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What’s in a Word? The Conceptual Politics of ‘Informal’ Street Trade in Dar es Salaam

Ilona Steiler


Focussing on policies towards urban street trade in Dar es Salaam, Tanzania, in this paper I illustrate how despite the widely acknowledged limits to its analytical usefulness, the contested and politically charged concept of the ‘informal economy’ continues to play a vital role in informing strategies of economic and social development on multiple levels of government. I argue that while the negative connotations of the concept continue to cast street trade as an aberration from the norm of formalised economic activity, its usage distracts from the causes and conditions of street trade and leads to a narrow focus on business formalisation, with disastrous consequences for traders and city authorities. I aim at making a conceptual and empirical contribution, structured in two parts: First, starting from Keith Hart’s reflections, I sketch out the discussions surrounding the concept of the informal economy and highlight its socially constructed and normative dimension. In the second part, I delineate the legal status of street trade in Tanzania. The conception of street trade as ‘informal’ is then traced from an international think tank to a national formalisation programme, further to urban planning and law enforcement policies, and finally contrasted with the views of traders.

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The research was supported by the Nordic Africa Institute (NAI) and the Finnish Graduate School in Development Studies (Devestu). I wish to express my gratitude to the editors and two anonymous reviewers, and to Juhani Koponen and Marjaana Jauhola for their very constructive comments on earlier drafts. Special thanks go to Thomas Slätis for his invaluable help with fine-tuning.


1From its inception in the early 1970s, the concept of the informal economy has been the focus of much criticism. Not least Keith Hart, who coined the concept in a seminal article on different types of income generation in Accra (Hart 1973), writes in light of preponderating economic activities outside of the regulatory capacities of state institutions particularly in the Global South: “When so much of the economy is ‘informal’, we are entitled to ask whether the term has outgrown its usefulness” (Hart 2001). His doubts are acutely applicable to representations of urban street trade. The various contributions to this Special Issue indicate that street trade is a common part of everyday life in cities around the world. The officially licensed urban street markets found in the highly regulated economies of industrialized countries are the exception to the global rule, whereas especially in cities of the global South, street trade presents an “economic manifestation of informality” (Rogerson 2016: 205).

2The informality of street trade is, however, related to a multitude of concerns: Broadly, it implies a situation in which street traders operate outside or even in violation of existing laws and by-laws. In sub-Sahara Africa, the phenomenon is associated with migration, urbanisation and macroeconomic developments in the wake of structural adjustment and economic crises (Skinner 2010). While informal street trade is found to contribute to poverty reduction (Jimu 2004, Mafunzwaini 2013, Mramba 2015a, b), it frequently clashes with regulatory policies of public authorities, earning traders an uneasy position “between tolerance and clearance” (Brown et al. 2015: 2244, see also Adaawen and Jørgensen 2012). The informality of street trade is often discussed in the context of urban planning and democratic participation, as it is enmeshed in struggles over public space and, relatedly, to struggles over recognition of traders’ citizenship and their “right to the city” (Bénit-Gbaffou 2016, see also Skinner 2008, Brown et al. 2010, Lyons et al. 2012, Wafer 2014). Moreover, as “informal workers” (Lindell 2010), traders often have limited resources to organise and make their voice heard, both in political decision-making processes (Brown and Lyons 2010) and in claiming workers’ rights (Çelik 2011). Moving beyond empirical analysis of street trading practices, urban policy design and implementation, recent scholarship is investigating the notion of informality itself. Several contributions study how street trade is shaped in interplay with international, national and local discourses on law, rights and informality (Rogerson 2016, Brown 2017). Amin Kamete shows how informality has both an economic and urban dimension in Southern cities, where attempts to eradicate the alleged “abnormality” (2013: 641ff.) of informality threaten to stamp out its life-sustaining functions as well (Kamete 2018).

3Given the numerous facets of informality, I take my cue from these timely inquiries and ask, what does it mean to call street trade informal? More specifically, what kind of conceptions and connotations lie beneath representations of street trade as informal, and which effects does this have on policies towards street trade? In this paper, I contend that although the limits of the analytical usefulness of the ‘informal economy’ are by now widely acknowledged, it continues to play a vital role as a contested and politically charged concept in informing strategies for economic and social development on multiple levels of government. The main argument is that the still widespread negative and binary conception of the informal economy casts street trade as an aberration from the norm of the formal economy. Centring on the constructed formal-informal divide pays insufficient attention to the complex causes and conditions of street trade and leads to a fixation on formalisation, which is moreover narrowly understood as business formalisation – with disastrous consequences for traders and city administrations alike.

4My intention is to make both a conceptual and empirical contribution: In the first section, I problematise the normative and political content of the ‘informal economy’, starting with a brief summary of the definitions and discussions surrounding this contested concept. Importantly, although the socially constructed and normative elements of what was originally called the ‘informal sector’ were already highlighted by Keith Hart’s observations 45 years ago, more nuanced conceptions of the relations between informal activities and formal institutions are only slowly taking root in policy making. The next sections provide empirical insights from seven months of research work in Dar es Salaam conducted in 2014 and 2015, based on a reading of policy documents and on interviews with government officials, traders’ organizations and individual traders as well as on participant observation. First, I briefly contextualize the legal status of Tanzanian street traders in historical context. I then trace the concept of the informal economy from a Peruvian think tank to the “Business and Property Formalisation Programme” of the Tanzanian government, the law enforcement policies of the Dar es Salaam Municipal Councils, and finally to the – significantly deviating – perceptions of traders on the informality, legality and legitimacy of their work. The conclusion summarizes the main findings.

