Jul 12, 2018 the first publication, informal trade in south africa. The sleeping giant informal trade in south africa tweet. Informal trading is a phenomenon prevalent throughout the world, but nowhere more visible and contributively to local economies than in the developing world. Fellow of the bertha centre for social innovation and entrepreneurship, zarina nteta highlights the key findings and relates it back to cape towns context. In addition, poverty and unemployment, hivaids and concomitant. The state of informal workers organisations in south africa. South africa faces similar challenges as any other emerging economy, which demonstrates a duality insofar as its formal and informal arrangements are concerned. South africas formal business sector south african. Street traders contribute greatly to the overall economy of south africa, as demonstrated by the.
The municipal manager of the city of johannesburg metropolitan municipality hereby in terms is section a local government. 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 african informal traders forum saitf home facebook. Street and informal traders fall within the informal economy sector. The first publication, informal trade in south africa. While the informal sector is the forgotten sector in many ways, it provides livelihoods, employment and income for about 2. Pdf the challenges faced by informal traders in greater letaba. 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. A recent study by wiego gives insight into the challenges facing informal traders in the global south. Dont underestimate the power of africas informal sector. A number of stylised facts about the broad characteristics of employment in the informal sector in south africa are now widely accepted. Many workers in the informal economy are in a highly precarious economic situation. The informal sector and the challenges of development in south africa lindile l. To address this issue, this paper applies for the first time the light intensity approach instead of gdp.
Informal trade plays an important role in addressing these challenges. Informal economy panel federation of union south africa. Durban is credited as being the first city in south africa to develop a policy for street traders. Pdf the challenges faced by informal traders in greater. In many townships and rural areas some asylum seekers have been involved in informal trading an activity that might contravene municipal bylaws and should.
S to support their claim about the persistence of a small scale and informal sector in developed countries. The south african informal economy what stats sa data show. Informal trade in south africa legislation, case law and. Slf has spent the past five years conducting research on these issues in four provinces of south africa. City of cape town informal trading western cape government. Hardly good news for the millions of unemployed south africans. With a multidisciplinary outlook, the journal will stimulate service delivery and performance challenges being faced in government. Suggests a strategy for improving productivity and incomes in the informal sector through skills development. 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. In the southern african development community sadc, for example, it. Walking short taxi access to formal shops, rail terminal and middle class neighbourhoods. In many townships and rural areas some asylum seekers have been involved in informal trading. Results suggest that informal economy in subsaharan africa remains among the largest in the world, although this share has been very gradually declining. 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.
South africas labour market has another important distinction. Traders hawking food products are also required to get a business licence and comply with local health standards. Strategies for improving skills in the informal sector. South africa and its effects on this market has prompted this study. South africas informal economy sustainable livelihoods. 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.
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. In the south african inner city context, street trading is thriving and provides. Women are disproportionately at the bottom of the pyramid and face the biggest challenges. In addition, poverty and unemployment, hivaids and concomitant social. A critical analysis of the current south african informal sector. One in every six south africans who work, work in the informal sector. 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. Pdf informal cross border trade and smuggling in africa. The first paper, entitled informal trade in south africa. The multiple indicatormultiple cause mimic method is a wellestablished tool for measuring informal economic activity.
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. Informal street vendors in johannesburg, south africa. For example, activities in the informal sector are concentrated largely in the wholesale, retail and trade sector. What are the reasons for the high informal sector employment. For a number of reasons, any feasible and reliable scenarios of employment in south africa needs to pay due attention to the informal economy. Informal crossborder trade icbt constitutes a major form of informal activity in most african countries. South africas formal business sector south african market. 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. This cai paper attempts to shed more light on some of the challenges faced by informal sector workers, particularly women traders in durban.
Formal and informal street trading is both prevalent and growing in inner city settings. Some estimate it as high as 12% provides more that 3. Trade predominates at1 070 000 or 41% of those working in the informal sector were trading q2. The city of cape town department of economic development has an informal trading function. South africas unemployment rate increased by 0,1 of a percentage point to 29,1% in q3 of 2019. 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. The bangladesh market in westcliff is a special case where the informal trading centre exists within a residential area, amidst other formal businesses. 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. The study addresses the problems of a cluster of informal trading activities.
Saitf is a forum of informal trader organizations that represent informal traders, its. One of the city s objects is to promote social and economic development. May 01, 2011 5 examples of informal traders in south africa thanks. There are no definite figures on the informal sector. 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. Average informal economy business creates an additional 0. Informal trading is further supplemented by tourism as mtubatuba is a tourism gateway to ismangaliso wetlands park and hluhluwe umfolozi game reserve. The informal sector is a versatile and dynamic sector which includes a variety of economic activities.
South africans and 40%, coloured south africans, 5% foreign africans. An unemployed man in diepsloot, johannesburg, collects trash for resale before south africa went into a covid19 lockdown. Informal is the new normal overseas development institute. First, based on aggregate monetary indicators they argue that the informal economy represented 10 per cent of. This phenomenon is particularly prevalent in central business districts cbds. Some argue that informal trading has been in south africa for centuries. Legislation, case law and recommendations for local government, unpacks a court judgment that has established the rights of informal. 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. The motivation for the study was thus to understand the role of informal trading in the economic development of small towns. It also uses the predictive mean matching pmm method to estimate the. 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. It also finds significant heterogeneity, with informality ranging from a low of 20 to 25 percent in mauritius, south africa and namibia to a high of 50 to 65 percent in benin, tanzania and. Informal trading and hawking is controlled by the municipality. Pdf informalsector policy and legislation in south africa.
Informal sector employment and poverty in south africa. 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. Ilo research counterparts in south africa were the community agency for social enquiry case jointly with the southern african labour research institute. The state of informal workers organisations in south. However, it has been criticized because gdp is used both as a cause and indicator variable. The international labour organisation ilo estimates that its average size as a percentage of gross domestic product in. Legislation, case law and recommendations for local government, unpacks a court judgment that. 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. For instance, south africa, the continents largest economy, is also the. 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. 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. The sector comprises one half to three quarters of nonagricultural employment in developing countries.
However intensive manufacturing also takes place under this sector. The south african context is a new democracy, having recently emerged from a history of apartheid and responding to economic globalization by lifting trade. South africa faces developmental challenges of unemployment, poverty and ruralurban migration. The role of informal trading in economic development. Informal traders are required to get trading permits and may only trade in specified areas. Informal trade is a rapidly growing feature of the south durban basin economy. South african informal traders forum saitf, johannesburg, gauteng. 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.
Data not available informal settlement, limited social infrastructure. The national development plan, for example, sees the informal sector creating between 1. Informal sector key stats informal sector contributes between 8 and 10% to south africas gdp. 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. Formal informal linkages, current policy experiences and reform priorities. Introduction employment policy in south africa has paid only limited attention to issues of the informal economy. Towards recommendations on the regulation of informal. 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. 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.
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