Enhancing contributions of the informal sector to National development: The case of Uganda

Regardless of the definition of the informal sector, there is wide spread consensus that the sector is important to the developing world. The International Lab-our Organization estimated that in 1990, 21 percent of the Sub-Saharan Africa's 227 million labour force was working in the informal economy. As the informal sector continued to grow both in urban and rural areas, there was a decline or stagnation in the growth of formal employment. The informal sector's contribution to gross domestic product (GDP) is increasing, although not much is known in most countries because the sector hardly enters the official statistical records. This study analyzes Uganda's informal sector size, contribution, formal-informal sector linkages, causes, constraints and policies aimed at formalizing or enhancing its contributions. The methodology used involved a review of relevant policy documents, including UBOS's survey reports on the informal sector. Of particular relevance are the 2002/03 household Uganda Business Inquiry and the 2001/02 Uganda business Register. the household surveys documenting the informal sector in Uganda define the informal sector as an enterprise employing less than 5 persons...