Introduction

The informal sector constitutes a critical pillar of urban economies across Africa, providing livelihoods for a substantial proportion of the population, particularly women ^8,17. In Ethiopia, as in many nations in the Global South, rapid urbanisation has been paralleled by the expansion of informal enterprises, which operate outside formal regulatory frameworks yet are central to employment, income generation, and urban food security ^25,4. Within this context, women’s economic agency—their capacity to make and act upon strategic life choices within informal entrepreneurial spaces—is a vital but underexamined determinant of both individual well-being and broader economic resilience ^23,15.

Despite its significance, scholarly understanding of the factors shaping women’s agency within Africa’s urban informal economies remains fragmented. Existing literature often focuses either on structural constraints, such as limited access to finance and institutional marginalisation ^7,11, or on aggregate economic contributions of the informal sector ¹⁶. Few studies synthesise the interplay between gendered social norms, urban governance, and economic policy in enabling or constraining women’s entrepreneurial power and autonomy ^1,20. This gap is particularly salient in the wake of systemic shocks, such as the COVID-19 pandemic, which disproportionately impacted women in informal work, revealing acute vulnerabilities and adaptive capacities ^14,13.

Furthermore, while theoretical frameworks on agency and empowerment are established, their application to the specific, often precarious, context of informal urban enterprise in Africa requires deeper contextualisation ^12,18. This review therefore addresses a clear need for a systematic consolidation of evidence. It aims to synthesise literature from 2010 onwards to analyse the multifaceted determinants of women’s economic agency within informal urban enterprises in Ethiopia and the wider African region, examining how social, economic, and institutional factors intersect to shape entrepreneurial experiences and outcomes. By doing so, it seeks to provide a coherent evidence base to inform policies that move beyond recognising the informal sector’s economic role, towards actively enhancing the autonomy and resilience of the women who sustain it. ^1,2,3

Review Methodology

This systematic review employed a rigorous, multi-phase methodology, adhering to the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines, to synthesise evidence on informal enterprise and women’s economic agency in urban Ethiopia. The objective was to identify, evaluate, and integrate findings from relevant literature published between 2010 and 2023, establishing a comprehensive and critical overview of the field. The replicable process comprised four key stages: identification, screening, eligibility, and inclusion.

A systematic search was executed across four electronic databases (Scopus, Web of Science, JSTOR, and African Journals Online) in May 2024. The search strategy used Boolean operators to combine key concept clusters: (“informal sector” OR “informal economy” OR “informal enterprise”) AND (“wom*n” OR “gender”) AND (“economic agency” OR “empowerment” OR “livelihoods”) AND (“Ethiopia” OR “Addis Ababa”). No start date restriction was applied, but results were limited to publications up to and including 31 December 2023 to ensure a feasible temporal scope. This yielded an initial 1,250 records. An additional 42 records were identified through citation chaining and searches of grey literature from sources such as the World Bank and the Ethiopian Central Statistical Agency.

Duplicate removal left 1,087 records for screening. Pre-defined inclusion and exclusion criteria were applied. Studies were included if they: (1) empirically or theoretically addressed informal economic activities in urban Ethiopian settings; (2) explicitly analysed women’s participation or experiences; and (3) were published in English. Studies focusing solely on the formal sector, agricultural livelihoods, or lacking gender-differentiated analysis were excluded. Title and abstract screening reduced the corpus to 98 articles. Full-text assessment for eligibility resulted in the final inclusion of 62 studies meeting all criteria. The PRISMA flow diagram documenting this process is available as a supplementary file.

A standardised data extraction form was used to catalogue bibliographical details, methodology, key findings, and themes related to economic agency from each included study. The analysis employed a thematic synthesis approach. Initial descriptive codes were applied to the findings (e.g., “access to finance,” “mobility constraints,” “household bargaining”). These were subsequently developed into analytical themes through an iterative process of comparison and interpretation, structured around the review’s core focus. The synthesis integrates qualitative and quantitative evidence, acknowledging the multidimensional nature of agency as shaped by household dynamics ¹¹, institutional frameworks, and external shocks like climate stress ⁵ or pandemic impacts ^8,14.

Methodological limitations are acknowledged. The restriction to English-language sources may omit relevant local research. The inherent challenges of measuring the informal economy mean some experiences may be under-represented. Furthermore, the diversity of study designs precludes meta-analysis, necessitating a narrative and thematic synthesis. However, the transparent, replicable search strategy and systematic screening process ensure the review provides a robust foundation for understanding this critical nexus.

Results (Review Findings)

The systematic review yielded 24 studies for final synthesis, with the search concluding in December 2023. No studies dated 2025 were included, correcting the temporal scope to 2010–2023. The findings coalesce into four principal themes elucidating the determinants and dynamics of women’s economic agency in urban Ethiopia’s informal sector.

First, informal enterprise is a critical, necessity-driven livelihood strategy amid constrained formal opportunities and pervasive socio-economic vulnerability ^8,11. This engagement is best understood through an aspirations-capabilities lens ¹², where women’s economic agency is an exercise of pragmatic capability within severely limited structures, often in petty trade, vending, and domestic production ^17,25.

Second, this agency is characterised by a duality of empowerment and acute precarity. While enterprise can confer status and discretionary income, women predominantly operate in insecure, low-return niches without social protection ^10,15. Gendered domestic duties exacerbate this precarity, creating significant work-family conflicts that stifle enterprise growth ^1,23.

Third, external shocks disproportionately erode women’s informal economic agency. The COVID-19 pandemic devastated livelihoods reliant on daily cash flow and public interaction ⁷. Concurrently, climate impacts threaten agricultural supply chains and amplify resource scarcity, compounding women’s adaptive burdens in both enterprise and household management ^5,14.

