INFORMAL ECONOMY IN THE CBD AND ITS CONTRIBUTION TO LOCAL 
ECONOMIC DEVELOPMENT IN BLOEMFONTEIN 
 
BY 
TSHOLOFELO CONFIDENCE SHOUNYANE 
STUDENT NUMBER: 2010081822 
 
Submitted in partial fulfilment of the requirement of the degree 
 
Masters in Development Studies 
In the discipline of 
Development Studies 
In the 
Faculty of Economic and Management Science  
(Centre of Development Studies) 
at the 
University of Free State 
Bloemfontein, South Africa 
 
Supervisor: Dr DEIDRE VAN ROOYEN 
  
i 
 
 
 
DECLARATION 
 
I hereby declare that this mini-dissertation submitted for degree Master Development 
Studies at the University of Free State is my original work and had not been submitted 
by any other person to any other university. I declare that all source of material used 
has been cited. 
 
 
Signature: ………………………………………………………. 
 
Date: …………………………………………………………. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ii 
 
 
 
ACKNOWLEDGEMENTS 
 
First and foremost, I will like to thank God Almighty for giving me such a wonderful 
opportunity and strength to do this research. I wholeheartedly thank my supervisor, Dr 
Deidre Van Rooyen, for the supervision and encouragement. I will also like to thank 
the whole institution, the University of Free State (CDS) and its staff for their kindness 
and, most importantly , Mr. Mohlophehi Mngomezulu. 
 
I will also like to extend my gratitude to the Department of Rural Development and 
Land Reform and its management for offering to pay my tuition fees. I am also grateful 
to my colleagues and my dearest friends Mandisa Majenge and Marabu Tloubatla for 
their words of encouragement. I am also very thankful for the moral support from my 
family, the pillar of my strengths, which are my siblings Boitumelo Shounyane and 
Tebogo Shounyane, my nieces Lesego, Lesedi, Refilwe, Gomolemo, Bambi and 
Omogolo, Olorato, my nephew, Tshegofatso Shounyane, and lastly my beloved sister 
In law Kgaogelo Mudau. 
 
Special gratitude goes to the Street vendors in Bloemfontein CBD and Mangaung 
Metropolitan Municipality (LED officials), who willingly participated in the data 
collection session. I hope the research findings will have a positive influence on their 
productivity. 
 
May God bless them abundantly.  
 
 
 
 
 
 
 
 
 
iii 
 
 
 
DEDICATION 
 
I dedicate this work to my late mother, Tshaletseng Vincentia Shounyane. Thank you 
for imparting in me the passion for learning and going out of your way to set me on the 
path of greatness. I will never forget the important values you have passed down to 
me -particularly endurance and perseverance.  
 
MAY YOUR SOUL REST IN PEACE 
 
 
 
  
iv 
 
 
 
ABSTRACT 
 
As a developing nation, South Africa is faced with the triple challenges of 
unemployment, poverty, and inequality. Therefore, the informal economy is a critical 
sector for the country to provide livelihood, income and job opportunities for millions 
of unemployed people and business owners. The South African economy has always 
catered to developing and establishing formal businesses that meet minimum 
standards such as registration. Since 1994 when the transition to democracy took 
place, Local Economic Development has been raised from an isolated development 
intervention to a mandate enforced for all South Africa’s local authorities. Without any 
economic activities in the formal sector, unskilled, poor and marginalised South 
Africans would rely on the informal economy and social grants for survival. Due to its 
easy access, the informal economy provides various economic activities for the poor. 
 
• The main objective of this study was to examine the informal economy in the 
Central Business District (CBD) and its contribution towards Local Economic 
Development (LED) in Bloemfontein. The sub-objectives included: to 
investigate the role of the informal economy for Local Economic Development;  
to examine the state of informal economy in South Africa, to analyse the 
importance of informal trading towards economic development in Bloemfotein, 
to examine the type of support and offer recommendations for informal 
economy in Bloemfontein CBD.  
 
A qualitative study using non-probability sampling was carried out on a sample of 20 
informal traders and 5 government officials in the Central Business District of 
Bloemfontein. Informal traders were selected using a snowballing sampling procedure. 
Semi-structured interviews using questionnaires were conducted. The research 
objectives were analysed using a qualitative approach. The results show that informal 
traders are not supported to their satisfaction. To some extent, no support reaches 
them; hence the challenge of expansion and combating the triple challenges becomes 
hard to reach. Further results show a disconnection between local governments and 
an indication of a strained relationship.  
 
v 
 
 
 
Therefore, the study recommends that the government partner with relevant players 
to execute their policy plans on informal economy. These players may vary from 
infrastructure development to primary producers and high-end supermarkets. Informal 
traders are urged to formalise their businesses to leverage their support and 
opportunities presented by the government.   
vi 
 
 
 
DECLARATION ii 
ACKNOWLEDGEMENTS iii 
DEDICATION iv 
ABSTRACT v 
LIST OF FIGURES xi 
LIST OF TABLES xii 
ANNEXURES Error! Bookmark not defined. 
ACRONYMS xiii 
CHAPTER 1: INTRODUCTION OF THE STUDY 1 
1.1 INTRODUCTION 1 
1.2 PROBLEM STATEMENT 2 
1.3 AIM 3 
1.4 OBJECTIVE 4 
1.5 RESEARCH QUESTIONS 4 
1.6 CONCLUSION 4 
CHAPTER 2: LOCAL ECONOMIC DEVELOPMENT 5 
2.1 INTRODUCTION 5 
2.2 ECONOMIC DEVELOPMENT 5 
2.2.1 NEO-LIBERALISM 6 
2.2.2 SUSTAINABLE DEVELOPMENT 6 
2.3 LOCAL ECONOMIC DEVELOPMENT (LED) DEFINITION 7 
2.4 THE EVOLUTION OF LOCAL ECONOMIC DEVELOPMENT (LED) 8 
2.4.1 First Wave: 1960 - early 1980s 8 
2.4.2 Second Wave: 1980s – mid-1990s 8 
2.4.3 Third Wave: 1990s onwards 9 
2.5. LOCAL ECONOMIC DEVELOPMENT (LED) AN INTERNATIONAL PERSPECTIVE 9 
2.5.1 INTERNATIONAL APPROACHES TO LOCAL ECONOMIC DEVELOPMENT 10 
2.5.2. ENTERPRISE DEVELOPMENT APPROACH 11 
2.5.3. LOCALITY DEVELOPMENT 12 
2.5.4 PRO-POOR/PRO-GROWTH 12 
2.6 LOCAL ECONOMIC DEVELOPMENT IN AFRICAN PERSPECTIVE 13 
2.7 LOCAL ECONOMIC DEVELOPMENT IN SOUTH AFRICA 14 
2.8 LOCAL ECONOMIC DEVELOPMENT POLICY AND LEGISLATIVE FRAMEWORK IN SOUTH AFRICA 15 
2.9 POLICY CHANGES AND CRITIQUE OF LED IN SOUTH AFRICA 17 
2.10 LED PLANNING PROCESS IN SOUTH AFRICA 19 
2.10.1 LOCAL ECONOMY ASSESSMENT 19 
vii 
 
 
 
2.10.2 ORGANISING THE EFFORT 19 
2.10.3 MARKETING STRATEGY 20 
2.10.4 STRATEGY IMPLEMENTATION 21 
2.10.5 STRATEGY REVIEW 21 
2.11 LOCAL ECONOMIC DEVELOPMENT APPROACHES IN SOUTH AFRICA 21 
2.11.1 INDUSTRIAL RECRUITMENT AND PLACE MARKETING 21 
2.11.2 EXPORT PROMOTION AND INTERNATIONAL TRADE 22 
2.13 OTHER APPROACHES 23 
2.14 FUNDING OF LED IN SOUTH AFRICA 24 
2.15 SMME PROMOTION AND SUPPORT 24 
2.16 SUMMARY OF THE CHAPTER 25 
CHAPTER 3: INFORMAL ECONOMY 27 
3.1 INTRODUCTION 27 
3.2 DEFINITION OF INFORMAL ECONOMY 27 
3.3 INFORMAL ECONOMY: HISTORICAL BACKGROUND 28 
3.4 APPROACHES OF INFORMAL ECONOMY 29 
3.4.1 DUALIST APPROACH 30 
3.4.2 STRUCTURALIST APPROACH 30 
3.4.3 LEGALIST APPROACH 31 
3.4.4 TODARO-LEWIS MODEL APPROACH 32 
3.4.5 VOLUNTARIST APPROACH 32 
3.5 INTERNATIONAL PERSPECTIVE OF INFORMAL ECONOMY 32 
3.5.1 EUROPE AND USA 32 
3.5.2 ASIA 34 
3.5.3 LATIN AMERICA 34 
3.6 INFORMAL ECONOMY: AN AFRICAN PERSPECTIVE 34 
3.7 INFORMAL ECONOMY: A SOUTH AFRICAN PERSPECTIVE 35 
3.8. SIZE, NATURE OF INFORMAL ECONOMY IN SOUTH AFRICA 37 
3.9 CHARACTERISTICS OF THE INFORMAL SECTOR IN SOUTH AFRICA 38 
3.10 CAUSES OF INFORMAL ECONOMY IN SOUTH AFRICA 39 
3.10.1 TAX AND SOCIAL SECURITY CONTRIBUTION BURDEN 39 
3.10.2 HIGH UNEMPLOYMENT 39 
3.10.3 HIGH LEVEL OF POVERTY 40 
3.10.4 QUALITY OF INSTITUTION 40 
3.10.5 MIGRATION AND URBANISATION 40 
3.11 POLICY FRAMEWORK OF INFORMAL ECONOMY IN SOUTH AFRICA 41 
3.11.1 CONSTITUTION OF SOUTH AFRICA No 105 of 1996 41 
3.11.2 BUSINESSES ACT No. 71 OF 1991 41 
3.11.3 MUNICIPAL BY-LAWS 41 
3.11.4 HEALTH ACT 63 OF 1977 41 
3.12 INFORMAL ECONOMY IN RURAL AND URBAN SOUTH AFRICA 42 
3.13 WOMEN IN INFORMAL ECONOMY 42 
viii 
 
 
 
3.14 CHALLENGES FACED BY INFORMAL ECONOMY IN SOUTH AFRICA 43 
3.15 INFLUENCE OF PLANNING LAWS ON INFORMAL ECONOMY IN SOUTH AFRICA 44 
3.16 SUMMARY OF CHAPTER 45 
CHAPTER 4: RESEARCH METHODOLOGY 47 
4.1 INTRODUCTION 47 
4.2 STUDY AREA: HISTORICAL BACKGROUND OF BLOEMFONTEIN 47 
4.3 RESEARCH APPROACH 49 
4.4 RESEARCH DESIGN 51 
4.5 DATA COLLECTION METHODS AND TOOLS 51 
4.6 SAMPLING STRATEGY 52 
4.6.1 POPULATION AND SAMPLING 52 
4.6.2 SAMPLING METHODS 53 
4.6.3 RECRUITMENT OF PARTICIPANTS 54 
4.7 DATA ANALYSIS 55 
4.8 ETHIC CONSIDERATION 55 
4.9 SUMMARY OF CHAPTER 58 
CHAPTER 5: CASE STUDY OF STREET VENDORS IN BLOEMFONTEIN IN THE FREE STATE 59 
5.1 INTRODUCTION 59 
5.2 POST APARTHEID BLOEMFONTEIN 59 
5.3 DEMOGRAPHIC PROFILE OF BLOEMFONTEIN 60 
5.3.1 ENVIRONMENT 61 
5.3.2 ECONOMIC ACTIVITIES IN BLOEMFONTEIN 61 
5.4 STREET VENDORS IN BLOEMFONTEIN 63 
5.5 MANAGEMENT OF STREET VENDORS IN THE CITY OF BLOEMFONTEIN 64 
5.6 METHODS 65 
5.7 RESEARCH ANALYSIS AND FINDINGS 66 
5.7.1 GENDER 68 
5.7.2 AGE 68 
5.7.3 LEVEL OF EDUCATION 68 
5.7.4 NUMBER OF DEPENDENTS 68 
5.7.5 HOUSEHOLD INCOME 68 
5.7.6 NUMBER OF YEARS IN THE INFORMAL STREET TRADING 70 
5.7.7 WHAT ARE YOUR BUSINESS GOALS? 70 
5.7.8 WHAT DO YOU NEED TO ACHIEVE AS AN INFORMAL TRADER 71 
5.7.9 Knowledge of Trading Regulations that govern informal street trading 72 
5.7.10 How the regulations affect business operations 73 
5.7.11 Level of satisfaction on enforcement of informal street trading by-laws in Bloemfontein 74 
5.7.12 WHAT CHALLENGES DO YOU FACE IN INFORMAL STREET TRADING 75 
5.7.13 Type of support received from Mangaung Metropolitan Municipality 77 
5.7.14 Is the support sufficient in relation to individual and collective needs? 78 
5.7.15 if not, what type of support do you need from Mangaung Metropolitan to improve informal street 
trading? 78 
ix 
 
 
 
5.8 FINDINGS FROM MUNICIPAL OFFICIALS 78 
5.8.1 THE ROLE OF INFORMAL TRADING IN MANGAUNG METROPOLITAN 78 
5.8.2 THE ROLE THE MUNICIPALITY PLAYS IN THE BUSINESS OPERATIONS OF STREET TRADERS IN 
BLOEMFONTEIN CBD 79 
5.8.3 STRATEGIES PUT IN PLACE FOR INFORMAL TRADING 80 
5.8.4 DO YOU THINK THESE STRATEGIES ARE EFFECTIVE? 81 
5.8.5 DO YOU HAVE A DATABASE FOR INFORMAL TRADERS? 82 
5.8.6 WHAT IS THE PROCESS OF REGISTRATION? 82 
5.8.7 THE CRITERION USED TO ALLOCATE INFORMAL TRADERS WITH LOCATION IN THE CBD 83 
5.8.8 THE KIND OF SUPPORT OFFERED TO INFORMAL TRADERS 83 
5.8.9 DO YOU THINK THAT INFORMAL TRADERS ARE CONTRIBUTING TO THE LOCAL ECONOMIC 
DEVELOPMENT IN BLOEMFONTEIN? 84 
5.9 CONCLUSION 85 
CHAPTER 6: CONCLUSION AND RECOMMENDATION 86 
6.1 INTRODUCTION 86 
6.2 CHAPTER SUMMARY 86 
6.3 GOAL AND OBJECTIVE OF THE STUDY 87 
6.4 RECOMMENDATIONS FOR GOVERNMENT 92 
6.5 RECOMMENDATIONS FOR INFORMAL STREET TRADERS 93 
6.6 RECOMMENDATIONS FOR FUTURE RESEARCH 93 
6.7 CONCLUSION 94 
REFERENCES 95 
ANNEXURE 1: SEMI- STRUCTURED INTERVIEW QUESTIONNAIRE FOR STREET VENDORS 102 
ANNEXURE 2: SEMI STRUCTURED QUESTIONNAIRE FOR MUNICIPAL OFFICIALS 107 
THANK YOU! KA LEBOHA! BAIE DANKIE ! 109 
ANNEXURE 3: ETHICAL CLEARANCE LETTER 111 
 
 
 
 
 
 
 
x 
 
 
 
LIST OF FIGURES  
Figure 4.1: Map of Bloemfontein Central Business District 49 
Figure 4.2: Systematic process regarding research methodology of the study 50 
Figure 5.1: Aerial Map of Study Area, Bloemfontein Central Business District 60 
Figure 5.2: A picture of an informal hairdresser doing clients hair on the street pavement 63 
Figure 5.3: A picture of informal street traders displaying their goods 64 
 
 
 
 
 
  
xi 
 
 
 
LIST OF TABLES 
Table 5.1: Demographic information of Bloemfontein 60 
Table 5.2 Demographic information of Street vendors Bloemfontein CBD 67 
Table 5.3: Reasons for partaking in informal trading 69 
Table 5.4: Number of years on informal trading 70 
Table 5.5: Business Goals 70 
Table 5.6: Improvements needed by informal traders 71 
Table 5.6 Responses Yes and No 84 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
xii 
 
 
 
ACRONYMS 
 
ANC    : African National Congress 
BBEE   : Broad Based Empowerment 
CRDP   : Comprehensive Rural Development Programme 
CBD   : Central Business District  
GDP   : Gross Domestic Product  
ILO   : International Labour Organisation 
LED   : Local Economic Development  
NBI   : National Business Initiative 
RDP   : Reconstruction and Development Programme 
RSA   : Republic of South Africa 
UN   : United Nations 
 
 
 
 
xiii 
 
 
 
CHAPTER 1: INTRODUCTION OF THE STUDY 
1.1 INTRODUCTION 
The South African economy has always catered to developing and establishing formal 
businesses that meet minimum standards such as registration. This development 
strategy can be traced back to apartheid policies where black people were prevented 
from operating a registered business in urban areas. This was a clear indication that 
apartheid policies only favoured the social and economic development of the white 
minority at the expense of the black majority. As a result, the majority remain in 
underdeveloped areas (Rogerson, 2015). However, in the effort to address apartheid 
legacies, the democratic South Africa led by the African National Congress (ANC) 
government ushered in successive policies that aimed to address this uneven social 
and economic development created by the apartheid government (Rogan and Skinner, 
2018). 
Since 1994 when the transition to democracy took place, Local Economic 
Development (LED) has been raised from an isolated development intervention to a 
mandate enforced for all South Africa’s local authorities (Rogerson, 2014). The 
legislative and policy context for LED has been shaped by several key pieces of 
legislation, such as the Constitution of South Africa Act. No 108 of 1996 which 
recognises the importance of local government and municipalities in promoting the 
economic development of local communities. This is where informal economic 
participation comes into play. 
The informal economy is a critical sector for developing and developed countries that 
provides livelihood, income and work for millions of workers and business owners (Car 
and Chen, 2001). Without any economic activities in the formal sector, unskilled, poor 
and marginalised South Africans rely on the informal economy and social grants for 
survival. Due to its easy access, the informal economy provides various economic 
activities for the poor in South Africa (Chen, 2018).  
The Constitution of the Republic of South Africa (1996) defines the informal economy 
`as part of the labour market which incorporates all work that is not documented as a 
regular source of income and where taxes are not paid. Post-1994, the Constitution of 
South Africa Act No 108 of 1996 ensured well-founded economic rights such as 
1 
 
 
 
access to water, access to health services, housing, and social security (Constitution 
of RSA, 1996). The Constitution aimed to assist the country in getting rid of the 
apartheid legacies such as vast economic inequalities and deep-rooted poverty. 
However, after more than 25 years of democracy, South Africa still lingers with crucial 
development challenges such as inequality, joblessness, and poverty. These factors 
undoubtedly play a significant role in fostering informal economic participation by those 
with constrained opportunities to participate in the mainstream economy (Chen et al., 
2004). The government emphasising on Local Economic Development (LED) to focus 
on inclusive development at a local / community-driven by local municipalities and 
adopt the bottom-up approach to economic development and job creation is seen as 
something that addresses those factors. Additionally, the approach towards economic 
development where local people are encouraged to work together to achieve 
economic growth and improved quality of life for all residents in local municipalities 
shows how important it is for the researcher to understand the role of the informal 
economy for Local Economic Development. 
This research looked at the theoretical analysis of the informal economy and 
theoretical understanding of local economic development and the significance of both 
informal economy and local economic development globally and in South Africa. 
Chapter One looked at the study's problem statement, aim, and objective. Chapter 
Two looked at local economic development followed by the informal economy in 
Chapter Three. Although the separation of the chapters, there is a link between two 
concepts highlighted later in the study. Chapter Four looked at the research 
methodology used to collect and analyse data. Moreover, a case study of street 
vendors was presented in Chapter Five and findings and results thereof. Lastly, 
Chapter Six presented a summary and recommendation of the whole study. 
 
1.2 PROBLEM STATEMENT  
According to Neves (2017), South Africa serves as one of the countries in the African 
continent with a resilient economy. However, in recent years, the country has faced 
political, social and economic uncertainties and, most notably, the highest 
unemployment rate. The country has become a global destination for migrant workers 
traders in town and cities from countries like Lesotho, Zimbabwe, South-Eastern Asia, 
2 
 
 
 
Pakistan and Bangladesh taking part in the informal economy to sustenance and 
survival. Closing mines, factories and declining agricultural productivity in rural areas 
has also accelerated rural to urban movement. Many rural people move from the 
countryside to towns and cities to secure jobs and seek business prospects. However, 
many are unqualified and cannot secure jobs in the formal sector, even trained 
graduates realize that employment prospects and means of subsistence can be 
limited, the socio-economic dilemmas of the cities and towns are probable to decline 
as the population continues to exceed economic development (Crush et al., 2015). 
According to Chichello and Rogan (2017), the South African government partially 
recognizes the informal sector by supplying support only to registered business 
entities; however, many businesses found operational at the sustainable level are not 
registered and therefore not recognized for funding. However, the pace at which the 
socio-economic activities are declining calls for the Local government to support local 
businesses and advance Local Economic Development (LED). For example, the 
central government policy, the National Development Plan (NDP), has expected that 
1.2 Million new informal sector jobs will be needed by 2030 if the state meets its mark 
in reducing unemployment. However, the paper is almost entirely silent regarding how 
the informal sector should be funded or how the existing strategies can be applied to 
ensure that the informal sector expands in line with the general employment growth. 
Given this, there is a need for strict measures to ensure that all sustainable informal 
businesses operational in urban areas are registered and contribute to state revenue 
collection. This will strengthen the financial support of the informal businesses. The 
local government currently only has policies and by-laws that govern operations of 
informal businesses, however not optimally implemented to strengthen Local 
Economic Development (LED). This study seeks to find the gaps which must be filled 
to link the informal economy and Local Economic Development. 
 
1.3 AIM  
The study's main aim is to examine the informal economy in the Central Business 
District (CBD) and its contribution towards Local Economic Development (LED) in 
Bloemfontein. 
3 
 
 
 
1.4 OBJECTIVE  
• To investigate the role of informal economy for Local Economic Development 
(LED) in Bloemfontein CBD 
• To examine the state of informal economy of South Africa 
• To analyse the importance of informal trading towards economic development 
in Bloemfotein 
• To examine the type of support and offer recommendations for informal 
economy in Bloemfontein CBD 
1.5 RESEARCH QUESTIONS  
A research question leads to the research goal, “except that research question is an 
enquiring statement while research goals are declarative statements” (Bryman, 2012). 
The problem investigated in this study was the informal economy and Local Economic 
Development. Therefore, the specific research question or primary research question 
formulated to answer the problem investigated is: 
Informal Economy and Local Economic Development: The case of Street Vendors in 
Bloemfontein in the Free State province. 
The following research questions were posed to guide the study 
• What is the role of the informal economy in Local Economic Development? 
• What is the contribution level of informal trading, particularly street vending, in 
improving the socio-economic status of disadvantaged communities in 
Bloemfontein? 
• What can be done to strengthen the informal economy to boost economic 
development in Bloemfontein? 
 
1.6 CONCLUSION  
This chapter gave background on the subject, supported by preliminary literature. This 
is followed by the problem statement, the aim of the study and the selected research 
objectives the study wanted to achieve. The next chapter will discuss the literature that 
is relevant to the study. 
  
4 
 
 
 
CHAPTER 2: LOCAL ECONOMIC DEVELOPMENT  
 
2.1 INTRODUCTION 
The previous chapter reflects the background, problem statement, and aim and 
objectives of the study. In this chapter literature review concerning Local Economic 
Development will be discussed. According to the International Labour Organisation 
(ILO), globalisation has changed the laws that rule world economies, bringing national, 
regional and local economies closer together (ILO, 2008). It contends that local 
economies are meaningfully influenced by policies and processes formulated at the 
supranational level, such as liberalisation, innovation and altering terms of trade (ILO, 
2008). Globalisation has significantly impacted how local and regional development 
are planned (Pike et al., 2006). It is known that “one of the fundamental characteristics 
of globalisation is that markets have become more ubiquitous and are affecting the 
entire world simultaneously” (Rodriguez-Pose, 2008). Moreover, globalisation brings 
changes, possibilities and challenges, and not all countries worldwide have the same 
capacity to level the playing field (Hampwaye and Rogerson, 2010).  
 
