In June 2025, UNDP published its Baseline Study of the Informal Economy across Africa, Caribbean and Pacific regions — the most comprehensive assessment of unregistered economic activity in the developing world since the pandemic. Its Central African findings confirmed what anyone who has spent time in Kinshasa's Marché de la Liberté or Douala's Marché Congo already knew: the informal economy is not a shadow system operating alongside the formal one. It is the main system. The formal one is the shadow.
In the DRC, 82% of the workforce is employed in the informal sector, according to BTI 2026, published earlier this year. Approximately 85% of businesses operate informally — specifically to avoid the taxes and regulatory costs that formal registration would impose. The AfDB's June 2026 country outlook for the DRC records a tax burden of 13.5% of GDP in 2025, attributing it directly to "a narrow tax base, pervasive informality, and limited financial inclusion." For comparison, the OECD average tax-to-GDP ratio is approximately 34%. The DRC government collects, in formal taxes, less than half of what the average middle-income country manages. The gap is not a measurement problem. It is the informal economy, operating at scale, by design.
Why informality is a rational choice
The standard policy framing treats informality as a failure — of regulation, of enforcement, of state capacity. That framing gets the causality backwards. In the DRC, 85% of businesses are not informal because they failed to register. They are informal because registering carries costs that formal operation cannot justify. As recently as 2020, incorporating a company in the DRC took 24 days on average. ANAPI's one-stop shop, supported by the World Bank, reduced that to 7 days by 2023 — a genuine reform achievement. But business registration is only the entry point. After registration comes tax compliance, labour code obligations, customs procedures, and regulatory oversight — all of which, in the DRC context, involve not just formal costs but informal ones: the bribes that accompany every interaction with a state official who controls something the business needs. Credit to the private sector stands at just 3.2% of GDP, with interest rates ranging from 18 to 25%. A formally registered small business faces regulatory costs, tax obligations, and borrowing costs at rates that make informality economically superior at almost every scale below medium enterprise. This is not a cultural pathology or a governance failure in isolation. It is a rational response to an institutional environment that offers the costs of formality without the benefits.
The financial architecture informality built
Because less than 26% of the DRC population held a formal bank account as of the most recent Global Findex data — and the figures are lower in CAR and Chad — capital mobilization across the region has developed its own parallel infrastructure. Tontines — rotating savings and credit associations where members contribute fixed amounts at regular intervals and each member in turn receives the pool — function as the primary source of credit for millions of entrepreneurs who have no credit score, no collateral, and no relationship with a commercial bank. These are not informal in the sense of being unstructured. They are governed by strict social contracts, enforced through reputation and community pressure, and have historically had lower default rates than formal microfinance in the same communities. In recent years, tontines have integrated seamlessly with mobile money networks. A member's contribution is transferred via Airtel Money or Orange Money. The pool is held in a mobile wallet. Disbursements are instant. The entire credit cycle — contribution, pooling, disbursement, repayment — occurs without a bank, without a credit bureau, and without a regulatory framework. It is faster, cheaper, and more accessible than anything the formal financial system offers at that income level.
The tax problem that formalization cannot solve
The central fiscal consequence of the informal economy's dominance is structural and difficult to escape. With 82% of the workforce and approximately 40-50% of GDP operating outside the formal tax net, governments in the region cannot collect the revenue required to fund the public goods — infrastructure, healthcare, education, security — that would make formal operation attractive in the first place. The DRC's 13.5% tax-to-GDP ratio is the result of this loop, not its cause.
The standard policy response — aggressive formalization campaigns, stricter enforcement, heavier penalties for unregistered businesses — has consistently failed and sometimes made things worse. When Zimbabwe ran formalization campaigns in the 2000s and Nigeria has done periodically, the result was not a broader tax base but a contraction of economic activity as traders moved, dispersed, or simply stopped operating rather than register. The World Bank's own enterprise surveys document the same dynamic across Central Africa: small businesses respond to enforcement pressure by reducing their visible footprint, not by registering.
The alternative approach — lowering the cost of formality rather than raising the cost of informality — has produced more durable results where it has been tried. ANAPI's reforms in the DRC reduced incorporation time. The DRC's digital tax collection platform Sigida-Taxe boosted non-mining revenues by 18% in 2023 by making compliance faster rather than enforcement harsher. These are small movements in a large structural problem, but their direction is right: the informal economy will formalize when formality becomes worth the cost, and not before.
What this means for the macroeconomic picture
The AfDB's June 2026 DRC outlook puts the broader implication plainly: "growth is non-inclusive, with a high Gini coefficient approaching 0.5 in 2024. Security spending crowds out social spending." With 67% of the population living in extreme poverty and 82% of households depending on subsistence farming or informal trade, the DRC's formal GDP growth figure — 5.5% in 2025 — describes an economy that is growing in its extractive and mining sectors while leaving most of its population in exactly the economic environment that makes informality rational and formal participation irrational.
Central Africa's informal economy is not a problem to be solved before development can happen. It is the development that is already happening, at the scale and in the forms that the institutional environment allows. The policy question is not how to bring it inside the formal system. It is how to make the formal system worth entering — which requires a level of state capacity, regulatory predictability, and public goods delivery that most of the region has not yet demonstrated it can provide. Until that changes, the market in Kinshasa will keep running on its own rules, and the government's economic statistics will keep measuring something other than the economy most people actually live in.
