DEVELOPING A POLICY FRAMEWORK FOR LOCAL GOVERNMENT ENGAGEMENT WITH

THE INFORMAL ECONOMY

REPORT FOUR: CONSULTATION REPORT

Draft for discussion: 16 October 2018

Prepared for:mSouth African Local Government Association (SALGA)

By: TMHM Consulting

Contributors:Dr. Koech K. CheruiyotOlga KomaSeyco ManyakaMamokete MatjomaneThembani MkhizeDr. Tanya Zack

‘The challenge is to convince the policy makers to promote and encourage hybrid economies in which micro-businesses can co-exist alongside small, medium, and large businesses: in which the street vendors can co-exist alongside the kiosks, retail shops and large malls….they should encourage economic diversity. Also, they should try to promote a level playing field in which all sizes of businesses and all categories of workers can compete on equal and fair terms’ Ela Bhatt, founder of SEWA, the largest trade union of informal workers in the world (Chen, 2018:44).

SECTION ONE: MUNICIPAL DIALOGUES ON THE INFORMAL ECONOMY...............................................4

1.1 Summary of the three dialogues..................................................................................................4

1.2 Foreign nationals.........................................................................................................................4

1.3 Role of traditional authorities......................................................................................................6

1.4 Role and tools/resources of local government............................................................................7

1.5 Six strategic pillars.......................................................................................................................7

1.6 Gauteng recommendations/position of local government on informal economy.....................12

SECTION TWO: Gauteng: Dialogues with Metro governments............................................................16

The role of local government in enabling the informal economy........................................................16

2.1 Background and Objective.........................................................................................................16

2.2 Workshop Framework...............................................................................................................16

2.3 Group Feedback.........................................................................................................................16

2.4 What could we prioritise? (Short and long-term actions)..........................................................18

2.5 What tools/resources do we have or need?..............................................................................19

2.6 Other Comments.......................................................................................................................19

2.7 Conclusion and Recommendations............................................................................................20

SECTION THREE: Limpopo: Dialogues with Local Government............................................................23

The role of local government in enabling the informal economy........................................................23

Limpopo Dialogue Report (18 September 2018).................................................................................23

3.1 Background and objectives........................................................................................................23

3.2 Introduction to the dialogue......................................................................................................23

3.3 Dialogue Framework..................................................................................................................24

3.4 Dialogue Discussions: Feedback on issues raised by presentation............................................24

3.5 Responses on the 6 pillars.........................................................................................................26

3.6 Recommendations/ priority areas.............................................................................................27

SECTION FOUR: Eastern Cape: Dialogues with Local Government......................................................29

The role of local government in enabling the informal economy........................................................29

Eastern Cape Dialogue Report (16 August 2018).................................................................................29

4.1 Background and Objective.........................................................................................................29

4.2 Workshop Framework...............................................................................................................29

4.3 Dialogue Discussions: Feedback on issues raisd by presentation..............................................29

4.4 Dialogue discussions: Group Feedback......................................................................................31

4.5 General Comments....................................................................................................................33

4.6 Conclusion and Recommendations............................................................................................33

SECTION FIVE: Key Informant Interviews.............................................................................................34

Final Interview Summaries..................................................................................................................34

5.1 Contribution of informal sector in the economy.......................................................................34

5.2 Organisation and representation...............................................................................................34

5.3 Regulatory environment............................................................................................................34

5.4 SMMEs and Skills Development.................................................................................................35

5.5 Infrastructure and land..............................................................................................................36

5.6 Social inclusion..........................................................................................................................37

5.7 Practices of the state: Engagement between informal economy workers and local.................38

SECTION ONE: MUNICIPAL DIALOGUES ON THE INFORMAL ECONOMY

1.1 Summary of the three dialogues

1.1.1 Practices of the state

Politics often impacts heavily on laws/ by-laws, traders are prohibited from selling in their containers which last year lead to protests/ and a court order. The containers were confiscated due to the officials claiming that they obstructed other users. However, during elections the containers are overlooked. The impounding was done using the Traffic Act, which claimed that the containers were parked illegally. This was due to a change in the governance of the KSD, old by-laws which have not been updated, and a lack of enforcement (EC)

1.1.2 Responses to the informal economy

Exploitation often occurs whereby people in formal settings can exploit those vulnerable, this occurs due to the desperation of people that cannot find work (who end up working informally on behalf of formal establishments—by government, by other members of society (EC)

1.2 Foreign nationals

Eastern Cape

The issue of foreign migrants is a contested one. On the one hand you have people (mainly foreigners) who are able to exploit shortfalls in the system (i.e. municipal regulations) which has led to tensions with local residents (entrepreneurs).

Foreign migrants, while local government understands national legislation, having to deal and convince community members to embrace foreigners has proved a challenge, as the perception is often negative

As much as foreign nationals in SA are protected by the Constitution (the constitution covers every person legal or otherwise), and government having an obligation to recognise that they too have a right to work , each local government has a responsibility to know what is going on in its jurisdiction. The responsibility includes the registration of all businesses, demarcating trading spaces, issuing proprietorship licences etc—law and order needs to be maintained

Even with the limitation of local government regulatory framework, the onus is on local government to find a developmental solution. The issue is not to curb the business strategies of foreigners, local government must not counteract foreigners’ efforts. If local government regulations are relaxed, i.e. zoning, then the blame should not be posed on foreigners, local government must rather put in place policies that regulate, enable and support all types of legal trade. Often local government policies are lacking which result in their exploitation by mainly foreigner. Thus local government fails everyone by not putting in place proper by laws

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The issue of foreign migrants is one that national government needs to assist municipalities on, in creating their policies. However, local government still have tools within their disposal they can draw on in developing their policies

Limpopo

Foreign nationals were not an issue for some time but that there is brewing discontent from residents of Mankweng regarding their involvement in the informal economy. Some residents are arguing that foreign nationals should close down their stalls and hand them over to South African residents. However, it is the same residents that rent out their garages or erect structures within their properties so that foreign nationals can operate and pay them. They even go to the extent of applying for a permit to operate a spaza shop and then give that permit o foreign nationals so that they can conduct their businesses

The Planning Department participants arguing that foreign nationals are not operating according to the law because the policy on spaza shops (which was promulgated in 2002 and outdated) gives permission for spaza shops in properties but once permission is granted they open wholesalers and hardwares

The Polokwane Spaza Shop Policy states that a person operating a business within a property must be the owner of that particular property. In an instance where foreign nationals or any other person operates within a property that is not theirs and uses a permit under false pretences that is considered ‘illegal land use’

Some participants arguing for the reservation of the informal sector for South Africans only because foreign nationals are currently taking over the sector. She said that foreign nationals can operate more than one informal business on the same street while these should be operated by South Africans because statistics show that the informal sector creates employment and these opportunities should be for South Africans only. The other issues is that foreigners are also buying stands in villages and operating their businesses there without paying any rent or employing South Africans

Gauteng

Polokwane: there is mushrooming of foreign nationals as it is a town with a border connecting South Africa and Zimbabwe and this is problematic as locals complain about foreigners taking over their businesses

Emfuleni: Foreigners tend to do as they please without adhering and abiding by the by-laws in place

o There is an issue of documentation of foreigners and inconsistencies in terms of what is required by the Department of Home Affairs (DHA) and the municipality

o There is an issue of foreigners coming in the country as asylum seekers and others coming in with passports indicating they in the country to do business but applying for trading spaces

Ekurhuleni: the municipality does not focus on foreign nationals as a separate group but enforces by-laws and deal with contraventions in general

o Municipality deals with informal workers as a whole and not deal with foreigners separately

o The challenge is that foreign migrants operate in areas not demarcated for such activities and this could be linked to lack of understanding of the regulations in place

o The issue is that the community rises up when the municipality is not acting on the issue

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o The municipality has been approached by foreigners to engage and one of the things they are looking into is translating the existing by-laws and policies into languages understood by foreigners

o There is a need to engage with DHA to understand the issues but asylum seekers have the right to earn a living in the informal economy because this is self-employment

o The issuing of licenses is done once DHA confirms whether this can be done or noto There is an issue of foreign national run barber shops charging less that South

Africans and this creates issueso Foreign nationals also own dilapidated buildings and charging rent to South Africans

Mogale City: The issue is that foreign nationals buy out spaza shops from South Africans but the permit still remains in the name of the original owner

o The municipality had a blitz on expired and fake goods sold in foreign migrants run spaza shops

o The municipality also faces challenge of foreigners who are in the country with business permit and applying for trading licenses

Mangaung: DHA is hampering processes of municipality to deal with foreign nationals in the informal economy where some foreign nationals have work permits but apply for trading licenses

Tshwane: Asylum seekers are not allowed to apply for trading permits simply because they as a municipality can give a foreign national permit and DHA might deport the same person 3 months later therefore creating issues. They as a municipality will wait for DHA to confirm the status of a foreign national before they can receive and process applications for a permit

o The work and study permits and what this means for working in the informal economy should be clarified by DHA and this cannot be done in such a way that violates the rights of locals

Johannesburg: There is an issue of culture where South Africans adopt some of the negative practices i.e Nigerians in Yeoville who braai anywhere on the street and spaza shop owners sleeping inside the shop where they sell and store their goods

DSBD: There are various categories of foreigners: economic migrants who in the country in search of better prospects and there is a task team on migration which looks at issues of this dynamic

o There needs to be some benchmarking in other African countries to understand how they deal with the issues of foreign migrants in the informal economy and the issue of xenophobia and how it is being dealt with. In Ghana the government has reserved the informal economy for their locals

o The reality is that foreigners are taking economic opportunities from locals where for the labour force of big restaurants for example is mainly made up of foreigners

o NIBUS is very clear on foreign nationals and talks about the promotion of local entrepreneurs, promotion of partnerships between locals and foreign nationals and that every foreigner should be documented and be in the country legally

SERI: Human dignity is an overarching principle in the Constitution and applies to everyone even undocumented foreign nationals who are in the country illegally

Officials need to comply with the provisions of the Constitution regardless of whether they are dealing with documented or undocumented foreign nationals

1.3 Role of traditional authorities

The big issue is land as most of it is owned by private sector and SANRAL and this makes it difficult to demarcate and allocate for informal economic activities (Limpopo)

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Some municipalities have land owned by dikgoshi (traditional authorities) and informal traders do not want to pay any fees to the municipality (Limpopo)

1.4 Role and tools/resources of local government

The role of LOCAL GOVERNMENT is to create a conducive environment for informal economy to thrive, especially considering the high unemployment rates.

