Diagnosis on informality in targeted intervention areas of the PROSPECTS programme in Uganda

In 2020, the ILO commissioned a study on the informal economy in the forced displacement context in Uganda. The aim of the study was to assess drivers of informality in refugee settlements and host communities in targeted regions of the PROSPECTS programme and identify opportunities to improve working conditions and reduce informality among these target groups.

The informal economy is defined as economic activities by workers and economic units that are — in law or in practice — not covered or insufficiently covered by formal arrangements. It covers not only informal employment and informal sector units but also all informal activities carried out within the formal economy. This study was realised to generate qualitative information on informality characteristics of forced displacement contexts within the target regions of the PROSPECTS programme in Uganda.

The research established a profile of informal economy activities conducted by refugees and other forcibly displaced people as well as of host communities members. The report aims at identifying some of the primary causes for informality, some transversal to all manifestations of informality in Uganda, others specific to refugees or to host community members as well as possible drivers that can facilitate the formalization of jobs and enterprises among the target groups. In addition, a mapping of central actors and policy approaches that are relevant for facilitating the transition to formality, including the reduction of decent work deficits to create favourable conditions for formalization in the short and/or long term was completed.

The analysis demonstrates, amongst others, how the current legal framework in Uganda (e.g. concerning business and tax registration, access to social protection) and the application of labour, social and fiscal laws and regulations, make provisions for job and enterprise formalization to the benefit of refugees and host communities and where this still falls short. Moreover, perceived priority needs of refugees and host community members, whether employees or business owners, are documented and reviewed vis-à-vis formalization-related services offered by actors in the region.