9:59:59.000,9:59:59.000
The informal markets of Africa[br]are stereotypically seen

9:59:59.000,9:59:59.000
as chaotic and lackadaisical.

9:59:59.000,9:59:59.000
The downside of hearing the word informal

9:59:59.000,9:59:59.000
is this automatic association we have,

9:59:59.000,9:59:59.000
which is very negative,

9:59:59.000,9:59:59.000
and it's had significant consequences[br]and economic losses,

9:59:59.000,9:59:59.000
easily adding --

9:59:59.000,9:59:59.000
or subrtacting 40 to 60 percent[br]of the profit margin

9:59:59.000,9:59:59.000
for the informal markets alone.

9:59:59.000,9:59:59.000
As part of a task of mapping[br]the informal trade ecosystem,

9:59:59.000,9:59:59.000
we've done an extensive literature review[br]of all the reports and reseach

9:59:59.000,9:59:59.000
on cross-border trade in East Africa,

9:59:59.000,9:59:59.000
going back 20 years.

9:59:59.000,9:59:59.000
This was to prepare us for field work[br]to understand what was the problem,

9:59:59.000,9:59:59.000
what was holding back informal trade[br]in the informal sector.

9:59:59.000,9:59:59.000
What we discovered over the last 20 years

9:59:59.000,9:59:59.000
was nobody had distinguished[br]between illicit,

9:59:59.000,9:59:59.000
which is like smuggling or contraband[br]in the informal sector,

9:59:59.000,9:59:59.000
from the legal but unrecorded,

9:59:59.000,9:59:59.000
such as tomatoes, oranges --

9:59:59.000,9:59:59.000
fruit.

9:59:59.000,9:59:59.000
This criminalization,

9:59:59.000,9:59:59.000
what in Swahili refers to as "Biashara,"

9:59:59.000,9:59:59.000
which is the trade or the commerce,

9:59:59.000,9:59:59.000
versus "Magendo,"

9:59:59.000,9:59:59.000
which is the smuggling or contraband.

9:59:59.000,9:59:59.000
This criminalization[br]of the informal sector,

9:59:59.000,9:59:59.000
in English,

9:59:59.000,9:59:59.000
by not distinguishing these aspects,

9:59:59.000,9:59:59.000
easily can cost each African economy[br]between 60 to 80 percent addition

9:59:59.000,9:59:59.000
on the annual DP growth rate

9:59:59.000,9:59:59.000
because we are not recognizing[br]

9:59:59.000,9:59:59.000
the engine of what keeps[br]the economies running.

9:59:59.000,9:59:59.000
The informal sector is growing jobs[br]at four times the rate

9:59:59.000,9:59:59.000
of the traditional formal economy,

9:59:59.000,9:59:59.000
or "modern" economy, as many call it.

9:59:59.000,9:59:59.000
It offers employment and income[br]generation opportunities

9:59:59.000,9:59:59.000
to the most "unskilled"[br]in conventional disciplines.

9:59:59.000,9:59:59.000
But can you make a french fry[br]machine out of an old car?

9:59:59.000,9:59:59.000
So, this, ladies and gentlemen,

9:59:59.000,9:59:59.000
is what so desperately needs[br]to be recognized.

9:59:59.000,9:59:59.000
As long as the current assumptions hold[br]that this is criminal,

9:59:59.000,9:59:59.000
this is shadow,

9:59:59.000,9:59:59.000
this is illegal,

9:59:59.000,9:59:59.000
there will be no attempt at integrating[br]the informal economic ecosystem

9:59:59.000,9:59:59.000
with the form or even the global one.

9:59:59.000,9:59:59.000
I'm going to tell you a story of Theresea,

9:59:59.000,9:59:59.000
a trader who overturned[br]all our assumptions,

9:59:59.000,9:59:59.000
made us question all the stereotypes[br]that we'd gone in on

9:59:59.000,9:59:59.000
based on 20 years of literature review.

9:59:59.000,9:59:59.000
Theresea sells clothes under a tree[br]in a town called [Manaba]

9:59:59.000,9:59:59.000
on the border of Uganda and Kenya.

9:59:59.000,9:59:59.000
You think it's very simple, don't you?

9:59:59.000,9:59:59.000
We'll go hang up new clothes[br]from the branches,

9:59:59.000,9:59:59.000
put out the tarp,

9:59:59.000,9:59:59.000
settle down,

9:59:59.000,9:59:59.000
wait for customers

9:59:59.000,9:59:59.000
and there we have it.

9:59:59.000,9:59:59.000
She was everything we were expecting[br]according to the literature,

9:59:59.000,9:59:59.000
to the research.

9:59:59.000,9:59:59.000
Right down to she was a single mom,

9:59:59.000,9:59:59.000
driven to trade,

9:59:59.000,9:59:59.000
supporting her kids.

9:59:59.000,9:59:59.000
So what overturned our assumptions?

9:59:59.000,9:59:59.000
What surprised us?

9:59:59.000,9:59:59.000
First, Theresea paid the county[br]government market fees

9:59:59.000,9:59:59.000
every single working day

9:59:59.000,9:59:59.000
for the privilege of setting[br]up shop under her tree.

9:59:59.000,9:59:59.000
She's been doing it for seven years,

9:59:59.000,9:59:59.000
and she's been getting receipts.

9:59:59.000,9:59:59.000
She keeps records.

9:59:59.000,9:59:59.000
We're seeing not a marginal,

9:59:59.000,9:59:59.000
underprivileged,

9:59:59.000,9:59:59.000
[wearable],

9:59:59.000,9:59:59.000
African woman trader[br]by the side of the road,

9:59:59.000,9:59:59.000
no.