As a town planner the mandate is to create land uses that do not clash with each other, and it is necessary to know that there will be trade-offs (EC)

Local government needs to re-evaluate not their responsibilities, but the tools/the legislative instruments that would make their responsibilities clearer, along with the resources local government needs to take on a productive/focused role to support the informal and formal sectors (EC)

There is a need for an overall policy that encapsulates all the departments and thus achieves intergovernmental coordination (EC)

Legislative review and training of both traders and officials (Gauteng) There needs to be compatibility of legislation (Gauteng) There should be education of parties regarding regulation before any enforcement takes

place (Gauteng)

1.5 Six strategic pillars

1.5.1 Pillar one: Regulation

Eastern Cape

Policies are often absent, or where they exist these have not been updated, therefore land use policies do not correlate with actual use, and planning is rendered non-existent. Demarcations for trading and other activities does not happen; and there is no penalty on activities that are informal such as the containers that occupy sidewalks.

Regulations are unclear or ambiguous or even lacking in specifics and therefore there are risks (e.g. legal risks). No updated comprehensive by-laws (e.g. containers were moved by municipality- however as these are not mentioned in any by laws, nor are there tariffs for containers- four days the municipality was taken to court and lost the ruling, and thus ordered to return all containers)

There is no joint management or joint committee; or a strategy on the informal sector. KSD municipality stated that they have:

o no updated and comprehensive by-laws on the informal sector o no dedicated staff or unit for informal trade development o no inclusion of informal economy in overall supply value chain; no joint resource

mobilisation; no joint monitoring and evaluation

Limpopo

Contents of by-laws not known and understood by stakeholders within municipalities Roles and responsibilities of government stakeholders are not clear All municipalities present have by-laws but they are not adequately enforced Outdated spaza shop policy developed in 2002 and it is not clear in terms of acceptable

radius to develop spazas in neighborhoods Traditional authorities should also apply the same regulations in place by the

municipality in order to avoid disconnect

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Gauteng

There are regulations on the informal economy but these are inconsistent between and within municipalities and departments

There is no national policy to act as a framework for municipalities There is also lack of knowledge and understanding of these by officials and informal

workers There is lack of consultation with stakeholders to properly understand the issues

Priorities

A conducive environment needs to be created where policies developed support and properly regulate the informal economy

Facilitate access of informal workers to markets Develop policies and bylaws in communication with informal workers and other

stakeholders There needs to be monitoring and evaluation Review and synchronise legislation Create databases of informal workers at the local level Need training around policies and bylaws and how things should work on the ground in

order to support and enable the informal economy

1.5.2 Pillar two: Infrastructure and land

Eastern Cape

No access to basic infrastructure such as water, sanitation, electricity etc, which stresses municipal infrastructure due to illegal connections or the misuse of spaces. Basic infrastructure has therefore been dilapidated, as people leach on infrastructure available for other uses.

Lack of waste management has led to waste pollution Therefore, joint planning and management is needed, joint monitoring by all

departments There are hawkers’ stalls but no provision of water and as a result they get water from

fire hydrants Spaces to conduct business are given but the municipalities are unable to provide every

trader with a stall

Limpopo

There are also unoccupied stalls because of shifts in economic activities and traders end up abandoning their allocated stalls (Polokwane)

There is challenge of illegal subletting of spaces allocated as by-laws clearly say subletting is not allowed

The challenge is how to reach trade-offs between the accommodation of traders and the image of the city because ‘we can’t have informal traders on every street in Polokwane. We can accommodate 1000 out of 3000 traders for instance’. We can’t have neighbourhoods with 200 households that have 50 spazas in residential areas’

Some of the solutions proposed include:o Public private partnerships to provide infrastructure and serviceso Communicate with tribal authorities and private property owners to regulate

the informal sector and come up with a memorandum of understanding

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o Need for temporary structures depending on types of goods sold and not only rely on permanent structures

Gauteng

Municipalities are moving at a slow pace to provide the necessary infrastructure and services

o E.g. In Mogale City it took 5 years to source funding to build a taxi rank which will accommodate a substantial number of informal traders

There are damaged facilities and municipalities have no funds for maintenance There is no ‘informal economy’ funding provided within the BEPPs

o In Mangaung the municipality partnered with the provincial government to build a container park but according to town planning provisions this is not allowed. The issue is legislations of various departments are developed in silos resulting in lack of consistency between them and creating loopholes for informal workers

o Polokwane built infrastructure without consulting with informal workers and this created issues of vacancy in the built up markets. There current urban renewal and BRT plans accommodate informal trade and stakeholders are being consulted

There is an issue of land ownership by tribal authorities and developers approaching them to seek permission. Sometimes the relationship between tribal authorities and municipalities is negative thereby hampering development

Tribal authorities have no mandate to regularise the informal economy but they do so informally

The needs for infrastructure and land include funding, acquisition of more well located land conducive for business

Priorities

Sourcing finances and other resources to build appropriate infrastructure in well located land

Revitalise urban and rural economies in a sustainable manner There needs to be training of officials and informal workers in terms of taking

responsibility for projects Informal workers should be included on projects from planning to implementation

phases Public private partnerships should be at the centre of development

1.5.3 Pillar three: SMMEs, business support and development

Eastern Cape

Business support is crucial in skills provision, and there is a need for technical training e.g. artisans/ plumbers etc. need expertise guidance. For example, KSD provides technical expertise training for some entrepreneurs, however more is needed for different types of activities

There is a need for value chain linkages, local government cannot be responsible for everything; they need to start thing about how to link or create these value chains

There is a need for resource mobilisation and LED inclusive strategies that deal with integrating all areas such as policies that guide nodal developments or identify different types of nodes or areas for opportunities. Greater focus on all informal business no just traders

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There is a need for improving skills within local government, i.e. capacity building There is lack of knowledge on basic business skills and management on the part of

informal operators

Limpopo

Skills audit process undertaken by LED to ascertain the skills needed by informal operators but this does not adequately inform the type of training that should be administered

There are also unaccredited service providers giving inadequate training to the traders without clearly defining what the objectives of training are: there seems to be an emphasis on traders getting certificated after training without training them in necessary skills to ensure that they impact on their business i.e health and hygiene

There are no linkages between the formal and informal firms Short term solutions such as linking traders to economic opportunities such as creating

opportunities in events such as Mapungubwe and link traders to those opportunities There needs to be policy guidance to direct these economic opportunities to the

informal economy

Gauteng

There issues include lack of funding, budget allocation, re-allocation of funds (exceptional case of Buffalo City making funds available for informal traders’ skills development), lack of capacity in LED to run programmes

There is lack of mentorship of officials in terms of how to address issues in the informal economy

What could be done to better the situation include joint ventures with other stakeholders especially the private sector, clear communication between traders and officials and IDPs and SDIPs should inform the development of SMMEs and informal businesses

Social inclusion programmes exists for women, and those disabled Issue around foreign traders i.e. Policy is silent on foreigners and here there is potential

for conflict

Priorities

developing informal workers. These funds should be allocated to local government instead. “Funding where it matters the most is not sufficient”

The registration of informal workers should be simplified, red tape should be reduced significantly

Skills development of sector agents and officials (mentoring and coaching of officials) There is a need for training on issues that matter such as waste management, safety and

security on the street, environmental health, financial management (including record keeping in order to encourage growth-oriented businesses)

1.5.4 Pillar four: Organisation, representation and social inclusion

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Eastern Cape

Organisational representation is lacking, for example fishermen or car washers do not have organisations, and thus there is a need for assistance so that they can form associations.

Govern support, is not always filtering down to the person on the street level Social inclusion programmes exists for women, and those disabled Issue around foreign traders i.e. Policy is silent on foreigners and here there is potential

for conflict

Limpopo

There are associations of traders but individual traders are also given a platform to engage the municipality

Trader organisations and question of election as there are area based committees which are self-elected and this creates a representativity problem

In Polokwane there is ad-hoc engagement between traders and municipality and this is not institutionalized forum for informal operators

Blouberg municipality has a forum that meets on a quarterly basis Some solutions suggested:

o Capacitate members of organisations to better run their organisations and represent the interests of traders

o Create platforms for regular stakeholder engagement Representation of the informal sector is problematic (issues of not speaking in one

voice; constant change in leadership) and they are militant in nature making it difficult to control them when they protest

Gauteng

Informal worker organisations, especially informal traders, engaging with the municipality-In Tshwane informal traders influence decision making and this is working well

There municipality has built facilities as a strategy to create employment i.e. car wash and braai facilities

Priorities

Encourage self- regulation and management of storage facilities Encourage trader organisations to work closely with law enforcement officers during

operations to witness what is happening on site and help assist curb the issue of bribes Encourage traders to appoint leaders who will engage with local government on their

behalf There is need for social dialogue between various stakeholders including local

government and informal workers

1.5.5 Pillar Five: Innovations/doing well

has provided 66 beneficiaries with trading stalls, through accessing the infrastructure grant which has been used for these trading stalls

have tapped into various other funds to cost and design a container park the municipality has also supplied sewing machines for textile workers, and have built

capacity through accessing SEDA funds

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KSD plans to open up new spaces for trading, which need to be aligned to new precinct plans so that planners take into account the needs for LED

