Tavonga njaya informal sector, panacea to the high unemployment in zimbabwe. Over a fiveyear period, slf has undertaken empirical research into the largely understudied field of the township informal economy in south africa. Experts have argued that in most african economies, the informal sector is often the continue reading the role of the informal. A regression model to estimate the informal economy was used in this study. Mscagric december 2012 the importance of the agricultural sector in the south african economy is. Incorporated as a notforprofit foundation in 1971, and headquartered in geneva, switzerland, the forum is tied to no political, partisan or national interests. A history of south african capitalism in national and. May 11, 2011 the informal sector of the economy often refers to the unregulated and mostly unregistered sector of the economy, put simply it refers to the numerous petty or small scale businesses operated by artisans, peasants and other micro entrepreneurs, within the economy. The multiple indicatormultiple cause mimic method is a wellestablished tool for measuring informal economic activity. Informal agricultural employment in south africa by metro status and.
In south africa the informal sector contributes between 7% and 20% to the economy. The importance of the informal sector in west africa. Improving skills development in the informal sector. While the informal sector is the forgotten sector in many ways, it provides livelihoods, employment and income for about 2. The public sector manager communicates with a strategic component of governments target audiences senior public sector managers. Kennedy school of government, harvard university, cambridge, ma, usa. May 30, 2017 due, in part, to the way in which poverty and informal employment are conventionally viewed, there is no research on how informal sector employment contributes to poverty reduction in south africa. A job in the informal sector reduces poverty about as much as. Data not available informal settlement, limited social infrastructure. Experts have argued that in most african economies, the informal sector is often the. An exploration of the informal backyard rental sector in. South africans and 40%, coloured south africans, 5% foreign africans. After nearly two decades since the ending of apartheid colonialism, poverty, unemployment, inequality, and environmental degradation remain persistent.
Other estimates for the size of the south african informal economy includes an estimate from loots who estimated the size of the informal economy using the labour market approach to be 12. Understanding south africas economic puzzles dani rodrik john f. The importance of the informal sector in west africa world. Mapping the green economy landscape in south africa final. It also uses the predictive mean matching pmm method to estimate the. The role of the informal sector in african economy. Informal sector employment and poverty in south africa. South africa relative to countries in the sadc region. Pdf while the informal sector in south africa is the forgotten sector in many ways, it provides livelihoods, employment and income for about 2. The only difference is the extent of economic and political. The role of the agricultural sector in the south african economy j. However, it has been criticized because gdp is used both as a cause and indicator variable. The backyard sector can be observed in every settlement found within the boundaries of south africa, in urban centres and even in more rural locations where formal housing has been provided. Braude 2005 estimated that informal sector in south africa comprises between 7 and 12 per cent of the total economy.
The informal sector in south africa, therefore, should not be characterised as a homogenous sector which can provide freeentry to the unemployed. Introduction according to the 2006 september labour force survey, approximately 22% of the employed excluding domestic workers and agricultural employment are engaged in informal sector activities as their main work to sustain themselves and their dependents. Walking short taxi access to formal shops, rail terminal and middle class neighbourhoods. In zimbabwe the informal sector coexisted with the formal economy since time immemorial though at a very small scale up to the early 1990s. However, little is known of these businesses or the factors that foster or inhibit enterprise development within the sector. Public sector manager magazine government communication and.
Informal sector, panacea to the high unemployment in zimbabwe. By the time the pricing regulations were published in january, only 4 biofuels and biodiesel companies were licensed. Public sector manager magazine government communication. Nov 10, 20 reasons for high informal sector employment in south africa case studies from three informal sector contexts challenges facing south africas informal sector 9. The magazine aims to help public sectorgovernment managers and their departmentsagencies to improve the quality of the services they provide by reporting on management innovations and best practices within the public sector. It is not as large as in other african economies, but it still plays a.
The size and composition of south africas informal economy using an employmentbased definition of informal work, the number of persons in nonagricultural informal employment in south africa was estimated at 3. This paper presents an analysis of the nature of, and recent trends in, the south african informal sector using quarterly labour force survey qlfs data from 20082014. The contribution of south africas informal sectoreconomy to gdp. How important is the informal sector in urban food security. Among the manufacturing powerhouses of the continent, south africa has a strong industrial tradition dating back 150 years. A critical analysis of the current south african informal sector. Pdf the dynamics of the informal sector in south africa a. Informal employment accounts for a smaller share of nonagricultural employment in southern africa 33% in south africa and 44% in namibia relative to countries in other subregions 82% in mali and 76% in tanzania vanek et al 2014. In south africa, the banking sector accounts for more than 20 percent of gross domestic product gdp, and is the third largest employer, accounting for over 10 percent of o verall e mployment. Estimating the size of the informal economy in south africa. An analysis of national household surveys sector employers through the intervention of a labour broker, for example, are not likely to receive nonwage benefits e. The main link between the informal sector and income poverty, in broad terms, is through its. The past few decades have been difficult, with external and domestic factors weighing on the sector, but the government and industry leaders have been working to stoke growth and develop valueadded industries.
