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IN PICTURES | The Occupation Of Unemployment In South Africa

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At the end of the third quarter last year, South Africa recorded a high unemployment rate of 27.5%. Townships and informal settlements are at the helm of this problem where the youth lack resources to even apply for jobs.


A young, unemployed man crosses a busy street on 12th Avenue.

Dragging a greasy trolley filled with trash, he looks at us blankly as he continues to lug his garbage to the nearest junkyard.

It is a regular sight and a regular weekday on the streets of Alexandra, eight kilometers from Africa’s richest square mile, Sandton, in South Africa. 

Sixteen-seater minibus-taxis dash from corner to corner, packing their vehicles with enough passengers before making their way out of the township.

It is 10.30AM on this sunny Wednesday morning in December.

The street corners are adorned with colorful tuckshops; they stand out against the backdrop of the grey homes around them.

An Alexandra resident collects trash in order to make a living in the over-populated community. Picture: Gypseenia Lion

One of the spaza shops is bright blue with light textures of yellow paint; a man sits behind a mesh by the sales counter. It is almost impossible to see his face.

He offers a young man a cigarette via a peep hole through the mesh.

Three men gather to smoke the same cigarette before making their way to the multi-purpose community center on the other side of the road.

Each carrying a sling bag and an A4 envelope, they disappear into a building located at the end of a twirling staircase. Young and old ceaselessly walk in and out.

The yard is filled with a number of service centers: the local clinic, revenue service offices, the post office, multiple internet shops and the Youth Advisory Centre (YAC).

At the end of the hallway, Themba Mafuya sits collecting dozens of résumés from the eager youth who are desperately in search of employment.

He gathers the pile of documents and hands it over to his assistant.

“People are hungry for jobs,” he says as he looks at the unending stream of visitors walking in and out of the center.

Mafuya’s institution creates a database of unemployed youth within the community with the sole purpose of  collaborating with companies that are looking to hire.

By working closely with government, YAC reports to the City of Johannesburg on the state of unemployment in the community.

Dressed in casual wear, the 29-year-old has a friendly and positive approach when he advises potential employees.

“Go and correct the mistakes on your résumé that I explained to you. Make sure your documents are certified and bring it to me as soon as possible. Don’t worry, they will hire you,” he tells a young lady.

With Gauteng province being the economic powerhouse of South Africa, contributing 35% to the country’s GDP, according to recent figures released by Stats SA, unemployment remains an area of concern – 29.6% of people live in the province without jobs.

But the province is not among the lowest performing in the country. With an unemployment rate of 36.6%, the Free State has the highest provincial unemployment rate according to StatsSA, in 2018.

Limpopo, with a prominent rural population, surprisingly, has an unemployment rate of 18.9%, making it the lowest in the country.

Townships in the surrounding areas of Gauteng are still faced with an influx of challenges relating to unemployment.

Adding to the lack of jobs, social issues play a big part.

“We need to start doing follow-ups. Ask how many youth have been employed? Who are not employed? Why are they not employed? Maybe they do not have a correct résumé and we need to figure out why the employees do not choose them,” says Mafuya.

Just a few streets away is a compound adjacent to a block of fading pink apartments.

The yard is divided by a muddy passage with small dwellings on either side.

A smell lingers far beyond the cracks of the cement block as two buckets get noisly filled with hot water to clean chicken.

A scene depicting a busy street corner on a late Wednesday morning in Alexandra. Popularly known as Alex, the township has one of the most highest concentrated unemployment rates in Gauteng.
Picture: Gypseenia Lion

Alfredah Phuloane introduces herself after she wipes the chicken remnants off her hands using her multi-colored t-shirt.

With Phuloane is her uncle Velile Ndlovu who is her business partner.

“As long as I have chicken, they are going. If I have 55, all of them will be bought. I’ve already sold 25 for the day and we have just started,” she says.

A helper, who didn’t want to be named, gushes: “I love my job and I am proud of it.”

She too, like the 27.5% of the South African population who are unemployed, will celebrate any job that will help them put food on the table. 

In 2018, StatsSA announced an increase in the unemployment rate at the end of the third quarter.

According to the Quarterly Labour Force Survey, there are 16.4 million employed people and 6.2 million unemployed people between the ages of 15 and 64 years in South Africa.

The latest figures record that the number of unemployed people in South Africa grew by 127,000 from the 6.08 million in the previous quarter.

