The informal economy is receiving increased attention from policymakers, as it provides jobs and income to many of Africa’s poorest households. Yet, employment in the informal sector is vulnerable and income irregular. Furthermore, informal workers often lack social protection and long-term prospects. Crucial questions to be addressed are: How can (Dutch) development policies and programmes be more responsive to the needs and potential of the informal economy in Sub-Saharan Africa? And how can the informal sector create productive and decent jobs?

These questions guide the online dossier on the informal sector recently launched by INCLUDE. This policy brief follows up on a previous INCLUDE policy brief on the informal sector and synthesizes relevant resources from INCLUDE’s research groups and knowledge base. It provides a definition of the informal economy as well as the rationale behind an enhanced policy focus on this sector. It also outlines the potential of two policy approaches for dealing with informality and formulates several recommendations to stimulate inclusive growth through informal sector development.