The informal economy as a catalyst for development in the Raymond Mhlaba Municipality

In South Africa, the informal economy is expected to play a significant role, mainly because informal employment is relatively high in comparison to formal employment. The South African economy is characterised by a sluggish pace of job creation in the formal sector and a high rate of unemployment. The literature reveals that in recent years, small towns in South Africa have become key hubs for service delivery and the economic activity involved in the receipt and processing thereof. As such, these towns are viewed as essential to the implementation of the developmental local goals of South Africa’s government. In relation to this view, the established strand relates to the small-town growth and development potential with the core theme of local economic development. Raymond Mhlaba informal trading has become an economic alternative for some community members. In order to ensure the optimal efficiency of informal businesses there is a need to understand the needs of informal traders and the contributions made by the informal sector in their lives. There is a tremendous potential within the informal business sector for it to become a major role player in sustaining the livelihoods of many people, but the efficiency of these informal businesses needs to be improved by removing some of the constraints which hinder their effective functioning. These constraints include crime, transport, municipal services and financial support with the assistance from Local Eco-nomic Development (LED) to enhance a competitive, increasing sustainable growth and to ensure that growth within a local area is inclusive. This research therefore assesses the role of the informal economy as a catalyst for development in the Raymond Mhlaba Municipality. In addition, the findings will be useful for local municipalities within the district to fully comprehend the views of municipal legislations and informal traders with regard to policies and practices, as well as their impact on enabling the development of local municipalities through the informal economy. Lastly, the research findings will also enrich the knowledge base on informal trading in local municipalities and may be useful information regarding the development of a more sustainable regulatory approach to informal economy in Raymond Mhlaba Local Municipality