TOPIC: INFORMAL SEC.

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 1. HYPOTHESIS.

The informal sector plays an important role in alleviating poverty in the

Mukula area.

 The informal sector plays an important role in increasing the

economic development of the above mentioned area (Mukula) as it
is the main source of income enabling them to can meet their basic
needs and wants thus making it possible for them to survive while
in informal sector.
 It also decrease unemployment in people of Mukula,they’ll earn
and still use the money to meet their needs and wants and also
allow the employees to balance their family responsibilities for
survival
 Informal sector helps in the development of intreprenual skills thus
increasing the chances of the person to economically development
since he or she will by all means to invest more in business and in
return more money will be made.

2.MAP.

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 3.BACKGROUND INFORMATION.

Mukula is situated in the far north-east part of the Limpopo province

bordering the Republic of Zimbabwe in the North and the Republic of
Mozambique in the East. It is under Vhembe East District and it is
located near the influence of Mutale River. It is situated 25km or 11 miles
east of Thohoyandou. It is located in a fertile region where farming is
partially practiced. Its estimated population is ±25000 with high rate of
unemployment and many people in informal sector for survival. The
annual average temperature is ±30 degree Celsius and precipitation is
about 369 mm.

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 4: DISCRIPTION OF THE TOPIC:

INFORMAL SECTOR.

• Definition
Researchers who are concerned with the informal sector face
difficulties in defining it.This is also reflected in the variety of names
used to identify it-the
shadow,hidden,black,underground,gray,clandestine,illegal,unreported,
non-cash and parallel economy.
According to Geography Platinum grade 12 textbook Informal sector is a
business that is not registered, it is a business operated by selfemployed
people with an objective of earning a living. It is dominantly
characterised by insecurity from criminal and natural disaster .Activities
within the informal sector include sewing and street vendoring.

According to Geography Focus textbook Informal sector is characterised

by so many names such as street vendor, black market, casual work,
hidden sector, irregular sector, etc. Informal sector workers do don’t pay
tax as they are self-employed and unskilled workers earning little
amount of money. It has no access from intuition or other support and
protection.

• Causes
• Unemployment.

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According to Excel in Geography Grade 12 Study guide, a slump in the
economy has caused large scale job loses. Mechanism of the economy
has resulted in job loses forcing people to seek casual work. People had
to come with a plan of earning a living, they started their own
businesses.

• Lack of education.

According to Excel in Geography Grade 12 Study guide, it is hard for

uneducated people to find jobs because they don’t proper qualifications
required for a particular job. They have to start small businesses so that
they can earn a living so they can provide for their families.

• Poverty and lack of funding.

It was said by Ms Judith Luruli from Mukula informal sector that being
poor or inability to sustain their family needs and wants forces them to at
least start business with which in her case had to be an informal
business because she didn’t not have much to start a business but she
was depending on her kids grant as a capital.
• Importance.
According Excel in Geography Grade 12 Study guide, Infomal sector
provides a source of income to those who cannot find a job on the
formal sector. It also reduces crime by creating employment to
unemployed people and goods can be purchased at a lower price. It
plays a vital role in economic growth.

• Challenges faced by people in informal sector.

According Excel in Geography Grade 12 Study guide, Informal traders

are frequently harassed by local authorities as informal sector activities
are considered to be illegal. Hawkers do not have access to proper
trading facilities therefore they are forced to rade on bare pavements
and exposed to the elements of the weather such as rain and high
temperatures. Informal traders do not have skills and education required
to enter the formal economy.

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Also from Excel Grade 12 Study guide, Banks are reluctant to grant
loans to informal workers hence making it difficult for them to expand
their businesses into formal trading. Informal traders borrow money from
money lenders that charge high interest rates thus they are always in
debt and have funds to improve their business operations. Local
markets may be small and the high cost of transport of goods to large
distant markets makes it impossible for the traders to enter such
markets.

According to Platinum Grade 12 text book, Excessive government often

state rules and requirements for permits and business licenses hamper
informal businesses. Government regulations, particularly on how public
space is regulated but also regarding issues such as liquor licensing
cause problems for informal traders. There is limited access to training in
areas such as business skills, technical training and other basic
education and training. There is also limited access to technology.

1. Data collection.

1.1 Statistics.

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 A bar graph showing number of people in
100 informal sector in Mukula area.
90

80

70

60

50

40 no of people

30

20

10
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2021 2022 2023 2024

Sales in Mukula informal sector

Vegetables
fast foods
sewing and barber
cellphone accecories

1.2 Pictures of informal sector.

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2. QUESTIONAIRES.

We visited the 5 informal markets in Mukula and asked 5 same

questions which are:

a) When did you start selling in informal sector?

b) What made you have an idea of being a vendor?
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 c) What are the main challenges that you face every day.
d) And what do you think can be done to reduce these challenges.
e) And lastly, how did you know market improved your standard of
living.

2.1 Mrs Musetha from Mukula of cell phone number 0661259257

answered the following:

a) I opened this market just after the opening of this U-Save store in
2011, I have 14 years’ experience.
b) Since I’m not educated my kids lost their father in a car accident, I
had to look for a way of making money so I can meet my kid’s
needs.
c) The only main challenge is that the income is unreliable resulting
in loss in what we have invested.
d) I think to reduce this; local authorities should provide area for
trading and improve skills through leadership programmes.
e) I was able to meet my kid’s needs and wants and also I had
balance left after I bought more products to sell.

