Comparing Refugees and South Africans in the Urban Informal Sector

This report compares the business operations of over 2,000 South
Africans and refugees in the urban informal economy and systematically
dispels some of the myths that have grown up around their activities.
First, the report takes issue with the perception that South Africans
are inexperienced and unmotivated participants in the informal economy.
Many have years of experience and have successfully grown their
businesses. Second, it contests the view that refugees enjoy a
competitive advantage because they come to South Africa with inherent
talent and already honed skills. On the contrary, over 80% of those
surveyed had no prior informal sector experience and learned their
skills on the job and after coming to South Africa. Third, the report
shows that there is fierce competition in the urban informal sector
between and within the two groups. However, business competition between
refugees and South Africans is mitigated by the fact that they tend to
dominate different sections of the informal economy with South Africans
dominant in the food sector and refugees in the household products and
personal services sectors. Finally, the report takes issue with recent
arguments that all informal sector businesses are equally at risk from
robbery, extortion and other crimes. It shows that South Africans are
affected but that refugees are far more vulnerable than their South
African counterparts. The report therefore confirms that xenophobia and
xenophobic violence are major threats to refugees seeking a livelihood
in the informal sector, especially if they venture into informal
settlements.