International Migrants and Refugees in Cape Town’s Informal Economy

Full text

International Migrants and
Refugees in Cape Town’s
Informal Economy
SAMP MIGRATION POLICY SERIES 70

International Migrants and Refugees
in Cape Town’s Informal Economy
SAMP MIGRATION POLICY SERIES No. 70
Godfrey Tawodzera, Abel Chikanda, Jonathan Crush
and Robertson Tengeh
Series Editor: Prof. Jonathan Crush
Southern African Migration Programme (SAMP)
2015

AUTHORS
Godfrey Tawodzera is Senior Lecturer, Department of Geography, University of Limpopo
Abel Chikanda is Assistant Professor, Department of Geography, University of Kansas,
Lawrence, USA
Jonathan Crush is CIGI Chair in Global Migration and Development, Balsillie School of
International Aairs, Waterloo, Canada
Robertson Tengeh is Senior Lecturer, Cape Peninsula University of Technology, Cape Town
ACKNOWLEDGEMENTS
SAMP and its partners in the Growing Informal Cities Project would like to thank the
IDRC for funding the project and this publication. e survey methodology was designed
by a group of researchers that included Wade Pendleton (UCT), Caroline Skinner (UCT),
Sally Peberdy (GCRO), Ines Raimundo (EMU), Ramos Muanamoha (EMU), Potsiso Pha-
sha (GCRO), Paul Okwi (IDRC) and the authors of this report. Key informant interviews
were conducted by Vanya Gastrow. anks are also due to Edgar Pieterse, Bronwen Dachs,
Maria Salamone, Jane Battersby and Gareth Haysom.
© Southern African Migration Programme (SAMP) 2015
Published by the Southern African Migration Programme, International Migration
Research Centre, Balsillie School of International Aairs, Waterloo, Ontario, Canada
First published 2015
ISBN 978-1-920596-15-6
Cover photo by om Pierce for the Growing Informal Cities Project
Production by Bronwen Dachs Muller, Cape Town
Printed by Megadigital, Cape Town
All rights reserved. No part of this publication may be reproduced or transmitted, in any
form or by any means, without prior permission from the publishers

CONTENTS PAGE
Executive Summary 1
Introduction 7
Research Methodology 9
Prole of Informal Migrant Entrepreneurs 11
Moving to South Africa 15
Entrepreneurial Motivation 18
Business Ownership and Strategies 22
Contributions to the Cape Town Economy 29
Mobility and Cross-Border Linkages 36
Import and Export of Goods 36
Remittances 37
Business Challenges 40
Conclusion 47
Endnotes 50
Migration Policy Series 55
LIST OF TABLES
Table 1: Geographical Distribution of Survey Sample 10
Table 2: Educational Levels of Migrant Entrepreneurs and South Africans 12
Table 3: Country of Origin of Migrant Entrepreneurs 13
Table 4: Immigration Status of Migrant Entrepreneurs 15
Table 5: Year of Arrival in South Africa 16
Table 6: Occupation before Leaving Home Country 17
Table 7: Occupations since Migrating to South Africa 17
Table 8: Method of Acquiring Skills Used in Business 19
Table 9: e Motivation to Start a Business 21
Table 10: Location Where Business Usually Conducted 23
Table 11: Origins of Business 24

Table 12: Primary Sources of Start-up Capital 26
Table 13: Source of Business Loans 27
Table 14: Occupancy/Tenure Status of Business Premises 30
Table 15: Source of Goods and Supplies 32
Table 16: Jobs Created by Migrant Entrepreneurs (Non-Family Employment) 33
Table 17: Sex of Employees of Migrant Entrepreneurs in Cape Town 33
Table 18: Reasons for Remitting to Home Country 40
Table 19: Business Challenges and Problems 41
Table 20: Extent to which Xenophobia Aects Business Operations by Home Country 46
LIST OF FIGURES
Figure 1: Age of Survey Respondents 12
Figure 2: Reasons for Migrating to South Africa 14
Figure 3: Sectoral Breakdown of Migrant Businesses 22
Figure 4: Year of Arrival and Year of Business Establishment 24
Figure 5: Comparison between Start-up Capital and Current Business Value 28
Figure 6: Monthly Prot from Business Activities 28
Figure 7: Frequency of Sending Remittances 38
Figure 8: Money Transfer Channels Used by Migrant Entrepreneurs 39

migration policy series no. 70
1
EXECUTIVE SUMMARY
Attacks on migrant and refugee entrepreneurs and their properties by South African
rivals and ordinary citizens have become a common phenomenon throughout the coun-
try, including the city of Cape Town. Business robberies oen result in deaths or serious
injuries. e Somali Community Board has noted that over 400 Somali refugees, many of
them informal traders, were murdered in South Africa between early 2002 and mid-2010.
e police are frequently accused by migrants of fomenting or turning a blind eye to xeno-
phobic attacks on their businesses. Meanwhile, the government refuses to acknowledge
the existence of xenophobia or the xenophobic rhetoric in many of these attacks, claiming
instead that they are simply the actions of criminal elements. Photographs published in
the media of the looting of migrant stores do not tend to feature hardened criminals, but
ordinary citizens including children in school uniform.
Migrant businesses are portrayed by ocials, citizens and the media as having a neg-
ative impact on the South African economy and undermining the livelihoods of South
Africans. e prevalence of such perceptions helps to explain growing xenophobic senti-
ment against migrants and refugees. Contrary to these popular perceptions, an emerging
literature on migrant entrepreneurship is beginning to demonstrate the positive economic
contributions of migrants and refugees to the country. is report examines the nature
of informal migrant and refugee entrepreneurship in Cape Town and whether or not the
negative stereotypes have any validity. It also seeks to examine what economic contribu-
tions migrants and refugees make to the local economy.
e report is based on the research conducted by the Growing Informal Cities project, a
partnership between SAMP/IMRC, the African Centre for Cities at the University of Cape
Town, the Gauteng City-Region Observatory (GCRO) and Eduardo Mondlane University
in Maputo. A questionnaire was administered to a sample of 518 migrant owners of micro-
enterprises, which had to meet three basic criteria for inclusion: (a) owned by a non-South
African; (b) in operation for at least two years; and (c) unregistered with the South African
Revenue Services (SARS). Although migrant entrepreneurs are located in most areas of the
city, certain areas have particular concentrations of migrant-owned businesses. e ques-
tionnaires were administered in four such areas: Imizamo Yethu, Philippi, Bellville, and
Cape Town CBD. irty in-depth interviews were also conducted with selected owners
of informal micro-enterprises. Two focus group discussions were held in the Cape Town

international migrants and refugees in cape town’s informal economy
2
CBD and Philippi respectively. Fieen key informant interviews were held with various
stakeholders in Cape Town to understand the operation and constraints faced by migrants
operating in the city’s informal economy.
e major ndings about the personal prole of the migrant and refugee entrepreneurs
were as follows:
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the Democratic Republic of the Congo (DRC), Nigeria, Malawi, Ethiopia and Camer-
oon were the most prominent. Just over a third were from other countries in the SADC.
ćFQSPNJOFODFPG;JNCBCXFBOFOUSFQSFOFVSTJO UIF$BQF5PXO JOGPSNBMFDPOPNZ
is not surprising, given the events in that country over the past decade and a half and
resultant mass migration to South Africa. A total of 57% of the entrepreneurs were from
other African countries, especially the DRC, Somalia, Nigeria and Ethiopia. e major-
ity of migrants from these countries (except Nigeria) came to South Africa as refugees.
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three countries: the DRC, Ethiopia and Somalia. A further 31% held asylum-seeker per-
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pia and Somalia. Nearly 12% had permanent residence permits while 8% were holders
of work permits. Only 7% of the respondents indicated that they did not have ocial
documentation to stay in South Africa. us, the majority of migrant entrepreneurs are
forced migrants who are entitled to human rights protection under international and
South African refugee law.
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in the immediate post-apartheid years. While another 20% came in the period 2000
to 2004, the vast majority (70%) came during the last decade. As many as 44% arrived
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particular, escalated between 2005 and 2009 as the country plunged deeper into crisis.
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Africa, only 14% of the entrepreneurs were unemployed immediately before leaving
for South Africa. Another 19% were students. Twenty-six percent were working in the
informal economy in their home countries.
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as unskilled manual workers (20%), skilled manual workers (11%), domestic workers

migration policy series no. 70
3
(10%), farmworkers (6%) and security workers (5%). Only 12% had experienced peri-
ods of unemployment and 7% had been students. Some had started informal businesses
while they were still studying to help nance their studies while others started their
business aer nishing their education and failing to nd formal employment.
ere is a perception in South Africa, including in government, that migrant entrepre-
neurs have an innate ability or set of skills that makes them more skilled and competitive
than South Africans. Understanding why people establish businesses is useful in under-
standing such entrepreneurial motivation. e survey sought to investigate how migrant
entrepreneurs in Cape Town acquired the skills that they used in their business. e major-
ity (64%) said that they were self-taught while 44% said they had learned skills from friends
and relatives. Around a quarter (26%) had acquired skills from previous work experience.
Less than 10% had formal skills training that they used in their business activity.
e survey concentrated on micro-enterprises in three major sectors: (a) retail, trade
and wholesale; (b) manufacturing; and (c) services. About 62% of the entrepreneurs were
engaged in retail, trade and wholesale activities, 28% in services and 10% in manufactur-
ing. A number of migrant entrepreneurs were engaged in more than one sector; for exam-
ple, manufacturing cras as well as selling shoes. eir business strategies and activities
included the following:
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(over 50%) started in 2010 and aer. In general, the data suggests that in Cape Town the
rapid growth of non-South Africans in the city’s informal economy is a relatively recent
phenomenon.
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established their business shows that there is a clear time lag between the two. Most
migrants therefore do not establish a business as soon as they arrive.
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total sample). Next was a permanent stall on the street (21%). Other xed premises
included workshops or shops (16%), their own home (11%), a permanent stall in a
market (11%) and a shop in a house, yard or garage (3%). Other temporary sites of
signicance included taxi ranks (11%) and in the customer’s home (3%). A total of 9%
were mobile, predominantly selling goods door to door.
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15% started the business with other migrants from their home countries, and 12% with

international migrants and refugees in cape town’s informal economy
4
members of their family. Only 4% reported starting with South African partners. Even
fewer took over businesses that had been started by South Africans.
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migrants used savings from prior employment. Other sources of start-up funds were
loans from relatives (29%) and non-relatives, usually other migrants from their home
country (16%). e use of both formal and informal nancial institutions was limited,
which emphasizes self-reliance and personal networks as sources of business start-up
capital. ose who tried to get bank loans were invariably turned down.
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sources. e majority (83%) had not acquired a single loan in the previous 12 months.
e growth of a business is almost entirely dependent on the reinvestment of prots
from that business.
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8IJMFPOMZIBEBUMFBTU;"3BUTUBSUVQOFBSMZWBMVFEUIFJSDVSSFOUCVTJ-
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neurs are able to scale up their business operations.
Migrants have long been portrayed by ocials, citizens and the media as having a neg-
ative impact on the South African economy and undermining the livelihoods of South
Africans. Contrary to these popular perceptions, this report demonstrates their positive
economic contributions to Cape Town:
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Furthermore, 31% pay rent to the South African private owner of their business prem-
ises. Only a quarter of the respondents said they did not pay any rent. e average rent
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;"3NJMMJPOQFSZFBS
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wholesalers (63%), small shops and retailers (20%), supermarkets (15%) and from fac-
tories. A smaller number (11%) sourced produce (mainly fruit and vegetables) from
the fresh produce market in Epping. Only a small proportion sourced the goods from

migration policy series no. 70
5
another country (10%) or their home country (7%). is clearly indicates that migrant
entrepreneurs play an important role in supporting South African businesses.
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goods from retailers and wholesalers and thus directly support the employees of South
African-based manufacturers who sell their goods through local retailers and wholesal-
ers. Second, they support local jobs at the wholesalers and retailers where they buy their
goods. ird, they play an important role in direct hiring of people to work for them in
their businesses.
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for non-family. Of the non-family jobs, 282 (57%) went to South Africans. Of these, 41%
were full-time jobs. As many as 41% of the entrepreneurs employed South Africans.
ere is a general preference for female South Africans in hiring. Not only are migrant
entrepreneurs creating jobs for South Africans, they show a distinct and welcome gen-
der bias in that they employ more female than male South Africans. In a labour market
that discriminates against women, this contribution to greater gender equity should not
be overlooked.
e report also examines the problems and challenges migrant entrepreneurs face in
running a successful business operation in Cape Town. e main challenges faced by the
migrant entrepreneurs, like business owners everywhere, are economic. Competition is
erce in the informal economy and half of the respondents said they had too many com-
petitors. As many as 45% were aected by competition from supermarkets.
Migrant entrepreneurs also face signicant security challenges. South Africa has
an extremely high crime rate but there is evidence that migrants are disproportionately
aected by violence. Some of this can be attributed to business competition. However, the
and looting of migrants businesses by ordinary citizens is also common. As many as 73% of
the entrepreneurs saw crime and the as a signicant challenge to their operations. Physi-
cal attacks and assault by South Africans were of concern to 36% of the respondents. Some
felt that they are systematically targeted because the criminals know that the police will not
help. Many claimed that, even when crimes are reported, the police do not take action. A
third cited conscation of goods by the police as a problem and 15% cited physical assaults
by the police.
Nearly 50% of the entrepreneurs mentioned discrimination against people of their
nationality as a problem and a third that they had to endure verbal assaults from South

international migrants and refugees in cape town’s informal economy
6
Africans. Forty-ve percent said their business operations had been aected by xenopho-
bia. Where a migrant comes from appears to inuence how susceptible their business
operations are to xenophobia. For example, 68% of Cameroonians, 66% of Somalis, 50%
of Congolese, 49% of Ethiopians, 45% of Kenyans and 41% of Nigerians said their business
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aected by xenophobia.
Cape Town Mayor, Patricia de Lille, has made several public pronouncements about
the value of informal entrepreneurs to Cape Town’s economy. It is not clear whether she
includes migrant and refugee entrepreneurs in her statements. e Operation Fiela attack
by the police and army on vendors at the Cape Town railway station in early 2015 certainly
leaves room for doubt. However, she is also on record as stating that Cape Town’s strategies,
policies and by-laws on the informal economy should include everyone. is report goes
beyond the rhetoric of inclusion to demonstrate with hard evidence exactly why migrant
and refugee entrepreneurs should not be excluded but accepted as an integral and valuable
part of the local economy.

