Unlocking Prosperity: Embracing the Potential of the South African Informal Economy for Inclusive Growth

William Manga Mokofe ORCID iD 

Issue: Vol. 6 No.14 Article 15 pp.3617 – 3628
DOI: https://doi.org/10.38159/ehass.202561415 | Published online 29th December, 2025
© 2025 The Author(s). This is an open access article under the CCBY license (http://creativecommons.org/licenses/by/4.0/).

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This study examines the South African informal economy, focusing on its significance, challenges, and potential to drive inclusive growth. Once viewed merely as a survivalist activity, the informal economy is increasingly recognised as a dynamic sector with the capacity to generate employment, reduce poverty, and contribute to national development. Using a qualitative methodology, the research drew on literature, policy reviews, and empirical studies to analyse the characteristics of the sector and the systemic barriers it faces. Findings highlight obstacles such as a lack of access to finance, skills shortages, inadequate infrastructure, and weak integration with formal markets. The discussion underscored the importance of policies that balance formalisation with targeted support. Recommendations include inclusive financing mechanisms, vocational skills development, infrastructure investment, and stronger market linkages, all within a supportive regulatory framework. The study contributes to scholarship by reframing the informal economy as an asset rather than a liability, offering a policy-oriented framework for harnessing its potential to build a more resilient, equitable, and prosperous South Africa.

Keywords: Informal Economy, Economic Growth, Policy Framework, Formalisation, Inclusive Development

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Dr. William Manga Mokofe (LLD), (LLM), (LLB) is a Senior Law Lecturer Law at the Walter Sisulu University, South Africa. He serves as the Chairperson, Research and Higher Degrees Committee, Faculty of Law, Humanities and Social Sciences Walter Sisulu University, South Africa Advocate of the High Court of South Africa.

Mokofe, William Manga. “Unlocking Prosperity: Embracing the Potential of the South African Informal Economy for Inclusive Growth.” E-Journal of Humanities, Arts and Social Sciences 6, no. 14 (2025): 3617 – 3628, https://doi.org/10.38159/ehass.202561415

© 2025 The Author(s). Published and Maintained by Noyam Journals. This is an open access article under the CCBY license (http://creativecommons.org/licenses/by/4.0/).

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