Publisher: Qira’at Afriqiyah Magazine
Issue: 57, July 2023
ISSN: 2634-131X
Year : 19
Pages: 74-85
Author: Dr. Gihan Abdel Salam
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Abstract:
The term Shadow Economy or (informal sector) is the productive and commercial economic activities that are not officially registered and are carried out away from the government’s knowledge, neither of their size or productivity of these activities. The main aim is to avoid paying taxes, for example, paying social security contributions, or circumventing certain standards or official requirements, as this sector is also considered to be largely unprotected by law. In recent years, many African countries have experienced a revival in economic growth, but this has not necessarily generated decent jobs, rather, unemployment rates have remained high among young African adults. Little attention has been given to the role of the informal sector in promoting growth and job creation. In reality, the informal sector contributes to about 55% of sub-Saharan Africa’s GDP and employs about 80% of the labor force. Hence the importance of the informal sector in most African economies in terms of the opportunities it provides to the most vulnerable population groups, and its contribution to the gross domestic product significantly, although the shadow economy represents an opportunity to contribute to the economic development process in sub-Saharan Africa, it There are also many problems, the most important of which is that most informal workers lack a guaranteed income, employment benefits, social protection, tax evasion, etc. In this sense, this study aims to present and analyze the role of the shadow economy, or the so-called informal sector, in the economic development process in sub-Saharan Africa. The study also deals with the most important features and characteristics of this sector, and the nature of the problems it faces, in addition to the proposed ways to enhance the role of this broad economic sector and ways to integrate it within the activities of the formal sector.