migration policy series no. 70
7
INTRODUCTION
Opening the 2013 City of Cape Town Summit on Informal Traders, Executive Mayor Patri-
cia de Lille observed that “our strategy, which has as its goal economic growth for Cape
Town, understands the layers of the market. It understands that there is a formal sector and
an informal one and, while we may need to cater to each one dierently, both of them must
be central features of our policy decisions.”1 She continued in similarly positive vein that “it
is oen the energy generated by the informal sector that provides much of the cash ow,
exchange and commodity consumption within large sectors of the respective populations.
e critical element at the core is that the solvency of many communities, of many families,
and of many individuals, is enabled by informal economic activity.” Pledging the City’s sup-
port for the informal economy, she concluded: “We need traders to be a part of the city and
give their input on our policies, on our strategies, and on our by-laws so that they include
everyone and do not exclude anyone.”
e traders who ply the markets, streets and communities of Cape Town may see the
Mayor’s words of welcome for everyone in the informal economy as political rhetoric. Fol-
lowing nationwide xenophobic attacks on migrants and refugees in early 2015, the South
African government launched “Operation Fiela”, a thinly disguised attempt to make life
even more uncomfortable for informal migrant entrepreneurs. On World Refugee Day in
June, SAPS and military ocers, trac ocials, Metro police and immigration ocials
descended en masse on the Cape Town Station Deck, a well-known taxi terminus and
market above the Cape Town railway station.2 ey closed it for four hours and raided
all the stalls, later trumpeting the arrest of 81 “foreign nationals” and the conscation of
;"3JOiDPVOUFSGFJUHPPETwBOEiTVCTUBOUJBMBNPVOUTwPGEBHHBćFQFSTQFDUJWFPG
the informal traders on what happened was less triumphal:
Yesterday was a big loss. We had prepared food that could not be delivered to
our customers as usual. No one was allowed to come in or out of the deck.
Soldiers and police had blocked all entrances and exit points. I have not yet
paid my workers…Since I started this business (selling pap and mutton stew) in
2010, I never let my workers down when it comes to paying wages.3
e police, they come to the shop next door all the time, and they get nothing.
It’s a Nigerian shop, and each and every time they search they nd nothing, but
they still come back. When they came Saturday, they went next door and they

international migrants and refugees in cape town’s informal economy
8
said they heard that shop isopen 24/7. We pay rent; it’s none of their business
if we open 24/7, and the way we are paying the rent, they don’t give us choice…
you must make money the way you know how, which is toopen 24/7. Aer they
search the shop, they turn the shop upside down. eyleave it just like that, and
they said: “It’s not the last time you will see me in thisshop.”4
ey asked me for my document. Itake my passport and showed them, and
they le. I’ve been here for ve yearsalready. Nothing like this has happened to
me. Most of the people didn’t havetheir documents (with them), and there was
nowhere to run – it was all over the place. I sawthey arrested a woman, but
she was back here yesterday. She didn’t have herdocument on Saturday, but she
maybe asked her kids to bring it to the police soshe could be released. e army
thing, I don’t understand why they arehere. ey carry those guns like it’s war
here. If you come to search the peoplelike that, it’s not good, because even today
some shops didn’t open because thepeople were worried about that.5
I didn’t know what was happening. I just came to the train station and
when Icame upstairs, everything was closed. e police told us that we can’t
enter.ere were many people: police, army, and law enforcement. Downstairs
therewas nothing, they didn’t ask anyone about papers. I have my papers, but
mypapers are expired. If they saw my documents that day, they would arrest
me. Ididn’t renew them, because people say that to go to Home Aairs you
must payR2,000 to make the new documents. You need money and I don’t have
money. Itmakes you feel pain, because they arrest you and they take you away,
and youdon’t want to go. ere’s no jobs in Malawi. My friend, she works here,
and shewas arrested. I spoke to her on the phone – I asked her where she is; she
said she’sby the police but she don’t know which police station. She say she don’t
knowanything. When I tried again later, her phone was on voicemail.6
It was really terrifying the manner in which they did [things] yesterday. Soldiers
pointed guns, ready to shoot anyone [who was] against what was happening.
I was selling some brand stu, but these people went beyond that. Some of
them were wicked. I could neither question their authority nor do anything
to stop them from taking my stu. ey came in and took down all my stu.
ey conscated almost 50 items [including] jeans, trousers and tops. Out of
these items, less than 10 were brand names. Yesterday was a great loss, since

migration policy series no. 70
9
the operation went into our busiest time of the day, between 10 and 11am…
e unfortunate thing is they did not give us a receipt to show what they have
conscated…I believe in a normal situation they issue a receipt…We did not get
any chance to talk to them regarding how we could go about [getting back] the
goods seized.7
e contrast between the Mayor’s welcoming words and events on the streets of Cape
Town could not be starker, especially when it comes to the treatment of informal entre-
preneurs from other countries. reats of violence and actual attacks on migrant entre-
preneurs and their properties by South African rivals and ordinary citizens are a common
phenomenon throughout the city.8 In 2008, during an upsurge of attacks on migrant-
owned businesses, about 200 Somali businessmen in Western Cape province were threat-
ened with violence if they continued doing business in the townships. A group of local
UPXOTIJQCVTJOFTTNFOVOEFSUIFCBOOFSPGUIF;BOPLIBOZP3FUBJMFST"TTPDJBUJPOTFOU
letters to the Somalis, warning them to close their shops or face “actions that will include
physically ghting.”9 e Somali Community Board claims that over 400 Somalis, many of
them informal traders, were murdered in South Africa between early 2002 and mid-2010.10
Business robberies oen result in deaths or serious injuries; Somalis interviewed in one
study “were most traumatised by crimes orchestrated against them by South African trad-
ers, including assassination style killings and arson attacks that resulted in some Somali
traders being burnt to death.”11 e police are frequently accused of fomenting or turning a
blind eye to xenophobic attacks on migrant businesses. Whether true or not, there is little
evidence that the attackers are ever arrested or convicted. One study reports that police col-
lude in restricting the numbers of migrant entrepreneurs operating in townships.12
RESEARCH METHODOLOGY
Studies of the “hidden” role of migrant informal entrepreneurship in Cape Town have
begun to proliferate.13 is report builds on this research with the largest survey yet of Afri-
can migrant and refugee entrepreneurs from over 20 countries in dierent parts of the city.
Here we discuss the research design, which combined qualitative and quantitative methods
to provide a better understanding of the origins, operations, opportunities, and problems
confronting migrant entrepreneurs. e quantitative component of the study involved
the administration of the standardized SAMP-GIC questionnaire to a sample of migrant

international migrants and refugees in cape town’s informal economy
10
entrepreneurs. e questionnaire sought information on the origin of the enterprises, their
ownership, structure, capitalization, income, growth, and employment creation potential as
well as problems they faced. Qualitative data collection entailed the use of in-depth inter-
views, key informant interviews, and focus group discussions. e survey and interviews
generated information on the links between international migration and informality, the
opportunities available to the entrepreneurs to grow their businesses, and the obstacles they
face in their business operations.
e SAMP-GIC questionnaire was administered to a sample of 518 migrant owners of
micro-enterprises in Cape Town by graduate research assistants drawn from the Univer-
sity of Cape Town (UCT) and the Cape Peninsula University of Technology (CPUT). e
micro-enterprises had to meet all three basic criteria for inclusion: (a) owned by a non-
South African; (b) in operation for at least two years to allow for a retrospective analysis
of the start-up, problems, and opportunities; and (c) unregistered with the South African
Revenue Services (SARS). e questionnaires were administered in four areas that were
purposively selected: Imizamo Yethu, Philippi, Bellville, and Cape Town CBD (Table 1).
Although migrant entrepreneurs are located in most areas of the city, these areas have par-
ticular concentrations of migrant-owned businesses.
Table 1: Geographical Distribution of Survey Sample
No. %
Imizamo Yethu 103 19.9
Philippi 106 20.5
Bellville 154 29.7
CBD 155 29.9
Total 518 100.0
In all the survey areas, systematic random sampling was used. As almost all micro-
enterprises were located at street level, every third enterprise along a street was selected. e
starting point in each area was established by identifying the rst six enterprises, assigning
numbers to them and then rolling a dice to pick the starting point. ereaer, every third
enterprise was selected. Should the selected enterprise belong to a South African citizen or
not meet all three criteria, it was substituted by the next one and the process was repeated
until a street was covered.

migration policy series no. 70
11
A total of 30 in-depth interviews were conducted with selected owners of informal
micro-enterprises. e selection of respondents occurred during the questionnaire admin-
istration phase when all were asked if they were willing to partake in an in-depth interview.
A semi-structured interview schedule was used for the interviews. is allowed the inter-
viewers to probe for additional information by pursuing interesting issues through follow-
up questions. Twenty two of the 30 in-depth interviews were recorded and later transcribed
for use. e responses of the other eight were captured through note-taking. Two focus
group discussions were held in the Cape Town CBD and Philippi respectively. e former
had seven participants and the latter six. e aim of the focus groups was to elicit more
in-depth information on the perceptions, insights, attitudes, and experiences of migrant
entrepreneurs regarding their involvement in the informal sector, the opportunities they
saw, the problems and hurdles they faced and the institutional mechanisms and regulations
governing their operation in the city. e size of the two focus groups was manageable and
each lasted for about 100 minutes.
Fieen key informant interviews were held with various stakeholders in Cape Town
to understand the operation and constraints faced by migrants operating in the informal
economy. ese included the City of Cape Town, the Department of Trade and Industry,
and the Small Enterprise Development Agency, as well as some diaspora organizations. e
selection of key informants was based on their ability to supply information relevant to the
migrant enterprises and general issues regarding the operation of micro-enterprises.
PROFILE OF INFORMAL MIGRANT ENTREPRENEURS
e age prole of the interviewed migrants varied considerably from a minimum of 18 to a
maximum of 62 years. Most were relatively young, however, with 23% aged between 25 and
29 and 27% between 30 and 34. In total, nearly 80% of the sample was aged below 40 (Fig-
ure 1). e general youthfulness of the entrepreneurs is both a reection of the tendency
for migrants to South Africa to be working-age adults and the fact that informal business
activity generally requires one to be physically t enough to haul large loads of goods to
and from storerooms to the street on a daily basis, to brave unfavourable weather condi-
tions in the open, and sometimes to engage in running battles with municipal police. Men
outnumbered women by 73% to 27%.

international migrants and refugees in cape town’s informal economy
12
Figure 1: Age of Survey Respondents
e sample was relatively educated in comparison with the South African population,
although the numbers with post-secondary education were not large. Only 4% indicated
that they had no formal education (Table 2). Most of the respondents (89%) had some
secondary education: 36% had completed secondary or high school and another 28% had
some secondary education. Around 17% held a college certicate or diploma, 6% had some
university education, and 2% had completed an undergraduate degree.
Table 2: Educational Levels of Migrant Entrepreneurs and South Africans
Migrant entrepreneurs (%) South Africans (%)
(Census 2011)
No formal schooling 3.9 8.6
Primary only 5.7 16.9
Some secondary 27.6 33.9
Secondary/high school diploma 36.0 28.9
Post-secondary qualifications 25.6 11.8
Other 1.2 0.0
Total 100.0 100.0
<=19 20-24 25-29 30-34 35-39
Age category (in years)
40-44 45-49 50+
0
5
10
15
20
25
30
Percentage (%)

migration policy series no. 70
13
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Nigeria, Malawi, Ethiopia and Cameroon (Table 3). Just over a third (36%) were from other
4"%$DPVOUSJFTćFQSPNJOFODFPG;JNCBCXFBOFOUSFQSFOFVSTJOUIF$BQF5PX OJOGPS-
mal economy is not surprising, given the negative events in that country over the past
decade and a half and the resultant mass migration to South Africa.14 A total of 57% of the
entrepreneurs were from other African countries, especially the DRC, Somalia, Nigeria and
Ethiopia. e majority of migrants from these countries (with the exception of Nigeria)
would have come to South Africa as refugees. e political crisis in Somalia over the past
two decades has seen an inux of migrants into South Africa, where most seek and are
granted asylum.15
Table 3: Country of Origin of Migrant Entrepreneurs
No. %
SADC
Zimbabwe 118 22.8
Malawi 39 7.5
Tanzania 9 1.7
Lesotho 5 1.0
Zambia 5 1.0
Angola 4 0.8
Mozambique 4 0.8
Other African
Somalia 70 13.5
Democratic Republic of the Congo 58 11.2
Nigeria 48 9.3
Ethiopia 37 7.2
Cameroon 22 4.3
Ghana 17 3.3
Congo (Brazzaville) 14 2.7
Uganda 12 2.3
Kenya 11 2.1
Rwanda 5 1.0

international migrants and refugees in cape town’s informal economy
14
Other
Pakistan 8 1.5
Bangladesh 4 0.8
Other country 27 5.2
Total 517 100.0
Migrants generally have more than one reason for migrating. In an eort to capture this
multi-faceted aspect, the survey asked the respondents to rate several dierent possible
motives in terms of their level of importance. Wanting to provide for their families back
home was cited as an important factor by 72%, closely followed by those who came to the
country to seek asylum (68%) (Figure 2). As many as 62% said they came with the inten-
tion of starting a business. At the same time, 48% said they came to look for employment,
which suggests that some entrepreneurs may have been rationalizing their later decision to
become an entrepreneur as their original intention for coming. e responses also provide
insights into the role of migrant networks: while only 18% said they had originally come
to join a family business, as many as 47% said they had been encouraged to come to South
Africa by friends and relatives.
Figure 2: Reasons for Migrating to South Africa
% of sample
Intended
to look for
formal job
Intended to
join family
business
Intended to
start own
business
Intended to
further
studies
Came as a
refugee/
asylum seeker
Wanted to
provide for
family back
home
Encouraged
to come by
friends/
relatives already
in South Africa
0
10
20
30
40
50
60
70
80
Agree Neither agree nor disagree Disagree

