INFORMAL ECONOMY

2012

uMhlathuze Municipality encompasses Richards Bay, Empangeni, eSikhaleni, eNgwelezane, eNseleni, Vulindlela, KwaDUBE, Madlebe, KwaKhoza, KwaMkhwanazi.

It has an unemployment rate of 38% and low levels of education and skills (IDP, Statistics SA)

SYNOPSIS

First EconomyFormal Economy

Second / Informal EconomyThe informal sector is economic activity that is neither taxed nor monitored by a government

ECONOMIC DEVELOPMENT FOCUS

It costs approximately R20 million to create a job in big business and R20,000 for small business, and a Negligible amount for informal business

uMhlathuze Municipality has approximately 1, 800 Informal Traders, trading in the following fields:

1. Street or curbside trading2. Trading in pedestrian malls3. Markets4. Trading at transport intersections5. Trading in Public Open Space6. Mobile Traders, includes trading from caravans, bakkies, trailers and containers7. Special events8. Roadside mechanics9. Car wash10. Hair dressers

INFORMAL ECONOMY

Generally, informal traders locate at localities where there are high volumes of people or activity at public places or a high number of less affluent households in the traditional “townships” in areas of private land ownership.

Richards Bay CBD:Taxi CityCheckers Markets Esikhaleni Shopping Centres:Ntokozweni Esikhaleni Mall eNseleni: eNseleni Rank Meerensee Suburban Mall:LAC CentreAlkanstrand Beach Front

AREAS OF TRADE

Empangeni CBD:Empangeni Rail-A RankCommercial StreetLot 63B RankBiyela Street Union StreetMaxwell Street Ngwelezane:Ngwelezane HospitalNgwelezane Taxi Rank

AREAS OF TRADE

INFORMAL TRADING REGULATION

• Provincial Informal Trade Policy, Municipal Bylaws, Informal Trade Policy

• Institutional Arrangements for Informal Trading:

Business Support, Markets & Tourism, Traffic Services, and Environmental Health

Business Support markets and Tourism is a unit under the City Development Cluster.

The sub-unit Markets is responsible for coordinating and monitoring of the Informal Economy actors within the city.

•Maintain and update a database of Informal Traders

•Conduct a needs analysisConduct a needs analysis

•Plan relevant interventions and source funding to Plan relevant interventions and source funding to assist informal traders, e.g.: Infrastructure upgrade, assist informal traders, e.g.: Infrastructure upgrade, or new infrastructure or new infrastructure

ROLE OF BUSINESS SUPPORT, MARKETS & TOURISM

• Provide basic business training, markets / bulk purchasing, etc. for Informal Traders

Issue of Informal Trading Permits / Renewals

Since its inception in 2011 (The sub-unit Markets) has partnered with financial institutions such as ABSA Bank and Standard Bank in offering Financial Literacy and Business Management Skills training. With the assistance of Council’s Spatial Planning the Unit is in the process of identifying additional sites to be demarcated for trading

Compiled and Submitted Business Plans for infrastructure Development to COGTA in 2012 for the construction of 250 Trading Stalls

Currently reviewing the Informal Trading Policy to align with Provincial Policy 

…ROLE OF BUSINESS SUPPORT, MARKETS & TOURISM

TRAFFIC UNIT

•Routine Inspections,

•Enforcement of Council bylaws

ENVIRONMENTAL HEALTH UNITENVIRONMENTAL HEALTH UNIT

•Routine InspectionsRoutine Inspections

•Training in food handling and housekeeping issuesTraining in food handling and housekeeping issues

ROLE OF…

BUSINESS SUPPORT, MARKETS & TOURISM•There is a large number of Informal Traders, and There is a large number of Informal Traders, and currently there are resisting the movement to the currently there are resisting the movement to the formal sector, because of stringent regulation and formal sector, because of stringent regulation and high cost of overheads.high cost of overheads.•Insufficient manpower in the Unit, even though Insufficient manpower in the Unit, even though positions have been created, due to budgetary positions have been created, due to budgetary constraints they remain unfilled. constraints they remain unfilled.

TRAFFIC UNIT•There are currently 5 Nuisance Officers, this is not There are currently 5 Nuisance Officers, this is not sufficient for the number of traders (1,800), sufficient for the number of traders (1,800), •No follow up when transgressions are reported,No follow up when transgressions are reported,

CHALLENGES

……TRAFFIC UNITTRAFFIC UNIT

•No follow up or consequences when fines issued are No follow up or consequences when fines issued are unpaidunpaid•No consequences for repeat offendersNo consequences for repeat offenders

ENVIRONMENTAL HEALTH UNITENVIRONMENTAL HEALTH UNIT

•Health Inspectors not conducting routine inspections Health Inspectors not conducting routine inspections frequentlyfrequently•No follow up on complaints receivedNo follow up on complaints received

CHALLENGES

BUSINESS SUPPORT, MARKETS &TOURISMBUSINESS SUPPORT, MARKETS &TOURISM

•Design an evaluation tool to monitor Traders and Design an evaluation tool to monitor Traders and determine readiness levels for graduation to the determine readiness levels for graduation to the Formal Sector,Formal Sector,

•Draw up and implement a mentorship programme for Draw up and implement a mentorship programme for Traders that are ready to graduate to the Formal Traders that are ready to graduate to the Formal Sector.Sector.

•Constantly update the database of TradersConstantly update the database of Traders

•Filling of the vacant positions, at least one position Filling of the vacant positions, at least one position per financial year.per financial year.

WAY FORWARD

TRAFFIC UNITTRAFFIC UNIT

•Additional Nuisance officers required, as the number Additional Nuisance officers required, as the number of Informal Traders is high, and it is growing annually.of Informal Traders is high, and it is growing annually.

ENVIRONMENTAL HEALTH UNITENVIRONMENTAL HEALTH UNIT

•Routine Inspections to be frequent, and Routine Inspections to be frequent, and •transgressors to be reported to the Traffic Unit, and transgressors to be reported to the Traffic Unit, and follow up be done fortnightly to ensure compliancefollow up be done fortnightly to ensure compliance

WAY FORWARD

• Business SupportBusiness Support

• 035 907 5417035 907 5417

• Informal TradingInformal Trading

• 035 907 5430035 907 5430

• TourismTourism

• 035 907 5614035 907 5614

• Investment PromotionInvestment Promotion

• 035 907 5435035 907 5435

CONTACT DETAILS

THANK YOU