What are the reasons for the high informal sector employment. The motivation for the study was thus to understand the role of informal trading in the economic development of small towns. However intensive manufacturing also takes place under this sector. Hardly good news for the millions of unemployed south africans. At the end of the 1st quarter of 2017, formal sector employment was sitting at 9 765 296, while for the 4th quarter of 2017, employment was sitting at 9 778 254, which means that south africas formal business sector added just under 000 jobs during 2017.
This phenomenon is particularly prevalent in central business districts cbds. The multiple indicatormultiple cause mimic method is a wellestablished tool for measuring informal economic activity. Red tape is onerous and pushes up the cost of doing business considerably, thereby reducing the potential number of employers categories of entrepreneurs are being hamstrung by legislation this legis. To address this issue, this paper applies for the first time the light intensity approach instead of gdp.
Slf has spent the past five years conducting research on these issues in four provinces of south africa. For instance, south africa, the continents largest economy, is also the. Informal cross border trade and smuggling in africa 183 smuggling producer surplus gain is a and government tariff revenue loss is a 1 b, for a net loss of area b. While the informal sector is the forgotten sector in many ways, it provides livelihoods, employment and income for about 2. Informal sector key stats informal sector contributes between 8 and 10% to south africas gdp. May 01, 2011 5 examples of informal traders in south africa thanks. Shortfalls in skills in the informal sector are largely due to low education of prospective workers, unequal access to training, underdeveloped markets, lack of attention by public training providers, and market constraints affecting small and household enterprises. Set against the backdrop of south africas constitutional requirements for local government to provide for the rights of all citizens and for them to benefit equally from services, this cai. South africas unemployment rate increased by 0,1 of a percentage point to 29,1% in q3 of 2019. South africas informal economy sustainable livelihoods. The bangladesh market in westcliff is a special case where the informal trading centre exists within a residential area, amidst other formal businesses. The informal sector is a versatile and dynamic sector which includes a variety of economic activities.
A critical analysis of the current south african informal sector. In the southern african development community sadc, for example, it. The state of informal workers organisations in south africa. Informal sector employment and poverty in south africa. Thus, while the informal sector in south africa is small compared to other developing countries and also subsaharan africa see the comparative analysis of grabrucker et al. Informal is the new normal overseas development institute.
Pdf the challenges faced by informal traders in greater. Dont underestimate the power of africas informal sector. Informal trading and hawking is controlled by the municipality. Saitf is a forum of informal trader organizations that represent informal traders, its. The role of informal trading in economic development.
Fellow of the bertha centre for social innovation and entrepreneurship, zarina nteta highlights the key findings and relates it back to cape towns context. South african informal traders forum saitf, johannesburg, gauteng. South africans and 40%, coloured south africans, 5% foreign africans. Results suggest that informal economy in subsaharan africa remains among the largest in the world, although this share has been very gradually declining. The state of informal workers organisations in south. Informal traders are required to get trading permits and may only trade in specified areas. In many townships and rural areas some asylum seekers have been involved in informal trading. At a recent gathering of parties involved in the formal independent and informal retail trade, trade intelligence ti md maryla masojada shared some insights into the various trends affecting the industry.
City of cape town informal trading western cape government. The study addresses the problems of a cluster of informal trading activities. Formal and informal street trading is both prevalent and growing in inner city settings. The informal sector and the challenges of development in south africa lindile l. First, based on aggregate monetary indicators they argue that the informal economy represented 10 per cent of. The informal sector of south africa is over represented by women who come from previously disadvantaged backgrounds and, as outlined in part 1, this has been reinforced and maintained through history, legislation and city planning. Research by statistics south africa has shown that there are more females than males working in the informal sector and that these females dominate the wholesale and retail trade. Introduction employment policy in south africa has paid only limited attention to issues of the informal economy. South african informal traders forum saitf home facebook. For a number of reasons, any feasible and reliable scenarios of employment in south africa needs to pay due attention to the informal economy. South africas formal business sector south african market. Informal trade is highly sensitive to consumer demand, thus they are very in tune and responsive to the needs of their customers create employment opportunities informal trade requires various services such as transporters, packers and sellers, therefore they directly and indirectly contribute to job creation. The south african context is a new democracy, having recently emerged from a history of apartheid and responding to economic globalization by lifting trade. Informal trading is further supplemented by tourism as mtubatuba is a tourism gateway to ismangaliso wetlands park and hluhluwe umfolozi game reserve.
In many townships and rural areas some asylum seekers have been involved in informal trading an activity that might contravene municipal bylaws and should. Towards recommendations on the regulation of informal. A comparison of four cities in south africa will highlight best and worst practices regarding, for example, formal policies regarding street trading, the level of integration of street trading into future planning for the 1 brazil, bolivia, ghana, honduras, india, italy, kenya, mexico, philippines, south africa and the usa. Informal trade plays an important role in addressing these challenges. However, it has been criticized because gdp is used both as a cause and indicator variable.
