Assessing the challenges faced by informal street traders operating in Durban, South Africa

Purpose: The informal sector consists of all unregistered businesses operating as street vendors and home-based businesses. Although these businesses employ about 6 out of every 10 workers worldwide, they encounter numerous challenges in carrying out their daily operations. Therefore, in this chapter, the challenges faced by informal traders located in the Durban central district of South Africa’s Kwa-Zulu Natal province are investigated. Design/methodology/approach: This study employs the qualitative research approach utilising structured interviews to obtain data. The Snowball sampling method assisted the researchers to obtain the required data and was analysed using Content Analysis. Findings: The results shows that, lack of business space for trading and storage, lack of funding to expand business, poor hygiene and the lack of ablution facilities for traders as well as municipal harassment were the major constraints of the informal operators

Constraints to growth in informal sector activities and formalisation: A case study of Ghanaian slums

Background: Globally, people often migrate from rural to urban areas in search of employment. Lack of adequate employment opportunities in cities forced individuals to engage in slum informal economic activities out of necessity. Aim: The informal sector presently employed about 86% of labour in Ghana, contributing 42% to its gross domestic product (GDP). Various constraints held back the development of slum informal activities. Formalising the informal sector is advocated as a step to generate employment. This article investigated the dynamics of informal sector activities and formalisation among slum operators in Ghana, based on a survey in two major cities there. Setting: This article investigated the constraints that hinder the development of slum activities in Accra and Kumasi, two cities in Ghana, and examined the informal operators’ subjective well-being and their willingness to graduate to the formal sector, should the constraints be addressed. Methods: Data were collected by means of a questionnaire, administered to a random sample of 342 informal slum operators. Enterprise constraints are examined by using the principal component analysis (PCA) method and the likelihood of the informal operators’ graduating to the formal sector by using logistic regression. Results: The PCA identified six clusters as limitations, explaining about 77% of the variation in constraints. These related to a lack of business knowledge, credit access, tools and materials, security and social networking. The logistic regression results reflect that, of all the constraints, it is only when access to capital is addressed, that slum operators will move into formal activities. Conclusion: When people are happy in what they are doing, they are reluctant to move to the formal sector, despite incentives or interventions that address their enterprise constraints. Hence, slum operators and informal activities are unlikely to disappear. Nevertheless, policy-makers have to devise appropriate financing strategies for slum operators to help in their formalisation and growth pathways

Exploring the Motives for Operating in Ghana’s Informal Slum Sector

In the developing world, slums house a sizeable amount of the urban population and most slum inhabitants are engaged in informal activities. In Sub Sahara African countries this sector has historically contributed above 50% to non-agricultural Gross Value Added. Informal sector activities in Ghanaian slums employ a substantial amount of people, who on average earn about $8 a day, a figure which is above the poverty threshold of$2 a day. Most of these slum activity operators reside in slums whereas a sizable amount reside in formal housing, a phenomenon which has led to the growth of Ghanaian urban slums. To assist these slum operators grow and someday integrate into the formal sector, it is important to find out the factors that motivated them to engage in these activities in the first place. The study employed Exploratory Factor Analysis, on a sample of 344 drawn from the two biggest slums (Sodom & Gomorrah and Akwatia Line) in Ghana’s two major cities, Accra and Kumasi respectively. The results show a set of six clusters, explaining 61% of the variation in motives for slum activities. The avoidance of government regulation was found as the main motive for one’s involvement in slum activities. Other driving forces include the ‘luxury’ of working at one’s own time, making use of one’s talents and family relations, as well as the quest for earning a higher incom

Investigating the Deterring Factors for Youth Entrepreneurial Intention among Students at a South African University

Youth unemployment, which is a global phenomenon, is one of the main causes of poverty amongst the youth of South Africa. It has been observed that attaining a university qualification, no longer guarantees one an employment opportunity as the job market is highly saturated and cannot accommodate the thousands of young graduates churned out by universities each year. This leaves graduates with two options, either start a business or to remain unemployed and hope for an employment opportunity. This economic problem has led academics to inquire about what possible factors may influence young people to engage in entrepreneurship and what may turn them away from starting their own business. Although entrepreneurship has been purported globally as the springboard in facilitating economic participation among youth, they face many stumbling blocks during their entrepreneurial journey. The current study, therefore, sought to explore the factors that may deter youth entrepreneurial intention at a South African university. This is a quantitative research approach and data were collected using structured questionnaires from 247 participants and analysed using Factor analysis. It was discovered that lack of business management skills, risk and economic difficulties, financial challenges, lack of a support system, uncertain future and difficulty in finding partners, bureaucracy and crime as well as lack of relevant information were the factors deterring prospective young entrepreneurs from engaging in entrepreneurial activities

The Role of Gender and Personal Traits in Determining Business Performance of Ghana’s Informal Slum Businesses

Purpose: It has been established that most informal businesses in Ghana are performing well and earn incomes higher than the poverty line threshold. The current study, therefore, aims at ascertaining how one’s gender and personal traits (locus of control) affect business performance. Design/methodology/approach: To this effect, cross sectional quantitative data was obtained from 344 participants in two informal settlements in Ghana using a structured interview. The independent sample T-test was used to analyse the data. Findings: It was found out that there was no significant difference between the performances of male or female owned businesses. Furthermore, it was also discovered that there was a significant difference in the business performance of operators based on locus of control