migration policy series no. 70
15
Just under a third of the migrant entrepreneurs had refugee permits (Table 4). Of these,
59% came from only three countries: the DRC, Ethiopia and Somalia. A further 31% held
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GSPNUIF%3$&UIJPQJBBOE4PNBMJBBOPUIFSJOUPUBM)PXFWFSPOMZBGFX;JNCB-
CXFBOTIBWFFWFSCFFOHSBOUFESFGVHFFTUBUVTCFDBVTF4PVUI"GSJDBNBJOUBJOTUIBU;JNCB-
bweans are not political refugees but economic migrants.16 Nearly 12% had permanent resi-
EFODFQFSNJUTXIJMFIBEXPSLQFSNJUT;JNCBCXFBOTIFMENPSFUIBOIBMGPGUIF
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by the South African government in late 2010.17 Only 7% of the respondents indicated that
they did not have ocial documentation to stay in South Africa. More importantly, the pro-
le drawn from this research shows that the vast majority of migrant entrepreneurs are in
fact forced migrants who deserve protection under international and South African refugee
law. Rather than being victimized for choosing to enter the informal economy, they deserve
greater protection from the state as they seek to rebuild their lives in a foreign land.
Table 4: Immigration Status of Migrant Entrepreneurs
No. %
Refugee permit holder 162 31.5
Asylum-seeker permit holder 158 30.7
Permanent resident of South Africa 61 11.9
Work permit holder 40 7.8
No official documentation 38 7.4
Visitor’s permit holder 30 5.8
Other immigration status 12 2.3
Refused/No answer 12 2.4
Citizen of South Africa 1 0.2
Total 514 100.0
MOVING TO SOUTH AFRICA
Very few of the migrant entrepreneurs had entered South Africa before 1994 and only 8%
had arrived in the immediate post-apartheid years. While another 20% came between 2000
and 2004, the vast majority (70%) arrived during the last decade: as many as 44% between
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international migrants and refugees in cape town’s informal economy
16
escalated between 2005 and 2009 as the country plunged deeper into crisis. It is also pos-
sible that South Africa’s nationwide xenophobic violence in 2008 and continuing attacks
on migrant businesses have exercised a dampening eect on migration and discouraged
migrant entrepreneurship in recent years.18
Table 5: Year of Arrival in South Africa
No. %
Before 1994 2 0.4
1994-1999 43 8.4
2000-2004 106 20.5
2005-2009 226 43.7
2010-2014 140 27.1
Total 517 100.0
Despite the perception that unemployment at home is a driver of migration, only 14%
of the entrepreneurs were unemployed immediately before leaving for South Africa (Table
6). Another 19% were students, which means that around two-thirds were engaged in some
form of income-generating activity before leaving or being forced to leave. Twenty-six per-
cent were working in the informal economy in their home countries, while the rest (40%)
were working in the formal economy as skilled and unskilled manual workers, profession-
als, farm workers, oce workers, teachers, domestic workers, and in a range of other jobs.
Some respondents were involved in more than one activity; for example, holding a job and
running an informal business at the same time.
When migrants move to South Africa, they are rarely guaranteed the same types of jobs
they had back home. Being in a new environment with its own labour market and demands,
many migrants struggle to nd suitable employment and are forced to accept low-paying
jobs. Around 60% had worked in the formal sector since coming to South Africa, primar-
ily as unskilled manual workers (20%), skilled manual workers (11%), domestic workers
(10%), farm workers (6%) and security workers (5%) (Table 7). Only 12% had experienced
periods of unemployment and 7% had been students. Some had started informal busi-
nesses while still at school to help nance their studies, while others started their business
aer nishing their education and failing to nd formal employment. As many as 56% had
operated a dierent business from the one they were currently operating, either doing the
same (41%) or a dierent activity (15%).

migration policy series no. 70
17
Table 6: Occupation before Leaving Home Country
No. %
Operated own informal sector business 152 36.1
Scholar/student 112 19.3
Unemployed 80 13.8
Skilled manual worker 35 6.0
Professional (e.g. lawyer, doctor, academic, engineer) 32 5.5
Agricultural worker 32 5.5
Unskilled manual worker 29 5.0
Office worker 26 4.5
Teacher 12 2.1
Police/military/security 10 1.7
Domestic worker 10 1.7
Formal sector business owner 4 0.7
Employer/manager 3 0.5
Mineworker 2 0.3
Health worker 1 0.2
Other occupation 33 5.7
Total 563 100.0
Table 7: Occupations since Migrating to South Africa
No. % of total
Business
Operated informal business (same activity as now) 211 40.7
Operated informal business (different activity than now) 77 14.9
Businessman/woman formal sector (self-employed) 10 1.9
Employment
Unskilled manual worker 104 20.0
Skilled manual worker 57 11.0
Domestic worker 50 9.7
Farm worker 31 6.0
Security 26 5.0

international migrants and refugees in cape town’s informal economy
18
Professional 18 3.5
Office worker 15 2.9
Teacher 5 1.0
Mineworker 2 0.4
Employer/manager 1 0.2
Health worker 1 0.2
Other
Unemployed 64 8.2
Other occupation 56 7.2
Student 35 4.5
Total 763 100.0
Note: multiple response question
ENTREPRENEURIAL MOTIVATION
Research in South Africa has shown that migrants, especially refugees, face many barri-
ers in gaining access to formal employment leading many to nd work in the informal
economy.19 e possibilities for informal entrepreneurship are mediated by several factors,
including the ease of acquisition of relevant skills. For instance, if the skills required for a
certain entrepreneurial activity can only be acquired through training programmes, indi-
viduals who do not have access to such programmes face barriers of entry. e survey
sought to investigate how migrant entrepreneurs in Cape Town acquired the skills that they
used in their business. Many cited more than one method of acquiring the relevant skills.
e majority (64%) said that they were self-taught while 44% said they had learned skills
from friends and relatives (Table 8). Around a quarter (26%) had acquired skills from pre-
vious work experience (26%). e number with formal business skills training was much
lower: 8% had training from a university, school or training centre; 7% had accessed a
government training course; and 3% had training from NGOs. A total of 11% said they did
not need any particular skills in their business. In total, less than 10% had formal training
to help them acquire the skills used in their business activity.

migration policy series no. 70
19
Table 8: Method of Acquiring Skills Used in Business
No. % of total
Informal
Self-taught 332 64.1
Learning from friends and relatives 227 43.8
Previous work experience 136 26.4
Apprenticeship/on the job training 57 11.0
Formal
University, school or other training centre 44 8.5
Training courses/programmes (government) 37 7.1
Training courses/ programmes (NGO, private sector) 18 3.5
Other
Other methods 6 1.1
No skills needed 55 10.6
Note: multiple response question
Are entrepreneurs born or made? is question has spawned a large literature examining
whether entrepreneurs have a natural predisposition towards entrepreneurship in terms of
personal motivation and orientation.20 Some argue that examining the reasons why people
establish businesses is useful in understanding entrepreneurial motivation and orientation.
e current study therefore examined the factors that motivated migrants in Cape Town to
establish a business. In general terms, these can be classied as pull and push factors. Push
factors that drive migrants into entrepreneurship relate mostly to employment factors. On
the other hand, pull factors include monetary or nancial motivations, the desire for pres-
tige or independence, intrinsic rewards (that is, self-fullment and growth) and various
other human, social and economic factors.
To identify these “entrepreneurial triggers”, respondents were asked to rank the impor-
tance of various factors on a motivation scale ranging from 1 (no importance) to 5 (extremely
important). Table 9 presents the results of this exercise in the form of a mean score for the
respondents as a whole on each of the 24 factors that were pre-identied as components
of entrepreneurial motivation. Each of these factors was grouped into one of four gen-
eral categories: nancial benets and security; entrepreneurial orientation and personal
rewards; building social capital; and creating employment. Of these, creating employment

international migrants and refugees in cape town’s informal economy
20
scored the lowest with all factors scoring less than 3.0. In other words, unemployment and
the desire to provide employment for others did not rate particularly highly as motives for
entrepreneurship. Insofar as employment creation was a factor, it is of interest that creating
jobs for family and for South Africans both scored 2.5 (and better than creating jobs for
other people from the home country at 2.2).
Within the group of factors relating to building social capital, there was considerable
diversity with four factors scoring over 3.0 and three less than 2.5. Less important were
factors relating to working collaboratively to establish a business. More signicant were
the desire to provide a product or service to South Africans (3.9) and other immigrants
(3.7) and a desire to contribute to the development of South Africa (3.6). In general, it was
personal motivations and rewards (as in the nancial benets and security group and the
intrinsic rewards group) that consistently scored the highest with every factor rating over
3.0. e highest scoring was in the entrepreneurial orientation and personal rewards cate-
gory and included “being one’s own boss” (at 4.1 the highest mean score overall), having the
right personality to run a business (3.9) and a desire to challenge oneself (3.8). Overall, this
suggests that the migrant entrepreneurs tended to go into business because they felt that
they were personally suited to this kind of activity as independent-minded people looking
for a challenge, wanting to learn new skills and willing to take risks.
At the same time, material factors cannot be entirely discounted as the scores in the
nancial benets and security category were also high. e highest factor of all was needing
more money to survive (4.1). Other material motivations included greater nancial secu-
rity for the family (3.9) and making money to remit to the home country (3.8). Another
high-scoring factor was the long-term desire to run their own business (at 4.0), which can
also be seen as another sign of independence and intrinsic reward. However, while the
entrepreneurs tend to favour individualistic explanations for why they established their
business, when it comes to the economic fruits of that business, they tend to take a more
social stance, emphasizing the benets to family in South Africa and, through remittances,
their home country.
In sum, while nancial factors provided the strongest motivation to start a business, it
was also a means of fullling personal goals and aspirations. For others, entrepreneurship
provided them with a way of serving the community, including South Africans, their own
families, and the wider immigrant community in South Africa. erefore, the success of
immigrant-owned businesses does not only result in individual benets accruing to the

migration policy series no. 70
21
entrepreneurs but the benets are likely to be felt by the general population including ordi-
nary South Africans and other migrants.
Table 9: The Motivation to Start a Business
Factor Mean score
Financial benefits/security
I needed more money just to survive 4.1
I have always wanted to run my own business 4.0
I wanted to give my family greater financial security 3.9
I wanted to make more money to send to my family in my home country 3.8
Entrepreneurial orientation and personal rewards
I wanted more control over my own time/to be my own boss 4.1
I have the right personality to run my own business 3.9
I like to challenge myself 3.8
I like to learn new skills 3.7
I enjoy taking risks 3.6
I wanted to do something new and challenging 3.5
I wanted to compete with others and be the best 3.3
Building social capital
I wanted to provide a product/service to South Africans 3.9
I wanted to contribute to the development of South Africa 3.6
I had a good idea for a service/product for other immigrants 3.7
I wanted to increase my status in the community 3.2
Support and help in starting my business was available from other immigrants 2.4
My family members have always been involved in business 2.2
I decided to go into business in partnership with others 2.1
Creating employment
I was unemployed and unable to find a job 2.9
I wanted to provide employment for members of my family 2.5
I wanted to provide employment for South Africans 2.5
I had a job but it did not pay enough 2.4
I wanted to provide employment for other people from my home country 2.2
I had a job but it did not suit my qualifications and experience 2.0

international migrants and refugees in cape town’s informal economy
22
BUSINESS OWNERSHIP AND STRATEGIES
e survey collected detailed information about the entrepreneurs’ businesses on issues
such as the year of establishment, who started the business, the amount and source of
start-up capital, and the current value of the business. e survey concentrated on micro-
enterprises in three major sectors: (a) retail, trade and wholesale; (b) manufacturing; and
(c) services. About 62% of the migrant entrepreneurs were engaged in retail, trade and
wholesale activities, 28% in services, and 10% in manufacturing (Figure 3). A number of
entrepreneurs were engaged in more than one sector; for example, manufacturing cras as
well as selling shoes.
Figure 3: Sectoral Breakdown of Migrant Businesses
e entrepreneurs conducted their business activities from a variety of temporary and
permanent locations (Table 10). Some, particularly the more mobile, operated in more than
one location. e most signicant location was a temporary stall on the street (38% of
the total sample). Next was a permanent stall on the street (at 21%). Other xed premises
included workshops or shops (16%), their own home (11%), a permanent stall in a market
(11%) and a shop in a house, yard or garage (3%). Other temporary sites of signicance
included taxi ranks (11%) and in the customer’s home (3%). A total of 9% were mobile,
predominantly selling goods door to door.
Retail, trade and
wholesale
Services Manufacturing
0
10
20
30
40
50
60
70
Percentage (%)

migration policy series no. 70
23
Table 10: Location Where Business Usually Conducted
No. % of total
Permanent
Permanent stall on the street 109 21.0
Workshop or shop 85 16.4
Permanent stall in a market 55 10.6
In own home 55 10.6
Shop in house/yard/garage 18 3.5
Taxi/public transport station in permanent structure 10 1.9
Restaurant or hotel 2 0.4
Temporary
Temporary stall on the street 198 38.2
Taxi rank 57 11.0
Mobile (e.g. door to door) 46 8.9
In customer’s home (e.g. hairstyling) 17 3.3
From vehicle (car, truck, motor bike, bike) 6 1.2
Other
Other location 34 6.6
N 518
Note: multiple response question
Only a few of the businesses (less than 5%) were established before 2000. e majority
(over 50%) started between 2010 and 2014 (Figure 4). In general, the data suggests that the
rapid growth of non-South Africans in the city’s informal economy is a relatively recent
phenomenon and may account, in part, for the growing hostility that migrant entrepre-
neurs are facing. Comparing the year in which the migrant came to South Africa with the
year they established their business shows that there is a clear time lag between the two. In
other words, most migrants do not establish a business as soon as they arrive.
Over 70% of the migrants started their business on their own, without the assistance of
others. is is consistent with the ndings about individualism in the analysis of entrepre-
neurial motivation above (Table 11). Only 15% started the business with other migrants
from their home countries, and 12% with members of their family. Only 4% reported start-
ing with South African partners. Even fewer took over businesses that had been started by
South Africans.

