In the Angolan capital, Luanda, street vendors can be found on just about every corner and they appear whenever traffic comes to a halt, which happens more often then not. The sheer number of hawkers is surprising, but so is the huge variety of goods they are trying to sell: newspapers, soft drinks and beer, food, carpets, radios, lights for photography studios, and the list goes on. The sellers are among the millions of Angolans who depend on the informal economy for survival.
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Luisa, money changer:
"I started off with $100. I buy for 4100 kwanzas (the national currency) and I sell for 4250 kwanzas. I earn about 50 kwanzas (€1.60) a day, but on good days, I get up to 200 or 300 kwanzas.
"I started doing this three years ago. Before then I had a job, but I got laid off. Now I'm here on the streets, working for myself."
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For the past 7 years, 30-something Andre has been selling car stereos and speakers. He waves his wares at drivers and passengers in collective taxis near the port of Luanda. When the sun becomes too hot, he takes refuge under a big, stunning tree in the middle of the road. Andre buys the speakers for $60 and sells them for $80. He earns between $200 and $250 a month, far more than the average Angolan. He stares blankly when asked why anyone would purchase a stereo or a speaker in the street, and then replies "to make their car nicer". When the question is reformulated, he pauses again, and then answers simply, "people buy things in the street because it's cheaper than in stores".
Lack of Jobs
The informal sector is important in many parts of the developing world, but even more so in Angola, says Margaret Jiri of Development Workshop, an Angolan aid group. "The reason is simple: there are no jobs. In the mid-90s, the government introduced economic reforms that made the formal sector unattractive. Restrictions were placed on foreign exchange, taxes were increased and it became more difficult to obtain licenses. As a result, even businessmen started selling their goods in the informal sector."
Today, most products are imported by middlemen and then sold by others in the streets. "It's a risky business", says Margaret Jiri. "In the streets, you don't get a receipt or a guarantee. But people prefer to take the risk because there aren't many shops and goods are much cheaper in the street."
Tough Competition
Competition is tough, particularly in big markets like Roque Santeiro in Luanda. Even though the profit margins are small, it's the only way many people can make a livelihood.
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Poverty
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1995
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2000
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Non-poor
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39%
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37%
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Moderately poor
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50%
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38%
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Extremely poor
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11%
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25%
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Source: Angolan National Statistics Institute (INE)
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To help stimulate Angola's urban poor, Development Workshop and another aid group, CARE International, are providing small loans to traders. They can obtain loans of $100 to $150 to expand their businesses. When they repay it, they can get bigger loans of up to $2000. Development Workshop has provided loans to 4000 people in Luanda and Angola's second largest city, Huambo. Margaret Jiri is pleased with the results so far. "Our repayment rate has been almost 100%."
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Listen to the audio reporton Angola's informal economy (9'01")
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The United Nations Development Programme and the International Organisation for Migration recently carried out a thorough study of urban micro-enterprises. Since the informal sector is likely to play a significant role in the Angolan economy for years to come, the researchers argue that aid organisations should provide more loans to the millions of people who depend on petty trading for a living. That would be welcome news for someone like Andre, who has almost no education or job skills and no prospects of ever getting a normal job. "At least by working here on the street I can make ends meet."
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A recent study carried out by Angola's National Statistics Institute showed that over 40% of Angolans rely on the informal sector for employment. Self-employment accounts for over half of urban household income.
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Tags:
Angola,
development,
economy,
poverty,
street traders,
trade
