Mobile phones in the transformation of the informal economy: stories from market women in Kampala, Uganda

ABSTRACT

This research project is situated within the area mobile technologies for development (M4D), i.e. that mobile communication technologies play a vital role in the livelihood of people in developing regions. Out of a larger explorative study of how market women in Kampala use their mobile phone(s), this article focuses on the transformation of the so-called informal economy, here in the form of Kampala street markets. Departing from stories of the women themselves, the article discusses the role of mobile telephony in this transformation. The street markets today have become hybridized as mobile money allows for non-street transactions. The appropriation of the mobile phone into these micro enterprises, we argue, has the potential to produce new regulatory spaces, considering that mobile services, located in the formal sector, are deeply embedded in Kampala’s informal economic practices. To make sense of these results, we turn to science, technology and society studies (STS). STS helps us understand the mutual co-production of mobile phone practices and the transformation of the street markets. The mobile phone represents a force for change in the market women’s economic activities, at once challenging and reinforcing the informality of the Kampala markets.

KEYWORDS:

• Development
• informal economy
• hybridity
• mobile phones
• market women
• Kampala

Formal structures equally sectioned into what we estimate to be about 20sqm of shop spaces, teeming with merchandise hanging on doors and through windows along a stretch of half a kilometre, stand in contrast to a few rudimentary shacks on the opposite end. Between these structures, other market traders occupy every ground space available, selling everything from fresh cabbages to second-hand shoes to fried chicken in the open air. We hurry towards one of these rudimentary shacks, the one that houses Sophia’s (one of our informants) fridge and the water and soft beverages she sells daily. Nakawa market is heaving with activity and it is barely 9 am. A refuse truck from Kampala Capital City Association (KCCA) is on site, collecting refuse from the traders. A couple of KCCA-clad men can be seen sweeping through the muddy remains from a storm the night before for refuse. Sophia returns (having left us in charge of her store) from her first outing in search of additional customers. We chat as she takes a break. We pick up the discussion on tax payments we had had during the focus groups the week before. ‘Everyone here has to pay tax’, says Sophia.¹ We ask how much she pays, looking around her small shack. ‘10 000 UGx a month’.² What about these people? I ask, pointing to those who trade in the open. ‘Those pay 8500 every month.’ Who do you pay this tax to? ‘KCCA’, responds Sophia. We ask a follow-up question. ‘Now, with the city council collecting these monthly taxes, what do they give you in return?’ She answers, ‘Nothing, they allow us to do business here.’ Our eyes stray to the KCCA truck that is still out there devotedly cleaning the market. She continues,

And then there is the ground rent; each stall has an owner to whom rent is paid on a monthly basis. For example, those buildings you see across (points to the formal structures), they all have landlords that collect monthly rent because they put up those structures.

We turn our eyes away from the formal structures she has been pointing towards as she explains and ask, ‘So you pay 10 000 every month for taxes; do you pay rent?’ Sophia, with a heavy sigh, replies ‘I pay 100 000 UGx rent every month. We told you last week that we are working under difficult conditions.’ How does someone who sells a bottle of water for 200UGx make enough money to pay tax and rent? The question hangs in our minds as we look at her with a mixture of respect and disbelief.³

Introduction

This article revolves around the so-called informal economy and how it is currently being transformed. The informal economy generally refers to economic activities that are unregulated, including employment relationships that are neither protected nor legally regulated. As such, the concept has mostly been applied to cities of the Global South and thus used and measured by international and bilateral organizations⁴ to understand, discuss and analyse so-called (economic) development. However, the informal economy’s continued growth and significance are bones of contention for regulators who actively work towards formalizing the sector and thus contributing to its demise. In response to the enduring and ever-shifting nature of the informal economy, city officials in the Global South – as highlighted in the field note excerpt above – are constantly devising new ways of taming, subduing and integrating this sector into the formal. Despite these attempts, or perhaps because of countermeasures, the informal economy usefully reinvents itself and emerges in new and unexpected ways and places.⁵

Taking this transformation of the informal economy as our point of departure, our aim is to study the role(s) of mobile phones in this ongoing transformation. Departing from stories of the market women in Kampala themselves, we will show how the mobile phone, which contributes to their organizing and growing of enterprises, simultaneously suggests a level of precarity for the continued informality of the street markets. In other contexts such as India, mobile transactions have contributed to transitioning informal activities into the formal economy.⁶ Economists argue that reducing the size of the informal economy worldwide will improve the provision of state services⁷ and reduce poverty. Hence, the more transactions ply their way onto digital platforms, the better for development in each context. However, our data suggest that the female micro-entrepreneurs in Kampala do not share this view. This study aims to contribute a critical perspective to the area of mLivelihood, which tends to underline the vital role of mobile phones in the livelihood of people in the Global South.⁸ Inspired by Science Technology and Society studies (STS), we will discuss our findings as a mutual co-production of mobile phone practices and the informal economy (here, street markets). Hence, the study also contributes a more nuanced understanding of mobile phone practices in the transformation of the informal economy.

This article stems from a larger project in which we set out to study the role of mobile phone practices in empowering, as well as disempowering, market women in Kampala.⁹ Conducting this research, we used the concept of the informal economy (with reference to studies in the field of development) to justify and situate our study of women market traders in Kampala. However, already during our first fieldwork observations, we realized that the informal economy was not as informal as our readings had led us to believe. It was under transformation. A closer look revealed that mobile phone practices played a key role in this transformation. Hence, we broadened our field observations and battery of questions to include these aspects.

