The Covid-19 pandemic and subsequent lockdown have had a major impact on the informal economy and its participants, and while some measures are being taken to mitigate this, more needs to be done.

This was indicated by speakers on April 23 during an Institute for Poverty, Land and Agrarian Studies: PLAAS webinar, which examined what is happening in the country’s informal economy during the Covid-19 pandemic and the lockdown.

University of the Witwatersrand Faculty of Commerce, Law and Management professor Imraan Valodia said the lockdown had placed people in the informal sector in a liquidity position that seemed completely unacceptable.

Participants in the informal economy mostly require access to a certain site to earn their livelihood, and their income is on a day-to-day basis, with no spare cash on hand like large organisations.

While Valodia noted that such workers had been cut off from their work for understandable and obvious reasons by the lockdown, it had placed them in an “impossible dilemma”.

This entails having to choose between themselves and/or their families starving; or going out to earn a living, but thereby breaking the law and placing their own lives and others’ at risk. 

Therefore, he noted the argument for some sort of income replacement scheme as a pretty clear solution to solving the dilemma.

Valodia also noted another issue in the discrepancy between how society and regulations defined essential work in the formal and informal sectors.

For example, the regulations allow waste workers in the formal sector to undertake work, but those in the informal sector that are undertaking the exact same tasks are denied this because it is not included in the regulation’s definitions.

This issue was reiterated by African Reclaimers Organisation’s Luyanda Hlatswayo, who also used an example of reclaimers to highlight the discrepancy, and lack of recognition of workers in the informal economy.

He noted that the City of Johannesburg’s definition of reclaimers differed to that of the organisation, with the city requiring them to have some form of document and to participate in the organised waste economy. However, the organisation’s observations were that the majority were foreign nationals with no documentation, and that they worked mainly in the recycling industry, and were not included in the city’s waste management databases.

Therefore, while the city recognises a low number of reclaimers, the actual number is considerably higher and, therefore, the policies and regulations do not include and account for them, and they are unable to participate as essential workers, or to claim from relief funds and efforts.

Hlatswayo therefore emphasised the need to first deal with the policies and clarify these to include and recognise informal workers, before Covid-19 measures can be applied.

He also touched on another issue affecting those in the informal economy, that of a lack of education. He indicated that in his experience in the community, he had found that there was inadequate access to information about the complexity and severity of Covid-19 and the lockdown.

For both these issues, he emphasised the need for government to engage with organisations such as his, and others, that have been working on the ground in the informal economy for many years, and know how it operates.

Meanwhile, Black Sash national director Lynette Maart indicated that the social grant increases announced this week by President Cyril Ramaphosa were necessary to ensure that recipients did not plunge into starvation during the lockdown and pandemic.

While she commended the rollout of the Covid-19 Social Relief of Distress Grant, she indicated that this needed to be increased to at least R1 000.

Moreover, she noted that when implementing grants, major challenges were the onerous criteria to qualify for one, and the administrative burden of accessing this.

She therefore called for the process to be simplified, calling on the South African Social Security Agency to use existing databases for information.