Women constitute 89 percent of the workforce in the informal economies in sub-Saharan Africa. This sector constitutes economic activities, enterprises, and workers that are neither regulated nor protected by the government.
In East Africa, the informal economies make significant contribution to employment creation, income generation, poverty reduction and overall economic growth. However, gains made in this sector stand to be eroded by the COVID-19 pandemic. The International Labour Organization projected that 1.6 billion informal workers to have been among those most severely affected at the onset of the pandemic globally. Women in this sector have borne the brunt of the socio-economic shocks brought about by the pandemic.
Cycles of lockdowns, cessation of movements, social distancing, and other COVID-19 containment measures for almost 21 months for countries in East Africa proved disruptive to the informal sector, especially women workers in the sector.
Evidence from a study undertaken by the International Center for Research on Women (ICRW) on the impact of COVID-19 on informal women workers, demonstrates an increase in women working in this sector from 34% in June 2020 to highs of 83% in May 2021 in the region. Women in this sector also experienced (and continue to) increased vulnerabilities due to loss of livelihoods &income, gender-based violence, increased unpaid care and domestic work burden, mental instability, and lack of social and labour protections.
Notwithstanding, women in this sector are not a homogenous group. The pandemic had differential impacts on the informal economy, specifically the service (food and trading) sub-sectors. Workers in these sub-sectors were extensively affected by the restrictive movements, business closures, and all other COVID-19 containment measures which increased business operating costs and disruptions in supply chains and market operations.
While no country has been spared from the impact of the pandemic, the lack of gendered data further compounds this gap. Hence the lack of understanding on the exact impact of the pandemic on this sector, and the continued ‘invisibility’ of the informal sector in current post-pandemic economic recovery and policy responses.
The significant repercussions of the pandemic to the informal sector demands pragmatic considerations for a gendered response of the pandemic. Governments ought to position the economic recovery for informal workers at the center of their recovery plans by recognizing the challenges encountered, barriers to their bounce back and opportunities for enhancing coping and resilience mechanisms by the informal workers.
What next for the informal women workers?
Job and social protections for workers: The increased burden of care placed on women workers underscores the need for childcare benefits as an income and job protection measure. Innovations towards setting up of workplace or community childcare infrastructure options for women in the informal sector are requisite in enabling a work- life balance by women in the sector and providing alternatives to reducing the care load. Investments by both the government and private sector will go along away in making this a reality for the informal workers.
Financial inclusion: Studies show that women depleted their savings to meet their business and household basic needs during the pandemic. Some of the workers traded off their assets, such as land and business equipment as a means to their survival. In building back, the economy, the need for access to low-cost credit and financing solutions by informal enterprises is a priority. Women in the informal economy continue to rely on loan sharks and fintech for alternative financing. While these alternatives are easy to access, they have high interest rates. Most of the women in this sector do not have a credible credit history to facilitate their access to finance from formal and regulated financial institutions such as banks and microfinance institutions. There is need therefore for actors in the financial sectors to design financial products and services that will benefit women in the informal sector.
Inclusive social protection packages: While vulnerable households were targeted by governments and civil society with cash transfers or food rations, there is insufficient evidence on whether the right beneficiaries were reached through these schemes. The absence of health insurance packages targeting informal workers is glaring in most of the East Africa countries. It is therefore imperative for the governments to invest in responsive, targeted social protection measures which gives entitlement to the women in the informal economy. This calls for sealing all loopholes in cross-sectoral programming, expanding social protection systems including scaling up social transfer programmes to protect female-headed households and their microenterprise from the worst secondary impacts of the continuing COVID-19 crisis.
Responsive tax regimes: The effects of emerging taxation regime that seem to target the informal businesses such the turnover taxes, the minimum taxes, value added taxes on essential commodities and digital taxes should be reconsidered in the period of recovery. They have a direct negative impact on the ‘survivalist’ income drawn by the informal women workers. The IMF and World Bank Group recommend that fiscal policies should prioritize spending on human development programmes. Financial tracking and monitoring public finance systems for women-sensitive spending are imperative measures to ensure adequate resource allocation and expenditure to meet their economic needs not just taking away from them.
In conclusion, for women to thrive in the informal sector and overcome shocks and risks, gender smart investments by all relevant stakeholders must be made. The governments in the East African Community need to acknowledge the diversities among women in the informal economy to necessitate a gendered analysis of the pandemic, and the inclusion of the women in designing solutions contextualized to the various sectors and sub-sectors.
Chryspin Afifu’ is a Gender & Women Eonomic Empowerment Specialist at the International Center for Research on Women (ICRW)
By the REBUILD Project Team | International Center for Research on Women (ICRW)