In Zambia, among the Bemba people, there’s a wedding tradition called Matebeto. It’s a feast a bride’s family prepares to thank and honour the groom — big pots of food, cooked and organised entirely through family networks, borrowed labour, and community goodwill. No business licence. No bank loan. No government office involved. Just people pooling what they have to create something valuable.
I think about Matebeto often when I look at Uganda’s markets, garages, and roadside workshops. Because what’s happening there is not so different. A mechanic in Katwe learned his trade the same way — watching, helping, slowly taking on customers of his own. A market vendor in Owino built her stock through a savings group, not a bank. None of it shows up in GDP statistics the way a registered company does. But it is real work, real income, and real value — created the informal way.
Here’s the thing policymakers keep missing: the informal sector isn’t a small, messy corner of Uganda’s economy. It’s the main economy. Most Ugandans — especially young people and women — earn their living outside any formal business registry. They trade, repair, cook, build, transport, and sell without waiting for a government programme to create a job for them. And that’s actually the sector’s biggest strength. Anyone with a skill and a bit of hustle can start earning within days. No one is waiting two years for a factory to be built or a foreign investor to show up. That’s why the informal sector, not the formal one, is Uganda’s real jobs engine.
Informal businesses run on something formal ones often lack — trust. Skills get passed down through apprenticeships. Credit comes from savings groups where your neighbours vouch for you, not from a bank that wants collateral you don’t have. Uganda already has its own version of this in village savings and loan associations, or VSLAs. It’s the same idea as Matebeto: mobilise what the community has, and get things done.
The mistake many governments make — and Uganda has flirted with this too — is treating informal traders as a problem to be cleaned up. Sending in enforcement teams. Demanding licences people can’t afford. Evicting vendors from the spots where their customers actually are. This doesn’t formalise anything. It just destroys livelihoods and pushes people further into precarity. The smarter path is to support the informal sector as it is, and build gentle bridges toward formality — not force people through a door that isn’t built for them.
A few practical steps would go a long way. Government and development partners should give people finance they can actually use — most informal traders can’t meet a bank’s collateral requirements, so scaling up support for SACCOs and VSLAs, and designing loan products around mobile money transaction records and group guarantees, would meet people where they already are financially. Vendors also need a secure place to work. Constant eviction threats keep traders small and mobile because they can’t risk investing in a fixed spot; formalising access to market stalls and trading zones, with basic sanitation and security, would let businesses finally grow.
There’s also a case for recognising the skills people already have. Uganda’s informal apprenticeship system — in mechanics, tailoring, carpentry — is a real skills pipeline, even if no certificate comes out of it. Government could offer simple certification for these skills, plus optional technical top-ups, without disrupting how people already learn. Formalizing itself needs to be made worth it, too. Instead of punishing traders into registering, government could offer a cheap, fast, tiered registration system with real benefits attached — access to public contracts, insurance, or business support. People formalize when there’s something in it for them, not because they’re threatened.
Meeting people where they already are extends to technology as well. Mobile money is already widespread across Uganda. Government and banks should build on this to help traders keep simple digital records, which over time builds the credit history they currently lack. And finally, traders need a seat at the table. Zambia’s informal traders have associations like Alliance for Zambia Informal Economy Associations (AZIEA) that push government to consult them before new rules are made. Uganda’s informal sector needs the same — real representation, not an afterthought.
Matebeto endures in Zambia because it channels what a community already has toward something everyone values — without needing a formal institution to make it happen. Uganda’s informal economy is doing the very same thing, every day, at a national scale. The job of government isn’t to replace this system. It’s to give it what it’s missing — finance, space, recognition, and a voice — so it can keep doing what it already does best: putting Ugandans to work.
By Nathan Were
Mr. Were works to advance farming systems in Africa based in South Africa.
Email: [email protected]
