Action plan for formalization in the Solomon Islands takes shape

Financial inclusion, digitalization, and blended finance identified amongst potential pathways to formality for informal enterprises.

News | 19 July 2023
Honiara, Solomon Islands (ILO News) – A national action plan is taking shape to support the formalization of enterprises and employment in the Solomon Islands.

The development of a National Formalization Action Plan was discussed by representatives of the government as well as employers’ and workers’ organizations, civil society organizations and other national stakeholders, along with the ILO, the United Nations Development Programme (UNDP), the European Union (EU) and the Organisation of African, Caribbean and Pacific States (OACPS) at a technical meeting held in Honoria on 13 July 2023.

The meeting aimed to strengthen the draft national action plan and identify potential actions the Government of the Solomon Islands and other stakeholders can take to promote pathways to formality. It emphasizes the development of financial and non-financial incentives and support schemes for enterprises to formalize.


A large majority of the total labour force in the Solomon Islands is engaged in the informal economy, lacking formal work arrangements and social protection benefits. Informal enterprises contribute significantly to the country’s economy, where almost one-third of the total GDP is generated by informal enterprises.

However, informality poses a key barrier to growth for enterprises in particular and the economy at large. To address these challenges, the ILO in partnership with UNDP is working with relevant partners and national stakeholders in the Solomon Islands to build community resilience, foster economic diversification and promote pathways to formality for enterprises and their workers.

During his opening remarks, His Excellency Mr. Moses Kouni Mose, Ambassador Extraordinary and Plenipotentiary, Head of the Mission of the Solomon Islands to the European Union, stressed the “significance of this undertaking for our country’s economic growth and for the betterment of our people’s lives”. The audience was also addressed by representatives of the ILO, the EU and OACPS, who highlighted the importance of this initiative, the benefits of formalization and its prospects to contribute to economic development and the creation of decent jobs.

What are the incentives that we are offering to encourage entrepreneurs in the informal economy to formalize their business?

Simon White, Consultant
The National Formalization Action Plan builds on various government initiatives that integrate business development for small enterprises with their formalization and is aligned with the Solomon Islands National Development Strategy. The action plan proposes ways to advance an integrated approach towards formalization pathways which makes the transition easier, more feasible and beneficial for enterprises. Financial inclusion and digitalization are identified among the potential pathways to formality.

As a follow up to the meeting, inputs from stakeholders will be addressed in the draft action plan, which will be validated at a high-level event.

Support for developing the National Action Plan is provided through two projects: “Supporting informal enterprises transition towards sustainable growth and formalization in the African, Caribbean and Pacific regions,” financed by the EU and UNDP in collaboration with OACPS, and implemented by UNDP and ILO; and “Advancing the SDGs by Improving livelihoods and resilience via economic diversification and digital transformation,” financed by the UN Joint SDG Fund and implemented with several UN agencies.