Susanne et al. (2012) discuss the government’s initiatives towards the incorporation of the informal market into development systems. The authors allude that over the last years both national and local governments have recognised the value of the informal market in economic development (in African countries to be specific). Authors petitioning on behalf of the poor state that policy frameworks and spatial strategies focusing on the informal market must be developed without interfering with the potential for economic growth. However, the realisation of the challenges that the government faces in the formulation of these frameworks and spatial strategies is still a widely debated topic. The debate entails the subject of spatially inclusive and supportive frameworks. These frameworks should recognise the value and functionality of the informal market and the people working in the field. Lema (2013) in in his journal titled ‘assessment of the informal sector and its impact on the economy in Tanzania: the case of Arusha Municipality’, highlights the contribution of the informal economy (SME’s and SMME’s) to the economy of Tanzania. The research mentions the policy inclusiveness of the informal economy, stating that the government developed a national policy that aims at triggering the potential capabilities of SMMEs via the private sector. Literature claims that the African continent is very concerned about the welfare of the poor and takes a ‘hands on’ approach with the improvement of its economic platforms, although it struggles to reach its desired goals and objectives with regards to the informal market’s growth and sustainability.
88 3.8.1. Informal markets in the South African spatial context
The post-apartheid era spatial frameworks were dependent on a design approach that was abstract, characterised by the use of nodes and corridors which became a standard form of South African planning (Todes, 2006). The approach was coordinated by the ideology of urban compaction which was focused on indicative guidance for spatial development. The author reveals that land use regulations and comprehensive planning were static and incapable of dealing with change. With the footprint of apartheid spatial planning was neglected and in the post-apartheid era planning still neglects the concept of the informal market. The current spatial framework planning in South Africa is thus still lacking, as various critiques outline (Watson, 2016; Todes, 2008; Harrison, Todes and Watson, 2008).
Literature debates that spatial frameworks are too utopian, contradicted by national policy, neglected in site decision making, and they do not align with land use management systems including infrastructure planning (Todes, 2006). However, the author reveals that some municipalities move beyond criticism towards plans closely related to both infrastructure and land use management approaches. Many spatial plans remain concept based, and planners need to obtain knowledge and understanding of urban economic space to see how planning relates to markets, including the informal market. Writers also suggest a strong incorporation of infrastructure planning, revealing that traditional planning attempts to bring into line infrastructure planning with land use planning and that infrastructure planning was intended to follow spatial planning (Biermann, 1998; Graham and Marvin, 2001). Charman and Petersen (2015) contend that the informal markets in townships are located throughout the townships, and the spatial pattern is irregular in that businesses are situated in what one would expect to be the prime business areas. Thus the authors argue that spatial frameworks should promote the township economy by coming to terms with the reality that already exists.
Scheba (2016), in the article ‘growing the informal economy: regulations and other obstacles to the spatial integration of informal enterprises’, states that official city policies declare government support for the informal market, and that national and local municipality by-laws contain spatial integration of the informal market in the city. The author suggests a more realistic and flexible approach that is inclusive and which will enable growth and transformation of the township economy and informal market (Scheba, 2016).
3.8.2. Legislation on the informal market’s situation
The Department of Economic Development and Tourism (DEDT) (2012) in the topic ‘policy for the informal economy of KwaZulu-Natal’ divulges the information that legislation
89 concerning national and provincial government areas of jurisdiction is ignored in the informal market. Responses to the informal market are instead unstructured policies and legislative interventions. The DEDT (2012) research states that the government only focuses on formal legislation for economic development at the national level. It discusses the creation of a spatial framework that supports economic growth in the informal market, the repealing of laws that limit governmental roles in regulating the informal market, and the research also talks about a policy framework that repositions the informal market into the country’s mainstream economy. Vermaak (2017), in the article based on social developments in the informal markets, states that the existing developmental polices struggle to bring about growth in the informal economic sector. Added to this, the informal economy is also characterised by tax evasion, illegal activities and corruption (Bernabe, 2002). Because the informal economy is not integrated into a formal framework it and is not properly regulated and aligned for development the, lack of economic growth is not unexpected. In some parts of the world the evidence of uncertainty within the informal economy has led to debates on development policy for this sector, and Vermaak (2017) goes on to expound on the importance of these policies and the types of development policies required for the sector.
