Informal business a way to go


Most informal businesses are found in rural areas, small towns and downtown sections of cities. Informal businesses are usually self-owned by the unemployed.

By Siphelo Dyongman

Informal businesses have been a breadwinning entrepreneurship for unemployed South African residents for a long time. Statistics SA has recently shown that 23.9% of the country’s labour force is unemployed.

Informal business is self-monitored, not included in the Gross National Product, not taxed and not registered as a business under South African Law. The communications officer of the Eastern Cape’s Department of Labour, Vuyokazi Mbanja, said the department deals with the employee/employer relationship and informal businesses do not generally have that relationship; hence the department does not cater for them by any means.

Mostly are situated in rural areas and downtown sections of cities. Informal businesses are usually self-owned by the unemployed and sometimes uneducated citizens. However, some people prefer to run their own businesses.

Mr Sithembele Mahanjana, a 27 year-old from Ziphunzana village, said: “I am an uneducated citizen and I do this business by choice as it is easier to manage my own rather than being employed and instructed for hard labour with less income for my whole family.”

Lumka Manquma, a Mdantsane resident and a single mother who sells fruits and vegetables, said: “I started this business as a result of unemployment in 2003 with a lousy R100. I do not regret it because ever since I have never been to cash loans. I manage just fine and even contribute to my family’s merchandise even when there’s a traditional ceremony back home I contribute well. It is better to do things on your own. ”

She further said she does everything on her own, from buying the vegetables and fruit to maintaining her business on the daily basis. Her average gross income day is close to R350 during rainy days and approximately R450 a day during pay-days.

Unlike the formal businesses, informal businesses do not follow legal requirements, standards and procedures. It reduces poverty as their owners support themselves and offer pierce jobs to the needy unemployed. – WSU-SNA

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