““Approaches to Municipal Approaches to Municipal Management of the informal Management of the informal

Economy: Hibiscus Coast: Case Economy: Hibiscus Coast: Case Study Study

By By

Siyabonga Zama Siyabonga Zama

Directorate of Economic DevelopmentDirectorate of Economic Development

Hibiscus Coast Municipality Hibiscus Coast Municipality

Presentation Outline Presentation Outline

•Hibiscus CoastHibiscus Coast

•Informal Trade HCM Perspective Informal Trade HCM Perspective

•Integration of Informal Economy Integration of Informal Economy

•Types of Informal Trade in HCMTypes of Informal Trade in HCM

•Informal Economy Regulatory Informal Economy Regulatory EnvironmentEnvironment

•Challenges Challenges

•Recommendations Recommendations

•

HIBISCUS COUAST HIBISCUS COUAST MUNICIPALITY MUNICIPALITY

• 65 Km Coastal Belt65 Km Coastal Belt• 21 Beaches 21 Beaches • 7 Blue Flag Beaches7 Blue Flag Beaches• Prime Tourist DestinationPrime Tourist Destination• +80% Rural +80% Rural • 20% Urban Contributes 80% towards the economy of the 20% Urban Contributes 80% towards the economy of the

municipalitymunicipality

•

Informal Economy HCM Informal Economy HCM Perspective Perspective

• Refers to economic activities that are not regulated Refers to economic activities that are not regulated in terms of the laws applicable to the formal sector.in terms of the laws applicable to the formal sector.

• Trading in goods and services in designated areas Trading in goods and services in designated areas (Informal Trading Areas)(Informal Trading Areas)

• Operators in the second economy are survivalist in Operators in the second economy are survivalist in naturenature

• Source of employment for most rural, peri- urban Source of employment for most rural, peri- urban communities communities

•

Integration Of The Informal Economy To Integration Of The Informal Economy To The Formal Economy The Formal Economy

• Second economy cannot be formalizedSecond economy cannot be formalized

• Create a regulated environment Create a regulated environment

• Alignment of activities with the activities in the formal sector especially Alignment of activities with the activities in the formal sector especially tourism i.e. major events, business retention programs tourism i.e. major events, business retention programs

• Ensuring on going partnerships with organized business and tourism Ensuring on going partnerships with organized business and tourism body.body.

• Form part of the LED Strategy and SMME’ Development Plan Form part of the LED Strategy and SMME’ Development Plan

Types of informal Trade Types of informal Trade

• Beach Traders Beach Traders • Street TradingStreet Trading• SalonsSalons• KitchensKitchens• Car guidesCar guides• Bovine heads traders Bovine heads traders • Mobile Traders etc.Mobile Traders etc.•

Regulatory Environment Regulatory Environment

• Informal Trade By LawsInformal Trade By Laws• Informal Trade Policy Informal Trade Policy • Informal Trade Registration Committee Informal Trade Registration Committee • Informal Trade Areas Informal Trade Areas • Enforcement Enforcement

Challenges of the Informal Challenges of the Informal Economy Economy

• Second Economy is an unfunded mandate Second Economy is an unfunded mandate • Lack of Infrastructure for informal tradersLack of Infrastructure for informal traders• Lack of adequate infrastructure for food Lack of adequate infrastructure for food

traders ( trading in unsafe enveronment)traders ( trading in unsafe enveronment)• Lack of financial literacyLack of financial literacy• Capacity to provide support Capacity to provide support • Financial Support to informal Traders Financial Support to informal Traders

Continue… Continue…

• Growing number of people entering the Growing number of people entering the second economy e.g. our African brothers second economy e.g. our African brothers

• Enforcement Enforcement • Planning considerations Planning considerations • Capacity of the informal Traders Chambers Capacity of the informal Traders Chambers

at a local levelat a local level• Chambers VS prior existing associations. Chambers VS prior existing associations.

Recommendations Recommendations

• Provisions of infrastructure in the designated informal Provisions of infrastructure in the designated informal trading areas.trading areas.

• Developing generic support systems Developing generic support systems • Financial support to informal traders Financial support to informal traders • Financial Literacy Training Financial Literacy Training • Local municipality based research initiativesLocal municipality based research initiatives• Provide capacity to municipalities : human and financial Provide capacity to municipalities : human and financial

resources resources •

CONTINUE…..CONTINUE…..• Mainstreaming into the Mainstreaming into the existing value chain existing value chain • Planning considerations Planning considerations

Conclusion Conclusion

• Informal economy remain the source of Informal economy remain the source of employment for the poor employment for the poor

• Any support to municipalities will enable Any support to municipalities will enable municipalities to cope with the growing number municipalities to cope with the growing number of people entering the sector daily of people entering the sector daily

NGIYABONGANGIYABONGA

THANK YOUTHANK YOU