Document Type

Other Report

Publication Date

2015

Department

Balsillie School of International Affairs

Abstract

While increasing attention is being paid to the drivers and forms of entrepreneurship in informal economies, much less of this policy and research focus is directed at understanding the links between mobility and informality. This report examines the current state of knowledge about this relationship with particular reference to three countries (Mozambique, South Africa and Zimbabwe) and four cities (Cape Town, Harare, Johannesburg and Maputo), identifying major themes, knowledge gaps, research questions and policy implications. In many African cities, informal enterprises are operated by internal and international migrants. The extent and nature of mobile entrepreneurship and the opportunities and challenges confronting migrant entrepreneurs are under-researched in Africa in general and Southern Africa in particular. Their contribution to the informal economy and employment generation in countries of destination and origin are similarly undervalued by policy-makers. Informal migrant entrepreneurs are often viewed with suspicion, if not hostility, by citizens and officials. In part, this is because central and municipal governments see them as increasing the growth of an informal sector that they want tamed, if not eradicated. Also, it is because they are often incorrectly seen as all “illegal immigrants” and, by definition, engaged in illicit activities. And, in countries with high levels of xenophobia such as South Africa, migrant-owned businesses are a visible and easy target for xenophobic attacks. Violent attacks on migrant entrepreneurs and their property have become extremely common in many South African cities.

South Africa’s relatively small informal sector is accompanied by very high unemployment levels. Many commentators therefore feel that the South African informal economy ought to be much larger than it is. Given the apartheid-era repression of informal entrepreneurship, the key question may not be why the informal economy is not larger, but why, after decades of repression, it is as large and important as it is. One of the reasons is that the informal economy is not just populated by South African citizens. Migrants from other African countries play an increasingly important role in the sector and experience considerable success, something that eludes many locally-owned start-ups. Informal retailing has been the major focus of economic research on different sub-sectors of the informal economy. Particularly common are small-area case studies of survivalist street trading (particularly of food and handicrafts) in the inner city. The spaza shop sector in low-income residential areas has also been studied. Other informal entrepreneurial activities that have attracted attention include the minibus taxi industry, waste collection and recycling, shebeens, trade in medicinal plants and poverty tourism.

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