International Migrants In Johannesburgs Informal Economy

This report provides a rich view of the activities of migrant entrepreneurs in the informal economy of Johannesburg. It is hoped that the information will facilitate understanding of the informal sector and its potential, and not just in the context of migrant entrepreneurs. The informal economy plays a significant role in the entrepreneurial landscape of the City of Johannesburg and is patronized by most of the citys residents. The research presented here challenges commonly held opinions about migrant entrepreneurs in the City of Johannesburg and shows that they do not dominate the informal economy, which remains largely in the hands of South Africans. In late 2013, the City, through Operation Clean Sweep, removed up to 8,000 traders from the citys streets. As this and recent xenophobic attacks demonstrate, Johannesburg can be a hostile place in which to operate a business as an informal economy migrant entrepreneur. Instead of trying to sweep the streets clean of these small businesses, government at national, provincial and city levels should develop policies to grow the SMME economy, develop township economies, and manage the informal economy and street trading. They need to incorporate the businesses owned by migrant entrepreneurs, rather than exclude and demonize them. These businesses make an invaluable contribution to Johannesburgs economy despite operating in a non-enabling political and policy environment.

Debates about international migration in South Africa often centre on the role of international migrant entrepreneurs who are seen to be more successful than their South African counterparts, squeezing them out of entrepreneurial spaces, particularly in townships. This report explores and compares the experiences of international and South African migrant entrepreneurs operating informal sector businesses in Johannesburg.

While increasing attention is being paid to the drivers and forms of entrepreneurship in informal economies, much less of this policy and research focus is directed at understanding the links between mobility and informality. This report examines the current state of knowledge about this relationship with particular reference to three countries (Mozambique, South Africa and Zimbabwe) and four cities (Cape Town, Harare, Johannesburg and Maputo), identifying major themes, knowledge gaps, research questions and policy implications.

This is report is the most comprehensive study yet of the contribution of migrant and refugee entrepreneurs to Cape Towns local economy. The survey of over 500 entrepreneurs engaged in trade, services and manufacturing in different areas of the city dispels some of the more prevalent myths that o#en attach to the activities of migrants. The vast majority are not illegal foreigners, but have a legal right to be in South Africa and to run a business. Most are highly motivated individuals who enter the informal economy to earn revenue to support themselves, their families, and because they have a strong entrepreneurial motivation. Contrary to the claims of South African competitors, the vast majority are not successful because they are engaged in shadowy business practices. What emerges from the survey is that while migrant entrepreneurs undoubtedly have strong social networks, their businesses are highly individualistic in terms of organization, ownership and activity in a competitive business environment. This report demonstrates their positive economic contributions to Cape Town and examines the challenges they face in running a successful business operation in the city. It goes beyond the rhetoric of inclusion to demonstrate with hard evidence exactly why migrant and refugee entrepreneurs should be accepted as an integral and valuable part of the local economy.

To understand the policy environment within which refugees establish and operate their enterprises in South Africas informal sector, this report brings together two streams of policy analysis. The first concerns the changing refugee policies and the erosion of the progressive approach that characterized the immediate post-apartheid period. The second concerns the informal sector policy, which oscillates between tolerance and attempted destruction at national and municipal levels. While there have been longstanding tensions between foreign and South African informal sector operators, an overtly anti-foreign migrant sentiment has increasingly been expressed in official policy and practice. This report describes the strategies being used to turn South Africa into an undesirable destination for refugees, including the setting up of additional procedural, administrative and logistical hurdles; the undercutting of court judgments affirming the right of asylum-seekers and refugees to employment and self-employment; ensuring that protection is always temporary by making it extremely difficult for refugees to progress to permanent residence and eventual citizenship; and restricting opportunities to pursue a livelihood in the informal sector. The authors conclude that the protection of refugee rights is likely to continue to depend on a cohort of non-governmental organizations prioritizing migrant livelihood rights and being willing and able to pursue time-consuming and costly litigation on their behalf.

This report compares the business operations of over 2,000 South Africans and refugees in the urban informal economy and systematically dispels some of the myths that have grown up around their activities. First, the report takes issue with the perception that South Africans are inexperienced and unmotivated participants in the informal economy. Many have years of experience and have successfully grown their businesses. Second, it contests the view that refugees enjoy a competitive advantage because they come to South Africa with inherent talent and already honed skills. On the contrary, over 80% of those surveyed had no prior informal sector experience and learned their skills on the job and after coming to South Africa. Third, the report shows that there is fierce competition in the urban informal sector between and within the two groups. However, business competition between refugees and South Africans is mitigated by the fact that they tend to dominate different sections of the informal economy with South Africans dominant in the food sector and refugees in the household products and personal services sectors. Finally, the report takes issue with recent arguments that all informal sector businesses are equally at risk from robbery, extortion and other crimes. It shows that South Africans are affected but that refugees are far more vulnerable than their South African counterparts. The report therefore confirms that xenophobia and xenophobic violence are major threats to refugees seeking a livelihood in the informal sector, especially if they venture into informal settlements.

One of the defining characteristics of many large cities in the rapidly urbanizing global South is the high degree of informality of shelter, services and economic livelihoods. It is these dynamic, shifting and dangerous informal urban spaces that refugees often arrive in with few resources other than a will to survive, a few social contacts and a drive to support themselves in the absence of financial support from the host government and international agencies. This report addresses the question of variability in economic opportunity and entrepreneurial activity between urban environments within the same destination country - South Africa - by comparing refugee entrepreneurship in Cape Town, South Africa’s second largest city, and several small towns in the province of Limpopo. The research shows that refugee entrepreneurial activity in Limpopo is a more recent phenomenon and largely a function of refugees moving from large cities such as Johannesburg where their businesses and lives are in greater danger. The refugee populations in both areas are equally diverse and tend to be engaged in the same wide range of activities. This report shows that different urban geographies do shape the local nature of refugee entrepreneurial economies, but there are also remarkable similarities in the manner in which unconnected refugee entrepreneurs establish and grow their businesses in large cities and small provincial towns.

This book powerfully demonstrates that some of the most resourceful entrepreneurs in the South African informal economy are migrants and refugees. Yet far from being lauded, they take their life into their hands when they trade on South Africas mean streets. The book draws attention to what they bring to their adopted country through research into previously unexamined areas of migrant entrepreneurship. Ranging from studies of how migrants have created agglomeration economies in Jeppe and Ivory Park in Johannesburg, to guanxi networks of Chinese entrepreneurs, to competition and cooperation among Somali shop owners, to cross-border informal traders, to the informal transport operators between South Africa and Zimbabwe, the chapters in this book reveal the positive economic contributions of migrants. these include generating employment, paying rents, providing cheaper goods to poor consumers, and supporting formal sector wholesalers and retailers. As well, Mean Streets highlights the xenophobic responses to migrant and refugee entrepreneurs and the challenges they face in running a successful business on the streets.