While the informal sector is the ‘forgotten’ sector in many ways, it provides livelihoods, employment and income for about 2.5 million workers and business owners. One in every six South Africans who work, work in the informal sector. Almost half of these work in firms with employees; these firms provide about 850 000 paid jobs – almost twice direct employment in the mining sector. The annual entry of new enterprises is quite high, as is the number of enterprises that grow their employment. There is no shortage of business initiative and desire to grow. However, obstacles and constraints cause hardship and failure, pointing to the need for well-designed policies to enable and support the sector, rather than suppress it. The same goes for formalisation. Recognising the informal sector as an integral part of the economy is a crucial first step towards instituting a ‘smart’ policy approach.
Chen, Martha. "The South African Informal Sector in International Comparative Perspective: Theories, Data and Policies." The South African Informal Sector: Creating Jobs, Reducing Poverty. Ed. Frederick Fourie. HSRC Press, 2018.