Informal sector dynamics are increasingly recognised as crucial to understanding urban economies in developing countries, particularly those with significant historical and cultural influences like Guinea. This study employs a qualitative approach to analyse existing literature on Guinean urban economies and interviews with local business owners and policymakers to gather insights into the informal sector’s structure and impact. A notable finding is that over 60% of urban businesses in Guinea operate informally, highlighting significant economic disparities and regulatory gaps that impede formalization efforts. Policymakers must address these challenges by implementing targeted interventions such as simplifying bureaucratic procedures and offering financial support to help businesses transition from informal to formal sectors. Specific recommendations include streamlining business registration processes, providing microfinance services to enhance the financial stability of small enterprises, and enforcing fair trade policies to protect market integrity.