October 23, 2023

Beyond the formal: A new paradigm for socioeconomic prosperity in the Africas

Written by:
Yanick Kemayou

For decades, the global development narrative has been clear: formalize Africa’s economies to pave the way for prosperity. This mantra, endorsed by national governments, major development agencies and other prescriptive stakeholders such as the World Bank, has shaped the strategies of impact investors and philanthropic actors from the U.S. to Europe towards the Africas. But what if this one-size-fits-all approach is missing the mark? What if it overlooks the complex realities of economies like Cameroon, Kenya, Mali, etc. where informality is not a problem to solve but a vital part of the economic fabric?

Let me take you back to an afternoon in November 2020. In a large meeting room at the Bamako headquarters of a major international organization, I am facing four representatives responsible for disbursing tens of millions of Euros in development aid across Mali. Their portfolios span green economy, education, training, and private sector development. I feel that the conditioned air in the room is thick; but highly likely the air is as fine as it can get in Bamako. The thickness of the moment probably stems from the importance of the meeting for me and, Kabakoo Academies, the organization I co-head.

My mission is straightforward yet audacious: to shift the focus of that major international organization from creating formal jobs to supporting the often-overlooked “informal” sector. As someone who once navigated the bustling streets of Yaoundé (Cameroon) as a street vendor to finance my university education, I know the stakes. I know the resilience and ingenuity that thrive in these so-called “informal” settings. The two hours of debate end up looking like a Rigorosum during which I try to defend my thesis before a committee theoretically interested in what I have to say, but also quite sure of their own thing. Needless to say, I fail. My arguments might have landed, but changing entrenched paradigms is no small feat. 

You might wonder why I am so invested in shifting the narrative about the so-called “informal sector”. The answer lies in my own journey. And my love for evidence-based work. As a young man in Yaoundé, I was part of the statistics we often gloss over. Looking at Sub-Saharan-Africa,  85% are making a living beyond formal employment. I was one of the many who have to create their own paths, their own “informal” jobs, to survive and thrive.

The narrative surrounding Africa’s “informal” sector is steeped in misconception and historical amnesia.

To understand its roots, we must journey back to the colonial era. According to historian Catherine Coquery-Vidrovitch, the “informal” sector is a by-product of colonization. It originated with individuals who were excluded from the scarce formal employment related to colonial administration. This exclusionary practice is vividly captured in Eza Boto’s novel “Cruel City”, where colonialized individuals from Tanga Nord are barred from entering Tanga Sud, the city for the urbanized happy few, i.e., the colonizers and the local elites involved.

Fast forward to today, and the landscape hasn’t changed as much as we would like to think. In Kenya, for instance, a staggering 95% of young people work in the “informal” sector. Again: this isn’t a localized phenomenon; it’s a continental reality. Reports from institutions such as the World Bank and the Brookings Institution corroborate this, stating that even under optimal conditions, informality will dominate Sub-Saharan Africa for decades.

So, why the resistance to embracing the so-called “informal” sector? Perhaps because the term “informal” itself carries a stigma, a tacit implication of sub-optimality and undesirability? But let’s be clear: The 85% of Africans making a living beyond formal employment are not “informal workers”. They are not “necessity entrepreneurs.” They are resourceful individuals navigating complex socioeconomic landscapes, often with remarkable ingenuity and skills.

What do we do with those skills, ingenuity, and enacted agency?

We are at a crossroads, and the decisions we make today will shape the economic landscape of the Africas for generations to come. The challenge is monumental. We are talking about hundreds of millions of young individuals, each with dreams, aspirations, and the will to improve their daily lives. And yet, the formal sector can’t accommodate them all. In a country such as Mali according to the International Labour Organisation, 300,000 young people enter the job market each year, competing for a paltry 15,000 formal jobs. The math doesn’t add up.

What is the solution? For years, the development sector, influenced by major players like the World Bank and other prescriptive development organizations, has pushed for formalization. Even our own organization, Kabakoo, initially encouraged young entrepreneurs to register their businesses, to get formal. Sure, it was the golden ticket to success. But to whom success? We have come to realize that this approach might serve the (reporting) interests of funders more than the people we aim to see thriving.

