The impact of the informal sector on supply chains in Africa

ABSTRACT

The informal sector adds a systemic layer of uncertainty and risk for the performance of Food Supply Chains in sub-Saharan Africa. Based on interviews conducted among all the agents directly involved in the FSCs and international statistics, we analysed how the informal sector affects five mango FSCs in Burkina Faso in their economic, social and environmental performance. The informal sector accounts for about 30% of the total FSCs value, 67% of the total production, and 99% of the workforce. The lack of statistics, lack of legal compliance, lack of public infrastructure, increases the probability and severity of any given risk and therefore hinders investments. Firms internalise the risks with horizontal and vertical integration, the support of subsidies, or by avoiding the costs of international standards compliance. As a result, we distinguish subsidised resilience from informal resilience. FSC's resilience in sub-Saharan Africa will depend on how the level of state intervention, legal compliance and law enforcement will affect the informal sector.

KEYWORDS:

• Informal sector
• risk
• resilience
• food supply chain
• sustainability
• Burkina faso

Acknowledgments

The authors thank all the actors in the Burkinabe mango value chains for their kind welcome during the 2017 harvest season. The authors would like to thank Cécile Fovet-Rabot and Frédéric Lançon for their comments on earlier versions of this paper and the two reviewers for their useful comments.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the DEVCO project under grant VCA4D CTR 2016/375-804 funded by the European Union, with technical support provided by Agrinatura, European Alliance for Agricultural Knowledge for Development.