StatsSA Statistician-General, Risenga Maluleke, says unemployment, according to the statistics collected, is calculated using the 4×4 rule.

These are job-seekers in search of employment four days a week in a four-week period.

Phuloane, who has been unemployed for three years, took the iniatitive to start the business when she realized there was a demand for freshly-slaughtered chicken in her community. 

“At the time, when we were slaughtering the chicken for our own consumption, some people were coming in and asking if we were selling them. That is when we realized people needed chicken,”  Ndlovu laughs.

Ndlovu leaves the compound at 4.30AM to stand in a long queue in Linbro Park where he buys the live chickens.

On his return, at around 7AM, he places the fowl in a makeshift coop.

With the helper, who earns a sum of money for her assistance, the trio spend the day processing and packaging chicken for customers.

Three years of unemployment led Phuloane, a former domestic worker, to entrepreneurship.

“If my business does succeed, I want to hire those who do not have jobs. I want to make their lives simple. They can start their own businesses then, because you can’t wait for work. There are no jobs now and it will be difficult,” Phuloane says.

Her uncle on the other hand, who worked as a recycler in a recycling company, decided to quit his job in late 2018.

When Ndlovu rejected a job transfer to South Africa’s capital Pretoria, it suddenly made him one of the thousands without employment.

The formal sector recorded job losses of 65,000 people, and agriculture lost 1,000 employees in the third quarter of last year.

Without the promise of an increase, had he accepted the job in Pretoria, Ndlovu’s expenses would have increased by $111 to travel 41 kilometers to the north eastern part of Johannesburg.

He decided to quit.

“We realized that there is a big opportunity in the township. We are trying by all means to not rely on anyone. We can take our children to school. No one will suffer if they think about starting a business,” he says.

Social engineer Action Setaka, from the organization ACTIVATE! Change Drivers (ACD), who advocates for the unemployed, says there is a copious amount of injustice hampering access to employment.

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It is even worse in the townships.

ACD is a network of young people interested in driving change for the public good of the country through innovation and activism.

For Setaka, unemployment has become a commodity for business and institutions to exploit those desperately in search of work.

From the seemlingly endless amount of documentation required when applying for governmental posts, to the costs of printing and accessing the internet at internet cafés, money is required.

It does not end there.

“Transportation costs for traveling to interviews; posting of résumés cost money, which benefits the internet cafés; data to browse job opportunities and mobile networks make money out of this. Searching for employment requires money, yet you find people who claim that our young people are lazy and, therefore, they are not prepared to find work,” Setaka says.

The dire plight of the jobless youth in Alexandra is not in isolation.

Similar circumstances reverbarate throughout the townships of South Africa.

Another township, much like Alexandra, with compounds filled with shacks, is swarming with people seeking jobs for survival.

Located in the northern part of Johannesburg, Diepsloot has the highest concentration of unemployed people in Gauteng.

This is according to the Gauteng City-Regional Observatory (GCRO)’s Mapping Unemployment publication, released in August 2018.

The location, established in 1994, has grown into a community with a population of more than 160,000 with an estimate of “24,737 shacks alongside more than 5,000 formal housing units, such as RDP (Reconstruction and Development Programme) houses, self-built houses on serviced sites, and a small number of bank-financed houses,” as quoted in Diepsloot, a brochure compiled by the Johannesburg Development Agency.

Based on the StatsSA 2011 census, the GCRO map shows the concentration of unemployed people in areas that had rates worse than the provincial median in 2011.

According to GCRO statistics, “the square kilometer areas with the highest concentration of unemployed people are observed in townships such as Alexandra and Diepsloot and contain 4,965 and 8,758 people”.

Diepsloot’s South African Youth Project (SAYP) general manager, Clifford Legodi, says gaining access to employment for unemployed youth in townships is harder than it is for youth who grow up in urban regions. This points to a system exclusion due to the lack of access to resources.

Thus, the development programs that will meet the demands of the working environment will, in turn, open up opportunities.

It starts with breaking norms.

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“Young black people or previously disadvantaged communities are still using the traditional method of taking a taxi, printing a résumé or going to the offices. We felt that it was important to incorporate an online skills program. You look at their online presence. How they apply for a job online. Are they actually keeping a good online profile and how to secure opportunities in time?” Legodi says.

SAYP is a youth development organization aimed at the empowerment of young people by giving them the skillsets to utilize the opportunities around them.

This is done through the ‘Power Through Jobs’ program offered by the non-profit.