(In)formal economies

The informal economy constitutes economic activities that are located ‘outside’ of business activities that are regulated, controlled, supported, audited and taxed by the government.¹⁰ Often discussed in contrast to government-regulated economic practices, the concept brings ideas of an informal ‘sector’ and informal ‘employment’ together. The informal sector is used to describe large segments of self-, or sporadically, employed low-earners with no job security. Informal employment implies the absence of social protection, health coverage and written contracts.¹¹ Therefore, some prefer the label ‘need economy’¹² as it is mostly constituted by people living under petty conditions. The informal economy thus has its origins both in (the lack of) state bureaucracy and control, and in the doings of self-organized people.¹³

The relationship between governments and informal economies is interesting in that local authorities, in acknowledging and tolerating the existence of this sector, have always found ways of engaging with it.¹⁴ Indeed, as the vast majority of economic activities in this sector are legal, they ‘are registered in some way and do pay taxes even though they may not be in a position to comply with the full range of legal and administrative requirements’.¹⁵ Some argue that the ‘informal economy should be viewed not as a marginal or peripheral sector but as a basic component – the base, if you will – of the total economy’.¹⁶ A number of informal economic activities have ‘production or distribution relations with formal enterprises’.¹⁷ Yet in the Global South, governments initially ignored informal enterprises as activities that could not be classified as ‘productive work’.¹⁸ However, with few alternatives, especially with regard to the state failing to take care of its citizens, the sector has continued to show resilience. Indeed, at the heart of the tension, the informal economy brings with it is the state’s failure to guarantee the provision of services and commodities as well as a source of income for all its citizens.¹⁹ Governments across sub-Saharan Africa are also regulating a number of relationships associated with the informal economy.²⁰

It is claimed that the informal economy opens up possibilities for segments of the population outside the formal economy, especially in the Global South, to earn their living, not the least since it is characterized by a quick and easy entry and exist for traders.²¹ Other determinants of the informal economy include an absence of or limited record-keeping practices due to limited education on the part of traders, or in some cases a deliberate omission to avoid or limit their tax payments. Furthermore, it is argued that the informal economy is responsible for the well-being of about 2 billion people worldwide, and continues to rise steadily due to a number of factors such as growing retrenchments from formal sectors and increasing numbers of school dropouts.²² The informal economy is thus a common concept used in the reports and policy papers of international aid organizations. Here its importance for poverty alleviation is acknowledged, often accompanied by calls for increasing knowledge and mapping of the informal economy as well as for the government to specifically target this segment of the economy when designing international aid cooperation policies.²³ In other words, it is a concept that is used and thus made meaningful by international aid organizations.

Today, informal economies are being transformed. In sub-Saharan Africa, governments work at curbing the sector’s growth despite the benefits informality offers in response to unemployment and poverty.²⁴ The informality does not appeal to or espouse the beautiful city ethos that is a legacy of colonialism. As many cities in these regions are striving for a modern aesthetically appealing look,²⁵ informal economic activities, which are often characterized by temporality, uncontrollability and incongruity,²⁶ represent a measure of shame for developing cities that aspire to what they imagine cities should look like.²⁷ Colonial legacies of the ‘city beautiful’ ethos²⁸ raise questions such as sanitation and health and have a lingering influence on urban planners in the Global South.²⁹ As such, this uncontrolled side of the economy is a sticking point, in part due to the above but also because tax revenues and other forms of benefits for the growth of the state and the economy are challenged by the characteristics of the informal economy.³⁰

Some have described the relationship between the formal and informal (need) economy as an integral part of the global market network.³¹ More studies label it as post-colonial capitalism, highlighting how many regions in the Global South are dependent on old hierarchies.³² The people populating this economy are described, with reference to Foucault, as ‘prisoners of a voyage without destination’,³³ driven out of their traditional occupation in agriculture but still denied entry into the formal economy. Hence, if (economic) development means transition into market capitalism, the market women in the informal economy that we studied would be a product of development itself, ‘the leftovers of capital arising’,³⁴ and ‘a post-colonial wasteland’.³⁵

At the same time, there are claims of the informal economy empowering women financially. Some argue that investing in women will result in the higher well-being for the whole family (especially children) as well as contribute to greater growth and development. Women in the Global South, Uganda included, are usually at the lower end of the social economic scale, a position determined by tradition and social structures, lacking access to, control of and ownership of property and land.³⁶ In this sense, the informal economy, it could be argued, contributes to the livelihood of women. This article relies on the Ministry of Gender and Labour and Social Development (MoGLSD)’s definition of the informal economy, defined as a sector comprising small and micro enterprises. The material informing this article falls under the micro enterprises because the women who inform the data, run and own the business, and rely on their families to assist them. The data also fit other parts of the MoGLSD definition, such as enterprises being located in a fixed location and having fewer than five employees.³⁷

Studying mobiles phones and livelihoods in the Global South

The mobile phone has been found to be beneficial to actors in the informal economy, to increase the livelihood of the poor (women included³⁸). While the mobile phone is the most important and commonly used ICT device in East Africa,³⁹ the informal sector is still mainly cash and face-to-face driven.⁴⁰ It is perhaps not surprising then that it is especially in the area of livelihood that mobile phones have been studied and discussed as contributing to so-called development. The increasing use of mobile phones in the informal sector⁴¹ is thus a sign of the current transformation of the informal economy. In general, mobile phones are supposed to enhance business activities by enabling a better access to information and a more efficient communication with suppliers, customers and business partners.⁴² However, a literature review⁴³ of mLivelihood articles and conference contributions reveals a market orientation, a conception of poor people as mere consumers and the Global South as a potential market for investors. Even though critical voices are present, development is largely understood through socio-economic measures, and mobile phones from a techno-deterministic stance, i.e. that mobile phones practices will bring about an increase in business revenues, which is equalled with an increase in standards of living.⁴⁴