1.5.6 Pillar Six: Recommendations

Need for framework at the national level: National government has to put legislation in place that talks directly to the informal sector, so that municipalities can draw up comprehensive developmental policies and strategies. There is thus need for a legislative instrument to assist municipalities in coming up with policies, by-laws and strategies (EC)

The role and mandate of traditional leaders often affects the management of land, therefore municipalities have to consider in their jurisdiction the impact that traditional authorities have in allocating land for economic purposes (EC)

Often municipalities have difficulty accessing funding to support the informal sector as most of the funding is mostly available for formal businesses, national government must make funding available and easily accessible for municipalities that have proven to have the capacities, skills and programmes in place to support the informal sector—challenge not only limited funding at local level but that funds are mostly made available to formal businesses with no consideration for informal ones (EC)

While most challenges that face municipalities are urban management related, solutions cannot only be geared towards managing spaces, but must rather seek to develop strong municipal strategies with rural-urban linkages and illustrated value chains (EC)

Need to create human and financial capital as well as capacitate practitioners as most municipalities have 2 to 3 staff members dealing with the informal economy while in certain municipalities, people that deal with the informal economy do not have the skills and professional training to undertake the task (Limpopo)

There is need to solicit funds for local government from various sources such as the private sector to develop the informal economy (Limpopo)

Provision of adequate infrastructure and services to address some of the issues that traders are faced with (Limpopo)

There is a challenge where municipalities are pushing for formalization of the informal especially at directorship level but it is not clear what this means. The team needs to define clearly what they mean by ‘formalize’ and what is that we are trying to achieve with the formalization process (Limpopo)

1.6 Gauteng recommendations/position of local government on informal economy

1.6.1 A local government position on supporting the informal economy

The informal economy is a crucial component of the local economy in South African cities, towns and rural areas.

Local government plays an important role in supporting the informal economy

Local government recognises that informality creates jobs and opportunities for vulnerable populations

Local government must proactively nurture and foster the productivity of informal business so that the sector can grow the quality and quantity of jobs it generates and can contribute to sustainable economic development.

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Local government must provide the space and opportunity for informal business to thrive, grow and transition to formality.

Local government resolves to further a developmental approach to enabling the informal economy. This is:

1.6.2 An approach that facilitates economic inclusion:

To this end South African local governments will recognise and embrace informal economic activities as an integral part of the local economy

They will incorporate informal economic activity in local and strategic spatial, social and economic plans.

They will develop overarching policy, and strategies that address regulation, spatial development, infrastructure provision, representation, entrepreneurial support, and social inclusion of the informal sector in local areas.

They will promote facilitate linkages between the formal and informal economy, as well as access to appropriate training, mentorship and skills development for informal sector workers in the various economic sectors of their local economy

They will act decisively against any employees who are found to be perpetrators of corruption, violence , xenophobia and abuse of power in relation to informal sector operators, without regard for ethnicity of the operators

They will actively support vulnerable informal firms through facilitating access to business and management training and relevant skills development

They will proactively recognise, celebrate and promote local economic benefits for youth, women, disabled and migrant entrepreneurs from the rest of South Africa and from other countries in the informal sector

1.6.3 An approach that facilitates the transition to formality

They will facilitate the transition from unemployment to informal employment and from informal employment to formal employment

They will support micro, small and medium enterprises to transition towards formality, by providing access to resources as well as by addressing the local level inhibitors to formalisation of these businesses

They will devise accessible registration and legitimation processes for informal firms to operate within local jurisdictions

Provide straightforward information and training on relevant local level bylaws Actively demonstrate the benefits of formalisation to encourage informal firms to

transition towards formalization They will actively facilitate the linkage of informal sector operators with formal sector

operators and opportunities.

1.6.4 An approach that supports organisation and representation:

They will actively enable the organisation and representation of informal sector workers and economic units in relevant plans and dialogues

They will offer support for the organisation efforts of legitimate representative bodies of informal sector workers and economic units and will include informal sector representatives in strategic economic conversations.

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1.6.5 A rights-based approach:

They will uphold the rights of those who work in the informal sector

They will ensure their policy and bylaws align with their Constitutional obligations to uphold the rights of informal sector workers and economic units.

They will not use regulation to enforce formalization in punitive ways that force informal economic agents out of the market.

They will carve an appropriate regulatory framework and associated by laws to oversee, manage and safeguard legal informal economic activity, collectively across all relevant municipal departments.

1.6.6 An area based approach:

They will tailor contextually appropriate solutions for the specific needs of informal workers and economic units by developing area based responses to the operations of the informal sector in their areas of jurisdiction.

1.6.7 An approach that is built on a platform of sound service delivery:

They will provide or facilitate access for informal sector operators to resources including where possible access to space, energy and credit to undertake, grow and improve their operations.

They will actively allocate and design places and spatial infrastructure to encourage and support the business activities of informal sector workers and economic units in economic nodes.

1.6.8 A managed approach

They will develop strategies and implementation plans to manage the location, allocation of rights to trade and the provision and management of services that support informal sector operations.

They will develop partnership parches to management with private operators and with informal sector workers and economic units.

1.6.9 A knowledge sharing approach:

They will actively collect data and deepen knowledge of the role, nature, scale and challenges of the informal economy within the overall local economy in their areas of jurisdiction

They will improve their monitoring and evaluation of the performance of the informal sector

They will support and encourage innovation in informal, small, micro and medium enterprise.

They will develop opportunities for informal firms to share knowledge and learning with one another

They will develop opportunities to share knowledge with other on the support and management of informal sector operations local governments

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SECTION TWO: Gauteng: Dialogues with Metro governments

The role of local government in enabling the informal economy

2.1 Background and Objective

A two day workshop ‘03 – 04 October 2018’ was held in Ekurhuleni Municipality, being the last of three dialogues held over a three month period. The intension of the dialogues was to gather an understanding of the divergent discourses, perspectives and attitudes of local government officials tasked to deal with the informal economy.

Dialogue participants included municipal officials and informal sector representatives. The dialogue purpose and objective was to investigate and understand the role of the local government in the Gauteng Metros and other municipalities, in terms of supporting, managing, and regulating the informal economy. The overall aim was to focus on this region’s response and challenges to enabling the informal economy to be more robust. Participants were encouraged to respond to some of the key questions thrown at them such as “the challenges they faced in enabling the informal sector”.

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2.2 Workshop Framework

A presentation was conducted by the project team as a means to frame discussions. The information presented included:

Day 1:

A clear definition of the informal economy Why the informal sector matters A statistical overview of the informal sector in the country The myths regarding the informal sector International thinking Some of the reasons why it is difficult to integrate the informal economy, and Six enabling policy pillars were strategic policy can be framed

Day 2:

Recap from previous day Facilitated discussion on key questions Local government position framework Proposed resolutions

2.3 Group Feedback

2.3.1 Regulation:

There are regulations on the informal economy but these are inconsistent between and within municipalities and departments

There is no national policy to act as a framework for municipalities There is also lack of knowledge and understanding of these by officials and informal

workers There is lack of consultation with stakeholders to properly understand the issues

2.3.2 Infrastructure and land:

Municipalities are moving at a slow pace to provide the necessary infrastructure and services

o E.g. In Mogale City it took 5 years to source funding to build a taxi rank which will accommodate a substantial number of informal traders

There are damaged facilities and municipalities have no funds for maintenance There is no ‘informal economy’ funding provided within the BEPPs

o In Mangaung the municipality partnered with the provincial government to build a container park but according to town planning provisions this is not allowed. The issue is legislations of various departments are developed in silos resulting in lack of consistency between them and creating loopholes for informal workers

o Polokwane built infrastructure without consulting with informal workers and this created issues of vacancy in the built up markets. There current urban renewal and BRT plans accommodate informal trade and stakeholders are being consulted

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There is an issue of land ownership by tribal authorities and developers approaching them to seek permission. Sometimes the relationship between tribal authorities and municipalities is negative thereby hampering development

Tribal authorities have no mandate to regularise the informal economy but they do so informally

The needs for infrastructure and land include funding, acquisition of more well located land conducive for business

2.3.3 Organisation and representation:

Informal worker organisations, especially informal traders, engaging with the municipality-In Tshwane informal traders influence decision making and this is working well

There municipality has built facilities as a strategy to create employment i.e. car wash and braai facilities

2.3.4 SMMEs and skills development:

There issues include lack of funding, budget allocation, re-allocation of funds (exceptional case of Buffalo City making funds available for informal traders’ skills development), lack of capacity in LED to run programmes

There is lack of mentorship of officials in terms of how to address issues in the informal economy

What could be done to better the situation include joint ventures with other stakeholders especially the private sector, clear communication between traders and officials and IDPs and SDIPs should inform the development of SMMEs and informal businesses

2.3.5 Social Inclusion

Social inclusion programmes exists for women, and those disabled Issue around foreign traders i.e. Policy is silent on foreigners and here there is potential

for conflict

2.4 What could we prioritise? (Short and long-term actions)

2.4.1 Organisation, representation and social inclusion

Encourage self- regulation and management of storage facilities Encourage trader organisations to work closely with law enforcement officers during

operations to witness what is happening on site and help assist curb the issue of bribes Encourage traders to appoint leaders who will engage with local government on their

behalf There is need for social dialogue between various stakeholders including local

government and informal workers

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2.4.2 SMMEs and skills development

National and provincial government has streams of funding but is not involved in developing informal workers. These funds should be allocated to local government instead. “Funding where it matters the most is not sufficient”

The registration of informal workers should be simplified, red tape should be reduced significantly

Skills development of sector agents and officials (mentoring and coaching of officials) There is a need for training on issues that matter such as waste management, safety and

security on the street, environmental health, financial management (including record keeping in order to encourage growth-oriented businesses).

