paper - African Development Bank

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DRAFT
Bringing women in the informal sector to the fore of the of regional integration
ABSTRACT
This paper seeks to discuss women in the informal sector and how they can contribute to
regional integration. The paper discusses the challenges that women in this sector face and
gives suggestions on how regional integration could be instrumental in addressing some of
these challenges. The paper also considers the shortfalls of regional integration vis-à-vis
women in the informal sector and how these could also be addressed to ensure women are
empowered from initiatives such as regional integration. The paper also discusses how
regional and international instruments such as the Convention on the Elimination of All
Forms of Discrimination Against Women and the SADC Gender Protocol can be of benefit to
women in the quest for empowerment through the informal sector and regional integration.
1. Introduction
According to the African Development Bank, the goal of the Southern African regional
integration agenda is to "create a fully integrated and internationally competitive region with
the overarching objective of poverty reduction". The participation of all sectors and
stakeholders, especially women, in this process is important in order to improve on and
accelerate the gains made in advancing gender equity and parity in the SADC region both of
which impact on poverty reduction. The importance of gender and the participation of women
in this front are also recognised within the Bank’s Southern African regional integration
strategy which considers gender as a cross cutting theme to be addressed "in the context of the
design and implementation of specific regional projects/programmes". Such considerations
speak to the recognition of people's rights and the different roles each can play towards the
attainment of regional integration. Such an inclusive society must be based on the principles
of embracing – not coercing or forcing – diversity and using participatory processes that
involve all stakeholders in the decision-making that affects their lives. ECOSOC sees this as a
dynamic and principled process in which societies engage in order to further human
development. Successful social integration processes encourage “coming together” while
respecting differences, and consciously and explicitly putting great value on maintaining
diversity. In linking this to regional integration, there is the assumption that the individual
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states create blocs for regional integration in which there is no coercion but they do so with
the recognition there are gains to be made as individual states which can be further
accelerated by the creation of a regional force. This implies additional focus on the social
integration whose goal is "according to the Economic and Social Council (ECOSOC), the
goal of social integration is to create “a more stable, safe and just society for all”, in which
every individual, each with rights and responsibilities, has an active role to play.
Regional integration is also concerned with enhanced cooperation through the creation of
regional institutions, rules and agreements. The objectives of the agreement could range from
economic, political to environmental and usually involves written agreements in which the
areas of cooperation are detailed (Carleton, 2013). Regional integration can foster
competition, subsidiarity, access to wider market (via trade), larger and diversified investment
and production, socio-economic and political stability and bargaining power for the countries
involved. It can be multi-dimensional to cover the movement of goods and services (i.e.
trade), capital and labour, socio-economic policy coordination and harmonisation,
infrastructure development, environmental management, and reforms in other public goods
such as governance, peace, defence and security. Regional integration allows for the bloc to
speak with one voice on issues affecting the region. This has the advantage of removing the
burden of responsibility off one member state as decisions are seen as belonging to the whole
bloc. It can also be a platform for applying pressure on non-complying governments to ensure
these conform. This has the long term effect of bringing about development within member
states and by so doing improving socio-economic and political indicators across the whole
bloc.
However, integration can be complicated by perceived or real gains or losses among the
members that may lead to disputes and a sense of “loss” of national sovereignty which is why
it is important to be clear on the objectives of and processes to achieve regional integration
with clear sanctions of erring member states. For success, integration therefore requires strong
commitment in implementing the agreed arrangements, fair mechanisms to arbitrate disputes
and equitable distribution of the gains and costs of integration.
This paper seeks to discuss the importance of the recognition of women in the informal sector
and their contribution to the success of regional integration.
2. Background
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In Africa in general, regional integration has been propelled by the growing fear of Africa’s
marginalisation in an era of globalisation in which there have been concerted efforts both at
the regional and sub-regional level to jointly harness resources for putting viable development
policies in place (Chauvin and Gaulier:10). Though globalisation brings opportunities and
challenges, the African countries are on the receiving side rather than being proactive in the
global arena. Globalisation is driven by information technology and free flow of capital
around the world, much of which African’s access to these is limited. Mutharika (1972) also
notes that it’s important to have in place effective regional institutions and adequate
institutional machinery to oversee the implementation of these development policies. The
SADC body represents an example of an effort towards regional integration. This goes back
as far as the 1980s where in African countries, having sought ways of enhancing their
domestic economies came up with the Lagos Plan of Action in 1980 and in 1991 the Abuja
Treaty of Declaration. The two policy documents underscored the need for regional
integration by 2020 for Africa but also recognised the regional initiatives already undertaken.
