Research Nugget

Covid-19 and the informal economy in SA

For emerging and developing nations, where most of the population is employed in the informal sector, COVID-19 has threatened the very fibre of livelihood strategies employed by more than two billion people globally.

A study by DSI-NRF Centre of Excellence in Human Development found that informal workers and low-income households faced the greatest consequences of the ongoing COVID-19 pandemic. The study surveyed 75 informal workers in KwaDukuza Municipality, KwaZulu-Natal, South Africa to find out the socio-economic impact of COVID-19 on the South African informal economy.

Most participants in the study cited various challenges, such as the loss of income because of the lockdown restrictions, running out of food and savings, inability to afford rent and other living expenses, loss of assets and setbacks in paying employees. Further impact can be noted in that over 50% of informal workers reportedly struggled to recover more than half of their pre-COVID income during the early phases of the economic recovery period.

Without necessary measures to support those in the most precarious jobs amid the pandemic’s prolonged and evolving socio-economic impact, the country is unlikely to address the high levels of poverty and unemployment.

Read the detailed summary of the study is available here