2.4.3 Infrastructure and land

Sourcing finances and other resources to build appropriate infrastructure in well located land

Revitalise urban and rural economies in a sustainable manner There needs to be training of officials and informal workers in terms of taking

responsibility for projects Informal workers should be included on projects from planning to implementation

phases Public private partnerships should be at the centre of development

2.4.4 Regulatory environment

A conducive environment needs to be created where policies developed support and properly regulate the informal economy

Facilitate access of informal workers to markets Develop policies and bylaws in communication with informal workers and other

stakeholders There needs to be monitoring and evaluation Review and synchronise legislation Create databases of informal workers at the local level Need training around policies and bylaws and how things should work on the ground in

order to support and enable the informal economy

2.5 What tools/resources do we have or need?

Legislative review and training of both traders and officials There needs to be compatibility of legislation There should be education of parties regarding regulation before any enforcement takes

place

2.6 Other Comments

2.6.1 Foreign nationals and the informal economy

Polokwane: there is mushrooming of foreign nationals as it is a town with a border connecting South Africa and Zimbabwe and this is problematic as locals complain about foreigners taking over their businesses

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Emfuleni: Foreigners tend to do as they please without adhering and abiding by the by-laws in place

o There is an issue of documentation of foreigners and inconsistencies in terms of what is required by the Department of Home Affairs (DHA) and the municipality

o There is an issue of foreigners coming in the country as asylum seekers and others coming in with passports indicating they in the country to do business but applying for trading spaces

Ekurhuleni: the municipality does not focus on foreign nationals as a separate group but enforces by-laws and deal with contraventions in general

o Municipality deals with informal workers as a whole and not deal with foreigners separately

o The challenge is that foreign migrants operate in areas not demarcated for such activities and this could be linked to lack of understanding of the regulations in place

o The issue is that the community rises up when the municipality is not acting on the issue

o The municipality has been approached by foreigners to engage and one of the things they are looking into is translating the existing by-laws and policies into languages understood by foreigners

o There is a need to engage with DHA to understand the issues but asylum seekers have the right to earn a living in the informal economy because this is self-employment

o The issuing of licenses is done once DHA confirms whether this can be done or noto There is an issue of foreign national run barber shops charging less that South

Africans and this creates issueso Foreign nationals also own dilapidated buildings and charging rent to South Africans

Mogale City: The issue is that foreign nationals buy out spaza shops from South Africans but the permit still remains in the name of the original owner

o The municipality had a blitz on expired and fake goods sold in foreign migrants run spaza shops

o The municipality also faces challenge of foreigners who are in the country with business permit and applying for trading licenses

Mangaung: DHA is hampering processes of municipality to deal with foreign nationals in the informal economy where some foreign nationals have work permits but apply for trading licenses

Tshwane: Asylum seekers are not allowed to apply for trading permits simply because they as a municipality can give a foreign national permit and DHA might deport the same person 3 months later therefore creating issues. They as a municipality will wait for DHA to confirm the status of a foreign national before they can receive and process applications for a permit

o The work and study permits and what this means for working in the informal economy should be clarified by DHA and this cannot be done in such a way that violates the rights of locals

Johannesburg: There is an issue of culture where South Africans adopt some of the negative practices i.e Nigerians in Yeoville who braai anywhere on the street and spaza shop owners sleeping inside the shop where they sell and store their goods

DSBD: There are various categories of foreigners: economic migrants who in the country in search of better prospects and there is a task team on migration which looks at issues of this dynamic

o There needs to be some benchmarking in other African countries to understand how they deal with the issues of foreign migrants in the informal economy and the issue of xenophobia and how it is being dealt with. In Ghana the government has reserved the informal economy for their locals

o The reality is that foreigners are taking economic opportunities from locals where for the labour force of big restaurants for example is mainly made up of foreigners

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o NIBUS is very clear on foreign nationals and talks about the promotion of local entrepreneurs, promotion of partnerships between locals and foreign nationals and that every foreigner should be documented and be in the country legally

SERI: Human dignity is an overarching principle in the Constitution and applies to everyone even undocumented foreign nationals who are in the country illegally

Officials need to comply with the provisions of the Constitution regardless of whether they are dealing with documented or undocumented foreign nationals

2.7 Conclusion and Recommendations

2.7.1 A local government position on supporting the informal economy

The informal economy is a crucial component of the local economy in South African cities, towns and rural areas.

Local government plays an important role in supporting the informal economy

Local government recognises that informality creates jobs and opportunities for vulnerable populations

Local government must proactively nurture and foster the productivity of informal business so that the sector can grow the quality and quantity of jobs it generates and can contribute to sustainable economic development.

Local government must provide the space and opportunity for informal business to thrive, grow and transition to formality.

Local government resolves to further a developmental approach to enabling the informal economy. This is:

2.7.2 An approach that facilitates economic inclusion:

To this end South African local governments will recognise and embrace informal economic activities as an integral part of the local economy

They will incorporate informal economic activity in local and strategic spatial, social and economic plans.

They will develop overarching policy, and strategies that address regulation, spatial development, infrastructure provision, representation, entrepreneurial support, and social inclusion of the informal sector in local areas.

They will promote facilitate linkages between the formal and informal economy, as well as access to appropriate training, mentorship and skills development for informal sector workers in the various economic sectors of their local economy

They will act decisively against any employees who are found to be perpetrators of corruption, violence , xenophobia and abuse of power in relation to informal sector operators, without regard for ethnicity of the operators

They will actively support vulnerable informal firms through facilitating access to business and management training and relevant skills development

They will proactively recognise, celebrate and promote local economic benefits for youth, women, disabled and migrant entrepreneurs from the rest of South Africa and from other countries in the informal sector

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2.7.3 An approach that facilitates the transition to formality

They will facilitate the transition from unemployment to informal employment and from informal employment to formal employment

They will support micro, small and medium enterprises to transition towards formality, by providing access to resources as well as by addressing the local level inhibitors to formalisation of these businesses

They will devise accessible registration and legitimation processes for informal firms to operate within local jurisdictions

Provide straightforward information and training on relevant local level bylaws Actively demonstrate the benefits of formalisation to encourage informal firms to

transition towards formalization They will actively facilitate the linkage of informal sector operators with formal sector

operators and opportunities.

2.7.4 An approach that supports organisation and representation:

They will actively enable the organisation and representation of informal sector workers and economic units in relevant plans and dialogues

They will offer support for the organisation efforts of legitimate representative bodies of informal sector workers and economic units and will include informal sector representatives in strategic economic conversations.

2.7.4 A rights-based approach:They will uphold the rights of those who work in the informal sector

They will ensure their policy and bylaws align with their Constitutional obligations to uphold the rights of informal sector workers and economic units.

They will not use regulation to enforce formalization in punitive ways that force informal economic agents out of the market.

They will carve an appropriate regulatory framework and associated by laws to oversee, manage and safeguard legal informal economic activity, collectively across all relevant municipal departments.

2.7.5 An area based approach:

They will tailor contextually appropriate solutions for the specific needs of informal workers and economic units by developing area based responses to the operations of the informal sector in their areas of jurisdiction.

2.7.6 An approach that is built on a platform of sound service delivery:

They will provide or facilitate access for informal sector operators to resources including where possible access to space, energy and credit to undertake, grow and improve their operations.

They will actively allocate and design places and spatial infrastructure to encourage and support the business activities of informal sector workers and economic units in economic nodes.

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2.7.7 A managed approach

They will develop strategies and implementation plans to manage the location, allocation of rights to trade and the provision and management of services that support informal sector operations.

They will develop partnership parches to management with private operators and with informal sector workers and economic units.

2.7.8 A knowledge sharing approach:

They will actively collect data and deepen knowledge of the role, nature, scale and challenges of the informal economy within the overall local economy in their areas of jurisdiction

They will improve their monitoring and evaluation of the performance of the informal sector

They will support and encourage innovation in informal, small, micro and medium enterprise.

They will develop opportunities for informal firms to share knowledge and learning with one another

They will develop opportunities to share knowledge with other on the support and management of informal sector operations local governments

SECTION THREE: Limpopo: Dialogues with Local Government

The role of local government in enabling the informal economy

Limpopo Dialogue Report (18 September 2018)

3.1 Background and objectives

The South African Local Government Association represented by THMH Consultancy held a dialogue concerning ‘The Role of Local Government in the Informal Economy’ on the 18 th of September 2018 in Limpopo, Polokwane. The dialogue was the second of three, with the first held in the Eastern Cape on 16th August 2018 and the last scheduled for 03-04 October 2018 in Gauteng. The intention of the dialogues is to gather an understanding of the divergent discourses, perspectives and attitudes of local government officials tasked with dealing with the informal economy.

Dialogue participants included municipal officials from Capricorn District Municipality; Blouberg; Lepelle-Nkumpi; Molemole and Polokwane Local Municipalities with representatives from various departments such as Local Economic Development, Tourism, Community Development, Town Planning and Law Enforcement.

The objective of the dialogue was to investigate and understand the role of the local government in Limpopo, in terms of supporting, managing, and regulating the informal economy. The overall

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aim was to focus on this region’s responses and challenges to enabling the informal economy to be more robust.

3.2 Introduction to the dialogue

As an introduction to the workshop, participants were asked a set of questions to get a sense of how they think about and approach the informal economy in their specific contexts within the Limpopo Province. Some of the responses from the participants are noted under the respective question.

