South Africa’s total employment through the informal economy otherwise referred to as the ‘township economy’ is 17%. In a country that has a significantly high unemployment rate, the informal sector can be a lifeline to families who lack formal employment.
Two major ways in which informal businesses contribute to the economy are by generating employment opportunities and supporting local economic development through stimulating activity, promoting investment, and attracting resources to previously marginalized areas., the vibrant, culture-rich township economy that represents billions of rands in spending power is largely untapped.
Spaza shops annually receive estimated spending of approximately R150 billion in cash, contributing 5.2% to South Africa’s GDP and employing 2.6 million people. Technology has the potential to accelerate these numbers to new heights and may provide opportunities for formal and informal businesses to trade beyond the limits of the township.