Life skills, work-readiness, and getting a job are some of the main points of focus for the youth of the township.

Online job-searching skills have been implemented in order to keep up with the evolving working environment.

Through encouragement and continuous skills development, Legodi says the notion of staying in one position will fade away, and the youth of Diepsloot will aspire to climb the corporate ladder.

“If they can conduct themselves in a professional manner, they will gain credibility,” he says.

The population is dominated by black people and for Legodi, the lack of opportunities within their reach means that those who are able find employment will have to travel long distances to get to work.

“Diepsloot has its own reputation that is quite limiting for young people to get opportunities out there.

“The media also has a bit of an influence, bad news sells. A lot of the things you see are about the crime, but everyone is treated equally within the community,” he says.

“The mistake we have been making in the past when it comes to addressing unemployment, is that we tried to develop a program that put everyone in the same box. We tend to forget that people come from different geographical locations and they are exposed to different lifestyles.”

Twenty-nine-year-old Thapelo Tau sits in a living room watching television.

Thapelo Tau of Alexandra.
Picture: Gypseenia Lion

It is noon and he is catching up on his favorite shows in the home he shares with his mother and two sisters.

“I have been unemployed for five or six years. It has been difficult to look for work. Many people here give up and they just sit at home and watch television,” he says.

He spends most of his time on his phone and reading.

“You may take your documents to look for work, but when you leave, they tear it up. We just give up because there is nothing we can do. I have an uncle who has been looking for work for a long time. He just stopped looking,” Tau says.

When approached for comment, the uncle dismisses the interview in vernacular.

“We are looking for work. We can’t even speak English,” he says.

English is widely considered the language of access in this nation where there are 11 official langages. Those who can’t speak the language are almost always immediately excluded from public participation.

“The problem that we have seen with people from townships is self-confidence. They get afraid when they have to leave their comfort space. They then need to present themselves in a different way, they have to adjust to a different lifestyle to showcase an approach,” says Legodi.

Afri-Berry founder and director, Relobohile Moeng, says the language barrier is one of the biggest challenges for the youth in the townships. Going the extra mile for an intern who lacked verbal communication skills, she offered mentorship and guidance. “The confidence part I had to build in, as her mentor,” attests Moeng.

Townships have the undying potential to contribute greatly to the country’s aggregate economic growth; this can be achieved only if the high populations are granted the opportunity to play their part in the economy. Alexandra and Diepsloot are testament to the facts.

In the interim, Ndlovu, much like the rest of the unemployed population, strives against all odds, hoping against hope to continue to put food on his own table whilst feeding his community.

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The Blue Economy: ‘Billions Of Dollars In The Ocean’

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From the Caribbean to the South African coast, marine  archaeologist Matthew Arnett’s work involves recovering treasures from the deep – and preserving them for posterity.


I have a pet peeve with people like Elon Musk who want to jet off to space,” remarks Matthew Arnett, who has made it his business to explore the depths of the world’s oceans.

“I would think 99% of the sea is left unexplored. I believe there are answers there that come from energy and renewable resources. There is a twilight zone that we don’t even know is there, and they want to go to Mars!” 

 It is the planet we are in that Arnett, the co-founder and CEO of PO8, has made his priority, uncovering treasures that date as far back as the 1400s.

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“Millions should be spent under the ocean instead of jetting off to space so quick. There are many aspects of the blue economy that have not been explored and there are so many opportunities that come out of it,” says the explorer who is based in the Caribbean and visiting South Africa.

PO8 is a marine archaeology startup that uses blockchain technology to recover sunken artifacts from the ocean floor.

Using the blockchain model, through PO8, ownership of the recovered treasures and artifacts is with non-fungible tokens, which are asset-backed tokens.

Arnett says the sensitive, more lucrative approach is preserving these artifacts in museums and not giving them away to private collectors.

“They [the artifacts] have to stay in the public domain and that is why there are the museums.”

With innovative ways of looking at the blue economy, the PO8 project, based in the Caribbean, also aims to connect lost histories across the globe.

The growing historical tourism market in the Caribbean generates revenue without selling any of the recovered artifacts, leading to social and economic impact that he says can be duplicated in Africa.

“Because of the success in the Caribbean, it only makes sense to come back to Africa to put the same model in place.

“There are millions and billions of dollars in the ocean,” Arnett says.

“We are going to find other things that relate back to Africa, so we might also be able to find some missing links from an anthropology stand point.” 