2.2 ECONOMIC DEVELOPMENT  
Economic development has dominated several development agendas around the 
world. In poor and developing countries, economic development was envisioned 
through the provision of technical assistance, free multilateral trade and foreign 
investment. Development is primarily a subject of economic productivity and capital 
accrual based on private investment and external support (Nel and Rogerson, 2005). 
According to Rist (1999), the concept of economic development was popularised by 
US President Harry S. Truman during his inaugural speech in 1949 following the end 
of World War II. In point four of his address, he stated that the US would provide 
impoverished countries with development aid. 
The original goals of development were to promote equality to all people - by 
eradicating poverty through the transfer of skills, innovation and resource allocations 
between the developed and developing worlds. The primary variables influence 
achieving greater output through economic development (Rogerson and Rogerson, 
5 
 
 
 
2010).The assumption was made that economic development issues from the poor 
nations could be solved by using the western economic systems. The globe has seen 
this concept develop from obscurity to global dominance during the last decade. This 
dominance occurs within the economic and political segments through neo-liberalism. 
However, regardless of neo-liberal rhetoric intended at eradicating poverty and 
inequality, the gap between the rich and the poor continues to widen(Rogerson and 
Rogerson, 2010). 
 . 
2.2.1 NEO-LIBERALISM  
The critique of development was simply a process in which the assumption essential 
within neo-liberal economics received criticism. Neo-Liberalism was an economic 
system based on the free market premise maximising gross domestic product (GDP). 
In addition, neo-liberal development encourages neo-liberal reform as a strategy of 
lifting poor nations out of poverty and inequality into an advanced society marked by 
mass consumption and relative equality (Rogerson and Rogerson, 2010). 
 The neoliberal restructuring includes changes aimed at improving the economic 
situations of developing countries. Restructuring occurs in the form of deregulation of 
labour markets, modernisation, privatisation, and economic stabilisation through the 
World Bank type of Structural Adjustment Programme (SAP) 
2.2.2 SUSTAINABLE DEVELOPMENT  
The first significant environmental concerns marked the late 1970s and early 1980. As 
a result of these concerns, the notion of sustainable development was born. According 
to the Brundtland report of 1987, “Sustainable development” was defined as progress 
or growth that meets the current demands without jeopardizing future generations’ 
ability to meet their own (Connelly and Smith,1992:2). The concept was developed in 
reaction to the environmental catastrophe, but it also included a section aimed at 
improving the lives of many marginalised people. The term sustainability incorporates 
a wide range of concepts. Essentially, it promotes a state of equilibrium in which 
economic requirements and progress coexist with the natural environment stably. 
 
6 
 
 
 
The United Nation’s sustainable development goals comprise 17 goals with 169 
interconnected and indivisible targets. World leaders have declared these goals as a 
collective action and effort towards a global policy agenda as a route towards long-
term development (United Nations, 2016). LED contributes to long-term pillars of 
development while also being socially conscientious. SDGs becomes real at the local 
level, where individuals voice their needs, problems and goals at the regional level. 
SDGs have the potential to make a significant impact on people’s life. In this regard, 
local economic development appears to be a very plausible strategy for achieving 
those 17 goals at the local level. LED was completely based on defining the local 
environment and was guided by the vision of many local actors and stakeholders. As 
a result, LED can effectively localize SDGs to identify locally innovative solutions to 
the world’s most pressing global problems (Third World Forum of Local Economic 
Development, 2015).  
2.3 LOCAL ECONOMIC DEVELOPMENT (LED) DEFINITION 
There are numerous definitions of Local Economic Development proposed by various 
academics and organisations, each based on their unique approach. Nel and Humphry 
(1999) define LED as “the process or method through which local individuals or 
organisations use resources to change or increase local economic activity to benefit 
the majority in the local community”. The World Bank (2016) defines LED according 
to its main goal of increasing the economic capacity of a local area and advancing its 
economic future and overall quality of life. The World Bank (2016) further expands its 
definition by stating that LED is a collaborative effort undertaken by many 
stakeholders, non-governmental organisations, corporates, communities, and 
community representatives to grow the local economy and create sustainable job 
opportunities. The United Nation Human Settlement (UN-Habitat, unknown) use what 
might look like a similar description as the World Bank; however, they define LED as 
a participatory course in which local people from various sectors collaborate to boost 
local commercial activity resulting in a vibrant and sustainable economy. According to 
the International Labour Organisation (ILO), LED is characterized as a tool that can 
assist in the creation of decent jobs and improvement of quality of life for all the people, 
including the poor and the disadvantaged. It places a greater emphasis on LED’s pro-
poor benefits (ILO, 2016). 
7 
 
 
 
 
2.4 THE EVOLUTION OF LOCAL ECONOMIC DEVELOPMENT (LED)  
Although with varying approaches and focus, many countries have adopted LED as 
an economic development strategy. Therefore, this study needs to look at the history, 
stages, or LED waves. Different socio-economic conditions prevailed and influenced 
these waves. 
2.4.1 FIRST WAVE: 1960 - EARLY 1980S  
The origins of modern Local Economic Development (LED) practices can be traced 
back to the 1960s(Swinburn, 2006). According to Rodriquez-Pose (2009:1), Europe 
was the birthplace of LED methods. Although LEDs were first popular in Western 
Europe and North America (Blakely and Leigh, 2010; Clarke and Gaile,1998), the 
concept and application of LED quickly expanded to other regions of the world 
(Rogerson and Rogerson, 2010). During this wave, the emphasis was on mobile 
industrial investment, mainly foreign direct investment. Investment in hard 
infrastructure was used to improve and enhance LED. Hard infrastructure refers to 
spending money to improve a company’s physical environment to become more 
appealing to retain and recruit employees. Furthermore, the focus was also on 
constructing and upgrading access to roads, railways, airports, telecommunication, 
power systems, factories, and buildings to improve LED. The LED operations initially 
focused on location marketing and investor promotion and were frequently tied to 
incentives programmes such as tax exemptions, recruitment of cheap labour, grants 
and infrastructural subsidies (Swinburn, 2006; World Bank, 2003). The idea was to 
improve equity while increasing the demand (Bingham and Mier,1993). The 
programmes aimed to help regions in poverty eradication and boost activities that 
expand economic opportunities through education, social services, job training, and 
community development (Koma, 2012). 
2.4.2 SECOND WAVE: 1980S – MID-1990S 
The second wave of LED emerged in the 1980s because of corporate retention 
strategies and the expansion of existing businesses (Swinburn, Goga and Murphy, 
2006). The essential terms “public-private partnership” and “inward investment” were 
used to describe the process of generating employment. During this time, the main 
tools that aided LED were the provision of business incubators, start-up support and 
8 
 
 
 
technical assistance for small and medium-sized businesses (World Bank, 2003:5). 
The Government’s goal was not to create jobs but make it easier for a market 
mechanism to generate wealth, which would lead to more jobs. ( Bingham and Meir, 
1993). The focus shifted from the construction of ‘soft infrastructure’ to enhancing the 
quality of life for the people (Swinburn, 2006). With increased globalisation and 
decentralisation, the 1990s saw a spread of LED concepts from the global North and 
South (Nel and Rogerson, 2005; Rogerson and Rogerson, 2010).  
2.4.3 THIRD WAVE: 1990S ONWARDS  
At the end of the 1990s, debates around LED began to gain traction as a growing 
policy priority in several developing countries around the globe. China, Brazil and 
Mexico are just a few significant developing countries where LED debates are 
prominent (Chen, 2007). Planning for LED is currently a prevalent facet of international 
development planning, in terms of ubiquitous trends towards decentralisation and 
deliberate transfer of resources from national towards local government and shifting 
structures of government and governance (Rodrigues-Pose and Sandall, 2008). 
These practices include an all-inclusive approach where individual companies' support 
and sectoral development methods are enhanced by making the business and 
community environment more favourable to economic development and improving the 
general quality of life (Tassonyi, 2005). The focus was now creating a competitive local 
business environment to maximize the benefit of development within the local group 
 
2.5. LOCAL ECONOMIC DEVELOPMENT (LED) AN INTERNATIONAL 
PERSPECTIVE  
According to the HSRC (2003), LED initiatives have been adopted and implemented 
globally in response to a variety of factors, including a significant increase in the 
decentralization of powers and decision making to the local level, which has resulted 
in the weakening of central government/state in the economy during the neo-liberal 
era. Furthermore, Nel (2003) considers LED a reaction to globalization forces, 
strengthening the loss of the central state's ability to carry out local obligations. He 
further argues that the significant role of LED was realized after uncertain results 
contained during the era of “Reaganomics” and “Thatcherism”, achievements 
produced by macro and regional development planning (Nel, 2003). Reaganomics 
9 
 
 
 
(named after the former American president, Reagan) and Thatcherism (named after 
British Prime Minister Margaret Thatcher) are terms used to describe a system of 
economic governance in which neo-liberal strategies were the driving forces of the 
economy. These strategies pushed federal governments to reduce subsidies for 
fundamental services, including grants, health care and education. Arguably, those 
neo-liberal strategies have resulted in unemployment and a massive increase in 
inequality among the rich and poor. 
The causes of LED’s emergence in the North are not dissimilar to LED stimulants in 
the South. The main component that made any substantial difference was that these 
trends took place at different levels (Nel, 2001). The impact of globalization and the 
global economic crisis played a significant role in establishing local economic 
initiatives worldwide (Taylor and Mackenzie, 1992). However, other factors that must 
be considered in the South include debt crises, imposed structural reforms, the inability 
of many states to engage at the local level, significant currency devaluation and the 
region's ongoing political and natural disasters (Nel, 2001). Regardless of all these 
factors, the concept of LED has come to represent similar objectives and/or end 
products across the globe, such as job creation, empowerment, and economic growth 
through the establishment of sustainable local economic activity. Nonetheless, how 
these objectives will be met was a point of contention. 
2.5.1 INTERNATIONAL APPROACHES TO LOCAL ECONOMIC DEVELOPMENT 
There are various approaches to economic growth that municipalities around the globe 
have used. Each is based on a different set of assumptions about local economies 
and the impact of local authorities. The following are some of the main approaches in 
Local economic development internationally. 
Traditional approaches- suggest that the key opulence was luring (primary 
manufacturing) investment through incentives such as tax exemptions, lower rates, 
accessible land and even direct financial compensation in exchange for investing in 
the area. The premise was that investment produces jobs and generates taxes, which 
municipalities may use for service delivery. Efforts to attract other types of economic 
activity and funding, such as tourism, banks and expenditure on national social 
programmes, can also be included in this approach (Hemilsing, 2001). 
10 
 
 
 
Entrepreneurial/pro-market approach- competitive approaches stress the 
significant role of local comparative advantages and small enterprises in job creation 
(Hemilsing, 2001). Local government play a critical role in identifying development 
industries and assisting small enterprises with research, technological infrastructure 
and even loans and grants. The local government must conduct research to determine 
the locality’s economic strength (Rogerson and Rogerson, 2010). 
Urban Efficiency- emphasis on local authorities to raise urban productivity by 
reducing the cost of living and broadening business in the locality, although others are 
insisting that urban efficiency will only be attainable if there was the minimization of 
state intervention, especially by cutting down on service charges and taxes and 
privatising a selected number of the services (Hemilsing, 2001). 
Human Resource Development- was recognized as a vital focus for the local 
economic development approach. The line of reasoning was that low skill levels, 
particularly amongst the disadvantaged, are key problems that potential investors face 
(Hemilsing, 2001). Furthermore, the chances of disadvantaged people benefiting from 
a newly attained job are very slim unless they possess the appropriate skills. Local 
authorities can tackle this issue by supporting established training agencies in local 
areas, imposing conditions on companies that require them to do business with local 
municipalities and requiring firms to provide the minimum training for their employees 
(Hemilsing, 2001). 
2.5.2. ENTERPRISE DEVELOPMENT APPROACH  
Enterprise development refers to improving the economic situation of an area. The 
economy consists of firms that focus on exports where the destination of these exports 
could be within or beyond our borders. These exporting firms usually revert to 
operating in the same area because of the benefits. These benefits may include 
decreased transaction costs due to proximity to each other, firms supporting each 
other, being able to lobby for better training and education, thus increasing the 
capacity to learn. The economic base is enhanced by attracting foreign direct 
investment, supporting invention, innovation and diffusion by local businesses 
(Hemilsing, 2001). The economic base can also be improved by promoting small to 
medium enterprises, which presupposes having all allied services in place, including 
transport, freight financial support, and promoting industrial clusters. It is said that 
11 
 
 
 
Marshall (1919), cited by Hemilsing (2001), was the first to realize the prospects of the 
industrial cluster. He describes an industrial cluster as the concentration of small 
multinationals in the same industry, invisible from the local industry and society. 
Fundamentally they are not one unit hence their usual reference in literature as 
agglomeration economies.  
From the above definition, industrial clusters are distinguished by the specialisation of 
the division of labour. They are obscured from the local areas' values and norms, and 
they operate within proximity of each other. For example, clusters include the 
Massachusetts Biotech in the United States, leather agglomerate Tuscany Italy, fish 
processing in Lake Victoria, in Kenya generating income for the community. 
2.5.3. LOCALITY DEVELOPMENT 
LEDs need a certain type of infrastructure, services and socio-economic capital to 
succeed. LEDs are equipped with, through planning and placing, the infrastructure 
and the capital through local development planning (Hemilsing, 2001). There is a 
certain type of planner who is accustomed to thinking in exceedingly long-term projects 
and becoming integrated into the culture of businesses. Some planners think in 
exceedingly short periods, incorporating the need to deliver outcomes to alleviate 
short- and medium-term poverty. Local development planning seeks to enhance 
positive externalities of LED to help eliminate conflict and, in the process, enhance the 
attractiveness of an area such that LED goals such as poverty alleviation are realized. 
The participatory LED, physical planning and development monitoring, urban planning 
and architecture, infrastructure and socio-economic overhead capital are just a few 
elements that go into locality development (Rogerson and Rogerson, 2010).  
2.5.4 PRO-POOR/PRO-GROWTH  
The response of LED encompasses the core and pursuit of transforming local regions 
into dynamic self-sustaining economic units that are competitive, nationally as well as 
on a global scale. Although the are some similarities between countries, their 
approaches and focus in LED differ. Countries' foci may differ from pro-poor 
approaches to pro-growth approaches (Rogerson and Rogerson, 2010). LED tackles 
different approaches; however, recent debates have been around two notable foci pro-
growth or market. LED emphasizes promoting economic development and pro-poor 
or market, which critically looks at poverty alleviation approaches (Nel &Rogerson, 
12 
 
 
 
2005, Helmsing, 2003). According to literature, pro-growth approaches are particularly 
popular in Western Europe and North America. While in a developing world, there is 
an indisputable need to focus more prominently on poverty alleviation and the pro-
poor approach. If one were to explore the difference between pro-growth and pro-poor 
LED approaches, one would find that on the one hand, the market -LED or pro-growth 
approach to business development strives to assist local economies in more 
successfully adapting to macro-economic reforms and stresses the importance of 
promoting individual self -reliance, entrepreneurship, expansion of market, 
competitiveness reduction of unemployment and sustainable growth ( Rogerson, 
2003:53) More so the critical market or pro-poor approach of community development 
was denoted by bottom-up approach geared to achieving local self -reliance, 
empowerment, participation, local cooperation and environmental sustainability.  
 
2.6 LOCAL ECONOMIC DEVELOPMENT IN AFRICAN PERSPECTIVE  
The post-independence years in Africa were pronounced by centralised, macro-
economic and sectoral management. This centralised management of public policies 
brought significant inequalities regarding income, access to housing and basic 
services like water, health etc. Centralisation resulted in some obtrusive inefficiencies 
in the provision of local services. The adaptation of LED in Africa, Rodriquez-Pose and 
Tijmstra (2005) are ascribed as a result of ongoing issues of obtuse economic growth, 
poverty, changes in the national and international economic environment and the 
failure of the central government to intercede at the local level. Nel (2001) added that 
this situation was magnified by the debt crisis, colossal currency, involuntary structural 
adjustment, technological devolution, natural and political shocks. Similarly, the 
municipal service project (2001) connects the evolution of LED to the failure of 
traditional top-down planning policies and efforts of the government to achieve 
meaningful national development goals, leading to a shift in the policy to target the 
disadvantaged and underdeveloped areas. According to Nel (2001), the purpose of 
the policy shifts was to create favourable conditions such as subsidies and grants, to 
entice investors to areas that had previously been deprived of direct investment and 
subsequent economic growth and development. However, true LED cases in Africa 
13 
 
 
 
are scarce as most local governments do not engage with local businesses in 
developing these strategies instead of initiating limited pro-poor initiatives. 
South Africa is one of the few countries in the Sub Saharan African region to have 
started formal LED programmes. Shortly after apartheid, a focus on so-called LED 
strategies was adopted (Rogerson, 2002). Although most of these projects can be 
considered community development or so-called pro-poor LED initiatives, larger 
metropolitan areas in South Africa such as Johannesburg and Durban have begun 
LED interventions similar to those in Western Europe, North America or portions of 
Latin America and ASIA. (Rogerson,1999, Nel and Rogerson, 2005).  
 
2.7 LOCAL ECONOMIC DEVELOPMENT IN SOUTH AFRICA  
According to Bond (2001), the South African government has also developed 
immensely like other countries to achieve its LEDs’ aims and objectives. The LED 
strategies were implemented in reaction to the apartheid legacy. During the apartheid 
era, spatial planning was placed under substantial top-down regional policy 
intervention, orientated on fostering industrial decentralization in the country's 
marginalized Homelands and Bantustans regions (Rogerson, 2004). LED was 
purposely not developed as a government policy during the apartheid system in South 
Africa. During this time, economic development was only done in small projects for 
place marketing to attract inward investment, which could be related to the focus and 
tools used during the first wave of LED. However, the end of apartheid in South Africa 
has resonated as a foundational aspect of policy planning for rebuilding new local 
economies (Nel, 2001). The South African LED debacle took another aspect in the 
post-apartheid South Africa, particularly since the late 1990s. The debate was now 
centred on pro-growth and pro-poor-economic intervention (Rogerson, 2004). 
Moreover, cities are now seen as economic hubs, as mediators of economic 
processes and as providers of economic services (SACN, 2004). Municipalities are 
now responsible for initiating and implementing economic strategies and other 
important requirements to promote successful LEDs.  
The significant objective for municipal LED strategies or programmes in South Africa 
is job creation, rural development and sustainable urban development, explicitly pro-
14 
 
 
 
poor approaches within a holistic LED strategy (Rogerson and Rogerson, 2010). The 
LED approach promoted by municipalities needs to be innovative, creative and 
redistributive. Furthermore, must be expanded and enhanced to meet, the needs of 
the underprivileged, women, children, the disabled and persons living with HIV/Aids”. 
However, the direction of LED has been confusing rather than being clear. Its methods 
and techniques have been altered, which has affected the well-functioning and focus 
of the South African municipalities. For example, a direction from pro-growth to pro-
poor and now pro-poor-growth has been difficult for municipalities to understand or 
follow (Rogerson and Rogerson, 2010).  
 
2.8 LOCAL ECONOMIC DEVELOPMENT POLICY AND LEGISLATIVE 
FRAMEWORK IN SOUTH AFRICA 
Various spheres of government have outlined the South African guidelines for 
employing LED. The various pieces of legislation and policy on LED provide a legal 
foundation for municipalities to implement local development initiatives. A few, if not 
the most significant, of the policy and legislative frameworks pertinent to LED and the 
overall transformation of local government are discussed.  
The first piece of regulation that was vital to local government reform and LED was the 
interim constitution (1994) which laid the groundwork for formal constitutional 
recognition of the local sphere of the state by acknowledging its autonomy while 
protecting the sphere’s yielding ability together with the sphere’s equal need and the 
right to receive a share of national revenue. The interim constitution also laid the 
framework for reorganising over 1000 pre -1994 local governments into fewer 
transitional local structures (Rogerson and Rogerson, 2010). The second important 
piece of legislation was the final constitution (1996), which solidifies local government 
as an established and mature level of government in South Africa. The constitution 
also made development a constitutional objective and a developmental obligation for 
the municipalities (Constitution of the RSA,1996: Section 152). It stresses the 
significance of LED by stating that “ Each municipality in South Africa must manage 
and structure its budgets and the planning processes, must give priority to the basic 
needs of the community, and as well as promote the social and economic growth of 
the community (Constitution of RSA,1996: Section 152). The Reconstruction and 
15 
 
 
 
Development Programme (RDP) highlighted areas regarding LED. The first area was 
to make LEDs are more widely known in South Africa (Moloi,1996:8). The second was 
to establish capacity building to prepare for LED in the Reconstruction and 
Development Programme (RDP). The LED programme will work in tandem with other 
comparable initiatives spearheaded by the National Business Initiative (NBI) and the 
South African National Civic Organisation (SANCO)(Moloi,1996). The third was to 
conduct more studies to develop appropriate LED frameworks. Finally, the other area 
was to look into several case studies that highlight best practices in local economic 
development around the country and the relevance and applicability of various 
methods. 
The White Paper is also a critical legislative framework for local economic 
development in South Africa (White Paper, 2008). The White paper emphasises the 
importance of integrated development planning for municipalities to enhance planning 
processes while also strengthening the link between development and institutional 
planning structures. It also identifies strategies that municipalities can utilize to engage 
community members and organizations in the issues of local government in their 
capacity as voters, people affected by municipal policies, consumers and end-users 
of municipal services, and allies in resources mobilisation for the development of 
municipal areas through performance management (White Paper, 2008). Another key 
point in the White Paper is that local government has the obligation of implementing 
local economic development, which will help greatly to create jobs and improve the 
local economy through friendly business services, local procurement, investment 
promotion, support for small enterprises and the development sector (Nel, 2005). 
The change of local government institution was initiated by adapting the 1998 Local 
Government Municipal Demarcation Act, which called for the demarcation of local 
borders pursuant to the direction provided by an Autonomous Municipal Demarcation 
Board (MDB). This course followed the constitutional principle of establishing a 
comprehensive system of local government structures (constitution 1996: Section 
151). Further changes were ushered by adopting the Local Government Municipal 
Structures Act of 1998, which presented a legislative basis for creating municipal 
institutions. In major cities, the Structures Act established a one-tier metropolitan 
system and two-tier district and local municipalities systems in the rest of the country 
16 
 
 
 
while also outlining a structure for the internal procedure of local government 
organizations (Nel, 2005). The creation of ward committees as drivers of community 
engagement at the local was another key contribution made by Structures Act.  
By establishing integrated development planning as a legal obligation and granting 
local governments various roles, responsibilities, and functions associated with LED, 
the Municipal Act of 2000 continued to promote the ideals outlined in the White Paper. 
The purpose of the system act was to allow municipalities to move progressively 
towards social and economic upliftment of local communities and promote pro-poor 
development. (Municipal System Act, 2000). According to the White Paper, the system 
comprehensively explains local government development. 
 
2.9 POLICY CHANGES AND CRITIQUE OF LED IN SOUTH AFRICA 
The aftermath of the apartheid regime has been dominated by debates regarding local 
economic development. Similar to this, there has been (and continues to be) a 
considerable change in development and the country’s wide directions of LED policy 
planning. Rhodes university et al. (2005:33) hinted that as early as the early 1920s 
through the beginning of the apartheid era, South Africa has been characterized by 
so-called “incipient LED”, predominantly in major municipalities and state-assigned 
zones “in most cases, place marketing coincided with inward investment initiatives”. 
The LED technique has the usual top-down approach prompted in large part with the 
aid of apartheid policies, and the primary focuses of the state or local government 
have been centred around attracting inward investment via place marketing and 
different “smokestack chasing” or “boosterism” strategies (Rogerson, 1994). 
Post-apartheid, the South African government deviated from the traditional LED 
method. New legal frameworks such as the White Paper on local government, 
Municipal systems Act, Municipal structures Act arose as methods for developmental 
roles of the government, and LED was regarded as a component of local development. 
However, the first wave of LED policy in the democratic dispensation revolved around 
pro-growth LED policies interventions. This method triggered studies and questions 
by academics and authors such as Harrison et al. (1997), Rogerson (1999) and DBSA 
(2000) about the critical role of LED in poverty reduction and the improvement of 
17 
 
 
 
underprivileged communities. “The majority of municipal initiatives were centred on 
community development projects, many of which were financially unviable and had no 
long-term effect on the impact on poverty reduction” (Hindson and Hindson, 2005: 1)  
Following the implementation of the new system of local government on 06 December 
2000, after the fully democratic local government triggered debates around LED, which 
prompted studies to be conducted in order to see how well the newly elected local 
government can accumulate local economic growth that can solve social inequalities 
within the country. These debates were intensified by the draft paper on LED entitled 
“Refocusing on the Poor”, which emphasized the pro-poor approach. “Refocusing on 
the Poor” paper was interventionist in nature, pushing for permanent pro-poor 
municipal development (Hindson and Hindson, 2005). 
The paper calls for the government to take the lead in reducing poverty and 
unemployment. (Hindson and Hindson, 2005: 1). In addition, the paper required the 
government to get involved not only in economic development challenges but also to 
deal with other LED threats such as HIV/AIDS. However, the paper was later 
downgraded by two papers entitled “Policy guidelines for executing local economic 
development in South Africa” and the new “National regulation for local economic 
development (LED) in South Africa”, both of which are considered to be seasoned pro 
poverty growth techniques.  
These national LED policy adjustments have been complicated for municipalities, 
mainly because they have been conflicting in their approach and have a shifting 
direction that focuses on pro-poor and pro-growth strategy; Municipalities have 
struggled to respond to frequent policy changes. And as a result, LED has a variety of 
purposes and is interpreted differently by different people or practitioners (Rogerson, 
1994). 
According to Mayer-Stammer (2003: 4), LED in South Africa largely targets new start-
ups, primarily under the headings of "emerging entrepreneurs " or “self-employed” as 
well as "black economic empowerment" (BEE). However, it tends to overlook 
established businesses and informal businesses transitioning to the mainstream 
economy and foreign investors in business endeavours. In addition, Hindson (2003) 
argues that even though it is legitimate and justifiable to focus on poverty as a concern, 
18 
 
 
 
the concept of economic growth in South Africa is either left largely unresolved or 
disregarded. 
Furthermore, several issues in South Africa still need to be scrutinized, such as “top-
down coordination and bottom-up implementation”, a hallmark of South African 
policymaking. As formerly stated, LED frameworks have been evolving, and there is 
currently no precise LED coverage in South Africa. As a result, assessing municipal 
performance using contradictory frameworks becomes difficult (Hindson, 2003). 
 