The United Nations Economic Commission emphasized the importance of regional
integration for Africa in the 1960s.
SADC: the Landscape
The Southern African Development Community (SADC)’s goal is to further socio-economic
cooperation and integration as well as political and security cooperation among 15 southern
African states.
The socio-economic, political and security cooperation aims of SADC are equally wideranging and intended to achieve the objects set out and address the various common
challenges. The objectives1 of SADC are to promote sustainable and equitable economic
growth and socio-economic development, promote political values and democracy, self
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promote sustainable and equitable economic growth and socio-economic development that will ensure poverty alleviation with
the ultimate objective of its eradication, enhance the standard and quality of life of the people of Southern Africa and support the
socially disadvantaged through regional integration;
promote common political values, systems and other shared values which are transmitted through institutions which are
democratic, legitimate and effective;
consolidate, defend and maintain democracy, peace, security and stability;
promote self-sustaining development on the basis of collective self-reliance, and the interdependence of Member States;
achieve complementarity between national and regional strategies and programmes;
promote and maximise productive employment and utilisation of resources of the Region;
achieve sustainable utilisation of natural resources and effective protection of the environment;
strengthen and consolidate the long standing historical, social and cultural affinities and links among the people of the Region;
combat HIV/AIDS or other deadly and communicable diseases;
ensure that poverty eradication is addressed in all SADC activities and programmes; and
mainstream gender in the process of community building.
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sustaining development, complementarity amongst member states, maximise productive
employment, combat HIV&AIDS and ensure gender mainstreaming.
The Southern African region is very diverse with a mix of middle income countries (MICs)
and low income countries (LICs). The distribution of the countries based on per capita GDP
in 2009 and average GDP growth rate is illustrated in Figures 1 and 2 below.
Fig 1: Per capita GDP in 2009 (Currency US$
Fig 2: Average GDP growth rate
(2000-2009)
As other regional blocs, the SADC is also affected by climate changes which have varying
effects on agriculture. The island countries also have their own specificity in terms of
vulnerabilities to climate change and limited linkages with the continent. Lack of direct access
to seaports by landlocked countries increases the cost of their imports and exports, thus
making efficient cross-border transport links and elimination of transit barriers critical for
their competitiveness. The largest economy in this bloc is South Africa with the largest
contribution to regional GDP of 71.5%.
Fig 3: Country contribution to regional GDP in 2009
Fig 4: Sector contribution to regional GDP in 2009
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As a region, SADC is plagued by a myriad of challenges in sectors such as social,
development, economic, trade, education, health, diplomatic, security, agriculture,
employment and political challenges (AfDB). Of note is that some of these challenges cannot
be tackled effectively by individual members yet the sustainable development that trade could
bring is threatened by the existence of different product standards and tariff regimes, weak
customs infrastructure and bad roads, unemployment and food insecurity. Although average
per capita income in the SADC region (US$ 2,674) is the highest amongst all sub-Saharan
regions, poverty persists to varying degrees in each country. Approximately 45% of the
Southern African population lives below the poverty line and on less than 1 dollar a day. Life
expectancy has declined over the last decade from about 60 years to 40 years, and infant
mortality rates are high, with 50 deaths per 1,000 births recorded. The falling life expectancy
is partly due to the impact of the HIV/AIDS pandemic, as the region struggles with over 37%
of the world’s infected population. HIV/AIDS has adversely affected agricultural production
in the region by reducing labour availability and increasing expenditure on health, thereby
reducing income to purchase goods, services and food at the household level.
For example, in Zimbabwe which typifies the bulk of countries in this bloc, the impact of
HIV/AIDS has been particularly felt by women as they provide 70 percent of agricultural
labour, while they constitute 55 percent of people living with HIV (PLHIV) (MHCW, 2009).
