Freedom to trade for Informal Traders

Breakdown: Essential services during the lockdown
March 27, 2020
Protecting activities which provide food security during COVID-19
April 23, 2020

Freedom to trade for Informal Traders

Pursuant to the lockdown Regulations made under section 27 (2) of the Disaster Management Act, 2002 (Act No. 57 of 2002): Measures to Prevent and Combat the Spread of Covid-19, the Minister of Small Business Development, Ms Khumbudzo Ntshaveni issued directives in terms of regulation 10 (8). These directives are set to regulate informal trading during the lockdown period.

What is noteworthy from these directives, read together with the regulations, is that all informal traders can continue trading as long as they are in possession of a permit. Permits are obtainable from the local municipalities in which a trader operates. The directives provide that as long as these traders are designated as providers of “essential goods and services” as per Annexure B of the lockdown regulations, they will be allowed to operate.

In terms of the Minister’s directives, informal food traders are limited to fruit and vegetables and the Langanas, who operate in the Northern Cape and Western Cape. The regulations, on the other hand, do not limit the food sold by informal traders to fruit and vegetables only. There is further confusion with the directives in that they make specific reference to the lockdown regulations providing that all enterprises which are designated as providers of essential goods and services as per Annexure B to the lockdown regulations are permitted to continue operating. This includes essential goods which are not food products.

According to the directives issued by the Minister, all spaza shop owners and informal food traders must hold permits issued by their respective local municipalities allowing them to trade, in line with the provisions of the Business Act, 71 of 1991 as amended.

The Business Act is the primary piece of legislation that governs informal trading in South Africa.  This piece of legislation empowers all municipalities to regulate informal trading within their areas of jurisdiction.  This means that municipalities have the power to adopt their own municipal by-laws that will govern informal trading in their areas. Consequently, different municipalities will adopt different approaches to informal trade compared to others.

Given that municipalities regulate informal trading separately, it is likely that municipalities may interpret the regulations differently. Some may allow informal traders selling any essential goods to operate, others may allow only informal food traders to trade, while other municipalities may follow the narrow interpretation in the directives and allow only for fruit and vegetable traders to operate.  Yet it could be argued, for instance, that informal traders selling traditional herbs and medicines should be permitted to trade and can be considered to be selling essential goods given that pharmacies and medicines are still widely available and accessible. It could be argued that some consumers may wish to turn to traditional medicines and healing instead of visiting a pharmacy or doctor. The informal trader or healer selling these products is therefore essential.

Allowing informal trading, particularly of food, is important not only for the traders who rely on the income to feed their own families, but also for communities who rely on the informal food economy where they cannot afford supermarket-priced food. Food insecurity in South Africa is a problem which will only worsen if the informal food economy suffers. It is important to note as well that informal businesses – spaza shops, informal traders and fishermen – can also qualify for the national debt relief fund for small and micro enterprises to assist them to remain viable during and following the pandemic. It is, however, unclear whether eligibility is focused primarily on those not working during lockdown and whether going to work would diminish eligibility.

According to a circular issued by Dr Nkosazana Dlamini Zuma, Minister of Cooperative Governance and Traditional Affairs dated 05 April 2020; municipalities are requested to ensure that all relevant sections dealing with informal trading are opened with immediate effect. Additionally, to safeguard the safety of informal traders, municipalities have been requested to ensure that informal food trading (uncooked) takes place in an area specially demarcated for such purpose, that appropriate hygiene and sanitation services and facilities are provided; and that all Covid-19 and municipal health regulations are strictly adhered to.

It seems that in some cities, such as Durban, the task of providing informal traders with protective equipment has fallen to NGOs. In particular, Asiye eTafuleni (AeT) and WIEGO assisted and supported informal traders to develop interventions to reduce the spread of COVID-19. At Warwick Junction, one of the largest informal markets in Durban, distancing bibs and protective masks were made available with the assistance of the NGOs prior to the lockdown and hand sanitisers were provided to informal traders.

The importance of the informal sector in ensuring food security and reducing poverty cannot be understated and Municipalities should bear this in mind when issuing permits.

To apply for an essential services permit to operate during this time, informal traders should go to the following centres:

Durban – Sizakala Centres at 127 Johannes Nkosi Street, Pinetown (60 Kings Road), Verulum (151 Wick Street), Tongaat (325 Gopalall Hurbans Road) KwaMashu (20 Ntuzuma Access Road) or Isipingo (16 Inwabi Road).

Grahamstown/Makhanda – Makana Municipality Health and Environment Office, City Hall, High Street

Cape Town – Information on the application process, documents required and downloadable forms is available here.

Johannesburg –  City of Johannesburg. Jorissen Place 66 Jorissen St Braamfontein. South Africa. Telephone. (011) 358-3000

Traders may also contact the Department of Small Business Development (DSBD) on 0860 663 7867, or email info@dsbd.gov.za for more information and to enquire about whether the services they render are essential.

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