The government has outlined its policy direction and strategies for the growth and empowerment of the informal sector, including financial assistance packages and measures to protect informal traders from harassment by law enforcement. This was in response to a parliamentary question posed by Taolo Lucas, Member of Parliament for Bobirwa, to the Minister of Trade and Entrepreneurship.
The Minister stated that in August 2020, the government, with support from the United Nations Development Programme (UNDP), developed a short-to-medium-term Informal Sector Recovery Plan (ISRP). The plan was aimed at mitigating the economic effects of COVID-19 on informal traders and harnessing the sector’s long-term potential. The key principles of the plan included the transition to formalisation, economic resilience, entrepreneurial mobility, and prioritising the needs of women and youth in the sector.
Several initiatives have been undertaken under the ISRP, including the Industry Support Facility (ISF), which disbursed P50 million to 50,000 informal sector businesses as a once-off P1,000 financial relief package. Additionally, P20 million was allocated for the development of supportive infrastructure such as market stalls and fresh produce markets in Selebi-Phikwe, Ledumang, Letsholathebe, Lobatse, and Francistown. However, financial constraints prevented the implementation of planned projects in Maun, Jwaneng, and Francistown.
The Minister also highlighted a partnership between the government and UNDP, which led to the development of an Informal Sector Strategy for the City of Francistown. This strategy seeks to mainstream the informal sector into national economic development by fostering employment opportunities, stimulating investment, and encouraging entrepreneurship. Plans are underway to replicate this initiative in other local authorities, subject to funding availability.
To provide financial assistance to informal businesses, the Citizen Entrepreneurial Development Agency (CEDA) offers microfinance products such as Mabogo Dinku and Letlhabile, which cater specifically to the informal sector. Additionally, CEDA has been responsible for administering Chema Chema funds to further support informal traders.
Regarding the issue of law enforcement and regulatory challenges faced by informal traders, the Minister acknowledged the existence of weak regulatory frameworks across various local authorities. In response, the Ministry of Local Government and Traditional Affairs is developing a national regulatory framework aimed at protecting informal traders’ rights while ensuring compliance with reasonable health and safety standards. The new regulations will also establish dispute-resolution mechanisms to allow traders to appeal decisions that negatively impact their businesses. The framework, expected to be completed within the current financial year, seeks to create an enabling environment where informal traders can operate with improved access to essential services such as water, sanitation, and waste management.
