The role of the informal sector in the economy of the DRC

The main objective of this study is to assess the role of the informal sector in the economy of the Democratic Republic of Congo (DRC) by measuring its linkage with the formal sector. An attempt to assess the linkage between the formal and informal sectors was carried out by using quantitative techniques that range from the construction of a Social Accounting Matrix (SAM) to the building of a Computable General Equilibrium (CGE) model to assess the impact of each of the sectors in the DRC economy. A new SAM that incorporates formal and informal sector is constructed whereby different techniques and methodologies are applied. The data sources and techniques used to build the SAM and CGE model are described. The DRC Formal Informal Sector Model (DRCFIM) is constructed based on ORANI model of the Australian economy. DRCFIM is used to perform two policy simulations. The first policy simulation assessed the impact of land use on the DRC economy and the second is on trade liberalisation.

Autorentext

Jean Luc Erero holds a Master degree in Statistics, another Master degree in Economics and a Ph.D. in Economics. He developed a CGE model for the Democratic Republic of Congo (DRC) based on the Australian ORANI-G model. He is the first scholar to have developed a CGE model that linked the formal and informal sectors of the DRC.