2.2 Mrs Maambavhanwe J from Mukula of cell phone number

0649738473.

a) That was in 2021 June.

b) I started selling because I couldn’t afford my diabetes pills since
those I get from public clinic are not enough.
c) Since we do not have proper premises we are always exposed to
weather which is not good for our health
d) I think the government should at least provide a working\selling
premises to keep our business going and storage for the goods we
sell.
e) Everything has changed, I’m now able to afford my medicals and
also this place gives me a piece of mind.

2.3 Ms Madzhie Mulalo from Mukula of cell phone number

07226865576.

a) I started selling this year, 2024.

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 b) This was because I had no job because I’m not educated
and also I can’t read or write.
c) We quit as sometimes fail to buy products after loss because
lack of funds or aid to keep the business running.
d) We should be given access to bank loans or funds or aids
should be given to people in informal sector.
e) I always managed and still manage to buy clothes and food
for me and my family.

2.4 Mr Masakona ML from Vondwe of the cell phone number

0822381764.

a) I opened this informal business in 2016.

b) My child had to go to the university and he had no bursary so I had
to make plan for him to continue with his studies.
c) Other than being exposed to criminals, we also live in fear that we
may be evicted by the local authorities.
d) We should be given proper infrastructures for our business and
safety.
e) I paid all the fees and book allowances throughout that year till he
get funded.

2.5 Mr Luruli W from Ngudza of cell number 0732341567.

a) I started sewing in 2020.

b) I was fired from work after being blamed of stealing.
c) We are exposed to extreme weather conditions.
d) Infrastructures for our businesses should be built by the
government.
e) I always manage to buy food and all other required products by my
family.

3. ANALYSIS AND SYNTHESIS OF DATA.

 The informal sector alleviates the local economic development of

Mukula area with a percentage of 10.32%.

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 • The number of people in informal sector in Mukula is only ±25%
through which they are selling fruits, fast foods, selling cell phone
accessories and some in barber.
• This simply means the number of people in formal sector and
those who don’t work is only ±75%.
• Informal sector reduces rate of unemployment effectively.
• Entrepreneurs gain skills which they can use in informal sector.
• The people in informal sector are more likely to be women who are
not educated or who are illiterate.
• There is limit or finance and banking institution\they are not
allowed to be given bank loans.
• There is lack of storage facilities such as working premises and
lack of toilets.
• There is limited access to technology.
• They are more likely to quit because of insufficient funds to further
their businesses.

4. RECOMMENDATIONS AND SOLUTIONS.

The government should provide money to informal traders so they can

be able to expand their businesses to formal businesses. The
government should provide leadership programmes to help improve
skills to make their working conditions a better place. The government
should also give funds to people in informal businesses so they can be
able to expand their businesses. Those informal entrepreneurs are given
the access to bank loans.

The local authorities should provide infrastructure for business and

storage of goods to avoid theft. The informal sector should be regulated
by the local government or authorities. The government should improve
management of water and other resources as it is important that people
have equitable resources as they depend mainly on agriculture to
survive. The people in informal sector should be empowered by
involving them in the development and implementation of
plans/programmes to reduce poverty.
5. CONCLUSION.

It can be concluded that the informal sector plays a role in alleviating

poverty in Mukula (Makhado) with 10.32% of the total percentage of the

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area since there are so many people in the sector thus decreasing
unemployment rate of the people in Mukula.The sector helps people to
survive and increases their standard of living. In informal sector there
are only people who are financially unstable or who are in poverty.

If someday informal trading become suspended so many people will be

affected resulting in enhanced poverty in Mukula area .That is also one
of the reasons why we think the government should aid the informal
traders with money to expand their businesses into formal businesses.
Also infrastructures should be provided for business to continue even in
extreme weather conditions.

9.BIBLOGRAPHY

1.BOOK.

 S.Cohen, B .Fleming, P.Jay, L.Kroll, P.Ranby , J.Saunders, C.D.

van der Merwe.2013.The informal Sector. Askew Miller Longman
(Pty) Ltd.2013.
 J. Brett, A. Gelling, K. Marimuthu , S. Mclntyre , C .Vlok . 2007.
The importance and challenges of the informal sector. Macmillan
South Africa (Pty) Ltd .2013.
 Dr M Singh, Ms V Pillay, Mr S Chandrabhaon.2015.Informal sector.
TESS Publishing cc.2015.

2. Interview.

 According to Mrs Musetha.

Mrs Musetha.2024.Informal business owner. Personal
interview: Research based on informal sector.Mukula.06
April 2024.

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 According to Mrs Maambavhanwe J.
Mrs Maambavhanwe J.2024.Informal business owner.
Personal interview: Research based on informal
sector.Mukula.06 April 2024.
 According to Ms Madzhie M.
Ms Madzhie M.2024.Informal business owner. Personal
interview: Research based on informal sector.Mukula.06
April 2024.
 According to Mr Masakona ML.
Mr Masakona ML.2024.Informal business owner.
Personal interview: Research based on informal
sector.Mukula.06 April 2024.
 According to Mr Luruli W.
Mr Luruli W.2024.Informal business owner. Personal
interview: Research based on informal sector.Mukula .06
April 2024.

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