3.2.1 Why do you think the informal economy exists?

There are scarce formal jobs due to limited economic growth leading to few (formal) economic opportunities

People involved in the informal sector avoid tax and registration processes People live hand to mouth with no savings and get involved in the informal sector to

supplement their income

3.2.2 What should we do to respond to the informal economy?

Municipalities must come up with laws to ensure the accommodation of the informal economy. These should protect operators in the informal economy

Municipalities must provide infrastructure as well as financial and non-financial support to informal workers. Workers in the informal economy should be linked to markets and major retailers

Create an environment for the informal to co-exist with the formal economy. The situation where the informal competes negatively with the formal economy should be avoided

3.2.3 What are some of the issues that you have regarding the informal economy?

Some noted lack of space within their municipalities to accommodate the informal sector while others noted that space is there and demarcated but is not occupied by informal traders

The big issue is land as most of it is owned by private sector and SANRAL and this makes it difficult to demarcate and allocate for informal economic activities

Some municipalities have land owned by dikgoshi (traditional authorities) and informal traders do not want to pay any fees to the municipality

The number of traders keep increasing, In Polokwane there is about 3500 traders Some traders contributing to grime on streets by throwing rubbish in drainage systems,

also blocking pavements Representation of the informal sector is problematic (issues of not speaking in one

voice; constant change in leadership) and they are militant in nature making it difficult to control them when they protest

Municipalities struggle to regulate and manage illegal structures that are set up by informal traders

The permit application process requires traders to declare goods to be sold but once they get permit they sell other things that were not mentioned in application. One of the participants said that “you find a person selling 3 apples and 2 bananas, but we all know that person is also selling dagga or something illegal”

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3.3 Dialogue Framework

A presentation was conducted by the project team as a means to frame discussions. The information presented included:

A clear definition of the informal economy Why the informal sector matters A statistical overview of the informal sector in the country and Limpopo province The myths regarding the informal sector Current international thinking Some of the reasons why it is difficult to integrate the informal economy, Some of the responses to the informal sector including the issue of foreign nationals, and Six enabling policy pillars were strategic policy can be framed

3.4 Dialogue Discussions: Feedback on issues raised by presentation

There were various discussions on issues raised during the presentation. Some of the most robust discussions were noted on the following issues:

3.4.1 Why the informal sector takes up a large share in Limpopo as compared to other provinces?

There are limited formal industries in the province while in areas such as Durban and Johannesburg there are industries which are able to absorb the labour force

Province is largely rural and most people seek employment in Polokwane which in turn is unable to absorb the demand

3.4.2 One of the myth on the informal economy is that the informal sector presents unfair competition to formal firms

One of the myths on the informal economy posits that the informal sector poses unfair competition on the formal sector firms mainly because they do not pay tax and utilities to government. The myth has been debunked over time to indicate that informal operators do pay some fees to government in order to operate, whether directly or indirectly. An example was given that informal operators source their goods from formal sector firms and these are charged Value Added Tax (VAT)

Some participants said that the informal sector does present unfair competition to formal firms because they sell in close proximity to these formal firms and do not pay any fees to the municipality. An example of an informal trader selling clothes next to a formal establishment like Woolworths was given. The argument was that Woolworths pays massive rentals to the municipality every month while an informal trader taking advantage of the location pays only R200 per month. In some instances the formal establishments are complaining about the situation because there seems to be unfair competition

Another participant indicated that the debate on unfair competition relates to how people see the informal economy. She said that those arguing the informal presents unfair competition to the formal sector see the informal and formal economies as parallel with no links

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3.4.3 Foreign nationals and the informal economy

The discussion on the experiences of Limpopo municipalities in dealing with foreign nationals in the informal economy was robust and multifaceted. Participants seemed to think through some of their responses before making them public

They indicated that foreign nationals were not an issue for some time but that there is brewing discontent from residents of Mankweng regarding their involvement in the informal economy. Some residents are arguing that foreign nationals should close down their stalls and hand them over to South African residents. However, it is the same residents that rent out their garages or erect structures within their properties so that foreign nationals can operate and pay them. They even go to the extent of applying for a permit to operate a spaza shop and then give that permit o foreign nationals so that they can conduct their businesses

The Planning Department participants arguing that foreign nationals are not operating according to the law because the policy on spaza shops (which was promulgated in 2002 and outdated) gives permission for spaza shops in properties but once permission is granted they open wholesalers and hardwares

The Polokwane Spaza Shop Policy states that a person operating a business within a property must be the owner of that particular property. In an instance where foreign nationals or any other person operates within a property that is not theirs and uses a permit under false pretenses that is considered ‘illegal land use’

One of the participants had strong views about reserving informal sector for South Africans only because foreign nationals are currently taking over the sector. She said that foreign nationals can operate more than one informal business on the same street while these should be operated by South Africans because statistics show that the informal sector creates employment and these opportunities should be for South Africans only. The other issues is that foreigners are also buying stands in villages and operating their businesses there without paying any rent or employing South Africans

Some participants noted that reserving the informal sector for South Africans is not sustainable solution to the issue. They said that the issue is that South Africans are unable to work together to create successful businesses and that is why the idea of cooperatives is unsuccessful. The participants noted that there is some agitation by residents because the state has relaxed some of its rules on foreign nationals and their involvement in the economy. They said that repressive approaches should be adopted to deal with foreign nationals. Law enforcement should be relied on to make sure foreigners have the required documents to be involved in the informal economy

There is a Limpopo Business Regulation Act which was adopted in 2003 but has not cascaded down to municipalities. This Act requires aspiring business people to get consent to operate business. There is need to bring various stakeholders on board such as SARS, Home Affairs, Police to check compliance and operation of spaza shops

3.4.4 Coordination of policies between departments

There is need for various departments to work together collaboratively Policy and by-laws and the need for integration and coherence between various

departments dealing with the informal sector i.e Town Planning and Economic Development. Currently the various departments create policies and by-laws that are not consistent with other departments that deal with the informal economy and these creates gaps and loopholes that informal operators can use to their advantage. For instance the Town Planning Department is not in touch with what the Local Economic Department is doing in terms of regulating and managing informal traders and the latter is not clued up in terms of what the former’s spaza shop policy entails. ‘Policies from LED and Planning are not talking to each other’

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Informal trading is not included in planning tools such as Spatial Development Framework (SDF) in Planning Department and Land Use Planning while the size, nature, location of trading stalls depends on guidelines by these departments

3.5 Responses on the 6 pillars

Regulatory environment

Contents of by-laws not known and understood by stakeholders within municipalities Roles and responsibilities of government stakeholders are not clear All municipalities present have by-laws but they are not adequately enforced Outdated spaza shop policy developed in 2002 and it is not clear in terms of acceptable

radius to develop spazas in neighborhoods Traditional authorities should also apply the same regulations in place by the

municipality in order to avoid disconnect

Infrastructure and space

There are hawkers’ stalls but no provision of water and as a result they get water from fire hydrants

Spaces to conduct business are given but the municipalities are unable to provide every trader with a stall

There are also unoccupied stalls because of shifts in economic activities and traders end up abandoning their allocated stalls (Polokwane)

There is challenge of illegal subletting of spaces allocated as by-laws clearly say subletting is not allowed

The challenge is how to reach trade-offs between the accommodation of traders and the image of the city because ‘we can’t have informal traders on every street in Polokwane. We can accommodate 1000 out of 3000 traders for instance’. We can’t have neighbourhoods with 200 households that have 50 spazas in residential areas’

Some of the solutions proposed include:o Public private partnerships to provide infrastructure and serviceso Communicate with tribal authorities and private property owners to regulate

the informal sector and come up with a memorandum of understandingo Need for temporary structures depending on types of goods sold and not only

rely on permanent structures

Support of micro Small and Medium Enterprises

There is lack of knowledge on basic business skills and management on the part of informal operators

Skills audit process undertaken by LED to ascertain the skills needed by informal operators but this does not adequately inform the type of training that should be administered

There are also unaccredited service providers giving inadequate training to the traders without clearly defining what the objectives of training are: there seems to be an emphasis on traders getting certificated after training without training them in necessary skills to ensure that they impact on their business i.e health and hygiene

Organisation and representation

There are associations of traders but individual traders are also given a platform to engage the municipality

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Trader organisations and question of election as there are area based committees which are self-elected and this creates a representativity problem

In Polokwane there is ad-hoc engagement between traders and municipality and this is not institutionalized forum for informal operators

Blouberg municipality has a forum that meets on a quarterly basis Some solutions suggested:

o Capacitate members of organisations to better run their organisations and represent the interests of traders

o Create platforms for regular stakeholder engagement

Entrepreneurship and skills development

There are no linkages between the formal and informal firms Short term solutions such as linking traders to economic opportunities such as creating

opportunities in events such as Mapungubwe and link traders to those opportunities There needs to be policy guidance to direct these economic opportunities to the

informal economy

3.6 Recommendations/ priority areas

Provision of adequate infrastructure and services to address some of the issues that traders are faced with

Creation of a flea market in Polokwane where traders are clustered as a tourist attraction. There is a need to shift the way in which things are being done to come up with innovations

Need to create human and financial capital as well as capacitate practitioners as most municipalities have 2 to 3 staff members dealing with the informal economy while in certain municipalities, people that deal with the informal economy do not have the skills and professional training to undertake the task

There is need to solicit funds for local government from various sources such as the private sector to develop the informal economy

There is a challenge where municipalities are pushing for formalization of the informal especially at directorship level but it is not clear what this means. The team needs to define clearly what they mean by ‘formalize’ and what is that we are trying to achieve with the formalization process

The team also needs to unpack and make clear what they mean by ‘flourish’ in terms of what this could entails and what it means for local government agents dealing with the informal economy. Does it entails skills development, increase in numbers in the informal economy, profitability, development and sustainability.

