What we read : Africa’s informal economy
Recently, we were interested to read two articles that match with our focus on Africa’s informal distribution channels.
The first one is about the size of the informal economy in Africa, 40%. Clearly a big chunk of the economy is not traced today, which makes it hard to measure, and understand its dynamics.
The second refers to the structure of congested African cities, and how slums are a rational response for those willing to stay close from job opportunities. You will be surprised to read that it is actually not cheap to live in slums, when you look at the price per unit, in housing, or electricity consumed, something called the poverty premium. Obviously habitants in slums do not take cars to go to shopping malls, and buy through the dukas and small shops present there.
For FMCGs operating in Africa, it shows that there is a need to value and understand the informal distribution, that accounts for 90% of the sales, according to some estimates. Ensuring the distribution is efficiently done at that level is extremely difficult, and we believe crowdsourcing data is an agile way to at least have visibility on what happens, the first step to solve issues and engage the corrective action plans.