The South African Informal Sector a haven for the poor to middle class citizens.

The informal sector is a necessary feature in even the most industrialized capitalist economies in the world. Its’s impact on the economy has either been overlooked or frowned upon by economic analysts and commentators alike. Notably, the demeanor of researchers can be likened to the bourgeoisie as depicted by Karl Marx in the 18th century.


In South Africa, the “Dunusa” market “a colloquial term that means bend over” is one such market that has been ignored over the years. This market can be located all over the streets of central Johannesburg providing a clothing haven for the poor to middle class citizens. Not only do the street merchants sell extremely cheap clothing but the quality of their products can at times be matched to those in retail stores.


This market can be characterized as crowded, chaotic, and loud but rewarding as a single trip could result in a total revamp of one’s wardrobe. This market has shown an ever increasing trend and sustainability in the long run. Whilst South Africa has faced a difficult economic climate in recent times, the “Dunusa” market continues to soar.


Closely related to the Dunusa Market is the Vegetable Eden on Kerk Street in Johannesburg. This market hosts more than 30 street vendors each selling identical fruits and vegetables. Similar to the clothing Dunusa Market, the products are of impeccable quality.


In a perfectly competitive market, the producers are price takers as product prices are determined by market forces of supply and demand. This is likely to hold in a formal retail store such as Spar and Pick n Pay. However, the competitive advantage of this informal sector is that the pre – determined price can be negotiated down right at the point of sale.


This bargaining phenomenon is not only unique to the clothing and food stalls as the “market” boasts an array of hairdressers, barbers and various street hawkers selling decent products at a fraction of the price.


According to Fourie (2018), 2.3 million people were employed in the non-agricultural informal sector of the economy. In 2018, this number increased to 2.9 million. Empirical evidence suggests that the informal sector would have created 2 million and more jobs by 2030.


The current economic climate in South Africa is in dire straits. On the 26th of July 2019, prominent credit rating agency Fitch, downgraded the nations sub-investment grade outlook to negative. Fitch cited a widening fiscal deficit and continued support for the struggling state owned entities as the core reasons for its inevitable decision. Moody’s, one of the big three credit rating agencies that still has South Africa’s outlook at sub – investment grade argued that the states plan to bail out their SOE’s is “credit negative”.
The “Dunusa Market” is not without any pitfalls as the potential to distribute counterfeit goods is a reality. The quintessential example of this was when the South African Metro Police raided the stores in different areas of Johannesburg. Not only were counterfeit goods found, they were seized with no return to the market.


It would be naïve to think that business owners would not take risks in order to increase the bottom – line which is profit. Consumers and interested parties alike need to be vigilant when sourcing products from the Dunusa Market.


Regardless of the difficulties that are faced by seeking refuge in those markets, the human survival needs outweigh that of the aesthetic appeal.
For as long as South Africa’s economy remains where it is, the Dunusa Market will continue to grow and expand as consumers seek cheaper and good quality products in order to bring some kind of reprieve.


Maslow’s Hierarchy of needs stresses that physiological needs will always outweigh that of self – esteem.

2 Comments

  1. Interesting read. How do we get the I formal sector to start making a positive impact on our economy without ‘formalising’ it, that way stabilising our ‘unstable economy’

    I’m of the opinion that since trade in the Dunusa market is cash to hand like, the only way to quantify the cash flow is when the seller uses some of this money in the formal market.

  2. I agree. These street merchants contribute through paying VAT and rent. They save money at the Dunusa Market and channel those funds towards spending on something else.

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