Highlighted findings from the 2014 WIEGO Informal Economy Budget Analysis (IEBA) of

eThekwini Municipality

Presentation to MILE eThekwini University Research Symposium 5-6 April 2016

Glen Robbins (UKZN) and Tasmi Quazi (Asiye eTafuleni – AET & UKZN Development Studies MA graduate)

This research assignment was undertaken for Women in Informal Employment: Globalizing and Organising (WIEGO).

Introduction to IEBAs • What is an IEBA?

– “IEBA asks how government budgets address the needs and interests of different groups of informal workers. It also investigates what opportunities exist for informal workers or their representatives to participate at different stages of the budget process.” Budlender (WIEGO), 2009: 2

• Why an IEBA? – No clear accounting of informal economy revenue and expenditure in

city/municipal processes, when a rising share of the global employed are working informally in cities.

– In many global regions, non-agricultural informal work is the norm and not the exception e.g. (South Asia: 82%, Sub-Saharan Africa: 62%)

• How is it done? – Work with city officials (where possible) to examine & analyse official

budget data, interview experts and interact with informal economy actors.

• What are the reports used for? – Sharing knowledge – Providing visibility of what is transpiring in cities – Exploring challenges and opportunities

eThekwini was a pioneer: Durban had the first IEBA in 2000

conducted as part of the Informal Economy Policy process by budget analysis expert, Debbie Budlender (she was awarded an Honorary Doctorate for her work by UKZN in 2009!)

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The informal economy in Durban • Approximately one in four employed persons in the

metropolitan region are working informally (UrbanEcon, 2012: 101).

• The Municipality notes that, due in part to the effects of the 2008 recession, the number of informally employed individuals grew from over 233,000 in 2006 to almost 263,000 in 2011 (UrbanEcon, 2012: 102).

• The municipality highlights the challenges related to employment and, more specifically, informal employment in its strategic documents, such as the Integrated Development Plan 2012/13 to 2016/17 (eThekwini Municipality, 2013a) and in its Economic Development and Job-Creation Strategy 2012-2017 (Economic Development Unit, eThekwini Municipality, 2012).

• eThekwini was, for much of the past 2 decades, seen as a pioneer in policy, services, processes and infrastructure for those working informally.

• Growing pressures in the municipality and outside for enhanced regulation and questioning of policy and spending in last five years. 2

IHS Global insight data often used by eThekwini staff

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eThekwini Budget: Revenue

• eThekwini secures the bulk of its revenue from own revenue sources (utilities, property rates, charges).

• Around 20% comes from inter-government transfers.

• Budget pressures have seen growing attention on raising local sources of revenue.

• Informal businesses contribute to service income (paying for services), other revenue (licenses, rental, fines etc.) and in some cases for property rates (directly or indirectly – e.g. via a landlord). – 31,000 flea/retail market traders:

R11m – 14,000 “permitted” street traders:

R10m – Makes up the bulk of revenue to

Business Support Markets and Tourism – funds around 27% of total Unit expenditure.

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eThekwini revenue sources as a % of total revenue

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Service charges

Property rates

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eThekwini Budget: expenditure

Major categories Expenditure: recent years (% of total)

Major IDP programme expenditure allocations: recent years

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Municipal departments with some IE mandates

• Business Support and Markets

• Economic Development and Investment Promotions

• Inner-Thekwini Regeneration and Urban Management Programme (iTRUMP)

• Durban Solid Waste

• Parks, Recreation and Culture

• eThekwini Transport Authority

• Metro Police

• Planning

• Architecture

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From the IDP … • “There is fully-serviced infrastructure for informal traders

provided to date valued at approximately R250m for services such as structures, ablution facilities, storages, access to water and services, etc. eThekwini was the first City to adopt the Informal Economy Policy and established 16 retail markets, 15 containers Parks, 10 flea-markets throughout the region. The Unit registered 45,572 vendors in the informal economy sector on the computerized Revenue Management System (RMS) generating roughly R36,6m in monthly revenue.

• There were capacity building programs for informal workers, e.g. Financial literacy with close on 5000 Traders benefiting, Business Management skills training for 2000, 1000 vendors attended Food Safety Training and 3000 Traders received Loans through Standard Bank Thuthuka Fund, trained 1000 machinist.

• The informal trade team facilitated the establishment of the Informal Economy Stakeholder Forum, which is a leadership structure allowing stakeholders to engage in dialogue on strategic issues affecting the informal economy comprising formal business representatives, trader organizations and committees, various municipality departments, enforcement agencies, councilors and provincial departments of economic development officials for the advancement of the informal sector ” (eThekwini IDP, 2013: 35-36)

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eThekwini Budget: Operating spend

• Most direct spend on support and regulation programmes:

– Business Support and Markets (+/- R10-15 million annually) – including maintenance of markets

• Indirect spend:

– Metro Police enforcement

– DSW cleaning and waste collection

– Sums not clearly demarcated

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eThekwini Budget: Capital spend

• Erratic capital allocations to “economic” projects.

• Most IE capital spend in “township renewal” projects – funded from external grants (National Treasury)

• Own revenue capital spend for IE limited to handful of projects – around 1/10 of 1%.

Main capital spend programmes: recent years (R bn)

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Examples of IE urban renewal projects

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eThekwini Budget: process

• Annual cycle for budget: focus on large scale “strategic” level interactions in a few “regions”.

• No requirement for more intimate stakeholder dialogue by Departments or Metro-wide.

• Highly technical format of presentations and information – difficult for people to understand/engage.

• Internal challenges to raising the profile of the issue in a consistent manner.

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Some policy recommendations

• Budget processes:

− Need for more dialogue with informal economy actors

− Need for capacitation of actors to participate in processes

• Budget:

− Must show greater recognition of contribution and needs of IE workers (e.g. role of waste pickers

− Specific issues of costs to IE workers need attention (permits, rental etc.

− Maintenance of facilities is poor and underfunded (issues for IE workers and customers

− Large-scale urban renewal processes have tended to offer only limited embracing of IE work in their products – not reflect reality of their context.

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