He believes his work contributes to transforming the narrative of the Caribbean that’s often only known for tourism. “When you look at the Caribbean, it is no longer just sun, sand and sea; there is a tech tsunami that is coming,” he says.

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“I am from an island known for pirates. There is a pirate who was able to withstand the British government for 31 years while the British government controlled other parts of the Bahamas. He used the Bahamas as his treasure chest… and that blood is soaked in the soil; that is out of which I am born. I was raised with these stories of piracy.”

 As Arnett taps into new knowledge systems, he believes that there is value in ensuring that all have access to his findings.

“These artifacts are open to anthropologists, archaeologists, or to university programs all over the world to come to the Bahamas and study these objects to draw parallels between other pieces and artifacts that might be similar to them. Essentially, we are telling the story of our past in a way that it can be globally accepted and people can own a part of history.”

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Agriculture

Cyclone Idai Aftermath: No Maize, No Money, No Future

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The deadliest African cyclone, to date, tore through Zimbabwe, Malawi and Mozambique in March, leaving a trail of death and destruction. The worst is yet to come for survivors.


The deadliest cyclone to ever hit Africa, Idai, overnight, ripped through Mozambique and then tore into Zimbabwe and Malawi, leaving a long trail of destruction in its wake.

Trees were uprooted, so were people, in the millions.

Roads were washed away, houses destroyed and bridges torn from their edifices. Worst of all, the raging muddy waters killed at least 847 people, affected about two million and destroyed several hundreds of thousands of crops. The devastation caused by the cyclone is almost unimaginable as, in these three countries, bodies could be seen floating in water where there used to be villages.

“This was unimaginable. I am in the military but I have never seen such. People are desperate for help and have lost everything,” says Brigadier General Joe Muzvidziwa, who is helping survivors in Zimbabwe.

For those who did survive, the worst is yet to come. Many of them will mourn the deaths of their loved ones on empty pockets and growling stomachs.

The drive to Zimbabwe’s hardest hit district, Chimanimani, is long and painful. A mere six days after the furious waters swept away most parts of the villages in the area, the ground is dry but the pain and destruction still palpable.

We struggle to drive into the villages as trees and debris still block the roads and bridges have been decimated.

We continue our journey on foot and meet many with no place to call home. One of them is Tsitsi Mungana.

Tsitsi Mungana in the aftermath of Cyclone Idai. Picture:

As we meet, she is trying to climb over a tree blocking the road, to make her way to aid agencies for her first decent meal since Cyclone Idai. She is walking barefoot and is wearing the only dress and doek (headwrap) she now owns. She mutters a few words to herself as tears stream down her cheeks.

“It’s been the worst time of my life. I don’t know how I am going to move on from this. I don’t have anything else left. My husband was swept away by the floods and was found about 10km away… We spent hours looking for my grandson. The rocks which fell off the mountain due to the heavy rains and wind covered his body and it took many people to find him. All our belongings and livestock are also gone,” says Mungana as she begins to weep uncontrollably.

She is one of hundreds of families who have lost loved ones, and thousands who are most likely going to starve this year.

According to Wandile Sihlobo, Chief Economist of the Agricultural Business Chamber of South Africa (Agbiz), Mozambique, Zimbabwe and Malawi will collectively have to import over a million tons of maize this year to feed its people.

He says Zimbabwe’s maize imports could reach 900,000 tons in order to meet the annual needs of roughly two million tons a year.

“Meanwhile, Mozambique will most likely double the typical maize import volume of about 100,000 tons a year,” he says.

It’s going to be hard to find suppliers of maize because the key suppliers, South Africa and Zambia, are expecting low harvests this year.

“If we assume that South Africa’s expected production of 10.6 million tons materializes, then the country could have about 1.1 million tons of maize for export markets. A large share of this will, most likely, be destined to the BNLS countries (Botswana, Namibia, Lesotho, and Eswatini), thus leaving a small volume for Zimbabwe and Mozambique,” Sihlobo says.

There is also very little to be expected from Zambia as the International Grains Council forecasts the country’s 2018/19 maize harvest at 2.4 million tons, down by 33% year-on-year. This will be enough only for domestic consumption.

Cyclone Idai also affected trade.

In its wake, according to the UN Economic Commission for Africa Executive Secretary, Vera Songwe, the cyclone cost Africa infrastructure worth more than a billion dollars.