In South Africa past policies, namely the Group Areas Act and the Native Land Act had a great impact on shaping the spatial features of the informal economy by influencing the migrant rate. These policies did not encourage the informal market to move into the urban environment or indeed even focus specifically on the market; they restricted any such activities in urban areas altogether and denied accessibility to infrastructure and resources.
With the abolishment of apartheid and these apartheid era policies, large numbers of migrants started moving into urban areas and establishing informal activities, without the guidance of the necessary spatial planning strategies and without the necessary infrastructure and resources to support their activities (Tengeh and Lapah, 2013). The abolishment of the previous policies and frameworks and the subsequent failure to replace them with specific new policies placed a heavy burden on the spatial form of cities and the current informal economy’s space, functionality and character. Vermaak (2017) mentions the development of the National Development Plan to rectify the situation but expresses uncertainty that the new framework will work sufficiently and effectively in attempting to increase the quality of life of all people.
3.8.3. Experiences in South Africa
South Africa, in a transformative phase, has aligned its resources to focus on instituting programmes for the development of the informal economy. These programmes are intended to deal with the previous discriminatory economy via deregulation and privatisation, with
90 capitalisation as the key factor to South Africa’s economic production mechanism (Vuslat, 2006). African people (Blacks) were the majority native group that were denied the right and privilege to utilise the available resources to make a livelihood suited for them. They were denied land, the right to operate formal businesses via wage and tax barriers, and were denied efficient and effective human development. The development they experienced instead was artificial as it did not improve their livelihoods and kept them stagnant, both socially and economically. This is because all development experienced was imposed on them by White superiors as an exploitative and oppressive strategy.
In order to eradicate this and to encourage Black people and promote wealth creation within African communities, the new South African government formulated programmes aimed at promoting Black owned businesses outside of urban townships. A new spatial planning approach was set in motion as businesses were directed and located in industrial parks and thus considered to be semi-formalised and apart from informal production activities. The spatial concept, with respect to the location of these businesses, has benefited the economic development within the semi-formalised sphere. The strategic spatial location, with its accessibility to the relevant support facilities and resources (provided by the industrial park) and within an environment that is deregulated, has had an effective outcome in reducing the existing developmental constraints. These constraints include a lack of capital, lack of accessibility and restrictive regulations. Now these businesses have access to new opportunities and benefit from the development of the surrounding environment. Vuslat (2006, p. 103 cited in ITC, (2003) states:
This initiative has created jobs with conventional informal sector activities and outlined the benefits obtained from a mutual relationship between the informal and formal sectors. This has also made way for the informal sector to see the competition as an opportunity to grow.
Interactions between the two sectors have increased, with the most effective approach of subcontracting being seen to be a beneficial outlet, increasing turnover and constructing a new platform for enterprises that are more complementary to the formal sector. Literature reveals that this initiative has consequently created a reliable income path with increased assistance and a spatial context within industrial parks (Vuslat, 2006).
91 3.8.4. Spatial patterns in urban areas
The South African government realises the configuration of the informal market and its importance in providing for the previously disadvantaged and the poor. The significance of the spatial pattern within South Africa is an issue as the post-apartheid government inherited the apartheid and colonial spatial planning (Skinner, 2008) and it is a difficult task to alter the spatial setting which is characterised by widespread segregation. It is a social-class based environmental setting, with poor residents on the outskirts of industrial parks/city centres.
The urban design is also unequally distributed and pavement and street space used for informal street trading activities is limited. Access to resources is limited. Currently, the South African government has a role to play in improving the livelihood of the poor by supporting the informal market through urban spatial configuration and deregulation, rather than providing tax incentives (Beall, Crankshaw and Parnell, 2002).
The inauguration of the new democratic government in 1994 set a new agenda to promote, encourage by encouraging, and support the Black community socially and economically.
Attempts to connect the isolated townships on the periphery of the cities, via transport and land use planning, need two critical subjects for adjusting the spatial fragmentation that exists in South Africa (Skinner, 2008). The goal is to try and dissolve the prospect of isolation of Black communities from the cities’ industrial and city centre opportunities.
Traders have been given the opportunity to access these strategic locations (with transport nodes and middle class consumers), however, they have not been included within the existing spatially planning frameworks in the cities. Although these traders have been given access, the process has not been inclusive, thus there is a need for them to be formally incorporated into areas of high congestion so that they may operate effectively (Skinner, 2008).