In the literature on mLivelihood, the area of mobile money stands out.⁴⁵ The history of mobile money takes us to the Philippines, where people have been able to conduct their basic banking tasks via mobile networks since 2006.⁴⁶ A year later, Kenyan mobile service provider Safaricom launched M-Pesa as an SMS-based money transfer system allowing users to deposit, send and withdraw funds from their mobile phones. Mobile money has been hailed as Africa’s solution to banking the unbanked.⁴⁷ Studies on mobile money have largely focused on the user end of the services, and have given the view of a revolutionary service. Some have, for example, argued that mobile money contributes to poverty reduction because financial exclusion goes hand in hand with poverty.⁴⁸ In Uganda, more than half of the population have signed up for m-banking.⁴⁹ When mobile money first emerged in Uganda, banks kept a distance until statistics in the fifth year revealed the exponential growth of the service. Like other countries in the sub-Saharan region, it was the mobile network operators who dominated mobile money services because the central bank did not regard this service as ‘doing banking business’.⁵⁰ In 2013, mobile financial services were brought under the supervisory mandate of the Central Bank of Uganda,⁵¹ which imposes additional formalities to the basic registration with service providers, and yet the Bank’s duty of secrecy has little or no bearing on mobile money service providers. The appropriation of the mobile phone into informal micro enterprises means that databases of personal information on traders are available within the mobile system; this is information that is located within formal factions such as mobile services providers. Informal businesses⁵² show that businesses in Uganda in general use mobile money as much as they use banks, further underlining how mobile phones (here through mobile money) transform not only the informal economy but the economy as a whole.

The hype around mobile phones and their contribution to livelihood generally ignores counter practices that complicate the dominant techno-optimist (as well as determinist) image. In a previous study, we were confronted by stories of how these women were monitored by their life partners, who sought to control them.⁵³ At the same time, throughout the fieldwork, we were also made aware of how the mobile phone helped the women communicate and transact with customers as well as public authorities. Herein we veer away from techno-optimist/determinist type of studies in order to gain a more nuanced and critical understanding of the role of mobile phones in the transformation of the informal economy.

In order to achieve this critical understanding, we draw on STS. Developed as a critique of techno-determinism, early studies focused on how different social groups attributed meaning to artefacts and how these meanings became increasingly stable.⁵⁴ Emphasis was placed on how so-called ‘technological frames’ structured interactions in the social group and how this shaped thinking and acting.⁵⁵ These assertions are framed within the social construction of technology movement (SCOT) – a stream within STS – which approaches the study of technology from a cultural perspective, showing the demands technology places on users as well as the other way around. The premise is that both technology and society as cultural enterprises shape and inform each other, making it necessary to analyse what is termed ‘technological culture’.⁵⁶ The culture of mobile phone use makes visible the complexities of mobile communication in the sense that services provided through the device are located in the formal structures, and are being integrated into informal street markets, at once challenging and reinforcing the informality of these markets. Mobile phones assist the market women in their everyday lives but the same technology is reshaping market activities, redefining what informal trade means in Kampala. Every owner of a mobile phone in Uganda is required to register their SIM card. To register and acquire a SIM card requires some form of identification. It is mandatory for every Ugandan to register for the national identity card, which is always required of anyone engaging with formal structures.

The setting, methods and material

Our study draws on ethnographic-style fieldwork among market women in Uganda’s capital city Kampala, whose transactions are categorized as informal. The Uganda Bureau of Statistics records all businesses that have an ‘absence of final accounts, having less than 5 employees, no fixed location, in most cases not registered and sometimes such businesses are operational for only 6 months or less’ as informal.⁵⁷ Uganda’s informal sector continues to grow at an exponential rate, accounting for 43% of the country’s total economy.⁵⁸ We situated our study in the capital city because the informal economy is the biggest source of employment in urban areas.⁵⁹ This is not to suggest that informality is only restricted to urban areas but the migration trends from rural to urban areas force many to seek economic activities that are not so plagued by bureaucratic obstructions.⁶⁰ And we focus on women as they dominate the informal sector, as in other parts of sub-Saharan Africa.⁶¹

The transformation of the informal economy will be studied among women in Kampala’s three biggest markets Owino, Nakawa and Kalerwe. These markets are on undeveloped grounds (unpaved, not tarred) and in the open air; some parts have provisional shacks, loosely built with iron sheets and pieces of wood. During our visits, we observed that the markets were clean, with the city agency KCCA cleaning up and collecting rubbish (as noted in the opening observations). Women were trading fresh produce, shoes and children’s toys on urban streets and men and women were attending to grooming practices such as hair braiding or hair barbering, foot scrubs/pedicure on the pavements.

This study is exploratory in the sense that we entered the field for the first time in November 2014, supported by small grants that only made it possible for us to stay two weeks. The first author is originally from Uganda and fluent in Luganda, the main language of the Kampala region.⁶² As researchers from Sweden with a small research budget, we wanted to use our time efficiently. Therefore, prior to our arrival, we contracted a local research team to carry out a survey as a foundation for focus group discussions (FGDs) and the ethnographic fieldwork. From Sweden, we drew up a questionnaire with the team in Kampala so we had data on which to base the FGDs upon our arrival in Kampala.