It’s time for a paradigm shift. The future is “informal” and it’s already there. It’s not about preparing young populations across the Africas for formal jobs that don’t exist. And won’t exist any time soon. It’s about increasing returns within the existing “informal” sector. It’s about understanding the structures in which the young workers deploy their agency. It’s about taking off the heavy load we put on productive workers’ identity by calling them “informal”. It’s about shifting our lens.

In her study on working joblessness in Liberia and Sierra Leone, Frances Fortune put it aptly: “They are successful or skillful bricoleurs but labeled unskilled or unemployed.” 
And you know what?

An analysis of the skills needed to thrive in the “informal” sector shows that collaboration, creativity, grit, communication, and problem-solving top the list. Sounds familiar? Sure! Elsewhere, they are called 21st-century skills!

We need to support young Africans in acquiring the skills to navigate the world as it is—a world where informality isn’t a stopgap but a long-term reality. A world where we do not tell young working and productive people that they are “informal” workers lacking a formal job. A world where we invest to allow them to strengthen and deepen their skills and enjoy higher socioeconomic returns thereon.

It’s time to act. If you are a policymaker, an investor, a philanthropist, or anyone with a stake in the employment discussions in the Africas, let’s shift our focus and resources. The future is already here, and it’s informal. Let’s embrace it, invest in it, and most importantly, let’s not underestimate the ingenuity, skills, and agency of the young Africans who are already making it work.

References and further reading

Beti, M. (2013). Cruel City: A Novel. Indiana University Press.

Bourdet, Y., Dabitao, K., & Dembélé, A. S. (2012). Croissance, emploi et politiques pour l'emploi au Mali. Internalional Labour Organization (Bureau International du Travail).

Coquery-Vidrovitch, C. (1988). Villes coloniales et histoire des Africains. Vingtieme siecle. Revue d'histoire, 49-73.

Eekhout, T., Berrou, J. P., & Combarnous, F. (2023). Entrepreneurs' mobile phone appropriation and technical efficiency of informal firms in Dakar (Senegal). Journal of International Development, 35(6), 1429-1455.

Fox, L. (2021). Good news, Africa is creating jobs, but the narrative is complicated. https://www.brookings.edu/articles/africa-is-creating-jobs-but-the-narrative-is-complicated/ [Last access: 13th September 2023]

Fortune, F. (2021). Working Joblessness: Young People Deploying 21st Century Skills in Post-Conflict Liberia And Sierra Leone. Ph.D. dissertation, Wilfrid Laurier University, Waterloo.

Meagher, K. (2018). Cannibalizing the informal economy: Frugal innovation and economic inclusion in Africa. The European Journal of Development Research, 30, 17-33.

Shujaaz Inc nationally-representative survey 2016-2022. https://kenyanyouthtrends.shujaazinc.com/income-and-work [Last access: 13th September 2023]

This post was originally written as guest article for the blog of the Azurit Foundation, a partner of Kabakoo. You can find the original publication here.

About the author:

Dr. Yanick Kemayou is Co-Founder and Chief Learning Officer of Kabakoo Academies. With over a decade of professional experience in the education sector as well as in international cooperation, with a focus on fostering innovation in sub-Saharan Africa, Yanick co-founded Kabakoo in 2019 with Michèle Traoré. Kabakoo is a community-driven upskilling platform designed to allow young people in West Africa to develop the mindset and the skills needed to improve their life in a context of missing formal jobs. Its hybrid approach combines a mobile app with real-life networks of peers and mentors to support young people in envisioning and realizing better futures for themselves and their communities. 

Dr. Yanick Kemayou was born and raised in Bafoussam, Cameroon. Due to a lack of prospects at home, he migrated to Germany and ended up studying at top universities in China and Europe and earning a PhD. He has held positions including as senior lecturer at the University of Vienna and as professor at the Sorbonne Nouvelle University in Paris. Since the initial problem which pushed him into migration has kept bugging them, he decided to dedicate his experience and skills to tackle the problem with Kabakoo. You can contact him at akwaba[at]kabakoo[dot]africa.