New approaches to support the informal sector

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

project overview

South Africa’s informal sector provides employment for about 2.5 million workers and business owners. This viable and dynamic sector requires innovative policy development for it to make a far greater and more meaningful contribution to the economy through securing livelihoods and creating opportunity for real growth.

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. Through this approach, 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.

A comprehensive and holistic set of Trading Guidelines were developed through extensive engagement with informal traders, local government representatives, researchers, experts and NGOs. These guidelines are not only grounded in reality, but are widely endorsed and supported.


More about the project

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.

Some of the key issues that currently inhibit the productivity of the informal sector 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.

Project objectives 
The project aimed to reduce the regulatory burden imposed on these microenterprises by ensuring that municipal bylaws are cohesive and are designed to assist informal enterprises to remain economically viable while contributing to employment creation.
Key objectives were 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.

CBPEP’s approach
CBPEP is building models for collaborative urban governance that can better equip the country for tomorrow’s world.  Our approach draws from human-centred design thinking principles. This methodology ensured that informal-sector businesses were engaged in the processes to develop the solutions aimed at assisting and supporting them. 

The impact
The value and potential impact of these Trading Guidelines lies in the fact that they not only integrate SALGA’s previous research into a single comprehensive and holistic guideline, but that the guideline has been extensively discussed with stakeholders, including informal traders, local government, researcher and experts and civil society. 

The adoption and implementation of the trading guidelines by municipalities will have a positive impact on the ability of informal traders to do business, on employment and on the contribution of the informal sector to livelihoods and the economy.

project outputs

Guidelines for safe and viable public spaces trading

The SALGA guidelines aim to assist municipalities in the development of a more enabling environment for public space trading. This document provides the guidelines for ensuring safe livelihood opportunities in public spaces and guidelines for space planning, infrastructure provisions and sustainable urban management.


Governance of informal trading in public spaces

These policy guidelines identify key challenges in the governance of public space trading. They present solutions and propose a set of policy recommendations for municipalities, to enable more effective governance of informal trading in public spaces.


Framework bylaw for informal trading in public spaces

The Framework bylaw for informal trading in public spaces contributes to the broader objectives of ensuring economic participation, social protection and inclusion and the strengthening of local government.


Background research on the informal sector

This research paper details key issues impacting on local government and public space trading in South Africa. It also identifies the relevant policy issues which inform the development of responsive regulatory guidelines.


Creating a Supportive Regulatory Environment for the Informal Sector: Final project report

This project sought to develop a set of interrelated regulator tools to support local governments in creating a supportive regulatory environment for the informal sector. This completion report provides an overview of the project’s findings and observations.


Public Space Trading Guidelines for Local Government 2021 – 2026

This booklet contains a compendium of three documents – the Policy Guidelines, Framework By-law Guidelines and Health, Safety and Infrastructure Guidelines for public space trading. These guidelines provide important recommendations for municipalities to ensure a supportive environment for the informal economy

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