From Extraction to Regeneration: Designing Systems for Africa’s Real Informal Economy

If informality is Africa’s real economy, what systems will upgrade and regenerate it rather than quietly extract from it?

Much policy debate still treats informality as a problem to be eliminated rather than a system to be understood. It is described as the part of the economy that has not yet made it into the formal, regulated, taxable mainstream. The Brookings Institution article written by Prof. Pierre Nguimkeu (Georgia State University) titled “Rethinking informality in Africa: An economy hiding in plain sight” reverses that logic. It argues that informality is not a deviation from Africa’s trajectory, but the dominant mode of economic organisation under conditions of scarce wage employment, incomplete markets and weak institutions. That shift in vantage point has serious consequences for how labour markets and labour mobility are governed.

If informality is the norm rather than the exception, policy cannot rest on the assumption that it will soon be absorbed into a formal wage economy. The question becomes: how does one design systems that make this real, existing economy more productive, less vulnerable and more developmental over time? The article leans towards “productive inclusion”: interventions that upgrade productivity, reduce risk and expand access to finance and markets for informal workers and firms, instead of trying to force them into institutional forms that do not fit.

One useful way to read the piece is as a critique of project logic and an implicit argument for infrastructure logic. Project logic approaches informality through pilots, workshops and time‑bound programmes: a training here, a digitised permit there, a compliance campaign somewhere else. These can be useful, but they rarely change how the system behaves once the funding ends. Infrastructure logic starts from a different place. It asks what durable arrangements – rules, platforms, financing mechanisms, data systems and feedback loops – would need to exist so that the default trajectory of informal work is gradual upgrading rather than stagnation.

Labour mobility sits squarely inside that infrastructure conversation. Informal and semi‑formal workers move across sectors and borders through a patchwork of weakly governed channels. In many cases, this mobility functions much like the rest of the informal economy: a great deal of activity, relatively little deliberate system design. If one accepts the article’s starting point, then the same logic applies here as in domestic labour markets. The choice is not between mobility and no mobility, but between unmanaged, extractive mobility and governed, regenerative mobility.

This is where a second idea connects directly to the first: regeneration versus extraction. If informality is the real economy, it matters whether surrounding systems reproduce capability or quietly consume it. Prof. Nguimkeu underlines the point that informal work sustains livelihoods at scale, but often in highly vulnerable conditions. When responses focus narrowly on pulling a small minority into formal wage jobs, or on extracting more tax from a fragile base, they risk weakening the very systems that hold things together. A regenerative lens instead asks whether today’s income gains make it more or less likely that there will be capable workers, functioning firms and resilient communities tomorrow.

Digitalisation sharpens this dilemma. The article highlights the potential of low‑skill‑biased digital technologies to raise productivity and expand market access for informal workers and firms. Yet digital visibility can be a double‑edged sword. When informal actors become more legible to the state and large platforms, they may gain access to finance and services—but they may also become more exposed to enforcement and new obligations without a matching increase in support. The sequencing question reappears: visibility becomes an asset only if it is coupled to infrastructure that delivers credit on fair terms, portable protection, skills recognition and usable dispute‑resolution, not just more control.

For policymakers, the value of this piece from The Brookings Institution lies less in any single policy prescription and more in this reframing. It invites readers to stop imagining a clean, formal labour market as the baseline and to start instead from the actual economy that exists. Once that move is made, it becomes natural to ask different questions: not “How do we eradicate informality?” but “What systems will upgrade it?” Not “How do we stop people leaving?” but “How do we design mobility and digital visibility so that they regenerate capability rather than deplete it?” The full article is well worth reading as a contribution to this emerging conversation, and as a prompt to reconsider how African work, skills and mobility are designed and governed in light of the world as it is, not as it used to be imagined.