New approaches to support the informal sector

Improving regulatory tools and practices in local government to create a supportive environment for the informal sector


As local governments across South Africa navigate the issue of creating regulatory frameworks for the informal sector, there is an acknowledgement of the need for new approaches. This project continues and extends CBPEP’s approach to bring teams and stakeholders together in order to come up with new ways of doing things. In doing so, we have encountered a willingness and enthusiasm to share lessons, resources and opportunities to develop innovative, inclusive policies that recognise the value of the informal economy.

Informal-sector businesses must be engaged in developing any solutions aimed at assisting and supporting them. Drawing in part from our human-centred design principles, we are building models for collaborative urban governance that can better equip the country for tomorrow’s world.

Innovative policy development can enable the informal sector to prosper through securing livelihoods and creating opportunity for real growth. This viable and dynamic sector has the potential to make a far greater and more meaningful contribution to the economy.

More about the project

The objective of this project is to:
1. develop regulatory tools for local government’s developmental mandate; and 
2. function as a regulatory support mechanism, taking into consideration the vulnerable position of the informal sector in local municipalities, especially as a result of COVID-19.

The project aims to reduce the regulatory burden imposed on these micro-enterprises by ensuring that municipal bylaws are cohesive and are designed to assist informal enterprises to remain economically viable while contributing to employment creation.

A number of key issues currently inhibit the productivity of the informal sector.
These include: 
• the regulatory environment; 
• infrastructure and services (including land);
• enterprise support and capacity building;
• organisation and representation; and
• social protection and inclusion. 

Addressing these challenges will give direction to policy interventions that will create a supportive regulatory environment for public space trading across South African municipalities.

In the past few years, a number of developments regarding South Africa’s informal sector have led to significant shifts in thinking. For instance, in 2012 the South African Local Government Association (SALGA) co-produced guidelines in the form of model policy and bylaws on informal trading. In 2018 SALGA was also involved in work to evaluate how local government engages with the informal economy.



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