COVID-19 Impact on the Informal Sector; Action Must Start from the Base

By Gbenga Komolafe

The Federation of Informal Workers’ Organizations of Nigeria aggregating 170 organizations of working people in the sector in Nigeria across 21 states of the Nigerian federation wishes to make this urgent Save our Soul Call in the light of the fast spreading Covid-19 pandemic in Nigeria.

The Covid-19 pandemic has exacted devastating social-economic impacts on most working people especially in the informal sector who have no guaranteed income of any sort, no social safety net or health insurance.

Covid-19 pandemic has amplified long existing dangerous fault lines in the social fabric of the Nigerian nation. The decades old underfunding of the public healthcare system and the poor municipal services especially potable water and sanitation in most communities have become dramatized given the fact that these are elementary requirements for the containment of Covid-19 which demands scrupulous personal and communal hygiene because of the highly contagious nature of the pandemic.

Most state governments have imposed lock-downs restricting physical movements of people with varying degrees of severity while the federal government-imposed lockdown in Lagos Ogun and the FCT has just been eased. While the lockdowns have put physical movement of people on hold with most productive activities suspended, sustaining the most basic requirements for survival for people in form of food, water and medical supplies have been problematic. Most poor households especially those without any form of guaranteed incomes in the informal sector have been faced with starvation, poor health and destitution.

Thus, for instance, Lagos state government announced plan to feed 200, 000 people during the lockdown barely scratched the surface of the need of most people in the informal sector to access basic nutrition given that about 5.5 million people, representing about 75% of the state’s 7.5 million labour force are employed in the informal economy, according to the National Bureau of Statistics (NBS).

The situation in Lagos is probably even better than what obtains in most other states that have imposed lockdown on economic activities across the country.

The federal government response includes a conditional cash transfer of N20,000 per month (cumulative for four months) to the most vulnerable households who have been targeted on the basis of a Social Register of Poor and Vulnerable Households set up in 2016.

But the register comprises agricultural and rural households, who are less likely to be negatively affected by the economic shocks of COVID-19 being that most agrarian/rural households are usually food sufficient, and also, the food supply chain has been excluded from the lockdown. Given this scenario, it was no surprise that most working people demanded for easing of the lockdown in the face of mass starvation.

The inability of the Nigerian state to conduct mass purposive testing to help isolate those already infected, provide underserved communities where people remain very ignorant about the pandemic with basic education about the pandemic, conduct mass purposive testing, provide well – equipped isolation centers etc, lockdowns and no lockdowns, the pandemic might continue to spike.

The challenge of addressing the need for Covid-19 awareness outreaches by public healthcare workers to educate people about the mode of transmission of Covid-19 and the need for people to take responsibility for basic hygiene especially frequent hand washing, physical distancing, face masking and the need for early reporting and isolation of those infected remains even more pressing after easing of the lockdown.

To make such community outreaches plausible, provision of water supply, face masks not only in underserved communities but also in informal work places and clusters is also imperative.

Economic Stimulus Plan is Not Reaching the Informal Sector

The COVID-19 crisis has worsened the vulnerability of all working people and the least protected in society. It is highlighting deep economic and social inequalities and inadequate health and social protection systems that require urgent attention as part of the public health response.

Scores of millions of traders engaged in supplies of essential spare parts, household materials supply and processing, artisans engaged in petty manufacturing, fabrications, repairs and construction, shoe makers, including those engaged in footwear, clothing and garment making, transportation and vehicle repairs etc have been severely impacted. Thus, basic livelihoods, access to services, including health care, food, water, education and social services, safety at home, adequate standards of living and family life has been constricted with dire consequences for most working people.

Unfortunately, most of the intervention plans announced by federal and state governments have failed to specifically target the informal sector despite its macro – economic importance, employing over 80% of the working population and contributing close to 60% to the national GDP.

A few economic plans have been announced by the federal government including a N3.5 trillion stimulus package focused on assisting employers in key sectors such as housing, healthcare, agriculture and light manufacturing without specific provision for the informal ends of these sectors.

There are also no specific provisions for social service interventions especially in the areas of provision of water and sanitation and urgent financial assistance for the informal sector to revive grassroots economic activities to help rapid containment of Covid-19 and save our communities.

The informal sector is totally absent in the stimulus plan. The 50 billion-naira MSME package recently disbursed by the CBN excluded the informal sector because of its exclusive conditionalities.  Key details of the intervention have been lacking which limits the scope for accountability. Given the lack of a comprehensive database of informal workers, and their institutional financial exclusion and the insistence on property as collateral, the informal sector and most poor producing households are effectively excluded. In the light of these realities, the Federation of Informal Workers’ Organizations of Nigeria (FIWON), hereby makes the following demands:

1. The Federal Government in conjunction with state governments should immediately institute the immediate implementation of a basic emergency grant to all those without guaranteed income in the informal economy. This will cushion the devastating impact of the lock down on the working poor without guaranteed income or social protection of any kind, boost local consumption and help local manufacturing and production value chains to quickly recover.
2. Rapid provision of water and sanitation services: The Federal government, if necessary should support states to provide both temporary and more permanent water supply technologies in underserved communities and informal production clusters such as garages, mechanics villages, markets, saw mills, abattoirs etc, etc, to encourage frequent hand washing which is very crucial for Covid-19 containment
3. The 50 billion-naira MSME package recently disbursed by the CBN excluded the informal sector because of its exclusive conditionalities. But the plan should incorporate appropriate credit facilities for the informal sector through their associations and cooperatives as most informal sector operators have depleted their meagre business funds on food during the lockdown.

We therefore the reiterate the call for the expansion of this plan to include the informal sector or a separate plan for the informal sector should be urgently constituted with the full participation of the stakeholders in the informal sector.

4. As a strategy of job creation and economic stimulation, Government should embark on massive investment in social housing including slums upgrade programmes. Private developers have historically proved incapable of producing affordable housing.
5. Provision of universal healthcare and rehabilitation of collapsing healthcare infrastructures in the communities as well as recruitment and training of healthcare professionals.
6. Rapid expansion of physical infrastructures to decongest public schools both at primary and secondary school levels (especially in big urban centers like Lagos), employment of more teachers and provision of water in these schools.
7. Immediate halt to all evictions in informal settlements and work clusters. Available public spaces should be carefully selected and developed as informal work clusters especially in cities like Lagos where informal work places have been systematically taken over by private interests in the past two decades with over 40 markets, mechanic villages and other informal production clusters destroyed without alternative spatial provision. Informal work should be recognized as crucial for employment generation and succuor that it has become for the huge army of the unemployed.

Gbenga Komolafe

General Secretary