ECA - CEA
Economic Commission for Africa
Commission economique pour VAfrique
ECA's Assistance to African Countries for promoting the Informal Sector
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INTRODUCTION
It should be pointed out that ECA has been paying much attention to the development of informal sector. Since 1980, it undertook a series of studies on the role, the structure, the obstacles and the prospects of development of informal sector in Africa. ECA is currently implementing two programmes in informal sectors which fall under the framework of the UN special initiative for Africa for Poverty Alleviation through the Promotion of the informal sector and employment generating opportunities.
a) Since 1992, the ECA Secretariat started to implement with the financial assistance of the Federal Republic of Germany a research-action project focusing of development and promotion of informal sector in two pilot countries, namely Cote d'lvoire and Ghana. In view of the successful results of the project, Germany renewed its financial assistance up to 1998 in order to extend the project to two other African countries like Ethiopia and Zambia. In 1998, it is planned to hold an international conference to review the results of the project. African countries, donors, international agencies, NGOs will be invited to attend the Conference. Such a conference would allow ECA to extend the experience of the project to a maximum of African countries which will wish to adopt the same approach to the informal sector because it must also convince and mobilize bilateral and multilateral aid-donors as well as other international organizations and agencies to assist more and better the informal sector organization.
b) Parallel to the above-mentioned project, ECA is implementing a subprogramme aimed at improving informal and micro-enterprise sector. Studies planned under 1997-98 Work Programme will assist African governments to improve enabling environment for these informal enterprises. The Secretariat is therefore expected to better assess the countries needs and select the countries for the extension of the above-mentioned project.
Below is the summary presentation of the on-going ECA project as well as the elements of the subprogramme on development of informal sector for 1997-99.
ECA Pilot Ongoing Assistance to African Countries
1 Objectives
The long term objective of the project is to contribute to the acceleration of the process of socio-economic development in Africa through the enhancement of the informal sector's role.
This means a balanced increase of efficiency in the production of goods and services and in the creation of employment and income.
Decision makers in several African countries will be sensitized on the need to improve the informal sector's enabling environment. Beneficiaries of the project are informal sector operators and their groups and associations in the pilot countries. Both men and women are to benefit from the project activities which are to be decided upon solely by the beneficiaries themselves.The project will focus on groups and associations instead of individual operators.
The aim of the project will be attained if ECA has shared its methodological approach - then tested in four countries - with African governments.
2. Proposed methodological approach
The project tries to facilitate a process and therefore
Approaches individual the Informal Sector (IS) operators, informal groups and associations with the invitation to identify their problems in small cluster groups, in order to prioritize the problems, analyze their causes, look for solutions, formulate plans of actions and implement strategies;
Assists the groups to devise actions to overcome the causes of some of the identified problems by moderating and structuring their discussions, and by making experts available.
Assists the groups to solve their problems by linking them with other existing groups
staff and decision makers of specialized organizations and ongoing projects for help; and by supporting them through the project's micro project fund;
Provides encouragement, devoid of any pressure, to the groups to formalize their groups as recognized associations, and/or join with other existing groups to form bigger organizations, which ever is more practical.
3. Guiding principles of the project
ECA and its project staff act as facilitators only. They create a forum for representatives of micro and small-scale enterprises for them to decide on problem priorities, solutions, action plaM and activities and they encourage them to take appropriate action. They employ a strict
participatory approach.
4. The project's contributions to the solution of problems are limited to the provision of information and to the refund of communication and travel expenses (e.g. bringing in ideas developed and experiences made elsewhere; refund of costs of regular meetings, financing visits to places where solutions to certain problems have been tested already). Even this is done only if the partners' own efforts have failed or their capacities are exhausted (subsidiarity principle).