Women are also the major care givers for the sick and this has impacted negatively on food
and nutrition security as women play a crucial role as food producers and processors. Poor
water and sanitation and healthcare-related issues compound the chronic food insecurity. The
SADC region has become a net importer of food, while a large proportion of the population
has had to rely on food aid. Economic decline across the region has led to worsening poverty
and high unemployment. As economic growth declined, so did formal employment. This
resulted in substantial job losses and the “informalization” of the economy. The
unemployment levels of over 20% across countries in the region pose great challenges to
efforts at addressing poverty and income inequality and gender parity.
Women and Employment in the SADC
Women are severely disadvantaged in labour and employment in the region. In South Africa
the unemployment rate for women is 27.7% compared to 23% for men and notwithstanding
the fact that women constitute 50.9 % of the population (Nyenti 2012). In Zambia, the
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employment-population ratio is lower for women (64.9%) than for men (72.4%) (Chikalanga,
Chisupa, 2012). In Tanzania, females account for 57% of all unemployed persons in Mainland
Tanzania (Masabo 2012). In Botswana, the participation rate for females is 50.5% compared
to 64% for males (Ntseane 2012). In Malawi, 71% of rural women are illiterate (Kanyongolo
2012b). Generally, the majority of women in SADC are employed in low level jobs such as
agriculture and domestic work which are mostly in the informal sector and are unable to
participate in formal labour markets because of low levels of education, lack of skills and
their care-giving roles (Kaseke, Olivier, 2012).
Females account for 67.1% of workers in the informal economy in Tanzania, 50.6% in
Zambia and 70% in Zimbabwe. More women in Zimbabwe (53 percent) were employed in the
informal sector than men with 44 percent of those employed in the informal sector living
below the Total Consumption Poverty Line (TCPL), compared to 36 percent of the formal
sector (PASS II, 2003). Given the many challenges such as high levels of unemployment
amongst women within the region, there is an opportunity to harness the contributions of the
informal sector into the fore of development and leverage on this to bring about socioeconomic development, regional integration and reduced poverty.
The Informal Sector
The informal sector refers to those workers who are self-employed, or who work for those
who are self-employed. People who earn a living through self-employment in most cases are
not on payrolls, and thus are not taxed. Many informal workers do their businesses in
unprotected and unsecured places (Lund, 2012). “For work to be defined as formal, there has
to be a written contract, and the work has to be covered by basic conditions of employment,
such as stipulated working hours, pay for overtime work, paid holidays, and sick leave. Most
formal work also carries some provision of social security, the core of which is access to
health insurance, unemployment insurance, maternity leave, compensation for work-related
injury or disease, and coverage for family in the case of work-related death” (Lund 2012). In
informal work, employment relations are not legally registered. Women in the informal sector
are in a variety of activities, the most common being cross border trading. This enables small
scale entrepreneurs to escape poverty. Contrary to the past when the informal sector was
associated with low levels of education, according to a study of Cross Border Traders, the
number of people indulging in ICBT with degree‐level education is rising. On the one hand,
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this is a pointer that cross‐border trade is increasingly becoming more sophisticated, requiring
better education for one to be able to transact. It also confirms that most university graduates
these days are without jobs or starting capital to pursue formal business. Thus, an increasing
number of them resort to informal businesses as a form of employment and means of income
generation. This further underpins the importance of drawing on the informal sector as a
means of addressing poverty and improving lives of women and subsequently their families.
While women are generally disadvantaged inside the sector of formal employment, they are
even more so in the informal economy. There is increasing informalisation by changing
employment contracts to contractual relations, where former workers become their own selfemployed business-entrepreneurs. This leads to an erosion of a “wage culture” (Theron
2010), in which working standards and remuneration are socially regulated and negotiated
and not externalised by guising the employer-worker-relationship through superficial
business relationships. . By investing through informal channels, African entrepreneurs seek
to reduce costs related to wages, retirement pensions and other social benefits (AfDB).
Meanwhile, the informal sector is also highly segmented between higher income and poorest
strata, which coincides with a gender pattern employment and wage-employment.
The prominence of the informal sector in most African economies stems from the
opportunities it offers to the most vulnerable populations such as the poorest, women and
youth. Even though the informal sector is an opportunity for generating reasonable incomes
for many people, most informal workers are without secure income, employments benefits
and social protection. The informal sector is unable to benefit from social security
arrangements because of the informality of the work (Kaseke, Olivier, 2011).
