Benefits and limitation of informal trading in promoting sustainable local economic development in the Intsika Yethu Municipality

The informal sector refers to all economic activities by workers and economic units that are not covered or insufficiently covered by formal arrangements which can be carried out across all the sectors of the economy both in public and private spaces. The study was conducted to determine the benefits and limitation of informal trading in promoting sustainable local economic development in the Intsika Yethu Municipality. South African municipalities for various reasons fail in providing local economic development friendly environment and more developmental and inclusive informal economy policies and by-laws. The objective of the study was to assess the benefits and challenges which might hinder the maximisation of benefits in the sector. The literature was reviewed with the aim to integrate published academic data on the benefits and limitations of informal trading in promoting sustainable local economic development. Data for the study was sourced from the literature and questionnaires administered to respondents who were selected by means of a purposive sampling technique. The respondents from which data was collected were 18 and a qualitative research approach was used as a main research methodology. The responses obtained were subjected to content analyses. The main findings of the study include; informal traders are uncoordinated, informal traders are faced with challenges which hinder their success, majority of respondents see benefits from informal trading, the informal sector of responds to triple social ills and all respondents started up businesses due to the inability of the formal sector to create job opportunities that are permanent and enough for everyone. In response to the findings about the main recommendation made is the improvement of communication between government and informal trader for the sustainability of municipal programs