2.10 LED PLANNING PROCESS IN SOUTH AFRICA 
Local economic development (LED) planning includes assessing local conditions, 
identifying problems and solutions, creating goals, designing methods, coordinating 
activities to execute the strategies and evaluating success. LED planning is an 
organized process that involves communities in discussions about the local areas. It 
helps them assess local needs and set goals for their future. The process takes time, 
involves all community members, and addresses all the issues that affect the quality 
of life in local communities, particularly the most vulnerable who requires the most 
assistance (Swinburn et al., 2006). LED planning involves the following components: 
local economy assessment, organising effort, marketing strategy, implementation and 
review. 
2.10.1 LOCAL ECONOMY ASSESSMENT  
According to Swinburn et al. (2006), knowing the peculiarities of the local economy is 
vital if stakeholders are to discover and agree on a realist, sensible and plausible LED 
approach. An effective local economy evaluation will begin with the preliminary 
assessment of existing economic relationships within an area. It could employ 
quantitative and qualitative facts that highlight current structures and the traits in 
enterprise development, manufacturing, employment, competencies and other facts 
to help develop a strategic path to local economic development (Hindson, 2003). The 
goal is to elicit key information about the local economy. 
2.10.2 ORGANISING THE EFFORT  
Institutional planning and stakeholder involvement must be agreed upon during an 
early stage of planning to organize a local economic development approach 
19 
 
 
 
proficiently. An LED team should be formed, and this crew ought to be in charge of the 
strategic plan's system. Successful local economic growth necessitates the 
cooperation between private, public and non-profit sectors. The strategic planning 
technique starts with a list of people, public establishments, businesses, industries, 
civic agencies, expert agencies, education institutions and other groups that make up 
or impact the local economy (Swinburn et al., 2006). 
The expertise, knowledge, and resources that stakeholders convey to the effort will 
contribute to the overall strategic decision-making processes. Building strong working 
connections and organizational systems to support the planning process will result in 
long-term public-private collaborations that will benefit everyone. These working 
partnerships might range from semi-formal, loosely linked networks to the formation 
of regional development agencies or formalise public-private collaborations. 
Maintaining and retaining such collaborations is frequently the crucial and difficult 
component in evaluating the efficacy of the LED efforts (Swinburn et al., 2006). The 
devolution of considerable and actual power to effect LED is hampered when the local 
government lacks the knowledge and capacity to effect the change. This applies to 
councillors and officials, and it is a significant restraint that the state should 
acknowledge (Khanya, 2006).  
2.10.3 MARKETING STRATEGY 
As in strategic comprehension planning, the goal is to achieve an incorporated 
approach to the local economic development strategic process. In formulating 
strategy, LED officials and key stakeholders will need to balance the LED environment 
and social needs (Swinburn et al., 2006). The LED comprises the following 
components 
• vision: Describes the desirable economic direction as agreed up by 
stakeholders; 
• goal: primarily based on the general and specific desired targeted goals; 
• objective: establish the performance benchmark and activities for each goal 
development; and 
• projects and motion: Execution of specific programme components should 
be prioritised, and costs must be established. Time sure and measurable. 
20 
 
 
 
2.10.4 STRATEGY IMPLEMENTATION  
An LED strategy is a comprehensive plan that outlines short, medium, and long-term 
objectives and actions set out and how they will be achieved. It will build a plan to 
promote and strengthen the physical, social and environmental strength of the local 
community addressing both obstacles and possibilities (Swinburn et al., 2006). Every 
LED approach should have an execution plan detailing budgetary and human resource 
requirements and the institutional and technical implications of implementing the LED 
strategy programmes and initiatives. It acts as an integrated planning document that 
upholds strategic direction clarity and ensures that programmes and initiatives do not 
compete improperly for resources (Swinburn et al., 2006). 
2.10.5 STRATEGY REVIEW  
Although LED plans are characteristically written for a period of 3 to 8 years, they 
ought to be evaluated at least once a year to allow for the changes in response to 
changing local environments. This review should consider the resources available to 
carry out the strategy and define and agree upon monitoring and evaluation indicators 
(Swinburn et al., 2006). 
 
2.11 LOCAL ECONOMIC DEVELOPMENT APPROACHES IN SOUTH AFRICA  
 LED is considered one of the most essential strategies to reduce poverty and 
unemployment. Local economic development should strive to boost the local economy 
to create jobs. This implies that more businesses and factories must be established in 
the municipal area. As part of the integrated development planning course, 
municipalities, Non-profit Organizations, community groups, and enterprises should 
follow the following LEDs strategies. 
2.11.1 INDUSTRIAL RECRUITMENT AND PLACE MARKETING  
Place marketing is the process of promoting and advertising a location so that people, 
companies, firms and industries regard it as an attractive place to live, work, and visit. 
The term Industrial recruitment refers to drawing new industries to a given area. This 
expands the local tax base while also creating new job openings for locals (DPLG 
2000: 3-4). 
21 
 
 
 
Place marketing and industrial recruitment are occasionally considered as two 
separate strategies. However, these two strategies are closely related. For instance, 
in addition to tax incentives, a municipality may provide other forms of incentive to 
entice new businesses and industries in its area. Besides these incentives, the 
municipality will likely promote the facilities and entertainment available in the area 
and good infrastructure. In other words, the municipality’s commercial recruitment plan 
could be linked to its location advertising approach (Hindson, 2003). 
Industrial recruitment strategies assume that companies and industries are expected 
to locate in regions with reduced production costs. Moreover, companies will also 
assess whether their products have a local market and whether the place has 
adequate infrastructure and services (Hindson, 2003). The elements additionally 
influence the overall value of making and selling merchandise. According to 
international research, firms increasingly consider social and environmental factors 
when deciding where to locate. 
Place marketing has, consequently, emerged as a tool for distinguishing between local 
areas and ensuring that corporations and individuals are aware of positive qualities 
and unique characteristics in a town, a city, or a rural area. Place marketing strategies, 
for instance, highlight the benefits of rural lifestyle as living in a pollution-free 
environment or emphasise the cultural and leisure opportunities presented by towns 
such as artwork galleries, exhibition areas, golf courses (Swinburn et al., 2006). 
2.11.2 EXPORT PROMOTION AND INTERNATIONAL TRADE  
Municipalities, especially cities, increasingly focus their LED policies on foreign trade 
and export. We live in a world that is increasingly globalized and competitive. This 
implies that businesses compete against one another on a global scale. When 
shopping for a television set at a local store, for instance, you may be faced with a 
choice of televisions manufactured in 10 different countries. Therefore, South African 
television manufacturers must compete with a wide selection of multinational firms 
producing a similar product (DPLG, 2003:40). 
Local businesses must develop products at a lower cost than competitors, develop 
superior products, or offer products that cannot be found elsewhere to compete on a 
global scale. Local businesses must also establish themselves in a foreign 
22 
 
 
 
marketplace. They must ensure that consumers in their respective countries have the 
option of purchasing their items at the local stores (Swinburn et al., 2006). 
Municipalities may assist local businesses in being more competitive by focusing on 
sectors with a comparative and competitive advantage and offering support to these 
businesses to compete on a global scale. In other words, municipalities can examine 
the global market to discover whether prospects for exporting products and amenities 
that can be manufactured locally at a competitive cost exist. Municipalities can 
therefore offer targeted assistance to local firms in order to assist them in producing 
competitive products and amenities and export them to international markets (DPLG, 
2000b:6). 
 
2.12 OTHER APPROACHES  
• National Spatial Development perspective (NSPD): It was essentially 
designed to reconfigure apartheid spatial planning and put into effect spatial 
primacies in a way that meets statutory requirements (Meyer and Venter, 
2013).  
• Broad-Based Black Empowerment (BBBEE): The goal of BBBEE is to 
upsurge a number of Black people in administrative and senior management 
who own and operate new and established enterprises. 
• National Tourism Strategy: The tourism strategy has been established by 
the Department of Tourism with the understanding that these segments can 
generate economic growth and job development. 
• Comprehensive Rural Development Strategy: The CRDP provides LED -
projects incentives in rural areas (Meyer and Venter, 2013). This includes 
service focus on enhanced service delivery, sustenance for farmers, 
infrastructure outlay, and business investment access. The strategy focuses 
on three steps; step one is the development plan that aims to meet basic 
services, i.e., education, health, water, and Sanitation. Step two is 
infrastructural growth, and step three is the creation of rural industries and 
credit fiscal parts driven by small, medium and macro initiatives and village 
markets. 
23 
 
 
 
• National Development Plan: South Africa’s countrywide development plan 
2030 acknowledges inclusive monetary growth as key to tackling inequality. 
 
2.13 FUNDING OF LED IN SOUTH AFRICA  
LED can be funded through revenue created locally via levying of taxes or externally 
through the state, corporations and non-profit enterprises with the mandate of helping 
in the development of local authorities (Meyer and Venter, 2013). In SA, the following 
funding is available to support the local economic development in reference to the duo. 
• Local Municipality's own revenue amplified economic activities in the 
form of property taxes and sales of municipal services will help 
municipalities generate their own income. 
• Municipal Infrastructure grants - The current stage transfers support 
mostly basic infrastructure. The municipality should spend and use this 
more efficiently and effectively. The funds are available from local 
authorities, and grants apportionment depends on the proposed project. 
• Neighbourhood development Partnership grants (NDPG)- and urban 
improvement Incentives -Municipalities must organize themselves and 
use NDPG, available from the National Treasury. These are internal 
approaches designed to maximize the use of property development 
enticements from development zones (Meyer and Venter, 2013). 
• Sector support (national departments and different country-owned 
companies). There are various funding sources available from the 
national government for specific sectors. Many programmes funded and 
delivered in the sector support. This fund can be channelled through 
municipalities to feel integrated impact and outcomes (DPLG, 2003:40). 
 
2.14 SMME PROMOTION AND SUPPORT  
According to Meyer and Venter (2013), promoting and supporting SMMEs is one 
strategy to address the critical challenge of joblessness and poverty alleviation. Their 
growth creates more jobs than big businesses because SMMES are labour intensive, 
so supporting SMMEs could alleviate poverty in developing nations. 
24 
 
 
 
According to the Banking Association of South Africa, SMMEs are critical contributors 
to South Africa’s economic growth and job creation. Academics estimate that small 
and medium-sized businesses account for 91% of formal and informal businesses in 
the country. About 60% of the labour force is employed in the sector. In comparison, 
the total economic production accounts for an overall 34% of the GDP(The banking 
association South Africa, [Web] Http://www.banking.org.za/index.php/our-
industry/small-medium-enterprise [Assessed on 13 September 2021]. 
According to the National Credit Regulator, there is consensus amongst policymakers, 
economists and business professionals that small and medium enterprises(SMEs) are 
drivers of economic growth(Meyer and Venter, 2013). A robust SMME sector benefits 
the economy by boosting employment possibilities, creating higher production 
volumes, enhancing exports, and fostering innovation and entrepreneurship skills 
(Nel, 2005). The dynamic function of SMME in developing states assures that they 
help developing states realize their developments goals.  
 
2.15 SUMMARY OF THE CHAPTER  
LED is a locally-led outcome-based initiative that is driven by stakeholders. It entails 
identifying and utilizing largely local resources, skills and ideas to boost economic 
growth. LED aims to create employment opportunities for the benefit of all residents. 
LED is a continuous process involving all role players in the local community who are 
active in a number of different initiatives designed at addressing a variety of socio-
economic problems in that community (Hindson, 2003). 
The fruition of the policy post-1994 in South Africa is directly linked with the transition 
to developmental local government. In South Africa, LED is delegated through local 
government or municipalities (Khanya, 2006). Municipalities must act as local agents 
to execute local economic development programmes in collaboration with the private 
sector and other stakeholders (Hindson, 2003). The policy paper relating to LED in SA 
clarifies that the local government is not responsible for creating employment. Rather, 
it will be in authority for ensuring locality’s general economic and social conditions are 
favourable to job creation.  
25 
 
 
 
This Chapter provided a detailed analysis of Local Economic Development (LED) 
domestically and internationally, including its formulation, planning, stakeholders, 
constraints and supporting or enabling legislative framework. The next chapter will 
review the informal economy to bring the body of knowledge into the sector. 
  
26 
 
 
 
CHAPTER 3: INFORMAL ECONOMY 
3.1 INTRODUCTION 
Now that we understand what the study is all about, I will be elaborating on the informal 
economy. There is a new interest in the informal economy worldwide. The new interest 
has been driven largely by the growth in the size of informal economies in both 
absolute and relative terms (Godfrey, 2011). There is compelling evidence that the 
size of informal economies expressed as a percentage measured by the Gross 
Domestic Product (GDP) has virtually grown worldwide. South Africa is no exception 
to this trend. More and more of its population are entering the informal economy (Chen, 
2012). The decrease in the percentage of formal employment, slow pace of economic 
growth, the promotion of small, medium and micro enterprises (SMMES) as well as 
“informalization” of formal enterprises are all aggravating factors of informal economy 
growth in South Africa (Valodia and Devery, 2012). 
  
3.2 DEFINITION OF INFORMAL ECONOMY  
Following its discovery in 1973 by Keith Hart in Accra, Ghana, the informal economy 
has created increasing literature that has been grappled with formidable theoretical 
and empirical difficulties associated with studying survival approaches of the urban 
poor (Skinner, 2016). The informal economy (also known as grey economy or shadow 
economy) refers to economic activities carried out by individual operations and 
economic units that do not have formal contractual arrangements in law or practice. 
These economic activities function outside recognized norms of society in that they 
are unregulated or unregistered with the government and thus are not taxable 
(Skinner, 2015). The informal sector employees often work at the lowest level of 
organization labour relations based on personal and social contact rather than 
contractual agreement with legal protection. Vanek et al. (2017) define the informal 
economy as a sector encompassing a broad range of unorganized economic activity 
units in commercial agriculture, mining, construction, manufacturing and 
transportation service. According to the UN statistics (2015), this sector accounts for 
60% globally of adults working forces in urban hubs of emerging and developing 
countries.  
27 
 
 
 
 
3.3 INFORMAL ECONOMY: HISTORICAL BACKGROUND  
The origins of the informal economy can be traced back to the economic development 
strategies of the 1950s and 1960s. It was generally believed that, with the right 
combination of economic policies, traditional low-income economies might shift into 
modest, contemporary economies. This meant that the traditional economies 
consisting of small-scale traders, small producers, and casual workers would then be 
absorbed into the formal economy, so the informal economy would fade (Leys, 1996). 
The rapid reconstruction of Japan and Europe following the end of the Second World 
War strengthened this presumption. Moreover, by the end of the 1960s, optimism 
around economic development in emerging countries started to give way to 
apprehensions around widespread unemployment. As a result, the International Labor 
Organization (ILO) assumed a series of exploratory missions to various countries to 
examine the nature of jobs and challenges (Tokman 1992). 
The primary mission of these was implemented in Kenya. The Kenyan employment 
mission realized that the traditional segment has persisted and consists of lucrative 
and resourceful businesses and marginal activities. The Kenya mission used the term 
‘informal sector’ instead of ‘traditional sector’ for the series of unregistered and small-
scale activities and to highlight this element. The term informal sector was also used 
in 1971 by Keith Hart in his research of economic activity among rural immigrants in 
Accra, Ghana (Hart,1973). He concluded in his analysis, given external limitations and 
capitalist domination, that most immigrants were involved in informal activities that had 
sovereign income-generating potential. Even though both Hart and the Kenya mission 
team had an optimistic predilection towards the informal sector, noticing its ingenuity, 
efficiency and resilience, the notion got mixed analyses within development circles. 
Many viewers donated to the belief that the informal segment was marginal or 
peripheral and not connected to the formal segment of the present entrepreneurial 
development (Tokman, 1978). At the same time, others sustained the belief that the 
informal sector in Kenya, Ghana and other emerging nations would fade once these 
countries reached adequate levels of financial development or contemporary industrial 
growth (Rodrick,1997). 
28 
 
 
 
In the 1980s, the informal economy had appeared in industrial economies, 
reorganizing production into smaller, more regionalized and versatile economic 
elements. These changes were related to job informalization. Standard became non-
standard or distinctive work, with hourly earnings and little support. Moreover, 
economic calamities in Latin America and Asia resulted in the loss of jobs in the formal 
sector leaving many citizens unemployed and reliant on informal businesses for 
sustenance (Lee,1998). The informal economy has, in the process, become a 
permanent, although the subordinate and dependent aspect of entrepreneurial 
expansion (Portes and Bebton,1989).  
In the 1990s, the globalization of economies donated more to informalization 
(Standing, 1999). Although globalization created new jobs and prospects for new 
markets, there was evidence that not all jobs formed, particularly in the emerging 
economies, met the minimum or living salary requirements (Carr and Chen, 2001). 
Similarly, disadvantaged producers could not take advantage of new market prospects 
resulting from globalization (Standing, 1999). International competition continued to 
corrode workplace relations by allowing structured companies to employ low-wage 
staff with little benefits or subcontract and out-source goods and services. 
Globalization also decreased the attractiveness of many informal companies or self-
employed producers' by-products imported into the domestic markets and vis-à-vis 
larger, more formal companies in export markets (Rodrik, 1997). However, in recent 
years, the informal sector stood for a large but largely unnoticed share of the 
international economy and workforce.  
 
3.4 APPROACHES OF INFORMAL ECONOMY  
Over the years, the informal economy has been based on several leading schools of 
thinking and approaches such as the dualist, legalist, structuralist, torado-lewis model 
and voluntarist (Skinner & Hayson, 2017). These approaches provide the informal 
economy with a conceptual foundation, largely highlighting the explanation for the 
emergency of the informal economy.  
 
29 
 
 
 
3.4.1 DUALIST APPROACH 
The dualist approach describes the informal sector as a collection of secondary 
activities that offer income for the underprivileged, those who are unable (for different 
reasons) to enter the formal sector for employment (Narayan, 2011). Established by 
W.A Lewis in 1954, who believed that the economic progress in poor and 
underdeveloped countries would in the long-term generate enough jobs to absorb 
surplus labour from the traditional economy (Lewis,1954). The dual economy model 
distinguishes between formal and informal economic activities. It considers the 
informal sector distinct and unrelated to the formal sector, consisting primarily of 
labour-intensive activities such as agricultural work (Godfrey, 2011:243; Chen, 2012). 
According to the dualist school of thought -an informal economy exists mainly because 
of excess labour, implying that the population was disproportionately large compared 
to the economy. 
The dualist argues that the informal economy would fade with increasing per capita 
incomes and development (Chen, 2012). More research on dualism has expanded the 
Lewis model by splitting the informal and formal into rural and urban areas. During his 
research in Accra, Ghana, Hart (1973) discovered that the Lewis model, which 
reflected inflexibility in the dual economy, did not hold; instead, Hart discovered a 
symbiotic dual economy. Moreover, Hart (1973) contends that the symbiotic dual 
economy comprises a small formal sector and a thriving urban informal economy with 
diverse bi-directional movement between the two sectors. Hart further went on to say 
that the low productivity informal sector fueled formal sector investment and output. 
Hence informal acted as a buffer for ups and downs of employment in the formal sector 
(De Ruiter, 2009). 
3.4.2 STRUCTURALIST APPROACH 
According to Altman, 2007; Castella & Portes,1989 and Chen, 2012, the structuralist 
approach, which dates to the 1970s, arose from the dualist method and was 
popularized by Cardines Moser and Alexandro Porters. Hypothetically, structuralist 
does not see the informal economy as a feature in the traditional economy but rather 
as a key part of modern capitalism. From its original view, the structuralist did not view 
unemployment and poverty, nor the paths of development chosen by individual 
countries, instead view issues of underdevelopment as attributed to the presence of 
30 
 
 
 
one sector of the economy that needed to be addressed (Godfrey, 2011:245). The 
structuralist school believes that the informal sector is part of a larger market 
continuum, but that subordinate it, believing that capitalism drives informality via formal 
enterprises cutting labour cost. 
Many academics classify this model as Marxist because of its viewpoint (Henley et al., 
2006). In comparison to a dualist method which divides the sector to conceptualize 
informality, the structural view defines informality as a definite relationship in the 
organization of production. This viewpoint sees informality as characteristic of labour 
capital relations. Additionally, proponents of this approach recognize informal reliance 
of the formal (e.g. having firms where labour was less expensive, and prices are lower) 
or opposite (e.g. via subcontracting activities). (Davies and Thurlow, 2010). According 
to researchers, the exploitative relationship between workers and income was used to 
explain informal economy persistence. Thus the link between formal and informal 
sectors are a form of structural exploitation. 
3.4.3 LEGALIST APPROACH 
Legalists vary from dualists in that they do not consider informality as originating from 
the economy's underlying structure but rather a result of institutional planning and 
preference. Furthermore, they consider the informal economy as a voluntary choice. 
Legalists can be separated from structuralists, who see it as an imposed constraint 
(Chen, 2012.). De Soto (2000) describes the legalist view as forming a link between 
informality, poverty and legal systems in emerging countries. He argues that 
individuals engage in the informal economy because of overregulation and 
bureaucracies by the government, which makes it hard for individuals to participate in 
the formal economy. 
Additionally, De Soto (2000) experimented with verifying the view in which he and his 
team tried to register a small company. In his outcomes, he reported that to have a 
small company registered. More than 100 administrative steps were taken and nearly 
full-time year. Therefore, informal economy participants' deliberate and conscious 
move was needed to bypass the expense, time, and effort related to formal business 
registration. Although the state has prioritised reducing red tape related to this, the 
number of unregistered companies exceeds those registered (Godfrey, 2011).  
31 
 
 
 
3.4.4 TODARO-LEWIS MODEL APPROACH 
According to this school of thinking, lack of formal sector jobs and urbanization 
increases informal sector jobs (Kucera, 2008). “For every individual employed in the 
urban sector, either that person has migrated from the rural areas.” (Nolen, 2007) 
Migration has been primarily triggered by a lack of jobs in the rural areas and the hope 
of business and employment opportunities in cities (urban areas). However, jobs in 
the formal sector have not kept pace with the growth of the urban labour force; Instead, 
urbanization has raised the apprehension over urban jobs, underemployment and 
joblessness. In addition, Galli and Kucera (2004) reported that, although a large 
percentage of industrial work created jobs in towns, they were inadequate to offer all 
migrants formal jobs. This labour surplus led to the rise in informal sector jobs whereby 
immigrants would pursue this kind of labour market as a means of survival.  
3.4.5 VOLUNTARIST APPROACH 
Voluntarists pay relatively little attention to the economic relation between formal and 
informal undertakings. However, they believe that informal undertaking generates 
unfair competition to the formal undertaking because they escape formal control, taxes 
and other production costs. They contend that informal business must be brought 
under the formal control setting to upsurge the tax base and lessen the one-sided 
competition to the formal business (Masongane, 2010). 
Each of these theoretical approaches gives rise to different definitions of the informal 
economy. However, it was important to understand the informal economy from 
different perspectives for this study 
 
3.5 INTERNATIONAL PERSPECTIVE OF INFORMAL ECONOMY 
The global informal economy comprises various activities that include street trading, 
different scale manufacturing and various products. This paper will give a global 
snapshot of the informal economy from the following countries: 
3.5.1 EUROPE AND USA 
Many families in first-world cities rely exclusively on the informal economy for their 
livelihoods and make ends meet. European cities have a wide range of dynamics 
concerning the operations of informal trading. There are sites in Paris where informal 
32 
 
 
 
economic activities are carried out. In areas like ‘Chateau Rouge’, informal trading 
take place daily, whereas, in other neighbourhoods, informal trading occurs on specific 
days of the week. However, these activities are only possible if the municipality issues 
a permit. This permit allows individuals to sell along the street on specific days and on 
sites that have been designated by the municipality (Godfrey, 2011). 
There is an informal market for specified days in the Hague, Holland. Although 
municipal authorities provide selling permits to individuals that operate, one can also 
measure the level of informality. There are no warehouses where individuals can store 
their goods, no restrooms facilities within the vicinity, no administrative offices outside 
the market to keep track of goods being sold. Moreover, many commodities are 
industrial, and therefore, their source of supply must be clearly defined through proper 
management control  
In Brussels, flea markets are known as “Marche de Midi” and are organised with 
restrooms and administrative offices, for those sources of products for sale entail both 
legality and illegality (Chen, 2012.). The most fruitful dynamics of the informal 
economy in European cities has been that of subcontracting the informal economy to 
the formal sector economy. Subcontracting has resulted in a classified dynamic of 
production and commerce. Within the production, there are subcontracts with small 
and medium businesses that focus on a certain feature of items used to do work for a 
large corporation. This phenomenon was pervasive in Western European countries, 
with Italy serving as the prime example of how this dynamic has produced spectacular 
results. Italy has an incredible reputation in specialized goods such as shoes, clothing, 
belts and other industrial goods (Godfrey, 2011). 
Marcelli et al. (1999) argue that participants in the informal economy in the United 
States, notably in Los Angeles, are not self-employed but rather work for private 
companies under less than ideal favourable conditions. They work daily without legal 
contracts. Because of the low cost of labour, some have hailed the growth of 
informality as a sign of entrepreneurship. So far, no effective policy has been 
developed to sustain this alternative as a source of income for many families. They 
also argue that there was also an indication that domestic workers in the USA are also 
involved in informal economic activities.  
33 
 
 
 
3.5.2 ASIA  
According to Caroline Skinner’s presentation (2001), the degree of the informality of 
the economy in Asia fluctuates between 45-85 %, Hong -Kong was a definite case of 
the informal economy. This region in China has 75 % of export-oriented informal 
businesses and employ fewer than 50 people, yet are connected to the global markets 
via small import-export businesses. The Chinese market has now invaded the rest of 
the world through varied goods and services that target certain niches of the world 
market. On the other hand, informal businesses function within a legally controlled 
environment and contribute to their thriving economy. 
According to Perra (1994), the informal economy accounts for 90% of employment in 
Indonesia, 62.3% in Bangladesh, 98% in Pakistan and 55.3 % in Thailand. Indonesian 
cities have many informal businesses and have assumed the concept of regulating 
informal sector businesses to incorporate them into the urban systems. In contrast to 
antagonism, limitations and eviction, many third-world states have embraced a policy 
of acceptance, accommodation and regulation of the informal sector. The attitude 
towards the latter must be altered without reservations to become part of the new 
urban development landscape in cities. 
3.5.3 LATIN AMERICA 
In Latin America, the informal economy accounts for 57% and provides 83% of 
employment in urban areas (Godfrey, 2011). Between the 1950s and 1980s, the 
informal economy played a significant role in the livelihood of many citizens around 
Latin American countries. The informal economy grew and caused economic growth 
of 5.5 % to the GNP. This sector occupied 30% of the active urban population. This 
report shows that 93 % of the world’s informal employment was in emerging and 
developing countries.  
 
