An informal bussiness sector perspective on local economic development in Buffalo City Metropolitan Municipality

Abstract

The advent of globalisation coupled with the recent (2008-2009) global financial crisis has caused a decrease in formal employment everywhere in the world in particular the developing nations. This article explores whether the informal business sector in Buffalo City Metropolitan Municipality (BCMM) is prioritised as a contributor in the municipality’s local economic development strategy. A survey questionnaire was administered to informal business actors in BCMM and semi-structured interviews were conducted with BCMM managers in the Business Development and LED Directorates. The study found that the municipality acknowledges the contributions of the informal business sector in local economic development from a job creation (self-employment) and poverty alleviation perspective. The lack of financial support, the absence of a clear policy or strategy dedicated to the prioritisation of the needs of the informal sector, and the lack of designated trading space for the informal sector specifically, however, hampers the informal business sector’s optimum functioning.