Municipal Institute Of LearningMILE - Municipal Institute Of Learning
Providing Strategic Support to the Informal Economy: Learning Exchange in Maputo, Mozambique, 7 - 9 November 2012
​eThekwini Municipality Senior Managers from the Business Support Unit, Michael Hlangu and Anneline Chetty on MILE assignment with the UCLG in Maputo, visiting an informal market.
A Short Summary of Proceedings and Key Learnings: DRAFT ONLY 
 
Background:

As Maputo was gearing up to celebrate its 125th anniversary on 10th November 2012, the Provincial capital cities and twinned cities of Mozambique together with the cities of eThekwini Municipality in South Africa, Belo Horizonte and Porto Alegre from Brazil converged on the City Hall to exchange practical ideas and experiences on how to improve the working conditions of informal traders. This event was organized by a range of partners including the UCLG, ANAM, ILO, Cities Alliance the Norwegian Ministry of Foreign Affairs.
 
DAY ONE:Opening Session

In setting the scene, Mr Dioniso, General Secretary of ANAM, outlined the importance of the learning exchange and the sharing of good practice in a critical area such as the informal economy. Ms Sara Hoeflich, UCLG Programme Manager, explained the role of UCLG on the world stage, and more specifically in this event, focussing on the unique opportunity created for learning by bringing together the different international partners, networks and funders with cities from the global south like Porto Alegre, Belo Horizonte, Durban, Maputo and other Mozambican Provincial capital cities.
 
As the promotion of decent work and dignity is a key focus of the ILO, Mr Pierre Martinot-Lagarde, in his opening address spoke about his excitement in participating in the event, and the wonderful space that the event offered the ILO to collaborate in this area to share lessons learned and operationalise the recently signed Memorandum of Understanding that centres around local economic development.
 
Declaring the event open,  His Excellency, the Mayor Dr David Simango, was very optimistic that the event would help shape good practice in the city of Maputo. He outlined the four pillars of the informal trading strategy before reaffirming the city's commitment to work with the stakeholders to find better solutions to preserving hygiene and health in the city's markets.
 
Below are some of the highlights from the learning event:
 
Perspectives from Maputo City Council: The Challenge of Informal Trade in Maputo

The Council fully acknowledges that, increasingly, citizens from Maputo are forced to find ways of making a living in the informal sector given the challenge around employment in the context of a global economic crisis. The city council had tried to forcefully move peddlers from certain areas, however this has not been very successful. Interestingly, owners of the formal shops have recently begun to use the peddlers as employees of formal shops, selling new products. It is important to note that peddling or hawking is currently forbidden in the City.
 
Many of the traders are refugees from other countries or from the rural hinterland. Some of them are involved in the trade of alcoholic drinks in shebeens, and this is a challenge as many school children are frequenting these places and it is a major social ill. The health of the city is compromised too as a result of these activities, given the unhygienic preparation of food practices especially in downtown Maputo.
 
The improper disposal of solid waste has been a major challenge as a result of the mixing of organic and inorganic waste as the waste separation culture has not been entrenched amongst vendors.
 
The Maputo City Council Response
 
In recognition that something proactive has to be done, numerous strategies have been devised by the respective departments within the Council.
 
A proposal has been developed that involves the designation of a space for the approximately 40 000 traders, and trading times set out. A tax of 100 meticals has been prescribed irrespective of the goods being sold. Penalties for trading out of the prescribed zones has also be proposed as well as the confiscation of the goods.
 
With regard to food safety, the Health Unit collaborated with the Markets and Trade Fairs in the Council to prepare a joint plan to address the health challenges raised above, beginning with clear terms of reference. The main objective is to improve the health and hygienic conditions and indirectly improve the quality of the urban environment. The education of citizens is a key strategy and behaviour change in this regard is fundamental. Dissemination campaigns must be increased in partnership with mainstream media.
 
On the issue of the operation and organisation of markets in Maputo, formal markets have been categorized into classes from A to D - a 33 million metical industry. Informal markets are also organised and a partnership approach is being adopted, with participation from the vendors. An innovative mechanism of establishing a Vendors' Committee elected by the vendors from various sectors that ensures that 10 percent of the revenue goes back to the market to address local needs as identified by the traders was highlighted. Also noteworthy is the fact the City Council not only builds new markets and ablution facilities, but also refurbishes and continually improves markets to ensure that health and safety standards are maintained.
 
The management of solid waste in municipal markets to improve the overall quality of the public space is an area that the City Council has applied itself to. The selective collection of waste is the central focus of the strategy: paper, glass and metal will be collected and recycled or decomposed by the private sector.
 
Sharing experiences from Mozambique

Macia Village shared its solid waste management practices, noting that the Council intervened to provide ablution facilities in its major market and is working in partnership with citizens on solid waste education.

