COVID-19 and the informal economy in a small-town in South Africa: governance implications in the post-COVID era

Abstract

The coronavirus (COVID-19) has been disruptive to the global socio-economic production of livelihoods because of the lockdown of national economies. In developing nations, the prolonged impact of the pandemic might stagnate millions of people into poverty because the informal sector contributes a significant share of total employment. This paper explored the socio-economic impact of COVID-19 on the South African informal economy, through a survey conducted with 75 informal workers in KwaDukuza Municipality, KwaZulu-Natal, South Africa. The results show that the COVID-19 lockdown amplified the precariousness of informal workers as most participants reported a decline in socio-economic status marked by increased unemployment, poverty and vulnerability. These challenges are also exacerbated by the lack of proactively targeted and timely interventions to cushion those in the informal economy against COVID-induced socio-economic shocks. Without necessary measures to support those in the most precarious jobs amid the pandemic’s prolonged and evolving socio-economic impact, the country is unlikely to address the high levels of poverty and unemployment. The paper also discusses the post-COVID governance implications for the informal economy in South Africa.

Keywords

• COVID-19
• South Africa
• lockdown
• informal economy
• poverty
• developing countries