The informal sector comprises several, quite different forms of work. Most informal sector
workers are relatively small scale entrepreneurs although they may also employ some
workers. For instance, in a study of cross border traders, it was found that on average 1.2
people were employed by SADC traders in their home country (1.3 for South Africans in
South Africa), over 60% of Mozambicans employed people in their businesses in
Mozambique and at least 20% of SADC entrepreneurs involved in the handicraft/curio sector
of street trade in South Africa employ people (usually South Africans). Informal traders also
have limited access to preferential tariff agreements, free trade areas and are unable to
benefit from provisions of customs unions and common markets. As the informal sector
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grows, it behoves policy makers to act on drawing these traders to the fore of development,
more so the women that are the majority in this sector. At a policy level, the relegation of the
informal sector to the periphery of development and regional integration is detrimental to the
sector and obscures its contribution to regional integration and overall women’s
empowerment. The lack of attention paid by policy-makers to the activities of informal
traders reflects, in part, the limited amount of information about their activities as well as
whom they are.
As the sector grows, it also becomes more complex and along with this comes challenges
that affect both women and men but more so women because of the multiple roles they carry.
Such challenges include:
1. Occupational health and safety regulations and standards only apply in the
formal sector, which points to a significant gap in social protection coverage of
informal workers. The particular challenge lies in recognising hidden informal
workers as workers. Given the turbulence of SADC economies, the HIV burden,
high poverty levels, women are generally prejudiced and further marginalised just
by being in the informal sector. Health and maternity benefits are luxuries that
women can mostly imagine. Social security systems built on formal employment
have and continue to reproduce such gender disadvantage against women by
insufficiently providing for interrupted working times, part-time employment,
survivor’s benefits and so on. Workers in the informal sector are subjected to
appalling and dangerous working conditions that result in ill-health which because
of the absence of organised unions, their voices are hard to hear.
Lund explains, “in general, more men than women work in the formal economy, they have
greater upward mobility than women do, and earn more than women do. The spouses and
families of men who work formally get access to social protection as dependents of their
partners. In the formal economy, more women than men do part-time work, and part time
work brings fewer social protections” (Lund 2012). Women suffer an extra gender penalty in
the valuation of work; nurses and engineers require the same amount of training, expertise
and responsibility and yet show extreme wage differentials (Budlender; Lund 2012).
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2. Informal work as care work: A large portion of informal work is care work,
which is done by women in most countries in the world. “This is not ‘culture’
operating; it is patriarchy” (Lund 2012). On the positive, there are increasing
work opportunities for women both in the formal and informal sector, while
interrupted or atypical work arrangements exclude women from social protection
schemes. Informalisation generally shifts the responsibility of social security
from employers onto the workers. Rather than speaking of a gender divide
between informal and formal sector, Lund points to women’s subordinate
positions “in all parts of the economic continuum” (Lund 2012). Chitja (2012), on
rural women notes that “they would benefit from engendered institutions that
support rural women’s grassroots efforts and voices to build and strengthen assets
and agency for trading in markets for a livelihood.” The creation of a livelihood
base would also allow women to transition from basic care work to more
formalised, regulated work.
3. Non –existence of organised unions-The sector also suffers from consequences
of the non-existence of organised unions. This means their grievances are difficult
to address as these are not presented from a unified voice. In the case of accessing
productive assets such as bank loans and skills, it may be difficult for those in this
sector especially women to access these, notwithstanding the fact that evidence
shows that women are better at servicing loans than men. Women’s access to
productive assets in the formal sector is limited and is even more so in the
informal where there are no unions to lobby and advocate on their behalf.
4. Contribution to economic growth not recognised-The contribution of the
informal economy to the national GDP is also difficult to measure yet there is
without a doubt, a huge contribution. For example, in the peak of the Zimbabwe
socio-economic-political crisis, what kept families afloat could easily be attributed
to the activities of the informal sector. There was an increase in cross border trade,
mostly undertaken by women who went to neighbouring countries to buy goods
for resale and groceries for households.