Problematising the use(s) of a contested concept

5The socially constructed and normative attributes of the “informal sector” were already addressed by Hart (1973) in his study of informal income opportunities and urban employment in Ghana. First and foremost, he depicted a range of diverse empirically observable income-generating activities taken up by the urban poor lacking formal employment opportunities. These activities often combined legal or illegal income strategies, and importantly, did not take place separately from the formal economy but rather in exchange with it. Hart pointed out that beyond observable activities, the informal sector is what we make of it: Not only does the respectability and legitimacy of informal activities lie in the eye of the beholder (Hart 1973: 74f.), it is also a matter of interpretation whether such income opportunities are condemned as being the result of “deprivation or exploitation” or praised as “the possibility of a dramatic ‘bootstrap’ operation, lifting the underdeveloped economies through their own indigenous enterprise” (Hart 1973: 89). In a later reflection on his contribution to coining the concept, Hart therefore emphasizes that he did not “identify the informal sector with a place or a class or even whole persons” (2001).

645 years later, the question of what to make of informal activities, both conceptually and as an object of political intervention, is still open to debate. The term informal sector, later changed to “informal economy”, was incorporated into various policy agendas of major development institutions such as the ILO (International Labour Organization 1972, 1991, 2002, 2015a, 2015b), the World Bank (2004) or the United Nations Development Programme (UNDP 2008), yet with considerable variation in the conception of the informal economy across institutions and time. Although no clarity exists on the exact meaning, the presently most prominent definition is based on a rather broad conception suggested by the ILO, according to which the term informal economy describes “all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements” (2002: 3) but “does not cover illicit activities” such as trafficking of drugs, firearms or persons (2015b: section I). In research literature, the term continues to be used as a “commonsense notion” (Lindell 2010: 5) to portray activities beyond state regulation. Despite or perhaps precisely because of their much-debated ambiguity, usage of the terms formal and informal has prevailed in academic and policy discourse (Guha-Khasnobis et al. 2006: 7). Their usefulness has been discussed repeatedly and at length, based on extensive empirical studies pointing towards the complexity and heterogeneity of economic activities under its heading. For analytical objectives, any discussion of the informal economy must thus have a deeper look into the diversity, differentiation and multiple power relations at play behind the elusive concept (Lindell 2010: 5ff.).

7The complexity and heterogeneity of informal activities, however, is often overlooked when the concept is used to achieve political and economic objectives. Far from being neutral, the open-ended definition of the informal economy allows different actors and groups to imbue the term with specific conceptions of informality. In public discourse and political practice, the informal economy is deployed as a “commonsense” concept, which is always connoted with different and at times competing understandings regarding the causes, conditions and consequences of widespread economic informality. As indicated by Hart already in his early study, conceptions and representations of the informal economy are not value-free but tied to predetermined normative associations and political goals, often irrespective of more nuanced findings of empirical research (Hart 1973, Sindzingre 2006: 62f.). Research literature groups these conceptions of the informal economy into three perspectives: The modernization perspective, which considers the informal economy an undesirable relic of the past; the structuralist perspective, according to which it represents an inevitable survival strategy amidst processes of capital accumulation; and the neoliberal perspective, which sees informal activities as a rational response to over-regulation of the market (cf. Kamete 2018: 4f.). Different conceptions of the informal economy, in turn, direct and legitimise different policy interventions and therefore have real-life effects on people whose livelihoods depend on informal income; how exactly conceptions of informality influence policies and policy outcomes deserves closer scrutiny (Kamete 2018, Vainio 2012: 7).

8Hence, to better understand policy interventions into urban street trade, which is typically informal, it is indispensable to ask what kind of conceptions lie beneath representations of street trade as informal, and how this affects policies towards street trade as well as traders and urban administrations. For the discussion in this paper, two areas of conceptual contestation surrounding the informal economy are relevant: The first concerns relations between the informal economy and the formal economy. Contrary to common associations of the informal economy with specific places or stages of socio-economic development, chiefly with developing countries in the Global South, research has shown it to exist across developing and industrialized economies in various forms. It has also increasingly become clear that informal work is not disappearing with economic modernization, as its persistence and expansion are intricately interlinked with larger dynamics of economic globalization (Portes et al. 1989, Carr and Chen 2001, Williams 2004, Tempkin and Veizaga 2010, ILO 2015a). Informal activities are further not restricted to specific sectors, sizes of enterprise, levels of productivity and income, or employment status, but rather surface across all branches of the economy and are for the most part interconnected with formal frameworks. They may moreover serve a range of purposes from survival to accumulation (Tranberg Hansen and Vaa 2004, Guha-Khasnobis et al. 2006, Chen 2007, Lindell 2010). Yet despite empirical evidence of this complexity, the informal economy continues to be conceptualized and represented as “unstructured and chaotic” (Guha-Khasnobis et al. 2006: 7) and as deficient and separate from the formal economy, which remains the standard model of employment and market development (Sankaran 2011); in other words, it is seen as deviation and “pathology” (Kamete 2013: 242).