Port of Beira, the main corridor for Zimbabwe, Zambia, Malawi and Eastern DRC, closed its doors.

“We closed the port two days before the cyclone hit to allow us time to prepare for it by reorganizing and removing all potential hazards. There was a lot of damage to the port. It took another two days to clean up and, at least, make the port accessible. The damage was several millions of dollars. We are currently in talks with insurance to know how much exactly. It will take time and money to fix everything up. We are currently improvising just to make sure business goes on,” says Jan de Vries, Managing Director of Port of Beira.

Jan de Vries, Managing Director of Port of Beira.

Before this disaster, Beira port controlled 60% of the country’s imports and 40% of its exports.

“We handle about 300,000 containers per year and about three million tons of general cargo per year and a lot of fuel but we had to put services on hold… On the first day, it was tough to go around. Nearly all the roads were blocked, to some extent, with trees, electricity cables and many things. There was a lot of destruction. A lot of roofs damaged, buildings completely collapsed. This place looked like a warzone,” de Vries says.

He says at the port, roofs, doors and warehouses were destroyed but they are lucky because it is currently low season.

“Electricity supply had been cut off but we are very impressed by the government because power is being restored. Technicians from all over the country are working hard. Major industries have been reconnected and a few residential areas are now being connected. Rail and road infrastructure is also being fixed. Although we have to struggle a bit, we have opened the port and business continues,” he says.

The president of the Confederation of Zimbabwe Industries (CZI) Sifelani Jabangwe says Beira is one of the major ports for the SADC (Southern African Development Community) region and its closure, no matter how short-lived, affected trade.

“Zimbabwe imports fuel and wheat through the Port of Beira. The closure caused a strain on the supply of these two commodities. We had trucks that were stuck in Beira for a number of days. The bigger impact is also on businesses located on the eastern sides of the country, like timber estates, fruit and tea producers, and even the diamond company, in that area, is now revising its targeted output because of the flooding,” Jabangwe says.

Henry Nemaire, the Chairman of the CZI Trade Development and Investments Promotion Committee based in Mutare, says most businesses have been severely affected and are looking for funding to rebuild.

“Some businesses are in areas that can’t be accessed with 30-ton trucks which they used to move their goods like timber… Power lines are cut off and there are issues around water supply systems which have been damaged. Smaller businesses were the most affected. Most of them are now trying to apply for loans to get new trucks and rebuild so they can get back on track,” Nemaire says.

Jabangwe agrees with Nemaire. He says it will be a long and harsh road to recovery.

“We are still waiting for reports from various companies affected by the cyclone which should start coming in soon so we can understand the actual loss that has occurred… there are already teams working with government to import the required maize to feed the country. We need additional support to make sure that people are catered for. We would need to feed people in that area for at least 12 months, which means a full-fledged program has to be put in place,” he says.

Cherukai Mukamba, a local smallholder farmer, says he relied on farming to make money. “I would sell maize and chicken, and sometimes cows, to make money to be able to take care of my children. A week before the cyclone, I had hired people who were going to help me with harvesting when the time came,” he says.

Cherukai Mukamba, a local smallholder farmer.

Like many in this area, Mukamba spent the night fearing for his life and that of his family.

“I was asleep and was woken up by very loud winds that I have never heard before. I went outside to look and right in front of me, was a bus rolling down the mountain. I could hear people scream and it crushed them before my eyes. I tried to go help but it pouring and I could see rocks fall off the mountain right into the fields and I had to go back in the house and say a prayer.”

The next day, Mukamba says he woke up to the biggest horror.

“Everything was destroyed; all my crops, livestock and part of my house. I went to check on the bus but didn’t find anyone inside. I heard that there had been three people in the bus and their bodies were found over 100km away. I couldn’t believe it. It is the worst thing to ever happen to us,” he says.

Mukamba’s story is one of thousands of stories in Zimbabwe, Malawi and Mozambique.

These countries have weathered many storms over the years like Cyclone Leon–Eline and poverty, but this massive natural disaster will go down in history books as the worst and southern Africa will bear its scars for generations to come.

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Economy

South Africa’s Informal Sector: Why People Get Stuck In Precarious Jobs

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South Africa has a jobs crisis. In the fourth quarter of 2018, 6.14 million people were out of work, an unemployment rate of 27.1%, which is one of the highest rates in the world, along with sub-Saharan African countries like Lesotho, Mozambique and Namibia.

