ABOUT THE IEDF

Informal workers have often been deemed as vulnerable because they are unprotected and susceptible to violent abuse, harassment, and theft perpetrated by fellow members of their communities, criminal gangs and in some instances, local authorities. Their complaints often go unheard or are dismissed entirely. Therefore, since 2002, leaders within the informal economy,  supported by formal organised structures, worked tirelessly to organise and mobilize the informal sector, to form a national structure that would represent and protect the rights of all informal sector workers. In 2013, a national congress was held with the representatives from all nine provincial structures; leadership was officially elected, and the South African Informal Traders’ Alliance (SAITA) was eventually formed. Since its inception, SAITA has been the leading voice of the South African informal sector with their main aim being to advocate for the social protection of informal workers and the protection of their right to trade and do business.

It is estimated that about 30% of South Africa’s population is employed in the informal sector, and when the COVID-19 pandemic struck it resulted in a significant loss of jobs. Many people turned to the sector to seek alternative means of generating income for their families, however, the implementation of strict lockdown measures at the onset of the COVID-19 pandemic resulted in massive loss of earnings for informal workers and they were left with the choice of halting operations or shutting down their businesses completely. Informal businesses operating within townships and rural communities were the most impacted.

Informal businesses, by definition, are businesses that are unregistered, unregulated, governed by self-employment and therefore, offer little to no job security. The prevailing question emerged during the pandemic of how informal businesses could recover when affected by crises. Government made relief funding available, but to be able to access the funding there were prerequisites that informal businesses had to meet, such as possessing a tax clearance certificate; being registered and possessing a UIF number. So, SAITA were not only fighting for social protection of the informal sector, but they were fighting to obtain financial support for informal workers through government funding during this global pandemic.

In 2020, SAITA leadership decided that the organisation should begin looking at economic opportunities and finding means to attract potential investments – the structure of the SAITA Economic Development Forum (EDF) therefore originated from these discussions. The EDF division would be focused on accessing economic opportunities for the informal sector by attracting investment from companies that wanted to access informal economies. In November 2020, the SAITA Executive Council signed a resolution on the formation of the EDF, and in February 2021 the SAITA EDF was launched and officially begun its operations. The SAITA EDF, a team of subject matter experts with a passionate interest in building the informal economy, came together to determine how they could support SAITA initiatives.  These experts would agree to volunteer their services to SAITA.

SAITA EDF later recognised that there was a need for an increase in speed and efficiency in delivering much needed support services, and it was therefore necessary to operate on a full-time basis to execute in the areas needing immediate focus.  SAITA EDF’s services had been mainly geared to the informal sector which involved informal businesses such as street traders and vendors. However, there were other national structures that comprised of vulnerable workers with specific interests in specific sectors. National associations such as the South African Youth Council (SAYC), the South African Women in Mining Association (SAWIMA) and the Trade Union for Musicians of South Africa (TUMSA) to name a few.  These associations are among many that operate within the informal economy, but with different requirements and interests. A common feature for all national associations is the need for funding – they service businesses whereby economic opportunities are critical for business development and growth.  Under SAITA EDF, these structures were unable to be aided and supported as the services were limited to the SAITA organisation. Therefore, a meeting was held with SAITA leadership where it was decided that they would no longer operate as SAITA EDF. This led to the formation of an independent structure called the Informal Economy Development Forum (IEDF).

The first area of focus is to get informal businesses funding ready, with a specific focus on woman owned businesses. Financing is essential to achieve business growth and there are certain requirements businesses must meet to obtain access to funding. The IEDF will facilitate this process.

Another key area of focus as the IEDF is to stimulate entrepreneurial opportunities to combat the high unemployment rate which is prevalent among our youth.

In 2015, the International Labour Organisation (ILO) passed the Recommendation 204, which addresses the formalisation of the informal economy. Under R204, the transitional process of informality to formality presents an opportunity for stakeholders to collaborate with the informal economy; gain market access and to be part of their move towards formalisation.

The process of formalising a business requires support from corporate and government – each of these entities have targets they want to meet and a partnership with the IEDF helps them to achieve their objectives.

The IEDF ultimately wants to bring the informal economy, the private sector and the government together in a space where they can collaborate on projects and campaigns to stimulate job creation and improve the livelihoods of all South Africans.

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