INFORMAL ECONOMY IN PROMOTING LOCAL ECONOMIC DEVELOPMENT: THE CASE OF MANGAUNG CENTRAL BUSINESS DISTRICT

Td Modirapula and D van Rooyen
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Td Modirapula: University of the Free State
D van Rooyen: University of the Free State

Journal of Economic and Social Development, 2025, vol. 12, issue 1, 127-145

Abstract: This article focuses on how the informal economy is challenged, transitioned, and supported to contribute to local economic development (LED). The informal economy has become a sector where people have opened their businesses and found employment, which contrasts with the inability of the government to create sustainable jobs in the formal economy and a conducive environment for small businesses. The study investigates how the informal economy is challenged, supported and transitioned in the Mangaung Metropolitan Municipality. It assesses the approach of the Municipality towards the informal economy and how this has impacted the livelihoods of those making a living in this sector. Unlike other studies that have focused on the information economy within the central business district, this study goes further to include the informal street traders operating in the location, specifically the Batho location. The article adopted a qualitative methodological approach, and data were collected through semi-structured interviews with 26 purposely selected participants. The participants included municipal and government officials, the chairperson of the informal economy association, and informal traders. Recommendations are presented on how the municipality can create an environment conducive for informal businesses to operate as industrial clusters that can help create jobs and reduce poverty and inequality, in line with the goals of the LED.

Keywords: Informal Economy; Informal Sector; Local Economic Development; Poverty; Unemployment (search for similar items in EconPapers)
JEL-codes: O11 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ris:joeasd:0172

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