international migrants and refugees in cape town’s informal economy
24
Figure 4: Year of Arrival and Year of Business Establishment
Table 11: Origins of Business
No. % of total
I started it alone 371 71.6
I started it with people from my home country 77 14.9
I started it with my family 65 12.5
I started it with people from other countries 22 4.2
I started it with South African business partners 11 2.1
I bought this business from a non-South African 8 1.5
I bought this business from a South African 5 1.0
Other 3 0.6
N 518
Note: multiple response question
A key issue confronting small businesses in general, and informal businesses in par-
ticular, is the perception that they have low prot margins, a high rate of failure and do not
grow. Such perceptions stem from the argument that the driving force behind most of these
establishments is mere survival. One question that this study sought to answer was whether
0
10
20
30
40
50
60
Year of business establishmentYear of arrival
1995-1999 2000-2004 2005-2009 2010-2014
Percentage (%)

migration policy series no. 70
25
the businesses operated by migrant entrepreneurs are survivalist enterprises on the periph-
ery of the economy or vibrant enterprises capable of increasing their capitalization. e
study therefore collected data on the sources and amounts of start-up capital used to estab-
lish the business and the current value of the business. Dierences between the start-up and
the current value of a business provide evidence of growth or contraction of the enterprise.
Obtaining start-up business capital can be a daunting exercise for migrants and refugees
in South Africa. ey frequently lack the necessary collateral to acquire a loan from nan-
cial institutions. Various reasons were provided for why banks turned down loan applica-
tions. e most common was that the migrants were “not South African” and did not have
identity documents, an indictment of the banks given how many of the entrepreneurs have
a legal right to be in South Africa. Others were turned down because their enterprise was
deemed unviable by a bank. Still others were rejected on the basis that they lacked collateral
and had insucient operating capital.
Unsurprisingly, therefore, the vast majority of migrant entrepreneurs (81%) used per-
sonal savings to start the business (Table 12). Most self-nancing migrants used savings
from prior employment:
We came without any money. But from small piece work jobs we did here and
there, my friend and I were able to save some money and obtain a certain capital
that allowed us to start something informal. God helped us to nd a place where
we could expose our business to meet clients.21
e secret of business capital is to save little by little because there is nowhere
you can get money. I started by saving little by little until I had something big
enough to start something consistent. So I started very small. I kept on saving
and increasing the quantity of my products until I became like this. As for others,
I think they get help from their families. But there is no one who just gets free
money.22
Our work does not need capital. e rst thing is your own energy and skill.
If you have no money you can borrow. It always begins like I am doing now.
You rst work for someone else. Aer some years, I can decide to have my own
activity. So you can nd help or you need to help yourself. But the bank is not for
us. We help each other instead.23

international migrants and refugees in cape town’s informal economy
26
Other sources of start-up funds were loans from relatives (29%) and non-relatives, usu-
ally other migrants from their home country (16%). e use of both formal and informal
nancial institutions was limited, which emphasizes self-reliance and personal networks as
sources of business start-up capital. As one female entrepreneur observed:
I started with a few thousand rands from my friends and relatives. I pay them
back little by little and they understand. at is how we do it. Others they come
with their own money to start a business, but those are the few. Most of us we
came with very little and so we borrow or we work for others until we raise the
money to start on our own. It’s wasting time to go to the bank. Once they see you
and you cannot produce an ID, then they say we cannot help.24
Table 12: Primary Sources of Start-up Capital
No. % of total
Personal savings 418 81.6
Loan from relatives 149 29.1
Loan from non-relatives 81 15.8
Money lenders 9 1.8
Loan from informal financial institutions 7 1.4
Business credit (goods on terms) 5 1.0
Loan from micro-finance institution 1 0.2
Other source of capital 23 4.5
N 512
Note: multiple response question
Once a business is established, very few of the entrepreneurs seek loans. e majority
(83%) had not acquired a single loan in the previous 12 months. While 28% had obtained
loans from relatives in the start-up phase, only 9% had done so in the previous year. Only
a tiny minority (less than 3%) had ever obtained loans from other formal and informal
sources (Table 13). Only 18 individuals (or 3.5%) of the sample had tried to apply for a bank
loan. Of these, only 5 (or 1%) had managed to secure loans. What this indicates is that the
growth of a business is entirely dependent on the reinvestment of prots from that business.
While migrant entrepreneurs receive no assistance from South African banks, they are also

migration policy series no. 70
27
unable to access government support schemes for small-scale businesses. Only 1% of the
respondents had beneted from such schemes.
Table 13: Source of Business Loans
No. % of total
Loan from relatives 49 9.4
Loan from other business owners 27 5.2
Business credit (goods on terms) 9 1.7
Mashonisa (money lenders) 6 1.1
Loan from banks 5 1.0
Informal financial institution 3 0.6
Micro-finance institution 2 0.4
Other source of loan 7 1.3
N 518
Note: multiple response question
e question, then, is whether businesses are able to grow despite the absence of credit
and lack of government support. e survey found that while more than two-thirds of
UIFTBNQMFIBEMFTTUIBO;"3UPTUBSUUIFJSCVTJOFTTPOMZWBMVFEUIFJSDVSSFOU
CVTJOFTTBUMFTTUIBO;"3'JHVSF0OUIFPUIFSIBOEXIJMFPOMZIBEBUMFBTU
;"3BUTUBSUVQOFBSMZWBMVFEUIFJSDVSSFOUCVTJOFTTBUNPSFUIBO;"3
suggesting an upward trend in the value of migrant-owned enterprises in the Cape Town
area. is is further evidence that informal migrant entrepreneurship is more than just sur-
vivalist; a great many of the entrepreneurs have managed to scale up their business opera-
tions.
0O BWFSBHF UIF SFTQPOEFOUT FBSO QSPĕUT PG ;"3 QFS NPOUIPS BQQSPYJNBUFMZ
;"3QFSZFBSGSPNUIFJSCVTJOFTTBDUJWJUJFTćJTJTMFTTUIBOUIF;"3 BWFS-
age income for black families in South Africa recorded in the 2011 census (Statistics South
Africa, 2012). However, the latter includes many middle-class families with much higher
JODPNFT"TNBOZBTFBSONPSFUIBO;"3QFSNPOUIGSPNUIFJSCVTJOFTTBDUJWJ-
ties (Figure 6).

international migrants and refugees in cape town’s informal economy
28
Figure 5: Comparison between Start-up Capital and Current Business Value
Figure 6: Monthly Profit from Business Activities
Percentage (%)
Less than
ZAR5,000
ZAR5,001-
ZAR10,000
ZAR10,001-
ZAR15,000
ZAR15,001-
ZAR20,000
ZAR20,001-
ZAR30,000
ZAR30,001-
ZAR50,000
ZAR50,001-
ZAR100,000
Over
ZAR100,000
Don't know/
missing
0
5
50
45
40
35
30
25
20
15
10
Start-up capital (%) Current business value (%)
Less than
ZAR1,000
ZAR1,000-
ZAR3,000
ZAR3,001-
ZAR6,000
ZAR6,001-
ZAR9,000
Over ZAR9,000
0
5
10
15
20
25
30
35
40
45
50
Percentage (%)

migration policy series no. 70
29
CONTRIBUTIONS TO THE CAPE TOWN ECONOMY
Migrants have long been portrayed by ocials, citizens and the media as having a negative
impact on the South African economy and undermining the livelihoods of South Africans.
e prevalence of such perceptions helps to explain growing xenophobic sentiment against
migrants and refugees.25 Contrary to these popular perceptions, an emerging literature on
migrant entrepreneurship is beginning to demonstrate the positive economic contributions
of migrants.26
is project sought to establish the contribution of migrant entrepreneurs to the local
economy using three main indicators: paying rent, purchasing arrangements, and employ-
ment of South Africans. First, with regard to rent, over a third of the respondents (34%)
pay rent to the city council or municipality (Table 14). Furthermore, 31% pay rent to the
South African private owner of their business premises and 9% to a non-South African
private owner. is means that the majority of entrepreneurs, despite being in the informal
economy, pay rent to the local government and/or South African property owners. Only a
quarter of the respondents said they did not pay any rent. A small minority (14%) were the
owners or part-owners of their business premises. e average rent paid per month varied
XJEFMZXJUIBNFBONPOUIMZSFOUBMPG;"34PNFPGUIFSFOUTXFSFDMFBSMZFYPSCJUBOU
and were negatively aecting the job-creation potential of the business:
e problem here is rentals. It is expensive. It is a company that changes
management. Sometimes they put in someone who comes with changes in the
rentals. Like recently, we signed a contract for three years and rentals went up
and up. ere used to be many people working with me but they are not here
any more because of rent. Sometimes you can only make enough money for rent
and don’t benet.27
e cost of living is high, the rent is expensive where I am staying in Cape Town.
I am paying R1,800 per month. And the shop I am renting here is R11,000
per month. e only trouble here is just the rent. If the government can do
something about this, we will be very thankful and grateful. e rent is killing
us. It is stressing us a lot. e rents are just too high.28
is place used to be a packing place for vehicles. We negotiated with the
owner and changed it into a market place and we pay rent. So everyone has a
responsibility to pay rent, or else there is no market here. You cannot conduct

international migrants and refugees in cape town’s informal economy
30
business here if you don’t have money. So we pay R30,000 for this place.
Sometimes a few of us are forced to pay all that money to keep the place. If we
are still here it is because we pay every time. We would not be here if we failed to
pay a month. Others come from Greenmarket [Square] and store their luggage
here and pay about R800 monthly.29
*OUPUBMUIF SFTQPOEFOUT DPMMFDUJWFMZ QBJE B NFBONPOUIMZ SFOU PG ;"3 PS
;"3NJMMJPOQFSZFBS
Table 14: Occupancy/Tenure Status of Business Premises
No. % of total
Pay rent to council/ municipality 177 34.2
Pay rent to private owner who is a South African 162 31.3
Rent-free, with permission 98 18.9
I own it/am part owner 72 13.9
Rent-free, without permission (squatting) 47 9.1
Pay rent to private owner who is not South African 45 8.7
Other occupancy/tenure status 8 1.5
Note: multiple response question
Some entrepreneurs rent larger business spaces from South African owners and then
sub-let on a regular or occasional basis to vendors who supply wholesale goods to other
vendors:
e people selling here are small business people from various places such as
Zimbabwe, Malawi, Namibia and Tanzania. is is a wholesale market. e
people out there come to order from here. So we created this place as a platform
for people coming from various places to expose their products here. When they
come, we give them a small space. ey sell their products and go back home
and others come in. Every day there are those that come in and those that leave.
ey pay something to us and we also pay to the owner of the place.30
Second, purchasing agreements are another way in which to gauge the migrant con-
tribution to the local economy. If, for example, migrant entrepreneurs sourced their

migration policy series no. 70
31
commodities locally this would help spur local economic development. A large number
of respondents indicated that they sourced their goods locally from wholesalers (63%),
small shops and retailers (20%), supermarkets (15%) and from factories (15%) (Table 15).
A smaller number (11%) sourced produce (mainly fruit and vegetables) from the Epping
fresh produce market. Only a small proportion sourced the goods from another country
(10%) or their home country (7%).
A common accusation levelled by South African informal sector entrepreneurs against
migrants is that they frequently engage in group buying, pooling their resources with other
entrepreneurs and negotiating better deals with wholesalers and manufacturers. is is a
perfectly legal practice which, lest it be forgotten, directly translates into lower prices for
consumers. Such group-buying practices have been documented in several studies.31 On
the other hand, some studies have contested whether the practice exists, arguing instead
that migrants do not buy in groups but are very attuned to price dierences at various
outlets.32 e present study found that group buying in bulk did exist but was far from uni-
versal. Just over a third of the respondents (36%) engaged in this practice. is means that
nearly two-thirds of our sample did not.
Given that many of the respondents source their goods from wholesalers, who usually
sell in bulk, it makes sense for small entrepreneurs to combine into groups to benet from
buying in bulk. One wholesaler interviewed for this project said that, in his experience,
Somalis were the most adept at group buying and that very few South Africans engaged in
the practice. He noted that, in the early stages, small businesses get together to form a “buy-
ing corporation” or “buying group”:
ey buy together to get better prices by buying in bulk. Instead of buying one
case and getting a price for 10, they’ll buy 20 because they’ll get a better price.
ey will elect a committee, two or three of them and they will do the buying.
Some of them have little warehouses. ey will buy the stock into the warehouse
and redistribute to themselves by a little bakkie (small truck) to each shop. at’s
how they deal with it. It’s not 20 of them all of a sudden. If they belong to a
buying group they elect somebody to represent them, and that person will come
and do the buying and it’s normally their best negotiator.33
Buying groups normally comprise a group of start-ups and once individuals have grown
their businesses suciently to buy in bulk on their own, they opt out of a buying group.

