Measures to promote the informal sector
- Providing credit facilities by the government. There is need for the government to provide credit facilities to the people involved in the informal sector at subsidized interest rates. This helps people involved to access capital and expand on their businesses.
- Adopting favourable government policies. This is in form of reducing taxes on raw materials and other inputs used by the informal sector so as to reduce the production costs. In addition, there is need for the government to grant legal recognition to the informal sector to protect it from unnecessary harassment
- Using appropriate technology. There is need for the government to encourage and promote the use of production techniques which are cost effective and are in line with the social and economic requirements of the society. This helps to increase on the quantity and quality of the products.
- Economic liberalization. There is need for the government to remove unnecessary restrictions from economic activities to allow people involved in the informal sector to carry out business freely with limited interference”
- Forming cooperatives and associations. Such associations help individual producers to secure loans from financial institutions and marketing of their products.
- Changing the education system. This is aimed at equipping the local man power with the required entrepreneurial skills necessary for efficient management and allocation of resources.
- Protectionism policies. There is need for the government to restrict the importation of those products produced by the informal sector by imposing high tariffs on them. This helps to protect the local producers in the informal sector and reduce competition from high quality imported products
- Construction and rehabilitation of basic social and economic infrastructure. This is in form of transport facilities, electricity, water facilities, storage facilities etc. This is aimed at facilitating the production, distribution and marketing of goods and services by the informal sector.
- Providing demarked work places. There is need for the government to provide land where people involved in the informal sector can carry out their activities.
- Market expansion. There is need for the government to expand market for the sector through economic integration, market research, promoting trade exhibitions and encouraging economic diversification.
- Using expansionary fiscal policies. There is need for the government to raise wages for civil servants so as to raise aggregate demand for the goods and services provided by the sector.
- Political stability. There is need for the government to ensure political stability. This helps to create a favourable environment for the prosperity of the informal sector.
- Increasing the exploitation of natural resources. This is aimed at obtaining raw materials required for production of goods and services by the informal sector
CATEGORIES Economics
TAGS Dr. Bbosa Science