9:59:59.000,9:59:59.000
We were seeing somebody who's keeping[br]sales records for years.

9:59:59.000,9:59:59.000
Somebody who had an entire ecosystem[br]of retail that comes in from Uganda

9:59:59.000,9:59:59.000
to pick up inventory.

9:59:59.000,9:59:59.000
Someone who's got handcarts[br]bringing the goods in,

9:59:59.000,9:59:59.000
[and the] mobile money agent[br]who comes to collect cash

9:59:59.000,9:59:59.000
at the end of the evening.

9:59:59.000,9:59:59.000
Can you guess how much Theresea spends[br]on average each month on inventory --

9:59:59.000,9:59:59.000
stocks of new clothes[br]that she gets from Nairobi?

9:59:59.000,9:59:59.000
$1,500 US dollars.

9:59:59.000,9:59:59.000
That's around 20,000 US dollars[br]invested in trade goods and services

9:59:59.000,9:59:59.000
every year.

9:59:59.000,9:59:59.000
This is Theresea,

9:59:59.000,9:59:59.000
the invisible one,

9:59:59.000,9:59:59.000
the hidden middle.

9:59:59.000,9:59:59.000
And she's only the first rung[br]of the small entrepreneurs,

9:59:59.000,9:59:59.000
the microbusinesses that can be found[br]in these market towns,

9:59:59.000,9:59:59.000
at least in the larger [Malaba] border,

9:59:59.000,9:59:59.000
she's at the first rung.

9:59:59.000,9:59:59.000
The people further up the value chain

9:59:59.000,9:59:59.000
are easily running[br]three lines of business,

9:59:59.000,9:59:59.000
investing 2,500 to 3,000[br]US dollars every month.

9:59:59.000,9:59:59.000
So the problem turned out[br]that it wasn't the criminalization,

9:59:59.000,9:59:59.000
you can't really criminalize someone[br]you're charging receipts from,

9:59:59.000,9:59:59.000
it's the lack of recognition[br]of their skilled occupations.

9:59:59.000,9:59:59.000
The bank systems and structures[br]have no means to recognize them

9:59:59.000,9:59:59.000
as microbusinesses,

9:59:59.000,9:59:59.000
much less the fact that,

9:59:59.000,9:59:59.000
you know,

9:59:59.000,9:59:59.000
a tree doesn't have a forwarding address.

9:59:59.000,9:59:59.000
So she's trapped in the middle.

9:59:59.000,9:59:59.000
She's falling through the cracks[br]of our assumptions.

9:59:59.000,9:59:59.000
You know all those microloans[br]to help African women traders?

9:59:59.000,9:59:59.000
They're going to loan her[br]50 dollars or 100 dollars.

9:59:59.000,9:59:59.000
What's she going to do with it?

9:59:59.000,9:59:59.000
She spends 10 times[br]that amount every month

9:59:59.000,9:59:59.000
just on inventory,

9:59:59.000,9:59:59.000
we're not talking about[br]the additional services

9:59:59.000,9:59:59.000
or the support ecosystem.

9:59:59.000,9:59:59.000
These are the ones who fit neither[br]the policy stereotype

9:59:59.000,9:59:59.000
of the low-skilled and the marginalized,

9:59:59.000,9:59:59.000
nor the white-collar,[br]salaried office worker

9:59:59.000,9:59:59.000
or civil servant with a pension

9:59:59.000,9:59:59.000
that the middle classes[br]are allegedly composed of.

9:59:59.000,9:59:59.000
Instead, what we have here[br]are the [proto-esenes],

9:59:59.000,9:59:59.000
these are the fertile seeds[br]of businesses and enterprises

9:59:59.000,9:59:59.000
that keep the engines running.

9:59:59.000,9:59:59.000
They put food on your table.

9:59:59.000,9:59:59.000
Even here in this hotel,

9:59:59.000,9:59:59.000
the invisible ones,

9:59:59.000,9:59:59.000
the butchers, the bakers[br]the candle-stick makers.

9:59:59.000,9:59:59.000
They make the machines that make[br]your french fries and they make your beds.

9:59:59.000,9:59:59.000
These are the invisible businesswomen[br]trading across borders.

9:59:59.000,9:59:59.000
All on the side of the road,

9:59:59.000,9:59:59.000
and so they're invisible[br]to data gatherers.

9:59:59.000,9:59:59.000
And get mashed together[br]with the vast informal sector

9:59:59.000,9:59:59.000
that doesn't bother to distinguish[br]between smuggles and tax evaders

9:59:59.000,9:59:59.000
and those running illegal whatnot,

9:59:59.000,9:59:59.000
and the ladies who trade[br]and who put food on the table,

9:59:59.000,9:59:59.000
and send their kids to university.

9:59:59.000,9:59:59.000
So that's really what I'm asking here.

9:59:59.000,9:59:59.000
That's all that we need[br]to start by doing.

9:59:59.000,9:59:59.000
Can we start by recognizing the skills,

9:59:59.000,9:59:59.000
the occupations,

9:59:59.000,9:59:59.000
we could transform the informal economy[br]by beginning the recognition

9:59:59.000,9:59:59.000
and then designing the customized doorways[br]for them to enter or integrate

9:59:59.000,9:59:59.000
with the formal, with global,[br]with the entire system.

9:59:59.000,9:59:59.000
Thank you ladies and gentlemen.

9:59:59.000,9:59:59.000
(Applause)