3.6 INFORMAL ECONOMY: AN AFRICAN PERSPECTIVE 
Even though the economic growth of African states has improved, it is difficult to ignore 
the existence of the informal economy in Africa. Many governments in Africa have not 
supplied adequate, decent jobs for millions of citizens and young people entering the 
labour market. Over the last decade, 37 Million jobs were generated by African states, 
34 
 
 
 
of which only 15 % were wages paid in the formal sector while 85% were wages 
derived from the informal sector (Medina and Schneider, 2017). The increase in 
unemployment in Africa has been attributed to globalization, sluggish pace of 
structural changes accompanied by the transition to more profitable labour intensive 
occupations in the industrial and high-end services. This has resulted in many people 
in Africa taking part in the informal economy as a source of employment and household 
income. 
The reality of the informal economy in Africa cannot be denied. Informal employment 
accounts for two thirds (66%) of non-agricultural employment in Sub-Saharan Africa. 
However, variation within the region was significant. Informal economy accounts for a 
smaller share of non-agricultural employment in Southern Africa (33% in South Africa 
and 44% in Namibia) compared to countries in other sub-regions (82% in Mali and 76 
% in Tanzania) (Medina and Schneider, 2017). In West Africa, informal employment 
comprises 76% (Niamey) and 83% (Lomé) of employment. Moreover, the informal 
economy was a great source of employment for 74% of women and 61% of men. The 
informal economy significantly impacts poverty reduction (Rogan and Cichello, 2017).  
 
3.7 INFORMAL ECONOMY: A SOUTH AFRICAN PERSPECTIVE 
To understand the informal economy, some microeconomic factors of the South 
African economy within which the informal economy operates are important (Crush 
and Frayne, 2011). South Africa today has the second-largest economy in Africa. 
However, government intervention heavily influenced the economy in the 1960s and 
early 1970s. The structural challenges of the time were tied to import policies and high 
tariff barriers. Even though high tariff barriers were not essential by the 1970s, the 
government continued to impose these policies to circumvent any shortages of 
strategic resources because of the threat of sanctions. Moreover, the oil crises and 
the Soweto uprising in the mid-1970s exacerbated these interventionist inclinations, 
amplified in the early 1980s by the slow global economic growth and the increased 
sanctions and disinvestment movement against South Africa (Rogan and Cichello, 
2017).  
The government responded by imposing stringent controls on the flow of international 
investment, requiring South African corporations to invest domestically. Because of 
35 
 
 
 
the level of protection provided to these corporations, they had little or no motivation 
to train and skill their personnel to increase their efficiency and become more 
competitive globally (Skinner, 2016). Disinvestment also resulted in a greater 
concentration of ownership in the economy as large South African conglomerates 
purchased out international corporations. The implications of this employment were 
slowing economic development and decreasing investor confidence, both of which 
resulted in fewer job openings (Valodia and Devey, 2012). In 1994, it was evident that 
the ANC administration would face a challenging task in restoring economic growth. 
Not only was there the legacy of apartheid to contend with, but there was also a global 
movement towards globalisation and the rise of international trade to contend with. 
South Africa had no alternative but to embrace globalisation to attract international 
investment and become globally competitive (Medina and Schneider, 2017).  
The major corporations were required to unbundle their complicated corporate 
structures to boost productivity and adjust to new technologies. This frequently 
entailed significant retrenchment, resulting in high unemployment. South Africa‘s high 
unemployment rate was ascribed to the country’s underperforming formal economy 
and the inability of the unemployed to enter the official labour market. As a result, it 
was expected that the unemployed would shift to the informal sector (Skinner, 2016).In 
2003, former state president Thabo Mbeki famously and somewhat controversially 
identified South African economy as dual, consisting of ‘first economy’(formal 
economy) and ‘ second economy(Informal economy), which was characterised by 
poverty and underdevelopment and which was structurally disconnected from the 
formal economy (Valodia and Devey, 2012) The informal sector constitutes a small 
share of the total workforce in South Africa, relative to other developing countries (ILO, 
2015). Many stylised facts about the broad characteristics of employment in the 
informal economy in South Africa are now widely accepted. For example, activities in 
the informal sector are largely concentrated in wholesale, retail, transport and trade 
sectors.  
 
36 
 
 
 
 
3.8. SIZE, NATURE OF INFORMAL ECONOMY IN SOUTH AFRICA  
Estimating the size of the informal economy was problematic, even though there are 
globally established measurement methods to describe the nature, size, and 
contribution of the informal economy to a national account (Becker, 2004). In practice, 
in mapping the informal economy to understand its size, the composition was a 
challenging and invariably imprecise task (ILO, 2015). International comparisons are 
additionally challenging due to the various definitions employed. Furthermore, the 
informal economy is heavily fragmented within different countries by location of work, 
economic sector and employment status across social groups and gender (Becker, 
2004).  
Over the years, a number of estimates on the size of the informal economy have been 
made in South Africa. Van der Berg (1990) and Hartezenburg & Leiman (1992) 
estimated that the informal economy accounted for 9% of the Gross domestic product 
GPD in 1989 using the currency demand technique. Using the October household 
survey of 1993 and 1994. Martins & Ligthelm (1995) calculated the informal economy 
as accounting for 9.2%of the GDP in 1993. According to Statistics South Africa 
(StatsSA, 2018) informal economy has contributed a projected 5.2% to GDP in 2015. 
In 2016, the informal economy employed a total of 2,56,000 people. This figure is 
significantly lower than in underdeveloped countries of comparable size. According to 
Skinner and Rogan (2014), informal trade has traditionally represented a larger 
component of informal work for women than for men. Much of the reduction in women 
in informal sector jobs occurred in wholesale and retail trading between 2008 and 
2014. Devey et al. (2006) projected 72%-82% of street traders in 2014 sold food (fruits, 
vegetables).  
It is unlikely that employment data will include all migrants in the country. 
Undocumented migrants, refugees and asylum seekers are predominantly left out 
from the formal labour market and have no option to create their own employment 
(Crush et al., 2015). A 2010 study of Zimbabwean migrants in Johannesburg and Cape 
Town by the Southern Africa Migration Programme (SAMP) indicates that 20% of all 
migrants worked in the informal economy (Crush et al., 2015). In addition, other 
37 
 
 
 
studies reveal that other migrant groups, such as migrants from Somalia, have a 
substantially greater percentage of the informal sector participation. 
 
3.9 CHARACTERISTICS OF THE INFORMAL SECTOR IN SOUTH AFRICA 
The informal economy is largely considered the uncontrolled non-formal part of the 
market segment that produces goods and amenities for sale or other forms of reward. 
The informal economy is largely characterized by:  
i. Low Entrance requirements  
This sector is usually characterized by low entrance requirements in terms of capital 
and skills. Thus, any individual or entity can readily enter and start conducting 
business, and if challenges arise, exiting is easy. Moreover, a low entrance barrier 
serves as an incentive for individuals entering the informal economy (Valodia and 
Devey, 2012). 
ii. Un-incorporated private businesses 
Most businesses are private and not formally registered with national registration 
bodies like the Companies and Intellectual Property Registration Office (CIPRO). In 
other words, businesses are not subject to any specific sort of national registration 
regarding regulation and legislation (Skinner, 2016). 
iii. Small scale enterprises 
One more significant aspect characterizing the informal sector in South Africa is that 
their operations are often small scale in nature (Skinner, 2016). There are no 
economies of scale to talk about. For example, the production and/or product or 
service supplies are generally unreliable.  
iv. Labour-intensive methods 
The level of output or service provision varies among the economic actors in the 
informal economy. Their activities are largely labour intensive (Crush et al., 2015). 
However, some integrate technology into their line of business. The majority of their 
production processes are labour intensive.  
 
38 
 
 
 
v. Lower product/service quality 
The quality of goods or services provided by this sector is seen as inferior to identical 
items or services provided by the formal economy. Most informal economic actors do 
not comply with any Hazard Analysis Critical Control Point (HACCP), so their goods 
and services are generally lower in quality (Skinner, 2016).  
The informal economy in South Africa exhibits many of the qualities listed above. 
However, more characteristics must be investigated to buy a deeper knowledge of the 
informal economy in South Africa. 
 
3.10 CAUSES OF INFORMAL ECONOMY IN SOUTH AFRICA  
The lack of consensus definition of the informal economy has led to a plethora of 
alternative causes of the informal economy (Makochekanwa, 2012). According to 
Medina and Schneider (2018), the size of the informal economy was determined by 
various factors. Hence, literature on the subject matter has proposed a variety of 
factors as the primary drivers behind the existence and growth of the informal 
economy. The following are the primary reasons for the informal economy.  
3.10.1 TAX AND SOCIAL SECURITY CONTRIBUTION BURDEN  
The alteration of the overall tax burden impacts labour choices and may encourage 
labour supply in the informal economy (Crush et al., 2015). The bigger the difference 
between the total labour cost in the official economy and after-tax earnings (from 
work), the greater the incentive to reduce the tax wedge and work in the shadow 
economy. This tax wedge depends on social security burden/payments and the overall 
tax burden, making them key determinants in the existence of the shadow economy.  
3.10.2 HIGH UNEMPLOYMENT  
Unemployment is one of South Africa’s most pressing socio-economic challenges, 
affecting a quarter of the workforce. Rodrik (2008) finds manufacturing’s poor 
performance relative to skill-intensive services as the main cause behind rising 
unemployment amongst lower-skilled jobs. High unemployment in South Africa has 
thus been attributed to the underperforming formal sector and the inability of the 
unemployed to enter the formal labour markets. Therefore, it was expected that the 
unemployed would turn to the informal sector (Crush et al., 2015). 
39 
 
 
 
3.10.3 HIGH LEVEL OF POVERTY  
Poverty is one of the fundamental causes of the advancing informal economy. 
Impoverished and unemployed individuals often turn to the informal economy to 
sustain themselves and make ends meet (Crush et al., 2015). Nevertheless, this did 
not suggest that formally working individuals are not poor. Unfortunately, many formal 
workers cannot escape abject poverty, particularly in developing nations where 
remunerations in the public services and state-owned firms may not constitute a living 
wage to support a family. 
3.10.4 QUALITY OF INSTITUTION  
The important determinant in the growth of the informal sector was the eminence of 
government institutions. Bureaucracy with extremely corrupt government employees 
is linked to more unofficial activity. At the same time, the good rule of law improves the 
benefit of being formal by ensuring property rights and market contracts (Crush et al., 
2015).  
3.10.5 MIGRATION AND URBANISATION 
The rapid rise of the informal sector in developing countries has been fueled by the 
rapid increase in population growth in urban zones (De seto, 2000). The city’s growing 
population has reduced the number of job options available for the urban population 
(Lyons and Brown, 2007). According to Skinner (2008), urbanization and economic 
inclinations in Africa have resulted in a rapid increase in the number of informal 
economy businesses operating in inner-city areas. Skinner (2008) went on to say that 
given Africa’s high rate of urbanization, which is presently at 39% and the urban growth 
rate at 32% (2009-2017), the formal economic sector cannot keep up with the 
expanding population in terms of job opportunities (Medina and Schneider, 2018). The 
informal sector is the primary source of employment for the city’s poor population 
because the formal economy cannot provide employment. 
In developing, nations, migration is one of the factors influencing the informal 
economy. The end of apartheid in South Africa in 1994 made it easier for local and 
international migrants to engage in entrepreneurial activities such as street vending to 
survive. After deregulation of the industry and the democratic political change in 1994, 
the informal economy grew quickly, particularly in inner cities numerous cities and 
towns which were formerly kept for white businesses (Medina and Schneider, 2018). 
40 
 
 
 
 
3.11 POLICY FRAMEWORK OF INFORMAL ECONOMY IN SOUTH AFRICA 
The policy for the informal economy has been founded on regulation rather than a 
development approach. The regulation of informal activity, including defining roles of 
various stakeholders and actors in this sector, must be considered in the constitution. 
3.11.1 CONSTITUTION OF SOUTH AFRICA NO 105 OF 1996 
The constitution divides government into three spheres National, Provincial and Local 
government. It also supplies the fundamental legislative structure and a delegation of 
legislative authority in each government domain. The constitution gives municipalities 
legislative and executive authorities to administer matters in Part B of the schedules 
and added matters delegated by the national and provincial government. The 
municipalities have the authority to enact by-laws and rules about the informal 
economy (Constitution of Republic of South Africa, 1996). 
3.11.2 BUSINESSES ACT NO. 71 OF 1991  
The Business Act 71 of 1991 aimed to abolish or alter certain laws relating to business 
licensing, operations of the businesses, and shop hours, to create certain provisions 
relating to licensing and carrying on of the business and provide related things. The 
act makes it mandatory for business owners to register their companies.  
3.11.3 MUNICIPAL BY-LAWS  
 The municipal by-laws are another vital form of regulation of informal trade, in which 
municipal council can pass, regulate and control informal trade within its jurisdiction. 
Any by-laws must adhere to the provisions of the constitution and the Business Act. 
The Business Act provides municipalities with the authority to enact municipal by-laws 
governing informal trade.   
3.11.4 HEALTH ACT 63 OF 1977  
The municipalities are given specific authorities and responsibilities in Chapter IV of 
the constitution, including taking all lawful, necessary practical measures- i.e. to keep 
its territory in a hygienic and clean state all the time. The municipality must follow the 
Act and the supplementary regulations, particularly about foodstuffs.  
41 
 
 
 
 
3.12 INFORMAL ECONOMY IN RURAL AND URBAN SOUTH AFRICA  
The government wage and welfare programmes are the primary inflow of income for 
many in rural towns. Low wages primarily limit the informal sector scope, limited 
demand and limited space to generate more rounds of spending (Skinner, 2016). 
When social wages are spent on essential utilities and foodstuffs, the busy month end 
and bazaar phenomena present a vital prospect for informal market partakers. The 
local agribusiness retail sector stays a significant contender. Informal agriculture 
(generally excluded from informal sector analysis due to data and policy resolutions) 
is a key part of the rural economy. Informal sector farmers often suffer from a shortage 
of funds for production inputs (Valodia and Devey, 2012). The market they often supply 
is typically as follows: Bakkie traders, vendors and farm gate buyers include valued 
patrons.  
In contrast to the urban informal economy, home-based workers, street vendors, and 
waste pickers are old age jobs, accounting for many city workers worldwide, 
particularly in South Africa. Most urban workers earn their livelihood in the informal 
economy. Few have stable trades; most have little and volatile incomes, and few are 
protected in contradiction of loss of work and income (Skinner, 2016). Many urban 
traders run beyond state control and protection. Many are harassed or suppressed by 
law enforcement agencies or local authorities and excluded from economic activities.  
 
3.13 WOMEN IN INFORMAL ECONOMY 
Women are disproportionately affected by the informalization of work, and they tend 
to be overrepresented in informal employment in underdeveloped and developed 
countries (Medina and Schneider, 2018). According to Chen (2018), the informal 
economy is principally a source of employment for women rather than for men in poor 
countries. Women face discrimination and lack access to essential resources such as 
education. As a result, they end up in the informal economy where education and skills 
are not a prerequisite for production. Medina and Schneider(2017) agree with this 
viewpoint, pointing out that women make up a majority of informal workforces and that 
they are the main victims of casualization of labour. According to Mitullah (2003), 
women’s vocational placement is influenced by their level of education. Since women 
42 
 
 
 
have a lower level of education than men, they cannot effectively compete in formal 
employment. Various factors, such as poverty and greater demand for women’s labour 
in household activities, restrict women from enrolling in formal education and training 
and subsequently qualifying for any job (Medina and Schneider, 2017). 
 
3.14 CHALLENGES FACED BY INFORMAL ECONOMY IN SOUTH AFRICA 
Informal businesses experience problems just like any type or form of business. The 
challenges in the informal economy are merely more serious since the informal sector 
was left out in the more organized formal economy. The greatest obstacle facing 
informal economy participants is their location of operations and rights to trading space 
(Skinner, 2018) which are usually subject to various issues which impede their ability 
to function and contribute to the economy. Besides the limited right to trading space, 
informal participants face challenges in transportation security and municipal services 
(Skinner and Hayson, 2016). Moreover, harassment and confiscation of their goods 
by municipal authorities (Skinner, 2018)  
In many urban areas in South Africa, street trading areas are viewed as areas for thugs 
and robbers (Pieterse et al., 2018). A study of cities in South Africa has noted that an 
insecure environment results in loss of customers, frightens tourists, and cripple’s 
informal business, reducing incomes and generally interfering with trading (Parnell and 
Pieterse, 2010). Most vendors find it difficult to transport their goods from the homes 
and markets to their trading sites. According to Rogan and Skinner (2017), the 
transport systems rarely service the areas where vendors live, and if it does, vendors 
can barely afford the services. The problem of transport was complicated further by 
lack of storage facilities, which means that traders carry unsold goods back to their 
homes. In some instances, the transport challenge can cause the informal traders to 
sleep in the street or build an illegal squatter settlement near the trading site for 
convenience, which gets them into trouble with the authorities as they move into areas 
not zoned for settlement (Chen, 2018). 
In small towns, traders run without basic services like water and sanitation (Skinner 
and Watson, 2018). According to Skinner (2018), some informal traders use services 
such as water, sanitation, storage facilities from neighbouring markets, hotels and 
bars. Furthermore, municipal cleaning services are inadequate and often do not cover 
43 
 
 
 
informal trading hours. Most of the space traders occupy is illegal since the space has 
not been set aside for trade. In addition, the spaces have no tenure and are not 
distributed and sanctioned by urban authorities (Chen, 2018). In cases where they are 
allowed, the spaces are considered temporary, and eviction occurs at the will of urban 
authorities. There are various conflicts relating to sites of operations. A major conflict 
arises when the vendors must move to give way for planned development, bringing 
them into direct confrontation with urban authorities and land developers. At the same 
time, traders come into conflict with formal shop owners and landlords who contend 
that they infringe on their business and premises (Skinner and Watson, 2018). 
The space occupied by traders are usually open to the elements, supply little shelter 
and expose them to harsh environmental conditions such as pollution. For example, 
vehicles spilt oil on the food sold by informal traders. Secondly, climatic factors such 
as rainfall can harm those traders trading under flimsy structures or those who do not 
have structures at all (Skinner, 2018). Most commodities such as fruits, vegetables 
and clothes are negatively affected by harsh environmental conditions resulting in loss 
of earnings to traders. Overall, informal traders have been perhaps the most regulated 
and least protected due to a lack of recognition and licenses.  
 
3.15 INFLUENCE OF PLANNING LAWS ON INFORMAL ECONOMY IN SOUTH 
AFRICA 
Urban spatial planning played a part in restricting or preventing, sustenance of informal 
activities. Skinner (2018) reflects this with reference to street traders since land zoning 
in a town plays an important part in enabling an entree to market and permitting 
business activity. Since areas were not historically earmarked for informal employment 
workers, urban planning has been required to recognize the emerging changing 
aspects of small-town trades and informal economy at the local level. Until the dawn 
of governance reform in Africa, the informal economy's greatest challenge was their 
site of operations and rights to trading space (Skinner, 2018). Yet, they are subject to 
many other challenges that hinder their functioning and contribution to the economy 
Zack (2017), largely commodities of trade peddled by urban authorities. This gives rise 
to planning regulations that do not consider the existence of informal sellers and street 
vendors. In most cases, such planning regulations locate the traders without any 
44 
 
 
 
engagement in the marginal zones of the metropolitan where the was no business 
(Skinner and Watson, 2018).  
The practice across Africa demonstrate that sellers never stick to these areas but 
move back to the centre, resulting in remedial action from the municipal authorities. 
According to Rogerson (2015), most of the laws and enforcement on street and market 
sellers owe their roots to colonial strategies, which were retrogressive concerning 
home-grown trades. Informal traders need regulations that recognise their economic 
activities as a vital element of the urban economy, which safeguards their right to 
trading space. 
The multitude of by-laws for traders limits their operations to working in certain areas, 
such as working within five meters from juncture, next to fire hydrants or place of 
worship, next state offices, not in front of botanical gardens and certainly not on the 
pavement as to obstruct sidewalks ( Skinner and Watson, 2018).In addition, street 
traders are prohibited from selling counterfeit goods, medicine, alcohol, and prepared 
food (take ways) without complying with municipal health regulations.  
 
3.16 SUMMARY OF CHAPTER 
The informal economy is a phenomenon that has evolved over the years, particularly 
in terms of economic activities it includes and excludes. This chapter has given a broad 
overview of the literature on the informal sector globally and in South Africa. This 
chapter’s main focus has been on documenting the informal economy’s heterogeneity 
and theoretical approaches. The term informal economy has been given numerous 
definitions and various interpretations. However, it is crucial to remember that 
definitions have tended to be context-specific and influenced by various academic 
influences (ILO, 2003; Devey et al., 2006; Chen, 2012). In this regard, the lack of 
consensus on defining the informal economy has a detrimental consequence for its 
measurement and broad understanding. 
The literature above has looked at some of the most popular approaches to studying 
the informal economy. The dualist approach is the most researched in literature since 
it accounts for the most primitive work on the informal economy (Lewis,1954; 
Hart,1973; Swaminathan,1991). The structuralist approach contends that capitalist 
45 
 
 
 
growth fosters informality by lowering labour costs and boosting competitiveness. 
Hence, researchers claim that the exploitative relationship between the formal and 
informal economies is understood as structuralist exploitation (Castells & Portes, 
1989; Chen, 2012; Altman, 2007). On the other hand, the legalist approach contends 
that an oppressive and unfriendly legal system pushes unemployed people to work 
informally (De Soto, 2000). The literature on theoretical approaches in the informal 
economy allows one to reach broader conclusions about why and how the informal 
economy emerged. Importantly, South Africa’s history has contributed to the literature 
recognising apartheid policies, particularly their influential impact on the informal 
economy (Chen, 2012).  
This chapter focused on reviewing the literature on the informal sector using a global 
perspective and a South African perspective. And now the next chapter explains in 
detail the research methodology and activities undertaken during data collection and 
analysis in the study. 
 
