Informal economy under spotlight

2011-10-05 00:00

THE development of the informal economy as part of government’s job creation strategy is under the spotlight.

Yunus Carrim, Deputy Minister of Co-operative Governance and Traditional Affairs (Cogta), said yesterday his department is looking into developing model regulations on informal trading, including hawkers and “spaza shops”.

Carrim spoke about good practices in the local economy at a seminar organised by the South African Local Government Association (Salga) on a project it runs to enhance good practice in municipalities.

This year the theme was local economic development (LED).

He said that LED is not sufficiently catered for by the National Planning Commission (NPC) or in the New Growth Path

However, he added, Cogta is engaging with the relevant departments to ensure that this happens.

“It seems to me that all three spheres of government do not take LED sufficiently seriously,” said Carrim. He acknowledged that his department should be doing more.

Carrim said that Cogta recently undertook a review of LED in the country. Among the various challenges identified were:

• A lack of understanding of what local economic development was or its value

• Significant differences about the appropriate geographical scaling of LED

• A lack of skills

• Failure of political leadership

• Private sector distrust of government

• Inadequate funding

• Weak co-operative governance

Carrim said that as a result there are various proposals to motivate and lend support to municipalities to become more active in LED and include it in their integrated development plans.

“Municipalities are being encouraged to set up LED units and LED forums. The department is looking into establishing a business development forum in each district to facilitate LED, especially in the rural municipalities. Cogta is also looking into mobilising SMMEs [small and medium enterprises], co-operatives and emerging farmers at district level,” said Carrim. It is important that LED is more effectively implemented in rural areas. If we don’t develop the rural economies, we will not be able to stem the continued migration of people from rural to urban areas,” Carrim said.

• nalini@witness.co.za

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