Informal traders improve skills

2016-02-25 06:00
Lindiwe Zulu, the minister of Small Business Development giving certificates to informal traders, recently. PHOTO: Supplied

Lindiwe Zulu, the minister of Small Business Development giving certificates to informal traders, recently. PHOTO: Supplied

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The City of Cape Town’s Economic Development Department, along with other role players, gave informal traders in the city a boost through a programme aimed at developing their business skills.

The first graduates from the Informal Traders Upliftment Project were awarded certificates two weeks ago.

Cape Town informal traders were given a hand up through the Informal Traders Upliftment Project (ITUP) which saw 116 informal traders from around the city, including Nyanga, Khayelitsha, Manenberg and Athlone, complete a six-week development course aimed at growing and developing their business skills.

The City’s Economic Development Department collaborated with the Department of Small Business (SBD) and the Wholesale and Retail Sector Education and Training Authority (W&RSETA) to identify traders and create awareness of the ITUP.

ITUP forms part of the National Business Upliftment Strategy to include the informal economy in their national economic growth plan.

The strategy aims to grow informal business and the traders so they can participate in the formal economy, thus transforming the lives of those in this sector.

‘Informal traders are an important component of our economy. The City recognises their contribution and this programme helps them to develop skills in terms of financial management, understanding the importance of customer care, and marketing their businesses,’ said the City’s Mayoral Committee Member for Tourism, Events and Economic Development, Councillor Garreth Bloor.

JoyousThe City’s Economic Development Department is currently pursuing ways of collaborating further with the SBD and W&RSETA to broaden the programme and its accessibility in Cape Town.

‘It was a joyous occasion when the 116 informal traders from around Cape Town were awarded certificates of completion after taking part in the programme. As a City we are committed to supporting informal traders and equipping them with the necessary business skills,’ said Councillor Bloor.

The second programme will roll out in April 2016.

About 161 000 individuals (11,3% of the total workforce in Cape Town) are employed in the informal sector. It is estimated that without informal sector income, the poverty rate in the city would be 25,1%. Once its income contribution is taken into account, the poverty rate is reduced to 20,6% (a reduction of 4,5%). The 4,5 percentage-point reduction in Cape Town’s poverty rate is equivalent to pulling 186 000 individuals out of poverty.

Great contributionAlthough the aggregate contribution from this sector to the GDP may be small, the aggregate improvement in well-being is large. While almost 40% of informal sector workers are employed in the wholesale and retail business sector, a significant proportion of workers are also engaged in manufacturing (10,2%), construction (13,1%), financial services (10,9%) and community services (16,9%). If the informal sector was viewed as a conventional economic sector, and based on a conservative estimate of about 10% of the workforce, it would be the fifth largest employing sector in the city, just below manufacturing (11,96%) and above the construction sector (9,52%).

The informal economy is represented by a diverse array of economic activities including financial services, healthcare, retail in food and beverages, recycling, maintenance and repair of motor vehicles, and the repair of personal and household goods, to mention just a few.

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