The Informal Economy and Growth


Recent iiG research and new data from Ghana show that carefully designed policies can increase the size of the informal economy. This would help to increase tax revenue and accelerate growth in Africa. Roughly half of the labour force in Africa is employed in the informal sector. Informal sector businesses and services do not pay taxes or comply with government regulation, meaning that governments are left with low tax revenue and workers have no access to pensions or health care. A number of policy recommendations are made.


iiG Briefing Paper 11, CSAE Economics Department, University of Oxford, Oxford, UK, 2 pp

The Informal Economy and Growth

Published 1 January 2010