international migrants and refugees in cape town’s informal economy
32
ird, migrant entrepreneurs create jobs in Cape Town in three main ways. First, by
buying goods from retailers and wholesalers they directly support the employees of South
African-based manufacturers who sell their goods through the local retailers and wholesal-
ers. Second, they support local jobs at the wholesalers and retailers where they buy their
goods. ird, they play an important role in direct hiring of people to work for them in
their businesses. While other studies have documented the extent to which migrants create
employment and opportunities for fellow immigrants, especially those from their home
country, less is known about the full range of opportunities that they create for all people,
including South Africans.34
Table 15: Source of Goods and Supplies
No. % of total
Suppliers
Wholesalers 329 63.5
Small shops/retailers 102 19.7
Supermarkets 77 14.9
Direct from factory 76 14.7
Epping fresh produce market 57 11.0
Direct from farmers 14 2.7
Other
Make or grow them myself 91 17.6
From other informal sector producer/retailer 83 16.0
From another country 51 9.8
From home country 39 7.5
N 518
Note: multiple response question
A common assertion is that employment creation by migrant entrepreneurs is limited
to family members and people from their own countries.35 is may be true in Del, a
township on the outskirts of Cape Town, but is not replicated across the city as a whole. e
migrant entrepreneurs surveyed created a total of 644 jobs including family employment,
or 496 jobs excluding family employment (Table 16). Of the 496 non-family jobs, 282 (or
57%) went to South Africans. At the time of the survey, 21% of the migrant entrepreneurs

migration policy series no. 70
33
employed their own family members in their business, 18% employed people from their
home country and 12% employed migrants from other countries (Table 17). By creating
employment for their family members and home country peers, it could be argued that
they are actually reducing the unemployment problem in South Africa by reducing pres-
sure on the over-subscribed job market. In terms of gender, male family members working
on a full-time basis outnumbered female employees by a factor of one to two and a half and
by one to four for those working on a part-time basis (Table 17). Men also outnumbered
women in the hiring of migrants from the home country and other countries.
Table 16: Jobs Created by Migrant Entrepreneurs (Non-Family Employment)
South Africans Non-South Africans Total
No. % No. % No. %
Full-time 203 40.9 166 33 369 74.4
Part-time 79 15.9 48 10 127 25.6
Total 282 56.9 214 43.1 496 43.1
Table 17: Sex of Employees of Migrant Entrepreneurs in Cape Town
No. of employees Family members Home country
peers South Africans People from other
countries
N % N % N % N %
Full time
– male
1 49 9.5 38 7.3 35 6.8 27 5.2
2 9 1.7 12 2.3 11 2.1 5 1.0
3 1 0.2 2 0.4 3 0.6 1 0.2
4 2 0.4 1 0.2 0 0.0 0 0.0
5 1 0.2 2 0.4 0 0.0 0 0.0
Full time
– female
1 23 4.4 14 2.7 73 14.1 9 1.7
2 1 0.2 4 0.8 23 4.4 5 1.0
3 0 0.0 0 0.0 6 1.2 1 0.2
Part time
– male
1 13 2.5 6 1.2 16 3.1 9 1.7
2 7 1.4 3 0.6 7 1.4 2 0.4
3 1 0.2 1 0.2 0 0.0 1 0.2
4 1 0.2 1 0.2 0 0.0 0 0.0

international migrants and refugees in cape town’s informal economy
34
Part time
– female
1 4 0.8 6 1.2 34 6.6 5 1.0
2 1 0.2 1 0.2 6 1.2 0 0.0
3 0 0.0 0 0.0 1 0.2 0 0.0
N=518
As many as 41% of the entrepreneurs employed South Africans, a rather unexpected
nding given the well-documented and widespread negative attitudes of the latter towards
migrants and refugees. Unlike with family members and home country peers, there is a
general preference for hiring females when employing South Africans. us, while 20% of
the businesses employ female South Africans on a full-time basis, only 9% employ male
South Africans. Similarly, while 8% of the businesses employ female South Africans on a
part-time basis, only 4% employ male South Africans on a part-time basis. In other words,
not only are migrant entrepreneurs creating jobs for South Africans, they show a distinct
and welcome gender bias in that they employ more female than male South Africans. In a
labour market that discriminates against women, this contribution to greater gender equity
should not be overlooked.
Migrant entrepreneurs are certainly aware of what the employment of South Africans
means for them and their families. As one focus group participant noted:
I make clothes, especially African attires. My business is contributing to the
economy. I think it is contributing in reducing the number of people who are
unemployed and therefore reducing crime in South Africa. e people who are
working for me are able to get money to buy food or help some other people in
need and their families.36
Another commented at length on the perception that migrants take rather than create
jobs and the xenophobia to which this gives rise:
You see, many people say we take jobs. No, that is not right, we do not take
jobs, but we create jobs. I came with my brother from Pakistan and started our
small shop. We had R2,000, maybe R3,000. It was not much so we started small.
Selling small things like cell-phone chargers, glasses (spectacles), shoe polish, nail
polish, just small things. We were selling on the street and displaying on a box.
But later we rented a stall from a guy who wanted to go to a bigger shop. So now
we had a small stall and we are selling food: drinks, biscuits, chips, sh and other

migration policy series no. 70
35
things. Now we have three shops. We sell everything and we work hard. Two
people we employ are South Africans. We pay fair. But you see sometimes they
steal, and so they go. e ones I am working with now are good and two years
they are with me, so I do not complain. I help them, they help me. ey speak
Xhosa and can talk to customers. I know little Xhosa, but we make business. But
you see, some people don’t like it. ey want us to close down. Some want us to
go away. e government says we can stay and then some people just think we
can just go and leave everything. If we go, we sell. But who is going to run the
shops? I don’t know.37
Several respondents commented not only on their job creation for South Africans but
their skills transfer potential:
If you don’t have experience in the business to speak to people and to manage
the business, you can come to us to get experience. Here I employ three people.
I pay their salary from the money we make here. ey are all South African.
ey help me operate the business. ey know the language and can help me
get customers.38
You can see here that we are nine people; we used to be 11 people. So if a man
comes and says he wants to be part of this, why should we refuse him? Five
people here are South Africans, two Malawians and two Nigerians. ere used
to be a Congolese here, but he le. So there are jobs for any race. It doesn’t
matter where you come from, we are not like some people practising racism. No,
we are free, we can chat with the customers, we are all Africans and the spirit of
Africa is reigning in this shop.39
e people here (South Africans) did not know anything about plaiting hair. We
have taught them. I don’t think this business will endure if all of the Congolese
ladies in the industry were told to go back home. is business has contributed
a lot to South African women’s development.40
Finally, there is the role that migrant entrepreneurs play in making aordable goods and
services available to poorer consumers in the city. In this study, we interviewed a furniture
repairer who bought and restored broken furniture for sale, a woman who had acquired an
old sewing machine and made clothes for sale, and a number of entrepreneurs in the hair-
style business, including hairdressers, barbers and vendors of hair products:

international migrants and refugees in cape town’s informal economy
36
I make South African outts and this place is mainly for South Africans. So
most South Africans benet from this. I buy my materials for them and tailor
for them. I buy my materials in East London.41
As you see, we don’t have real electricity. We are just using our own skills in
technology to obtain electricity. is is a battery with a converter and we have
electricity. When South Africans see such a thing, they encourage us. ey
promise us their support and say they will come to our barber shop. We don’t
have customers other than South Africans themselves. Our own people are just
too few.42
ose involved in food vending not only provide an important service, they also con-
tribute to the formal food economy:
is business is very important to us and the people of South Africa. Early in the
morning, the people need food and tea and other things. We make it ready for
them as they come here to get something to eat. e products are delivered to us
by Coke, Jive and others. And this bread is also brought here by the Wholesome
Bread company truck. Every morning they come to deliver here by truck. All
these products are local products, manufactured here in South Africa. We don’t
import outside products.43
MOBILITY AND CROSS-BORDER LINKAGES
IMPORT AND EXPORT OF GOODS
Informal traders are able to move goods across boundaries with relative ease and may own
businesses in more than one country. us, the current study sought to document the inter-
national connections maintained by migrant entrepreneurs in Cape Town. ese include
export and import of goods as well as international business ownership. However, since
only 2% of the respondents export goods from South Africa, their participation in interna-
tional trade is limited. A larger number (19%) import goods into South Africa. Imported
items include handcras or curios; cosmetics and hair items; new clothes and shoes; DVDs
and CDs; fresh, tinned and dried sh; traditional medicine; and textiles. In terms of the ori-
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$IJOB.BMBXJ .P[BNCJRVFBOE ,FOZB;JNCBCXFEPNJOBUFTBTUIFTPVSDFDPVOUSZ PG

migration policy series no. 70
37
handicras and curios, while the DRC is an important source of cosmetics. Chinese traders
were mentioned as a common source for goods from China:
Like most migrant businesses in Cape Town, we get our supplies from other
migrants that import from China, and sometimes we buy from Chinese
wholesalers in Cape Town, or Chinese centres in Ottery, and also we get our
supplies from Chinese importers. A few times, we go and buy stocks from
Johannesburg.44
Another question to ask about migrant entrepreneurship in South Africa is whether the
entrepreneurs own businesses in other countries with ties to the business they operate in
South Africa. However, only 5% of the migrant entrepreneurs who participated in the sur-
vey owned businesses outside South Africa (almost exclusively in their countries of origin)
that had direct links with their business in Cape Town.
REMITTANCES
Remittances are known to spur development in the home country of migrants whether they
are used for consumption or investment purposes.45 With respect to migrant entrepreneurs’
remitting behaviour, several questions arise. First, to what extent does informal migrant
ownership contribute to development and inclusive growth in countries of origin? Second,
to what extent does the practice of sending remittances by entrepreneurs encourage or sup-
port the growth of informal money transfer channels? ird, do the remitting patterns of
the entrepreneurs have an eect on the growth trajectories of their businesses? Finally, are
the migrant entrepreneurs themselves recipients of remittances from other countries which
could potentially encourage the growth of their businesses?
e frequency of sending remittances is an important measure of the strength of ties
that migrants maintain with their country of origin. As many as 60% of the respondents
can be categorized as regular remitters, sending remittances to people in their home coun-
try at least a few times a year (Figure 7). Only 23% do not send money at all to their home
countries. At least half of those who have never sent money have been in South Africa for
less than ve years and probably lack the resources to remit. Remittances are sent largely
to immediate and extended family members (95%). Less than 2% send money to be depos-
ited in a bank account for use on return and less than 1% send remittances to community
groups or organizations in their home country.

international migrants and refugees in cape town’s informal economy
38
Figure 7: Frequency of Sending Remittances
Formal money transfer agencies such as MoneyGram and Western Union (used by 40%
of the respondents) were extremely popular when sending money to the home country
(Figure 8). Banks were used by a further 20%. us, nearly 60% of the entrepreneurs rely on
formal transfer channels to send remittances. e widespread utilization of formal channels
is a further economic advantage to South Africa since it boosts local nancial institutions
that benet from the transfer fees. Informal money transfer channels were used by 17% of
the respondents while others preferred to send money with family members, friends or co-
workers (14%) or took it themselves (6%). ere is a popular perception that migrants clan-
destinely channel resources from South Africa. On the contrary, although entrepreneurs
are denied access to credit from nancial institutions, these ndings demonstrate that they
still support local banks and money transfer companies when remitting.
ćF NJHSBOU FOUSFQSFOFVST SFNJU BO BWFSBHF PG ;"3 QFS BOOVN ćJT JT B TJH-
nicant sum given that most of the entrepreneurs make an average annual prot of about
;"3QFSBOOVNćFBWFSBHFBNPVOUSFNJUUFEBOOVBMMZSFQSFTFOUTNPSFUIBOUXP
months of net earnings, which might have implications for the growth of the business.
However, only 15% of the respondents said that sending remittances had a negative impact
on their business. More (21%) actually see sending remittances as positive for the business,
which could be because of the peace of mind of knowing that their family in the home
country is taken care of. is conclusion is supported by the use to which the remittances
are put (Table 18), including buying food (60%), meeting other household expenses (49%),
At least once a
month
A few times
a year
Once a year Occasionally
(less than
once a year)
Never Don’t know
0
5
10
15
20
25
30
35
40
45
Percentage (%)

migration policy series no. 70
39
paying education fees (44%), buying clothes (40%) and paying medical bills (35%). Only
a small proportion (less than 10%) use the money for investment purposes such as build-
ing or renovating dwellings, buying property, purchasing agricultural inputs or equipment
(6%) or for starting or running a business.
Figure 8: Money Transfer Channels Used by Migrant Entrepreneurs
Table 18: Reasons for Remitting to Home Country
No. % of total
Buy food 311 60.2
Meet day-to-day household expenses (except food) 252 48.7
Pay educational/school fees 228 44.1
Buy clothes 204 39.5
Pay medical expenses 181 35.0
For special events e.g. wedding and funeral expenses 99 19.1
Pay transportation costs 40 7.7
Build, maintain or renovate their dwelling 40 7.7
Buy property 32 6.2
For agricultural inputs/ equipment 30 5.8
Formal money
transfer agency
(e.g. Western
Union)
Through a
bank
Informal money
transfer agency
(bus/taxi/
omalayisha)
With
family,
friend or
co-worker
I take it
myself
Other means Refused/
no response
0
5
10
15
20
25
30
35
40
45
Percentage (%)

international migrants and refugees in cape town’s informal economy
40
For savings investment 23 4.4
Purchase livestock 14 2.7
Start or run a business 6 1.2
Other reasons 6 1.2
Note: multiple response question
Only 7% of the respondents indicated that they received remittances from other coun-
tries, including from their family in the home country and family members living in other
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annum. Remittances received from other countries are largely invested in business growth.
Of the 30 respondents who received remittances from other countries, 80% noted that
receiving remittances had positive implications for their business.
BUSINESS CHALLENGES
e research sought to examine the problems and challenges migrant entrepreneurs face
in running a successful business operation in Cape Town. Nineteen potential challenges
were presented to the respondents who were asked to indicate whether they experienced
the problems oen, sometimes or never. For purposes of analysis, the potential challenges
were grouped into economic, social, security and other categories (Table 19). It becomes
immediately clear that the main challenges faced by the migrant entrepreneurs, like busi-
ness owners everywhere, are economic. Competition is erce in the informal economy and
half of the respondents said they had too many competitors (with 80% oen/sometimes
experiencing this problem). Related economic challenges were too few customers (94%)
and insucient sales (92%). Less important, but by no means insignicant, were suppli-
ers charging too much (64%), a lack of credit (54%) and customers not paying their debts
(50%).
In the Cape Town context, recent research has focused on the expansion of supermar-
kets throughout the city.46 A key unanswered question is whether supermarkets are under-
mining the informal economy. Only 14% of the entrepreneurs felt they were oen aected
by competition from supermarkets, although the number rose to 45% for those oen and
sometimes aected.

