvest that remains unsold at end of day and sell when demand peaks is not only cutting postharvest losses but increasing earning up to 30times.