The Parliament of the Economic Community of West African States (ECOWAS) has expressed concern over the dominance of the informal sector across West Africa, warning that nearly 90 per cent of economic activities and at least 60 per cent of the region’s workforce remain outside the formal economy.
Lawmakers said the trend continues to hinder economic growth, job creation and regional competitiveness, underscoring the need for urgent reforms to strengthen and formalise Micro, Small and Medium Enterprises (MSMEs).
The call was made on Monday during the opening of a Joint Committee meeting of the ECOWAS Parliament in Cotonou, Benin Republic, where parliamentarians, policymakers, private sector representatives and development partners gathered to discuss strategies for integrating millions of informal businesses into the formal economy.
Speaking on behalf of the Joint Committee on Industry and Private Sector, Macroeconomic Policy and Economic Research, Administration, Finance and Budget, and Public Accounts, Co-Chairperson Hon. Alhagie Darbo said the figures reflected both the resilience of West African entrepreneurs and the shortcomings of existing policies.
According to him, MSMEs remain the backbone of the region’s economies by creating jobs, driving innovation, promoting entrepreneurship, empowering women and youths, and facilitating cross-border trade. However, he noted that the vast majority continue to operate informally, limiting their access to finance, technology, markets, business support services and legal protection.
“It is estimated that the informal sector accounts for nearly 90 per cent of economic activities and employs not less than 60 per cent of our labour force across member states,” Darbo said.
“While this demonstrates the entrepreneurial spirit of our people, it also highlights the urgent need to create enabling policies that encourage formalisation, improve productivity and integrate MSMEs into regional and continental value chains.”
He described the formalisation of small businesses as a strategic imperative for achieving sustainable development, reducing poverty and accelerating regional integration.
Darbo urged ECOWAS member states to remove barriers hindering the growth of MSMEs through harmonised policies, improved access to finance, digital transformation, enhanced productive capacity and greater participation in regional value chains under the ECOWAS Trade Liberalisation Scheme (ETLS) and the African Continental Free Trade Area (AfCFTA).
He added that the reforms are consistent with ECOWAS Vision 2050, the regional bloc’s long-term development blueprint aimed at building a peaceful, prosperous and fully integrated West Africa through inclusive economic growth.
Declaring the meeting open, Speaker of the ECOWAS Parliament, Hon. Hadja Memounatou Ibrahima, represented by Second Deputy Speaker Hon. Adjaratou Coulibaly, linked economic empowerment to the region’s growing security challenges.
She said expanding opportunities for women and young people through thriving MSMEs would help tackle unemployment and address some of the root causes of insecurity across the sub-region.
According to her, creating an environment that enables citizens to participate meaningfully in economic activities remains one of the most effective long-term strategies for promoting peace, stability and sustainable development.
The committee is expected to submit recommendations to ECOWAS institutions and member states aimed at creating a more business-friendly environment, accelerating industrialisation, boosting intra-African trade and improving the global competitiveness of West African economies.
Across Africa, MSMEs account for more than 90 per cent of businesses and remain the largest source of employment outside the public sector. However, many continue to operate informally due to multiple taxation, burdensome regulations, inadequate infrastructure, limited access to affordable finance and weak institutional support.
The challenge has become increasingly significant as ECOWAS intensifies efforts to deepen regional integration through the ECOWAS Trade Liberalisation Scheme and the African Continental Free Trade Area, both of which depend on competitive, formalised businesses capable of participating effectively in cross-border trade.
