Background and basis of the project

The issues of economic and social inequality within societies poses a serious challenge to modern civilization, particularly in developing countries.1 Once this inequality is formed in cities, informal economies have tendency to develop as a means of survival for those who find themselves marginalized and excluded from formal economic systems. For the duration of this project, I will use the term informal economy to refer to an economic activity that is not regulated via the national government, and which operates outside of formal regulatory frameworks. This phenomenon is distinctly visible in developing countries where unstable economies and poverty are present.

Informal economies in Senegal are ubiquitous and occupy a critical position in the country's socio-economic landscape. Despite government efforts to formalize the economy, informal activity remains common, particularly in urban regions, serving as a vital source of income and employment for many individuals who lack access to formal jobs or education. According to a report by the International Labour Organization (ILO), informal employment accounts for 96.4% of the active population.2

However, Senegal is undergoing rapid urbanization, with the urban population projected to reach 53% of the total population by 2030.3 It is accompanied by a process of Westernization evident in the proliferation of Western-style shopping malls, supermarkets, and modern high-rise buildings, a trend that is noted by sources including the World Bank, The Conversation, The Guardian, and The New York Times, and various other reputable news sources. While the process has brought great economic growth and improved living standards, it has also had negative impacts on traditional cultures and way of life and has exacerbated social inequality. Some fear in Senegal, like many other nations, rapid urbanization is pushing traditional culture towards extinction.

Westernization has also proliferated into the economic sectors. As Laura Livesay, an Illinois State University researcher, writes in her article ‘Social Capital in Senegal: Bane or Boom?’, Senegal is experiencing a rearrangement of and change to its economic model. She focuses her work on the notion of social capital, which she refers to as a networks, relationships, and trust that people have with each other in a community, an idea commonly associated

In the context of informal economies, social capital plays an important role in facilitating economic activity and enabling individuals and groups to overcome the challenges faced due to the nature of the economy itself. Although a typical aspect of these prevalent informal economies in Senegal, social capital is currently ‘keep[ing] the local economy from substantial growth”.5 Western-style society, with its emphasis on formal institutions, regulations, and structure, will continue to experience difficulties such as above, when attempting to accommodate the informal nature of Senegalese economies.

As noted by the International Monetary Fund, "As countries move up the income ladder, the size of the informal sector tends to decline”.6 By disrupting and halting economic growth, it is clear to see that the types of society being erected will struggle to preserve the beauty and importance of the previously resistant informal sectors, in reality meaning the diminishing or potentially eradication of the subsectors.

But with such a huge proportion of the country’s population relying on these sectors for their livelihoods, it would be devastating to witness their demise. I believe policies and funding aimed at supporting informal economies and promoting formalisation should be prioritised and considered part of a broader effort to promote sustainable, inclusive development. Failing to preserve informal economies would have significant socioeconomic consequences, disproportionately for the most vulnerable members of society. This could potentially result in increased poverty, unemployment, and social exclusion, exacerbating existing inequalities and potentially leading to political instability and overall disrupt.

A report by the International Labour Organization (ILO) titled "Women and Men in the Informal Economy: A Statistical Picture." emphasizes the need to create policies that support integration of informal economies into formalised systems. It states that "the integration of the informal economy into the formal economy is an important objective of development policies".7 It is argued that that policies and strategies that arise should aim to create an enabling environment for informal economic activities to not only continue but become integrated, rather than seeking to suppress or eliminate them from society. The report further states that "governments [] need to find ways to integrate informal workers and enterprises into formal economic systems, which can increase productivity and improve working conditions, while contributing to broader economic growth and development objectives".8