Relationship between the Informal Economy and Local Economic Improvement in the Thembisile Hani Local Municipality in South Africa

Purpose: The LED in South Africa complies with the formalisation of economies, the legislative context and the economic development framework. It involves the progression of the informal economy through consideration of its characteristics and potentials together with the standard LED requirements that associate the notion of a green economy and the connections among the unregulated and the official economies. This study investigates the relationship between the informal economy and the LED in the Thembisile Hani local municipality in South Africa.Methodology: The scholarship uses face-to-face interviews to collect data from respondents in the Thembisile Hani municipality regarding their economic survival experiences.Findings: The study results show that several limitations such as infrastructure, capital, suitable skills, excessive regulations and security apprehensions compromise the informal economy growth. In addition, the study showed that employment opportunities are created in the informal sector for poverty reduction and economic improvement. Furthermore, inclusive economic development is required because the government have excluded the informal economy from their economic planning processes.Implications: Municipalities should ensure the enhancement of basic knowledge and a better environment for the informal economy players to create the bridge between the unofficial economy and a sustainable LED in the country.