The Spatial Evolution of Spaza Shops since the Inception of the Special Economic Zone (SEZ) in Saldanha

Lesley Peter Welman^1,

¹Lecturer at Stellenbosch University, Military Academy, Military Geography, Frans Erasmus Drive, Room 118A, Saldanha, 7395 South Africa

Cite this paper:
Lesley Peter Welman. The Spatial Evolution of Spaza Shops since the Inception of the Special Economic Zone (SEZ) in Saldanha. Journal of Finance and Economics. 2021; 9(5):184-192. doi: 10.12691/jfe-9-5-3

Abstract

The aim of this paper is to establish the link between the official announcement of the Saldanha Special Economic Zone (SSEZ) and consequently the gradual concentration of foreign traders and the steady fading of native residential spaza shop owners. This research focus on the existing literature on informal trading in Africa and specifically on micro level. Special prominence is given to the entrepreneurial culture of both the foreign and residential informal traders. Informal trading forms a substantial component of any economy in providing employment, secure sustainable livelihoods and income for millions of workers and business owners. Research in South Africa lack the aptitude to investigate and divulge the root causes of informal trading and how informal trading contributes to individual and household income, and to lay the platform for policy formation and intervention. This article envisages the major informal trading structures in Saldanha town, the underlying cause (-s) of doing business and its socio-economic impact on individuals, households, and the community. Central to this study will be the identification of various informal institutional economic activities and the situation, its evolution, their contribution to individual and household survival, and their relationships with the formal economy. The research followed a mixed methods approach (the combination of qualitative and quantitative methods). The application of semi-structured interviews, focus group and follow-up discussions reveals the deeper perceptions of doing business and their means to survival, despite current challenges of Covid-19 and evolving competition challenges. In contrast, the quantitative methods deal largely with the questions of “what” or “how many”.

Keywords:
informal tradesman tuck shops proprietors survivalist endurance

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

References:

