MEKELLE UNIVERISTY
COLLEGE OF BUSSINESS AND ECONOMICS
DEPARTMENT OF ECONOMICS
FINAL YEAR RESEARCH TITTLE
CAUSE AND EFFECT OF INFORMAL SECTORS:INCASE OF STREET
VENDORS IN MEKELLE(KEDEMAY WEYANE kebelle) ,ETHIOPIA.
NAME:GUESH BERHE
STATUS :EXTENSION STUDENT
PROGRAM:DEGREE
YEAR:2017E.C
Research Proposal
Title: Causes and Effects of the Informal Sector: A Case Study of Street Vendors in Kedamay Weyane
Kebele, Mekelle, Ethiopia
1) Introduction
The informal sector is a crucial part of many developing economies, providing employment and income
for individuals who may lack access to formal job opportunities. In Ethiopia, particularly in urban centers
like Mekelle, street vending is a prominent form of informal employment. Despite its economic
significance, the informal sector faces challenges such as lack of legal recognition, limited access to
financial services, and vulnerability to law enforcement actions.
This study aims to examine the causes that push individuals into street vending and analyze its economic
and social effects. Understanding these dynamics will help policymakers design strategies to integrate
informal sector workers into the formal economy while addressing their challenges.
2) Research Objectives
i. To identify the primary factors driving individuals into street vending in Kedamay Weyane
Kebele.
ii. To assess the economic and social impact of street vending on vendors and the community.
iii. To explore the challenges faced by street vendors in the informal sector.
iv. To provide policy recommendations for improving the livelihoods of street vendors.
3) Research Questions
i. What are the main reasons individuals engage in street vending in Mekelle?
ii. How does street vending contribute to the local economy and livelihoods?
iii. What are the major challenges faced by street vendors?
iv. What policy measures can be taken to address the challenges and enhance the benefits of the
informal sector?
4) Literature Review
The informal sector is a significant contributor to employment in Ethiopia, with street vending being one
of the most visible forms of informal work. Studies indicate that individuals engage in street vending due
to poverty, lack of formal job opportunities, and low entry barriers. However, they face issues such as
police harassment, lack of infrastructure, and unstable incomes.
Previous research on Ethiopia’s informal economy highlights both its economic contributions and the
regulatory challenges it faces. While street vendors provide affordable goods and services, they often
operate in insecure conditions without legal protection. Understanding these dynamics in Mekelle will
contribute to broader discussions on urban informal economies.
5) Methodology
Research Design
This study will employ a mixed-methods approach, combining quantitative surveys with qualitative
interviews to ensure a comprehensive analysis.
Data Collection Methods
Surveys: Structured questionnaires will be administered to 100 street vendors in Kedamay Weyane
Kebele to gather data on their socio-economic background, reasons for engaging in street vending,
income levels, and challenges.
Interviews: In-depth interviews will be conducted with local government officials, business
associations, and community leaders to understand the broader implications of the informal sector.
Observations: Direct field observations will help assess the working conditions of street vendors.
Data Analysis
Quantitative data (from surveys) will be analyzed using SPSS or Excel, applying descriptive statistics
such as percentages and averages.
Qualitative data (from interviews) will be analyzed thematically to identify common trends and
perspectives.
6) Significance of the Study
This research will provide insights into the economic and social role of street vending in Mekelle, helping
policymakers and stakeholders address the challenges faced by informal workers. Findings can
contribute to strategies for integrating the informal sector into urban economic
planning.
7) Expected Challenges and Limitations
Reluctance of vendors to provide information due to fear of government intervention.
Limited access to official data on the informal economy.
Time and resource constraints affecting the sample size.
8) References
International Labour Organization (ILO), 2020 – The Informal Economy in Africa.
Tadele, G. & Ayele, T., 2018 – Street Vending and Urban Economy in Ethiopia.
UN-Habitat, 2021 – Urban Informal Economies and Livelihoods in Ethiopia.
Ethiopian Central Statistics Agency (CSA), 2019 – Employment Trends in
Ethiopia.
Chen, M. A., 2012 – The Informal Economy: Definitions, Theories, and
Policies.
Roever, S., 2016 – Informal Trade and the Governance of Public Space.
Conclusion
This study aims to explore the causes and effects of street vending in the informal sector,
with a focus on Kedamay Weyane Kebele in Mekelle, Ethiopia. The research will identify the
factors driving individuals into street vending, assess its economic impact, and highlight the
challenges faced by vendors. The findings will contribute to policymaking by offering insights
into how informal workers can be better supported and integrated into the economy.
Ultimately, the study seeks to balance economic growth with sustainable urban
development, ensuring that the informal sector is recognized as a vital component of the
local economy.