9The second area of conceptual contestation concerns the relation of the informal economy with the law. As the above definitions imply, what makes some economic activities informal is that they operate outside the reach of formal law and state institutions because they are not covered either by the letter of the law or its practice. This may be caused by the inappropriateness of the law or lack of enforcement mechanisms, or by non-compliance of actors in the informal economy, or a combination thereof (see ILO 2002: 3). However, outside the law does not mean unregulated or illegal: Research has highlighted how the informal economy, comprising economic activities across different sectors as well as unauthorised or unregistered settlements, is regulated through multiple rules and norms, social networks and power relations which exist parallel to and intertwined with formal laws and regulations (e.g. Lourenço-Lindell 2002, Chiodelli and Moroni 2014). Apart from the production and trafficking of drugs, weapons et cetera, speaking of informal activities refers to the production and sale of goods or services that are by themselves considered legal, whereas the activity of producing or selling those goods is not registered or regulated by formal governance institutions. Importantly, the categorisation of informal activities as either legal or illegal is a political act, in which the legality of economic activities is closely tied to their perceived legitimacy. To simplify, legislation and political discourse are challenged by what is considered the fundamental dilemma of the informal economy: the question whether it represents a solution because it circumvents inadequate laws, or a problem which needs to be corrected by expansion of the law (Tranberg Hansen and Vaa 2004: 16, Hart 1973: 89). In practice, this dilemma characterizes the informal economy as an extra-legal grey zone, marked by legal and political uncertainties both for governments and for people depending on informal income. In the absence of clear-cut legal boundaries, specific representations of the informal economy as legal or illegal are used by various political actors to legitimise law evasion or law enforcement. Categorizing extra-legal activities as either legal or illegal is thus part of the conceptual and symbolic politics of informality (Potts 2008, Lindell 2010: 7).

10Dualistic conceptions of economic activities along the formal/informal and legal/illegal divides are as old as the history of the concept of the informal economy itself, and have received a fair share of criticism. Pointing out their empirical, conceptual and political shortcomings, a number of scholars have called for a departure from dichotomous uses of the concept and to instead understand the informal economy within moving boundaries. They suggest placing economic activities along a continuum between formal and informal to allow accounting for the complex and dynamic interactions between more or less regulated economic activities and state intervention (Castells and Portes 1989, Chen 2007, Guha-Khasnobis et al. 2006, Sindzingre 2006). In the international arena, since the early 2000s the ILO and non-governmental networks such as WIEGO (Women in Informal Employment: Globalising and Organising) or the street vendor alliance StreetNet have campaigned for a constructive and integrated approach towards inclusion of informal economy workers. Following its landmark 2002 Resolution concerning decent work and the informal economy, the ILO in 2015 passed Recommendation 204, in which it encourages members to promote the transition from the informal to the formal economy. The ILO emphasises that the “diversity of characteristics, circumstances and needs” found in the informal economy require tailored approaches, that “different and multiple strategies can be applied to facilitate the transition to the formal economy” and that, apart from the need for coherent and coordinated policies, all efforts must aim at ensuring “effective promotion and protection of the human rights” and decent work for informal economy workers (ILO 2015b: section II). It is worth mentioning that ILO Recommendation 204 acknowledges the wider contexts in which informality emerges in the first place, particularly the “lack of opportunities in the formal economy and […] the absence of other means of livelihood” as well as “governance and structural issues” (ILO 2015b: preamble).

11However, notwithstanding these rich explorations, representations of the informal economy continue to be influenced by dualistic conceptions portraying it negatively by what it is not (non-formal, non-organised, non-regulated), forgetting or dismissing the lessons learned from the history of the conceptual debate as well as from earlier policy interventions (Sindzingre 2006: 61, Potts 2008). In the following sections, I illustrate how in Tanzania, a largely binary and negative conception of the informal economy mirroring the modernization perspective has piloted representations of urban street trade and policy reforms on the city and national level. While any long-lasting effects of the most recent policy shift under the administration of President John Magufuli remain to be seen, policy documents and interviews prior to 2016 revealed a strong conceptual linking of the informality of urban street trade with illegality and lacking legitimacy. The conception of informality as the key problem, shared by an international think tank, the Tanzanian government and the Dar es Salaam city administration, however, is contested and falls short of coming to terms with the enormous presence of street trade.

Street trade in Dar es Salaam

12With more than three-quarters of all non-agricultural employment being informal in Tanzania (ILO 2012: 9), street traders are ubiquitous in the cities. Since only few of them have their presence and activities registered, the exact number of street traders across all districts of Dar es Salaam is unknown. Recent studies estimate the number to range between 700,000 in 2008 (Lyons and Msoka 2010: 1082) and over one million traders in 2014 (Mramba 2015a: 120). Although it is impossible to verify those numbers, in a city of 4.5 million residents (United Republic of Tanzania 2013), this means that around 15-20 per cent of the population depend on street trade for an income for themselves and their families, even when considering that actual residence numbers might be much higher than in the official census. Nonetheless, and despite street traders’ decade-long presence in the city, their work falls outside the boundaries of existing laws and regulations, as it is not covered by either commercial or labour laws. While the constitution guarantees the right to work, it is not specified whether this includes the operation of small-scale, unregistered business in lieu of other income opportunities.