Steps toward Gender Equality in the Informal Sector
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Progress in attaining gender equality has been most visible with regard to women’s political
representation and in education, with 5 countries having achieved parity in primary education,
and 6 countries having reached a minimum of 50% female enrolment in secondary schools
and universities. South Africa (42%), Angola (37%), Mozambique (35%), and Namibia (31%)
have achieved women’s participation of 30% and above in political representation, but other
countries such as Botswana (11%) lag very much behind.
However, progress towards
economic empowerment through the informal sector is still largely limited. The nonrecognition of women in the informal sector is also a contributory factor towards continued
subjugation of women and their role towards regional integration. The SADC has adopted the
following protocols which speak to gender parity and the advancement of women within
regional trade but evidence of women’s empowerment is still minimal. These protocols
include:
SADC Gender Protocol:
Objectives
With specific reference to women’s economic empowerment, one of the protocol’s objectives
is to:
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To achieve for the empowerment of women to eliminate discrimination and to achieve
gender equality and equity through the development and implementation of gender
responsive policies, legislation, programmes and projects. Article 17(Economic
Empowerment) notes that:
1. State parties shall by 2015, adopt policies and enact laws which ensure equal access,
benefit and opportunities for women and men in trade and entrepreneurship, taking into
account the contribution of women in the formal and informal sectors
2.
State parties shall by 2015, review their national trade and entrepreneurship
policies to make them gender responsive.
Article 19: Equal Access to employment and benefits states that State parties shall ensure
by 2015, review, amend and enact laws and policies that ensure women and men have equal
access to wage employment in all sectors of the economy.
The SADC Free Trade Protocol (Article 2) emphasised tariff reduction as a means to
encourage regional economic growth, integration and development and to promote regional
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trade and integration with the aim of creating a free trade zone by 2008 with policy reforms
and an enabling environment as the catalyst.
Whilst these are progressive commitments there are a number of factors that have made the
attainment of progress towards this limited. As such, regional integration should not be seen
as a panacea for addressing regional challenges as it has a number of challenges which
include:
1. Budgetary constraints
Commitments may be made which are progressive and meant to be binding across member
states. However, if there are no funds to implement activities towards these commitments, the
onus then remains on individual member states to carry these through. Budgetary constraints
and different priorities per country may be in tandem with regional priorities which then
retards the progress towards regional integration. In this regard, regional integration remains a
ceremonial commitment but with no accountability towards each other as member states.
2. Accountability
Political pledges to integration by African leaders have not always been translated into action.
The question of accountability needs to be clearly articulated and taken seriously by member
states. A case in which Zimbabwe failed to comply with a decision of the SADC Tribunal
points to the fact that the identity of the Summit and that of its member states might be
intrinsically linked. SADC has not garnered enough political will to draw the line between
the individual interest of member states and that of the region. The reality on the ground
perhaps does not match ideals in treaties, protocols and MOUs and the degree of integration
remains highly superficial. Thus results have been below expectations. This has been due to a
number of constraints, including:
Membership issues. On a continental basis and also within sub-regions, many African
countries belong to several groupings or sub-groupings that sometimes compete,
conflict or overlap amongst themselves rather than complement each other. This adds
to the burden of harmonisation and coordination, and is wasteful duplication in view
of constrained resources. Slow ratification of protocols and reluctant implementation
of agreed plans- Due to low political commitment and/or perceived or real losses and
sacrifices involved, a number of countries have been reluctant to fully implement
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integration programmes on a timely basis. Socio-economic policy divergence - The
inconsistency or incoherence at the macroeconomic level has also been a source of
problems for the systematic implementation and “internalisation” of the regional
integration agenda into national programmes. It has been Impossible to integrate
regionally where there has been continuously glaring policy, implementation and
information inconsistencies at the national level. Limited national and regional
capacities -the lack of mechanisms and resources for effective planning, coordination,
implementation, monitoring and pragmatic adjustment of programmes on the ground
have been another constraint to regional integration (Maruping, 2005).
In principle, a regional institution whose decisions are not directly binding on member states
may find it difficult to ensure the implementation of its decisions and this would inevitably
tend to affect the process of integration(Maruping, 2005).
