AFRICA'S INFORMAL SECTOR AND THE IMPACTS OF COVID-19: LESSONS FOR RESILIENCE AND READINESS FOR NIGERIA

Abstract

This paper examines the critical role of the informal sector of the African economy during the period of the unprecedented lock-down occasioned by the global COVID-19 pandemic. The lock-down measures unleashed dire economic consequences at the household, national and international levels, adversely affecting economies and stalling development progress. As the containment measures continued to have very severe drag effects on the economies, overall incomes, investments, factors’ employment, and government revenues, including taxes all regressed inexorably. The overall consequence was the setting in of global economic recessions as well as a negative growth trajectory for Africa by the second and third quarter of the year 2020. This paper highlights the sterling contributions of the informal sector as a veritable shock absorber and economic stabiliser during a crisis which clearly posed existential threats to many in the formal mainstream economy. It demonstrates that the global COVID-19 pandemic, like other crisis before it, exposed the limitations of the state and proves that the informal sector was the main sustenance for millions of people who would otherwise have remained well outside the reach of state intervention measures. For this reason, rather than castigate, undermine or write-off the informal sector, efforts should be made to make available all that will be needed to enhance the strength, resilience, dynamism, accessibility, and functionality of the sector. The paper recommends that informal economy denigration and pessimism be stopped and the call for the ‘formalisation’ of the informal sector should be approached with reasoned caution.