The impact of eThekwini municipality policies on informal traders: a case study of the northern regions of eThekwini

Abstract

The informal economy contributes about 5.2% of the gross domestic product of South Africa. It is estimated that it employs more than 2.6 million people which represents about 10% of the total employment in the country. However, this is considered to be low if it is compared to other African countries, despite the high unemployment in the country. Therefore, there may be some constraints hindering the growth of the informal sector. The apartheid government that was in place before 1994 enacted laws and policies that hindered the growth of the sector. In recent times the South African government has been revising the laws and putting in place policies that encourage the growth of the informal economy. A number of studies have shown that eThekwini Municipality has one of the best policies which target the informal economy in South Africa. Some of the policies that have been launched include National Informal Business Upliftment Strategy at national level and Durban’s Informal Economy Policy. The current Integrated Development Plan for eThekwini Municipality has sections specially dedicated to the informal economy. Despite the efforts of the national, provincial and local governments, the policies have been failing to be more effective to achieve the intended results due to several issues. This study aims to assess and analyse the municipality’s policies that impact on the growth and prosperity of informal traders as well as the challenges that they encounter as a result of these policies. This study also monitors and evaluates the policy and implementation at municipality level. The informal traders located in the northern parts of eThekwini are focussed on as a case study. The study involved use of both secondary and primary research. In the secondary research literature review on both the informal economy and the policies that affect the people that operate within this sector was done. In the primary research structured interviews were used to gather primary data required for this study backed up by onsite observations. The results from the study show that there is lack of awareness of the informal sector policies by the informal traders. Most of the informal traders are not registered and they do not see any benefits of doing so. There is still hostility between the informal and formal traders. Informal traders highlighted a number of challenges they face every day, such as lack of shelter, storage space and running battles with law enforcers. The study showed that there was lack of involvement of the informal traders in planning such that some of the stalls that were built by the municipality remain vacant due to several issues they pointed to such as low numbers of customers in the area. The study makes some recommendations based on the findings and other studies.