Exploring the impact of the Covid-19 pandemic on the informal economy in Durban, South Africa.

Abstract

The informal economy in South Africa is predominantly characterised by the presence of women and the working poor. The flexibility in entry and exit in the informal sector enables the marginalised and those with low skills to gain entry in this particular sector. Informality is quite prevalent in developing countries as the economies have less economic diversification. The high levels of unemployment in South Africa influence the growth of the informal sector as a method of livelihood. The informal economy has minimal protection, exposing those operating in the informal sector to social and economic shocks. The eThekwini region is noted as one of the busiest hubs in South Africa and has a strong presence of informal traders. It is impossible to ignore the outbreak of the Coronavirus pandemic, which has caused a huge instability in the daily lives of South Africans. Against this background, the aim of this study was to explore the impact of the Covid-19 pandemic on informal workers in the eThekwini Region. This study has also identified and explored the various livelihood and socio-economic challenges encountered by the informal workers in the region. Methodologically, the study utilised secondary data analysis as a data collection tool, informed by the mixed methods approach. The study’s data is based on a survey conducted with 150 informal workers in eThekwini on the impact of COVID-19 on their livelihoods. The key finding reveal that the Covid-19 brought upon great hardship and challenges in the informal businesses and the livelihoods dependent on the sector due to the closure of economic activities during the height of the pandemic. There was insufficient distribution of Covid-19 relief funds by the government and the local municipality towards informal workers in the midst of being barred from earning a living. Additionally, there is a huge gap for social security in the informal sector in the eThekwini region. While the resilient informal workers in eThekwini region have returned to trading (despite being unable to recover post-Covid income), most aspire for better protection in the midst of social and economic shocks.