The International Labour Organisation (ILO) reckons that the informal economy contributes 50-80 per cent of gross domestic product, 60-80 per cent of employment and 90 per cent of new jobs. Worse, about nine out of 10 workers in both rural and urban areas hold only informal jobs, leaving the majority of the population living from hand to mouth.
"In sub-Saharan Africa, poor-quality employment - rather than unemployment - remains the main labour market challenge. This problem is compounded by rapid population growth, specifically growth of the working-age population," states the ILO's World Employment Social Outlook 2017 report.
The problem of poor quality jobs is endemic in sub-Saharan Africa, where over 70 per cent of workers are in vulnerable employment against the global average of 46.3 per cent. The informality of employment is exerting pressures on economies because only a few people can afford vital services like medical cover or saving for retirement. The lack of productive opportunities for the youth and adults alike mean that 247 million people were in vulnerable employment in 2016, equivalent to around 68 per cent of all those with jobs. Over the next four years, the region will pump an additional 12.6 million youth into the same precarious labour force market.
The reality of vulnerable employment is worsened by working poverty, considering that 33.6 per cent of all employed people in sub-Sahara Africa were living in extreme poverty -- that is living on less than $1.90 per day -- in 2016. An additional 30.1 per cent were living in moderate poverty at between $1.90 and $3.10 per day, which corresponds to over 230 million people living in either extreme or moderate poverty. The rate of moderate working poverty is rising and is projected to be 30.5 per cent in 2017, representing an increase of approximately five million people in one year. The challenge is particularly dire for youth considering that almost 70 per cent of them in 2016 were in jobs characterised as working poverty.
Unemployment and low quality jobs is worsening in East Africa despite the region's being expected to post economic growth of 5.4 per cent in 2017 against a continental average of 2.5 per cent.