Informalizing the formal: The forays and the futures of street trading in Cape Town's CBD

Tariq Toffa, Cape Town Community Manager
Cape Town, 10 November 2014

Since the nineteenth century, the rise of colonial, industrialized, and capitalist states brought increasing disregard for the informal economy in favor of the formal economy. In South Africa, apartheid modernity would deepen this pattern, for its proscriptions on people of color in 'white' urban areas also meant restricting the practice of 'black' street trading. However, since the 1990s and more democratic governance in 1994, economic policies embraced urban street trading in a society where low skills and education levels make formal sector employment unlikely.

But these openings had other consequences. As South African cities became open to all, central business districts (CBDs) fell victim to urban decay as those who feared the process of integration left these areas. Today these CBDs have embarked on various urban regeneration models centered in the neo-liberal school of thought, to attract formal business back. In Cape Town CBD this has left informal traders in a strange reality: although accommodated and relatively affluent in the country's most attractive and tourist-friendly CBD, their numbers and permitted places of trade are highly restricted: of the major metros, Cape Town CBD contains the fewest number of traders but the lengthiest street trading by-laws (fig. 1).

In 2013, however, the City announced a draft report for more "progressive" policies from its current informal trading model of limited accommodation toward formalization. The report claims that the City will shift its focus from a regulatory to a developmental role, where informal traders will no longer be expected to formalize but will be supported in their livelihood choices. If taken up, this could be a step toward other value-based projects.

Along with policy, another crucial dimension that must be addressed is the spatial dimension. Location is crucial to the success of informal trading. The Spatial Development Framework, the policy that addresses space on a provincial level, affirms that the spatial structure of urban areas needs to be altered in order to successfully integrate small enterprises into the urban fabric of cities. In Cape Town CBD, permitted street trading is clustered in the essential core areas around the Cape Town Station precinct, whose heavy pedestrian and vehicular flows are ideal (fig. 2). Developments related to the station precinct are therefore critical to opening the CBD up to the informal economy. However, a 2012 upgrade of the station focused on an aesthetic "facelift" without altering the status quo for informal economic practices; and a R80 billion ($8bn) 2010 precinct proposal, which entailed sinking underground the existing railway lines into the CBD in order to open up some 50 hectares of land to new development, similarly shows little evidence of prioritising and restructuring the city to integrate the informal economic practices of the city's poorest (fig. 3).

If a new policy direction is to be taken seriously, the City then could revisit Louw and Dewar's intelligent — though apparently abandoned — decade-old proposal which recommended terminating the rail system outside the CBD and building a major new interchange there. This interchange would be linked back into the CBD with a "magnificent" linear public space with an inner city public transportation system, "creating maximum opportunities for small businesses, which are vital to the future of the city" (fig. 4).

In sum, new policy must energetically be supported by political will and implemented into urban space with imagination to bring about significant change. Informality must finally return from exile. The formal must be informalized, not only the reverse.

Photos: Fig. 1: City of Cape Town; Fig. 2: Toffa, Van Heerden 2011; Fig. 3: MDL; Fig. 4: Louw, Dewar, Van Zeil, Andrew 2010.

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