Informal Economies of the Sahel

Abstract

Sahelian countries, while sharing many features of other Sub-Saharan African economies, face some unique economic challenges, which merit particular scrutiny, notably: a sizable demographic bulge, being landlocked, a lower income per head, and a higher poverty incidence. The picture is further darkened by critical governance weaknesses, political instability, and radical Islamist threats, which, as discussed in other chapters in this volume, have caused serious security challenges within, and across, national borders. All these factors have contributed to a downsizing of the formal business environment and an expansion of the informal sector. This chapter assesses the relative weights of the formal and informal sectors in Sahelian national economies, its growth dynamics, as well as employment and productivity patterns. It also examines the implications of the rise of the informal sector for institutions and governance, social inclusion, and stability.