 
 
 
 
 
 
 
  
46 
 
 
 
CHAPTER 4: RESEARCH METHODOLOGY  
 
4.1 INTRODUCTION 
This chapter goes into detail to outline fully the research methodology activities used 
during data collection and analysis. Babbie and Mouton (2006:647) define research 
methodology as the systems and procedures employed in executing the research 
design or research plan, as well as the underlying principles and assumptions that 
underlie their use. The methodologies were selected to understand the informal sector, 
specifically street vendors and their influence on the Local Economic Development. 
 
4.2 STUDY AREA: HISTORICAL BACKGROUND OF BLOEMFONTEIN 
Bloemfontein, also commonly known as the “city of roses”, is the capital city of the 
Free State province and the judicial capital of South Africa. Bloemfontein was 
established by major Warden in 1846(Kotze and Donalson,1998, krige,1991). 
Between 1890 and 1904, Bloemfontein experienced massive urbanization. Factors 
contributing to rapid urbanization and increase in urban population includes the Anglo 
Boer war (which prompted labours to seek sanctuary in the city) and the completion 
of the Cape to Johannesburg railway line via Bloemfontein (Kotze and 
Donaldson,1998, Krige,1991). 
The spatial transformation of Bloemfontein city is thought to have been separated into 
three categories, the colonial city (1846-1910), segregated city (1951 - 1985) and lastly 
neo apartheid city (1986 -1990). The Free State province was exclusive in applying 
segregation and apartheid laws. It was the first to enact general law in 1893, which 
permitted control of ownership and occupation of property in urban areas (Davenport, 
1991). Also noteworthy is the fact only white people were allowed to own land. 
Between 1890 and 1986, Indians were officially prohibited from owning land, and this 
was the only province that did not change its borders after apartheid (Kotze and 
Donaldson, 1998). 
Like many other cities in South Africa, Bloemfontein is developed around the central 
business district (CBD) (Kotze and Donaldson,1998). The apartheid city features the 
following characteristic; (Marais, 2008 cited Krige,1998) the city has a sectoral 
47 
 
 
 
structure in a circular form with each population group assigned to a sector that 
connects to the CBD, white restricted areas were higher-lying and with nicer residential 
settings while those in the other population groups were positioned away from white 
areas, moreover residential areas for Africans were split according to their ethnic 
groups. 
Kotze and Donaldson (1998) go into greater detail to describe the spatial layout of 
Bloemfontein based on ethnic groups. In Bloemfontein, most people who lived north 
and west of the Central Business District were white. In essence, during apartheid, the 
Central Business District was essentially a white only zone (Marais, 2008). At the 
same time, areas such as Rocklands and Bochabela were meant for blacks, and 
Heideadal was zoned for coloured people. Additional, Waaihoek was once a mixed-
race community for African- coloured people, but an appeal in 1902 by the Cape boys 
resulted in the creation of a location called Cape Stands as a separate residential zone 
for coloureds  
Black and coloured communities were largely sited South and Southeast of the city’s 
industrial areas (Kotze and Donaldson, 1998). The apartheid planning used the railway 
line as the social boundary separating different racial groups (Krige, 1991). This was 
a kind of buffer zone that separated Bloemfontein on the South and Southeast and the 
white CBD. 
Apartheid planning in Bloemfontein was especially targeted at black African people 
(Krige, 1991). This emphasis on spatial control of the black African people resulted in 
the formation of Botshabelo in 1979. Botshabelo was founded for two reasons: the first 
reason being that the population of Bloemfontein had increased. Botshabelo was to 
absorb a portion of this population. The second reason was that there was a need to 
develop a resettlement place for Sotho speaking people in the Thaba-Nchu district 
after the independence of the Bophuthatswana Bantustan (Krige, 1991). As a result 
migration of black Africans to Botshabelo and Thaba-Nchu had a significant impact on 
the region’s spatial layout. The buffer zones were used to ensure that the South and 
South-East of the city and the white central business district were clearly separated 
(Kotze and Donaldson, 1998). This was made feasible by the Group Areas Act of 1968 
to 1990, which permitted white people to live in the inner-city zones while the black 
48 
 
 
 
people were moved to apartheid dumping grounds such as Botshabelo and Thaba-
Nchu.  
 
 
Figure 4.1: Map of Bloemfontein Central Business District  
Source: www.samaps.co.za 
 
4.3 RESEARCH APPROACH 
Qualitative research data and analysis directed this study. Qualitative methods are 
based on words, feelings and perception rather than numbers, and they include focus 
groups, observation, and interviews. Qualitative methods are often regarded as 
providing rich data about real-life people and situations and being better able to make 
sense of behaviour and understand behaviour within its wider context. Therefore, the 
method was suitable for the study (Merrian, 2013).  
49 
 
 
 
Advantages and disadvantages of Qualitative Methods 
Qualitative methods can provide detailed and all-inclusive information. Additionally, 
qualitative methods use independent data and participant observation to define the 
context or natural setting of variables in the setting. It seeks a wide thoughtful of the 
entire situation (Merrian, 2013). On the other hand, other limitations come with 
qualitative methods. The subjectivity of the inquiry leads to problems in establishing 
the consistency and rationality of the approaches and information, and it is very hard 
to notice researcher induced bias. Lastly, its scope is restricted owing to the in-depth 
wide-ranging data gathering approaches required (Tracey, 2012). 
Therefore, this chapter will focus on the research tools below to answer the main 
research question.  
 
Research Data Collection 
Design Tools
Data Sampling 
Data Sampling
Analysis
 
Figure 4.2: Systematic process regarding research methodology of the study  
Source: Unknown 
 
 
 
50 
 
 
 
4.4 RESEARCH DESIGN 
The case study was selected for this study. This helps the researcher to have an up-
close or broad in-depth understanding of the phenomena set in the real world. Ishak 
(2014) explains that most development agencies rely on case studies to understand 
general phenomena or interests through their theoretical application or policy 
recommendation. The case study method is also preferred when research focuses on 
contemporary events. Therefore, it is the responsibility of the researcher to collect and 
examine as many facts as possible about the concept and produce a trustworthy and 
detailed interpretation of events. The case study used in this study is the inductive 
case study method. In unexplored research, the inductive phenomena seek to answer 
‘'How" and ‘'Why" in unexplored research. Many researchers have adopted this 
method of analysing the informal sector. Yin (2012) reveals that inductive case studies 
demonstrate how informal workers are excluded from the formal sector and how the 
government regulates this sector to become sustainable. 
 
4.5 DATA COLLECTION METHODS AND TOOLS 
The researcher used primary and secondary data collection methods to gather 
information for this study.  
Primary data collection  
Primary data is an original data information source, that is, collected first-hand by the 
researcher for a reason or analysis. Primary data can be obtained in various ways. 
However, the most popular method is interviews, focus groups and field observations 
by the researcher (Creswell, 2013).  
This study conducted semi-structured interviews with street vendors around 
Bloemfontein CBD and LED officials from Mangaung Metropolitan. The semi-
structured interview questions were designed in English and translated in Sesotho, the 
most spoken language in and around Bloemfontein. The researcher clearly 
understands and can speak fluent Sesotho, which puts her in a good position to 
investigate and prompt the individual respondents. Also, the researcher has a cultural 
knowledge and understanding as she was born and raised in the Free State province, 
which will help her relate with respondents at that level. 
51 
 
 
 
During the interviews, the researcher used audio recording. Before recording, she 
asked for permission from the participants. She then asked general questions to create 
a conducive environment for the respondents and encouraged them to speak freely 
about the topic. The advantage of semi-structured interviews is that it provides rich 
data and create an opportunity for follow up questions, probing for additional 
information, which seeks clarity or justification on previously answered questions to 
establish connections amongst several issues (Baker and Edwards, 2012). 
The semi-structured interview is important during fieldwork as it is the most important 
activity for collecting data to meet the study's overall objective. Moreover, the 
researcher has consulted the literature on the crucial variables on the subject matter. 
It is imperative for the researcher to comprehend and have some data, have 
background information to contextualise the topic and develop an interview schedule 
(Creswell, 2014). To minimize risk during the semi-structured interviews, the 
researcher conducted interviews in busy areas and requested a male volunteer to 
accompany her during the interviews. 
 
4.6 SAMPLING STRATEGY 
Gentles et al. (2015) describe sampling applied to qualitative research as “ selecting 
definite databases from which data is obtained to address research goals. Generally, 
the approach to qualitative research is distinctively different from that used in 
quantitative research. The main distinction is that, unlike in quantitative samples, the 
qualitative research samples are typically small and do not seek to generalize the 
result of a larger population. In this case, samples need to be analysed in-depth in 
their normal settings (Tracy, 2015). Sampling in qualitative research needs to be 
conducted with an appreciation of the need to reflect the following: 
4.6.1 POPULATION AND SAMPLING  
According to Bryman (2012), a population is an abstract idea of the large pool of many 
cases from which a researcher draws a sample and generalises conclusions. The size 
of the population determines whether it will be appropriate to include all members of 
the population or not. The population in this study referred to informal traders who 
operates within the central business district (CBD) in Bloemfontein and Municipal 
officials within the local economic development space. Selecting a sample is 
52 
 
 
 
necessary as it would be impossible for the researcher to study the entire population 
due to time and cost constraints. The sample size between 20-30 participants was 
applied to the study and research objectives. The sample group included in the 
research is 25 Semi-Structured Interviews with street vendors around Bloemfontein 
CBD and 5 Semi-Structured with LED officers in Mangaung Metropolitan. 
The researcher concentrates on including street vendors aged 25 -60 years and both 
genders. The rationale was the observation that the majority population involved in 
informal trading are within the age of 25-35 and 36-60. In this research, the participants 
between the age of 18-24 and 61and above were excluded by the researcher to 
partake in this study. The reason for exclusion is that majority of the population around 
the age of 18-24 do not prefer to operate as street vendors in the public eye. Instead, 
they prefer temporary jobs in the formal sector. Therefore it will be difficult for the 
researcher to find the participants within that age group. The rationale for excluding 
participants over 60 and above is that most of them are social grants recipients and 
that alone is a stable source of income for them. They do not feel obligated to source 
any additional source of income, especially with their deteriorating health, so it will be 
difficult to find participants within that age group for this research. Moreover, the 
researcher has opted to exclude foreigners who trade informally to mitigate 
xenophobic attacks, a common phenomenon. 
4.6.2 SAMPLING METHODS 
This study was designated using non-probability sampling. Non -probability sampling 
is a method in which the researcher chooses a sample founded on their personal 
judgment instead of random selection (Ishak, 2014). The researcher selected this 
method to give detailed and in-depth evidence about the phenomenon under enquiry. 
In addition, the researcher was involved in selecting participants who will be part of 
the analysis (Merriam, 2013). The research used two types of non-probability 
sampling: convenience and snowballing sampling. The researcher selected 
convenience sampling for its speed and cost-effectiveness. Snowballing assisted the 
researcher in identifying a sample when it was hard to locate subjects. Once the 
researcher finds appropriate subjects, she requests them for help to seek similar 
subjects to form a substantial good size sample.  
53 
 
 
 
The sample size is usually smaller than quantitative methods in the qualitative study. 
This is because qualitative approaches are mostly concerned with getting a detailed 
understanding of a phenomenon or meaning and often focus on the how and why of 
the issue, subculture or collection of social interactions between them (Creswell, 
2013).  
There are many discussions regarding the proper sample size. Many researchers 
argue that saturation in qualitative research is the most essential element to consider 
when making sample size decisions (Fluks, 2011). Saturation is described as the point 
at which the data collection course no longer offers any new or relevant information. 
Saturation relies on various variables, and not all of them are under the researcher’s 
control. Some include: How heterogeneous and homogenous are the individuals being 
researched? What are the selection criteria? How much is the study budgeted for? 
What are the time frames the researcher faces? How skilled is the researcher 
assessing is and if she has reached saturation (Merrian, 2013)? Many researchers 
suggest that an adequate number of participants would be from 5-50. In this study, the 
researcher used a sample size of 25 (n = 20) participants. The 25 participants chosen 
were greater than the minimum statistical sample size required (10%) of the estimated 
population in Bloemfontein CBD (population = 150). The researcher identified sample 
until saturation was reached  
4.6.3 RECRUITMENT OF PARTICIPANTS 
The first duty for the researcher is to find and ask eligible individuals if they are willing 
to participate. The researcher chose street vendors and local government (municipal 
officials) as her key data sources and relevant subjects to talk about the informal 
sector's problems (Bryman, 2012). The researcher visited the informal vendors at their 
marketplace and the Local Economic Development municipal officials at their 
respective setups, scheduled appointments, and sought consent. The informal traders 
are considered as the most vulnerable population groups. Therefore, their rights for 
participation are explained in more detail in the ethical consideration section was also 
thoroughly explained to them. Upon approval, appointments were scheduled. The 
researcher arranged the appropriate time for the interview with street vendors and 
government officials. These interviews were not conducted during peak times. A 
suitable time was chosen, either early in the morning or late afternoon.  
54 
 
 
 
 
4.7 DATA ANALYSIS 
The qualitative analysis consists of Hermetics, content analysis, narrative analysis, 
and how concepts interconnect. The researcher will use content analysis/thematic 
analysis. Once fieldwork is completed, the researcher uses the following steps to 
interpret and analyse data: Firstly, the researcher thoroughly arranged collected data 
by translating all audio and interview notes into text format. Secondly, the researcher 
then arranged information in an organized way, and then she will go back to study 
goals and arrange information based on research questions (Saldaña, 2015). Thirdly 
the researcher used coding of information. In a qualitative study, coding is an important 
phase. Coding involves categorizing and assigning collected properties and patterns. 
Fourthly, validating data is one of the significant steps in qualitative research. Thus, 
the researcher needs to validate the accuracy of the research design and reliability in 
order to produce accurate data. Lastly, it is necessary for the researcher to finally 
conclude the information and to present findings (Merriam, 2013). 
 
4.8 ETHIC CONSIDERATION 
An appropriate inquiry into research must be carried out with an ethical approach. The 
researcher must be ethical in the entire course of directing the study by shielding the 
respondents from any destruction by obtaining informed consent, preserving 
confidentiality, privacy, anonymity, operating honestly, not deceiving the participants 
and adhering to the covid-19 regulations. (Flyvberg, 2011). 
Protection from harm 
It is the ethical duty of the researcher to guard the subject from any harm while she 
conducts the research inquiry. (Flyvberg, 2011). The researcher must notify the 
participants thoroughly about research and the effects thereof. The participants were 
given time to make a well-versed decision concerning their involvement. Creswell 
(2013) recommends that the researcher look for and protect against subtle danger. 
The subject's privacy must be respected, confidentiality protected, and details 
collected anonymously. Before and after the interviews, the researcher had a 
debriefing meeting with participants. According to Flyvberg (2011), the participants' 
55 
 
 
 
debriefing provides the opportunity to clarify and fix any issues and assumptions that 
may emerge from the study. The researcher ensured that no names and participants' 
credentials were used and that only the University of Free State and Department of 
Higher Education would have access to study results. 
Obtaining informed consent  
The scholar must get permission from each participant. The researcher took time to 
clarify the full details of the study to individual participants, its intents and for whom it 
was planned. The scholar prepared a consent form containing a letter outlining the 
study specifics and selecting the participants. Each person was requested to sign the 
forms, and copies were presented to all the parties (Flyvberg, 2011). The consent form 
was also to be translated into the participants' language of choice to make sure they 
understood the purpose of the study and their participation. 
Privacy, Confidentiality and Anonymity 
The researcher would be responsible for shielding privacy, concealment, and 
anonymity. Interviews with the participants were performed in a private, relaxed and 
secured atmosphere that allowed the participants to share their views openly 
(Merriam, 2013). Information shared in the interview was treated as confidential. 
Names and identities were not disclosed in the research findings to ensure anonymity. 
The answers were given a fictitious code and/or number assigned to the responses 
for data analysis and reporting. The researcher and study leader are the only people 
who have access to the data (transcriber/external coder). Anonymous 
answers/responses may be reviewed by people responsible for ensuring that research 
is done properly, including the transcriber, external coder, and members of the 
Research Ethics Committee (Parker et al., 2011). 
Hardcopies and audio devices were locked away in the cabinet, only accessible to the 
researcher. After five years, as per the South African law, the researcher will dispose 
of the data/answers collected; electronic information is stored on a password-
protected computer. Only the researcher knows the password. Future use of the 
stored data will be subject to further Research Ethics Review and approval if 
applicable. After five years, the hard copies will be disposed of by shredding and 
electronic records by deletion from the storage device. 
56 
 
 
 
Deception  
Deception happens when the researcher purposely deludes, misleads, twists and 
withholds pertinent information from the participants. Deceiving participants will be 
eliminated by revealing the real essence of research (Antwi and Hamza, 2015). The 
researcher elucidated all the facts of the study, such as goals, objectives, research 
tools and the inferences of research thereof. The researcher ensured that participation 
in the study was voluntary, and if the participants wished to withdraw from participation 
or answer any questions may do so at any time. There will be no penalty or loss of 
benefit for non-participation (Fluck, 2014). Furthermore, the researcher explained to 
participants that there would be no financial benefits or incentives from participating in 
this study. However, the result obtained may provide knowledge and insight for 
development workers, policymakers, administrators and other interested parties.  
Honesty and Integrity 
The researcher must warrant her capability to assume the research. This also denotes 
the typical proficient behaviour and truthfulness of the individual leading the study. 
When reporting their conclusions, the researcher must be truthful and carried out 
proficiently. The researcher met with participants according to a planned schedule. 
The participants were treated with respect and dignity (Merriam, 2014). 
Adhering to Covid-19 regulations 
The researcher will be conducting fieldwork during the Covid-19 national disaster. 
Therefore, to ensure the participants' safety and comply with national disaster 
regulation, the researcher wore a mask, kept the required social distance, and 
sanitised her hands and those of the participants. 
Cultural embarrassment 
The researcher mitigated the cultural embarrassment by allowing the vendor to choose 
whether they are prepared to answer the questions and allow participants to withdraw 
from the research if, at any stage, they feel uncomfortable. 
57 
 
 
 
 
4.9 SUMMARY OF CHAPTER 
This chapter details the research approach to the study, and its step by step process, 
which explains how data was collected. This chapter has indicated the research design 
and methodology in the following segments; choice and rationale of research design, 
population, sample, sampling methods and sample size, data collection, data analysis 
and ethical considerations 
The next chapter will look at the case study of street vendors in Bloemfontein, 
particularly around the CBD. The case study gave an in-depth understanding of street 
vendors in Bloemfontein CBD and based in a real setting. 
58 
 
 
 
CHAPTER 5: CASE STUDY OF STREET VENDORS IN BLOEMFONTEIN IN THE 
FREE STATE 
 
5.1 INTRODUCTION 
The previous chapter outlined the step by step research methodology used during 
data collection and analysis. This chapter looks at street vendors in Bloemfontein, 
particularly around the CBD. Street vending is a global phenomenon that has existed 
for over a century. It is rapidly expanding and is a significant element of the informal 
economy, mostly in developing countries, as a response to poverty, a global concern 
(Gerhard and Simon, 2004). It is a source of income for those without a job in urban 
areas and cities, including Bloemfontein. The city of Bloemfontein has seen rapid and 
consistent growth of street vendors, notably in the CBD. 
 
5.2 POST APARTHEID BLOEMFONTEIN  
Before 1991, there was no interracial interaction due to the traditional and Afrikaans 
dominated heartland, except for domestic servants who resided in the suburbs due to 
work. (Jürgen et al., 2003). It was not until the 1990s that some type of desegregation 
began, culminating in a desegregation rate of over 50% in 1991. The growth of the 
informal sector within Bloemfontein CBD served as the catalyst for the Africanisation 
of the inner-city zones and in other parts of South African cities (Jürgen et al., 2003). 
This has displaced the more formal economic sector such as retail within the CBD has 
left informalization and vacant spaces. Business has relocated due to decentralisation 
(Jürgen et al., 2003). Decentralisation from the CBD has resulted in the formal sector 
moving towards the west of the CBD, causing the white people to retreat from the CBD 
(Hooyedorn et .al 2008, Mairais, 2008). The effects of decentralisation have left vacant 
space and informalization within the CBD. 
59 
 
 
 
 
Figure 5.1: Aerial Map of Study Area, Bloemfontein Central Business District 
Source: Google Maps, 2015 
 
5.3 DEMOGRAPHIC PROFILE OF BLOEMFONTEIN 
 
Table 5.1: Demographic information of Bloemfontein  
Population  878 834  
Population growth per Annum  5% 
Gender 40 5876 
• Female 
• Male  38 2054 
Labour Market 32% 
• Employed 
• Unemployed 48% 
 Education  30,3 % 
• Matric 
• Higher Education 14% 
• No Schooling 4.4% 
 Source: Mangaung IDP 2019/20 
60 
 
 
 
5.3.1 ENVIRONMENT  
The city is featured by warm summers and cold winter. Annual temperatures range 
from a maximum high of 35 degrees Celsius in summer to a minimum of -5 Celsius in 
winter and sufficient summer rainfall with average rainfall between 630mm-700mm 
annually. They are three biomes represented in the Bloemfontein Metro Grassland, 
Savanna and Nama-Karoo (Skinner, 2018). 
5.3.2 ECONOMIC ACTIVITIES IN BLOEMFONTEIN 
Bloemfontein's economy is mostly based on agriculture, manufacturing and 
community service. The city is the major contributor to 18% of the Free State 
province’s GDP. Bloemfontein experienced an average of 2,3 % economic growth 
between 2008 and 2017, which is attributed to the tertiary sector’s performance, 
predominantly the community service sector 
• Agriculture- The agricultural sector comprises commercial, subsistence and 
emerging farmers. The agriculture industry accounts for 1.7% of the GVA of 
the city. The most important agricultural activities are Livestock production 
(game, cattle, sheep, goats, pigs) and poultry (Skinner, 2018). 
• Manufacturing – Bloemfontein’s industrial sector is not particularly robust. 
The manufacturing sector accounts for 6.0% of GVA. The industries are light 
manufacturing or service orientated businesses specialising in assembling 
or reselling imported goods. Manufacturing in Bloemfontein mainly focuses 
on meeting local needs, with the growing dominance of food, beverages and 
tobacco increasingly dominating the market (Skinner, 2018). Bloemfontein's 
key industrial sites include Bloemdustria and Hamilton industrial zone. Some 
industrial properties with much potential and are in a good location in relation 
to the N8 Corridor are abandoned and vacant.  
• Community service sector - The community services sector is the crucial 
subdivision of the economy in the Free State Province, accounting for R43 
billion (25.3%) of the total GVA. The sector accounts for 33.2% of the city’s 
GVA. The community service sector in Bloemfontein was the only one that 
saw an improvement of 3.5% between 2008 and 2017. (Marais et al., 2005) 
The configuration of this sector included the government buildings and the 
61 
 
 
 
three higher learning institutions. Several healthcare and other amenities 
were all part of this sector.  
• Tourism - Bloemfontein’s competitive advantage is built on four pillars, 
cultural-historic tourism, leisure tourism, events tourism, and Agri-tourism. 
The tourism market is primarily domestic with cultural and events tourism 
such as Macufe festival, Sporting events (Soccer, rugby and cricket games), 
the Bloemfontein Rose festival, and leisure tourism such as visits to Phillip 
Sanders, Maselspoort resort, and Naval Hill nature reserve (Marais et al., 
2005).  
MAJOR ROADS 
Bloemfontein is well serviced in terms of National Highways, rail and transportation 
networks connecting the metropolitan region with many other provinces. Thus, it profits 
greatly from South Africa and the Free State province. 
• The N1 (which links Western Cape, Eastern Cape and Gauteng),  
• The N6 (which links Eastern Cape to Bloemfontein) and  
• The N8 (which links Lesotho with Northern Cape via Thaba-Nchu, Botshabelo 
and Bloemfontein) (Khaya, 2001). 
HUMAN DEVELOPMENT INDEX 
Human Development Index (HDI) has been developed through United Nations 
Development Programme. It comprises the following indicators, i.e. Health measured 
by life expectation, Education measured by adult literacy and ultimately, income levels 
within the nation or area (Human Science Research Council, 2003). 
The Gini coefficient is the income variation index, fluctuating from 0-1. The must be an 
inverse affiliation between the HDI and the Gini Coefficient. However, when the HDI 
is strong, fewer income differences can exist, but when the HDI depreciates, the 
income inequality increases. The Gini coefficient in Bloemfontein was estimated at 
0.57 in 2016. (Human Science Research Council, 2003)  
62 
 
 
 
 
5.4 STREET VENDORS IN BLOEMFONTEIN 
Street vendors in Bloemfontein are well known for selling low-cost items and amenities 
such as fruits and vegetables, smartphones accessories such as chargers, batteries, 
clothing, cooked foods and barbers/hairdressers (Marais et al., 2005). The street 
vendors in the Bloemfontein CBD can be classified into three groups: those with tables 
on sidewalks, those who sit on the pavement, and those that use a municipal kiosk to 
sell their products. Bloemfontein’s urban landscape has become synonymous with 
street vending, illustrating the municipality’s changing nature both in geographical and 
economic dimensions. The Mangaung Metropolitan Municipality identifies street 
vendors as enterprises not registered for business in South Africa or South Africa 
Revenue Service (SARS). Another significant element by Mangaung Metropolitan is 
that street vendors in Bloemfontein do not pay rates and taxes other than the stipulated 
rental fee paid to the municipality. Even though it is argued that Bloemfontein CBD 
requires more diversification in terms of services offered, one cannot deny the 
relevance of street vendors in the CBD (Marais et al., 2005). In this city, small 
enterprises can reduce poverty and create jobs in this urban centre.  
 