A sample of 50 randomly selected women from each market took part by responding to the survey questions. Hence, a total of 150 women participated in the survey. After cleaning up the data, we were left with 149 surveys to work with. The survey provided a general overview of the market women, their contexts and communication practices. The questionnaire was in English and the field assistants translated the questions into Luganda. The results revealed that the majority of the women were in their 20s, and their working day consisted of eight or more hours. Many sold perishable goods, second-hand clothing or plastic toys, worked as seamstresses or sold soft beverages. The average daily earnings for these women was 30,000 shillings (which translates to 9 dollars). Of the 149 women, 143 owned their mobile phone. All 149 mentioned the phone as helpful to their business. While for 124 of the women their income had increased since they had started using the mobile phone, for 114 of them their expenditure had also increased. Most of the women used their phone mostly for contacting suppliers as well as fellow market women. Our survey indicated that 126 women used the phone to keep in touch with authorities and middlemen.

Each respondent was asked if she would like to take part in the FGDs. We had three FGDs in the vicinity of each market. From Nakawa, 16 women showed up, and from Owino and Kalerwe 15 each. The FGDs were moderated by our research team leader in Luganda. This allowed us to observe the proceedings while taking notes, with the first author interjecting with questions every so often to obtain more information. During the FGDs, the women from all three markets narrated experiences about their mobile phone communication practices. For example, we learned that mobile money payments as well as business-related communication informed the women’s mobile phone practices. It was also during the FGDs that stories about tax payments, rentals and other fees first came up and caught our attention. We decided to ask more about these when meeting some of the women in the markets during our short ethnographic-style fieldwork in the markets.

The FGDs opened up possibilities to arrange fieldwork, interviews and observations (as well as participant observations) at the respective markets. This gave us an opportunity to gain further understanding of the issues raised. From the market observations and interviews with the women, we noted that they were more vocal during the FGDs. The group setting enhanced responses to questions;⁶³ questions the women struggled to respond to with the same vigour when we met them at their market stalls. This is arguably because there were men also trading in the markets; they tended to hang around during our visits, taking the role of protector as well as eavesdropper during our observations and interviews. These men would often jump in, ask questions and offer to answer for the women when we posed questions. In 2015, the second author went back to Uganda to conduct a second round of observations in the markets.

We received permission from each woman during the FGDs as well as during the fieldwork to record the conversation we were having with them. These conversations were transcribed and translated into English by the first author. We were also given permission to take pictures with them, especially as they put us to work in their various businesses so we could understand what a regular workday entailed for them. Furthermore, permission was sought from the ‘chairmen’,⁶⁴ who are the gatekeepers of each market, before the survey commenced.

Finally, it is important to stress that we are writing from the perspective of the market women. We have not interviewed city officials or studied their legal documents. As the subtitle states, it is the stories and experiences from the market women we want to highlight in this article, to spread their voices and experiences, a point we explore further below.

Results

The result section is divided into three parts. As we analyse the market women’s stories, engaging with STS’s technological culture as a unit of analysis, we account for the organization practices being used by city authorities to (re)organize the street markets of Kampala. We share how women experienced the transformation of the informal economy in their Kampala street markets. In these accounts, we are particularly interested in the role(s) of mobile phones. Hence, in the following two sections, we will focus on how the street market is being transformed and the role of the mobile phone in this hybridization of street markets (to also include non-street transactions). In the final section, we will analyse these accounts according to our STS-inspired theoretical framework.

(Re)organizing the street markets of Kampala

The street markets in Kampala, even though classified as informal businesses, showed signs of increasing regulation. For example, a chairman,⁶⁵ who sits in a small office at each of the three markets, watched over us during our visits, and at times we had to pass through him before we could gain access to the market women. Sophia (from the opening excerpt) actually took us to meet the chairman at Nakawa, to whom we further explained our research despite permission having been sought by our field assistants during the survey. Noting the presence of the KCCA truck cleaning Nakawa market during one of the days we spent there, we saw that the city, through its agencies, was present in these markets.

One way of controlling these markets was through taxes. Women’s market stalls were usually rented on a monthly basis from a ‘landlord’, to whom the women also had to pay market taxes. We asked Sophia who her landlord was, and what rights he had to her shop. She said this is the person who had acquired rights to the spot of land on which her shop stood by acquiring ownership of it several years before. The women who sat in the open spaces had to pay what they called ‘ground taxes’ on a monthly basis. One of the defining aspects of the informal economy was that it was beyond tax liability; this was obviously not the case in these markets. Our discussion with Sophia (see opening excerpt) at Nakawa suggests that the tax being paid by market traders goes to KCCA. Plus, the deliberate cleaning exercises by the KCCA that same morning at Nakawa illustrated their vested interest in and direct engagement with the market.

Another aspect of formalizing the informal economy has to do with the construction of brick and mortar structures as opposed to the rudimentary shacks that characterized all three markets once upon a time. The establishment of market stalls in fixed locations is one of the ways in which the state has sought to organize marketplace types of economic activities. Market stalls in fixed locations have also enabled some form of monitoring. KCCA is building and has transformed the look of large segments of the three markets. Traders in these formal buildings are required to have a trading licence and pay rent to the city. At present, Kalerwe, Nakawa and Owino markets have large sections that still point to street vending but they have also developed factions, with concrete buildings that have a range of modern amenities which traders must pay higher rent for. When we returned in 2015, we witnessed that new structures had been built or were in the process of being built, further pushing street market vendors into expensive rentals and away from the street vending. In the Owino market, we sat down with three women (still in the under-developed section of the market) selling corporate ware. They had a lot to share:

