Picture: 123RF/CATHY YEULET
Picture: 123RF/CATHY YEULET

A British-based Nigerian academic wants to use an SA business school to launch an academic study on whether women lose out on opportunities when economies make the transition from informal to formal.

Prof Rajneesh Narula, of Henley Business School at the University of Reading, is interested in the transition from one economy to the other. The informal sector is unregulated and cash-based, and consists of unregistered small businesses, including subsistence farmers, corner shops and piece-workers.

Narula says all governments want to formalise the informal sector so that it can be regulated through registration and made to pay tax, but also to get smaller businesses to grow and employ more people through access to banking and loans.SA informal economy expert GG Alcock estimates SA’s informal economy could be as large as R200bn from spaza shops alone, while traditional medicine could account for as much as 6% of national health spend.

Narula’s research elsewhere shows that women often lose out when informal sectors are formalised.

“In Bangladesh, when the apparel industry grew rapidly, most of the unskilled jobs were taken by women, which was great for their economic empowerment and emancipation,” he says. “But when the local government started putting in more regulations around health and safety and business owners started firing people, they fired women.”

Of SA, he adds: “I suspect, given the patriarchal level of society, because of the uneven spread of education and skills, that women will benefit less from men from the transition.”

The project, which will be run by Henley Business School Africa’s new research institute, African Insight & Research, is intended to run from February to August next year.

Narula intends building on a preliminary work in KwaZulu-Natal by Wits University economist Imraan Valodia, dean of the faculty of commerce, law and management.

“There are many ways that government tries to shift people from the informal to the formal sectors to kick-start the economy; through entrepreneurial incubation hubs to training and internships, the study will find out if these work better for men than women,” Narula says.

Henley Africa dean Jon Foster-Pedley says the new research institute marks the school’s transition from a university school that confers qualifications, to a higher-education institution that provides relevant research.

He says: “Narula’s inequality study is one of eight we hope will provide impactful insights into contemporary problems.”

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