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Abstract
The informal sector in South Africa can play a pivotal role in alleviating the high levels of unemployment due to the potential for increased employment creation that it has exhibited in the Hilbrow area of Johannesburg. According to Schraader (2007:2), a series of linked constraints hamper informal traders to develop in South Africa. Insufficient capital, shortage of qualified personnel, government policy, and high transport and power costs cause serious inefficiencies in the informal trade sector.
Key Words: Challenges; Informal Traders; Unemployment;; Informal Traders; Capital; Qualified Personnel; Government Policy; Transport; Power Costs, Inefficiencies
INTRODUCTION
The South African government has been encouraging people for over past years to start up their own businesses to create job opportunities and to accelerate economic growth. The numbers of informal traders in South Africa have grown significantly. Informal traders have attracted increasing attention in recent years in light of concrete evidence of the importance of new business creation for economic growth and development (ACS, Arenius, Hay and Minniti, 2005).
The call for unemployed people to start their businesses was to address the current unemployment situation in the country. However, there is a belief that both factors are crucial to provide a comprehensive understanding of informal traders in a particular context, consistent with the integrative multilevel research design advocated by Bruin, Brush and Welter (2007: 323). It is apparent that the call for unemployed people to start their businesses was embraced by informal traders as a number of them are now engaged in business activities. There are various challenges facing by informal traders, some of the challenges are: financial related and lack of managerial skills. This study looks at the challenges facing informal traders in the Hilbrow, area of Johannesburg.
Objectives of the Study
The objectives:
· To determine what challenges informal traders are facing in Hilbrow to start their own businesses;
· To determine the needs of informal traders with regard to support, training and development;
· To determine the impact of these challenges on sustainability of the business; and
· To make recommendations to deal with the challenges which informal traders are facing.
LITERATURE REVIEW
In an address to the National Council of Provinces (NCP) in 2003, President Thabo Mbeki first introduced the idea of South Africa being...