They [KCCA] has constructed all that other side of Owino. This means that we have to hike our prices so as to be able to afford the rent. The rent here is a lot cheaper and as long as we trade from here our prices are what our customers want. But we are also forced to have presence in that place [new structure] there, because we know that it is just a matter of time before all of what you see here will look like that [gestures towards the formal structure]. Our market has been burned three times. Three times! [The women repeated for emphasis]. We lost everything! Now we are forced to pack up our clothes every day and take them to storage. We cannot leave them unattended here at night; what if they burn our stock?⁶⁶

Uganda’s local dailies (The New Vision and The Monitor) reported extensively on the incidence of Owino being burned down. As of December 2013, the market had been burned four times,⁶⁷ and a number of pictures show men and women desperately searching through the burned rubble for any merchandise that may have survived the fire, underlining the account of the women in the excerpt above. We asked the women who they thought was responsible for burning the market; they responded that they did not know. This refers directly to the argument that the informal (need) economy is constantly under threat, its conditions of existence are undermined by the expansion of capital.⁶⁸

Because of these burnings, storage houses – to which monthly rental must be paid – have become an important part of the Owino market traders’ daily work. Some traders pack up their goods at the end of their workday and take them to storehouses, leaving their stalls with just the bare essentials (e.g. stools, umbrellas), and at the start of each day, they fetch their products from storage and put them on display. However, there are still many traders who leave their merchandise on site when they end their workday. Like the women we spoke to had done in the past, they lock their goods in large wooden cartons, and in as much as this sounds risky, it has obviously worked. At Kalerwe, the traders often left their fruits and vegetables locked up in large wooden cartons at their stalls, similar to the cartons we found at Owino. These cartons double as platforms for displaying the goods for sale during the trading hours, and some of our informants sat on these cartons and offered us seats on the same.

The role of the mobile phone in the transformation of Kampala’s street markets

Hybridization

In response to the formal structures emerging on site, the market women maintain a presence in both, as noted in the excerpt from the women trading in Owino, who informed us that they have stalls within the old section of the market and they also sell merchandise in the new buildings. ‘Some customers prefer to go to the shops, others prefer to come here. We do not have a choice; we have to have both feet firmly planted [on both sites].’ We asked them how they managed to be in two places at once:

We help each other here and take turns to sit in the shops or to be here in the market. Our children are also very helpful. At the end of their school day, they come and help us and they either sit here at the market or they sit in the shops. If a customer wants to negotiate the price and my child does not know the final asking price, my child calls me on the phone and usually we can finish the transaction with me giving instructions on the phone, but if it is a difficult customer I sometimes have to leave the shop or the stall depending on where I am to come help my child.⁶⁹

The mobile phone, through its affordance of space–time reduction, thus contributes to the market women’s organization. Improved access to information and communication through mobile phones enables market traders to ‘take advantage of spatial arbitrage’.⁷⁰

Mobile money was also used to pay for goods and services, such as the storage fee required by the Owino women. These women said they relied on mobile financial transactions to manage their private lives (such as sending mobile money to their children’s minders to buy the daily food in their absence) as well as their businesses. Similarly, all the women in our study relied on mobile money to pay their bills, receive money from their customers, pay taxes and rental fees and also keep in touch with the storage owners. To illustrate this point further, we were informed by the 15 women who took part in the FGD at Kalerwe market that they relied on mobile money to

facilitate financial transactions. We are [all] registered with mobile money [our moderator asked the women if they were all mobile money users, to which they replied yes]. We receive payments from customers and in turn make payments to our suppliers. It is very convenient and it is very safe.

That all of our participants used mobile money is a sign of the ongoing transformation of street market transactions as the data from 2012⁷¹ suggested that informal businesses in Uganda were cash-driven and only about half used mobile money. Our study, while not quantitative, suggests that this is increasing.

Furthermore, our study suggests that the Kampala street markets have become hybridized with the introduction of the mobile phone. The women we talked to told us about customers they only met with once. When they knew what they wanted and had their phone number, they could negotiate deals and payments on the phone and then send the merchandise on local buses. Hawa phrased it like this:

I have customers that have been with me for a while now. They call and ask for whatever, say bedsheets. I get them the bedsheets they want, and if they live far, I send the bedsheets with a taxi conductor or driver, and the customer pays me using mobile money, then you get a SMS that they have sent you the money.⁷²

And where a customer was referred to them from a colleague, they might not have to meet with the customer at all. So, while still a street market in its literal sense, many transactions were taken off the street due to banking practices via the mobile phone. These women’s workplace has become a hybrid between street markets and mail (phone) orders. In this sense, the mobile phone helps the women, as well as their customers, to stay in touch and eases transactions without having to shift locations.

Indeed, mobile phones were an integral part of these women’s trading practices. During our observation visit to Kalerwe, we met and chatted with Cindy, who trades plastic toys in one of the open spaces. We asked her what life had been like before the mobile phone, to which she replied, ‘We do not know a life without mobile phones.’

New spaces for regulation

The other side of mobile phones in the transformation of the informal economy is their affordance of surveillance, most notably through mandatory SIM card registration. In 2014, 49 of the 55 countries in Africa required Sim card registration.⁷³ Uganda is among the 49, and speaking directly about the new spaces emerging for regulation for mobile phone users, Privacy International (a London-based charity organization) published a damning report in 2015 on how mobile phone users in Uganda are under state surveillance.⁷⁴ The report states that according to Uganda’s Regulation of Interception of Communications Act (2010), mobile service providers must comply with lawful interception requests (Privacy International) from the government.⁷⁵ Part of the obstinance of informal markets has been the limited intervention by the state, due to the fact that records and any information trails on the businesses in this sector are scant. However, the subsequent SIM card registration exercises have generated their own databases.⁷⁶

This was, however, not necessarily perceived in a negative light by the women. Cindy, for example, stated:

It is very good because before this registration, we really suffered using mobile money; people are crooks and sometimes we were victims of fraudsters. Now when you send mobile money, the system checks the person and you even get confirmation that that is the person to whom the money must be sent.

