Formal And Informal Sector Essay

INTRODUCTION

This essay seeks to address the link between the formal and the informal sector, the role of the informal sector in Botswana`s economic development and whether it has the potential through its activities to address the problem of employment in Botswana and also show the possible solutions to strengthen the informal sector. The essay is divided into four sections, section one will show the link, section two will state the role of the informal sector to Botswana’s economic development. Section three will further explain the potential of the informal sector to address the issue of unemployment and the last section will conclude by giving a number of possible solutions.

When defining the informal sector, most if not all people tend to forget the fact that there is a visible link between the informal and formal sectors, thus in most cases the two have an un-separable connection. There are some educators who mislead the society in defining and understanding the informal sector, for example, the 1972 ILO studies in Kenya define the informal sector and almost equated it to poverty, the study argues that the people in the informal sector are trying to ensure survival and mostly to put food on the table. The ILO study considers the informal sector

The off book dealings between the two sectors make them seem like they do not meet anywhere, also that is why the potential of the informal sector as entrepreneurs has never been recognised as they are not recorded in any statistics. It is clear that the informal sector is important for an economy like Botswana where the country is facing problems like lack of diversification as well as high unemployment rate .Lastly there are possible ways to strengthen the informal sector in Botswana which include establishment of cooperatives to market themselves as well as establishment of support channels through NGOs and