Empowering the poor via local economic development: analysis of the Long-Street Kiosk (micro-enterprise) project in Cape Town.

Abstract

The National Development Plan (NDP) recognises the relevance of the informal sector and its value, and stimates that the sector will create about two million new jobs by 2030. Although few empirical studies have been conducted on informal trading in the past, the Quarterly Labour Force Survey conducted by Statistics South Africa portrays a relatively bleak future for the South African economy. This projection is based on the current and bothersome unemployment rate of more than 27%, along with the current youth unemployment rate that exceeds 55%. This article explores the case of a 'transitional' informal enterprise support project aimed at micro-enterprise development, wherein ten informal traders in Cape Town, South Africa, took occupancy of provincial government sponsored kiosks. The Long Street Kiosks (LSK) offer ten traders per year, a unique trading opportunity in the CBD free of rent and service charges, with access to a unique and potentially large market. In terms of the analysis, we adopted a qualitative research approach, which involved a combination of two dimensions, namely, desktop (content analysis) and interviews/focus group sessions. Findings indicate that a number of limitations and shortcomings exist in the provincial government intervention strategy and its use as a model for LED. Thus, challenges of diversity and the impact of social, political, and economic realities in LED were ignored in the implementation. The transition from the informal to formal economy is also about physical space, which requires the mainstreaming of spatial challenges. Findings, therefore, provide new insights on the complex relationship between the informal and formal economies, and their relative potential for addressing the challenges of employment and economic growth in South Africa as a whole.