Vendors Initiative for Social and Economic Transformation (VISET) welcomes the rolling out of nationwide consultations on a social protection mechanism for the informal economy by the National Social Security Authority (NSSA).
The consultations, which are being carried out in partnership with VISET, are a culmination of many advocacy initiatives by our membership on the need for national institutionalized interventions that protect informal economy workers, considering that they are the bedrock of the economy, contributing as much as 64 percent of GDP, and over 80 percent of jobs. At present, the informal economy workers are reliant on self-financed savings schemes and micro -finance loans that charge usurious interest rates that have driven many out of business. According to the Monetary Policy Statement Financial Inclusion Indicators as at 31 December 2023, small businesses are getting less than 5% of total bank loans, with women accounting for just under 8 percent, and youths 3 percent.
The above statistics illustrate that informal economy workers are self-reliant for both their social and business needs, threatening not only their viability, but their social well-being. We acknowledge efforts in the past to provide temporary reprieves to the sector, particularly in 2020 when COVID-19 struck, and national lockdowns were enforced, however as disclosed by the Auditor-General’s report to Parliament, the facility was abused, with allowances meant for food insecure households, People with Disabilities, the elderly and child-headed families not received by the beneficiaries due to various reasons, including duplicate payments and disbursement of funds to people with fictitious names.
We therefore believe that piecemeal interventions in moments of disaster are subject to abuse, and that there is need for a legally enacted mechanism to grant social protection for the sector, in line with Sustainable Development Goals 1, 8 and 10 so as to reduce poverty, inequality, and vulnerability, while promoting economic growth and decent work.
Finally, we urge all actors within the informal economy ecosystem to make their voices heard through the consultations so that the sector membership can be granted social protection, which can help them reach their full potential business-wise!
