This means a total of 40, 421 informal businesses existed in Botswana by 2007, compared with 23, 454 in 1999 - almost doubling in eight years.

According to the 2007 Informal Sector Survey (ISS) released by the Central Statistics Office (CSO) on Monday, females accounted for 60.7 percent of total employment in the sector, three times the figure recorded in the 1999 survey.

The 2007 ISS is the second to be undertaken in the country after the 1999 exercise.

Chief Government Statistician, Anna Majelantle, says the huge increase in the size of the informal sector could be attributed to a decline in formal employment opportunities and the establishment of various industry support agencies by the government among them the Citizen Entrepreneurial Development Agency (CEDA) and the Local Enterprise Authority (LEA).

The 2007 ISS shows that the majority of informal sector businesses were operated by women (67.6 percent) and that the majority of informal sector business operators are involved in Wholesale and Retail Trade (40.5 percent), followed by Real Estate (20.3 percent).

About 12 percent of informal sector players were engaged in manufacturing. Most of the sector players also started their businesses from their own savings with very few securing assistance from commercial banks.

About four percent of businesses were financed with loans from friends and relatives, while agriculture was also cited as a source of capital for some businesses.

Commercial banks and SHHA (Self Help Housing Agency) accounted for 1.3 percent of capital sources, while CEDA loans were 0.4 percent. Researchers say the dominance of Wholesale and Retail Trade over Manufacturing was noted in the 1999 survey and was linked to availability of capital.

Says the report: "This trend was also observed in the 1999 Informal Sector Survey. This reveals that a pronounced majority of informal sector enterprises are active in the tertiary sector, especially in trade.

"This is not surprising given that primary and secondary activities require a large amount of initial investment capital, which is often not affordable to informal enterprises.

"Interestingly, the 2007 ISS shows that a significant number of informal enterprises are engaged in secondary activities such as manufacturing and construction."

According to the survey, the majority of informal sector businesses were operated by heads of households and nearly all of them were operated by citizens. Education had a significant effect on operators of informal businesses, with those with no or little education more likely to run an informal sector business.

According to statistics, 17.6 percent of informal sector business players had certificates; out of this, 45.3 percent had either a vocational or brigade certificate. Degree holders constituted 2.8 percent of the operators. "The results show that there is a positive correlation between informal business operators and those with no training," the researchers note.

On employment trends in the sector, the 2007 ISS found the majority (69.1 percent) of the 60 386 people employed in the sector were working proprietors, followed by paid permanent (19.7 percent) and temporary workers (6.9 percent).

"Most of the (people) in informal sector employment were fulltime employees with Wholesale and Retail Trade recording the highest number of employees (at) 37.3 percent," the report says.

"Among the fulltime citizen Wholesale and Retail Trade workers, 70.9 percent were females. Among those currently working in the sector as employees, 51.4 percent were males and the majority of all employees were aged between 20 and 34 years."

In terms of distribution, the survey found that informal sector activities tended to be concentrated in Cities and Towns and Urban Villages. Gaborone contributed 20 percent of the total, followed by Kweneng East and Francistown with 15.4 and 10.9 percent respectively.

The survey notes that the biggest challenge facing informal sector players is the non-payment of goods and services supplied on credit. This is a major shift from the 1999 survey which identified unavailability of credit facilities as the major challenge.

However, high competition and lack of capital still feature as difficulties experienced by the operators.

"Non-payment of goods and services was cited as the major problem, followed by high competition and lack of capital/equipment," the report says.

"In 1999, the major difficulties facing small businesses were unavailability of credit facilities, non-payment of goods and services supplied on credit and lack of space, in that order."

Significantly, respondents in the survey said the most useful assistance they could be provided with was better access to loans, followed by provision of permanent sites and assistance with marketing. When asked what type of training they required, 34.3 percent said bookkeeping/financial/accounting, while 27.3 percent said they required managerial skills. About 16 percent said they needed technical skills through formal training.

The 2007 ISS involved 5 650 respondents countrywide, who were interviewed through two questionnaires. From this, the CSO received an 89.2 percent response rate. Data collection by 12 specially trained CSO field staff, took place between March and July 2007.

Chief Government Statistician Majelantle says the purpose of the ISS is to provide current information to policymakers, researchers and programme managers for use in the planning, implementation, monitoring and evaluation of the informal sector in Botswana.

"The main objectives were to collect data that would provide information required to shed light on the size of informal sector employment, its contribution to the economy, common activities in the sector and the proportion of household income generated by the informal sector," she says.

Thabo Moseko
Mmegi