migration policy series no. 70
41
Table 19: Business Challenges and Problems
Often (%) Sometimes (%) Never (%)
Economic challenges
Too many competitors around here
49.4 31.1 19.5
Lack of access to credit
34.1 19.9 46.0
Insufficient sales
24.4 67.4 8.2
Too few customers
22.4 72.1 5.5
Suppliers charge too much
16.8 48.9 34.3
Competition from supermarkets/large stores
14.4 31.1 54.5
Customers don’t pay their debts
10.5 40.0 49.4
Social challenges
Prejudice against my nationality
13.7 35.4 51.0
Verbal insults against my business
11.2 22.9 65.9
Conflict with other entrepreneurs
6.8 32.8 60.4
Prejudice against my gender
1.0 5.5 93.5
Security challenges
Crime/theft
27.8 45.4 26.8
Confiscation of goods
7.7 28.1 64.2
Physical attacks/assaults by South Africans
7.1 28.9 64
Harassment/demands for bribes by police
5.5 20.3 74.2
Arrest/detention of yourself/employees
5.2 12.4 82.5
Physical attacks/assaults by police
2.7 12.3 84.9
Other
Storage problems
13.2 23.3 63.4
Lack of relevant business training
5.5 18.9 75.6
e in-depth interviews and focus groups provided additional insights into the eco-
nomic challenges facing the entrepreneurs. For example, for those whose business is tied to
tourism, the challenges are greater in the o-season:
Whenever it is time for tourism, the season I mean, people, a lot of people, come
to Cape Town and buy. But when winter comes, we face a lot of problems. ere
are few or no customers to come and buy because it’s cold and they don’t come.47

international migrants and refugees in cape town’s informal economy
42
One of the interview respondents attributed the problem of low sales to the global eco-
nomic crisis, which has restricted most people from spending beyond their basic needs:
ere are few customers who are buying as they used to before. Because in the
past years the customers were coming, they were buying. But I think because
of the global nancial crisis, they are not buying much anymore. ey are
budgeting their money and not spending a lot. We need customers to buy our
goods. Our business depends on customers who come to buy. So my problems
have to do with low sales. It’s really aecting most people here. You can go for
days without selling anything and you are expected to pay rent and other costs.48
Intense competition, particularly in the hair services sector, was mentioned by several
migrant entrepreneurs who were struggling to make a prot:
I plait hair. is business used to be good before, but currently it seems it is not
moving at all because there are too many people oering the same service. e
other issue is that we don’t support each other. You can nd that maybe we have
the same marketplace and have agreed the price, but one just decides to reduce
the price to attract more clients to her. Currently the money is not enough. We
just come and sit, we get cold and then we leave. We should be able to get R2,000
per week but these days you can only get R150 or R200. is is just a lot of
suering when you have to pay the owner of the place. We are seeing that this is
the end of the industry now. We have messed it up ourselves. We have brought
ourselves down by overcharging and over-competing.49
Before I was able to get R1,000 in a week. But currently it’s very dicult just to
get R200 in a week. at means there’s no more money in circulation and there
are not enough women coming for plaiting hair like before. Currently, it’s very
dicult just to pay for this place. We normally pay for it by the 5th but now we
can even go up to the 10th. Maybe I should go back to school because the hair
business is not successful anymore.50
As noted earlier, very few migrant and refugee entrepreneurs are able to get bank loans
for their businesses. Lack of access to credit was identied as a problem by 54% of the
respondents. Participants in focus group discussions and in-depth interviews indicated
that South African banks have a very negative attitude towards non-South African entre-
preneurs:

migration policy series no. 70
43
e banks do not see us as business people. ey see us as foreigners rst, so you
may not even get the chance to say I am a business person, so please can I have
money. ey just say do you have ID and if you say no, then they will tell you
that they cannot help. So, they do not see us as business people. We are migrants,
we are foreigners and that’s that.51
I think there is some criteria they (banks) use in order to give credit. I think we
are not tting the criteria, being foreigners. Maybe others think that if they give
us the money they won’t know where to nd us. e rst priority when you are
getting a credit or a loan from a bank, you must be a South African or have an
ID. We are not South Africans, we are refugees, we ed our country from a civil
war. Being a refugee, you get asylum from the government [but] as you go to
bank as a refugee automatically you are not qualied to have a loan.52
Capital is the biggest problem. Where do you get capital? I tried before, you
know, to get money from a bank, but I did not succeed. I have no green book,
that is what they told me. And I can also just leave without paying back the
loan. at is what they said. So, I think it is dicult to get money to start a
business if you are a foreigner.53
Migrant entrepreneurs also face signicant security challenges. South Africa has an
extremely high crime rate but there is also evidence that migrants are disproportionately
aected by violence.54 Some of this can be attributed to business competition or what has
been labelled “violent entrepreneurship” where attacks are orchestrated by South African
competitors.55 As one Somali entrepreneur observed:
e main problem that we are facing is competition, which is creating hatred
between local business owners and Somali business owners, whereby locals
are trying to mobilize the community around them to take advantage of that
process.56
However, the and looting of migrants businesses by ordinary citizens, including chil-
dren, is also common. As many as 28% of the entrepreneurs said they were oen victims
of the and crime and another 45% said this was sometimes the case. is means that
three-quarters of the respondents saw crime and the as a signicant challenge to their
operations. Physical attacks and assault by South Africans were of concern to 36% of the
respondents. Some felt that they are systematically targeted by criminals who know that the
police will not help:

international migrants and refugees in cape town’s informal economy
44
ey do not steal from us just because we are foreigners. ey are just thieves
and they steal everywhere. But maybe they know that foreigners will not be
helped by police and they steal.57
Many respondents claimed that, even when crimes are reported, the police do not take
any steps to apprehend the criminals:
Actually their reaction is very low. Because I was robbed twice, and the second
time it was captured on the CCTV cameras, they took the footage of the CCTV
cameras, and they have never responded to us. Never, not even came back to us
and ask about and give us feedback of the investigation. Even our investigation
ocer, it was our rst and the last time that we have seen him, the day of robbery.
So that means they are not even considering you as part of the community.58
e attitudes and actions of police were also a signicant concern for entrepreneurs. A
quarter said that demands for bribes by the police were a challenge. Even more (36%) said
the conscation of goods by the police was a problem. Fewer, but certainly not insigni-
cant, numbers said that police arrests were a challenge with which they had to deal (15%).
e same number cited physical assaults by the police as a signicant problem.
Nearly 50% of the entrepreneurs mentioned discrimination against people of their
nationality as a problem and a third said that they had to endure verbal assaults from South
Africans. Some, for example reported on the hostility as follows:
You are aware that the people here don’t really like us around. Yet we came here
just to look for survival. e locals don’t like us because they think we have come
to get their jobs. It’s too hard and it has become like a war. We are not enjoying
peace at all. ey don’t really know this job but they are just jealous of seeing
us do this job. So instead of coming to learn how we are doing it, they come and
rob us.59
Some people are rude, some are kind, and some don’t care about you. Even aer
you cut their hair some people will just start insulting you “Hey you foreigner!”
ere are some citizens who would just want to give you that kind of hassle. e
reason we don’t give up is because we don’t want to be in the street. We make
sure we put food on the table for the kids, pay the children’s school fees and pay
our rent.60

migration policy series no. 70
45
I lost goods in the past. We really fear that. It was the day the people were
marching here in town and they started rioting and vandalizing. We reported
the matter to the police but nothing has been done. Another day they came here
with knives. ey could not do anything physically but just insulted people here:
“Hey, you foreigners, makwerekwere.”61
A number of studies have demonstrated the impact of xenophobia on the livelihoods of
migrants and refugees in South Africa.62 An emerging literature has also started to exam-
ine the specic impact of xenophobia on the business enterprises of immigrants.63 Asked
whether their businesses had been aected by xenophobia, 18% said they had been aected
“a great deal” and 27% “to some extent”. us, nearly half of the respondents in total (45%)
have had their business operations aected by xenophobia. Where a migrant comes from
appears to inuence how susceptible their business operations are to xenophobia (Table
20). For example, 68% of Cameroonians, 66% of Somalis, 50% of Congolese, 49% of Ethio-
pians, 45% of Kenyans and 41% of Nigerians said their business was aected by xenopho-
bia. Notably, most of the entrepreneurs from three of these countries (the DRC, Somalia
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more positively by South Africans. However, this conclusion is belied by other evidence.64
Alternatively, it could be that Somalis and Ethiopians, in particular, are more willing to run
their businesses in the townships despite these areas being hotbeds of xenophobia.
Table 20: Extent to which Xenophobia Affects Business Operations by Home Country
A great deal/to some extent (%) Not very much/not at all (%)
SADC
DRC 50.0 50.0
Malawi 43.6 56.4
Zimbabwe 30.5 69.5
Other Africa
Cameroon 68.2 31.8
Somalia 64.3 35.7
Ethiopia 48.6 51.4
Nigeria 41.7 58.3
Kenya 45.5 54.5

international migrants and refugees in cape town’s informal economy
46
Ghana 41.2 58.8
Congo Brazzaville 38.5 61.5
Uganda 33.3 66.7
Note: only countries with 10 or more respondents included
Certainly, xenophobia has become a strong consideration in the choice of business sites
by the migrant entrepreneurs. Some avoid locating their businesses in townships altogether.
is means that they prefer running their businesses in the city centre where the levels of
xenophobia are perceived to be lower, with the downside that they experience intense com-
petition from other traders:
You see, this thing about xenophobia is just bad. It is very bad. Some people
in South Africa are not friendly. ey think all foreigners should go. But if the
government allows us to stay, then why are the people harassing us? I do not
understand it. e government should just tell us if they want us to stay or go.
I have a lot of friends that are aected by xenophobia. ey have shops and
stalls in the townships and that is where xenophobia is bad. e people come
and take your goods and your stock is taken just like that. You will take months
to recover and have to borrow from other people to restock. ieves also take
advantage of xenophobia and they steal and nothing is done. So, most people
are not comfortable going to the townships, and that is why there are a lot of us
here in the CBD. But now that aects our prots and we have to share the few
customers and get very little.65
CONCLUSION
is report began with the recent military-style assault on informal traders, both migrant
and South African, at the Cape Town railway station. While this whole operation seemed
like massive overkill and certainly mystied the traders themselves (apart from costing
them a day’s business and the loss of their hard-earned goods), it is not the rst time that
the power of the central and local state has been directed at the city’s informal economy.
Indeed, as this report demonstrates, a signicant number of migrant and refugee entre-
preneurs throughout the city have been victims of police misconduct in the form of physi-
cal and verbal assault, arbitrary arrests and conscation of goods without cause. Migrant

migration policy series no. 70
47
entrepreneurs trying to tap the township and informal settlement markets take their lives
into their hands because, they claim, they receive no police protection and the police do not
arrest those who attack them. e proportion of migrant entrepreneurs (even those who
do not go near the townships and informal settlements) who have been victims of crimes is
extraordinarily high. Clearly, the agents of law and order on the ground are not providing
even the most basic protections and, in some cases, are participants in creating an unsafe
environment for business (by commission and omission).66
One of the reasons for the aversion, uncertainty and stereotyping of migrant entrepre-
neurs on the streets and in the corridors of municipal power may be the relatively recent
penetration of Cape Town’s informal economy by migrants and refugees. Very few of the
respondents in this study came to South Africa before 2000 and the vast majority estab-
lished their businesses in the city aer 2005. If this is the case, then a serious eort needs
to be made to educate the public, the police and ocials about what migrant entrepreneurs
oer the city. All too oen, it is the supposed negative impacts that gain all the media atten-
tion – putting South Africans out of business, engaging in nefarious and underhand busi-
ness practices, purveying illegal goods and ring back when they are attacked by mobs of
looters. When service delivery protests against the state turn into violent attacks on migrant
businesses, as they did in 2013, there is clearly something badly amiss in the public percep-
tion of the role and value of migrant entrepreneurship.67
is report is the most comprehensive study yet of the contribution of migrant and
refugee entrepreneurs to Cape Town’s local economy. e survey of over 500 entrepreneurs
engaged in trade, services and manufacturing in dierent areas of the city dispels some
of the more prevalent myths that oen attach to the activities of migrants. First, the vast
majority are not “illegal foreigners” in the provocative language of the Immigration Act, but
have a legal right to be in South Africa and to run a business. Second, the majority are not
“survivalists”, forced into the informal economy out of poverty and desperation. Instead,
they are highly motivated individuals who enter the informal economy to earn revenue
to support themselves, their families, and their relatives in their home country (through
remittances) and because they have a strong entrepreneurial motivation. Also, they view
themselves as performing a broader social and economic function; that is, contributing to
the development of South Africa.
ird, contrary to the claims of South African competitors, the vast majority are not
successful because they are engaged in shadowy and illicit business practices. Even per-

international migrants and refugees in cape town’s informal economy
48
fectly legitimate practices, such as group bulk buying from suppliers, are not as widespread
as is oen claimed. What emerges from the survey is that while migrant and refugee entre-
preneurs undoubtedly have strong social networks at the personal level, their businesses are
highly individualistic in terms of organization, ownership and activity in a highly competi-
tive business environment.
Who, then, benets from their presence in Cape Town? First, city coers benet in
terms of payments by those occupying business premises for which the City charges rents.
is amounted to a third of the entrepreneurs in total. South African property owners also
benet by renting stands to migrants and refugees. Again, about a third of the entrepre-
neurs pay rentals to South Africans. Two-thirds of the entrepreneurs, despite being in the
informal economy, thus pay rent to the municipality or South African property owners. In
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e total gure from all entrepreneurs would be very much higher.
e third group of beneciaries are those from whom the entrepreneurs purchase their
goods and supplies. ese include wholesalers, small shops and retailers, supermarkets, fac-
tories and the Epping fresh produce market. Wholesalers benet the most with two-thirds
of the entrepreneurs sourcing goods from their outlets. Only a few entrepreneurs source
goods from another country or their home country, although some travel to other South
African cities such as Johannesburg to purchase goods for resale in Cape Town. ere is a
tendency – inherent in descriptions of the informal economy as the “second economy” – to
view formal and informal business as separate entities. is is an articial division in the
Cape Town context. Informal businesses constantly interact with formal suppliers, to the
obvious nancial benet of the latter.
e fourth group of beneciaries are the unemployed and job-seekers. Contrary to
popular perceptions that entrepreneurs only hire their own, this study revealed that infor-
mal businesses also generate employment for South Africans. e migrant entrepreneurs
interviewed for this study employed a total of 644 people (or 1.1 jobs per business). Of
these, 496 were non-family and 282 (or 57%) were South Africans. As many as 41% of the
entrepreneurs employed South Africans. By creating employment of any kind, they are
contributing to the alleviation of the unemployment problem in South Africa. However,
noting their specic employment of South Africans, it becomes more dicult to sustain
the common xenophobic argument that all migrants do is “steal” jobs from South Africans.

