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The South African Informal Traders Alliance (SAITA), representing over 2 million informal traders across South Africa, is pleading with the Minister of Finance to keep the plight of informal traders top of mind when he delivers his Medium-Term Budget Policy Statement on Thursday afternoon. 

Increases in administered prices and excise taxes all have a direct impact on the price and affordability of products sold by informal traders, including fruit and vegetables, dairy and tobacco products.

Rosheda Muller, National President of SAITA says: “With movement and gathering restrictions, lockdowns and a lack of financial support from Government, informal traders have been disproportionately impacted by the pandemic over the past 19 months.  Exacerbating this are the never-ending increases to the price of petrol, paraffin, water and electricity and the gravely concerning price of food.   

The most common products sold by traders are fruit and vegetables, dairy products, chips, sweets, cold drinks, cigarettes and other tobacco products.  

The profit margins of informal traders are tiny, says Muller, “So increases in input costs such as petrol, or an increase in taxes on tobacco, make a massive impact on our traders’ ability to stay relevant, and in business.

“This is especially true for tobacco products.  Illicit trade has exploded since the beginning of the pandemic, most likely due to the ban on tobacco sales.  This has had a significant impact on crime, the health of our citizens and our ability to compete with these criminals on a level playing field.  We are committed to fighting illicit trade, but extraordinary increases in cigarette taxes will simply drive customers to trade down into cheaper illicit brands.  We call on the Minister of Finance to do more to combat this growing scourge,” says Muller.

“We have also noticed the general move from traditional cigarettes to less harmful nicotine products.  Inclusivity and affordability are key to integrating these products into the informal market, and implementing excessive taxes on them will drive up their prices, further alienating the informal market and putting them out of reach for millions of customers. A move like this will discourage people from choosing less harmful alternatives to cigarettes.”

Millions of South Africans work in the informal trade in order to feed their families and educate their children but our voice is seldom heard, and our needs seldom taken into account when it comes to Government’s policies and budgets. 

As informal traders work towards becoming part of the formal sector, as recommended by the International Labor Organisation (ILO), through its Recommendation R204, it will be critical for Government, and particularly the Ministry of Finance, to take its voice into account. 

“We are beseeching the Minister of Finance to keep the plight of informal traders top of mind during his delivery of the medium-term budget policy statement (MTBPS),” concludes Muller.

Issued by South African Informal Traders Alliance