Lichinga's experience of mobilizing street sellers to join the 9 markets organized according to its products sold is also very useful.

Nampula's 32 markets' management experience has been similar to that of Maputo especially with regard to securing partnerships for cleaning. Some of the constraints shared include the poor location of markets, lack of security fencing resulting in dumping, and transportation of waste to dump sites.

Inhambane, a very small municipality relative to the other cities, has 13 markets, 4 of which are formal. The municipality is also active in providing support to the markets, again through public ablutions and sanitary inspections. Public staff, youth and women's organization support the public market campaign.

Olongwe is also a very small municipality which despite its size has thriving markets. The challenge is the over-expansion of market space, lack of separation of waste and insufficient infrastructure to manage waste (e.g. only one tractor). Again the election of Committees to work in partnership with traders is useful.

XaiXai City with a population of nearly 120 000 people, has relatively few markets, however the challenges faced are similar to other municipalities including poor solid waste disposal despite educational campaigns.

Chimoyo Municipality has five markets and has partnered with the media to promote educational awareness and is involved in a range of support initiatives.

Pemba Municipality also uses Committees effectively to ensure supervision of solid waste management. A large new site for solid waste disposal has been identified which is encouraging. The Council is interested in determining how other municipalities work in partnership with the private sector.

Matola Municipality's markets are represented by a Committee, like most other Mozambican municipalities. Waste removal is managed by local communities and this is effective. The ablution facilities at the markets however are insufficient. Informal vendors are a key challenge in terms of maintaining a clean environment, and must be focused on.
 
Some Preliminary Observations from abroad

One of the concerns raised from the Brazilian experience is the need to carefully think through the issue of appropriate pricing for traders. It is the experience of Porto Alegre that if the rental is not affordable, then traders will be forced into illegality which will perpetuate the social and environmental ills defined earlier.
 
From the experience of Barcelona (architects without borders), the important point made is that Maputo needs to think about the specificity of locations. As vendors locate in particular locations in the city for reasons. In the construction of new markets this specificity must be acknowledged.
 
International Perspectives on the informal economy: Experiences from Durban, South Africa
 
Acknowledging that the informal sector is here to stay, the eThekwini approach is more than controlling or managing the sector, but about a new bottom up livelihoods' framework that supports informal traders. The council highly subsidises the costs of facilities set up traders for the markets, and these are cleaned by cooperatives set up by the City. Training before the renewal of permits was also seen by Mozambican participants as an innovation that they can employ. In addition, the idea of holding the cleanest stall competition is a good response to ensure cleaner sites. The eThekwini Municipality Council has taken great steps to support SMMEs and has a dedicated unit to promote this sector. More than just providing facilities, eThekwini provides training programmes and has  set up business incubators to support traders. A focus is on women traders and this is are done in partnership with big business. "Businesses must drive Businesses!" SMMES are also supported through dedicated programmes such as an annual Business Fair and by providing access to finance. Enterprise development is managed through a mandatory 3 percent contribution from corporate businesses.
 
Lessons from Porto Alegre
 
Similar to the Durban, South Africa experience, informal trade is less about control and focuses more on creating an enabling environment for creating income generation and providing work. Finding centrally located spaces that are highly trafficked are key - this is a key recommendation to XaiXai which may want to think about how to ensure that their large formal markets are well located. Another interesting observation from Porto Alegre concerns the relationship between urban and rural. Their strategy also actively promotes rural development and links these projects into healthy school feeding.
 
Insights from Belo Horizonte

The Belo Horizonte experience is a very good example of integrated development grounded in sound urban planning and design process that allowed the participation of all citizens. In the 1990s the central area of the city had many green spaces and little economic vitality. Then integrated actions were proposed through a detailed master planning process to rejuvenate the city centre. Shebeens, peddlers and other sellers were removed and access prioritized for pedestrians. An old building was rehabilitated in partnership with the owners and transformed into spaces for shopping. The City was able to accommodate the peddlers in this new building, and then successfully replicated the model in other parts of the city. This has been a highly successful public-private partnership project that facilitated social inclusion and transformed the landscape of the city into one that now celebrates public life.
 
The role of women in the informal sector in Mozambique

A research study was commissioned by the ILO to understand the contribution of women in Mozambique. Using a range of methodologies, the study showed that more women work in the informal sector, they are generally less aware of the associations and funding available; wished to work less the main objective as part of the strategic plan to support the family and perform domestic chores; and found it difficult to reconcile work and household functions. More women felt victimized and more vulnerable. Having less education, more women were less satisfied with the remuneration than men, yet were more satisfied than men at work, as there were fewer options available to them. Some key recommendations include the need to endorse the ILO Convention ratifications and increase awareness of funding opportunities to informal traders.

