Skip to content

Trends Shaping Africa’s Informal Retail Sector

The informal retail sector in Africa, a dynamic sector that plays a crucial role in the continent’s economic development, is experiencing massive growth. It encompasses small, unregistered businesses that operate in the shadows of the formal economy. This sector includes street vendors, market stalls, and small shops, typically owned and operated by individuals or small groups. Rapid urbanization and technological advancement are a few of the factors that have contributed to this thriving sector of the African economy. While it is difficult to estimate the exact worth of Africa’s informal retail sector because of its unorganized nature, some estimates suggest that it makes up a significant portion of the continent’s overall retail market. It accounts for up to 80% of total retail sales in some countries, contributes $2.6 trillion to the region’s nominal GDP, and drives $1 trillion in annual sales. Making or receiving payments in Africa through mobile phones is becoming as popular as taking pictures. The overall growth of the logistics space reduces the chances of stockouts for informal retail players and enables them to meet customers demand in far-flung areas. The “Buy Now Pay Later” (BNPL) model has been on the rise in Africa’s informal retail market in recent years.