The Covid-19 pandemic has thrown the spotlight on the importance of the informal economy as a means of survival for South Africa’s 2.9 million citizens without access to formal employment – as well as their resulting vulnerability. This is another stark reminder that the government can no longer afford to ignore the need for formal support of the informal sector.
The process of adapting to new rules of engagement since the national state of disaster was declared in South Africa on 15 March 2020 has been more drastic for some than others.
Some, who are continuously marginalised and lack access to the formal economy, have had to create alternative ways of surviving. For these traders operating in the informal economy – street vendors, spaza shop owners, local entrepreneurs – moulding a new way of life and adapting to external forces to survive is not a foreign concept. For many, while it has been business unusual, it has been business nonetheless and adjusting has just meant converting living-rooms into meeting rooms.
For a long time, the informal sector has been positioned as the proverbial “safety net” against unemployment in this country. According to the Q1 Quarterly Labour Force Survey, there are 2.9 million people earning a living in the informal sector. In percentages, the informal sector accounts for almost 26% of total employment (traders at 17.8% and household or domestic workers at 8%).
Despite this, the informal sector continues to be largely overlooked by formal economic structures. The informal sector contributes notably to job creation and to the alleviation of poverty. As such, it should be praised and acknowledged as contributors to the GDP and economy, instead of being forced to operate on the peripheries.
The informal food economy is a lot larger than we think. According to reports from the University of the Western Cape’s Centre of Excellence in Food Security, it is estimated to account for about R360-billion a year. With such a notable contribution to the South African workforce and the economy, the informal food industry should not be an overlooked sector.
This is a shortened version of the article originally published by the Daily Maverick. Read the full article here.