Abstract
D.Com.(Economics)
One of the current most topical aspects of economic activity in South
Africa is the growth of the informal sector. In addition, with deregulation
becoming a hallmark of government economic policy, local authorities
have become increasingly aware of the growth of the informal sector.
The aim of this study is to investigate the nature and extent of informal
sector activities in the Johannesburg municipal area by means of a
questionnaire method of research.
After a study of the numerous definitions concerning the informal sector,
it was decided that for the purpose of this thesis, the informal sector be
defined as:
Those businesses that do not conform to a diversity of legal requirements,
while the market and price mechanisms determine the production,
distribution, and consumption of goods and services.
In Johannesburg, it was observed that the formal sector's inability to
create sufficient employment opportunities for all its citizens led to
increasing numbers of people becoming involved in the informal sector.
As far as the nature of the informal sector is concerned, the survey carried
out during August 1991 revealed that diverse types of economic activities
are being carried out. The main activities of the informal sector in
Johannesburg were found to be: (i) production (such as "furniture makers"
and "knitters"); (ii) accommodation (such as sub-letting of land/property
or premises); (iii) building construction (such as building contractors and
plasterers); (rv) repair services (such as motor repairs, panel beaters and
home appliance repairs); (v) retail distribution (such as food vendors and
hawkers of fresh produce); (vi) transport (such as the transport of goods
and passengers); and (vii) personal services (such as hairdressers and
photographers). The most important activity was found to be retail
distribution. Disproportionately more male than female entrepreneurs
were involved in this sector. Most entrepreneurs were between the ages of
31 and 40 years. These entrepreneurs work long hours and frequently
have to provide their services for seven days a week. Most of the
undertakings were operated solely by the informal sector entrepreneur,
and employees were only employed in exceptional cases. Informal sector
entrepreneurs experienced great problems in obtaining finance and
licences. Other problems included access to water and electricity.
A unique method was developed in order to determine the extent of
informal sector activities in Johannesburg. In applying this method it was
found that 15,20 percent of the total number of unemployed households
in Johannesburg participated in informal sector activities.
Having taken account of the findings of the survey conducted in August
1991, the informal sector has an important role to play in the future,
especially as an avenue for the employment of those who cannot be
accommodated in the formal sector. The greatest challenge facing the
Johannesburg City Council is to introduce development measures such as financial assistance, the provision of infrastructure, establishing a development fund, deregulation and training programmes in order to stimulate the expansion of informal sector activities without detrimentally affecting the formal sector activities.
Africa is the growth of the informal sector. In addition, with deregulation becoming a hallmark of government economic policy, local authorities have become increasingly aware of the growth of the informal sector.
The aim of this study is to investigate the nature and extent of informal sector activities in the Johannesburg municipal area by means of a questionnaire method of research.
After a study of the numerous definitions concerning the informal sector, it was decided that for the purpose of this thesis, the informal sector be defined as:
Those businesses that do not conform to a diversity of legal requirements, while the market and price mechanisms determine the production, distribution, and consumption of goods and services.
In Johannesburg, it was observed that the formal sector's inability to create sufficient employment opportunities for all its citizens led to increasing numbers of people becoming involved in the informal sector. As far as the nature of the informal sector is concerned, the survey carried out during August 1991 revealed that diverse types of economic activities are being carried out. The main activities of the informal sector in
Johannesburg were found to be: (i) production (such as "furniture makers"
and "knitters"); (ii) accommodation (such as sub-letting of land/property or premises); (iii) building construction (such as building contractors and plasterers); (iv) repair services (such as motor repairs, panel beaters and home appliance repairs); (v) retail distribution (such as food vendors and hawkers of fresh produce); (vi) transport (such as the transport of goods and passengers); and (vii) personal services (such as hairdressers and photographers). The most important activity was found to be retail
distribution. Disproportionately more male than female entrepreneurs were involved in this sector. Most entrepreneurs were between the ages of 31 and 40 years. These entrepreneurs work long hours and frequently have to provide their services for seven days a week. Most of the undertakings were operated solely by the informal sector entrepreneur, and employees were only employed in exceptional cases. Informal sector
entrepreneurs experienced great problems in obtaining finance and licences. Other problems included access to water and electricity.
A unique method was developed in order to determine the extent of informal sector activities in Johannesburg. In applying this method it was found that 15,20 percent of the total number of unemployed households in Johannesburg participated in informal sector activities.
Having taken account of the findings of the survey conducted in August 1991, the informal sector has an important role to play in the future, especially as an avenue for the employment of those who cannot be accommodated in the formal sector. The greatest challenge facing the Johannesburg City Council is to introduce development measures such as financial assistance, the provision of infrastructure, establishing a
development fund, deregulation and training programmes in order to stimulate the expansion of informal sector activities without detrimentally affecting the formal sector activities.