informal Sector workers

Research has proven that, informal sector workers in West Africa account 80% of total employment. Majority of which lack social protection rights and decent working conditions.

It is thus important to focus on a more coordinated administrative level approach, which involves building basic management, information, and administrative tools and integrating data and information management.    using a single registry and associated management information system to enhance coordination of social protection programs for operational benefits among informal sector workers contributory associations and unions.

Members of the various unions or association of the non-formal workers will be involved from development of the technological platforms, transactions, education of members on the use technology, registration, collection of contribution, and payment of benefits. This model suggests that a two-parts contributory pension fund be institutionalized between government and informal sector workers which will also be managed transparently to provide retirement benefits to the informal sector workers.

the basic challenges faced the informal sector workers due to lack of social security and pension makes the very vulnerable during economic challenges such as the Covid-19 pandemic.

The informal sector faces issues of low productivity even while operating on an employment flexible economy. Workers in this sector earn low income and wages compared to the effort put in as such they are unable to save. They have less accessibility to loans because they are not formal. Issues of poor job security is on the increase due to the fact that there is no insurance scheme in charge of this business, lives and property. Furthermore, due to their odd working hours, there is risk of insecurities among others.

These issues has dragged many down into economic hardship into a life of penury.

Africa and in particular Nigeria is characterized by trade unions who act many times as an effective tool in coordinating and regulating the activities of their members. Such unions and associations are characterized by contributions among members, on daily, weekly, monthly, quarterly as the case may be. These members usually have access to their contributions at agreed time intervals, they also provide lending opportunities for members who find themselves in financial hardship.

Financial system like the commercial banks can make use of dedicated banking programs such as the Bank Verification Number (BVN) used in Nigeria to track financial operations of such members, as well as the IT programme used by such members.

Special intervention for members in financial crisis will be strictly dependent on an agreed percentage in respect to their savings, as it will be agreed by the collaborating organization be it government or non-governmental association.

Members of the various unions or association of the non-formal workers will be involved at all stages of the implementation of this model. 

This model suggests that a two-parts contributory pension fund be institutionalized between government and informal sector workers.

Informal sector workers in West Africa account to 80% of total employment. Majority of the Informal sector workers lack social protection rights at work and decent working conditions.

they are usually easily hit badly as a result of their poor working conditions, lack of pensions savings, poor education level, which push them in untold hardship during economic downturns.

the best model to protect informal sector workers  during economic downturns caused by unforeseen circumstances such as the Covid-19 pandemic, is an integrated data and information management model, which fully incorporates the sector workers in all its operations.

my solution is a total upgrade of The Nigerian government’s micro-pension plan. 

however, my solution recognizes the place of the informal sector workers and their participation there of, the use of their already established unions and association, there already established lending and borrowing platforms which will be upgraded for more efficiency.

Government agencies, commercial banks and other non-government authority can now have easier and productive engagement with the various leaders of these associations and unions.

Financial system like the commercial banks can make use of dedicated banking programs such as the Bank Verification Number (BVN) used in Nigeria to track financial operations of such members, as well as the IT programme used by such members.

Cost of training on the use and application of the technology can be sponsored by the World Bank, and or other Non-Governmental organization or agencies.

Special intervention for members in financial crisis will be strictly dependent on an agreed percentage in respect to their savings, as it will be agreed by the collaborating organization be it government or non-governmental association (this will help to encourage saving habits among informal sector workers). 

This model suggests that a two-parts contributory pension fund be institutionalized between government and informal sector workers which will also be managed transparently to provide retirement benefits to the informal sector workers, as is the case with the formal sector workers, considering the important contribution of this sector to the economy.

individual solution

As someone who has lived my entire life in the western part of African, been involved or better  still directly or indirectly affected by the lack of social security for the informal workers, I honestly feel the best model to protect informal sector workers  during economic downturns caused by unforeseen circumstances such as the Covid-19 pandemic, is an integrated data and information management model.