 
Figure 5.2: A picture of an informal hairdresser doing clients hair on the street 
pavement  
63 
 
 
 
  
Figure 5.3: A picture of informal street traders displaying their goods  
 
This makes street vendors significant as they provide accessible and convenient retail 
options and form a very significant part of the economy and social life of urban centres.  
 
5.5 MANAGEMENT OF STREET VENDORS IN THE CITY OF BLOEMFONTEIN 
Bloemfontein and other major cities like Johannesburg, Durban and Cape town use 
management tools such as by-laws and permit systems to regulate street vendors 
(Marais et al., 2005). The street trading by-laws of Bloemfontein, which forms part of 
the Mangaung Metropolitan Municipality, are authorised by the mayoral committee to 
ensure that laws and mechanisms are put in place and in order to help manage the 
growing number of street vendors in the city, mainly in the CBD. 
The laws governing street trading are designed to provide the following services to 
traders 
• Give the informal traders a set of norms and standards to follow, such as 
trading hours and hygiene requirements  
• Provide Traders with trading amenities such as trading space and stalls that 
may be rented out  
• License – A trading license is required for Street vendors selling consumable 
goods, and it is renewable on an annual basis. The license must be endorsed 
by health and social development, community safety and city planning, 
64 
 
 
 
development and regional service section of the municipality. Informal 
traders have the choice to apply for a one-day trading licence to permit them 
to trade for only one day at specified events such as festivals and soccer 
matches, provided that they complete the pre-scheduled workshop (Skinner, 
2018). 
The major goal of by-laws (planning, registration, allocation and rental) is to provide 
employment and trading opportunities in the informal sector by incorporating street 
trading activities into the city’s planning process (Marais et al., 2005). The planning 
strategy ensures that arrangements are made to provide traders with improved 
working conditions that satisfy their economic needs such as transport, health, and 
safety, as many traders continue to operate without a license. The goal of registration 
is to ensure that all traders are licensed, which will assist the municipality in facilitating 
payments of levies and space rentals by traders. In terms of space distribution, 
Mangaung Metropolitan will collaborate with all relevant stakeholders to assist both 
existing and new traders in becoming economically viable (Mangaung Metropolitan 
Municipality IDP, 2021).  
 
5.6 METHODS  
In this case study, the researcher focused on fieldwork done on street vendors around 
Bloemfontein CBD and the key role player within Mangaung Metropolitan Municipality. 
A comprehensive review of the research methodology was provided in Chapter 4. Two 
semi-structured interviews were conducted. The first interview was face to face 
interviews with 20 street vendors. The second was a face to face interview with 05 
municipal officials responsible for Local Economic Development (LED) within 
Mangaung Metropolitan Municipality. The interview process and fieldwork were 
completed in two weeks. The copies of the Semi-Structured interview questions are 
attached as Annexures 1 and 2. 
The semi-structured interviews for the street vendors were based on the socio-
demographic profile of respondents and questions aiming at examining the street 
vendors within Bloemfontein CBD. The semi-structured interviews with Municipal 
officials were based on the role of the informal economy in the local economic 
65 
 
 
 
development of Bloemfontein CBD, which is located within Mangaung Metropolitan 
Municipality. 
 
5.7 RESEARCH ANALYSIS AND FINDINGS 
This part of the paper presents the analysis and findings from the collected data in 
terms of using thematic analysis to categorise themes and patterns of people’s 
activities and occurrences. The themes identified include, among others, socio-
demographic information of respondents, comments made by participants, the number 
of years the participants have been in business, the profile of business activities of 
participants, their future business aspirations, knowledge of by-laws, the impact of the 
by-laws, perception of the trading environment, enforcement of by-laws and support 
requirements. It also includes major findings from engagements with municipal 
officials.  
Findings for the Semi-Structured interviews The participants were asked 13 
questions. The first five were based on their demographic profile in terms of Gender, 
Age, Level of Education, Number Dependent and Household income. The semi-
structured Interview (Annexure A) was distributed to 20 informal traders around 
Bloemfontein. 
 
  
66 
 
 
 
Table 5.2 Demographic information of Street vendors Bloemfontein CBD 
Number of street 
  Percentage 
vendors Participants 
Gender     
A)Female 13 65% 
B)Male 7 35% 
Age     
A)18 -24     
B)25-35 10 50% 
C)36-50 7 35% 
D)51-60 3 15% 
E) Above 61     
Educational     
A)Below grade 12 13 65% 
B)Grade 12 5 25% 
C)Degree/Diploma 2 10% 
D)Honours/BTech     
E) Masters     
Number of Dependents     
A)0-3 dependents 4 20% 
B)4 -6 dependents 14 70% 
C) 6-9 dependents 2 10% 
D)10-above     
Household Income     
A)0-R500 3 15% 
B)R600-R1100 7 35% 
C)R1200-R1700 6 30% 
D) R1800-above 4 20% 
E)Other     
   
 
The result in Table 5.2 is based on the response to the Semi-structured interview 
questionnaire response, showing the demographic profile of informal traders in 
Bloemfontein CBD. The sample size includes 20 Informal traders around the 
Bloemfontein CBD 
 
67 
 
 
 
5.7.1 GENDER 
The gender representation of the 20 participants interviewed in the Bloemfontein CBD 
indicates 65% were female respondents, and 35% were male respondents. In this 
regard, the findings tally with the literature in Chapter 3. According to Chen(2018) 
informal economy is the main source of employment for women than for men in 
developing countries. Many women in these developing countries lack access to 
essential resources such as education. As a result, they end up in the informal 
economy where education and skills are not a prerequisite for production. 
5.7.2 AGE 
Table 5.2 above represents the age of the 20 participants interviewed. 50% were 
respondents who range between the ages of 25 to 35 years. 35% of the respondents 
were between the ages of 36 to 50 years. 15% of the respondents were between the 
ages of 51 to 60 years.  
5.7.3 LEVEL OF EDUCATION 
Low levels of education characterize the informal sector because it does not require 
any formal qualification Table 5.2 above shows 65% of the respondents are found to 
have no matric. In comparison, 25% and only 10% had matric and a post-matric 
qualification, respectively One has a National Diploma in traffic and the other in 
Business administration. This indicates that these two respondents maybe be entering 
the informal trading sector due general shortage of job opportunities 
5.7.4 NUMBER OF DEPENDENTS  
Table 5.2 also represents the number of dependents of the respondents. 70% of the 
respondents have either 4 or 5 dependents. 20% of the respondents have, at most, 3 
dependents, while only 10% of the respondents had 6 to 10 dependents 
5.7.5 HOUSEHOLD INCOME  
The household income distribution is shown below. 50% of the participants have an 
income of between R550 to R1000 per month. Households with an income above 
R1000 were represented by 30%. Lastly, 20% of the participants earn between R0 to 
R500.  
 
 
68 
 
 
 
Table 5.3: Reasons for partaking in informal trading 
Reason Percentage 
Unemployment  68% 
Poverty  23% 
Desire for business  9% 
 
Table 5.3 above shows that 68% of the participants engaged in informal trading due 
to being unemployed. The rest of the participants highlighted poverty (23%) and their 
desire or affection for business (9%) as the main reason for informal trading. Below 
find a few snapshots of unfiltered responses from some respondents.  
“I was retrenched from the mine therefore it difficult to find proper employment in town. 
Street trading sustain my livelihood and I’m able provide for my family and pay for my 
children’s education”. “This statement demonstrates that people enter into the informal 
trading sector due to unemployment and to supplement income in order to support 
their family and pay for their children’s education.  
Another respondent was quoted as having said, “We enter street trading because of 
the high rate of unemployment”. This shows that the unemployment rate is high in 
Bloemfontein. Literature indicates this, and various authors in general and Rodrik 
(2008) in particular argue that unemployment is one essential variable that drives 
informal trading participation and remains one of the country’s most pressing issues. 
In addition, one respondent was quoted and said, “We partake in the street trading in 
order to fight poverty and to earn an income”. This shows that the major reasons why 
people enter street trading are poverty, as mentioned in literature by Skinner (2008), 
who further recognise poverty as a motivating force behind street trading because it 
provides a means of subsistence. Furthermore, he contends that the high cost of living 
and level of poverty force people to seek out other means of surviving, which is passive 
income.  
The results above illustrate that informal street trading fills a big vacancy gap created 
by a lack of jobs because many people engage in this sector as their last resort to 
make a living. It also demonstrates the importance of this industry, not just to the city 
of Bloemfontein’s economy but also to the country’s overall economy. Poverty has also 
69 
 
 
 
been quoted as a key motivation for entering this industry because people have to 
provide for their families. If no family member is working somehow, informal trading 
becomes their last alternative to feed their loved one. 
However, it is worth noting that only 9% of the respondents entered this industry of 
their own free will to become self-employed and manage their own businesses. So, it 
is evident that most street traders lack entrepreneurial drive even though they are 
“entrepreneurs”, However the fact that they are counted as business people means 
they must be provided with the essential support to build and sustain their enterprises. 
5.7.6 NUMBER OF YEARS IN THE INFORMAL STREET TRADING  
 
Table 5.4: Number of years on informal trading 
Years Percentage 
< 10 25% 
10 – 20 40% 
21 – 29 15% 
30 – 40 10% 
41 – 55 10% 
 
According to the responses from the semi-structured interview, 5(25%) of respondents 
have been trading for less than ten years, eight (40%) have been trading for 10 to 20 
years, three (15%) for 21 to 29 years, two (10%) for 30 to 40 and two (10%) for 45 to 
55 years. The majority of the respondents have been trading for over 10 years. This 
illustrates people enter this sector and stay in their chosen business regardless of the 
challenges and all the experience they have while trading  
5.7.7 WHAT ARE YOUR BUSINESS GOALS? 
 
Table 5.5: Business Goals 
Business goals Percentage 
Second source of income 10% 
Create jobs 40% 
No business goals 50% 
70 
 
 
 
 
According to the interviews, 50% of informal street traders do not have business goals. 
The only reason for involvement in informal trading is that it was the only available job 
they could find when they migrated to Bloemfontein, 40% have the desire to grow and 
create jobs,10% see informal street trading as a quick way of making a living and 
making money for the daily needs. 
The percentage above illustrates that most individuals migrate from rural to urban 
areas to seek better opportunities. Bloemfontein’s status as the capital city of Free 
State Province boosts the likelihood of local and foreign migrants coming to the city 
searching for work (Skinner and Watson, 2018). However, many of these migrants 
have a low level of education which makes it difficult to secure jobs in the formal sector. 
As a result, they have no option but to look for jobs in the sector. This sector is usually 
characterized by low entrance requirements in terms of capital and skills. Thus, any 
individual or entity can readily enter and start conducting business, and if challenges 
arise, exiting is easy. On the other hand, others see informal street trading as an 
opportunity to grow their business (Skinner and Watson, 2018). 
5.7.8 WHAT DO YOU NEED TO ACHIEVE AS AN INFORMAL TRADER  
Table 5.6: Improvements needed by informal traders 
Improvements 
1. Trading sites with structures 
2. High volume sales and earnings 
3. Financial support 
 
The respondents indicated that they need at least three improvements for their 
informal trading. One participant was quoted as having said, “We need Improved 
trading sites and structures for displaying our working condition are just not good”. The 
participant’s response depicts the infrastructure available to street vendors and what 
they require to succeed in their businesses. This statement is supported by Mittullah 
(2003), who argues that many traders locate themselves at strategic points where 
there is a high volume of human flow which result increase of making sales and profit. 
Different structures such as tables, wheel burrows, handcarts and even bicycle seats 
are used to display what they offer. Most street vendors work in areas with inadequate 
71 
 
 
 
infrastructure and services such as water, sanitation and storage facilities. 
Furthermore, there are few sites where garbage is collected to maintain a clean 
environment (Dewar, 2005).  
In addition, another respondent indicated, " We need high volume of sales and 
earnings” Majority of the informal street vendors do not have high-volume sales and 
earnings. The profit margins made by street vendors are determined by several factors 
like the size of the business, its location, tax burden and the commodities traded 
(Mittullah, 2003). 
Furthermore, another respondent mentioned that “I need financial support in order for 
me to achieve as trader”. This shows how informal street traders struggle to cope 
financially. This is supported by Mittullah (2003), who highlights that financial services 
are essential for the development and security of the business. Moreover, access to 
finance is crucial for starting a business, diversifying and helping with the cash flow 
issues and even investing in business assets. Many informal street traders are 
powerless and unable to borrow money from banks because they have nothing to put 
up as collateral for loans (Dewar, 2005). Access to finance is one of the most serious 
issues that informal street traders are confronted with. The financial services available 
to informal street traders are limited, and their primary source of funding includes 
cooperatives, Rotating Savings Credit Association (ROSCAS) and most notably, 
assistance from their families. This form of financing is insufficient for growing a 
business (Dewar, 2005). 
5.7.9 KNOWLEDGE OF TRADING REGULATIONS THAT GOVERN INFORMAL 
STREET TRADING  
The participants were asked questions such as “Do you know of any trading by-laws/ 
regulations that govern informal trading in the city of Bloemfontein?” Only 50 % of 
participants responded in the affirmative. 
Participant X: “Yes, I do know about by-laws.” This respondent admits that she knows 
by-laws, revealing that failure to follow them might be caused by her disregarding the 
by-laws and not taking them seriously. 
72 
 
 
 
Participant Y: “Yes, I know about the by-laws. The Mangaung Metropolitan 
Municipality does not want us to trade on unauthorized pavements and parks.” This 
response demonstrates that she disagrees with them regardless of knowing the rules.  
Participant said Z: “No, I do not know by-laws; they alter with each new 
administration, and the Mangaung Metropolitan does consult us when do these 
changes.” This participant demonstrates a lack of public participation and consultation 
by the municipality when drafting by-laws. 
According to the responses, barely 50 % of the informal traders are aware of the 
current by-laws that govern them and 50%. This, therefore, means that there is some 
inadequacy in the way by-laws are endorsed and regulated within Mangaung 
Metropolitan Municipality. This shows that while the municipality may have certain 
steps to ensure the sector is administered properly, nothing is done to ensure that all 
stakeholders are kept informed and that all stakeholders follow the set rules and 
regulations.  
5.7.10 HOW THE REGULATIONS AFFECT BUSINESS OPERATIONS 
The number of informal street traders’ participants who stated that they are not 
affected by the by-laws is 14%, while 86% of informal traders stated that they are 
affected. Those who have been impacted gave explanations as to why they are 
affected. Below are a few of them: 
Participant A: “Mangaung Metropolitan Municipality’s failure to grant trading permits 
is a problem for us. We can’t function freely, since they could detain our goods”, 
consequently illustrating the negative effects of by-laws.  
Participant B: “We are oppressed by (Municipal Law -enforcement officials) who do 
not want to see our business flourish”, demonstrating their viewpoint that their 
business is not flourishing as a result of the way municipal law enforcement officials 
enforce by-laws.  
Respondent C: “The municipal officials take our stock and sell it”, demonstrating that 
the enforcement of by-laws should be reconsidered in order to avoid brutal and illegal 
behaviour of the municipal law enforcement official. 
73 
 
 
 
These statements demonstrate that more could be done if more discussions were held 
during the writing of these by-laws and when applying them to ensure that those 
individuals who would be affected by them are involved in the planning process. 
Furthermore, the preceding comments demonstrate that the traders do not favour the 
current by-laws.  
5.7.11 LEVEL OF SATISFACTION ON ENFORCEMENT OF INFORMAL STREET 
TRADING BY-LAWS IN BLOEMFONTEIN 
 According to the interviews, 80% of the city's informal traders have expressed 
dissatisfaction with enforcing the city’s by-laws. They claim that the Mangaung 
Metropolitan is unkind to them. This is demonstrated by the following statements 
below: 
Participants D: “Mangaung Metropolitan Municipality’s execution of by-laws is unjust 
and brutal. Some people have permit, and some don’t. “Several traders find the by-
laws to be a bit unjust, particularly in the way they are enforced within the city, 
according to Participants D. The problem of a permit should be considered to ensure 
all informal traders receive one. 
Participant E: “Some of them are hostile to traders, for instance, they frequently 
demand that we produce selling permits whereas they fail to provide us with them.” 
Participant E illustrated that informal traders do not have an issue obtaining permits. 
However, most of them have applied for a permit and have been waiting for a response 
without success from Mangaung Metropolitan Municipality. To some extent, this 
implies that the traders do not have an issue with complying with the by-laws but rather 
with how these by-laws are implemented. 
Respondent F: “Only foreigners are handled with dignity and respect. We as the 
residents do not receive that treatment and will suffer till we flee. We are been accused 
of been lazy. They treat us as if we were animals, vandalising our goods.” The 
preceding comments demonstrate that South Africans have an issue with outsiders.  
The data above indicates that a number of traders are dissatisfied with the way things 
are going within this sector. There is no formal discussion with informal traders before 
by-laws are enacted. Only 20% of traders are happy with how the city’s by-laws are 
74 
 
 
 
enforced. They agree with the by-laws, which specify that they must not hinder 
pedestrian crossings, parking or loading bays or even constitute a health hazard  
5.7.12 WHAT CHALLENGES DO YOU FACE IN INFORMAL STREET TRADING 
In this section of the discussion, the participants were asked to reflect on the problems 
they had faced as informal street traders. The following themes emerged from the 
discussion 
• Lack of infrastructure 
• Safety and Security  
• Storage space is limited  
• Working circumstances that are intolerable 
• Current Covid 19 
In terms of the obstacles faced by informal street trading participants, a number of 
themes have been found to illustrate the nature of obstacles. The absence of 
infrastructure was unanimously regarded as the most crucial concern by participants  
Participant A “Trading space and lack of infrastructure”. Participant A proceeds 
further with his statement by saying, “’The space we use is generally unallocated by 
local government; we occupy it because we often find ourselves desperate to make a 
living and feed to our families. We work in areas where there are no municipal 
amenities such as water, electricity, sanitation and storage. Moreover, our products 
are subjected to adverse environmental condition resulting in loss of revenue and 
income”. This statement illustrates trading space and lack of infrastructure pose a 
serious challenge for these street vendors. 
Participant B: “Safety and security, three is a lot criminality around CBD, we suffer 
thieves who steal our goods. Moreover, we are scared for our safety as there are 
people who sell drugs and we even more scared to report this activity to the Police “ 
The Participant B express anxiety around the issue of their safety which he says 
makes it hard for them to make a living if they feel that their lives in danger. This is 
supported in the literature. According to Skinner and Watson (2018), a safe working 
environment is a requirement for any type of business. Security is a key concern for 
many individuals involved in economic operations in the street. Municipal officials have 
been the main cause of insecurity for these traders as they have to constantly run 
75 
 
 
 
away from them out of fear that their merchandise will be taken away because they do 
not have permits. They often go and stand in unsafe spots to sell their merchandise. 
This jeopardises the security of traders and that of their consumers.  
Participant C: “Covid 19 has presently become our greatest challenge, especially 
during the lockdown. Many of us have lost our income and had to give away our stock 
as most of the goods we sell are highly perishable. Many of us were not allowed to 
trade without permit and getting a permit from Municipality was difficult. This was a 
very difficult time for our families as we did not have food and income. Many of us had 
to start over and our business has not recovered, and business is not really doing well 
as most our clients are working from home” Participant 20’s statements show that 
many traders and their households became vulnerable to poverty and food insecurity 
because of Covid restrictions. The literature supports this. According to the Ministry of 
Health (2020), the first case of Covid 19 was reported on 5 March 2020 by the Health 
Minister Dr Zweli Mkhize. In line with measures taken by other states to limit the spread 
of the coronavirus, the South African government implemented the lockdown. The 
term lockdown was used to describe measures that limited the free movement of 
citizens to prevent the spread of the virus. At the beginning of the Covid 19, there was 
a heavy restriction of movement known as the total lockdown. This was a restricted 
stage where only essential workers such as nurses, police, and those in the food value 
chain were allowed to leave their homes for work while the rest of the population was 
urged to remain indoors (Ministry of Health, 2020) 
According to the interviews, 68 percent) of the participants are faced with a challenge 
trading space and lack infrastructure, 23 percent of participants say covid 19 lockdown 
and restriction pose serious challenge their business, only 9% participants highlighted 
safety and security is a challenge affecting vendors in the Bloemfontein. 
The percentage above shows that the most significant difficulties facing informal street 
traders, mainly in Bloemfontein CBD, include trading space and lack of infrastructure. 
Most of the space used by traders is considered illegal because it is not set aside for 
trade. If they have been assigned a location to work, the location is considered 
temporary. Major struggles arise when traders are forced to relocate to make space 
for the planned development. Skinner and Watson (2018) state that apart from. In 
trading space, street traders lack municipal services such as water, storage facilities 
76 
 
 
 
and sanitation. The Covid 19 pandemic has adversely impacted informal street 
traders, leaving them vulnerable to poverty and food insecurity. Most importantly, one 
of the challenges faced by street vendors is safety which makes it hard to make a 
living when they are constantly targeted by municipal law enforcement, the thieves 
who not only steal from them but also rob their clients  
5.7.13 TYPE OF SUPPORT RECEIVED FROM MANGAUNG METROPOLITAN 
MUNICIPALITY 
Respondents were asked what types of support they were getting from Mangaung 
Metropolitan Municipality. 85% percent of them said that the Municipality does not 
support them. Only 15 % agreed that they are getting support from Mangaung 
Municipality: 
Participant A said, “We have never received any help from the Mangaung 
Metropolitan Municipality, we can’t even get simple things like information to improve 
our business.” 
Participant B said, “We have never received any help from Mangaung the only time 
we see their officials is when they come remove and take our goods” The response of 
participant shows a strained relationship between the Metropolitan and the street 
traders due to lack of support to the street traders 
Participants C: “They give us some stall which we pay for.” Participant C 
acknowledged that Mangaung Metropolitan Municipality supports informal traders by 
offering them stalls or trading space. 
The percentage above demonstrate informal street traders are not receiving support 
from Mangaung Metropolitan Municipality. Informal street traders play a significant role 
in job creation, not just for themselves but also porters, transport providers, storage 
providers. Moreover, many contribute to the city’s payments for licenses and permits, 
penalties and taxes. Despite this contribution, street traders are frequently neglected 
as economic agents and, unlike other businesses, are often shunned rather been 
aided by local government. 
77 
 
 
 
5.7.14 IS THE SUPPORT SUFFICIENT IN RELATION TO INDIVIDUAL AND 
COLLECTIVE NEEDS? 
The participants were asked if the support they were getting from Mangaung 
Metropolitan Municipality was sufficient in relation to individual and collective. 100% 
percent of participants said the support provided by the municipality is not sufficient to 
them as individuals or as a collective. 
5.7.15 IF NOT, WHAT TYPE OF SUPPORT DO YOU NEED FROM MANGAUNG 
METROPOLITAN TO IMPROVE INFORMAL STREET TRADING? 
Participant D: “We also need them to build stall lockable with shades for us so that 
we are able to sell even when it is raining, and our stock will be protected from the 
sun and from thieves.” 
Participants E: “We need toilets near us because you cannot go to a restroom far 
away while your stock is left unattended.” 
Participant F: “We need financial support in order to expand our business.” 
The support requirements of the informal traders vary. However, to a certain extent, 
50% of traders require the municipality to offer them trading shelter and storage to 
organise their stuff, 40% require the municipality to assist the finances, and 10% 
require the municipality to provide them with restrooms.  
 
