THE BLOG

The Informal Economy: Critical To The Hopes Of A Continent

09/11/2016 13:04

Sub-Saharan Africa - a region encompassing dozens of countries, over 850 million people and thousands of languages. However, to most of us it's a continent that a select few will visit to go on a safari but which in reality most know very little about. What's more our collective perception of the region is largely a negative one, with media headlines often skewed towards poverty, disease and civil war.

However, I want to look at the region through a positive lens and talk about talent, opportunity and what we as British consumers can do to support some hugely talented entrepreneurs and artisans across Africa. In recent years, after decades of stagnation, the region, which spans from Sudan in the north, right down to South Africa is on the up and is currently home to six of the world's 12 fastest growing economies.

Despite this, the jobs market remains heavily weighted towards the unregulated informal economy, which accounts for 80% of jobs in the region and contributing 55% of sub-Saharan Africa's GDP. Of course, in an ideal world many of these businesses and jobs would, in time, transition into the formal economy, where workers enjoy a more secure income, employment benefits and social protection. However one of the biggest challenges facing these informal sector businesses is their lack of access to a large customer base. For most, they are reliant on passing trade within a tiny geographical area. They typically lack the resources and know-how to expand and reap the benefits that a larger customer base would offer. For that to change, these tiny businesses thousands of miles away need our support.

Change afoot at home

Here in the UK, consumer spending habits are evolving quickly and in a way that presents new and exciting opportunities to non-traditional retailers. Much of this change is down to the fact that many of us have decided we want to know more about what we are buying and where it comes from. This has caught plenty of large and well-known retailers off guard. With long and complex supply chains many of them have been unable to respond to simple questions, such as where materials are sourced, who makes a product and how workers are treated and remunerated within supplier organisations.

This simply isn't acceptable in today's world and we, the consumer, have to let businesses know that. And if it means forgoing our favourite brands, then so be it. What is encouraging is that conscientious consumers are no longer a select few, they now outnumber those who are more apathetic, and are using the pound in their pocket not just to make a purchase but also a point. This was illustrated in a study from YouGov and the Global Poverty Project which revealed that 74% of those surveyed would pay an extra 5% for their clothes if there was a guarantee workers were being paid fairly and working in safe conditions. Some companies, such as consumer goods giant Unilever, understand that the consumer now dictates the terms and have made good progress putting an ethical approach at the heart of their product portfolio via their Sustainable Living Plan. Others have been much slower to respond.

While the big brands grapple with how to untangle their supply chains and implement sustainable and ethical practices (not just policies), there is a group of small and growing businesses in the UK, such as fashion brand People Tree who are going straight to source, uncovering talented and skilled artisans in obscure corners of the world. They are focused on telling the story of the maker, offering a quality product and ultimately, providing an ethical and sustainable alternative to some of their much bigger competitors.

This is the premise on which we founded Okapi Home, offering the most talented artisans we could find, many of whom are working in the informal economy, with an outlet beyond their local village or community. By doing so, these small-scale traders can grow, formalise, train the next generation of artisans and become a truly valuable cog in their local economy.

So all I ask of you is that when faced with a decision of where to buy your next cup of coffee, or piece of furniture for home, or your next scarf for your mother's birthday, you ask a couple of simple questions about the background to the product and how it was made. If we all do this, we can improve the lives of so many very skilled but largely underappreciated artisans all over the world. And the more we do this, the more the giants of retail will have to get their houses in order. Now that would be something to be really proud of.

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