Informal Sector

E-waste management is usually divided in two worlds: the “formal” and the “informal”, although they are rarely formally defined. The term “informal” sector has received many meanings:

  • As an equivalent to the subsistence economy, formed of people excluded from the capitalist economy.
  • As a sector carrying out illegal activities.
  • As the sector where unregistered business operate, avoiding paying taxes.
  • As the one where hazardous methods are taking place, in contrast with the formal economy that would be clean by definition.


These images are used to differentiate “informal” from “formal” recycling, although they do not provide information about legality, registration, taxes, or even methods. (Source: Amoyaw-Osei 2011).

A dualism between an informal sector (illegal, unregistered, hazardous) and a formal one (all the contrary) is far from reality. Everything is much more mixed, registered businesses pollute and good practices also happen in the informal economy. Dealing appropriately with the informal e-waste sector is crucial, as it is widely recognised in the literature. Cooperation rather than competition is advocated.

For instance in Ghana most of the economy is informal. There is only one formal e-waste recycling facility that can’t compete with informal e-waste collection, a situation also observed for instance in India and Peru. However, Ghana’s e-waste strategy aims at substituting informal recycling with formal systems.

High-tech, capital intensive recycling factories are not considered appropriate for every country. However, in India and China there have been cases where large scale e-waste recycling projects have displaced the efficient informal network, and failed afterwards, to leave the place worst than at the beginning. Many formal companies assume that users will drop their e-waste for free. This is not the case, and informal collectors understand it much better.

The informal sector is unlikely to disappear via regulations. Recognising the high collection rates achieved by the informal sector, finding better methods for informal recycling, currently lacking, are potential factors for the success of an efficient e-waste management scheme.

In Recyhub we want to contribute to the work of those struggling to survive. We want to focus on improving e-waste recycling methods for the informal sector.