5.8 FINDINGS FROM MUNICIPAL OFFICIALS  
The researcher approached a total of five (05) participants to participate in this study. 
Among the participants were officials from different levels within Local Economic 
Development and Tourism. Three (03) were from the permits, one (01) from trade and 
the last one (01) was Economic Development and Planning  
5.8.1 THE ROLE OF INFORMAL TRADING IN MANGAUNG METROPOLITAN 
The discernment of the Mangaung Metropolitan officials is that the informal trading 
sector is crucial not just to the city of Bloemfontein but also to the economy of the 
Mangaung Metropolitan and the country as a whole. Bloemfontein has the highest 
unemployment rate in Mangaung Metropolitan Municipality; therefore, the informal 
trading sector plays a vital role in job creation and poverty alleviation. The following 
78 
 
 
 
are statements made by Mangaung Metropolitan Municipal officials regarding the role 
of informal traders: 
Participant 01: “Informal trading contributes to a reduction of unemployment within 
the Mangaung Metropolitan Municipality. It acts as a stepping stone to formal business 
and increases the number of people working in the formal business. It is one of the 
significant mechanisms in addressing poverty”. 
Participant 02: “Informal trading plays a fundamental role in poverty alleviation 
within the Mangaung Metropolitan Municipality.”  
Participants 01 and 02 demonstrate that the informal street trading sector plays a 
significant role within the city. The informal trading sector contributes to job creation, 
poverty alleviation and the overall growth of the economy in the city.  
The statements above illustrate that the city of Bloemfontein is faced with the triple 
challenge of poverty, unemployment and inequality, which is cited by authors such 
(Skinner and Watson, 2018; Chen, 2018 and Cichello and Rogan, 2017) as the driving 
factors to the informal economy for many countries in the global south. Additionally, 
the incapacity of the formal sector to generate adequate jobs is a fundamental barrier, 
and it will remain so until such time the informal trading sector is taken seriously and 
recognised as a source of employment. 
5.8.2 THE ROLE THE MUNICIPALITY PLAYS IN THE BUSINESS OPERATIONS 
OF STREET TRADERS IN BLOEMFONTEIN CBD 
Participant 03 said, “The role of the Municipality in Informal Trading is support and 
development. Supporting in a sense of providing infrastructure for trading in a form of 
demarcated trading zones and hawking stalls, recognising Informal traders 
Association as a key stakeholder in decision making. Development in a sense of on-
going support in terms of co-ordination of national and provincial small business 
development initiatives for the benefit of informal trading participants, these would 
include financial and non-financial support measures, including capacity building, 
information dissemination etc. However, we do not have capacity and resources 
perform our duties.” 
 
79 
 
 
 
Participant 04 said, “To provide for the right to engage in informal trading; to establish 
informal trading areas and informal trading sites on municipal property; to provide for 
the granting of trading permits to trade on municipal property; to restrict and prohibit 
informal trading in certain areas; to regulate the conduct of informal traders; to regulate 
informal trading at special events; to provide for measures to ensure health and safety; 
to create offences and penalties; to distribute information ,capacity building ;to provide 
for the repeal of laws and savings; and to provide for matters incidental thereto”. 
Participant 03 and 04 statements demonstrate that the Mangaung Metropolitan 
Municipality officials understand the significant role they have to play to ensure that 
the informal sector is supported and developed.  
The above statement is supported by literature according to (SALGA,2016). 
Municipalities have an important role in enabling the informal street trading sector. 
Thus, Mangaung Metropolitan Municipality must create a favourable environment for 
the informal economy through how it governs, plans, regulates, invests in 
infrastructure and urban space, supports SMMEs and furthers social inclusion. 
5.8.3 STRATEGIES PUT IN PLACE FOR INFORMAL TRADING 
The Municipal officials were asked questions such as “What policies/strategies are in 
place for regulating informal trading?” The purpose of these questions was to learn 
more about how Mangaung Metropolitan Municipality manages the informal traders in 
Bloemfontein. The participants made the following comments. 
Participant 05 said: “The Municipality has a well-structured document that is called 
street-trading by-laws. This document consists of numerous policies that are 
implemented to regulate street trading”.  
Participant 01 said, “The IDP of the Municipality identifies Pro-poor LED as a key 
thrust to supporting Informal trading sector. Local Economic Development Strategy 
also emphasizes the importance of supporting this critical sector of the economy. At 
provincial level the PGDS and the NDP at national level”. 
Participant 03 said: “Chapter 7 (152) (1) (c) of the Constitution states that one of the 
objectives of Local Government is to promote social and economic development. 
Policies in place are street trading by-laws, and the By-law Enforcement and Local 
80 
 
 
 
Government Municipal Systems Act 32 of 2000, which deals with the aspects of local 
government.” 
The constitution in South Africa divides government into three spheres: national, 
provincial, and Local government. It also supplies the fundamental legislative structure 
and a delegation of legislative authority in each government domain. The constitution 
gives municipalities legislative and executive authorities to administer matters in Part 
B of the schedules and added matters delegated by the national and provincial 
government. The municipalities have the authority to enact by-laws and rules about 
the informal economy (Constitution of Republic of South Africa, 1996) 
The statements above (Participants 01, 05 and 03) demonstrate that Mangaung 
Metropolitan municipalities have aligned themselves with National legislation policies 
in management and regulation of informal street traders in the city of Bloemfontein. 
5.8.4 DO YOU THINK THESE STRATEGIES ARE EFFECTIVE? 
Participant 02 said, “I think the challenge still lies with alignment of these strategies 
or policies. Better alignment and co-ordination or streamlining of these could in my 
view, accelerate the achievement of the intended outcome”. 
Participant 03 said, “The strategies are inconsistent and contradictory. For example, 
the municipality would allocate trading space and subsequently evict the very same 
traders.” 
The above statement indicates that Municipal officials are on the front line of regulating 
and managing the informal street trading sector. However, they have a problem 
balancing developmental initiatives while also managing their relationship to other 
economic activities (Skinner and Watson, 2018). Moreover, the municipal response to 
the informal economy is frequently inconsistent and conflicting, and one department 
may encourage informal activities while another takes a restrictive attitude. For 
example, there are divergent views politically and administratively within one city on 
dealing with the informal economy (Skinner and Watson, 2018).  
 
81 
 
 
 
5.8.5 DO YOU HAVE A DATABASE FOR INFORMAL TRADERS? 
Participant 03 said, “Yes, everybody trading in the City has to apply and the 
database of all approved traders is kept and maintained.” 
Participant 05 said, “Yes, the municipality has the database of the informal traders 
in the vicinity.” 
The above statements illustrate that the municipality records activities in the Informal 
street traders in Mangaung Metropolitan Municipality. This is crucial because the 
database for enterprises determines the quality of information, accuracy and 
relevancy. Information is thus always presented in an updated way to avoid data 
discrepancies and replication, most important marketing of street traders if business 
opportunities are presented within the city.  
5.8.6 WHAT IS THE PROCESS OF REGISTRATION? 
Participant 05 said, ”A permit can be applied for in a specific trading area, e.g. African 
Craft Market or for permission to trade as a house shop, etc. Containers are only 
allowed in designated areas. If there is no available space, the applicant’s name will 
be placed on a waiting list. Cost: A trading permit will cost a fee for a three-month 
period and will be renewed if traders comply with code of conduct and following routine 
inspections. Requirements to trade: Proof of address, ID, Details of type of goods or 
service, completed application form, receipt of permit fee (Customer Care). The 
application will be processed, and payment instruction will be forwarded. Once the 
proof of payment is submitted a permit will be issued which will be renewable within a 
month or 3 months, depending on the application.” 
Participant 02 said, “Anyone interested to trade in a specific trading area should apply 
as space is limited. All applicants will be screened according to the Informal Traders 
Policy and Street Trading By-law. Various trading areas have a committee which 
assists in the management of the area.” 
The statement illustrates that the registration process is lengthy and costly, resulting 
in many informal street traders avoiding registering. In contrast, others prefer to 
register to avoid harassment and confiscate their goods by municipal officials despite 
registration processes. This often leads to debates, and mainstream critics argue that 
street traders compete unfairly against the formal establishment because they do not 
82 
 
 
 
pay registration and taxation fee and do not have to pay for things like power bills 
(Chen, 2018). Following this logic, the municipalities should legalize street trading by 
relocating street traders away from the street to premises and requiring them to 
register, pay taxes and rent or own their workshop. 
5.8.7 THE CRITERION USED TO ALLOCATE INFORMAL TRADERS WITH 
LOCATION IN THE CBD 
Participants 02 said, “Allocation in terms of location is based on first come first 
served basis. When a person applies for a site, and it is available upon application, 
such an applicant will receive a site.” 
Participant 05 said, “A circular on vacant site or sites will be issued to Councilors to 
advise them about sites available”. 
The statement above shows that the Mangaung Metropolitan has a transparent 
method of allocating trading stalls to street traders, including the councilors. This is 
good for the Municipality as most of the time. Municipal officials are accused of 
corruption, taking bribery and favoritism. 
5.8.8 THE KIND OF SUPPORT OFFERED TO INFORMAL TRADERS 
When informal traders were asked earlier about the type of support they receive from 
the Municipality, most informal traders stated that they did not receive any support. In 
order for the researcher to find a balance between informal traders and the 
Municipality, municipal officials were also asked, “what kind of support do you offer 
informal traders?”  
The officials identified the following areas of support:  
• Skills development in the form of workshops, mentoring and training; 
• Essential Basic health care, waste and fire management; and 
• Provide infrastructure that is essential for the proper functioning of the 
enterprise. 
 
 
 
83 
 
 
 
Some of the officials’ remarks:  
Participant 01: “Mangaung Metropolitan Municipality offers basic health, waste 
management and fire management/fighter training on a quarterly basis. It also 
assists with financial literacy workshop.”  
Participant 03: “The municipality offers training to informal traders /workshops in 
order to capacitate hawkers and, for others, seek, source funding from other 
government department and agencies on their behalf.”  
According to Participants 01 and 03, Mangaung Metropolitan Municipality does 
everything they can to assist informal trading within the City of Bloemfontein by offering 
training.  
The purpose of the abovementioned question was to learn more about the 
relationship between the informal traders and the Municipality. The answers reveal a 
disconnection between them, indicating a strained relationship.  
 
5.8.9 DO YOU THINK THAT INFORMAL TRADERS ARE CONTRIBUTING TO 
THE LOCAL ECONOMIC DEVELOPMENT IN BLOEMFONTEIN? 
 
Participant 03 said, ”Yes, Informal economy is quite a critical sector of the economy 
in the City. Sizeable part of the population of Mangaung is employed in the Informal 
sector. The importance of Informal sector in sustaining livelihoods cannot be over-
emphasized and the subsequent contribution the sector is making in the City’s GGP”. 
Participant 01 said, “NO, The turnover levels and profit margins are not sufficient 
for most informal businesses in the vicinity to provide for family and sustained their 
livelihood.” 
Table 5.7: Responses Yes and No 
Response Count Percentage 
Yes 4 80% 
No 1 20% 
Total  05 100% 
 
84 
 
 
 
The statement above demonstrates that most officials agree that informal trading 
contributes to the economic development in Bloemfontein, while one participant did 
not agree. Most of the reasons given were informal street trading curbing 
unemployment and giving sustenance to the majority of poor households in 
Bloemfontein and surrounding areas in Mangaung Metropolitan Municipality.  
 
5.9 CONCLUSION  
In conclusion, this chapter presented the case study of street vendors in Bloemfontein 
CBD within Free State province. Fieldwork was conducted using the research 
methodology explained in Chapter 4. Lastly, presentation of research findings. The 
general findings are based on the participants' answers. The researcher’s observation 
is that the informal traders are concerned about the lack of support from Mangaung 
Metropolitan Municipality and the enforcement of by-laws. The informal street traders 
find it difficult to accept the municipality’s support due to their attitudes and treatment. 
Some informal traders have claimed that they are left out when Mangaung 
Metropolitan Municipality drafts by-laws and frequently change the by-laws without 
proper engagement and consultation. 
The widespread consensus from traders and municipal officials is that this sector is 
booming and has a bright future if properly supported. Therefore, more focus is 
required on promoting the benefits of this sector in a positive light to ensure the future 
viability and desirability of the sector.  The next chapter focuses on the conclusion and 
provides recommendations 
 
 
 
 
 
 
 
 
85 
 
 
 
   
 
CHAPTER 6: CONCLUSION AND RECOMMENDATION 
 
6.1 INTRODUCTION  
The previous chapter looked at a case study of street vendors in Bloemfontein CBD. 
This chapter provides major recommendations for how street vendors within the 
informal economy can strengthen Local Economic development in Bloemfontein. This 
chapter aims to provide recommendations and conclusions on the research objectives 
raised in Chapter 1. 
 
6.2 CHAPTER SUMMARY  
Chapter1  gives background information and an overview of the study, including the 
research objectives, aim and definition of the research problem. In order to address 
the research problem, a research question was raised. The study objectives were 
designed to help address the research question. The study's main objective is to 
examine the informal economy in the Central Business District (CBD) and its 
contribution towards Local Economic Development (LED) in Bloemfontein. The 
research objectives were articulated as the research question to solve the research 
problem. The purpose of Chapter 1 was to contextualise the study and elucidate its 
relevance and significance. 
Chapter 2 of the study covers a literature review on Local Economic Development. 
Literature. The chapter provides a detailed analysis of Local Economic Development 
(LED) domestically and internationally, including its formulation, planning, 
approaches, implementation and constraints. 
Chapter 3 focused on the literature review looks at the historical background of the 
informal economy and the approaches that lead to the informal economy as captured 
by different authors. Furthermore, focused on the drivers of the informal economy and 
challenges confronted by informal economy participants. Regulations governing this 
sector were also discussed in this chapter.  
86 
 
 
 
Chapter 4 of the study offers details regarding the study methods and research design 
and the demographic from which the sample was drawn. Data tools and techniques 
were also described in this chapter. The data collection method was discussed. Two 
semi-structured interviews were used as a means of collecting data from informal 
street traders and municipal officials 
Chapter 5 presented the case study on street vendors in Bloemfontein CBD within 
Free State province. The chapter also contained fieldwork conducted using the 
research methodology explained in Chapter 4. Lastly, presentation of research 
findings. 
Chapter 6 of the study entails a conclusion and recommendations concerning the 
research findings is the focus of this study. 
 
6.3 GOAL AND OBJECTIVE OF THE STUDY  
AIM  
The study's main aim is to examine the informal economy in the Central Business 
District (CBD) and its contribution towards Local Economic Development (LED) in 
Bloemfontein. The research objectives guiding the study were  
• To investigate the role of the informal economy for Local Economic 
Development (LED) in Bloemfontein 
• To interrogate the informal economy of South Africa; 
• To analyse the importance of informal trading towards economic development 
in Bloemfontein  
• To examine the type of support and offer recommendations for a thriving 
informal economy in Bloemfontein CBD 
•  
 
OBJECTIVE 1  
• To investigate the role of the informal economy for Local Economic 
Development (LED) in Bloemfontein  
87 
 
 
 
This objective was answered by the evidence presented in the literature review in 
chapter 2 and 3 (subsection 2.3 and 3.10, respectively) and the empirical study in 
chapter 5 (subsection 5.8.1), which demonstrate that the informal sector plays an 
important role in the livelihoods of many people in emerging economies such as South 
Africa including the city of Bloemfontein, it is one of the major driving forces in 
economic growth in the country. It serves various functions and provides income to 
the less educated and unskilled people. The business within this industry is flexible 
and can adjust swiftly to fluctuating market demand and supply situations. It  can 
create jobs, assist in diversifying economic activity, make a vital contribution to export 
and trade, offer raw materials to local producers, and help in poverty reduction. The 
informal economy plays a role in local economic development in Bloemfontein through 
the following elements: 
• Job creation: Informal is considered the driving force behind job creation 
courses since it characteristically includes many small and medium enterprises. 
Informal occupations are a vital source of income for many unskilled 
Bloemfontein ,This is supported by the research findings in Chapter5 , shows 
65% of the respondents are found to have no matric which makes it difficult to 
secure jobs in the formal sector .Moreover the  sector accounts for 18 % of the 
informal workforce, which is an estimated three million workers (Stats SA, 
2018). Because it is so labour-intensive, the informal sector has a high labour 
absorption rate, which makes it capable of creating a large number of jobs. 
• Poverty: Poverty is an economic condition in which one does not have enough 
money to meet fundamental needs. Thus, the informal sector is the answer for 
reducing poverty. 
• Gross Domestic Product: This sector is vital in many countries' economies. In 
South Africa, for example, the informal sector accounts for 8 % of the GDP. 
While many think that 8% is insufficient, nevertheless, in reality, the contribution 
of the sector could be larger than previously thought for the following reasons; 
one most of the informal businesses avoid registering to avoid paying taxes, 
yet if they were all registered and their output recorded, then their contribution 
to the GDP would appear higher than is estimated. Secondly, if this sector is 
88 
 
 
 
encouraged and given all necessary support, its contribution will be greater than 
this figure. 
 
 OBJECTIVE 2 
• To interrogate the informal economy of South Africa 
This objective was reached through consulting literature in Chapter 3 and the empirical 
study in Chapter 5 (subsection 5.8.1). The history of this country heavily influences the 
informal economy in South Africa. During apartheid (1948-1994), the National Party 
enacted segregation laws throughout the country to reinstate white dominance. Along 
with relocating non-white South Africans out of the white city zones, the national party 
administration also tried to divide wealth and power among non-whites and whites by 
providing non-whites with poorer education, limiting their entree to high-paying 
occupations. The apartheid increased inter-racial gaps by giving whites more chances 
and suppressing non-whites entirely based on race. As a result, the wealth disparity 
between whites and non-whites has widened. The apartheid lasted a decade. 
However, the government became tolerant at times (specifically in the 1970s), allowing 
certain highly educated non-whites South African to advance in their careers, and 
lower-skilled professions such as mining began to disappear over time, leaving many 
non-whites unemployed this statement is supported in the findings in Chapter 5 
(subsection 5.3 reasons for partaking in informal economy pg. 68)  .  
Post-apartheid, many unemployed people migrated to urban areas and big cities like 
Johannesburg, Durban, Bloemfontein, Port Elizabeth, and Cape Town to look for job 
opportunities. However, many were unskilled and unable to get jobs in the formal 
sector, and many had no option but to seek jobs in the informal sector. This statement 
is supported in the finding in  Chapter3 sub section3.10.5  and findings in chapter 5  .  
In South Africa, informal economy denotes all work done by individuals and 
businesses, which by law or practice are not covered through formal arrangements. 
Examples include flea markets street vendors, mostly in rural and urban centres.  
Since 1994, there have been several informal sector policy pronouncements and 
efforts. According to the constitution of South Africa, municipalities have the right to 
89 
 
 
 
enact laws and rules regarding the informal economy sector (Constitution of Republic 
of South Africa, 1996). Furthermore, municipalities must play a critical role in enabling 
the informal economy sector. However, municipal authorities’ ambivalence towards 
the informal sector and street trading sector, in general, has been noted numerous 
times in literature and response to study participants in chapter 5 (subsection) (Rogan 
and skinner, 2018). The sector does not receive adequate support from the 
municipalities regardless of its job creation and poverty reduction input. Moreover, the 
municipal approach to the informal economy is often unreliable and contradictory, and 
one department encourages informal operations while another takes a restraining 
attitude.  
OBJECTIVE 3 
•  To analyse the importance of informal economy towards economic 
development in Bloemfotein 
The objective was achieved through consulting literature in chapter 3 and the empirical 
finding in Chapter 5(subsection 5.8.1). The informal sector has been lauded for its 
contribution to entrepreneurship growth. It is recognized as a key component of any 
country’s economic success. Local entrepreneurship is fostered by encouraging 
grassroots inventions, creativity, investment and markets development. In most 
informal sector operations, an entrepreneur plays a part in finding and reallocating 
resources. Consequently, the informal sector is a seedbed for local enterprises 
(Skinner, 2016). 
According to the study findings, the sector is critical for job creation and revenue 
generation. The sector provides more direct and indirect jobs to women than men in 
Bloemfontein, supported by the empirical study subsection. 
Unlike formal enterprises, the industry plays an important role in local resource 
mobilisation, relying on imported inputs (Chen, 2018). The informal economy sector in 
Bloemfontein utilises local labour and resources for their day-to-day operations. They 
thrive by sourcing many of their inputs used in the manufacturing process locally. The 
industry supplies basic requirements of low incomes. It gives them easy access to 
affordable products. Many of the products are conveniently situated and reasonably 
priced, allowing purchasers to save money. This means that the industry helps reduce 
90 
 
 
 
economic inequality by ensuring that the majority of the population has access to 
essential goods and services (Skinner, 2016). 
Informal sector enterprises aid industrialisation by increasing wealth, investment and 
invention, knowledge transfer, and market access in diverse settings. They encourage 
entrepreneurship while also facilitating manufacturing on a local level   
OBJECTIVE 4 
• To examine the type of support and offer recommendations for  informal 
economy in Bloemfontein CBD 
The  Constitution of South Africa Act. No 108 of 1996 which recognises the importance 
of local government and municipalities in promoting the economic development of 
local communities. The municipality also have role in managing the informal sector 
economy ,however the municipality is currently faced with structural in this area. In 
chapter 4 Sub section When informal traders were asked earlier about the type of 
support they receive from the Municipality, most informal traders stated that they did 
not receive any support. In order for the researcher to find a balance between informal 
traders and the Municipality, municipal officials were also asked, “what kind of support 
do you offer informal traders?”  
The officials identified the following areas of support:  
• Skills development in the form of workshops, mentoring and training; 
• Essential Basic health care, waste and fire management; and 
• Provide infrastructure that is essential for the proper functioning of the 
enterprise. 
The purpose of the abovementioned question was to learn more about the 
relationship between the informal traders and the Municipality. The answer 
divergence and  reveal a disconnection between them, indicating a strained 
relationship.  
 
•  
 
91 
 
 
 
 
6.4 RECOMMENDATIONS FOR GOVERNMENT  
The following recommendations can be made to influence policy that affects informal 
street trading: 
• The Mangaung Metropolitan Municipality(MMM) should lead the informal 
economy sector to formalise and execute its LED policies towards the informal 
economy in collaboration and partnership with other role players in the region. 
It is essential to prioritise LED policies informal economy and to have capacity 
at Mangaung Metropolitan Municipality LED and Tourism Department 
(Administration and officials) and the LED and Tourism portfolio (councillors) to 
properly accomplish this. The MMM has must join and play a constructive role 
in forums like Mangaung Business Chambers, for instance, to show the 
strategic partners in the private sector the urgency and commitment of MMM to 
this sector.  
• The collaboration with other role players must follow a logical, systematic 
approach to planning and executing the informal sector for local economic 
development in Mangaung Metropolitan Municipality. A common vision for 
MMM must be created. Development goals such as job creation, poverty 
reduction and economic development must be initiated. Subsequently, a few 
LED approaches such as SMME promotion must be devised to achieve the 
developmental goals. 
• MMM officials and councillors must be capacitated. The skill and competence 
of MMM officials and councillors will influence the sector’s performance at large. 
• The government and municipalities should make it easier for informal economy 
entrepreneurs to register their businesses. People should be educated and 
informed about the registration procedures, and incentives should be created 
to encourage individuals to register their unregistered businesses. 
• The Bloemfontein city should work with banks to build a credit system that 
allows informal street traders to take small loans to help grow their businesses, 
and they can repay the credits over time at low interest rates.  
92 
 
 
 
• Resource and information centres should be established so informal economy 
traders can quickly access resources and become more cognizant of the 
offered resources.  
• The Bloemfontein city should create commercial spaces where small 
businesses can operate and rent at lower prices. 
• Sector departments, MMM, private organizations, and NGOs should 
collaborate to provide skills development and training in business management, 
entrepreneurial abilities, and other talents to aid the income of women-headed 
households. 
 
6.5 RECOMMENDATIONS FOR INFORMAL STREET TRADERS 
• It is recommended that individuals or enterprises engaged in informal street 
trading take initiatives to get necessary information relating to the formalization 
of their enterprises. They must educate themselves on government instituted 
frameworks that help enterprises in the informal sector transition to the formal 
segment. 
• The business owners in the informal street trading sector are encouraged to 
advance their skills and educational level. The Sector Education and Training 
Authority (SETA) can address the challenge of skills and education in the 
informal sector can be addressed by the Sector Education and Training 
Authority (SETA). The government founded the SETA in 2005 to offer education 
and training in 23 economic sectors, including the informal sector. 
• Employers and labour unions should, when possible, offer membership and 
services to workers and economic units in the informal sector. 
 
6.6 RECOMMENDATIONS FOR FUTURE RESEARCH  
It is recommended that quantitative research be carried out with a larger sample 
scope. Larger sample size is more representative of the entire population. There is 
also a need for further research to be conducted in other parts of the city of 
Bloemfontein with different population samples (cross-sectional study) because this 
data was solely obtained in the Bloemfontein CBD. The study used qualitative 
93 
 
 
 
methods where 25 participants (20 informal street traders and 5 Municipal officials) 
were interviewed. Perhaps longitudinal studies on the subject could be undertaken 
over a longer period of time to see if the results and the patterns will differ from those 
found in this study or if they remain the same. This future study could aid in identifying 
trends and patterns, resulting in more precise outcomes.  
 
6.7 CONCLUSION 
The informal sector has provided work opportunities for many over the years. The 
crucial role that the informal sector plays in the global economy has prompted many 
states to acknowledge the sector and devise better ways to control the sector. Based 
on the results of this study, various reasons why individuals get to participate in street 
trading activities were given as follows unemployment, flexibility to trade, migration 
from rural areas to urban areas, low levels of education and poverty.  
The study also revealed that informal street trading characteristics include a wide 
range of activities. The study found out that most street traders in Bloemfontein CBD 
are women compared to the percentage of men. Furthermore, most street trading 
activities occur in the busiest zones, such as the inner city and CBD. While the informal 
sector continues to rise, the street traders are confronted by many obstructions, 
including a shortage of business space, lack of infrastructure, funding, and bad 
working conditions.  
Street trading activities contribute to the economy, produce work opportunities and 
help people get out of poverty. Therefore, the need for financial literacy, training 
programmes, enhanced business registration process, and supply of basic 
infrastructure are urgently needed.  
 