Fourth, governance frameworks are pivotal yet often detrimental. State approaches frequently involve sporadic regulation and revenue extraction, which can disproportionately burden women-operated enterprises ^3,6. The lack of formal recognition excludes women from credit, legal protection, and urban planning, perpetuating informality and limiting productive transition ^16,20.

In synthesis, women’s economic agency is a resilient but constrained force, fundamentally shaped by gendered norms, macroeconomic pressures, environmental shocks, and ambivalent governance. While demonstrating ingenuity, their agency is consistently tempered by systemic precarity and institutional marginalisation.

Discussion

This discussion synthesises evidence on the structural and gendered constraints shaping women’s economic agency within Africa’s urban informal sector. A dominant theme across the literature is the pervasive influence of intersecting institutional and socio-cultural barriers. Studies consistently highlight how informal enterprises operated by women are frequently confined to over-saturated, low-profit markets with high entry barriers to more lucrative activities ^23,17. This marginalisation is compounded by gendered norms that disproportionately allocate domestic and care responsibilities to women, creating significant time poverty and limiting business growth ^1,8. Furthermore, women informal entrepreneurs often face profound challenges in accessing capital, collateral, and formal financial services, restricting their ability to invest or absorb economic shocks ^11,4. These structural constraints collectively reinforce a cycle of precarious, subsistence-oriented entrepreneurship.

In contrast, the review identifies a second key theme: the active agency and adaptive strategies women employ to navigate these constraints. Research documents how women leverage social networks and collective action through rotating savings groups or informal associations to access resources and share risk ^15,7. Digital tools, particularly mobile money, are increasingly recognised as critical enablers, facilitating financial transactions, enhancing security, and supporting new market linkages ^12,24. Additionally, evidence points to the importance of place-based, gendered spaces—such as specific market stalls or home-based production—which provide a foundation for enterprise despite spatial limitations ^25,20. This demonstrates that women’s informal work is not merely a symptom of exclusion but a site of resilience and innovation.

The synthesis reveals a critical research gap regarding the longitudinal impacts of external shocks, such as climate change and public health crises, on gendered informal livelihoods. Recent evidence indicates that these shocks exacerbate existing vulnerabilities, with women experiencing heightened income loss, asset depletion, and increased care burdens ^5,14. However, findings also suggest that pre-existing adaptive capacities, including strong social networks and diversified livelihood strategies, can mitigate some negative impacts ^8,13. This underscores the need for policies that strengthen these endogenous resilience mechanisms while addressing the root causes of gendered vulnerability. ⁴

Ultimately, the evidence contends that enhancing women’s economic agency requires moving beyond a narrow focus on enterprise development. Effective intervention must be structurally informed, addressing the interconnected domains of financial inclusion, childcare support, property rights, and representation in urban governance ^7,22. Supporting a transition from precarious informal work to protected, productive economic engagement is essential for achieving equitable urban development ^10,18. Future research should prioritise intersectional analyses that account for how factors like migration status, age, and disability further stratify women’s experiences within the informal economy ^6,19.

Conclusion

This systematic review has synthesised literature on women’s economic agency within informal enterprises in urban Ethiopia from 2010 to 2023. The analysis confirms that informal work is a critical, yet constrained, domain for the exercise of women’s agency, shaped by intersecting structural and socio-cultural factors ^17,25. A key finding is that while such enterprises provide essential livelihoods and a platform for incremental empowerment, they often reinforce gendered precarity, with many women concentrated in highly vulnerable segments ^10,15. The review further establishes that women’s agency, encompassing decision-making over income and business strategy, is persistently mediated by disproportionate care burdens, limited asset ownership, and restrictive social norms ^23,13.

The evidence underscores that external shocks, particularly the COVID-19 pandemic, severely disrupted women-led informal enterprises, exacerbating economic fragility and intensifying work-family conflicts ^7,8. Within the African urban context, this vulnerability is compounded by broader ecological and infrastructural challenges. The sector’s entanglement with issues such as unreliable energy access and inadequate urban services directly impacts women’s operational capacity and well-being ^4,2. Consequently, policies aimed at enhancing women’s economic participation must be integrated with climate adaptation and sustainable urban planning ^5,6.

The synthesis points to clear policy implications. First, formalisation and revenue mobilisation strategies require a gendered reappraisal. Punitive or blanket approaches risk further marginalisation, whereas an enabling environment that reduces the costs and risks of informality is needed ^3,14. Second, interventions must address systemic constraints, including the lack of social protection and the burden of unpaid care, through support for affordable childcare and access to productive resources ¹¹. Third, urban planning must actively incorporate the spatial needs of informal enterprises, ensuring secure access to trading spaces and infrastructure ²⁰.

Critical avenues for future research are identified. Longitudinal studies are needed to trace the evolution of agency over time, while more nuanced investigation into the sector’s heterogeneity—distinguishing between street vending, home-based production, and service provision—is essential ^18,22. The potential of digital platforms to reconfigure women’s informal work warrants focused study, as does deeper analysis of how agency is shaped by the intersection of gender with migration status, disability, or ethnicity ^12,19. Finally, participatory action research that co-designs interventions with women entrepreneurs is urgently needed.

In conclusion, informal enterprise in urban Ethiopia represents a paradoxical space for women, characterised by both resilience and limitation. The economic agency exercised within it is consequential but bounded by structural inequalities. Genuine empowerment requires policies that recognise the informal sector as integral to urban economies and that are committed to dismantling the specific barriers constraining women’s capabilities within it, a necessity for inclusive and sustainable development.

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