migration policy series no. 70
49
As noted at the outset of this report, the Mayor of Cape Town made extremely positive
and encouraging remarks about the importance of the informal economy to the City at the
2013 Summit on Informal Traders. To prove that this was not simply rhetoric, the City took
a very critical public stance on the moribund dra Licensing of Businesses Bill tabled by
the Minister of Trade and Industry, which threatened to overwhelm small businesses and
the municipality with red tape and would give the police free reign to drive informal busi-
nesses to the wall. What was not clear from De Lille’s supportive remarks is whether she was
referring to all informal vendors or only those with South African citizenship. If she was
typical of the municipal authorities in many South African cities, as well as politicians like
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largely conned to South Africans.68 At the same time, De Lille also loudly condemned the
nationwide xenophobic violence in early 2015. In a strong public statement – “City Stands
United Against Xenophobia” – she proclaimed that “some among us have turned against
the brothers and sisters from the very nations who assisted us in our struggle against apart-
heid. We cannot allow this to continue. We cannot let this be done, in the name of our
country, South Africa.”69
e challenge facing the Mayor is to bring these two streams together in her own mind,
in the ranks of city ocials, and among ordinary Capetonians. In other words, xenophobia
needs to be purged from the informal economy and those who claim to police and regulate
it. ere is enough evidence in this report to suggest both that xenophobia is a signicant,
and unnecessary, business challenge for migrant and refugee entrepreneurs who are oen
vilied and not suciently protected to go about their business as usual. Xenophobia and
associated negative attitudes and regulations also pose signicant business challenges to a
group of extremely hard-working entrepreneurs whose eorts would be praised in most
other contexts. Instead of having them give up their “secrets” of success to their competi-
tors, as the Minister of Small Business Development recently demanded, it would make
much more sense to support their eorts through bank loans, micro-credit schemes and
business skills development, if only to create economic benet and additional jobs for all.70
Or as one of the focus group participants presciently observed:
South Africa allowed us to live here so we have to do something to help ourselves
and also help the people that provide us with the place to live. I am happy
about that…We are grateful to South Africa for allowing us to stay here. So we
appreciate that. We are here to do our bit. We will work and try as much as we

international migrants and refugees in cape town’s informal economy
50
can to operate our businesses and help each other. But we need the government
to protect us and make conditions better for us to survive. We are not here to
steal jobs. We are here to create jobs and help ourselves. South African people
must not see us as enemies. We are not enemies. We are just people trying to
make a living. We can work together, and they can learn from us. Like my South
African sister that works for me. Now she is able to do plaiting and a lot of hair
styles that she learned from me. We can do that with a lot of other people if they
do not scare us, or steal and threaten us.71
ENDNOTES
1 City of Cape Town, “Speech by the Executive Mayor of Cape Town, Alderman Patricia De Lille on the
Occasion of a Summit for Informal Traders Hosted by the City, 20 March 2013” Media Release No.
1260/ 2013.
2 Y. Kamaldien, “Foreigners Held in Cape Fiela Swoop” IOL News 21 June 2015.
3 Patricia Kawe, 60, of Khayelitsha, quoted in B. Chiguvare, “Army Closes Down Cape Town Station”
GroundUp 22 June 2015.
4 Noluvuyo Faye, informal trader, 32, Gugulethu, quoted in R. Pather, “Operation Fiela in the Cape
Town CBD” e Daily Vox 23 June 2015.
5 Mwanyange Ubao Mohamed, 37, informal trader, Salt River, from Tanzania, quoted in Pather
“Operation Fiela.”
6 Fatima Nyondo, 26, hairdresser, Lansdowne, from Malawi, quoted in Pather, “Operation Fiela.”
7 Philemon Nji Kum, 33, student at Cape Peninsula University of Technology and clothing trader,
from Cameroon, quoted in Chiguvare, “Army Closes Down Cape Town Station.”
8 V. Gastrow, “Business Robbery, the Foreign Trader and the Small Shop” SA Quarterly 43(2013): 5-16.
9 IRIN News, “Somalia-South Africa: Foreign Competitors Not Welcome” 17 October 2008.
10 https://www.facebook.com/SomaliSouthAfrica
11 Gastrow, “Business Robbery” p. 8.
12 Ibid., p. 11.
13 V. Kalitanyi, “Evaluation of Employment Creation by African Immigrant Entrepreneurs for
Unemployed South Africans in Cape Town” M.Comm. esis, University of the Western Cape, 2007;
V. Kalitanyi and K. Visser, “African Immigrants in South Africa: Job Takers or Job Creators?” South
African Journal of Economic and Management Sciences, 13(2010): 376-90; A. Charman and L. Piper,
“Xenophobia, Criminality and Violent Entrepreneurship: Violence against Somali Shopkeepers
in Del South, Cape Town, South Africa” South African Review of Sociology 43(2012): 81-105; A.

migration policy series no. 70
51
Charman, L. Petersen and L. Piper, “From Local Survivalism to Foreign Entrepreneurship: e
Transformation of the Spaza Sector in Del, Cape Town” Transformation: Critical Perspectives on
Southern Africa 78(2012): 47–73; R. Tengeh, “A Business Framework for the Eective Start-up and
Operation of African Immigrant-Owned Businesses in the Cape Town Metropolitan Area, South
Africa” PhD esis, Cape Peninsula University of Technology, 2012; V. Gastrow and R. Amit,
“Somalinomics: A Case Study on the Economic Dimensions of Somali Informal Trade in the Western
Cape” ACMS Report, University of the Witwatersrand, 2013; B. Mwasinga, “Assessing the Implications
of Local Governance on Street Trading: A Case of Cape Town’s Inner City” Masters in City and
Regional Planning esis, University of Cape Town, 2013; C. Lapah and R. Tengeh, “e Migratory
Trajectories of the Post-1994 Generation of African Immigrants to South Africa: An Empirical Study
of Street Vendors in the Cape Town Metropolitan Area” Mediterranean Journal of Social Sciences
4(2013): 181-95; T. Washinyira, “Cape Town: Immigrants Accuse Cops of Abuse as eir Businesses
are Destroyed” Daily Maverick 27 June 2013; F. Basardien, H. Parker, M. Bayat, C. Friedrich and
A. Sulaiman, “Entrepreneurial Orientation of Spaza Shop Entrepreneurs: Evidence from a Study of
South African and Somali-owned Spaza Shop Entrepreneurs in Khayelitsha” Singaporean Journal
of Business Economics and Management Studies 2(2014): 45-61; A. Bukasa, “Securing Sustainable
Livelihoods: A Critical Assessment of the City of Cape Town’s Approach to Inner City Street Trading”
MA esis, University of Cape Town, 2014; R. Khosa, “An Analysis of Challenges in Running Micro-
Enterprises: A Case of African Foreign Entrepreneurs in Cape Town, Western Cape” M.Tech. esis,
Cape Peninsula University of Technology, Cape Town, 2014; R. Khosa and V. Kalitanyi, “Challenges
in Operating Micro-Enterprises by African Foreign Entrepreneurs in Cape Town, South Africa”
Mediterranean Journal of Social Sciences 5(2014): 205-215; Gastrow, “Business Robbery”, Charman
and Piper, “Xenophobia, Criminality and Violent Entrepreneurship.”
14 J. Crush and D. Tevera, eds., Zimbabwe’s Exodus: Crisis, Migration, Survival (Ottawa and Cape Town:
IDRC and SAMP, 2010); J. Crush, A. Chikanda and G. Tawodzera, e ird Wave: Mixed Migration
from Zimbabwe to South Africa, SAMP Migration Policy Series No. 59, Cape Town, 2012.
15 N. Kleist, “Nomads, Sailors and Refugees: A Century of Somali Migration” Sussex Migration Working
1BQFS/P4VTTFY6OJWFSTJUZ;+JOOBIi3BUJPOBM3PVUFT 6OEFSTUBOEJOH4PNBMJ.JHSBUJPO
to South Africa” In M. van der Velde, ed., Mobility and Migration Choices: resholds to Crossing
Borders (Surrey: Ashgate, 2015), pp. 43-54.
 " )BNNFSTUBE i-JOLJOH 4PVUI "GSJDBT *NNJHSBUJPO 1PMJDZ BOE ;JNCBCXF %JQMPNBDZw 1PMJDZ
Brieng 42, South African Institute of International Aairs, Johannesburg, 2011.
17 A. Betts, “From Persecution to Deprivation: How Refugee Norms Adapt at Implementation” In A.
Betts and P. Orchard, eds., Implementation and World Politics: How International Norms Change
Practice (Oxford: Oxford University Press, 2014), pp. 29-49.
18 Charman and Piper, “Xenophobia, Criminality and Violent Entrepreneurship”; J. Crush, S.
Ramachandran and W. Pendleton, So Targets: Xenophobia, Public Violence and Changing Attitudes
to Migrants in South Africa Aer May 2008, SAMP Migration Policy Series No. 64, Cape Town, 2013;

international migrants and refugees in cape town’s informal economy
52
J. Crush and S. Ramachandran, Migrant Entrepreneurship and Collective Violence in South Africa,
SAMP Migration Policy Series No. 67, Cape Town, 2014.
 ;+JOOBIi.BLJOH)PNFJOB)PTUJMF-BOE6OEFSTUBOEJOH4PNBMJ*EFOUJUZ*OUFHSBUJPO-JWFMJIPPE
and Risks in Johannesburg” Journal of Sociology and Social Anthropology 1 (2010): 91-9; V. Gastrow
and R. Amit, “Somalinomics: A Case Study on the Economic Dimensions of Somali Informal Trade
in the Western Cape” ACMS Report, University of the Witwatersrand, 2013.
20 V. Vijaya, and T. Kamalanabhan, “A Scale to Assess Entrepreneurial Motivation” Journal of
Entrepreneurship 7(1998): 183-198; Y. Robichaud, E. McGraw and A. Roger, “Toward the Development
of a Measuring Instrument for Entrepreneurial Motivation” Journal of Development Entrepreneurship,
6(2001): 189-201; S. Shane, E. A. Locke and C. Collins, “Entrepreneurial Motivation” Human
Resource Management Review 13(2003): 257-79; B. Mitchell, “Motives of Entrepreneurs: A Case
Study of South Africa” Journal of Entrepreneurship 13(2004): 167-183; O. Fatoki and T. Patswawairi,
“e Motivations and Obstacles to Immigrant Entrepreneurship” Journal of Social Science 32(2012):
133-42; R. Khosa and V. Kalitanyi, “Migration Reasons, Traits and Entrepreneurial Motivation of
African Immigrant Entrepreneurs” Journal of Enterprising Communities: People and Places in the
Global Economy 9(2015):132-155.
21 Interview with Somali entrepreneur, Bellville, October 2014.
 *OUFSWJFXXJUI;JNCBCXFBOFOUSFQSFOFVS$BQF5PXO$#%
23 Interview with DRC entrepreneur, Bellville.
24 Focus group participant, Cape Town CBD, 21 June 2014.
25 Crush et al., So Targets; Charman and Piper, “Xenophobia, Criminality and Violent Entrepreneurship.”
26 Kalitanyi and Visser, “African Immigrants in South Africa”; N. Radipere, “An Analysis of Local and
Immigrant Entrepreneurship in the South African Small Enterprise Sector (Gauteng Province)” PhD
esis, UNISA, 2012; Tengeh, “Business Framework for Eective Start-up.”
27 Interview with female tailor, Philippi.
28 Interview with Nigerian barber-shop owner, Philippi.
 *OUFSWJFXXJUI;JNCBCXFBOFOUSFQSFOFVS$BQF5PXO$#%
 *OUFSWJFXXJUI;JNCBCXFBOFOUSFQSFOFVS$BQF5PXO$#%
31 O. Fatoki, “An Investigation into the Financial Bootstrapping Methods Used by Immigrant
Entrepreneurs in South Africa” Journal of Economics"*LVPNPMBBOE+ ;BBJNBO
“We Have Come to Stay and We Shall Find All Means to Live and Work in is Country: Nigerian
Migrants and Life Challenges in South Africa” Issues in Ethnology and Anthropology 9(2014): 371-88.
32 Gastrow and Amit, “Somalinomics”.
33 Interview with wholesale manager, Cape Town, 27 June 2014.
34 Kalitanyi, “Evaluation of Employment Creation”; Charman, Petersen and Piper, “From Local
Survivalism to Foreign Entrepreneurship.”

