‘An enabling economy, regulatory environment key for developing an informal economy’

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Creating an enabling policy and regulatory environment has been identified as key for the development of the informal economy.

Deputy President David Mabuza, also called for a cut down on bureaucracy which include the regulations and barriers that make it difficult for informal traders to operate.

Mabuza was addressing informal traders at a two-day symposium looking at informal economy, under way in the Eastern Cape.

The informal sector is a growing and thriving sector in South Africa, however there are still obstacles in its growth.

Currently this sector only makes up 20% of employment in the country, while only 10 % of South Africans are self-employed, compared to 30% in middle and upper class countries.

Mabuza says government is trying to find ways of making informal traders reach their full potential.

We need to make sure that our policies create a conducive environment for informal traders to thrive. We need to also break down all barriers that are hindrance to the growth of this sector, even within municipalities we need to limit all bureaucracy that is stopping this critical gem to our economy from growing.”

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The country currently has a 34% unemployment rate. Youth support through mentorship, funding, key infrastructure and access to markets is seen as key for development.

Minister of Small Business Development Stella Ndabeni-Abrahams says: “Although we want to ensure that we give as much support as we can to semester, we also want to ensure that their businesses are sustainable, that they don’t start and then fail. So what we have done is also offer business development and financial management training to ensure that we their business live on for generations to come.”

Informal traders say a lot still needs to be done to ensure this sector reaches its full potential.

‘What I would government to do for us is to create better working environments for us, like give us shelters so that we are safe. Also we would then to give us more security at our working station because the young kids hold us a gun point and demand money from us while we work.”

“What I think government needs to do is to level the playing field so that we are also able to compete on the same level as established business. Many a times you find that the bulk of the work needed by government is done by established businesses and we lose our cause we done have the resources that they have.”