A report published by the Poverty, Land and Agrarian Studies unit at the University of the Western Cape on South Africa’s dwindling township retail market concludes that “while it is obvious that supermarkets bring some benefits such as cheaper food and an increasingly diverse range of groceries, they also initiate a competitive race to the bottom that squeezes profits — and therefore livelihoods — out of micro-enterprises in the informal retail sector”.
The dominant policy approach, expressed by political leaders and local government officials, seeks to displace black informal economy activity with large corporate retailers. This view is informed by a number of underlying economic biases, which have not been tested or verified through empirical evidence. For example, the assumption that large corporate retailers automatically produce positive socioeconomic benefits in townships or rural areas is not valid.
This erroneous policy approach, which has come to the fore in Gauteng, is also driven by political expediency. It is motivated by a need to appease unsubstantiated popular statements on black informal economy challenges in underdeveloped areas. The discourse on purposefully excluding informal traders and micro-enterprises from certain sectors misses the point.
The research concludes that existing BEE strategies and approaches have been wholly inadequate for addressing the needs of South Africa’s informal economy. It makes the case for policy responses in this area through reforming BEE so that it appreciates the business context and needs of informal traders.
Dude, it's the informal economy. The world doesn't operate there!!!
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