A man, who had emerged from the structure housing the market chairman, who had checked up on us, added: ‘You even see their picture on the screen, which is very good because it was really bad before.’ Cindy appreciates the transparency the mandatory ID registration has created for mobile money users. Mobile transactions are traceable in an environment that enables digital trailing. Informality thrives in uncertainty, but with mobile services pervading these markets, traders feel more secure in tracking and accounting for their transactions.

As mentioned earlier, to use mobile money, a subscriber must register for the service, hence progression to mandatory SIM card registration, after mobile money, met with no resistance. SIM card registration commenced after mobile money had been well established in a number of sub-Saharan countries. As illustrated by Cindy and the chairman at Kalerwe market, it is highly appreciated for the transparency and accountability measures it offers in mobile banking processes.

While Cindy and the chairman were very positive about SIM card registration, they were equally annoyed with service providers’ spam messages and implored us to take their grievances to these institutions. Indeed, the women we talked to reported unwanted spamming that in some cases was costly. For example, towards the end of the Owino FGD, the women turned to us and asked us questions. Hawa and Sylvia, in particular, wanted to know why the service providers ‘stole’ their airtime (call credit). Our moderator asked for clarification, to which Hawa replied:

They sometimes send SMSs and if you don’t know you reply to them, and then they start to send you SMSs and every time you get the SMS, your airtime is deducted. Additionally, the customer care of [service provider] will call you and make offers, and if you don’t know better, you agree. They make these offers such as if you buy so much airtime and call two people, you will win so much airtime in return. The thing that bothers me is how much they know about me, because they talk as if they know me.

Together with mobile money transactions, the data accumulated on these women are staggering.⁷⁷ Studies suggest that informal sectors have always been acknowledged by the state; what mobile phones contribute to the transition of the informal markets is the digitally transacted, communicated, stored and disseminated information by the traders, and, as suggested by others, the lack of legislation ‘that clearly defines who can get access to a mobile money trail, and how, when or under what conditions such access may be obtained’⁷⁸ raises concerns around consumer privacy, especially as mobile communication is rooted in a highly regulated and controlled infrastructure.⁷⁹

An informal sector in transit – STS analysis

The environment in which mobile phone use among street markets in Kampala has been allowed to thrive read through the STS lens illustrates the dependency of the informal sector on its social environment, an environment permeated by formal services that contribute to socially engineering the transformation of the sector. Mobile phone practices among Kampala’s market women are eroded by social, cultural, economic and political relationships, and this complex interaction when confronted by informality is impacted by, and impacts, this paradigm.

Various mobile services/platforms, such as mobile banking, demand of their users’ registration exercises. All these user data accumulation, transactions and economic practices – many of which, the market women informed us, were carried out through the mobile phone – have paved the way for transforming the informality of these enterprises. Recall that part of the enduring character of the informal sector is that it is driven by cash; this aspect is being challenged by the mobile money services that the women use. While economists promote this transition as a positive move for the country’s growth as a whole, the women, aware of the efforts being made by KCCA (Kampala Capital City Authority), were wary of what this would mean for the future of their businesses.⁸⁰ Technological culture claims a co-production of technology and society; mobile phone use has similarly been impacted by the markets of Kampala. The women informed us that ‘the mobile phone runs the business’, saying that their enterprises are heavily reliant on the mobile phone. Their customers, suppliers and the landlords from whom they rent their market stalls request their mobile contact upon the establishment of a working relationship. As such, the street markets rely on social relations mediated by the mobile phone. In particular, the category of women under study here appreciate the mandatory national ID registration, which has meant that transactions can be trailed digitally. Transacting through the mobile phone has been impacted by the markets pushing for more transparent and traceable dealings. The women appreciate this aspect but also shared some concerns, as touched upon in the previous section. More assertions suggest that ‘[t]he technical is socially constructed, and the social is technically constructed – all stable ensembles are bound together as much by the technical as by social’.⁸¹ Paraphrasing Bijker, a technological culture means that, with mobile phones pervading every aspect of the markets in Kampala, trade practices are being transformed, and as our material shows, changes how customers, city authorities and the service providers, as well as the traders themselves, think of market practices.⁸²

At the same time, however, the mobile phones, albeit expanding the geographical scope of the women’s transactions, reinforce the precarity of the women’s socio-economic positions. The determinants of informal markets are maintained in that the elements that contribute to locating informal activities in this sector are preserved, while certain requirements from the traders are expected by the city authorities, such as tax payments. The mobile phone has also forced a revision of policy, allowing the payment of taxes through one’s mobile phone. Simplifying state entanglements with informal traders, such as allowing mobile money payments, has further embedded the government in the informal sectors.

