• How much does the informal economy contribute to the aggregate city economy? This data is crucial in determining the importance of the informal economy to the city economy.

• Which sectors within the informal economy are most profitable and provide the most opportunities for expansion and income generation? This data will ultimately assist in stage three -- Strategy Determination.

• Where are informal economy actors located? This information is important as local government interventions are often spatially based.

• What are the major activities undertaken by the informal economy, i.e., what is the nature of the informal economy: retail, manufacturing, distribution, services, etc.? The local government requires this information to design assistance programs. A second component is knowledge of the links between the formal and informal economy.  This ensures a proper understanding of the effect that interventions in the formal economy may have on the informal economy and vice versa.

• How much do they earn, and what is the nature of their business, i.e., Is the informal economy a stop gap strategy in times of need or does it provide a permanent income?

• What are their needs? 

• What is their capacity to take advantage of opportunities, i.e., what skills do they have?

• Demand conditions, i.e., customers: who are they and how do they behave (e.g., in Johannesburg the local government tried to implement a market-based system which did not work as customers in South Africa, unlike in most of Africa, do not view informal traders as a ‘destination’ but as ‘passers-by’.)

Back to Previous Page

---