A situational analysis of the informal sector in the three major cities Blantyre, Lilongwe & Mzuzu) of Malawi

Abstract

This study focuses on the situational analysis of the informal sector in the three major cities in Malawi. An extensive literature study was undertaken to understand the origin of the informal sector and how it has grown in the business environment to which it is exposed in Malawi. This understanding was essential because it formed the basis for conducting the whole research. A sample of four respondent groups, namely government officials, industry representatives, the shop owners and the informal sector participants themselves was drawn, and personal interviews conducted. The purpose of the interviews of the first three respondent groups was to discover their perception of the informal sector in Malawi. This perception was vital for it was clear that these groups influenced government policies much more than the populace. The informal sector participants themselves were interviewed to learn how the informal sector operated, its scope and benefits, why it was growing and how successful it was in the three major cities of Malawi. The results show that there were mixed feelings among the people in each of the four respondent groups. Although many of the government officials were positive, mainly because the President of Malawi and other politicians promote the informal sector publicly, they still believe there is a need to control the sector's operations. The industries and shops that benefit from the informal sector are positive while the others are not. More than 80 percent of the informal sector participants are making a comfortable livelihood through their activities. The lack of employment and the desire to survive were found to be the two issues that enhance the growth of the informal sector in Malawi. The participants could further expand their activities if suitable loans were made available. A coordinating organization within this sector has emerged and is controlling the sector's activities. However, further research is required into the size and contribution of this sector to Malawi's economy.