13Determining the legal status of urban street trade has a deep-rooted political dimension to it: Already during the colonial era, laws and by-laws served to regulate and restrict petty trade, a phenomenon associated with unwanted rural-urban migration as well as with un- and underemployment, and importantly, with strict hierarchies of race, gender and class. In Dar es Salaam, street trade grew rapidly in the wake of the Depression in the 1930s, and the municipal authorities were eager to curb the number of traders by issuing few licenses and rounding up the unlicensed ones. This applied particularly to male African traders, who were considered a threat to orderly urban development, the businesses of predominantly Indian shopkeepers as well as to European women and property (Burton 2005: 158ff.). The legal insecurity of traders and hostility towards them continued into Tanzanian independence and post-colonial government. During the 1970s and early 1980s, the government clamped down on “clandestine employment”, which was perceived as unfair competition to formal trade (Maliyamkono and Bagachwa 1990: 32), and “Operation Kila Mtu Afanye Kazi” (every person must work) was put in place. With the goal of keeping urban poverty at low levels, unemployed residents were deported back to rural areas, sometimes by the use of force (Mwaiselage and Mponzi 1999: 6f.). Amidst severe economic crisis and high levels of unemployment, the 1983 “Sera ya Nguvu Kazi”, known as Human Resources Deployment Act, followed previous attempts to engage every able-bodied person in “productive work”, certified by registration with local authorities and a labour identification card. The decision on the lawfulness of income-generation was left to local authorities, and in Dar es Salaam region, hawkers and petty traders were criminalized as “loiterers”, arrested and evicted from the city (Shaidi 1984: 85). However, the Act successively allowed for small-scale business to become recognised as a means to combat unemployment and by-laws were changed so traders could obtain the so-called “Nguvu Kazi” licenses. Since rural-urban migration still outgrew the capacities to accommodate traders, distribution of the licenses stopped in 1993 (Mwaiselage and Mponzi 1999: 7). The peddling licenses were effectively abolished another ten years later with the passing of the Business Licensing Act of 2003 and the Finance Act of 2004, which restructure license categories and oblige business to be registered, thereby ending the legal tolerance towards traders running unregistered businesses in public space. Although the objective of the latter two Acts was to simplify business formalisation and encourage registration, obtaining a license under the new legislation remains tied to high costs that are insurmountable for most street traders (Lyons et al. 2014: 1602).

14Currently, due to the high costs and for reasons elaborated further below, the majority of street traders in Dar es Salaam do not have their business or work registered with local or national authorities. Traders occupying plots in local market areas might have a license issued by the municipality or a private owner of the market space, yet these agreements are usually temporary and can be revoked on short notice. Irrespective of such non-permanent arrangements, traders’ status is in official language commonly defined as informal and extra-legal: as their activities are not registered with the state, they have limited access to legal protection against displacement or confiscations and to social protection. Their activities are moreover treated as illegal on the ground of two offenses: first, by trading without a valid license, traders contravene business, financial and tax laws on the national and municipal levels; second, by trading in non-designated areas, they are in violation of city by-laws on urban planning and use of public space. Laws and by-laws are enforced only sporadically but nonetheless criminalize traders’ daily work routines, and traders permanently face confiscations, evictions as well as financial penalties or imprisonment. In December 2016, the political mood shifted in favour of traders when President Magufuli called for a nation-wide halt to evictions, ordering local authorities to provide suitable alternative spaces for traders. The move has however been disputed by city authorities and led to confusion and further conflict with traders (Kisembo 2017, The Citizen 2017a), and it is still unclear to which extent the latest display of government tolerance leads to stable and long-lasting solutions (The Citizen 2017b).

MKURABITA and street trade

15In the early 2000s, facing rapidly growing number of traders and the inadequacy of laws prohibiting street trade, the Tanzanian government under President Benjamin Mkapa decided to engage in a long-term reform process, with the goal of embedding and eventually integrating street trade activities into the formal economy. To this aim, the government contracted the Institute for Liberty and Democracy (ILD), a Peruvian-based think tank chaired by economist Hernando de Soto, to draft a four-phase reform plan. The plan was then institutionalized in the “Business and Property Formalisation Programme,” a planning unit under the President’s office, known by its Swahili acronym MKURABITA (“Mpango wa Kurasimisha Rasilimali na Biashara za Wanyonge”). The ILD, after a considerable research effort resulting in a four-volume report of a total of 1,700 pages, largely followed the tenet of de Soto’s earlier work in its concluding recommendations and reform plan: In the view of the ILD, the existence of an extra-legal economy, parallel to legal economic structures and institutions, hampers the development towards an inclusive, modern market economy and perpetuates poverty. Accordingly, the poor need to be given easier access to the law, particular to property and business rights, in order to convert their assets into capital in the formal economy (de Soto 2001, ILD 2005).