migration policy series no. 70
53
35 Ibid.; R. Liedeman, “Understanding the Internal Dynamics and Organisation of Spaza Shop
Operators” Master’s esis, University of the Western Cape, 2013.
36 Focus group participant, Cape Town CBD, 21 June 2014.
37 Focus group participant, Cape Town CBD, 21 June 2014.
38 Interview with Somali entrepreneur, Cape Town.
39 Interview with Nigerian barber-shop owner, Philippi.
40 Interview with Congolese entrepreneur, Bellville.
41 Interview with female tailor, Philippi.
42 Interview with Congolese barber, Bellville.
43 Interview with Somali entrepreneur, Cape Town.
44 Interview with Cameroonian entrepreneur, Bellville, October 2014.
45 R. Adams, “Remittances, Poverty, and Investment in Guatemala” In Ç. Özden and M. Schi (Eds.),
International Migration, Remittances, and the Brain Drain (Washington D.C. and Basingstoke: World
Bank and Palgrave Macmillan, 2006), pp. 53-80; R. Adams and J. Page, “Do International Migration
and Remittances Reduce Poverty in Developing Countries?” World Development 33(2005): 1645-
69; D. Kapur, “Remittances: e New Development Mantra?” In S. Maimbo and D. Ratha, eds.,
Remittances: Development Impact and Future Prospects (Washington DC: World Bank, 2005), pp.
331-60.
46 J. Crush and B. Frayne, “Supermarket Expansion and the Informal Food Economy in Southern
African Cities: Implications for Urban Food Security” Journal of Southern African Studies 37(2011):
781-807; J. Battersby and S. Peyton, “e Geography of Supermarkets in Cape Town: Supermarket
Expansion and Food Access” Urban Forum 25(2014): 153-64; S. Peyton, W. Moseley andJ.
Battersby,“Implications of Supermarket Expansion on Urban Food Security in Cape Town, South
Africa” African Geographical Review 34(2015): 36-54.
 *OUFSWJFXXJUI;JNCBCXFBOUSBEFS$BQF5PX O $#%0DUPCFS
 *OUFSWJFXXJUI;JNCBCXFBOUSBEFS$BQF5PX O $#%0DUPCFS
49 Interview with Congolese hairdresser, Bellville.
50 Interview with Congolese hairdresser, Bellville.
51 Focus group participant, Cape Town CBD, 21 June 2014.
52 Interview with Somali entrepreneur, Bellville, October 2014.
53 Focus group participant, Cape Town CBD, 21 June 2014.
54 Gastrow, “Business Robbery”; Crush and Ramachandran, “Migrant Entrepreneurship and Collective
Violence in South Africa.”
55 Charman and Piper, “Xenophobia, Criminality and Violent Entrepreneurship.”

international migrants and refugees in cape town’s informal economy
54
56 Interview with Somali entrepreneur, Philippi, October 2014.
57 Interview with Pakistani entrepreneur, Bellville, October 2014.
58 Interview with Somali entrepreneur, Bellville, October 2014.
59 Interview with Cameroonian entrepreneur, Philippi.
60 Interview with barber, Philippi.
 *OUFSWJFXXJUI;JNCBCXFBOFOUSFQSFOFVS$BQF5PXO
62 C. Abdi, “Moving Beyond Xenophobia: Structural Violence, Conict and Encounters with the
‘Other’ Africans” Development Southern Africa 28(2011): 691-704; J. Crush, and S. Ramachandran,
“Xenophobia, International Migration and Development” Journal of Human Development and
Capabilities 11(2010): 209-228.
63 J. Crush, A. Chikanda, and C. Skinner, eds., Mean Streets: Migration, Xenophobia and Informality in
South Africa (Cape Town: SAMP, IDRC and ACC, 2015).
+ $SVTI BOE ( 5BXPE[FSB i.FEJDBM 9FOPQIPCJB BOE ;JNCBCXFBO .JHSBOU "DDFTT UP)FBMUI
Services in South Africa” Journal of Ethnic and Migration Studies 40(2014): 655-70.
65 Focus group participant, Cape Town CBD, 21 June 2014.
66 J. Crush and S. Ramachandran, “Doing Business with Xenophobia” In Crush, Chikanda and Skinner,
Mean Streets.
67 ECNA, “Cape Town Braces for Service Delivery Protest” 29 November 2013.
68 L. Steyn, “Mind Your Own Business, Minister” Mail & Guardian 30 January 2015.
69 https://www.capetown.gov.za/en/mayor/Documents/DeLille_speeches/Statement_City_united_
against_xenophobia.pdf.
70 K. Magubane, “Reveal Trade Secrets, Minister Tells Foreigners” Business Day 25 January 2015.
71 Focus group participant, Cape Town CBD, 21 June 2014.
MIGRATION POLICY SERIES
1 Covert Operations: Clandestine Migration, Temporary Work and Immigration Policy in South Africa
(1997) ISBN 1-874864-51-9
2 Riding the Tiger: Lesotho Miners and Permanent Residence in South Africa (1997) ISBN 1-874864-52-
7
3 International Migration, Immigrant Entrepreneurs and South Africa’s Small Enterprise Economy (1997)
ISBN 1-874864-62-4
4 Silenced by Nation Building: African Immigrants and Language Policy in the New South Africa (1998)
ISBN 1-874864-64-0

migration policy series no. 70
55
5 Le Out in the Cold? Housing and Immigration in the New South Africa (1998) ISBN 1-874864-68-3
6 Trading Places: Cross-Border Traders and the South African Informal Sector (1998) ISBN 1-874864-
71-3
7 Challenging Xenophobia: Myth and Realities about Cross-Border Migration in Southern Africa (1998)
ISBN 1-874864-70-5
8 Sons of Mozambique: Mozambican Miners and Post-Apartheid South Africa (1998) ISBN 1-874864-
78-0
9 Women on the Move: Gender and Cross-Border Migration to South Africa (1998) ISBN 1-874864-82-9.
10 Namibians on South Africa: Attitudes Towards Cross-Border Migration and Immigration Policy (1998)
ISBN 1-874864-84-5.
11 Building Skills: Cross-Border Migrants and the South African Construction Industry (1999) ISBN
1-874864-84-5
12 Immigration & Education: International Students at South African Universities and Technikons (1999)
ISBN 1-874864-89-6
13 e Lives and Times of African Immigrants in Post-Apartheid South Africa (1999) ISBN 1-874864-91-
8
14 Still Waiting for the Barbarians: South African Attitudes to Immigrants and Immigration (1999) ISBN
1-874864-91-8
15 Undermining Labour: Migrancy and Sub-Contracting in the South African Gold Mining Industry
(1999) ISBN 1-874864-91-8
16 Borderline Farming: Foreign Migrants in South African Commercial Agriculture (2000) ISBN
1-874864-97-7
17 Writing Xenophobia: Immigration and the Press in Post-Apartheid South Africa (2000) ISBN 1-919798-
01-3
18 Losing Our Minds: Skills Migration and the South African Brain Drain (2000) ISBN 1-919798-03-x
19 Botswana: Migration Perspectives and Prospects (2000) ISBN 1-919798-04-8
20 e Brain Gain: Skilled Migrants and Immigration Policy in Post-Apartheid South Africa (2000) ISBN
1-919798-14-5
21 Cross-Border Raiding and Community Conict in the Lesotho-South African Border Zone (2001) ISBN
1-919798-16-1
22 Immigration, Xenophobia and Human Rights in South Africa (2001) ISBN 1-919798-30-7
23 Gender and the Brain Drain from South Africa (2001) ISBN 1-919798-35-8
24 Spaces of Vulnerability: Migration and HIV/AIDS in South Africa (2002) ISBN 1-919798-38-2
25 Zimbabweans Who Move: Perspectives on International Migration in Zimbabwe (2002) ISBN
1-919798-40-4

international migrants and refugees in cape town’s informal economy
56
26 e Border Within: e Future of the Lesotho-South African International Boundary (2002) ISBN
1-919798-41-2
27 Mobile Namibia: Migration Trends and Attitudes (2002) ISBN 1-919798-44-7
28 Changing Attitudes to Immigration and Refugee Policy in Botswana (2003) ISBN 1-919798-47-1
29 e New Brain Drain from Zimbabwe (2003) ISBN 1-919798-48-X
30 Regionalizing Xenophobia? Citizen Attitudes to Immigration and Refugee Policy in Southern Africa
(2004) ISBN 1-919798-53-6
31 Migration, Sexuality and HIV/AIDS in Rural South Africa (2004) ISBN 1-919798-63-3
32 Swaziland Moves: Perceptions and Patterns of Modern Migration (2004) ISBN 1-919798-67-6
33 HIV/AIDS and Children’s Migration in Southern Africa (2004) ISBN 1-919798-70-6
34 Medical Leave: e Exodus of Health Professionals from Zimbabwe (2005) ISBN 1-919798-74-9
35 Degrees of Uncertainty: Students and the Brain Drain in Southern Africa (2005) ISBN 1-919798-84-6
36 Restless Minds: South African Students and the Brain Drain (2005) ISBN 1-919798-82-X
37 Understanding Press Coverage of Cross-Border Migration in Southern Africa since 2000 (2005) ISBN
1-919798-91-9
38 Northern Gateway: Cross-Border Migration Between Namibia and Angola (2005) ISBN 1-919798-92-
7
39 Early Departures: e Emigration Potential of Zimbabwean Students (2005) ISBN 1-919798-99-4
40 Migration and Domestic Workers: Worlds of Work, Health and Mobility in Johannesburg (2005) ISBN
1-920118-02-0
41 e Quality of Migration Services Delivery in South Africa (2005) ISBN 1-920118-03-9
42 States of Vulnerability: e Future Brain Drain of Talent to South Africa (2006) ISBN 1-920118-07-1
43 Migration and Development in Mozambique: Poverty, Inequality and Survival (2006) ISBN 1-920118-
10-1
44 Migration, Remittances and Development in Southern Africa (2006) ISBN 1-920118-15-2
45 Medical Recruiting: e Case of South African Health Care Professionals (2007) ISBN 1-920118-47-0
46 Voices From the Margins: Migrant Women’s Experiences in Southern Africa (2007) ISBN 1-920118-50-
0
47 e Haemorrhage of Health Professionals From South Africa: Medical Opinions (2007) ISBN 978-1-
920118-63-1
48 e Quality of Immigration and Citizenship Services in Namibia (2008) ISBN 978-1-920118-67-9
49 Gender, Migration and Remittances in Southern Africa (2008) ISBN 978-1-920118-70-9
50 e Perfect Storm: e Realities of Xenophobia in Contemporary South Africa (2008) ISBN 978-1-
920118-71-6

migration policy series no. 70
57
51 Migrant Remittances and Household Survival in Zimbabwe (2009) ISBN 978-1-920118-92-1
52 Migration, Remittances and ‘Development’ in Lesotho (2010) ISBN 978-1-920409-26-5
53 Migration-Induced HIV and AIDS in Rural Mozambique and Swaziland (2011) ISBN 978-1-920409-
49-4
54 Medical Xenophobia: Zimbabwean Access to Health Services in South Africa (2011) ISBN 978-1-
920409-63-0
55 e Engagement of the Zimbabwean Medical Diaspora (2011) ISBN 978-1-920409-64-7
56 Right to the Classroom: Educational Barriers for Zimbabweans in South Africa (2011) ISBN 978-1-
920409-68-5
57 Patients Without Borders: Medical Tourism and Medical Migration in Southern Africa (2012) ISBN
978-1-920409-74-6
58 e Disengagement of the South African Medical Diaspora (2012) ISBN 978-1-920596-00-2
59 e ird Wave: Mixed Migration from Zimbabwe to South Africa (2012) ISBN 978-1-920596-01-9
60 Linking Migration, Food Security and Development (2012) ISBN 978-1-920596-02-6
61 Unfriendly Neighbours: Contemporary Migration from Zimbabwe to Botswana (2012) ISBN 978-1-
920596-16-3
62 Heading North: e Zimbabwean Diaspora in Canada (2012) ISBN 978-1-920596-03-3
63 Dystopia and Disengagement: Diaspora Attitudes Towards South Africa (2012) ISBN 978-1-920596-
04-0
64 So Targets: Xenophobia, Public Violence and Changing Attitudes to Migrants in South Africa aer
May 2008 (2013) ISBN 978-1-920596-05-7
65 Brain Drain and Regain: Migration Behaviour of South African Medical Professionals (2014) ISBN
978-1-920596-07-1
66 Xenophobic Violence in South Africa: Denialism, Minimalism, Realism (2014) ISBN 978-1-920596-08-
8
67 Migrant Entrepreneurship Collective Violence and Xenophobia in South Africa (2014) ISBN 978-1-
920596-09-5
68 Informal Migrant Entrepreneurship and Inclusive Growth in South Africa, Zimbabwe and Mozambique
(2015) ISBN 978-1-920596-10-1
69 Calibrating Informal Cross-Border Trade in Southern Africa (2015) ISBN 978-1-920596-13-2

GROWING INFORMAL CITIES PROJECT
is report is the most comprehensive study yet of the contribution of migrant
and refugee entrepreneurs to Cape Town’s local economy. e survey of over 500
entrepreneurs engaged in trade, services and manufacturing in dierent areas of
the city dispels some of the more prevalent myths that oen attach to the activities
of migrants. e vast majority are not “illegal foreigners”, but have a legal right to
be in South Africa and to run a business. Most are highly motivated individuals
who enter the informal economy to earn revenue to support themselves, their
families, and because they have a strong entrepreneurial motivation. Contrary
to the claims of South African competitors, the vast majority are not successful
because they are engaged in shadowy business practices. What emerges from
the survey is that while migrant entrepreneurs undoubtedly have strong social
networks, their businesses are highly individualistic in terms of organization,
ownership and activity in a competitive business environment. is report
demonstrates their positive economic contributions to Cape Town and examines
the challenges they face in running a successful business operation in the city. It
goes beyond the rhetoric of inclusion to demonstrate with hard evidence exactly
why migrant and refugee entrepreneurs should be accepted as an integral and
valuable part of the local economy.