[1]	Tengeh, R.K. and Mukwarami, J, The growth challenges of native-owned spaza shops in selected townships in South Africa. International Journal of Applied Business and Economic Research, 15 (2): 61-74. 2017.
[2]	Bohme, M.’ & Thiele, R, (2014) Informal-formal linkages and informal enterprise performance in West Africa, European Journal of Development, 26: 473-489.
[3]	Getis, A., Bjelland, M. and Getis, V, Introduction to Geography. New York: McGraw-Hill Education. 2018.
[4]	Legodi, K., & Kanjere, M. The challenges faced by informal traders in greater Letaba municipality in Limpopo province, South Africa. Africa’s Public Service Delivery & Performance Review (SDPR) 3(4). 2015.
[5]	South African Government, National Development Plan, 2012.
[6]	Cichello, P., and Rogan, M, Informal sector employment and poverty in South Africa: Identifying the contribution of informal sources of income on aggregate poverty measures. The Research Project on Employment, Income Distribution, and Inclusive Growth (REDI) 3x3 Working Paper 34. 2017. 2002.
[7]	Charmank, A., Petersen, L., and Piper, L, From local survivalism to foreign entrepreneurship: The transformation of the spaza sector in Delft, Cape Town. Transformation, 78: 47-73. 2012.
[8]	Heintz, J., and Posel, D, Revisiting informal employment and segmentation in the South African labour market. South African Journal of Economics, 76, 1: 26-44. 2008.
[9]	Butler, J, Robert, I., Rotberg, and John, A, The Blacks Homelands of South Africa: The Political and Economic Development of Bophuthatswana and Kwa-Zulu. Berkeley:  University of California Press. The history of the homeland history essay. Available at: https://www.ukessays.com/essays/history/the-history-of-the-homelands-history-essay.php. 1978.
[10]	Stats SA, Quarterly Labour Force Report, Quarter 4. Republic of South Africa. 2019.
[11]	Stats SA, Survey of Employers and Self-Employed (SESE). Republic of South Africa. 2019.
[12]	Harris, A, 2004. Modes of informal urban development: A global phenomenon. Journal of Planning Literature, 1-21.
[13]	Hoosha, J., and Meyer, A, The informal economy and sustainable livelihoods. The Journal of the Helen Suzman Foundation, 21, 1-37. 2015.
[14]	Rogerson, C.M, Planning spatial development initiatives: South Africa’s industrial development zones. Urban Forum, 10, 259-73. 1999.
[15]	Rogerson, C.M, Spatial development initiatives in Southern Africa: The Maputo Development Corridor. Tijdschrift moor Econoische en Sociale Geografie, 92, 324-46. 2001.
[16]	Bek, D., Binns, J.A., & Nel, E.L, ‘Catching the developing train’: Perspectives on ‘top-down’ and ‘bottom-up’ development in post-apartheid South Africa. Progress in Development Studies 4, 22-46. 2004.
[17]	Dosi G, Opportunities, incentives, and the collective patterns of technological change. The Economic Journal, 107: 1530-1547. 1997.
[18]	Boschma, R.A, and Frenken, K, Applications of evolutionary economic geography. Danish Research Unit for Industrial Dynamics (DRUID), 1: 33. 2006.
[19]	Schumpeter, J.A, Capitalism, socialism, and democracy. New York: Harper and Row. 1942.
[20]	Henning, S.S., and Hoffman, L.C, Proximate and fatty acid composition of cooked South African Cape snoek (Thyrsites atun). South African Journal of Science, 113: 1-4. 2017.
[21]	Hoover, E.M., and Vernon, R, Anatomy of a Metropolis: The Changing Distribution of People and Jobs Within the New York Metropolitan Area. Pp. xvi, 345. Cambridge: Harvard University Press. 1959.
[22]	Porter, M.E., The Competitive Advantage of Nations. New York: Free Press. 1990.
[23]	Stam, E, Why butterflies do not leave. Locational behavior of entrepreneurial firms and life cycle. Economic Geography, 83: 27-50. 2007.
[24]	Grimm, M., Krüger, J., and Lay, J, Barriers to entry and returns to capital in informal activities: Evidence from sub-Saharan Africa. Review of Income and Wealth 57: 27-53. 2011a.
[25]	Grimm, M., Van der Hoeven, R., and Lay, J, Unlocking potential: Tackling economic, institutional, and social constraints of informal entrepreneurship in sub-Saharan Africa: Main findings and policy conclusions. International Institute of Social Studies, 22: 1-14. 2011b.
[26]	Biney, I.K., Unearthing entrepreneurial opportunities among youth vendors and hawkers: Challenges and strategies. Journal of Innovation and Entrepreneurship, 8(2): 1-15. 2019.
[27]	Rajesh-Raj, S.N., Sen, K., and Kathuria, V, Does banking development matter for new firm creation in the informal sector? Evidence from India. Review of Development Finance, 38-39. 2014.
[28]	Guibin, J, The informal sector and growth in China. Eco-Environmental Science, 4(2), 454-659. 2008.
[29]	Böhm, M.H., and Thiele R, Informal–Formal Linkages and Informal Enterprise Performance in Urban West Africa. European Journal of Development Research, 26(4): 473-489. 2014.
[30]	Rajesh-Raj, S.N., Sen, K., and Kathuria, V, Does banking development matter for new firm creation in the informal sector? Evidence from India. Review of Development Finance, 38-39. 2014.
[31]	Lewis, W.A, Economic development with unlimited supplies of labor. Oxford Bulletin of Economics and Statistics, 42: 203-226. 1954.
[32]	Todaro, M.P, A model of labor migration and urban unemployment in less developed countries. American Economic Review, 59: 139-148. 1969.
[33]	Mazumdar, D., The urban informal sector, World Development, 4: 655-679. 1976.
[34]	Reilly, B., Krstic, G., and Cominetta, M, Purchasing from informal markets: Evidence from Serbia. Applied Economics Quarterly, 52: 239-264. 2006.
[35]	La Porta, R., and Shleifer, A, The unofficial economy in Africa. NBER Working Paper 16821. 2011.
[36]	Kingdon, G.G., and Knight, J.B, Unemployment in South Africa: The nature of the beast. World Development, Elsevier, 32(3), 391-408. 2004.
[37]	Ligthelm, A.A., A targeted approach to informal business development: the entrepreneurial route. Development Southern Africa, 25(4): 367-382. 2008.
[38]	Minard, C.S.L, 2009. Valuing entrepreneurship in the informal economy in Senegal. Social Enterprise Journal, 5(3): 186-209.
[39]	Rogerson, C.M., & Nel, E., Redressing inequality in South Africa: The spatial targeting of distressed areas. Local Economy, 31(1-2): 28-41. 2016.
[40]	Department of Trade and Industry. Republic of South Africa. 2012.
[41]	Binns, T., and Nel, E., The role of local economic development and community self-reliance in rural South Africa. The Journal of Modern African Studies, 37(3): 389-408. 1999.
[42]	Government Gazette, Business Act 71 of 1991. Republic of South Africa. 1991.
[43]	SBM, Saldanha Bay municipality informal trading by-law. 1996.
[44]	Pasquier-Doumer, L., Oudin, X., and Thang, N. The Importance of Household Businesses and the Informal Sector for Inclusive Growth in Vietnam. Vietnam Academy of Social Sciences and the French National Research Institute for Sustainable Development. 2017.
[45]	Nuys, A. and Baud, P.F, The dual labour theory and the informal sector in South Africa, Acta Commercii, 240-265. 2007.