The Informal Sector And Prospects For Graduation Into Small And Medium Enterprises

Ten informal sector operators in the capital of Mozambique, a Souther African country are interviewed and asked about their rate of success in generating income and growing and which factors are important for positive (and negative) outcomes.

The effects of regulation, taxation and the behaviour of the police are found to be important:

- the more complicated regulation is, the more difficult is for the informal operators to grow;

- the higher the municipal and other taxes, the more difficult is to generate surplus for increased investments

- the police behaviour, many a times lowly paid, is generaly detrimental, as unchecked discretionary "fees" are levied with little possibility to recoup losses from this type of behaviour.