For Most Africans, Job Options Lie in the 'Informal' Economy

A new basket woven from old plastic bags; shoes cobbled from used car tires; an oil lamp made from a soda can.

If you can get past the desolation, African shantytowns are full of good ideas. The poor may have almost nothing, but, for the most part, they meet daily needs.

With an eye on this resourcefulness, some economic-development organizations in Africa are aiming to support the initiatives poor people come up with for themselves, rather than channeling increasingly scarce aid dollars into big top-down initiatives.

According to United Nations sources, 60 percent of Africa's labor force is employed in so-called "informal" economic activities that avoid taxes and are thus usually illegal. The sector is estimated to grow 6 to 7 percent a year, on average.

The expansion is a sign of a crisis, says Jacques Bugnicourt, head of Environmental Development Action (ENDA), which supports activities of impoverished communities in Africa and elsewhere. "But this crisis also implies new possibilities."

Last month, ENDA opened a large complex in the middle of an inner-city slum in Senegal's capital, Dakar, for poor people. "We feel there is a need for the disenfranchised, particularly youths, to try out their ideas; show each other what they are doing and what they plan to do," Mr. Bugnicourt says.

Among a maze of rooms and courtyards is a library, a crafts workshop, and an exhibition of "indigenous devices" from all over Africa. In an office, a group of metalworkers discusses setting up a factory together. The center, called Ecopole, is also the base for several music groups and will soon have a radio station and a computer site on the Internet's World Wide Web. The center is run mostly by volunteers, says Amadou Diallo, one of the organizers. It gets funding from the European Union.

African governments have often ignored or suppressed informal activities, holding that they undermine the formal economy. But with dwindling aid levels and little private investment, "they are beginning to realize that the poor are the only hope they have," says Taoufik Ben Abdallah, an ENDA economist.

To the surprise of many, two African presidents - Senegal's Abdou Diouf and Mali's Alpha Oumar Konare - were among the guests at the center's opening.

Despite years of difficult restructuring, most African economies continue to flounder. In Senegal, for example, each year sees 100,000 more people looking for work, but only about 2,000 new official job openings, says World Bank economist Abdoulaye Seck. "What the other 98,000 are doing to survive we really don't know."

Meanwhile, a 50-percent devaluation of the currency in French-speaking African nations has caused costs to skyrocket for the poor, while governmental domestic spending has been cut to pay for higher foreign-debt service charges. The result, the World Bank says, is a rise in informal activity: Semi-legal taxis are replacing public buses; people who can no longer afford sit-down restaurants eat at street vendors; the few people who can afford a telephone often do so as an investment, charging others to use it.

This means money is circulating more among the poor, and they often reinvest it in their own communities. In Pikine, one of Dakar's impoverished outer suburbs, traders recently pooled resources and constructed a big new market. Pikine's mayor admits that informal initiatives are responsible for more infrastructure development than his own administration can boast of.

In education, even though the share of government spending on primary schools has grown steadily since 1987, the percentage of primary-school age children enrolled in government schools has fallen. The reason, claims education specialist Adel Arab, is that poor communities are creating their own schools. Research suggests that two-thirds of the newly literate children in Dakar have had community rather than government schooling. State education is still based on the colonial system of more than 30 years ago, he says. "It was largely irrelevant for the poor then, and it is even more irrelevant now."