The contributions are provided by:
The CTA assisting ECA in the formulation of the methodological approaches and conceptual frameworks as well as in the supervision and the monitoring of the project. The CTA and ECA staff:
survey literature, documents etc. about the informal sector and promotional
measures;
survey the organizations of the informal sector (cooperatives, associations etc.) and main support organizations inclusive of their approaches and activities in the
sector;
contact opinion leaders and find out:
* their willingness to cooperate with the project,
their views on the most urgent needs and main problem areas of the
sector,
identify and select the National Project Coordinator (NPC), identify problem areas of the informal sector,
sensitize government officials, commercial banks1 and other important organizations' head figures for the project objectives and attract them to become members of the Advisory Board (ABs).
The National Project Coordinator(NPC) implements the project in respect of the lological approach.Particularly,the NPC has to:
identify individual infonnal sector operators, IS associations and invite to rej meetings during the whole process( actually 18 to 24 months );
initiate any form of appropriate action to satisfy the most urgent needs and to solve the most pressing identified problems by the IS operators, for this purpose;
encourage the elaboration of micro- project proposals;
support the exchange of experiences within the informal sector in the pilot countries and with the other countries;
encourage the fonnalization of groups;
links the IS operators,associations or groups with representatives of the formal sector, concerned public services,NGOs or donors; and
prepare and hold the national workshop.
c. The Advisory Board consists of members representing government authorities,the private sector, NGOs and financial institutions. It brings together experienced persons in working with micro enterprises.Its main objective is to guide,advise and assist the NPC in solving problems that the project implementation may encounter as well as in creating contacts with relevant public services and organizations.
Total cost and its financing (actual phase)
The cost of the actual phase II is us $ 821,058 financed by the Federal Republic of Germany (FRG) and channeled through GTZ to ECA The FRG has also financed Phase I for US
$ 450,000 in Ghana and Cdte D'lvoire.
Cost Components
Resource Persons 210,
Group meetings/training, national workshops and international conference 270,000
Mission cost 80,000
Microprojects 128,000
Other 133,058
Total cost 821
Time Frame
Phase II is being implemented in Ethiopia and Zambia.Project implementation takes 18 to 24 months in each country and started in January 1996 in Ethiopia and in Zambia in October 1996 . This will be followed by approximately six months of follow-up and winding-up, inclusive of the International Conference (second and third quarter 1998).
7. Partnerships at country level
During Phase I, other international agencies like UNDP, ILO and World Bank shared their experiences and expertise to enhance a coordinated approach to the development of the Informal Sector in Cote d'lvoire and Ghana. Bilateral donors like GTZ, France, Canada, Switzerland have been interested in the project approach and supported the Federation For Informal sector Development created in C6te d'lvoire as well as the german foundations and local NGOs.
Actually in Ethiopia, the project cooperates closely with GTZ projects working in related fields and NGOs. In Zambia, it cooperates with UNDP, UNIDO, ILO. Thus, ECA has avoided duplication with other agencies and secured its project with a bigger and longer lasting impact.
8. Expected Outputs Outputs and activities
ut I: Initiation of development processes in the Informal Sector (IS) in two additional African countries ("project countries") based on experience from the first phase.
Related indicator: ECA staff contributes to the selection of project countries and to the designing, backstopping, supervision and evaluation of the project activities.
Output II: In the project countries the IS succeeds in voicing and advocating its interests.
Related indicator: Documents about the IS' interests; minutes and n about meetings with other important social groups and organizations.
Output III: Political and economic decision makers in both project countries have been
II.
sensitized for the promotion of the IS.
Related indicator: Willingness of decision makers to talk with IS representatives and to change attitudes, rules and procedures.
Output IV: Identification and/or implementation of measures to promote the IS.
Related indicator: Some micro project proposals have been formulated and the implementation of and support to some follow-up measures has been started.
The Informal Sector in the ECA 1997-98 Regular Workprogramme
The strategy that ECA adopted for the next three years will consist of carrying out studies on best practices in private sector development. Dissemination ad implementation of best practices will be facilitated through a high-level consultative meeting on programmes and strategies designed to promote informal sector in Africa. The planned key outputs under this subprogramme are:
Reconciling indigenous informal and formal micro-financing systems and practices in Africa;
Case study of "Best practices" aimed at popularizing micro financing;
The role of micro-financing to the sustainable development of Small and Medium size Industries (SMIs) in Africa.
