It is remarkable to observe that this is the first edited book to appear on the state of the informal sector in South Africa for almost a quarter century. The volume edited by Frederick Fourie comprises 17 chapters and represents the collective output of a major four year long investigation into the country’s informal sector. Contributions are authored by a group of researchers drawn from an array of academic institutions (local South African plus from France, Germany and USA) as well as government and NGOs. The informal sector project was nested under the South African National Treasury funded REDI3 × 3 (Research Project on Employment, Income Distribution and Inclusive Growth) programme of work which was initiated to address knowledge gaps concerning issues around employment, income distribution and inclusive growth. As stated at the outset by the editor, the volume is ‘strongly evidence- and data-driven’ and contains ‘substantial quantitative contributions’ (p. 3). In terms of the development of informal sector scholarship in South Africa these quantitative interrogations are most welcome particularly in view of wildly conflicting estimates of the actual size of the country’s informal sector during the 1990s and even into the early 2000s. Several of the contributions are anchored upon interrogation of improved data from Statistics South Africa and most notably its nationally representative survey data and including the SESE (Survey of Employers and the Self-Employed). The availability of these new data sources has allowed – almost for the first time - quantitative researchers – and especially of economists in South Africa – to enter substantively into ongoing policy debates concerning the role and contribution of the informal sector variously to poverty alleviation, job creation, and the reduction of inequality. Certainly, the contributions in this volume fulfil the editor’s objective of contributing to a more ‘data-informed policy design and implementation’ (p. 4), something which is most urgently needed for evidence-based policy making in the country.
The 17 chapters are organised and flow well through four parts of material. Part one, the first three chapters begin appropriately by locating the volume’s contributions in relation to extant literature as well as situating the South African informal sector relative to international theoretical currents and in terms of its size is positioned as compared to other countries in sub-Saharan Africa. It is confirmed that in comparative context the size of South Africa’s informal sector is small and that notwithstanding the existence of chronic high unemployment rates there is a paradox of a low share of self-employment and business ownership recorded in the country. Part two is the largest section of the book and comprises six chapters which focus on a quantitative analysis of the character and contribution of the informal sector at the national levels. Taken together these six chapters represent a new benchmark for our understanding and must be important reference points for policy development. Among critical findings are the post-financial crisis gender reconfiguration of South Africa’s informal sector and the conclusion that whilst the small size of the informal sector limits its overall impact on poverty the changes in poverty rates which are associated with the loss of informal sector jobs are shown to be similar to those as linked to formal sector jobs.
Part three narrows the lens from national scale considerations to interrogate the contested development spaces of South Africa’s urban townships and underdeveloped rural areas. The authors in these five chapters tap different data sources and approaches for enriched local level insights. Arguably, as pointed out by Andrew Charman and Leif Petersen, ‘national data sets do not offer insight into the hugely diverse kinds of activities that occur in township informal economies’ and moreover ‘national-level characterisations of the informal sector may overlook or misrepresent local challenges’ (p. 254) and policy issues surround informal business development. As a geographer by training it was refreshing for me to see a spatial analysis of township informal economies and confirmation that in terms of local level planning for the informal sector that ‘geography matters’. Once again the originality and richness of all the contributions in Part three underscore the volume’s importance for policy development.
Finally, in Part Four, there are three chapters which address squarely questions of policy and where, if at all, the informal sector appears in the development planning landscape of the country. Fourie deftly dissects the approach of the National Development Plan towards the informal sector followed by Skinner’s excellent interrogation of the shifting policy currents at levels of both national and local state. Significantly, Skinner concludes by emphasising the major deficit in policy approaches so far in South Africa, namely the absence of detailed empirical analysis to inform policy development about the diversity and complexity of the informal sector. In the final chapter of this impressive volume Fourie critically confronts the murky debates about ‘formalising the informal sector’. His concluding thoughts are worth quoting:
The research in this volume shows unambiguously that the informal sector is an important source of employment and of paid employment. It is not suggested that the informal sector will ‘solve’ the problem of unemployment. But the informal sector is and must be an integral part of the response to the South African problems of unemployment, poverty and inequality. (p. 471)
In sum, this thought-provoking collection is undoubtedly a new landmark in scholarship on South Africa’s informal sector. It should be essential reading for all those engaged in development policy processes in South Africa. Although the volume is unashamedly focussed only on South Africa the book contributes a wealth of insights to broader theoretical and policy debates such as to merit a wider international readership.