16As the programme’s name already suggests, the main goal of MKURABITA is the formalisation of property and business assets, that is, the integration of informally operated business into the formal market economy. The rationale behind this goal is ILD’s observation that while poor Tanzanians hold extra-legal assets worth approximately 29 billion USD, these cannot be productively and effectively utilized, as entering formal market institutions is connected with immediate and long-term costs which are inhibitive to the poor (ILD 2005: 4f.). MKURABITA is to make use of this wealth through its objectives of enabling the integration of already existing informal rules and arrangements into the legal system, thereby unifying, modernizing and standardizing national property and business laws. Facilitating formalisation promises better governance of Tanzanians’ economic activities, stimulating growth and expanding the tax base while simultaneously opening access to legal protection for the poor, in a manner built on established local customs. Once assets like property and land are documented and legally registered, they can be used to obtain access to loans and further investment opportunities. The entry into the formal market is seen simultaneously as a factor integral to stimulating growth and as a goal in itself, as it promises to “economically empower property and business owners in the informal sector” and “enhance their opportunities in using their assets to access capital and thus improve national economic growth and reduce individual household poverty” (MKURABITA n.y.).

17MKURABITA does not pursue a sector-specific strategy towards street trade, which is considered one among a wide range of extra-legal economic activities. During the time of my research in 2014-15, implementation had been going slow due to institutional and political hurdles of the reform process but the programme still presents the main framework for dealing with street trade. The task of MKURABITA is to coordinate policy and legal reform strategies of various ministries and specialized governmental agencies with each other and in alignment with the Tanzanian “National Strategy for Growth and Reduction of Poverty”. Formalisation is thus closely linked to other economic and fiscal policies providing easier access to liquidity, for instance to microcredit schemes under the Doing Business agenda of the World Bank or the business training programmes of National Economic Empowerment Council (NEEC). Across these policies and programmes, street traders are considered self-employed business owners. The shortcomings of MKURABITA in meeting the needs of traders, particularly the poorest among them, are beyond the scope of this paper and discussed in detail elsewhere (Lyons 2013, Lyons et al. 2012).

18What is of relevance here is that the focus on formalisation, the keystone of MKURABITA, reinforces the conception of the informal economy as separate and inferior to the formal economy. The translation of de Soto’s model of economic development into Tanzanian policy mirrors the long-standing perception of informality as an indicator of underdevelopment and a stumbling block to economic growth. Applied to street trade, this approach implies that traders’ potential to contribute to their personal advancement as well as to national economic growth is not recognised as legitimate or valuable unless it is properly registered and formalised.

19This view is disputed. According to an official at the Ministry of Labour and Employment, two opposing schools of thought can be found across political parties and public institutions in Tanzania: One recognizing the informal economy as elementary part of the national economy and of equal importance to it, the other one considering it as peripheral and deficient. The latter appears to dominate among decision-makers and to be driving the MKURABITA reforms: Several of the interviewed government officials stated that street trade existed in Dar es Salaam because Tanzania was “not yet fully developed”. In a similar vein, a plain-language leaflet on MKURABITA explains the registration process as a linear development path moving from a “traditional, informal system” through the “modern, informal” to the “modern, formal system” (MKURABITA 2007: 7). Contrarily, representatives of the Tanzania Union of Industrial and Commercial Workers (TUICO), which has approximately 1,500 informal traders among its members, pointed towards the lack of formal jobs and underscored traders’ vital economic contributions, not only in generating their own income but also in providing goods and services to wider communities. Different perspectives lead to different strategies: MKURABITA and NEEC directly target the informality of street trade, aiming to enable traders to set up formalised enterprises in compliance with given laws and regulations. Supported by the ILO Country Office, conversely, TUICO has during the past decade turned towards organising informal economy workers, among them street traders. Formalisation is a long-term goal in their strategy; the immediate objectives are traders’ participation in social dialogue, improved working conditions and enhanced social protection. Although both views ultimately share the conception of informality as a pre-stage to formalisation, the discrepancy between identifying formalisation primarily as a matter of wider socioeconomic conditions or of traders’ individual responsibility marks an essential difference between “a welfarist [and] a technicist regulatory legalistic form of integration” of traders (Kamete 2018: 184). This manifests itself in the everyday governance of the streets, where the socially constructed and political dimension of casting street trade as deviance from the law and from the formal economy becomes clearly visible.

Formalising the streets?

20The twist of the formal/legal and informal/extra-legal binary became explicit during an interview with a legal officer of Kinondoni Municipal Council, one of three administrative districts of Dar es Salaam at the time of my research. Asked to explain the legal situation of street trade, the official responded: “[The street traders] are breaking the law when they are doing informal business”. When I consecutively asked what precisely distinguished informal from formal trade, the prompt answer was: “What makes these traders informal is that they don’t comply with the law. When they get a license and go to the market areas it’s not illegal”. Apparently unaware of the circle behind this reasoning, the official however moved on to clarify that the stipulations of the law were not carved in stone. While the authorities at the municipal level were obliged to enforce existing laws and by-laws, it was possible for the government to change the laws and thus legalize street trade. Yet he was doubtful whether such legal changes were feasible or even desirable, pointing towards the spatial restrictions to accommodating large numbers of traders in the city, and arguing that street trade offered no long-term solution to wider socio-economic problems of rural poverty. Hence, for the city administration, street trade presented a “problem”, which could be solved only through “money and force”.

