This research seeks to explore the relationship between informality and inclusive growth in sub-Saharan Africa, with a particular focus on South Africa. Despite relatively high growth rates, improvements in poverty and inequality have been constrained in many developing countries over the last decade, suggesting that economic growth has not been inclusive. In part, this relates to low levels of participation in the formal economy as well as high incidence of informality and unemployment in these countries. This research seeks to explore the relationship between informality and inclusive growth in sub-Saharan Africa, with a particular focus on South Africa. South Africans typically hold one of two opposing views on the informal sector. The first is that informality should be encouraged as an under-utilised source of new employment; the second is that it should be discouraged as an inferior source of employment. The central research question is therefore: “Do informal labour markets promote or constrain inclusive growth?” In order to examine the hypotheses, we use three different methodologies. Firstly, we undertake a regional evidence synthesis examining literature and case studies from the sub-Saharan Africa region. Secondly, we expand on the South African case study and examine the nature of transitions within the labour market. Thirdly, we examine to what extent income shocks may impact the likelihood of engagement within the informal sector.

This roundtable aimed at discussing and sparking new train of thoughts on how to strengthen the role of urban innovation among the city leaders, institutions and urban stakeholders, including private sector organisations. It further explored the strategic pathways for Urban Innovation Community (UIC) to provide new tools, expertise and knowledge on implementing and achieving the SDGs at the local level. 

This brief explores the relationship between informal employment and inclusive growth in sub-Saharan Africa, focused on the case of South Africa, with recommendations on how to address different types of informality. Informality in the labour market is often seen as both a hindrance and a help to inclusive growth. On the one hand, low pay and less benefits – which characterise informal markets – may exacerbate poverty and inequality concerns. On the other hand, it is far better than the alternative: unemployment. This brief explores the relationship between informal employment and inclusive growth in sub-Saharan Africa, with a specific focus on South Africa. We find clear benefits of informality for inclusive growth, including absorption of vulnerable groups into employment and the flexibility of the informal sector during and after economic downturns. Informal employment is not a magic bullet though; with issues such as lower pay, less benefits and job insecurity among the most problematic. We find policy measures aimed at reducing informality work best when they relax the external and internal constraints facing informal firms. Policy measures that aim to reduce informality by making it costly to be informal can unintentionally increase unemployment by pushing firms out of the market, which constrains inclusive growth. For this reason it is recommended that policy makers aim to support rather than to penalise informal enterprises.

Sub-Saharan African (SSA) countries have the highest rates of HIV prevalence in the world accounting for an estimated 71% of all new infections (UNAIDS 2010). HIV prevalence is greatest in urban informal areas, caused largely by the proliferation of a variety of risk environments that facilitate the rapid spread of HIV/AIDS. As a strategic response to the complex nature of the HIV/AIDs epidemic in urban areas, decentralised multisectoral HIV/AIDs responses at the local government level have been adopted. These are seen as a sustainable way of dealing with the spread of HIV/AIDs in a number of African cities, in line with internationally accepted recommendations. Now that a number of local governments in African cities have adopted HIV/AIDS multisectoral responses, the question can be asked to what degree is this is this response being implemented in these countries, and what challenges are faced by cities as they adopt this approach? This article reviews HIV/AIDS multisectoral responses in African cities, and discusses the challenges that face urban local governments as they implement these responses.

Decentralisation is now taking place in the public administrations of most countries of the world. A critical determinant of the effective performance of local governments is finance – their ability to both mobilise financial resources and to use those resources effectively and efficiently.

This book explores the variety of methods used to ensure that fiscal decentralisation takes place alongside administrative decentralisation. It considers the range of revenue sources available, the design systems of intergovernmental transfers between central and local government, and the kinds of rules and procedures necessary to ensure that local governments use their financial resources appropriately.

The experiences described in this book will help local government managers, and national policymakers charged with local government finance issues, to ensure that they follow good practice in their own programmes of local government reform.