Boosting the informal sector

An informal trader is described in Western Cape government legislation as “any person who carries on a business as a street vendor or hawker, including an employee of such a person, and includes any person who trades in a public place”.

Boosting the informal sector
Value-adding for time-pressed customers. Patricia Lewis and Shamiela Abdol, members of a traders co-op, prepare veggies for packaging.
Photo: Rosheda Muller

Informal trade is “the selling of goods and services within a space deemed to be public property or road within the informal sector”.

According to Caroline Skinner of the African Centre for Cities, SA has a total labour force of 13 million. Of these, 3,6 million work in the informal sector, and this is growing at 8% a year.

READ:Transporting produce in SA – yesterday, today and tomorrow

According to Skinner, traders face numerous challenges to earn a living, including difficulties with security of tenure, the right to trade, marketing and selling space, logistics and finance.

“We get permits from municipalities that have to be renewed month to month. There’s no security for traders operating [like this],” adds Rosheda Muller, deputy president of the SA Informal Trader’s Alliance (Saita).

“We face inclement weather and deal with a lack of facilities, like water, toilets, shelter, storage and power. Many of us don’t have a bank account, never mind access to finance.”

Muller, who has worked in the informal sector for 25 years, stresses that uplifting the informal economy will have a positive effect on the greater economy.

“One of our biggest problems is that [municipal] by-laws are promulgated without any participation from the informal sector. We’re moving for a uniform, countrywide by-law.”

Growth and improvement
In some cases, such as the Joburg Market, recognition of the informal trade, which accounts for 55% of marketed produce, has brought positive results and support.

“We provide some infrastructure in the form of shelter and ablution facilities,” says market CEO Simangele Sekgobela.

The Joburg Market also offers training to traders who want to learn how to package and prolong product life. “If they package smaller quantities, product handling is reduced, which is better for quality,” explains Sekgobela.

Grant Norman of Cape Town’s Epping Market says that his primary concern is to find markets for his growers, and informal traders are part of that market. He adds that traders are discerning buyers who want quality at a good price.

Sekgobela says the satellite market project is one way of taking produce to traders and consumers in places such as Hammanskraal, Marabastad, Diepsloot and Alex. The closer the supply, the lower the transport costs. Containers connected to a power source could help solve overnight storage and cooling problems for traders.

This sentiment is echoed by Norman, who adds that a lack of independent transport means relying on transport contractors. An informal trader could incur transport costs of up to R600 for a trip from Mitchell’s Plain to Epping Market and back.

In the Mitchells Plain area, Norman worked with traders to establish a good route to the market. “Now they move five to six pallets of bananas a week, employing 20 people. Uplifting communities has enormous positive spinoffs.”

Improving transport and infrastructure, establishing warehouses closer to traders and setting up temporary toilet facilities have been identified as important steps towards improving the lives of informal traders.

Problem solving

Sometimes partnerships between the formal and the informal sectors can make all the difference. Norman helped a 60-year-old woman on the street by giving her a box of bananas. “Now she trades moving one to four boxes a day. The cumulative effect has given her a ‘survivelihood’,” he says.

Muller’s plea is for partnership between farmers, agents, business and the informal sector. “They’re using your product. If we form partnerships and relationships, we can solve problems.”

Read more about Street survival & the informal economy’ in the 10 October issue of Farmer’s Weekly.

This article was originally published in the 10 October 2014 issue of Farmer’s Weekly.