The informal sector being labour intensive creates employment opportunity thereby reducing poverty among individual Ugandans.

The sector tends to engage in the production of essential goods and services. This benefits the consumers, especially the low income groups.

Uganda can conserve some of her foreign exchange, because the informal sector requires little of it, in any.

The informal sector in Uganda, quite often, provide their own training without costs to the state. This training promotes prospects for entrepreneurship.

Local production activities are encouraged e.g repair works, market provision of tools and implements, and the provision of cheap and afford consumer goods required for the local communities' daily needs.

Training costs tend to reduce, since the informal sector often produces mainly intermediate goods e.g building material such as bricks, tiles, ventilators, furniture, doors, windows, etc.

The informal sector engages in small capital requiring projects usually mobilized through family savings. This enables low income earners and even the unskilled to participate in production activities.

 

Government revenue through taxation is likely to increase, as it can be collected from various informal sector activities.

It is a vital source of income for the underemployed such as hawkers, shoe shiners, repairers, etc.

The growth of the informal sector can, consequently, lead to its transformation into a modern and dynamic sector.

The informal sector promotes the use of appropriate technology, given Uganda's prevailing suitable conditions.

The sector has got linkages in production i.e. forward and backward linkages with other sectors of the national economy. Such linkages tend to lead to achievement of an integrated economy.

The poor people in Uganda need to be supported. Since the informal sector in the country is dominated by the poor, its promotion can go a long way supporting them.

The informal sectors promote the spirit of self-sufficiency, thereby reducing t prevailing dependence on simple consumable products, and intermediate good.

Managerial difficulties are often minimized with the informal sector, since the sector is locally owned and controlled in most cases, on family lines.