21The conceptual connections between a circular logic, which equates formality with legality and informality with illegality, the political will to include or to exclude traders and struggles over the distribution of space are once more displayed in the law which continues to make having a fixed physical and postal address a condition for business registration (United Republic of Tanzania 2007, Lyons et al. 2014: 1604). This requirement is already tough for all traders who own stalls without access to a – more or less – permanent plot in a designated market area. Moreover, it categorically excludes the mobile Mama or Baba Ntilie pavement restaurants as well as machingas, as hawkers are colloquially called in Tanzania. Following from the regulations, street trade generally does not qualify as income-generating activity in its own right; neither does the street count as a legitimate workplace, particularly with regard to those traders who are the most marginalized as they have, in the language used by the ILD and MKURABITA, the least assets. By equating legality with formalisation, the regulations render the use of public space for unlicensed street trade a criminal offense.

22This is problematic for two reasons. First, street trade and especially hawking are attractive income-generating activities because of their low entry thresholds, which enable traders who possess little to no assets to make a living, at least for a limited time period. Street trade and hawking can serve to bypass financial bottlenecks during hard times, making them an example par excellence of informal activity in the original sense of the concept used by Hart (1973). The obligation of a fixed business strips street trade of its nature and its “lifeblood” (Kamete 2018: 168). Second, this approach counteracts the idea of bottom-up legal reform at the heart of the MKURABITA design. In its diagnosis of the Tanzanian extra-legal economy, the ILD reported various archetypes of property, business and market organization, which mainly lacked effective coordination and integration into the national economy. Advocating legal pluralism, these existing archetypes of social interaction “could be developed into a market order and rule of law for Tanzania that is actually embedded in local culture” (ILD cited in Norad 2007: 14). In defining those archetypes, the report indicated that the diverse practices found in Tanzania, while being extra-legal, are by no means unregulated, let alone illegal or criminal. However, recommendations for integrating archetypical organizational arrangements stop short of also opening the law to locally established income-generating practices such as street trade.

23The legal reforms thus leave little room to include a widespread, but unwelcome way of making a living. Since efficient market development is closely linked to formalisation of property and business, unlicensed street trade remains categorized as undesirable and illegal. Street trade, however, presents a deep-seated archetype of economic activity for those lacking assets precisely because it is essentially informal. The emphasis on the distinction between the informal and formal economy reinforces the representation of street traders as unlawfully encroaching public space and undermining public order. It ignores the tradition of almost one century of street trade in Dar es Salaam as well as the legitimacy it enjoys among many Tanzanians, for whom it presents a ubiquitous and necessary part of urban life. The bad fit was noted in a review by the Norwegian Agency for Development Cooperation, suspecting “that the reforms are not entirely based on Tanzanian reality” but are instead an “imposition of a ready-made template onto a new setting” (Norad 2007: 32). This critique can be applied to the entire endeavour of promoting formalisation as long as it is based on a negative conception of informality which does not do justice to the situation of street traders. As discussed in the next section, many traders are not opposed to formalisation per se, but do not see it as a priority in the way the reform agendas of the government do.

24Essentially, in this interpretation and practice of the law, the line drawn between the formal/legal and informal/extra-legal economy obscures the causes and diversity behind informal street trade and carries on the decade-long stalemate between urban authorities and traders, in which the former try to maintain order and control over “legitimate lawlessness” with limited resources (Burton 2005: 153), while the latter are repeatedly evicted only to return soon after. The continuing criminalization of street trade, combined with the oscillation of law enforcement and tolerance, often tied to the election cycle or the changing moods of political leaders, create insecurity for both sides and come with enormous economic, social and human costs. Violent clashes between city militias and traders have left property destroyed, traders hungry or imprisoned, and both militia members and traders injured or dead, to the extent that city officials and human rights activists spoke of the struggle over the streets of Dar es Salaam as “war”. This conflict is rooted in contested conceptions of the informal economy, and I now turn to traders’ perspectives on this subject.

Traders’ views on informality and the law

25There is considerable variety in the forms of street trade. Traders may operate alone or in larger enterprises comprising several people; they may be stationary or mobile; they may work for formal or informal employers, be self-employed or be self-employed with employees; they may have traded at the same spot for many years or moved to Dar es Salaam only recently. The traders I interviewed for this study, at random locations across Dar es Salaam, show this diversity: Fourteen of them were machingas, walking on the street and selling either their own or retailers’ merchandise; six operated stalls or tables; of those, four kept their stalls or tables on the roadside without a license, and two had temporary licenses to work at designated markets. In addition, I interviewed representatives of VIBINDO Society (Jumuia ya Vikundi vya Wenye Viwanda na Biashara Ndogondogo, community of groups of small producers and small business), an informal economy umbrella organisation counting approximately 60,000 members, as well as several board members of Migahawa (cafeteria), an association of food vendors at Ilala market, and of UWAWADAR (Umoja wa Wajasiliamali Walemavu Mkoa wa Dar es Salaam), an association of entrepreneurs with disabilities who operated their stalls at Karume food market and the Machinga Complex. The two associations were registered in their respective markets but none of the interviewed members held an official business license.

