The informal economy has received R4.5 million in grant funding from the South African Informal Traders Alliance (Saita) and the Industrial Development Corporation (IDC) to support businesses impacted by the July unrest and looting that occurred in parts of Gauteng and KwaZulu-Natal.
According to the two organisations, the grant initiative saw 180 informal traders each receiving R25 000 to help give their businesses a second chance – an opportunity to renew themselves and make a meaningful contribution to the local economy.
“For us as the IDC, we are happy that this collaboration will not only help to restore the businesses to pre-unrest levels, but it will also serve as a platform to reinforce the sustainability and resilience of the businesses supported,” says IDC head of partnership programmes David McGluwa.
According to Saita president Rosheda Muller, an estimated 50 000 traders were affected, with monthly income of R6 500 lost on average.
The unrest brought trade to a standstill for most informal traders, particularly those who traded outside looted malls, as customer numbers dropped due to store closures. Others had to close their stalls as it was unsafe to trade.
The unrest also meant that informal traders had to find means to travel to other stores to stock up, as the stores they usually bought from were looted.
According to Statistics SA’s Q3 2021 Quarterly Labour Force Survey, 2.7 million people earn a living in the informal economy, with the sector accounting for 18.9% of total employment.
The National Development Plan notes that the informal sector “provides a cushion for those who lose formal sector jobs or need to supplement their formal incomes during crises”.
Millions of people rely on informal traders not only to provide them with basic essentials but also to sustain the township economy and create jobs.
“As much as 40% of total food bought by consumers each year is from informal traders, who serve 77% of the population,” says Muller.
Saita and the IDC are operating under the ‘Build Better Campaign’ and say they aim to assist in creating one million jobs by 2023 and support the most vulnerable, protecting them from business closure, job losses and reduced income.
They also seek to fulfil their missions in relation to responding to impacted community needs and supporting entrepreneurship and business partnerships.
“Saita’s strength as the voice of the informal sector with a footprint across the nine provinces in South Africa allows for activities to be simultaneously running across all the provinces, whilst capitalising on focusing on the sectors where the informal economy needs the most assistance in every province,” the organisations said in a statement.
Read: Who really bears the burden of the stuttering SA economy?
Saita and IDC established their partnership in August 2019.
Palesa Mofokeng is a Moneyweb intern.