By Warren Hewitt, CEO at GTP
South Africa’s informal economy is often described as invisible, but its impact is anything but. From spaza shops to street-side food vendors, the informal sector employs up to 42% of our workforce and contributes as much as 6% of GDP, according to recent estimates.
Valued at between R750 billion and R1 trillion, the township and informal economy has become a quiet giant, keeping millions fed, employed, and connected.
Yet, it remains one of the most precarious sectors of our economy. Traders navigate red tape, displacement, lack of infrastructure, unsafe conditions, and limited access to finance. Nearly 60% of informal workers earn below R3,500 per month, often without access to credit, insurance, or even basic storage facilities.
For too long, informal traders have been seen as survivalists rather than entrepreneurs, despite many building businesses that have sustained families for decades.
A Living Laboratory in Bellville
If we want to redesign the future of South African cities, we must start by redesigning how we support our informal traders. In Cape Town’s Bellville CBD, the metro’s second-largest economic hub, more than 200 permitted informal food traders line the streets around the bustling transport interchange.
Many of these traders have operated for over 20 years, with more than 150 serving nutritious, affordable meals to over 50,000 daily commuters. There are also close to 1,000 unpermitted traders working to put food on the table, all part of the city’s economic heartbeat.
Their reality, however, is fraught with challenges. Traders often work in makeshift, weather-beaten structures that are neither hygienic nor secure. They face displacement for non-compliance with strict bylaws, and the daily costs of assembling, dismantling, and transporting stock eat into already slim margins.
Bellville is stepping forward as a living laboratory for innovation. The Greater Tygerberg Partnership (GTP), together with the South African Urban Food and Farming Trust (SAUFFT), AfriFOODlinks, and design collaborators, is piloting co-designed trading prototypes. These new mobile and stationary structures are built to be safe, hygienic, functional, and compliant.
Dignity Through Design
These prototypes go beyond physical design; they are about dignity, opportunity, and urban renewal. By designing weatherproof, lockable, and mobile units, we can reduce the daily burden of setup and transport. They integrate with municipal water and waste systems, addressing public health concerns while allowing traders to operate in clean, sustainable environments.
By reducing conflict with law enforcement and ensuring compliance with food safety standards, these structures allow traders to focus on what they do best: running businesses that feed the city. Most importantly, we must recognise informal traders as entrepreneurs. With the right infrastructure, they can thrive as legitimate business operators rather than merely surviving on the margins.
Informal Trade as a Driver of Urban Renewal
Supporting informal traders is not charity; it is sound urban and economic policy. The informal sector is the fifth-largest employment provider in Cape Town and a critical contributor to the national economy. By investing in its infrastructure, cities strengthen their resilience, improve food security, and promote inclusive growth.
There is a renewed effort to better understand this sector, with work under way to identify trader needs and develop supportive environments. Cape Town Executive Mayor, Geordin Hill‑Lewis, supports the informal economy and often stresses credibility, legality, and opportunity. He frames informal activity as something to be integrated into the city’s growth rather than suppressed.
The Bellville initiative shows that urban regeneration and informal trade are complementary forces. By providing fit-for-purpose structures, we enable informal markets to coexist with transport hubs, formal retail, and public spaces in a way that is safe, efficient, and mutually beneficial.
A Vision for the Future
Whether in a small township market or a bustling inner-city CBD, the challenges traders face are strikingly similar. Based on the GTP 2019 survey, these include weatherproofing, storage, hygiene, security, and compliance. Models like this offer a replicable solution that could be adapted for Durban, Johannesburg, or cities elsewhere on the continent.
At a national level, South Africa is already moving towards simplifying regulation and supporting SMMEs through innovative financing. By coupling these policy shifts with practical, community-driven design solutions, we can unlock the full potential of the informal economy.
The informal sector is not a problem to be managed but an opportunity to be embraced. Bellville may be the starting point, but the vision is for a South Africa where informal traders are seen as the cornerstone of sustainable urban development. The question is not whether we can afford to invest in informal traders; the question is whether we can afford not to.
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