An Investigation of the Impact of Post-Apartheid Informal Economy Policies on Informal Traders in South Africa

South Africa has one of the highest unemployment figures in the world. Despite the high figures there is low penetration of informal economy when compared not only to other African countries but the rest of the world. This is mainly attributed to the historical background of the country. The apartheid government that was in place before 1994 had zero tolerance towards informal traders and enacted laws and policies that did not favor the sector.In recent times the South African government has been revising the laws and putting in place policies that encourage the growth of the informal economy. A number of studies have shown that eThekwini Municipality has one of the best policies in South Africa which target the informal economy. The results from the study show that there is lack of awareness of the informal economy policies by the informal traders. Most of the informal traders are not registered and they do not see any benefits of doing so. There is still hostility between the informal and formal traders. Informal traders highlighted a number of challenges they face every day, such as lack of shelter, storage space and running battles with law enforcers. There is need to revise the funding and implementation strategy for informal traders or small businesses in South Africa. This study expands the conceptualization of informal business policy and strategy. Implications for theory and practice are offered. Additionally, limitations and future research directions are discussed.