Although this figure is far lower than our developing country counterparts, it still comprises 16,4% of south africas total employment. Series lcsh 16 a complete set of stats sa publications is available at stats sa library and the following libraries. According to jones 20 in the south african financial mail june 20, despite the many support programmes e. Pdf performance of the south african banking sector. Executive summary south africa is ranked well behind fellow african countries such as ghana and zambia in our ability to establish, sustain and grow successful new businesses source. Statistics south africa data collection classifications. The nature of the south african informal sector as reflected in the quarterly labourforce survey, 20082014. The world economic forum is an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas. It was difficult to ascertain from current available information, how many companies are active in the bioenergy sector in south africa. In a paper by stephan saunders that was published in the south african journal of economic and management sciences, he estimated the size of the informal economy to be 7. This is also because very few data sets have the necessary information to answer this question. Statistics of the nonprofit sector for south africa, 2012statistics south africa.
One in every six south africans who work, work in the informal sector. South africas informal economy sustainable livelihoods. Estimating size of south africas informal economy south. The role of the informal sector in african economy talkafrique. The debates about why south africa continues to have a small informal economy with high levels of unemployment is an important consideration for employment policy. In fact, one can say that a comprehensive understanding of this sector is. An informal economy informal sector or grey economy is the part of any economy that is neither taxed nor monitored by any form of government although the informal sector makes up a significant portion of the economies in developing countries, it is sometimes stigmatized as troublesome and unmanageable. Statistics south africa 2007 estimated nonagricultural employment in the. Strategies for subsaharan africa directions in development. The informal economy in south africa contributes about 5 percent to gross domestic product and 15 percent to employment.
Pdf on jan 1, 2005, p f blaauw and others published the dynamics of the informal sector in south africa a case study of day laborers in pretoria find. In seeking to improve the quality of life for all its inhabitants, south africa must also reduce poverty, create employment, and redress widening inequalities. A history of south african capitalism in national and global perspective keith hart, vishnu padayachee transformation. It is commonly acknowledged that south africa occupies a position comparable to first world industrialised countries, hence for purposes of the present study, it is considered a dominant country, and is said to be hegemonic. Schneider 2002 puts the size of informal economy in south africa as a percentage of gdp for the years 19992000 at 28. The sector provides much needed shelter to those waiting to be housed by. The impact of globalization on the informal sector in africa. Informal employment in south africa 3 contents tables 3 figures 3 executive summary 4 1.
Informal and smme retailers in south africa 3 international trends in 2003 smmes represented more than 99% of all retailing companies in europe and were the second largest employer with a workforce of 16 million. National library of south africa, pretoria division national library of south. Although large retailers dominate the sector, smmes provide more employment opportunities and have a larger proportion of market share. Apr 04, 2017 but, variation within the region is significant. Pdf the dynamics of the informal sector in south africa a case. An analysis of formal sector employment in south africa.
Although poverty may be most extreme among those without formal sector employment and hence incomes, it also extends to large numbers of wage earners. The south african informal sector stellenbosch university. Quarterly labour force survey statistics south africa. Other studies claim that a vast majority of jobs created in the 1990s were outside the formal sector. Pdf on jan 1, 2005, p f blaauw and others published the dynamics of the informal sector in south africa a case study of day laborers in pretoria find, read and cite all the research you. In south africa, the formal sector is defined as economic activity that occurs within the purview of state regulation and formal employment is defined as employment originating from a business or firm that is registered with the state. Why does the informal sector have such a bad reputation, despite employing so many people and representing such a substantial share of the economy. National library of south africa, pretoria division. The south african context is a new democracy, having recently emerged from a history of apartheid and responding to economic globalization by lifting trade.
Small informal sector and high unemployment in south africa 11 4. The informal sector and the challenges of development in south africa lindile l. Statistics on high informal employment it is estimated that about 3 million out of a labour force of about million are in the informal sector and is growing at 8% per year. According to statistics south africas apriljune 2016 quarterly labour force survey, 2 565 000 south africans reported working in the informal sector. Jan 02, 2017 according to statistics south africas apriljune 2016 quarterly labour force survey, 2 565 000 south africans reported working in the informal sector. Mapping the green economy landscape in south africa.
Greyling department of agricultural economics, university of stellenbosch, private bag x1, matieland 7602, south africa. Thus attempts to alleviate poverty usually emphasize employment generation or increases in real wages, or both. The informal sector and the challenges of development in. The results are contrasted with those obtained by brand 1969 and other authors, in order to establish whether, and if so how. Notwithstanding this growth, unlike most other developing countries, the informal economy in south africa continues to be small. This concern arises because of its perceived contribution to dynamic economic efficiency, possibly as a response to growing competitive pressures brought about by trade liberalization. Understanding south africas informal economy sustainable. Pdf the dynamics of the informal sector in south africa. The size of the informal sector is of particular interest to economic policy makers concerned to promote the development of a microentrepreneurial sector. To address this issue, this paper applies for the first time the light intensity approach instead of gdp.
The main african exception is south africa, where the informal sector engages merely 17 percent of workers. This is relatively low compared to the other countries considered. With a multidisciplinary outlook, the journal will stimulate service delivery and performance challenges being faced in government. Linkages between the formal and informal economy 5.