In addition, poverty and unemployment, hivaids and concomitant. This cai paper attempts to shed more light on some of the challenges faced by informal sector workers, particularly women traders in durban. South africas labour market has another important distinction. The municipal manager of the city of johannesburg metropolitan municipality hereby in terms is section a local government. There are no definite figures on the informal sector. What do informal trading realities suggestion for informal economy policy in south africa. An unemployed man in diepsloot, johannesburg, collects trash for resale before south africa went into a covid19 lockdown. Pdf informalsector policy and legislation in south africa. Women are disproportionately at the bottom of the pyramid and face the biggest challenges. Durban is credited as being the first city in south africa to develop a policy for street traders. According to the quarterly labour force survey qlfs released by statistics south africa, this is the highest unemployment rate since stats sa started measuring unemployment using the qlfs in 2008.
The first publication, informal trade in south africa. The first paper, entitled informal trade in south africa. S to support their claim about the persistence of a small scale and informal sector in developed countries. One of the city s objects is to promote social and economic development. The city of cape town department of economic development has an informal trading function. The international labour organisation ilo estimates that its average size as a percentage of gross domestic product in. Unorganized smallscale, selfemployment creating activities which might involve individuals or unremunerated relatives of the business owner, small number of hired workers or totally without any hired workers which the resourcepoor engage in for the purpose of increasing household income generation opportunities. Some argue that informal trading has been in south africa for centuries. A number of stylised facts about the broad characteristics of employment in the informal sector in south africa are now widely accepted. Informal trade in south africa legislation, case law and. With a multidisciplinary outlook, the journal will stimulate service delivery and performance challenges being faced in government.
Strategies for improving skills in the informal sector. It also uses the predictive mean matching pmm method to estimate the. Specifically, these figures amount to 48% of non agricultural employment in africa, 51% in latin america, 65% in asia, and 72% in subsaharan africa, excluding south africa. South africas formal business sector south african. In addition, poverty and unemployment, hivaids and concomitant social. Data not available informal settlement, limited social infrastructure. The challenges faced by informal traders in greater letaba municipality in limpopo province, south africa article pdf available december 2015 with,081 reads how we measure reads. Street traders in priority areas have been provided with trading facilities and more trading facilities will be made available in areas of the sdb set aside for informal trade as part of the on going regeneration of the area. Walking short taxi access to formal shops, rail terminal and middle class neighbourhoods. For example, activities in the informal sector are concentrated largely in the wholesale, retail and trade sector. Legislation, case law and recommendations for local government, unpacks a court judgment that has established the rights of informal. The sector comprises one half to three quarters of nonagricultural employment in developing countries. Informal economy panel federation of union south africa. Legislation, case law and recommendations for local government, unpacks a court judgment that.
At the end of the 1st quarter of 2017, formal sector employment was sitting at 9 765 296, while for the 4th quarter of 2017, employment was sitting at 9 778 254, which means that south africa s formal business sector added just under 000 jobs during 2017. Developing guidelines to adopt a more developmental approach towards the informal economy south african local government association salga, south africa one of the main factors that hinder a more developmental approach towards the informal economy in south africa is the very poor state of communication among the various stakeholders. The south african informal economy what stats sa data show. Historians and archaeologists locate the establishment of trade between south africa and the outside world as early as ad700, as well as with the establishment of the king. South africa and its effects on this market has prompted this study. Informal crossborder trade icbt constitutes a major form of informal activity in most african countries.
Trade predominates at1 070 000 or 41% of those working in the informal sector were trading q2. A recent study by wiego gives insight into the challenges facing informal traders in the global south. Suggests a strategy for improving productivity and incomes in the informal sector through skills development. In the south african inner city context, street trading is thriving and provides. Street and informal traders fall within the informal economy sector.
South africa faces developmental challenges of unemployment, poverty and ruralurban migration. Municipal systems act, 2000 act 32 of 2000, publishes informal trading bylaws for the of the city of johannesburg metropolitan municipality as approved by its council, as set out hereunder. Pdf informal cross border trade and smuggling in africa. Traders hawking food products are also required to get a business licence and comply with local health standards. Informal trading is a phenomenon prevalent throughout the world, but nowhere more visible and contributively to local economies than in the developing world. Pdf informal trade has grown at an alarming rate in south africa because of lack of employment opportunities in both the private and public sectors find. The fime project, therefore, provides invaluable insight into the scope and scale, business and societal trends, and growth prospects linked to south africas informal microenterprise. Jul 12, 2018 the first publication, informal trade in south africa.
Formal informal linkages, current policy experiences and reform priorities. Street traders contribute greatly to the overall economy of south africa, as demonstrated by the. Many workers in the informal economy are in a highly precarious economic situation. Informal street vendors in johannesburg, south africa. Ilo research counterparts in south africa were the community agency for social enquiry case jointly with the southern african labour research institute. One in every six south africans who work, work in the informal sector. The national development plan, for example, sees the informal sector creating between 1. The sleeping giant informal trade in south africa tweet. Informal trade is a rapidly growing feature of the south durban basin economy. Pdf the challenges faced by informal traders in greater letaba. South africa faces similar challenges as any other emerging economy, which demonstrates a duality insofar as its formal and informal arrangements are concerned. As a result, the informal street trading sector plays an important role in providing a security net for millions of the unemployed in the south african economy.
241 110 38 1571 53 556 1098 118 1545 1582 32 1099 597 1388 609 906 1123 1027 316 1199 549 1361 1176 1246 1442 683 1018 259