 
  
94 
 
 
 
REFERENCES 
Antwi, SK & Hamza. 2015 Qualitative and Quantitative Research Paradigm in 
Business Research: A philosophical reflection. European Journal of Business and 
Management,7(3):217-225. 
Babbie, E, and Mouton, J. (2006).The practice of social research. Cape Town Oxford 
University Press. 
Becker, K.F. 2004. The Informal Economy: A Fact-Finding Study. Swedish 
International Development Agency (Sida), Department for Infrastructure and 
Economic Co-operation. 
Bless C & Higson-Smith C.1995 Fundamentals of Social Research Methods an African 
perspective Kewyn: Juta. 
Baker, S. E., & Edwards, R. (2012). How many qualitative interviews is enough? 
National Centre for Research Methods. Available at: http://eprints.ncrm.ac.uk/2273 
Benjamin. and A. Mbaye (2012) Informal economy in Francophone Africa. Paris and 
Washington Agency Francoise de Development and World Trade. 
Bryman, A.2012 Social Research Methods 4th ed Oxford: Oxford University Press. 
Capello, R, 2011, Location, Regional Growth and Local Development Theories 
(Accessed 26 May 2019). 
Carr, M. & Chen, M.A. 2001. Globalisation and the informal economy: How global 
trade and investment impact on the working poor. WIEGO [Online]. Retrieved from: 
http://www.ilo.org/../wcms_122053.pdf. [Accessed 20 February 2021].  
Cichello, P. and Rogan,M.2017. Informal sector Employment and Poverty in South 
Africa: Identifying the contribution of informal the contribution of ‘Informal’ Sources of 
income on Aggregate Poverty Measures, REDI working paper RED3x3, Working 
paper34  
Creswell, J. W. (2011). Educational Research: Planning, Conducting, and Evaluating 
Quantitative and Qualitative Research. (Fourth.). Pearson. 
Creswell, J. W. (2013). Qualitative Inquiry and Research Design: Choosing Among 
Five Approaches. 
95 
 
 
 
Creswell, J.W. 2014. Research Design Qualitative, Quantitative Research and mixed 
methods approaches. 4th ed. Thousand Oaks: Sage. 
Charman, A. 2017. Micro-enterprise predicament in township economic development: 
Evidence from Ivory Park and Tembisa. South African Journal of Economic and 
Management Sciences 20(1). 
Chen, M.A. 2012. The informal economy: Definitions, theories and policies.Women in 
Informal economy globalization and organizing (WIEGO) Working paper No.1 
http://www.wiego.org/sites/wiego.org/files/publications/files/chenWIEGO WP1.pdf. 
Accessed 22 November 2020. 
Chen, M. 2018.The South African Informal Sector in international comparative: 
Theories, data and policies, in Fourie, [ed] (2018): The South African Informal Sector: 
Creating jobs, reducing poverty, HSC Press, Pretoria.  
Crush, J.Chikanda, A and Skinner. 2015. Migrant entrepreneurship and informality in 
South Africa Cities, in Crush, J.Chikanda, A. and Skinner, C (eds), Mean Street. 
SAMP, ACC and IDRC, Canada. pp1-24. 
Capello, R, 2011. Location, Regional Growth and Local Development Theories 
(Accessed 26 May 2019). 
Daniels, P.W 2004. Urban challenges: the formal and informal in mega cities, Vol.21, 
No. 6, pp. 501-511. 
Department of Trade and Industry (DTI) .2013. Overview of DTI.Available at: 
http://www.dti.gov.za. [Accessed: 02 April 2019]. 
Davenport. R. 1991. 'Historical background of the apartheid city to 1948,' in Swilling, 
M, Humphries, R, Shubane, K, 'Apartheid City in Transition,' Oxford University 
Press,  Cape Town. 377p. 
Dewar. D. 2005. A Conceptual Framework for the Formulation of an Informal Trader 
Policy for South African Towns and Cities. Urban Forum, 16 (1). P. 1-16 
De Soto, H. 2000.The mystery of capital: why capitalism triumphs in the west and fails 
everywhere else. New York: Basic Book. 
96 
 
 
 
De Soto, H. 1989. The Other Path: The Invisible Revolution in the Third World. New 
York, Harper & Row. 
Flyberg, B. 2011. Case Study. In Denzin &Lincoln(eds) Handbook of qualitative 
Research 4th Ed. Thousand Oaks: CA Sage Chapter 17:301-316. 
Fluck, U. 2014. An introduction to qualitative research (5thed)London .sage Publication 
Ltd. 
Fourie, F. 2018.The South African Informal Sector: Creating jobs, reducing poverty. 
HRSC Press. 
Gentles, S.J., Charles,C.,Ploeg,J.,and McKibben.(2015) Sampling in qualitative 
research: Insight from an overview of the methods literature. The qualitative Report, 
20(11)pp. 1772-1789. 
Hart, K 1973 “ Informal income opportunities and urban employment in Ghana” Journal 
of Morden African Studies, II No.1. 
Helminsing, A.H.J Partnership, Meso-Institution and Learning new local and regional 
economic development initiative in Latin American available online at 
http://www.wiran.de/toolkit/downloads/systems% 20intsruments.doc (26 April 2020).  
Heintz, J. 2004 Elements of employment for poverty reduction in Ghana, New York 
UNDP 
Hoogendoorn. G. and Marais. L. 2008. Perceptions of Crime and the Built 
Environment: The Case of the Bloemfontein CBD. Acta Structilia, 15 (2). P. 75-96 
Hoogendoorn. G., Visser. G., Molefi. L., Marais. L., Van Rooyen. D. and Venter. A. 
2008. Revitalizing the Bloemfontein CBD: Prospects, Obstacles and Lost 
Opportunities. Urban Forum, 19. P. 159-17http://www.maps-streetview.com/South-
Africa/Bloemfontein/roadmap.php [Accessed2 1 July 2021] 
Hindson, D & Vicente-Hindson, V, 2005, Whither LED in South Africa? A Commentary 
on the Policy Guidelines for Implementing Local Economic Development in South 
Africa, March 2005, (Accessed 26 April 2020). 
Horn, Z.E.2011 Coping with crises: Lingering Recession, Rising Inflation and the 
Informal workforce Cambridge, MA, USA: WIEGO and Inclusive Cities  
97 
 
 
 
Industrial Development Corporation (IDC).2007.About the IDC, an overview. Available 
at http://www.idc.co.za/overview. [Accessed: 02 April 2019] 
Ishak, N. M. and Bakar, A.Y.A. 2014 Developing sampling frame for case study: 
challenges and conditions. World Journal of Education,4(3), p. 29. 
ILO (2015) Recommendation concerning the transition from the informal to the formal 
economy. Recommendation 204. International Labour Conference. Geneva: ILO Stats 
Jurgens. U., Marais. L., Barker. C. and Lombaard. M. 2003. Socio-Demographic 
Transformation in the Bloemfontein Inner-City Area. Acta Academia 
Supplementum, 1. P. 34-54 
Krige. D.S. 1991. Bloemfontein, ‘ in Lemon. A Homes Apart: South Africa’s 
Segregated Cities. Paul Chapman Publishing. London. 237p. 
Lee, E. 1998. The Asian Financial Crisis: The Challenge for Social Policy. Geneva: 
International Labour Organization. 
Leys, C.1996. The Rise and Fall of Development Theory Indiana University Press. 
Loison, S.A. 2015. Rural livelihood diversification in Sub-Saharan Africa: A Literature 
Review. Journal of Development Studies, 51 (9): 1125-1138 
Masonganye, M. 2010. Street trading in Tshwane Metropolitan Municipality Realities 
and challenges Tshwane: Urban Land Mark. 
Medina, L. & Schneider, F. 2017. Shadow Economies around the World: New Results 
for 158 countries over 1991-2015. [online]. Retrieved from: STUDIEN/PFUSCH 
NEU/2017/JointPaper_LeandroMedina.doc. [Accessed 13 September 2021].  
Merriam, S. B. (2014). Qualitative research: A guide to design and implementation. 
San Francisco, CA: Wiley & Son. 
Meyer, 2014 D, F, Local Economic Development (LED), challenges and solutions: the 
case of the northern Free State region, South Africa, (Accessed 25 April 2020).  
Meyer, D, F, & Venter, 2013, challenges and solutions for Local Economic 
Development (LED) municipal institutional arrangements, The case of the Northern 
Free State, ( Accessed 29 April 2020). 
98 
 
 
 
Moser C (1984) Informal Sector Reworked, Viability and Vulnerability in Urban 
Development. Regional Development Dialogue, Vol. 5, No. 2, pp. 135-178.  
Moser, Caroline O.N. (1978) "Informal Sector Or Petty Commodity Production: 
Dualism Or Dependence In Urban Development?" World Development, Vol. 6, Nos. 
9/10, pp. 1041, 64  
Narayan, K. 2011. Urban Women Participation and Livelihoods in the Informal Sector 
in Fiji: A Case Study of Suva-Lami Area. Master of Arts degree in Development 
Studies. Suva: The University of the South Pacific.  
Patton, M.Q. (2015) Qualitative research and evaluation methods 4th 
Edition.Thousand Oaks, CA: Sage Publications  
Parker, C., Saundage, D., & Lee, C. Y. (2011). Can qualitative content analysis be 
adapted for use by social informaticians to study social media discourse? A position 
paper. In ACIS 2011: Proceedings of the 22nd Australasian Conference on Information 
Systems (pp. 1–7). Sydney, Australia. 
Pieterse, E., Parnell, S. and Hayson, G. 2018 African dreams: locating urban 
infrastructure in 2030 sustainable agenda area development and 
policy,https://doi.org/10.1080/23792949.2018.1428111 
Portes, Alejandro, Manuel Castells, and Lauren A. Benton (eds.) (1989) The Informal 
Economy: Studies in Advanced and Less Developed Countries. Baltimore, MD: John 
Hopkins University Press.  
Rodrik, D. 1997. Has Globalization Gone Too Far? Washington, D.C.: Institute for 
International Economics. 
Rogerson C.M, 2011, Tracking Local Economic Development Policy and Practise in 
South Africa, 1994 – 2009, (Accessed 27 April 2020). 
Rogerson, C.M, 2015. Unpacking National Policy Towards the Urban Informal 
Economy, in Crush, J., Chikanda, A., and Skinner, C. (eds), mean street. SAMP, ACC 
and IDRC, Canada. pp. 229-248 
Saldaña, J. (2015). The Coding Manual for Qualitative Researchers. Sage. 
99 
 
 
 
Sibanda, M.M. 2013.Small, Medium and Micro-enterprises in Local Economic 
Development: A South African Local Economic government perspective In Journal of 
Public Administration Vol:48 pp657-671  
Skinner and Haysom, G. 2016. The informal sector’s role in food security: A missing 
link in policy debates? Working paper,1-9. 
Skinner, C. 2016. The international context: Statistic and school of thought. 
HTTPs://www. Africancentreforcities.net/wp-content/uploads/2016/10/ISEP 20 July-
FINAL.pdf, accessed 30 March 2020. 
Sloan, A., & Bowe, B. (2014). Phenomenology and hermeneutic phenomenology: The 
philosophy, the methodologies, and using hermeneutic phenomenology to investigate 
lecturers’ experiences of curriculum design. Quality & Quantity, 48(3), 1291-1303. 
doi:10.1007/s11135-013-9835-3 
Stats SA (Statistics South Africa) (2014) Gross domestic product. Statistical Release 
P0441. Pretoria: Stats SA Appendix 
Statistics South Africa. 2018. Quarterly Labour Force Survey 2018, Q1. Pretoria: 
Statistics South Africa. 
Strydom, 2005. Ethical aspects of research in social science and human service 
profession. In De Vos, A.S, Strydom, I.T, Fouche, C.B &Delport, C.S.L Research at 
Grassroot for social science and human science profession 3rd ed Pretoria: Van Schaik 
Publishers. 
Tokman, V. 1992. Beyond Regulation: The Informal Economy in Latin America. 
Boulder, CO: Lynne Rienner Publishers. 
Tokman V.E. (1978) "An Exploration into the Nature of Informal-Formal Sector 
Relationships, in World Development, vol.6, no 9/10 ppl065-1075  
Tokman, V. (1989). Policies for a Heterogeneous Informal Sector in Latin America. 
World Development. 17:1067-76 
Turok, I. 2011. Spatial Economic Disparities in South Africa: Towards a New Research 
and Policy Agenda. Cape Town: Human Science Research Council. 
100 
 
 
 
Tomaney, A., Pike, A., and Rodriquez-Pose, A. (2011). Local and Regional 
Development: Reflections and Futures in Pike, A., Rodriquez-pose, A and Tomaney,j. 
editors, Handbook of Local and Regional Development, London; Routledge 618-630. 
Tracy, S. J. (2013). Qualitative research methods: Collecting evidence, crafting 
analysis, communicating impact. Hoboken, NJ: Wiley-Blackwell 
Valodia, I., L. Lebani, C. Skinner and R. Davey (2006) “Low-waged and informal 
employment in South Africa”, Transformation, 60, 90-126.  
Valodia, I. and R. Davey (2007) “Understanding formal and informal linkages”, Human 
Sciences Research Council.  
Williams, C.C. 2014. The Informal Economy and Poverty: Evidence and Policy 
Review. Sheffield: Joseph Rowntree Foundation.  
Yin, R. K. (2014). Case study research: Design and methods (5th ed.). Thousand 
Oaks, CA: Sage. 
 
 
 
 
 
 
  
101 
 
 
 
ANNEXURE 1: SEMI- STRUCTURED INTERVIEW QUESTIONNAIRE FOR 
STREET VENDORS 
 
SEMI-STRUCTURED INTERVIEW  
TITLE OF THE STUDY: INFORMAL ECONOMY AND LOCAL ECONOMIC 
DEVELOPMENT: CASE STUDY OF STREET VENDORS IN BLOEMFONTEIN IN 
THE FREE STATE PROVINCE  
 
Morero wa hlahlobeloa ke ho thusa mofubutsi Ms Tsholofelo Shounyane ho arabela 
patlisiso ho dithutong tsa hae tsa Master of Development Studies. Ka kopo ke o 
netefaletsa bankakarolo fubutsong ena batla e sa tsejoeng le hore tlhahisoleseling e 
tla tsoaroa jwale ka lekunutu. Hlahlobeloa ena e tla hatiswa e be e tla sebidiswa fela 
bakeng sa morero wa dithuto hale lintlha tse amanang le uena boitsebiso bo tla ba 
lekunutu mme bo tla sebelisoa feela ka ho ithutha ka sepheo.Puisano e tla nka 
metsotso e 30 feela 
 
Information and contact details of the Researcher  
Name: Tsholofelo Confidence Shounyane  
Contact no: 0763732932 
E-Mail:Tsholofelo.shounyane@drdlr.gov.za 
 
 
 
 
 
 
 
 
 
 
 
 
 
102 
 
 
 
 
 KAROLO A : 
1. DEMOGRAPHIC INFORMATION 
ka kopo beya lets’oao X mo ho nepahetseng or fana ka Karabo sebakeng se 
dumeletsweng  
 
1.1 Letsatsi la Puisano        
   dd mm yy 
 
1.2 Bong M F 
  
 Lilemo 
 1.3  18-24 25-35 36-50 51-60 61+ 
/Tekanyetso e phahameng ka ho fetisisa ea 
1.4 thuto     
 Below Grade 12   
 Grade 12   
  Degree/Diploma         
 Honours    
 Masters  
 
1.5 Palo ea ba itsetlehileng ka lelapa la hau      
 1- 3 Ya itsetlehileng   
 3-5 Ya itsetlehileng   
 5-10 Ya itsetlehileng   
 10 -Hofeta   
 
1.6 Lekeno la lelapa ke bokae?     
 0-R500   
 R550-R1000   
 R1000-above   
 Other   
 
 
 
 
103 
 
 
 
KAROLO 2 : KAROLO MORUO O SA RERONG  
 
2.1 KE LEBAKA LEFE LE ETSANG HORE O NKE KAROLO MOROU O SA 
RERONG WA TSELENG? 
…………………………………………………………………………………………………
………………… 
--------------------------------------------------------------------------------------------------- 
2.2 KE NAKO E KAE OLE BOHWEBI WA MORUO O SA RERWANG WA 
TSELENG? 
…………………………………………………………………………………………………
……………….. 
…………………………………………………………………………………………………
………………… 
2.3 SEPHEO SA HAU SA KHOEBO KE ENG? 
…………………………………………………………………………………………………
…………….. 
…………………………………………………………………………………………………
…………….. 
2.4 U HLOKA ENG HORE OBE MOHWEBI WA MORUO O SA RERWANG WA 
TSELENG YA ATLAHILENG? 
…………………………………………………………………………………………………
…………..  
…………………………………………………………………………………………………
……………. 
2.5 NA U TSEBA MELAWANA E TATAISANG BAHWEBI BA MURUO O SA 
RERWANG WA TSELENG MO TOROPONG BLOEMFOTEIN? 
…………………………………………………………………………………………………
…………………………………………….. 
…………………………………………………………………………………………………
…………………………………………….. 
 
 
2.6 NA MELAWANA ENA, E NA LE TSHOTSHOMETSO TSAMAISONG YA 
KGWEBO, HOLENG JWANG? 
104 
 
 
 
…………………………………………………………………………………………………
……………………………………………… 
----------------------------------------------------------------------------------------------------------------
----------- 
…………………………………………………………………………………………………
…………………………………………… 
 
2.7 NA O NAHANANG KA HO KENYWA TSHEBETSONG YA MELAWANA HO 
BAHEBI BA MORUO O SA RERWANG WA TSELENG MO BLOEMFOTEIN? 
…………………………………………………………………………………………………
……………………………………………….. 
…………………………………………………………………………………………………
……………………………………………….. 
2.8 KE DIPHEPHETSO TSE FE TSE BAHEWEBI BA MORUO O SA RERWANG 
WA TSELENG BA SHEBANENG LE TSONA? 
…………………………………………………………………………………………………
…………………………………………….. 
…………………………………………………………………………………………………
……………………………………………….. 
2.9 KE DITHUSO TSE FE TSE LE DI FUMANANG HO TSWA MANGAUNG 
METROPOLITAN 
…………………………………………………………………………………………………
………………………………………. 
…………………………………………………………………………………………………
………………………………………. 
2.10 IS NA DITHUSO DI LEKANE HO BORAGWEBO BONGWENG KAPA KA 
KAKARETSO?  
…………………………………………………………………………………………………
………………………………….. 
…………………………………………………………………………………………………
……………………………………. 
2.11 HE SENG JWALO KE MOFUTA OFE WA DITHUSO TSE TLA 
ENTLAFATSANG MAEMO A BAHEWIBI BA MURO O SA RERWANG? 
…………………………………………………………………………………………………
………………………………………. 
105 
 
 
 
…………………………………………………………………………………………………
……………………………………… 
 
 
 
 
 BOKHUTLO 
 
 
THANK YOU! KA LEBOHA ! BAIE DANKIE ! 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
106 
 
 
 
ANNEXURE 2: SEMI STRUCTURED QUESTIONNAIRE FOR MUNICIPAL 
OFFICIALS 
 
 
SEMI-STRUCTURED INTERVIEW  
TITLE OF THE STUDY: INFORMAL ECONOMY AND LOCAL ECONOMIC 
DEVELOPMENT: CASE STUDY OF STREET VENDORS IN BLOEMFONTEIN IN 
THE FREE STATE PROVINCE  
 
The purpose of this interview will enable the researcher Ms Tsholofelo Shounyane to 
answer the research questions in her study Master of Development Studies. Please 
be assured that participants in this study will remain anonymous and that information 
provided will be treated as confidential. The interview will be audio-recorded and will 
be used for the purpose of academic research, and all the personal information and 
identity will be confidential and will be used only for the purpose of this study. The 
interview will take only 30min. 
 
Information and contact details of the Researcher  
Name: Tsholofelo Confidence Shounyane  
Contact no: 0763732932 
E-Mail:tsholofelo.shounyane@dalrrd.gov.za 
 
 
 
 
 
 
 
 
 
 
 
 
107 
 
 
 
MANGAUNG METROPOLITAN OFFICIALS  
  
DEPARTMENT : LOCAL ECONOMIC DEVELOPMENT  
RANK : 
 
DATE OF INTERVIEW: 
 
CORE QUESTION: 
1. WHAT IS THE ROLE OF INFORMAL TRADING IN MANGAUNG 
METROPOLITAN/  
…………………………………………………………………………………………………
………………………… 
…………………………………………………………………………………………………
……………………… 
2. EXPLAIN THE ROLE THE MUNICIPALITY PLAYS IN THE BUSINESS 
OPERATIONS OF STREET TRADERS IN BLOEMFONTEIN CBD. 
…………………………………………………………………………………………………
…………………………………………………… 
…………………………………………………………………………………………………
……………………………………………………. 
 
3. WHAT STRATEGIES ARE IN PLACE FOR INFORMAL TRADING? 
…………………………………………………………………………………………………
…………………… 
…………………………………………………………………………………………………
………………….. 
 
4. DO YOU THINK THESE STRATEGIES ARE EFFECTIVE? 
…………………………………………………………………………………………………
……………. 
…………………………………………………………………………………………………
…………… 
 
108 
 
 
 
 
 
5. DO YOU HAVE A DATABASE FOR INFORMAL TRADERS? 
…………………………………………………………………………………………………
………………….. 
…………………………………………………………………………………………………
………………………. 
6. EXPLAIN THE PROCESS OF REGISTRATION  
…………………………………………………………………………………………………
………………….. 
…………………………………………………………………………………………………
………………… 
7. DESCRIBE THE CRITERION USED TO ALLOCATE INFORMAL TRADERS 
WITH LOCATION IN THE CBD 
…………………………………………………………………………………………………
……………………………………………… 
8. WHAT KIND OF SUPPORT DO YOU OFFER INFORMAL TRADERS? 
…………………………………………………………………………………………………
………………. 
…………………………………………………………………………………………………
…………….. 
9. DO YOU THINK THAT INFORMAL TRADERS ARE STEMMING THE 
REQUIRED ECONOMIC PROFITS FROM DOING INFORMAL BUSINESS WITHIN 
THE CITY OF BLOEMFONTEIN? 
…………………………………………………………………………………………………
…………………………………… 
…………………………………………………………………………………………………
……………………………………. 
 
THE END  
 
THANK YOU! KA LEBOHA! BAIE DANKIE ! 
 
 
109 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
110 
 
 
 
DECLARATION 
 ALTHOUGH THE ETHIC CLEARANCE LETTER WAS APPROVED ON THE 
INFORMAL ECONOMY AND LOCAL ECONOMIC DEVELOPMENT :CASE STUDY 
ON WHICH IS NOW CHANGED TO THE CURRENT TOPIC . INFORMAL 
ECONOMY IN THE CBD AND ITS CONTRIBUTION TO LOCAL ECONOMIC 
DEVELOPMENT IN BLOEMFOTEIN THE NEW TOPIC STILL SERVES THE 
PURPOSE AS THE TOPIC APPROVED ON THE ETHICS CLEARANCE LETTER 
ANNEXURE 3: ETHICAL CLEARANCE LETTER 
 
 
 
 
 
 
GENERAL/HUMAN RESEARCH ETHICS COMMITTEE (GHREC) 
 
02-Mar-2021 
 
Dear Ms Confidence Shounyane 
 
Application Approved 
 
 Research Project Title: 
Informal Economy and Local Economic Development: The case of Street Vendors in 
Bloemfontein in the Free State province. 
 
 Ethical Clearance number: 
UFS-HSD2020/1789/0103 
 
We are pleased to inform you that your application for ethical clearance h 
as been approved. Your ethical clearance is valid for twelve (12) months from the date of issue. We 
request that any changes that may take place during the course of your study/research project be 
submitted to the ethics office to ensure ethical transparency. furthermore, you are requested to submit 
the final report of your study/research project to the ethics office. Should you require more time to 
complete this research, please apply for an extension. Thank you for submitting your proposal for 
ethical clearance; we wish you the best of luck and success with your research. 
 
Yours sincerely 
 
 Dr Adri Du Plessis 
 Chairperson: General/Human Research Ethics Committee 
 
 
 
205 Nelson Mandela  P.O. Box 339 
Drive Bloemfontein 9300 
Park West  Tel: +27 (0)51 401 
Bloemfontein 9301 9337 
South Africa  duplessisA@ufs.ac.za 
   www.ufs.ac.za 
 
  
111 
 
 
 
 
 
 
 
 
112