Informal entrepreneurs: 20% have never been to school

What prevents informal entrepreneurs from taking the step to formalization? A survey conducted by the Ministry of Finance and the African Development Bank reveals a number of constraints. In its latest report, presented last week, the OECD also highlights the extent of this scourge (see www.leconomiste.com).

■ Very low levels of education

The first constraint identified by the authors of the survey is the very low level of education among informal entrepreneurs. Less than 15% of informal entrepreneurs have a university degree or vocational training. What’s more, over 20% of these entrepreneurs have never been to school. 25% of them have only a primary education, and 40% have a qualifying secondary or college education (24%). Of course, this has a direct bearing on the intrinsic skills of these entrepreneurs. Indeed, while they often display a determination to undertake, they are sorely lacking in fundamental entrepreneurial skills at all levels of the business creation and management process. And most of them can’t take them on (lack of cognitive skills) because these skills are linked to academic training in entrepreneurship, training in business creation (coaching, mentoring), or internships in a company (internship, freelance/free-lance) or in an associative activity.

■ Women and young people harder to get out of informality

The survey reveals that men (69%) are more likely than women (17%), and adults (2.5%) than young people, to work in the formal sector. This difference is not explained by the level of education or intrinsic characteristics of men versus women, nor by the economic sector invested. The results suggest that women engage in low-productivity activities, often within the home, and are therefore more likely to work in the informal sector. At the same time, the probability of a business being formal increases by 2.5% with each year of age of its owner.

■ High concentration in rural areas

Geographically, the survey shows that there is no marked difference between regions in terms of business informality, but that informality is more prevalent in rural areas and in the trade sector. Thus, the probability of observing a formal business in rural areas decreases by 80%, which is consistent with the prevalence of lower-productivity activities. The same applies to the trade sector, where the probability of having a formal business is reduced by 40%, compared with industry, agriculture or other services.

Aziz DIOUF