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SECTION FOUR: Eastern Cape: Dialogues with Local Government

The role of local government in enabling the informal economy

Eastern Cape Dialogue Report (16 August 2018)

4.1 Background and Objective

On the 16th of August 2018, the South African Local Government Association represented by THMH Consultancy held a dialogue concerning ‘The Role of Local Government in the Informal Economy’. The dialogue was held in the Eastern Cape, in Mthata, and was the first of three dialogues to be conducted. Others were to be conducted in Limpopo and in Gauteng Province. The intention of the dialogues is to gather an understanding of the divergent discourses, perspectives and attitudes of local government officials tasked with dealing with the informal economy.

Dialogue participants included municipal officials and informal sector representatives. The participants represented King Sabata Dalindyebo Municipality; OR Tambo District Municipality; Ingquza Hill Local Municipality; Mhlontlo Local Municipality. And the following key sector departments: Human settlements, environmental health; Local Economic Development; Waste Management; Town Planning; REDP - Rural Entrepreneurship Development Programme; economic and enterprise development; SMME development; and Law Enforcement. In addition KSD Hawkers Association was represented.

The objective of the dialogue was to investigate and understand the role of the local government in the Eastern Cape, in terms of supporting, managing, and regulating the informal economy. The overall aim was to focus on this region’s response and challenges to enabling the informal economy to be more robust.

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Participants were encouraged to respond to some of the key questions thrown at them such as “the challenges they faced in enabling the informal sector”.

4.2 Workshop Framework

A presentation was conducted by the project team as a means to frame discussions. The information presented included:

A clear definition of the informal economy Why the informal sector matters A statistical overview of the informal sector in the country; province and

the two metros in Eastern Cape The myths regarding the informal sector International thinking Some of the reasons why it is difficult to integrate the informal economy,

and Six enabling policy pillars were strategic policy can be framed

4.3 Dialogue Discussions: Feedback on issues raisd by presentation

4.3.1 Experiences with informal sector comments:

Intergovernmental coordination is lacking, especially inter-departmental Often national policies cannot be translated by local government,

implementation is generally difficult. While national government can pass high level resolutions, these have proven difficult to implement on the ground. How to bridge national legislation so that it translates on the ground? How can national government support this?

Politics often impacts heavily on laws/ by-laws. E.g. w.r.t. the informal economy, traders are prohibited from selling in their containers which last year lead to protests/ and a court order. The containers were confiscated due to the officials claiming that they obstructed other users. However, during elections the containers are overlooked

The impounding was done using the Traffic Act, which claimed that the containers were parked illegally.

o This was an due to change in the governance of the KSD, old by-laws which have not been updated, and a lack of enforcement

Traffic officer present, cited concern of other public users of space, and that their job was to enforce the laws. Environmental concerns were also raised.

4.3.2 Statistical Overview comments:

Unemployment rate in KSD sits at 50%, there is a lot of out migration especially among the youth. Therefore the informal sector in KSD seems to absorb those numbers

There is a lot of out migration, especially among the youth who opt to leave Mthata for other areas.

The types of informal sector activities that exist in KSD include textiles; food trading, which women tend to partake in; while the youth partake in car washes, hair dressing; and men are mainly in automotive/ mechanics. Also there are differences in urban and rural areas, whereby in rural areas women would also likely be dominant in sectors such as arts and crafts

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4.3.3 Responses to the informal economy

Exploitation often occurs whereby people in formal settings can exploit those vulnerable, this occurs due to the desperation of people that cannot find work (who end up working informally on behalf of formal establishments), thus how can these people be protected in such circumstances?

How do we create an opportunity or an enabling environment for vulnerable people to undertake work?

The issue of foreign migrants is a contested one. On the one hand you have people (mainly foreigners) who are able to exploit shortfalls in the system (i.e. municipal regulations) which has led to tensions with local residents (entrepreneurs).

Foreign migrants, while local government understands national legislation, having to deal and convince community members to embrace foreigners has proved a challenge, as the perception is often negative

The issue of the inability of local government to keep registration of businesses has also contributed to the infiltration of informality and the inability to control it.

A question was raised concerning the ILO mandate of transitioning informal to formal: with regards to foreign migrants whose mandate is it?

Migration/ foreign: there are foreign nationals in SA who are protected by the constitution, the constitution covers every person legal or otherwise/ all of government has an obligation to recognise that they too have a right to work here, however,

o Each local government has a responsibility to them, therefore the way to deal with issue of foreign is to recognise that local government has a responsibility to know what is going on in their jurisdiction, through the registration of all businesses, demarcating trading spaces, issuing proprietorship licences etc. Local government cannot eliminate competition, however local government can undertake awareness campaigns involving various departments i.e. security/ social services/ etc. instead of not knowing who is doing what where.

o Local government should also recognise that not everyone is able to pay taxes, and thus some businesses would need support to get there, and not everyone wants to be formal.

The role of traditional leaders is another aspect that must be considered

4.3.4 Myths about the informal economy

Transitioning from informal to formal is not necessarily what everyone wants to achieve

Municipalities need funding in order for them to support the informal economy. It is difficult to get funding for informal economy because legislation only speaks to formal businesses.

World class visions are not about how and what types of jobs we create, formal vs informal. It would be ideal to have a formal economy that is able to absorb everyone, however that is not the case.

o If we have a bigger informal economy, do we manage more or restrict informal economy?

The role of LOCAL GOVERNMENT is to create a conducive environment for informal economy to thrive, especially considering the high unemployment rates.

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As a town planner the mandate is to create land uses that are do not clash with each other, and it is necessary to know that there will be trade-offs

o Defining what makes informality is not easy. Informality is many things i.e. the way space is used or the type of contract you have

o Movement or transport vs local economic development, these are the trade-offs we need to think of when undertaking SDFs or IDPs. And often politicians need to be made aware the trade-offs

4.3.5 Why is it difficult to integrate the informal economy?

Sometimes by laws do not correspond, municipalities would have various by laws governing the same activity, and contravening each other.

Local government needs to re-evaluate not their responsibilities, but the tools/the legislative instruments that would make their responsibilities clearer, along with the resources local government needs to take on a productive/focused role to support the informal and formal sectors

4.4 Dialogue discussions: Group Feedback

4.4.1 Regulation:

Policies are often absent, or where they exist these have not been updated, therefore land use policies do not correlate with actual use, and planning is rendered non-existent. Demarcations for trading and other activities does not happen; and there is no penalty on activities that are informal such as the containers that occupy sidewalks.

Regulations are unclear or ambiguous or even lacking in specifics and therefore there are risks (e.g. legal risks). No updated comprehensive by-laws (e.g. containers were moved by municipality- however as these are not mentioned in any by laws, nor are there tariffs for containers- four days the municipality was taken to court and lost the ruling, and thus ordered to return all containers).

There is no joint management or joint committee; or a strategy on the informal sector. KSD municipality stated that they have:

o no updated and comprehensive by-laws on the informal sector o no dedicated staff or unit for informal trade development o no inclusion of informal economy in overall supply value chain; no

joint resource mobilisation; no joint monitoring and evaluation

4.4.2 Infrastructure planning

No access to basic infrastructure such as water, sanitation, electricity ect, which stresses municipal infrastructure due to illegal connections or the misuse of spaces. Basic infrastructure has therefore been dilapidated, as people leach on infrastructure available for other uses.

Lack of waste management has led to waste pollution Therefore, Joint planning and management is needed, joint monitoring by

all departments.

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4.4.3 Business support

Business support is crucial in skills provision, and there is a need for technical training e.g. artisans/ plumbers etc. need expertise guidance. For example, KSD provides technical expertise training for some entrepreneurs, however more is needed for different types of activities

There is a need for value chain linkages, local government cannot be responsible for everything; they need to start thing about how to link or create these value chains

There is a need for resource mobilisation and LED inclusive strategies, that deal with integrating all areas such as policies that guide nodal developments or identify different types of nodes or areas for opportunities. Greater focus on all informal business no just traders

There is a need for Improving skills within local government, i.e. capacity building

4.4.4 Organisation and representation

Organisational representation is lacking, for example fishermen or car washers do not have organisations, and thus there is a need for assistance so that they can form associations.

Govern support, is not always filtering down to the person on the street level

4.4.5 Social Inclusion

Social inclusion programmes exists for women, and those disabled Issue around foreign traders i.e. Policy is silent on foreigners and here

there is potential for conflict

4.4.6 What have municipalities done well?

KSD experiences:

has provided 66 beneficiaries with trading stalls, through accessing the infrastructure grant which has been used for these trading stalls

have tapped into various other funds to cost and design a container park the municipality has also supplied sewing machines for textile workers,

and have build capacity through accessing SEDA funds KSD plans to open up new spaces for trading, which need to be aligned to

new precinct plans so that planners take into account the needs for LED. Accessing Budgets and funds is the biggest problem.

4.5 General Comments

There is a need for an overall policy that encapsulates all the departments and thus achieves intergovernmental coordination.

The struggle with integrating foreign migrants: o Even with the limitation of local government regulatory framework,

the onus is on local government to find a developmental solution. The issue is not to curb the business strategies of foreigners, local government must not counteract foreigners’ efforts. If local government regulations are relaxed, i.e. zoning, then the blame

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should not be posed on foreigners, local government must rather put in place policies that regulate, enable and support all types of legal trade. Often local government policies are lacking which result in their exploitation by mainly foreigner. Thus local government fails everyone by not putting in place proper by laws.

4.6 Conclusion and Recommendations

It is recommended that:

National government has to put legislation in place that talks directly to the informal sector, so that municipalities can draw up comprehensive developmental policies and strategies. There is thus need for a legislative instrument to assist municipalities in coming up with policies, by-laws and strategies.

The role and mandate of traditional leaders often affects the management of land, therefore municipalities have to consider in their jurisdiction the impact that traditional authorities have in allocating land for economic purposes.

