Fox and Sohnesen (2013) in a study covering Burkina Faso, Cameroon, Republic of Congo, Ghana, Mozambique, Rwanda, Tanzania, and Uganda, estimate that wage and salary employment in private nonagricultural enterprises is still rare in SSA – this sector on average accounts for only 9 percent of the employed population.

# **C. Inclusion of disadvantaged groups**

Fox and Sohnesen (2013) also find that the creation of informal household enterprises is the common resort for non-agricultural employment for those who lack education or who are geographically disadvantaged. Mbaye and Benjamin (2014) point out the role of the urban informal sector in absorbing rural migrants. Another characteristic of the informal sector is the strong female presence: 60% of working women in the developing world are in the informal sector. In Sub-Saharan Africa, 84% of employed women are in the informal sector. Likewise, Steel and Snodgrass (2008) also found that the majority (59 to 83%) of informal sector workers are women. This confirms the CSO of Botswana (2008) finding that in 2007, 67.6% of the country’s informal firms were owned by women. According to Chen et al (2005), women are concentrated in the more precarious types of informal employment. Adams, de Silva, and Razmara, (2013) support this point on the basis of five African case studies.

Women often play an important role in ICBT (international cross-border trade) in Africa. MacGaffey (1991) points out that the subservient role of women in Congo pushed them into informal trading, including ICBT. In Zimbabwe, women constitute 85 percent of the traders (Ndela 2006) and in the Great Lakes Region, an estimated 85 percent of small-scale traders are women (Titeca and Kimanuka (2012)).

# **D. Role in productivity and growth**

Most studies on informal firm productivity show that informality is associated with lower growth and productivity. Steel and Snodgrass (2008) find that the productivity differential between formal and informal firms is due mainly to unequal access to public services. Gelb et al. (2009) compare the productivity of formal firms and informal firms using surveys on the investment climate for a number of countries in southern and eastern Africa. Their results confirm that formal sector firms are on average more productive than informal ones but the gap between formal and informal firms is much less for east African countries than for southern African countries. They attribute this to the difference in the quality of the business environment and the enforcement of rules. The relative weakness of the state in East Africa undermines the performance of formal firms and provides little incentive for strong informal firms to formalize, thereby lowering the gap between formal and informal firm productivity.

La Porta and Shleifer (2008) obtain related results using World Bank informal sector surveys covering registered and unregistered firms in 13 countries and micro-enterprise surveys covering India and 13 African countries. Their most salient finding is that the productivity of formal firms is substantially greater than that of informal firms, although most strongly so in India. However, once they control for expenditure on inputs, human capital of the top manager and firm size, being unregistered has little additional impact on productivity. By contrast, Perry et al. (2007), find a residual negative impact of informality on productivity, even when other characteristics are controlled for. Using aggregated data, Perry et al. (2007) find that the connection between informality and low productivity has to be nuanced in Latin America. According to them, informal entrepreneurs are wel <mark>l aware of their limitations in terms of access to capital and skilled labor. Therefore, they tend to operate in sectors where it is possible to produce more efficiently on a small scale.</mark> Results from Benjamin and Mbaye (2012) corroborate the 7