Informal sector contribution to sustainable livelihoods in Khayelitsha, Cape Town

Abstract

The aim of the research was to investigate the contribution of the informal sector to sustainable livelihoods using the case study of Khayelitsha township, in Cape Town. The study further examined factors affecting informal sector livelihoods in Khayelitsha in order to analyse policy gaps that impede the rationalisation of the informal sector. It also provides recommendations for improving the contribution of the informal sector to sustainable livelihoods. This research study was conducted using the case study of Mandela Park in Khayelitsha township, Cape Town. A qualitative research design was employed in the study. Structured interviews were used for data collection. The data was analysed using thematic analysis. Extant research states that the informal sector is commonly considered as a livelihood strategy because it offers manageable resources to fulfil basic needs (Susanto & Sudrajat, 2017). This study revealed that informal sector participants (street hawkers and small shop owners), use the income generated to support their respective families. Some have adopted the survivalist approach whereas others have aspirations for business growth and sustainability. The investigation reveals that inadequate responsive strategies, and an absence of policy support for the sector by the government affect business expansion and sustainability. A common sentiment among the informal sector participants was that the government is more interested in curtailing their business activities than in providing support. Overall, the research work revealed the need for South African policymakers to pay more attention to the informal sector in an effort to alleviate poverty and foster sustainable livelihoods. The informal sector must be an essential policy focus point in light of the fact that the sector was included in the South African national blueprint, the National Development Plan, where it is regarded as a critical component of economic development. In general, and in light of the increasing rate of unemployment in South Africa, policymakers need to rethink their attitude towards the informal economy and provide alternative interventions that can contribute towards poverty alleviation and employment creation. It is envisaged that the findings and recommendations of this study will contribute to the body of knowledge on the informal sector in South Africa. Further to this, the study will assist policymakers to identify constraints that are an impediment to informal sector policy support and implementation