PRESENTATION ON INFORMAL ECONOMY FRAMEWORK AND BUSINESS SUPPORT PROGRAMMES MSUNDUZI LOCAL MUNICIPALITY BUSINESS DAY FOR INFORMAL ECONOMY

Presentation outline Background Regulations Services Directorate Regulations Services Projects Enabling Environment

Background The Business Act 71 of 1991 had been assigned by the President of the Republic of SA to the administrators of Provinces by way of Proclamation in This in effect means that the rights, duties and obligations in terms of the Business Act had been totally transferred to provinces. KZN Cabinet adopted the Provincial Informal Economy Policy in The Policy serves as a guide for providing sustained environment for the Informal Economy Sector. The KZN Policy outlines that there should be municipal informal economy policy drafted and adopted at that level to regulate and promote the IE sector (Informal Economy contributes about 19% to the GDP). The Policy further advocate for establishment of informal economy chambers that would serve as the voice for the entire sector. A number of studies and assessments conducted by the Department with regard to the status of Business Licencing and informal economy in the KZN Province has indicated the following: -That the Act is obsolete and no longer relevant to the current political, social and economic sectors, particularly to the business sector in terms of the current economic dynamics; and -That there is a need to repeal the Act and develop a new Provincial Legislation that will speak to the current socio-political-economic landscape of the Province. - That the informal economy sector is not prioritised and treated as a nuisance

Regulations Services Directorate Provincial MEC for EDTEA is the custodian of the Business Act no. 71 of 1991 and IE Policy with which this Directorate serves as the monitoring team for implementation of legislations relating to both Formal and Informal sector. The Directorate provides the framework for sustained environment in the Province and replicate legislations to local municipalities for implementation. Regulations Services work with other Directorates within EDTEA to further promote the agenda for economic transformation, those directorates are not limited to; -Consumer Protection Services -SMME -COOPS -BBBEE -LED -Public entities (e.g. Ithala)  Traffic etc.

Regulation Services Projects Established the Informal Economy Web-based Database- which will help in Planning, Managing, Reporting and Supporting the sector through efficient application and monitoring processes for trading permits and licenses (this will assist in knowing who is where doing what and providing economic statistic from local to provincial level). A Draft KZN Informal Economy Strategy has been concluded- The Strategy aims to further profile and regulate the informal economy sector with which it direct municipalities to recognise and budget for the informal economy through IDP indicators, enhanced human resource capacity and business support. The KZN Business Bill has been drafted and is now under legal processes-The Bill aims to repeal the current act (Business Act no.71 of 1991), Regulate all businesses in KZN and provide a streamline licensing function including those businesses who are currently not regulated nor require trading licenses as per the business act of The Bill further advocates for radical economic transformation. Cooperative Financial Institutions (Championed by EDTEA-Cooperatives sub directorate)-to provide a financial muscle for the communities of KZN as one vehicle to speed up the radical economic transformation agenda. This initiative is to encourage traders to have stokfels which will raise their capital for bulk buying of goods. W&R SETA together with the DSBD in partnership with KZN EDTEA commenced with the programme which provides technical and infrastructure support for the Informal economy sector (Informal Traders Upliftment Project) through trainings at TVET Colleges and funding of R9000 per trader (16 traders per district are benefiting in this pilot project).

Projects Continued……… Providing on-going municipal Informal Economy Policy Alignment programme which aims at enabling the business environment for the sector to grow. Continuous monitoring implementation of regulations- all legislations devolved to municipalities for implementation are monitored to ensure implementation for providing a sustainable environment for both formal and informal sector. The establishment of a Small Enterprise Academy is underway- partnership/MOU between EDTEA, DSB, W&RSETA, SEDA, ILO and TVET College(s) for providing business support through skills development/transfer to traders in KZN. (In a process of setting up 11 Training centres- to be concluded during this current financial year). The newly established KZN Traders Association will assist in having a one single voice for the entire business sector which will also help in lobbying for price discounts (i.e. to lobby with Government and or Private Sector and also negotiate for lower purchase prices for small businesses to take advantage of maximum profits and competitiveness in the retail industry). The introduction and establishment of warehouses- warehouses will be established in the 11 districts for bulk buying of goods by collective traders at lower prices.(this initiative is to be achieved in the current financial year).

Regulation Continuous Education Support Compliance Monitoring Enforcement

THANK YOU MHLENGI NGUBANE /