3. Big sister syndrome
Issues of availability of resources to member states also determine the influence this may have
on other states. For instance, South Africa is the best endowed in the SADC bloc in terms of
economic indicators. It is a hub for growth and regional integration in Southern Africa. It
accounts for 71.5% of regional GDP (see Figure 4) and is a key player in NEPAD and SADC.
About 70% of intra-regional investment flows in the region is conducted by South African
firms. South African investments played a large role in neighbouring countries, accounting for
between 9% and 20% of GDP in Lesotho, Mauritius, Mozambique, Namibia and Swaziland
(IMF2005). A number of South African financial institutions are also expanding their reach
across the region, notably the Development Bank of Southern Africa (DBSA). This, inter alia,
facilitates production and trade financing, allows for goods purchased in one country to be
paid for in another, and provides a common and accessible financial service network. South
African telecommunications companies are also contributing to the consolidation of
telecommunications networks across the region (Note:IMF 2005. IMF working paper
05/58/2005 “The implication of South African economic growth for the rest of Africa”)
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With such a strong hold on the regional bloc, it is possible to manipulate other smaller
countries to conform to those of the bigger ones.
Addressing emerging challenges
Obama (2013), on women's rights, noted that a country's progress could be measured by how
women were treated. And, he added, although Africa is rising, "this progress... rests on a
fragile foundation." The SADC bloc has an opportunity to strengthen this foundation. The
establishment of the bloc is clear indication of the commitment towards regional integration
and the adoption of Protocols on gender bears testimony to the seriousness with which the
bloc considers issues of gender. Regional integration is indispensable to building the
economies of scale and achieving the international competitiveness necessary for Africa’s
structural transformation. In order for regional integration to be effective and address the
gender concerns within the informal sector, it is necessary for a couple of actions to be taken
some of which include:
1. Resource mobilisation as a region: such resources mobilised could be used to
implement projects that impact positively on women and improve border operations
for cross border traders. Financial resources could be set aside specifically targeting
women in the informal sector. This would also require the semi-regulation of the
informal sector for the purpose of recall of capital, but also at the same time be used as
a platform for skills and capacity building.
2. Friendlier border posts –There have been complaints of harassment of women who
engage in cross border trade. Women travelling to South Africa from Zimbabwe
complain of the many demanding processes which penalise women and negatively
impacts on the growth of their businesses. The ICBT often complain about the visa
restrictions, which almost stifles their businesses. In some countries like Botswana
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even when a visa is given, the authorities allow entry for 90 days only. Studies done
on ICBT indicate that traders enter Botswana or other countries for three to four days
and they exit shortly after that. They stay in their home country for two to three weeks
and then return for business. For that reason they need a policy framework that allows
for multiple entry and to spread the 90 days or 180 days over the year. In that way they
would not be seen as breaking legal requirements of entry. The traders have
complained of excessive harassment especially the women traders. Generally at the
port of entry men do the body search for any hidden goods. Women traders have
complained of embarrassment and discomfort and would prefer any inspection to be
done by women colleagues at the border post.
3. Creation of innovative social protection schemes –there needs to be innovative
ways that address the social security needs of women informal traders. The increasing
informalisation of work speaks volumes of the employment situation in the region. It
is imperative that social policy makers take the needs of the informal female traders
seriously and formulate ways of providing for social protection and also harnessing
their contributions to the formal economy, without necessarily formalising their work.
4. Promotion of organised unions – the advancement of various regional initiatives can
be traced to organised and active unions advocating for the cause. Women informal
traders would benefit from creating a regional body that represents their issues in key
emerging issues. Obviously such an initiative would have to feed from national
processes implying the country initiatives need to be active and vibrant in order to
influence regional initiatives and integration.
Conclusion
The paper has shown that women in the informal sector could benefit from regional and social
integration. If SADC is to be a force to reckon with globally, regional integration needs to
incorporate the diverse actors that contribute to economies, which in this instance are the
women informal traders. Even though the region is plagued by a myriad of challenges
especially unemployment, the paper has attempted to show that the bloc needs to go beyond
the formal sector and harness the contributions of the informal sector. What is also important
in this process is to recognise the shortfalls that the informal sector faces especially around
social security and access to free and safe border movement across countries for trade.
Women in the informal sector face challenges, but these can be addressed and minimised
from a regional platform.
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