Seeing these street markets as a microcosm of the informal economy illustrates the sector’s dependency on services located in the formal sector, and these contribute to socially engineering its transformation. User registration processes required in all mobile phone practices spill over into the informal market activities, essentially creating a hybrid socio-economic artefact that is at once formal and informal. On the one hand, the transactions through the mobile phone give the KCCA data on the women and allow the city some modicum of control over the women’s economic activities in these markets. The women, on the other hand, rely on the mobile phone to engage with suppliers and customers as well as navigate the complex relationship with the KCCA, and yet they are not protected by any labour laws⁸³ because their economic activities are classified as informal.⁸⁴ This was evident in how the women discussed the tax impositions by the city authorities and the rental demands from landlords, practices pertinent to their being able to continue their businesses and, by extension, earn a living. Additionally, the informal economy’s malleability has encouraged innovative coping strategies, aided heavily by the mobile phone, for the women to negotiate their economic practices in the wake of Kampala’s reconstruction of street markets.

Conclusion

While it can be argued that markets have always been regulated in some way or another, this article has shown how increasingly misleading the label of the informal economy is. Perhaps the informal economy was never a very successful concept. The concept of the need economy⁸⁵ arguably better reflects both the so-called informal economy’s interconnection to global capitalism as well as nuancing overtly optimist/determinist accounts of its perceived empowering potential. However, a single label of ‘need’ would perhaps fail to capture the complex nuances we observed among the Kampala market women. The women we talked to were, however, not always in need; sometimes they were empowered by the possibility of earning their own livelihood and managing their businesses.

In this article, we have directed attention to the roles of mobile telephony in the formalizing of informal markets. The opportunities that the mobile phone has brought to the process of state control promise to have far-reaching consequences that the women in our study have not yet reflected upon. The women we spoke to appreciate the mobile phone for enabling secure financial transactions as well as providing an information trail to their financial dealings. Cash transactions typically characterize informal trading,⁸⁶ yet these processes could be slowly ebbing away with mobile money hybridizing the street market. The consequence of this is that as new frontiers of development, mobile phones have created territorial opportunities for governance and the regulation of the markets.

Any account of this sector should include the experiences of the ones populating it, their viewpoints and coping strategies. We turned to the women in Kampala themselves in this article, to listen to how they experience the formalization of the street markets in which they work, how they coped under these circumstances and the role of the mobile phones in all this. As such, we have shed some light on the increasingly hybridized and technology-infused situations that market women in Kampala find themselves in and have to navigate on a day-to-day basis. Future research needs to map and study the role(s) of state institutions as well as service providers, and the links between them.

The transformation of the informal economy is on-going; it is shaped by and shaping the mobile phone. Conceiving this transformation as a co-production avoids the charges of social determinism and technological determinism.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This research has been supported by the Helge Ax:son Johnson Foundation, the Åke Wiberg Foundation and the Knut and Alice Wallenberg Foundation.

Notes

1. All quotes translated from Luganda by the first author.

2. 10,000 UGx corresponds to approximately 3 USD.

3. Excerpt from field notes (24 November 2014).

4. Such as the reports from the World Bank, 2013 and 2014 and Swedish International Development Agency (SIDA), 2004.

5. Chen, “Rethinking the Informal Economy,” 5.

6. Catania and Mumbai, “Unregulated, Untaxed, Unloved,” The Economist, https://www.economist.com/news/international/21708675-new-technology-may-persuade-informal-businesses-and-workers-become-formal-bringing-light (accessed 18 July 2017).

7. Ibid.

8. Svensson and Wamala Larsson, “Approaches to Development in M4D Studies.”

9. Svensson and Wamala Larsson, “Situated Empowerment.”

10. Hoyman, “Female Participation, Informal Economy,” 65; McInnis-Dittrick, “Women of the Shadows,” 399; Tripp, Defending the Right to Subsist, 10–11; Torri and Maritinez, “Women’s Empowerment and Micro-entrepreneurship,” 32.

11. Charmes, “The Informal Economy Worldwide,” 106.

12. Sanyal, “Rethinking Capitalist Development”, 208–15.

13. Hann and Hart, “Economic Anthropology,” 113.

14. de Soto, The Mystery of Capital, 162–9; Chen, “Rethinking the Informal Economy,” 8.

15. Informal sector production – OECD 2002, https://www.oecd.org/std/na/NOE-Handbook-%20Chapter10.pdf (accessed 28 August 2017).

16. Chen, “Rethinking the Informal Economy,” 8.

17. Ibid.

18. Tripp, “Defending the Right to Subsist,” 2.

19. Deen-Swarray, Ndiwalana, and Stork, “Bridging the Financial Gap,” 1–2.

20. Chen, “Rethinking the Informal Economy”, 8; Tripp, Changing the Rules, 2–3.

21. Chen, “The Informal Economy,” 9–10.

22. Ikoja-Odongo and Ocholla, “Information-Seeking Behavior,” 54.

23. See, for example, reports from SIDA, 2004; World Bank, 2014.

24. Obeng-Odoom, “The Informal Sector Ghana,” 357–8.

25. Howard, “Cities in Africa,” 199–200.

26. Ssali, “Kamya Kicks Out ‘Illegal’ Street Vendors.”

27. Wamala, “Does IT Count?”; Rogerson, “Urban Agriculture South Africa,” 33–4.

28. For example, the British administration, upon colonializing East Africa, pushed farming practices out of the city, into the countryside, and replaced the practice of farming in the city with industrial employment. When the colonial administration established itself in Kampala, the industrial economy was firmly introduced with new land patterns of use and modernist buildings. A modern city in a developing region is a space for contention, where specific rituals and claims explore modernity with control forms of governance. Counter rituals that challenge this process encounter resistance, such as street vending (see Milgram, “Reconfiguring Space, Mobilizing Livelihood,” 263).

