Supporting the informal sector in Africa: the Tambula e-marketplace experience

As everybody knows, the informal sector represents a large and growing share of the economy and of the employment force in all developing economies, including Africa. Although the definition of informality varies across countries, informal sector workers are generally those who do not have secure employment contracts and do not have benefits or access to a social safety net. They usually earn little, and are at a high risk of poverty. In realizing the importance of the informal sector for its economy, Namibia developed a smart and innovative solution to support informal vendors by offering them an online marketplace called “Tambula” for making their products or services accessible to a larger market. African problem, African solution.

Developed with the support of the United Nations Development Program (UNDP), Tambula was launched during the Covid emergency to allow Namibian consumers to purchase online essential goods from street vendors and have them safely and freely delivered at home, by avoiding physical contacts with their sellers. Subsequently, the range of products available on the platform has been expanded also to non-essential goods, including handcraft products. The only condition is that they must be handmade and produced according to artisanal methods. The portal, which is still active after the end of the Covid state of emergency, aims at sustaining this sector by allowing artisans and informal vendors to showcase and sell their products online, so creating new sales opportunities and possibilities for increasing sales volumes, which should in the end encourage formalization of such operators. An experience that – considering the importance of the informal sector in Africa - would deserve to be replicated in other African States and, hopefully, extended over the entire continent.

At continental level, an e-marketplace named Africa Trade Exchange (ATEX) was recently launched by Afreximbank in collaboration with the AfCFTA Secretariat, the African Union Commission and the Economic Commission for Africa of the United Nations (UNECA). Its objective is to stimulate the sale of essential products manufactured in Africa by connecting potential buyers to suppliers through an online platform. The ATEX has been conceived as a tool serving the purposes of the African Continental Free Trade Area (AfCFTA), and aims, specifically, at promoting inter-African trade transactions by putting at disposal of African sellers and buyers a virtual platform where they can conclude their trade transactions. In a more limited regional context, COMESA launched at the beginning of March 2021 – during the peak of Covid emergency - a similar tool to facilitate sales within the region of a large range of health protection products, food items and fuel. The platform, which is still active despite the end of the outbreak, also offers an area for the sale of services (e.g., transport, financial or consultancy services), which is however not yet utilised.

Unfortunately neither the ATEX, nor the COMESA e-marketplace offer the possibility to informal traders to showcase and sell their products online, a possibility that should be considered by the developers of these platforms, considering the size and the weight of the informal economy in the various African countries and the need to promote the formalisation of this sector in order to increase revenue collection in such States, especially in a post-Covid recovery scenario which has left them with further overstretched budgets.