26Generally, the informal nature of their work was only a minor concern for the traders. Their perspective was perhaps best summarized in the spontaneous reaction by Lazaro, a machinga working near Karume market, selling baseball caps and beanies, which he neatly arranged on a mat next to the road. When I asked him why he chose to work informally, he exclaimed: “Informal? But I’m here, on the street! Everyone can see me. How can I be informal?” After I clarified that my question aimed at the official registration and licensing procedure for his moveable shop, he claimed that apart from the infrequent clearance raids by the city militias, in which he had to pay harsh fines or bribes, the government did not care about a business as small and unsteady as his. Moreover, he did not see how registering would help with his daily chores or improve his income.

27Lazaro’s response captures recurring themes of my discussions of extra-legality and formalisation with traders. Firstly, it points towards the paradoxical relation between visibility in public space and legality. On the one hand, being visible exposes the traders to the considerable risk of severe fines and physical abuse as well as criminal persecution with up to six months in prison. On the other hand, high visibility in prominent locations is key for advertising and selling their goods, and there is much competition among traders for the most visible spots along busy roads and intersections, bus stands or traditional street market areas such as Kariakoo, Ilala, Ubungo or Mwenge. Visibility is both a necessity and a status symbol for traders; Lazaro, for example, took pride in having occupied a noticeable spot at a main road in Dar es Salaam for almost two years, and he was paying high maintenance costs in fines and bribes for it.

28These popular locations are however also the most congested, and importantly, the ones from which the city administration wants the traders most urgently removed. By contrast, the areas designated by the city administration for the establishment of new markets, to which traders are expected to move in order to set up a more permanent business in compliance with the law, are often far away from traffic hubs and lack the footfall the traders depend on (Lyons et al. 2012, The Citizen 2016). During the interviews, several traders explained that officially approved and simultaneously lucrative trading space, for instance at the markets along the bus lines on Morogoro Road, was rare and available only to experienced traders with sufficient capital. Especially machingas who had not been able to accumulate savings considered themselves forced to work in open and visible spaces, inevitably breaking the law.

29Moreover, for the traders, getting a license or officially registering the business is part of often complex cost-benefit calculations. For machingas like Lazaro, formalisation was no option. He did not have a fixed address for his business (indeed, he did not even have a home address in Dar es Salaam, where he stayed at a relative’s house), and moving his trade to a designated market area would rob him of his lucrative, highly visible spot and expose him to competition. Further, his income was small and unstable, since earning up to 25,000 Tanzanian Shilling (approximately 12 USD) on a successful day would often have to compensate for days of zero profit, or even a negative balance due to confiscations or bribes on other days. Although business was overall not bad, he had not managed to save up or expand his business during the time he had worked in Dar es Salaam, and he was not sure if he wanted to continue in this line of work. For these reasons, he preferred the infrequent penalty payments to long-term commitments and regular fees. Among the other machingas, opinion was split: Not all of them qualified as self-employed but were actually hired by larger retailers, selling items on commission with a very small profit margin. Many could simply not afford having a licensed shop or stall in a lucrative area, but hoped that one day, they could expand and become registered business owners. The others did not want to formalise, either because they were only temporary machingas looking for better work, or because they feared the restrictions and costs coming with formalisation.

30The situation was different for the stationary traders. For instance, Rose, who offered breakfast together with two other women at a roadside restaurant near Makumbusho, had sold food in different locations previously and twice lost her livelihood in evictions. At the present location, although without a license, she had been able to work without disturbance for several months and business was good. She had a broad customer base of taxi drivers, machingas as well as white-collar workers, among them police officers and city clerks. The women hoped to negotiate a deal with the municipality allowing them to build more permanent structures, but they were pessimistic about their prospects of formalising the restaurant, as they could not afford to buy or rent the otherwise unused space. Similarly, to the other stationary traders and particularly for market traders of Migahawa and UWAWADAR, formalisation and business registration appeared to be the least of their concerns. They were already paying fees and rents for their space, and willing to formalise as long as this was at affordable rates. They however pointed towards matters that are more urgent: poor infrastructure and services at their workplace; insufficient participation opportunities and transparency in the management and development of the markets; lacking access to education and skill training; and finally, missing recognition and respect for their work.

31Already this brief summary of diverse experiences shows that moving on from informal work to a permanent and formalised business is not considered a priority or the norm among traders. Particularly machingas, arguably the most vulnerable among them, do not fit into the picture of the dichotomous and hierarchical separation between informal and formal economy. The rigid conception of wealth as the result of putting assets and property to their most effective use through formalisation unsurprisingly fails those who have few assets and property to begin with. Significantly, to all the interviewed traders, the matter of formalisation was interrelated to other factors and constrains, such as income security and future prospects. In this vein, VIBINDO promotes a multi-pronged approach in which the goal of formalisation is embedded into local development policies that are conducive for small business. This includes advocacy and lobbying for members at local authorities, skill training, provision of finance and business facilities and the establishment of micro health insurance schemes. VIBINDO hence mirrors the more comprehensive approach towards formalisation of the ILO and TUICO, with the important difference that members of VIBINDO are organised as business owners rather than workers.

