An exploratory study on the Somali immigrant's involvement in the informal economy of Nelson Mandela Bay

The informal economy in South Africa and other parts of the continent is a safe haven for many who are unable to find jobs in the formal sector of the economy. In the case of South Africa, it is not only the nationals of the country who are striving to survive and generate their income from this sector. Since 1994, the country has experienced a huge influx of immigrants from other parts of the continent some escaping from dire living conditions in their home countries and looking for better life opportunities while many others were forced to migrate from their own countries as a result of political unrest and lack of stability and security. Among these later example is the Somali community who are the subject matter of this study. Many of these mainly African immigrants including Somalis got involved themselves in the informal sector of the South Africa. This has increased the competition in this sector and caused clashes between South Africans and immigrants who were also involved in the sector. This study examines the involvement of the Somali immigrants in South Africa’s informal sector. The study is exploratory in nature and tried to find the surrounding factors that impacted on the involvement of Somalis in the informal economy of Motherwell. The study has found that Somalis who arrived in Motherwell are generally young unmarried men who were attracted to the area mainly because there were affordable business opportunities in the township. Somalis financed their businesses through various resources including their savings from working while working inside and outside South Africa and from the contributions by their families and friends. Despite facing high levels of crime where many Somalis were killed and their property looted, they are still determined to stay in the township. This can be shown by their high level of savings and their intention to invest in the township. Although this research does not aim to be comparative in nature, personal and business characteristics of Somalis as well as South Africans who are also involved in the sector vii were compared. Because of this comparison, it has became clear that though price is an important factor in the business competition between the two groups, it is not the only factor, neither the most important, that creates friction and the shift of loyalty of customers from one side to another. Quality of service, the number of the people working in the business, responsibility towards the area the business serves, the strictness or the leniency towards customers who want to buy but are short of money and many other factors created a friendly atmosphere between the businesses run by the Somalis and their customers. The study showed that some of the Somali as well South African business owners were of this view. Although the vast majority of the Somalis have a minimum level of education, they still contribute positively to the economy of the township and the greater Nelson Mandela Bay. This is done through renting business premises, paying both direct and indirect taxes and taking the business services to remote areas of Motherwell. The study suggests that there is a need to sooth the relationship between the two groups particularly between Somalis and South Africans who are involved in grocery businesses through meetings, seminars, and other get-together activities. This can be done by South African Police Service, Somali Association of South Africa in Korsten, community elders from both sides and other concerned government institutions as well as the academic institutions particularly Nelson Mandela Metropolitan University. The business skills of both groups need to be uplifted in order to maximise their profitability and contribution to the people in the area