South Africa’s labour market has another important distinction. Only about three million people who are working – about 18% of all employed (16.53 million) – are in the informal sector. That’s much lower than other developing countries. For example in India and Ethiopia, up to 50% of those with jobs are employed in the informal sector. The figure is as high as 90% in Ghana and Mali.

There are two schools of thought around the role and value of a country’s informal sector. Some argue that it’s an important alternative to the limited opportunities available in the formal sector; a survivalist strategy that allows those without much formal education to work and earn money. In addition, others argue, the informal sector is also an important space for entrepreneurs.

But there are some who disagree, arguing that employment in the informal sector tends to be poorly paid and precarious. A mere 20% of informal sector employees are hired permanently, compared to 70% of those in the formal sector.

Little is known about how many people transition between the two sectors, a phenomenon called “churning”. Addressing this knowledge gap is important for a number of reasons. These include the fact that informal workers may be spending some time in the formal sector, getting valuable skills and work experience to boost their chances at formal employment, with the hope that they eventually settle permanently in the formal sector, which would be good news.

Conversely, knowing whether there’s a high rate of transition from the formal to the informal sector would be cause for concern because it would suggest high rates of retrenchment and fewer formal job opportunities.

The data

We set out to understand “churning” between South Africa’s formal and informal sectors. To do this we analysed data from the country’s National Income Dynamics Study – a study that was conducted four times between 2008 and 2015 by the Southern Africa Labour and Development Research Unit based at the University of Cape Town’s School of Economics.

We found there was a lot of movement between the informal and formal sectors during these years. But there were very few instances of people making successful, lasting transitions from informal to formal sector employment.

This emphasises South Africa’s skills mismatch. The formal sector requires skills that those in the informal sector simply don’t have. More education and support is necessary to bridge this gap.

Our data were drawn from the National Income Dynamics Survey, which is the first national household panel study in South Africa. It examines the living standards of individuals and households over time.

By analysing data from the four waves of the study we were able to make some key findings about churning, and about the informal sector more broadly. These included:

  • Only 8% of those surveyed were inactive (7%) or unemployed (1%) in all four waves – that is, throughout the seven-year period. About 54% were employed in one to three waves, meaning they worked transitorily but not continuously;
  • only 3% worked in the informal sector in all four waves;
  • only 12% always worked in the formal sector during the seven years under review; and,
  • 8% of individuals worked throughout the seven years under review but transitioned between the two sectors.

These results clearly indicate that a high proportion of the labour force participants have been in and out of employment (which is not surprising, given the country’s high unemployment rate), some workers enjoy the privilege of always working in the formal sector, and most importantly, churning between the informal and formal sectors definitely takes place to some extent.

The findings also emphasised how precarious the informal sector is. For instance, 67% of those who started off working in the formal sector in 2008 remained there seven years later. This suggests that for those who initially secured work in the formal sector, retrenchment likelihood is not as high as perhaps anticipated. The retention figure in the informal sector was just 39%. Only 27% of those in the informal sector successfully transitioned to the formal sector.

The country’s many social inequalities were evident in the data. Black women without school leaving certificates aged between 25 and 44 years were most likely to remain in the informal sector. Highly educated white men living in the urban areas of Gauteng and KwaZulu-Natal provinces were most likely to successfully transition from the informal to the formal sector.

Filling the gaps

Given what we’ve learned from this research, how might the government and policy makers deal with those who “churn”?

First, the country’s education system must do more to produce skilled labour in the areas the economy requires. Formal firms could help here, by providing assistance and information on what skills are needed and how to develop these. This implies that strengthening the partnership between industry and universities is important, as this would help those who are able to access higher education.

Those who don’t go on to higher education, or don’t complete their secondary schooling, also need to be helped. The government should more actively provide workshops and specialised assistance to enhance entrepreneurship skills and advise small informal firms on growth strategies. These incentives will assist in their growth, long-term sustainability and successful transition to the formal sector.

In addition, larger, more established formal firms can also play a role by helping to develop and train informal sector workers and providing expert guidance to informal firms. This assistance can be incentivised through tax reductions and the prospects of a larger collective market via the informal sector.

Lastly, the government should continuously alleviate the numerous barriers to the informal economy. These include limited credit and training opportunities, poor infrastructure and the red tape that makes it difficult to start a business.

Moegammad Faeez Nackerdien Lecturer, University of the Western Cape

Derek Yu Associate Professor, Economics, University of the Western Cape

-The Conversation

The Conversation

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