The Informal Sector and Economic Growth of South Africa and Nigeria: A Comparative Systematic Review

• Main Authors: Ernest Etim, Olawande Daramola
• Format: Article
• Language: English
• Published: MDPI AG 2020-11-01
• Series: Journal of Open Innovation: Technology, Market and Complexity
• Subjects: informal economy; systematic review; economic growth; economic development; open innovation; South Africa
• Online Access: https://www.mdpi.com/2199-8531/6/4/134

The informal sector is an integral part of several sub-Saharan African (SSA) countries and plays a key role in the economic growth of these countries. This article used a comparative systematic review to explore the factors that act as drivers to informality in South Africa (SA) and Nigeria, the challenges that impede the growth dynamics of the informal sector, the dominant subsectors, and policy initiatives targeting informal sector providers. A systematic search of Google Scholar, Scopus, ResearchGate was performed together with secondary data collated from grey literature. Using Boolean string search protocols facilitated the elucidation of research questions (RQs) raised in this study. An inclusion and exclusion criteria became necessary for rigour, comprehensiveness and limitation of publication bias. The data collated from thirty-one (31) primary studies (17 for SA and 14 for Nigeria) revealed that unemployment, income disparity among citizens, excessive tax burdens, excessive bureaucratic hurdles from government, inflationary tendencies, poor corruption control, GDP per capita, and lack of social protection survival tendencies all act as drivers to the informal sector in SA and Nigeria. Several challenges are given for both economies and policy incentives that might help sustain and improve the informal sector in these two countries.