DAY TWO:
SITE VISITS AND CASE STUDIES

Learning from a CASE STUDY: The Warwick informal traders story, by Asiye eTafuleni , Durban, South Africa
 
The second day of the Learning Exchange started off with an exciting site visit of informal traders and then the sharing of the experiences of Durban's largest informal market (6000 to 8000 workers) with participants from Mozambique, Brazil, the ILO and informal traders themselves. Focussing on the Warwick Junction story, a precinct where 460 000 people pass through each day, Richard Dobson spoke about the similarity between Durban and Maputo's context. The first important point made was that the project began as a result of health and hygiene issues - similar to the Maputo experience. Beginning work with about 1000 herb traders who were not in a space that was optimal, the project relocated these traders to a better suited space, and as a result facilitated a livelihood project in which USD 21 million is being turned around each year.
 
He spoke about the cooking of cows' heads that posed a severe health threat in the city, and which caused negative impacts to the city infrastructure. Rather than ignoring or wishing the challenge away, the city market managers worked with the traders to find local solutions and set up a new dedicated traditional food court. He shared interesting stories and anecdotes which inspired the participants. One particular story concerned setting up a cooking competition between the city market managers, who used gas cookers to boil mielies, and local mielie cookers who used traditional fires which normally damage city pavements, to prove the efficacy of the gas alternative. Much to the delight of the traders, their fires roared and their mielies were ready in no time... an important experiment indeed that resulted in the market managers having to rethink their strategy and finding more innovative solutions that both the traders and the market managers was happy with.
 
 
The five key learnings from the Durban study learned include:
 
1. It is important for city practitioners to accept and acknowledge that informal workers have a RIGHT TO THE CITY but, more importantly, they need to think creatively about how cities can rise to the challenge to work in partnership with informal traders. At the same time, the case study showed the importance of informal traders accepting responsibility for their actions and committing to working together.
 
2. The value of ensuring that a market is perfectly LOCATED cannot be underestimated. The Warwick Project has been active for 15 years, with the city investing USD 16 m into the project - predominantly because the market is located in a major transport nodal interchange and it makes perfect sense for traders to locate there! City officials must understand this fact, and be cautious about relocations as it could affect the viability of livelihoods.
 
3. Integrated URBAN MANAGEMENT is fundamental, and more specifically there is a need for infrastructure that is relevant to each type of trading facility. Managers must understand these local needs and then respond.
 
4. A NEW WAY OF DOING BUSINESS in the local area must be adopted. In Durban, the area-based management approach which brings local government closer to the people and is more responsive, was adopted from Porto Alegre.
 
5. City officials and informal traders must jointly develop a SHARED VISION and think about how this vision will be funded. Doing this incrementally and progressively was key to achieving the scale of a project like Warwick.
 
During the discussion session, the importance of facilitating good relationships between formal and informal traders was stressed. The role of local government is to create an enabling environment for facilitated discussion and dialogue. In addition, local government must make substantial investments in the informal economy, and must balance their capital and operating budgets. The point that informal traders do take precautions themselves to ensure the health safety of food was also recognized, as after all clients’ health was important to traders too, from a business perspective. A simple observation was made about the need for well maintained side walks that can be clearly designated. Also, the call for integrated and vibrant use of public spaces was made and planners were challenged not to perpetuate the old colonial sterile planning system that does not celebrate the diversity of land uses. Finally, the key point was made that we cannot glibly transpose the case study of Durban onto Maputo. Instead, the idea of "possibility thinking" was encouraged where Maputo colleagues are inspired to think about their own possibilities, and develop home grown solutions.
 
Two Brazilian Case Studies: Belo Horizonte and Porto Alegre
 
The focus of the highly innovative and participative Bello Horozonte SMME project first and foremost involves territorial delimitation, and then a careful and detailed analysis of what economic skills exist in informal traders - a process driven by local facilitators, who then pass on the information to economic development agents appointed by the project team.
 
The multi- partnership project which was initiated by the Brazilian government in order support local economies, involves sharing survey results with traders, linking these traders with training and capacity building, and, critically, to micro-credit facilities. Ultimately, the formalization and graduation of informal traders is a key outcome.
 
The Porto Alegre experience is similar to that of Belo Horizonte, but focuses more on the creative employment of a disused bus to run a mobile support service that empowers and builds capacity of those involved in small businesses. Interesting to note, is that a business management module is developed and run for small businesses that develops traders on all aspects of businesses.
 
DAY THREE

The third and final day wrapped up with a session that saw cities and agencies offering what they saw as areas for future collaboration. A draft roadmap was also prepared that will guide the next steps around learning, sharing and more importantly, about making useful interventions in the respective cities.
 
Copies of the presentations and photos will be uploaded onto the MILE website www.mile.org.za shortly.
 

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