32Throughout conversations with traders and in observing the bustling activities in the streets, street trade was represented by the associations, individual traders and customers alike as a necessity and legitimate way of making a living. This stood in stark contrast to the negative portrayal of informal trade displayed in the hostile approach of the municipal administration as well as in the government reform proposals, according to which hawking particularly does not qualify as rightful and valuable income generation. To Lazaro as well as many other traders, the lawlessness of their work was caused by unsympathetic laws and their enforcement, not by street trade in itself. With very few exceptions, the traders had not chosen informal work because it offered attractive options to them, but due to missing alternatives. Hawking and trading presented a way to accumulate wealth, but primarily, traders considered it respectable work, an opportunity to escape life in rural poverty and to provide for themselves and their family.

33For the traders and their customers, it was unacceptable that making a living was treated as a crime, and traders generally shared the impression of politics and the law as detached from their lives. Frequent instances of high-profile corruption scandals, everyday bribing of state officials and abuse by the city militias undermined the trust in government and, in the view of some traders, created an incentive to resist registration and taxation. Mudi, a machinga selling leather belts in the Posta area, complained about what he perceived as injustice, following the loss of his wares in a clearance raid: “So you know, the city council people come and arrest us because we’re breaking the law, but they take our money, our stuff for themselves, so you tell me, who is a thief? They are paid to chase us and they steal from us but we have to run away or we go to jail.” Experiencing law enforcement as despotic, many machingas openly contested the official distinction between legal and illegal money-making, claiming it was arbitrary and serving the interests of the rich and powerful. In this political climate, the conversations revealed the sharp gap between the conception of the ILD and MKURABITA on the one hand, in which the informal economy is a problem posing limits to growth and in dire need of formalisation, and the traders’ views on the other hand, in which the economy was marked by limited opportunities and legal irregularities reached all the way to the top of government.


34In this paper, I have illustrated how the normatively and politically charged concept of the informal economy continues to steer policies towards urban street trade. As Hart outlined in his seminal contribution, the value of the informal economy is not pre-given but constructed: With its conceptual link between the informal economy and extra-legality, and the resulting fixation on the formalisation of assets and business, the MKURABITA reform agenda presents informal street trade as incompatible with a modern economy and legal system. Somewhat tautologically, by tying legality to formalisation, and formalisation to a fixed business address, laws and by-laws fail to recognize street trading and particularly hawking as income activities which offer opportunities to many poor Tanzanians for the very reason that they are informal. As became clear in the traders’ responses, formalising assets and property to generate wealth holds little promise for those who take up street trade because they lack assets and property. Traders’ work is not recognised as a legitimate and valuable contribution to their own livelihood or the economy as a whole, while the formal-informal binary renders traders’ use of public space illegal and even a criminal offense. The conception of street trade as illegal, illegitimate and in dire need of formalisation clashes sharply – and violently in real life – with the way traders experience the informality, legality and, importantly, the legitimacy of their work.

35Much of what I learned about street trade in Dar es Salaam attests to a structuralist perspective on the informal economy. For many traders, particularly the machingas, it was a means of last resort, offering an income but also exposing them to exploitation and abuse. Informality was not a relic of the past to them but a necessity of today; and only very few actively chose to work informally to avoid the costs and limitations of a registered business. The majority of the traders were not opposed to formalisation per se, but formalisation depended on a consideration of monetary and non-monetary costs and benefits: their resources and income, access to services and education as well as to affordable and suitable space, transparency and participation in the management of markets, and crucially, the legitimacy and trustworthiness of the law and of local and national government. My study also allowed a glimpse into the diversity among street traders. Their various backgrounds, actual income and working conditions, experiences with law enforcement and their hopes for the future highlighted the limits of conceptualizing informal street trade in simplistic, clear-cut categories. This is exemplified by the difference between TUICO and VIBINDO, who both pursue a more comprehensive approach towards formalisation but organise traders as workers or as business owners. Finally, counter to the goal of formalisation, which the Tanzanian government, the ILO, TUICO and VIBINDO share at least in the long run, informal street trade is likely to stay an integral part of Tanzanian city life for some time to come. President Magufuli recognised this when he instructed city administrations to allow traders on the streets. It is too early to assess how deep this latest wave of tolerance will go in changing the attitudes towards traders and easing the tensions in urban spaces, especially since any long-term solution will also greatly depend on the government’s ability to facilitate large-scale job creation. But it is time to thoroughly re-evaluate the usefulness of ‘informality’ as a concept and target of policy intervention.

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Electronic reference

Ilona Steiler, What’s in a Word? The Conceptual Politics of ‘Informal’ Street Trade in Dar es SalaamArticulo - Journal of Urban Research [Online], 17-18 | 2018, Online since 25 February 2018, connection on 02 October 2023. URL:; DOI:

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About the author

Ilona Steiler

Ilona Steiler is a PhD candidate in Development Studies at the University of Helsinki, Finland. Email:

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