Investigating the socio-economic profile of informal street traders in Cape Town's central business district : a COVID-19 perspective

Abstract

Informal street trading, one of the most visible and prominent activities in the informal sector, is an important source of livelihood that entails various financial and social benefits. However, the livelihood of informal street traders is constrained by various challenges and exogenous shocks – of which COVID-19 is a prime example. This qualitative study used the Cape Town CBD as a descriptive case study to obtain a more in-depth understanding of the location-specific dynamics, benefits and barriers associated with informal street trading. The primary objective of this study was to use the framework and understanding provided by Amartya Sen’s capability approach to investigate the factors that have a positive and negative influence on the ability of these traders to generate a sustainable livelihood. Throughout the study, a particular focus was placed on the impact and hardships associated with COVID-19. Respondents identified camaraderie with other traders, interactions with customers and high levels of foot traffic as the key factors that have a positive influence on their work and that further enhance the positive outcomes associated with informal street trading. On the other hand, several respondents identified insufficient infrastructure as significant constraints, which are especially evident during wind and rain. Other prominent challenges include crime and corruption, volatile revenues, rising costs, increased competition, insufficient capital and access to formal financial institutions, and limited or no support. Many of these challenges are further aggravated by the uncertain trading environment as a result of the current COVID-19 pandemic. COVID-19 and the associated lockdown regulations led to unexpected and prolonged closures of informal street trading enterprises, characterised by no income, no or minimal remittances, and exposure to food insecurity. Several of the adverse effects continued even after the traders were able to gradually resume their activities after the initial hard lockdown. The results also question the theoretical shock absorber function of the informal sector.