Columnist calls for integrating South Africa’s informal sector into the economy — TimesLIVE
In South Africa, Mtiya Dynamics executive chair and Nelson Mandela University research fellow Thami Mazwai called for the informal sector to be integrated into the country’s mainstream economy. In a column for TimesLIVE, he argues that ignoring hundreds of thousands of people who produce and sell various goods comes at a high cost to the South African economy.
Informal economy
According to Mazwai, an approach that views the informal economy as a foundation for the growth of Africa’s national economies is beginning to gain support. The issue was raised at the Africa Pension Fund Institute indaba in Cape Town. Young professionals from five African countries, including South Africa, also launched the Rooted Insights Africa initiative.
The author referred to the position of former World Bank economist Justin Yifu Lin, who stressed that economic development should be based on a country’s natural resources, including its human potential. In Mazwai’s view, China integrated small businesses and the informal sector into the mainstream economy through various strategies, including “sharing economy” approaches.
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Support for small business
Mazwai noted that in 2010, then Minister of Trade and Industry Rob Davies tasked a group with reviewing state support for small businesses. The group recommended creating a separate body under the presidency to coordinate programmes of different ministries. Instead, under President Jacob Zuma, the Ministry of Small Business Development was created, which, in the author’s view, had no authority over other departments.
The author also cited data from the Finscope 2025 Survey: 23.2 million South African residents live on less than 1,400 rand per person per month, while more than 18 million, according to the study, borrow money for their next meal. Mazwai believes that small-business support programmes and the enterprise and supplier development component of the broad-based black economic empowerment policy have not delivered sufficient results. He called the integration of informal entrepreneurs into the mainstream economy one of the priorities of state policy.
