Informal sector Recovery Plan

When the Government of Botswana implemented a national lockdown in the month of March 2020 for a period of seven weeks coupled with the closure of certain facilities around the country, an acute decrease in domestic demand for goods and services was experienced. The situation was gravely felt by Micro, Small, and Medium-Sized Enterprises (MSMEs), especially those in the informal sector and others who are dependent on face-to-face customer interaction and worker collaboration. With workers in the informal sector having no legal identity (they are not formally registered as businesses), formal accounts or employee benefits and securities, the impact on them was disproportionately worse for them. As part of effort to mitigate the adverse impacts of the COVID-19 on the sector, the Ministry of Investment, Trade and Industry with the support of the United Nations Development Programme developed an Informal Sector Recovery Plan.
The strategic objectives of the Informal Sector Recovery Plan are:
1) To address the needs of the informal sector businesses in the short- to medium-term;
2) To ensure that the needs of participants in the informal sector are prioritised through the establishment of dedicated structures; and
3) To adopt policy measures that will build the economic resilience of informal sector workers to cushion them against future shocks in the post-COVID-19 era.

The targeting of the informal sector and all the participants in the sector is in fulfilment of the leave no one behind and the promotion of equality amongst all members of the society. Being one of the groups that have been most affected by the COVID-19 pandemic, along with other vulnerable groups such as people with disabilities, women and youth, it is important that such a strategic document has been developed to address their needs and build their resilience to withstand any future shocks.

Through the Informal Sector Recovery Plan, the Government of Botswana will establish informal sector facilitation structures to support the economic revitalization of the informal sector; develop, implement and manage all interventions for development and sustenance of the informal sector. The recovery plan has therefore recommended the establishment of an Informal Sector Unit or Agency which with the mandate to engage with the informal sector participants and their associations; and develop a sectoral business intelligence database, which will be populated with relevant information that will be required to support the sector and a pathway for participants to graduate to the formal sector. Government has designated a parastatal institution, the Local Enterprise Authority (LEA) to act as the Informal Sector Unit. Working with the Ministry of Investment, Trade and Industry and support of the United National Development Programme, LEA has already started the implementation of the Informal Sector Recovery Plan. Among the key areas of support, UNDP will engage a technical advisor to support the implementation of the recovery plan.

In terms of lesson learned, MSMEs are considered fundamental to promoting a dynamic and healthy economy, as well as contributing to the growth of the formal sector through private sector development and contributing significantly to job creation in the economy. These entities are also considered important in diversifying and transforming economies, especially if they are given the necessary support and the enabling policy and legislative environment to operate in. It is therefore important that the informal sector and all small, medium-sized enterprises are duly supported to eventually graduate to the formal and private sector.