29. Freeman, “City of Farmers,” the preface.

30. Obeng-Odoom, “The Informal Sector Ghana,” 357.

31. Sanyal, “Rethinking Capitalist Development”, 11.

32. Ibid., 34, 66.

33. Ibid., 46.

34. Ibid., 53.

35. Ibid., 63.

36. Wamala, “Theatre, Gender and Development.”

37. International Labour Organisation, “Child Labour Informal Sector”, X.

38. Svensson and Wamala Larsson, “Situated Empowerment.”

39. Deen-Swarray et al., “Bridging the Financial Gap,” 4.

40. Ibid.

41. Ibid.

42. Donner, “Customer Acquisition Small Business,” 4.

43. Svensson and Wamala Larsson, “Approaches to Development M4D Studies.”

44. Deen-Swarray et al., “Bridging the Financial Gap,” 4.

45. Mendes et al., “Innovative Use Mobile Applications,” 8–10.

46. Ibid.

47. Muwanguzi and Musambira, “Transformation of East Africa’s Economy,” 133.

48. Makulilo, “Privacy in Mobile Money,” 373.

49. Muwanguzi and Musambira, “Transformation of East Africa’s Economy,” 134.

50. Makulilo, “Privacy in Mobile Money,” 7.

51. For the history of mobile money in Uganda, see Muwanguzi and Musambira, “The Transformation of East Africa’s Economy Using Mobile Phone Money Transfer Services: A Comparative Analysis of Kenya and Uganda’s Experiences.”

52. Deen-Swarray et al., “Bridging the Financial Gap,” 4.

53. Svensson and Wamala Larsson, “Situated Empowerment.”

54. Bijker, “Social Construction of Technology,” 90.

55. Ibid., 91.

56. Bijker, “The Vulnerability of Technological Culture,” 2.

57. See Chapter 12, “The Informal Sector”, Uganda National Household Survey 2009/2010, http://www.ubos.org/onlinefiles/uploads/ubos/UNHS0910/UNHS%202009_2010%20socio-economic%20Report.pdf (accessed 12 June 2017).

58. Uganda Bureau of Statistics, cited in Kibelebele, “Informal Sector Now Growing Faster, Says Ubos.”

59. World Bank, Uganda Economic Update, 33.

60. Stark, “Bending Bars of Iron,” 638.

61. Charmes, “The Informal Economy Worldwide,” 117; Chen, “Women in the Informal,” 72–3.

62. Mukama, “Getting Ugandans to Speak,” 335–7.

63. See also Lewis, “Group Interviews Research Tool,” 413.

64. The markets are highly organised within their informality. The chairmen found at the markets are answerable to the market traders and to the KCCA. Conflicts that arise in the markets are brought before the chairman, who ensures the smooth running of the market. The KCCA is responsible for these market chairmen, and pays their salaries. For example, the court case between the Nakawa market vendors association and the KCCA, where the vendors prosecuted the KCCA for taking over their market leadership. The KCCA won the case and the right to control and run the market. Ntezza, “KCCA Beats Traders in Nakawa Market Case.”

65. This individual is appointed by the KCCA and is the go-between for the market vendors and the KCCA authority. Tumwine, “How Traders Are Coping with New Markets Upgrade”; Businge, “Uganda: Wandegeya Market Fears.” See also Montieth, “A Market for People,” 60–2.

66. Interview with Caroline, Maria, Hawa, 26 November 2014, Owino Market.

67. The New Vision, “Ownio Market Razed by Fire Again,” 4 December 2013, http://www.newvision.co.ug/news/650156-owino-market-razed-by-fire-again.html (accessed 7 October 2015).

68. Sanyal, “Rethinking Capitalist Development,” 46.

69. Interview with Caroline, Maria, Hawa, 26 November 2014, Owino Market.

70. Aker and Mbiti, “Mobile Phones Economic Development,” 216.

71. Svensson and Wamala Larsson, “Approaches to Development M4D Studies.”

72. Interview with Caroline, Maria, Hawa, 26 November 2014, Owino Market.

73. Makulilo, “Privacy in Mobile Money,” 375.

74. Privacy International, “For God and My President.”

75. Ibid.

76. Makulilo, “Privacy in Mobile Money,” 375.

77. Makulilo, “Privacy in Mobile Money,” 377.

78. UNCTAD, “Mobile Money for Business Development.”

79. Benkler, “Capital, Power Next Step,” 76.

80. Catania and Mumbai, “In Pursuit of the Untaxed: Bringing Light to the Grey Economy,” The Economist, 15 October 2016, https://www.economist.com/news/international/21708675-new-technology-may-persuade-informal-businesses-and-workers-become-formal-bringing-light (accessed 18 July 2017).

81. Bijker, “Life after Constructivism,” 125; Bijker, “How Is Technology Made?” 64–5.

82. Bijker, “How Is Technology Made?” 70–1.

83. US Department of Commerce, International Trade Association, Uganda Country Commercial Guide, Chapter 9.2, “Labor Policies and Practices,” https://www.export.gov/article?id=Uganda-Labor-Policies-and-Practices (accessed 12 June 2017).

84.. Chimp Reports, “KCCA to Modernize Kampala Markets,” 27 April 2013, http://www.chimpreports.com/9666-kcca-to-modernize-kampala-markets/; The New Vision, “KCCA Takes Over Usafi Market,” 4 January 2014, http://www.newvision.co.ug/new_vision/news/1336273/kcca-takes-usafi-market (accessed 12 June 2017); see also Monteith, “Market for the People?” 59–61.

85. Sanyal, “Rethinking Capitalist Development,” 46.

86. See Deen-Swarray et al., “Bridging the Financial Gap,” 1–2; Ginther and McGahan, “Healthcare in the Informal Economy,” 116.