Challenges And Prospects Of Informal Sector In Alleviating Urban Poverty In Yeka Sub-city Of Addis Ababa City Administration Ethiopia.

This study focuses on the role of the informal sector in alleviating poverty in Yeka sub city,rnAddis Ababa, Ethiopia. The objectives of this research were exploring general context in which therninformal sector operates, assessing the living and working conditions of informal sector operators,rnexploring the contribution of the informal sector to reducing poverty, identifying coping mechanism ofrnpoverty in the urban informal sector and forwarding recommendation.rnA descriptive survey design was used and a purposive sample of two respondent groups, namelyrngovernment officials and the informal sector participants themselves was drawn, and personalrninterviews conducted and questionnaires were filled. The purpose of the interviews of the firstrnrespondent group was to discover their perception of the informal sector in Addis Ababa City inrngeneral, and in Yeka sub city in particular. This perception was vital for it was clear that thisrngroup influenced government policies much more than the general public. The informal sectorrnparticipants themselves filled a questionnaire to learn how the informal sector operated, its scopernand benefits, how successful it was in alleviating poverty in Yeka sub city.rnThe results show that there were mixed feelings among the people in each of the two respondentrngroups. Although many of the government officials were positive, mainly because therngovernment’s policy of free enterprise and promote the formalization of the informal sectorrnpublicly, they still believe there is a need to control the sector’s operations. More than 83 percentrnof the informal sector participants are making a comfortable livelihood through their activitiesrndespite some difficulties. The lack of employment in the formal sector and the desire to survivernwere found to be the two pressing problems that enhance the growth of the informal sector inrnYeka sub city. The participants could further expand their informal business activities if accessrnto credit facilities and working space were made available. However, further research is requiredrninto the size and contribution of this sector to poverty alleviation and economic growth.rnKeywords: Informal Sector, poverty alleviation

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