Formalising the informal sector will lead to decrease in unemployment- Department of Employment and Labour
23 August 2023

Advocate Fikiswa Mncanca-Bede, Chief Director for Inspection and Enforcement Services' Statutory and Advocacy Services told the seminar that the formalisation of the informal sector would lead to a decrease in unemployment.

Advocate Mncanca-Bede was addressing the Informal Economy seminar today, 23 August 2023 at the Mark Strasse Civic centre at the uMhlathuze Municipality in Richards Bay.

“This informal sector contributes 28 percent to the country's economy and the unemployment rate is currently at 32.6 percent. The truth is that people in the informal economy are working but the work is regarded as informal. The work done there may contribute in decreasing unemployment," she said.

She told the seminar that the Department wants to partner with traders, municipalities and other government departments to bring the formalisation of the informal sector into reality.

Adv. Mncanca-Bede, reminded the seminar of the devastating consequences of Covid-19 on businesses where some had to close their businesses or even retrench their employees due to lack of income. She told the seminar that the situation was different with the formal sector who were assisted financially to pay their workers.

“During Covid-19, all businesses that were registered for the Unemployment Insurance Fund were assisted financially through the UIF Covi-19 Temporary Employer/Employee Relief Scheme. This was not available to the informal sector," Mncanca-Bede said.

She told the seminar that another advantage for formalising informal businesses was that they will be covered for injuries and diseases acquired at work. “Those who are injured and or diseased at work will be covered by the Compensation Fund which will cater for their hospitalisation, she said.

Adv. Mncanca-Bede told the seminar that the Department wants to ensure that decent work is achieved even in the informal sector.

The seminar under the theme: “Benefitting on Change" is aimed at empowering informal businesses and self-employed people through information transfer and creating awareness on the benefits of formalising informal businesses into the formal economy. Stakeholders in the informal sector are provided with information on labour laws as well as benefits for being formal.

The advocacy seminar is schedule to take place tomorrow, 24 August at the same place, starting at 10:00.

For media enquiries

Teboho Thejane

Departmental Spokesperson

082 697 0694/



Issued by: Department of Employment and Labour