Informal Sector and Inclusive Growth: RCE Kano and International Partners Propose Informal Sector Agenda

The Center for Renewable Energy and Action on Climate Change (CREACC), RCE Kano through the ELLA* Programme on Informality and with the support from Practical Action UK, met on the 27 February, 2017 in Kano, Nigeria, to renew their commitment to sustainable development and inclusive growth in Nigeria. The “Conference on Informality and Inclusive Green Growth: Achieving Sustainable Development through Inclusive Growth” was the first gathering of this kind in Nigeria to discuss informality and inclusive growth. The main message of this event was to reform and strengthen the informal sector to help address unemployment, reduce poverty and encourage sustainable policies by the government.

Participants affirmed support for CREACC and its partners’ efforts in tackling the dilemma of the informal sector of the economy. During the conference new benchmarks were defined and the requirements for a good collaboration restated.

The ELLA Programme, implemented by the Development Policy Research Unit (DPRU) South Africa and Fedesarrollo, and supported by Practical Action UK, is a global approach to create awareness for informal businesses and organizations. The collaboration aims to help “formalize” this sector to improve access to government and donors. The goal of the Network is to foster south-south learning that is sensitive to context, so that policymakers and practitioners can adapt knowledge from elsewhere to their own realities.

Below statements are the resolutions and outcomes of the conference to help formalise the informal sector.

A - Principles of Formalization of the Informal Sector

(1) Informal businesses must formalize by registering their businesses, pay taxes and comply with other business laws governing, such as product clearance and certification. This will improve access to grants, loans and other incentives by governments, donors and the private sector.

(2) The government must relax the cumbersome processes of registering businesses, especially those in the informal sector, reduce registration costs, and give tax exemtions to small businesses. This shall be without
sacrificing compliance to standards, set forth by government agencies such as NAFDAC, NCPC, NEPC etc. for businesses, their products and markets.

(3) Donors must also increase research and fact findings for better engagement with government, its agencies and the informal sector. This will, to a large extent, reduce leakages of funds disbursed to projects and programmes.

B - Formalization and Growth

(1) Modification of the nature and processes of various businesses.

Due to specificities related to markets in Nigeria (for example yoghurt and millet porridge, bean cake and others), the participants were concerned about the lack of technology to make changes to the production and marketing chain in small and medium businesses.

(2) Packaging

(3) Fair use of technology (fabrication).

(4) Equality

Women and youth are central to a sustainable development agenda, especially in a country such as Nigeria, where they constitute a large part of the population. Inclusion of these groups was essential.

(5) Government Regulation

Government regulation may protect small businesses against larger and more competitive ones as well as from foreign product imports. However, participants agreed that small businesses needed to apply certain standards of product quality.

(6) Effective Pricing

Small businesses need to have better pricing strategies in order to grow and survive.

The broad level of participation at the conference by small businesses, government agencies, the private sector and other stakeholders showed the high level of commitment to Inclusive Growth in general and to the South-South cause in particular. To support ongoing and new initiatives in this area, CREACC and its partners proposed to hold the first "Informality and Inclusive Green Growth National Conference" in Nigeria, calling for local and global partners for sponsorship to support the event.

Watch the welcome address by Ali Bukar Ahmad, RCE Kano here.

*The ELLA Network facilitates south-south comparative research and knowledge exchange, to inspire development policies and practices that are grounded in evidence about what works in varied country contexts.