Question

Problems created by informal trading​

Answer 1

Answer:

The three challenges to that realisation:

1. Infrastructure and planning

The study confirms the importance of a fixed place to trade as a priority shared by most traders. Consistency in trading location is economically significant, as returning patronage is a large portion of any trader's clientele. Thus, displacement due to construction of beautification projects in public spaces and urban developments like public transport can cause disruption to business for informal traders.

2. Government policy and practice

A commonly discussed outcome of informal sector regulation is that it provides a framework but often does not allow access to and leverage of that framework by the participants themselves. Additionally, regulation can hamper the dynamism and flexibility that allows certain informal economic activity to exist.

3. Economic variables

Trade input costs can impact current stock and profit margins. This is both a start-up and ongoing challenge for informal traders, who often deal with rising prices for goods by increasing their credit facility. These market concerns and commercial risks, which include competition from formal retail, are exacerbated by trading levies.

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