An enabling environment has to be provided for the most vulnerable citizens and foreigners to partake in economic activities.

Often municipalities have difficulty accessing funding to support the informal sector as most of the funding is mostly available for formal businesses, national government must make funding available and easily accessible for municipalities that have proven to have the capacities, skills and programmes in place to support the informal sector.

Municipalities have to realise that there are trade-offs that they will need to make in their SDFs and IDPs, and the onus is on them to make these tough decisions. It is useful for municipalities to be very clear on what these trade-offs are.

While most challenges that face municipalities are urban management related, solutions cannot only be geared towards managing spaces, but must rather seek to develop strong municipal strategies with rural-urban linkages and illustrated value chains.

Municipalities need to realise that while value can be achieved for businesses in the form of creating nodes, the solution is also one that takes place within space, and often these go hand in hand.

The issue of foreign migrants is one that national government needs to assist municipalities on, in creating their policies. However, local government still have tools within their disposal they can draw on in developing their policies.

SECTION FIVE: Key Informant Interviews

Final Interview Summaries

5.1 Contribution of informal sector in the economy

“I mean what we noticed in South Africa was that the stats about the contribution of the informal economy was that it was about 8-12% of the GDP, but the percentage of

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the workforce in the informal economy a few years ago was ranging between 30% and 40% depending on whether you count domestic workers” Pat Horn

“If there was proper infrastructure and we were allocated properly by the city then we would contribute towards rent and LED” SAITF leaders

“Informal workers are actually helping government, they are out there selling in the streets to help government with property rates and unemployment. Government should see them as benefiting the system of government in creating jobs” Theodora COSATU organising officer

5.2 Organisation and representation

There has been strengthening resistance from municipalities to deal with independent organisations

“The one thing I would say must be applied is the obligation to negotiate and that the negotiated agreements, for the basis of the regulation gets approved then that would force them to bring every plan of theirs to the negotiating table. So whether it is spatial regulation issue, or whether it’s an issue of fees, whether it’s an issue of you know all the fiscal issues that are involved, all of those issues go through negotiations” Pat Horn

“But despite them being organized … there is a reluctance at local government and amongst local government officials to recognize these as representative organizations of the workers and engage with them openly and honestly in good faith.” Vanessa Pillay, WEIGO o E.g. You’d often find situations that, you know Cape Town, where waste pickers

want a place to work, so working space is a big challenge for waste pickers, working space where they can sort the recyclable material. So, they would collect and need they need a space where they sort it into different categories so that it makes packaging easier, it makes processing easier for selling. Because that is not viewed as work, they don’t have dedicated work spaces like they do in other countries. Vanessa Pillay, WEIGO

“We’ve actually taken them (informal traders) through a workshop to form an organization, we assisted the formation of South African Informal Traders Association (SAITA). We assisted them to form an organization not because they are going to be our members of COSATU, but for them to negotiate for themselves with local government on their issues and also not to compete amongst each other” Theodora COSATU organising officer

5.3 Regulatory environment

“That all these activities be recognized as work. The occupant be then recognized as workers and flowing from that would then be a policy that regulates their working condition, not the way it does now. Because if you look at many by-laws, I mean if you look at the municipal act, It’s an ancient act. Many of the by-laws designed to criminalize informal work” Vanessa Pillay, WEIGO

If you were to interview any number street trader organization they would be able to tell you the high levels of harassment that they are exposed to, lack of access to basic ablution facilities like toilets. They have to share public toilets, and, in many cities, public toilets are now being privatized, its either they are not being maintained or they are privatized. So, when they are being privatized, and you are a street trader, you are at work for 8 hours in that space or more and the only access you have is to the public toilets that is privatized, and you need to pay for that. Vanessa Pillay, WEIGO

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It’s about access to those public spaces, It’s about servicing those public spaces as work spaces and not criminalizing the workers for being in those public work spaces. So, you know… Who’s the regulatory authority of public spaces at local government. So they need to speak of public spaces as work spaces to make sure there is provision for these spaces to serve the purpose for which they are developed or out of which the need has grown and make sure they are properly serviced. Vanessa Pillay, WEIGO

“Home-based workers, the challenge with home-based workers is because they work within the confines of their homes you know, it’s even more difficult and they are even more invisible talking about access to home-based workers but that’s why we say the policy environment has to recognize the activity they engage into as work and them as workers.” Vanessa Pillay, WEIGO

“So there is a regulatory role around, I suppose, management of the supply of services, businesses and things like that and regulation in terms of the use of public space but I would say that this should not be a heavy-handed enforcement driven will for local government. I think that there should be developmental regulations. So how do you encourage and help, rather than limit with all these horrible stuff like confiscating goods and things like that. I think it is regulations merged with urban management are quite important. And then infrastructure and all of that.” Sharon Lewis_ GTAC

“I think that maybe people understand their core mandates quite clearly but that is about interpretation and attitude where things go horribly wrong.” Sharon Lewis_ GTAC

Since operation clean sweep, smart cards are not issued or renewed when expired. “This means that we can be kicked off the streets at anytime” SAITF leaders

“There are old by-laws, outdated by-laws which local government uses as a basis to regulate informal workers” Theodora COSATU organising officer

“Various Local government have different by-laws operating differently and there is a lot of exploitation, corruption where informal workers have to bribe the police to be able to operate” Theodora COSATU organising officer

“Right now there aren’t favourable policies and by-laws for informal workers. So nationally there should be legislation to regulate the environment in which they operate” Theodora COSATU organising officer

5.4 SMMEs and Skills Development

“Every time the municipalities talk about it they say it in a patronising language of ‘we must help these poor people’. They even offer them courses on how to sort apples and how to serve their customers, I mean it is really insulting. When they talk about training that’s what they talk about”- inadequate training offered to informal traders” Pat Horn

“I don’t think that municipalities have been very good at doing enterprise development.” Sharon Lewis_ GTAC

“Even if you look at a program with the jobs fund that is very scientific in its approach, some of the jobs that were created through small enterprises were very expensive. It would have been cheaper to give people the money and tell them to stay at home. “I am not sure if local government should be doing too much of enterprise development.” Sharon Lewis_ GTAC

“I think having very clear policies around supply chain and around…even every contract “I feel like local government should rather set some rules and get out of the way” Sharon Lewis_ GTAC

“Two particular things that local governments should do very efficiently to support enterprise development. “Sharon Lewis_ GTAC

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“The first is to make sure that in property deals, municipal property deals, there are conditions of around the kind of affordable retail space and affordable commercial space. Just affordability of property using the municipal owned property. I think there is a very important role there and seeking out social objectives and enterprise development objectives through municipal property deals” Sharon Lewis_ GTAC

“And the second thing I would say is not so much about enterprise development but social organizations that support enterprise development should be supported by local municipalities. Whether that means initial start up funding or cheap rent municipal space.o E.g. The fashion district institute in downtown Johannesburg which is able to

fund its operations, which do support enterprise development, but it funds those operations through rent it gets from the municipal building that it got really cheaply for. The fashion district institute is a building that was refurbished by the JDA on behalf of the city of Joburg ..no it’s fashion square…so fashion square, the building, and fashion district institute was funded by the city of Johannesburg to establish itself, first of all, as it was new, and it was given a social route . So it can continue to fund its operations through the rent it gets and also maintain the building.” Sharon Lewis_ GTAC

5.5 Infrastructure and land

“Bad management can affect how a space works, so for example when we did the transit facility with trader spaces just near the Nelson Mandela bridge there is a square that was supposed to be conference facilities but we put trader spaces there and it was a very nice facility with solar panels for electricity and just nice features, nice bathrooms and when I go past there now it is just a disaster.” Sharon Lewis_ GTAC

“Then there are other places where we successfully set up the management partnerships with city improvement district for example, or with the transit operators, the guys who manages the transport facilities, and also that’s the sense of the company or whatever it is and sometimes management partnerships did work. There was another one that was very successful in Hillbrow which is the eKhaya neighborhoods where they are managing a park, and running all sorts of informal child care programs and things like that and that’s very successful, but not every space works like that.” Sharon Lewis_ GTAC

“In terms of taxis, the big mission was always providing enough space for taxi holding and ranking and we were not able to..in fact it was a strategic objective in the city of Johannesburg to try and encourage a move away from taxis to buses and trains. So there is this whole thing about..you are trying to make a bold shift, so you do not really want to build temporary taxi facilities because they will not be needed in the future. But in the meantime it is just awful. I think in many ways working smarter with taxi operators would be a really good thing and I am very glad that work is happening through city support program.” Sharon Lewis_ GTAC

“I think redirecting a little bit of funding towards decent facilities that are well managed would make a huge difference. I am trying to think why that does not happen normally, why it is such a mission, and I suppose it is because city parks is under funded, so they cannot deal with more facilities they have to manage. Until recently they did not even have a proper program for managing their public toilets” Sharon Lewis_ GTAC

“So our response was that, we then needed to look at developing facilities outside the inner city that will actually attract business in those spaces. That’s why for example the Bara Taxi Rank that was developed to accommodate informal traders. In Soweto you also have Kliptown which was also developed to accommodate

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informal traders. So we needed to look at mechanism of decongesting. If you look at that particular policy, it speaks to that. It says let’s open up, let’s open up, let’s open up!” Ex- MTC official

“Diversifying trading areas also came about, because then it made it very possible to say any new development must cater for informal trading. So for example if you take places like Cosmo City you’ll see that when it was developed, the developers there identified trading areas, specifically within their master plan to say this is going to be the area for informal business and this is going to be the area for formal business” Ex- MTC official

“Another important thing is partnerships with the private sector. In Joburg property owners between Eloff and President streets where there is Shoprite, the dead walls were opened to create kiosks for people to rent” Ex- MTC official

