The term “informal sector” was used for the first time in reports on Ghana and Kenya prepared under the ILO World Employment Programme in the early 1970s. The term is commonly used to refer to that segment of the labour market in developing countries which have absorbed significant numbers of jobseekers, mostly in self-employment, and to workers in very small production units.1 Informal activities are often characterized by low levels capital, skills and lack of access to organized markets and technology. Moreover, others include, low and unstable incomes, climate effects, not forgetting poor and unpredictable working conditions. Informal activities are often outside the scope of official statistical enumeration and government regulations and are also beyond formal systems of labour and social protection.2 Some studies suggest that the smallest enterprises are the most likely to become informal.3
Constraints to skills development are different in the informal sector. These have included low levels of education, multi-skilling needs (technical, finance, business, marketing), low capacity to identify training needs, lack of information to training benefits, high opportunity cost of training (need to work!), limited cash flow for training, limited supply catering to the informal sector, lack of economies of scale means higher unit training costs.
Preparing human potential for any country is key to its economic success. Youth in particular, cover the largest part of human resources in production and services sectors that are estimated to be two thirds of the workforce.