Informal trade or unrecorded trade is broadly defined as all trade activities between any two countries which are not included in the national income according to national income conventions because they are not captured by official national income statistics. In addition to cross borders, informal trade also covers domestic trade on the pavements and market-places, informal trade contracts based on trust and the given word, and the portion of official trade that goes unrecorded or under-recorded.
Informal trade is one of the main sectors providing job creation to a large proportion of population in Africa. While it is difficult to get an accurate overview of the extent of informal cross-border trade in Sub-Saharan Africa, reviewed surveys suggest that such trade still represents a significant proportion of regional cross-border trade. On average, it provides between 20 per cent and 75 per cent of total employment in most countries, with the exception of South Africa, where the estimated figure is 12 per cent of the active population (McLachlan, 2005). In addition to job creation, informal sector is also one of the major sources of income among African population. It is estimated that about 60 to 70 per cent of African families are being sustained by income earned in the informal sector, either directly as operators, or indirectly as beneficiaries of the services it provides.