South Africa’s Informal Economy: Reframing Debates in National Policy

In common with much of the global South, the policy environment in South Africa surrounding the informal economy is highly significant for local development futures. The objective in this paper is to unravel the shifting trajectories and reframing of national government policy towards the informal economy in South Africa since the 1994 democratic transition. It is disclosed that, notwithstanding a rhetoric of support for the informal economy as part of small, medium and micro-enterprise (SMME) policy, a national policy framework for supporting the informal economy in South Africa was initiated only in 2012. A pro-development narrative is provided in national policy documents and is accompanied by the progressive roll out of support interventions seeking to address certain of the key challenges of informal entrepreneurs. The most controversial aspects of the new policy framework surround initiatives introduced in proposals to ‘improve the regulatory environment’ for local informal entrepreneurs. What exists within national policy is a pro-development approach for South African informal entrepreneurs linked to an anti-developmental agenda towards migrant entrepreneurs. Arguably, South Africa is far from having established a set of inclusive policies towards the country’s informal economy and a suite of interventions that acknowledge its contributions for national economic development.