“How do we ensure that private sector, because majority of the development that is taking place now it’s actually conducted by a private sector. What is the role of the private sector in ensuring that the informal traders, they are also given space” Ex- MTC official

“The shelter build by the city on Noord Street is not really conducive for trading and this is mainly because traders were not consulted-when it rains their stock gets wet because the shelter was not properly built. The only thing the city provided was the shelter and demarcation by drawing yellow lines on the ground but the display structures that traders use to put their stock were organised by individual traders” SAITF leaders

“Refuse collection and storm water drains not provided for cooking traders and drains get blocked as result” SAITF leaders

“Traders are currently cleaning their places of business but there is no collection of rubbish by the city and they come back and complain that traders are the ones causing the city to be dirty. The city should complement the efforts of the traders by collecting the rubbish on a consistent basis’ SAITF leaders

“The city does not provide storage facilities. Traders are organising their own storage facilities where they pay around R250 a month. The issue with these private storerooms is that they have opening and closing time. “The one that most people in the linear market use opens in the morning at 5am and close at 10 am and 4pm in the afternoon and close at 8pm. If you come after 10am you will be denied entry into the storeroom to get your stock which means you have lost business for that day” SAITF leaders

5.6 Social inclusion

“Johannesburg as a whole is a city of immigrants, and it is a place for young people” Sharon Lewis_ GTAC

“I think the most important thing a city needs to do is demonstrate social inclusion and the identity of inclusion in places, and create public spaces and public facilities that offer opportunities for social cohesion. Public parks need to offer something to everybody. Museums and community facilities need to be inclusionary. You need to guide against having them captured by any particularly exclusive activities or operations or functions. That comes down often to urban design, better urban design, better thinking, but also the practice of participatory development, co-production of public places,” Sharon Lewis_ GTAC

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5.7 Practices of the state: Engagement between informal economy workers and local

Government

“The problem is that there is no statutory requirement on local government to sit down and talk to them. It’s normally something whereby they either do it out of the goodness of their hearts, if they have good hearts, or they do it because they feel under pressure to do it. I would say that the pressure one operates more than the good heart one” Pat Horn

“Most municipalities are either afraid to talk to the traders or to be honest. The officials in the municipalities do not have a clue how to negotiate. They do not have negotiation skills and even juniors in municipalities somehow have the idea that they are supposed to give instructions to informal traders and the informal traders are supposed to obey them. So the mind-set isn’t well gauged towards negotiations. The default position is that the municipalities have this idea that there is some parental relationship between them and the informal traders. “Our belief is that there should be some strategic obligations of municipalities to have proper negotiations. Which involves training their staff not to manipulate but to negotiate because most of them do that” Pat Horn

“There has been a lot of manipulation, a lot of setting up of fake platforms in many municipalities in South Africa especially in eThekwini and Johannesburg”. Municipalities have set up forums like that as a conveyer belt for giving instructions. Now that’s how they are not negotiating for them. And if you look at the terms of reference of those kind of things, it’s been a smart move for municipalities to make. Once they set up their own patronage networks then they bring the people they have created into those meetings—need for statutory (meaningful, genuine not manipulative) negotiating forums/structures in municipalities. Pat Horn

“if you know MTN Taxi rank, when it was developed there’s a mall there, you see? That particular mall was meant for the traders. So our gentlemen in the city [Planning Department] with their cleverness they gave it to the private sector. So what happened to the traders there? They’ve got no space. So I’m saying that it’s a question of other departments interpreting their mandate in a way that is actually in conflict with our [MTC/Department of Economic Development] mandate” Ex- MTC official

“Shelters are built for them but not in convenient places. Local government dumps them far away from the bus stops or taxi ranks. They must be there when workers are leaving work on the way to the taxi they pick up vegetables, they pick up fruits, and they should be close to where the train is that is where their customers are. Now to take them out of these places we go dump them far away where there is no is no business, nobody, no worker goes past there, they rely on business from workers that are rushing from work, going to catch a taxi and on the way they pick up goods” Theodora COSATU organising officer

“Where they are framing the Reclaimers as the poorest of the poor, socially excluded and then they put themselves in this role of a benevolent patriarch ‘saying’ oh you know we will give you training on how to be an entrepreneur”. Melanie Samson, (WITS) department of Geography

Role of Local Government

“so local government responsibility is to regulate all across the board fairness and equal access to all opportunities and services within these spaces. Now if you look at many local government policies they are pro-private sector and anti-informality. So,

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there’s a process of policy development but there also has to be a process of mindset change.” Vanessa Pillay, WEIGO

“Government doesn’t have to organize the informal workers, as I said they are already organized. It’s for local government to recognize the organizations of informal workers and sit down with them on basis of progressive engagement and really formalize” Vanessa Pillay, WEIGO

“I think one good thing would be as new policies are being developed. As progressive, inclusive developmental policies being developed, it has to be tied to the strict performance indicators of specific officials. People have to be held accountable, the policy can’t be just there and left to the good-will of somebody who’s gonna now pick up the policy and implement it.” Vanessa Pillay, WEIGO

“local governments’ responsibility to, first of all, understand the informal economy and what its role is and should be, then come up with strategies and plans; and to engage with the informal economy. Admissibly there is also regulatory role” Sharon Lewis_ GTAC

Constraints of local government

Lack of political will: “There are officials who don’t have capacity, who need a lot of training, and who easily get side tracked by attractive issues, you know the tender issues which always get regarded as more important” Pat Horn

“So when I say lack of political will I don’t mean bad will. But you know the lack of political will to just learn, talk to people, work as a team, is lacking. But each municipality could have its training program to train the officials about dealing with this kind of issues. So I am quite sure that some training programs, but perfectly pitched training programs would go a long way” Pat Horn

“You need to come up with programs that would actually ensure that at the same time you accommodate the needs, the interest of the poorest which are your informal traders. But balancing them with the interest of the property owners which are basically the guys who are paying your rates and taxes, to ensure that the city is actually running, because if you look at the rent that you charge at MTC , we are charging, I mean a trader will pay R50, but I will tell you that if you look at our debtors book, its actually as huge as a textbook” Ex- MTC official

Lack of appropriate funding mechanisms: for instance to fund waste pickers they rely on EPWP money and those funds have constraints. “one of the constraints is that the program only assist South Africans only, but the problem is that this sector, the significant proportion workers are foreign internationals (Basotho and Zimbabweans)”. Melanie Samson, (WITS) department of Geography

“National government whenever there a direct project that link all there sphere of government, they want to manage and run these projects themselves from national level with less interaction to the other spheres.” Michael Hlangu (Business Support and Tourism in Market Unit)

Proposed solutions

“I am a firm believer that we need to solve our developmental problems at neighbourhood level.” Sharon Lewis_ GTAC

“So it is very important to neighbourhood economics, and I would say if you buy into the idea of circular economies, then informal activities are especially important. And even the kind of small thinking, so lots of little interventions which are not particularly structured but unlocks community creativity.” Sharon Lewis_ GTAC

“What local government should be doing, should be ensuring that there’s shelter for them to be able to sell, they should ensure there is health and safety, they should

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make sure they are not harassed daily and having to pay bribes to operate, it’s the local government’s job!” Theodora COSATU organising officer

“We need to adopt participatory policymaking approach”Melanie Samson, (WITS) department of Geography

“create a social mobilization unit-which will interact with every stakeholder in the sector. ”Melanie Samson, (WITS) department of Geography

ILO R204

“The issues is that formalisation has got different takes on it. So there’s the employers take which is we make everybody register businesses, and we make the requirements so difficult to achieve that most people won’t manage, and in that way we get rid of competition to us. So basically the employers who were the ones who put this thing on agenda, I think they were hoping for some kind of unattainable registration processes that would criminalize most informal competitions to themselves” Pat Horn

“We kind of think that the employers want what the local government wants. When it comes to the issue of taxes for example, most workers in the informal economy do pay their taxes although maybe not in the conventional way. In fact they are paying taxes. But the taxes they pay are not called taxes. They are called all sorts of other things. So we are saying, recognise all of those payments” Pat Horn

“We are entirely in favour of a proper implementation of the recommendation tool for all. Not a selective recommendation in the interests of the employers and government. And there is lots of issues that aren’t being fixed. And this whole package, if you look at recommendation 204 it’s got very strong provisions about social protection. It’s got very strong positions about rights of workers. It’s got very strong positions about regulatory framework. What we are trying to make it be stronger on than it is was the obligations of the local government to negotiate with informal workers” Pat Horn

“There’s lots of issues that get done in the name of formalisation that are highly abusive. So the whole issue of, you know for the sake of formalisation, you just remove people from the streets and stop them from making their livelihoods while you are doing the so-called formalisation. There is a clause in the preamble which specifically states that the transitions must be done without anybody’s livelihood being sacrificed. So you know we defended that” Pat Horn

Foreign nationals

“So now you have competition for space, you have on one hand your local bonafied citizens, who lead the claim that it’s our city, ke toropo ya rona, priority must first come to us and then you have your asylum seekers as an example, who also say but we are running away from prosecution, persecution from our countries. We have been granted asylum seeker status in South Africa, therefore the law of this country allow us to earn a living, so the only job, I mean you have people with masters and Phds on the streets who are coming from African diaspora for example. They will tell you I have this qualification but I can’t find a job. I have to feed my family, where do I support them? Informal trading is the answer” Ex- MTC official

“Do you know Bree Metro mall? You see Bree we’ve got two blocks there, block B and C. That block B it was all South Africans. Guess what it is now? Nigerians and other foreigners have taken over. The accusation is that the Nigerians, they approach a South African… they make an offer to you, a financial offer of X amount of money. Sign an affidavit to surrender your stall to them and many South Africans have done that” Ex- MTC official

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“There is need for some collaboration between South Africans and foreigners in order to share fundamental business skills and experiences” Ex- MTC official

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