The informal sector is essential for recovering and rebuilding the economy in a post-lockdown world

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The informal sector is essential for recovering and rebuilding

the economy is a post-lockdown world.


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Authors: Sarah Heneck, Joanne Lees, Richard Dobson and Sithulisile Moyo (Asiye eTafuleni)

The coronavirus pandemic has brought a number of previously hidden issues to light; one of these being the mis-match between the now very obvious importance of the informal economy and the inadequacy of the policy instruments that have been governing the sector. This fault-line which has pervaded our systems for so long, should not simply be patched over in our quest to return to some degree of normalcy. Informal workers are resilient and creative and are likely to find ways to make their situations manageable, but they should not be forced to do this. The changes we make now need to be profound enough that the fault-line is obliterated entirely.

The informal economy plays an invaluable role in South African cities, as in cities across the world, however, informal workers are marginalised, which leaves them vulnerable, subjected to harassment, and unable to elevate themselves. The nationwide lockdown which came into effect in South Africa in March 2020, very quickly made it clear how vital the informal economy is in terms of the livelihoods that it sustains and in terms of its provision of goods and services, particularly for the urban poor. The importance of this sector warrants thinking boldly about how to improve its position in the urban sphere.

One week after the lockdown was announced, informal food vendors were declared an essential service. It took a few more weeks until traders selling other goods and informal recyclers were allowed back to work, but this recognition was a very significant step in terms of affirming the value of the sector and the rights of informal workers. As an organization which has been deeply involved with the informal economy (particularly in Warwick Junction, Durban) for over 12 years, Asiye eTafuleni (AeT) urges the government not to stop there. There is a much more that needs to be done.

Poorly managed urban informal workspaces, which are characterised by infrastructure and service deficits, not only disadvantage informal workers in terms of their capacity to thrive in their work environment, but also make it difficult for them to practice recommended health and hygiene protocols, particularly when public toilets are not working and proper public space cleansing is not occurring.

Various measures purporting to alleviate pressure felt by informal workers who were unable to earn an income due to the lockdown, have fallen short. There is a limited understanding of how the informal sector operates and how to support its needs. For the majority of informal workers, the R350 COVID-19 social relief of distress grant is their only option for receiving relief funds from the government. While this money can help contribute to household expenses, it misses the mark in terms of re-invigorating the informal economy post-lockdown.

Furthermore, authorities are clamping down with unnecessarily harsh regulations during a time when many people are struggling to survive. For example, Warwick Junction’s informal traders have been told that they will be unable to renew their permits unless they settle their debts, but with a drastically diminished (or in some cases, complete lack of) income over the past three months, this is an unreasonable demand.

This is not the time for enforcement of repressive laws or implementation of defensive strategies; the primary policy instruments, such as permits for demarcated areas, are no longer appropriate in the dynamic state of disaster we find ourselves in. Rather, now should be a time for re-evaluation of attitudes, review of regulations and the redesign of informal workspaces from first principles. In South Africa, there has historically been inadequate communication between the authorities and informal workers which has resulted in a lack of understanding of the informal sector and a lack of trust between the parties. The current situation, characterised by fear, and a tension between health guidelines and the likely increased demand for informal livelihood opportunities (due to pandemic related formal job losses), requires a collaborative, magnanimous, bottom-up approach.

The world cannot recover from the current crisis if the informal economy does not recover. Globally, 61% of livelihoods are informal. In South Africa, 70%of households frequently shop at informal food outlets and informal recyclers ‘are responsible for almost 90% of the country’s recycling.’ 8000 informal workers make a living on the streets and in the markets of Warwick Junction alone. The sector must be seen as a permanent and vital fixture in urban settings and should be treated as such. Proactive responses to informality during this crisis, have the potential to pave the way for the development of more just, more resilient, more attractive, and more inclusive urban spaces. This kind of real transformation would benefit all citizens well beyond the end of the COVID-19 pandemic. This opportunity to create better spaces than those that existed prior to the lockdown, must be grasped now, and must counter a reactive retreat into the kind of thinking that relegates the informal, despite its essential contributions, to the margins.

[Feature image: Warwick Junction by Dennis Gilbert (2019)]