COVID-19 and the informal economy in a small-town in South Africa: governance implications in the post-COVID era

Abstract The coronavirus (COVID-19) has been disruptive to the global socio-economic production of livelihoods because of the lockdown of national economies. In developing nations, the prolonged impact of the pandemic might stagnate millions of people into poverty because the informal sector contributes a significant share of total employment. This paper explored the socio-economic impact of COVID-19 on the South African informal economy, through a survey conducted with 75 informal workers in KwaDukuza Municipality, KwaZulu-Natal, South Africa. The results show that the COVID-19 lockdown amplified the precariousness of informal workers as most participants reported a decline in socio-economic status marked by increased unemployment, poverty and vulnerability. These challenges are also exacerbated by the lack of proactively targeted and timely interventions to cushion those in the informal economy against COVID-induced socio-economic shocks. Without necessary measures to support those in the most precarious jobs amid the pandemic’s prolonged and evolving socio-economic impact, the country is unlikely to address the high levels of poverty and unemployment. The paper also discusses the post-COVID governance implications for the informal economy in South Africa.


PUBLIC INTEREST STATEMENT
There is a consensus that the informal sector is one of the most precarious sectors of the economy. This paper reports on the findings from a study on the socio-economic impact of the Coronavirus (COVID-19) pandemic on the livelihoods of informal workers in the small-town of KwaDukuza, South Africa. The main findings focus on the socio-economic and livelihood impact of the pandemic, and the associated impact on the sustainable development goals (SDGs). For the general public, this study is important because it sheds light on the precariousness of the informal economy during the height of the pandemic. The results may assist in dispelling the myth that the informal economy is cushioned from economic shocks and vulnerabilities. This study is also significant in helping policy-makers develop inclusive policies to address the precariousness of the informal economy during unexpected shocks and pandemics.

Introduction
The coronavirus, popularly known as COVID-19, created the most unprecedented social, political and economic disruption and shocks to the entire world, with ripple effects likely to cause global vulnerabilities. The virus has killed more than three million people and destroyed national economies observable in the contraction of the global economy, with potential vicious outcomes for the poor in developing countries (International Monetary Fund, 2020a). While key literature (International Labour Organisation, 2020a, 2016Blaauw, 2017;Mróz, 2015;National Planning Commission, 2012) is aware of the supposed shock-absorbing effect of the informal economy during economic volatilities, the COVID-19 pandemic presents a different reality that profoundly affects the economic activities and livelihoods of those active in the informal economy. This level of precariousness is underpinned by the health risks that resulted in the lockdown of social and economic activities, thereby threatening the livelihood capitals of those who rely on the informal economy for income (Khambule, 2020a). For emerging and developing nations, where most of the population is employed in the informal sector, the virus has threatened the very fibre of livelihood strategies employed by more than two billion people globally.
On a global economic scale, the decline in labour supply because of the COVID-19 lockdown has vicious effects on the overall economic activities needed to keep economies afloat. At a domestic level, the COVID-19 pandemic might bring detrimental impact on household economies and present unprecedented shocks to sustainable development due to the shutdown of many economic activities. Sumner et al. (2020) note that the COVID-19 pandemic could increase global poverty to similar figures recorded over 30 years ago. The International Labour Organisation (2020) estimates that the pandemic will result in 9 to 35 million additional people working poor ($3.20 a day) in developing countries. Other estimates suggest the slowdown of the global domestic product (GDP) by 1% could likely increase poverty in sub-Saharan Africa and South Asia by 14-22 million people (Vos et al., 2020).
Several studies observed that unprotected workers in the informal economy, the self-employed, women, migrants and casual workers might be disproportionally affected because they are not protected by social security and labour laws (International Labour Organisation, 2020;United Nations Development Programme, 2020). Against this backdrop, this paper explores the socioeconomic impact of COVID-19 on the South African informal economy through a case study of informal workers in KwaDukuza Municipality, in the province of KwaZulu-Natal. Based on exploring the socio-economic impact of COVID-19 in developing countries, the COVID-19 disruption on the informal economy as a sustainable livelihoods strategy is delineated against the prevailing precariousness of the informal economy in South Africa and within developing nations. This paper's research question is: what is the socio-economic impact of the COVID-19 pandemic on the informal economy in KwaDukuza? Essentially, the sustainable livelihood approach is relevant to understanding the disruptions of livelihoods in the informal sector during the height of the pandemic.

The sustainable livelihood approach
In a world mired by uneven development, high levels of poverty and unemployment, there are various ways in which people try to make a living. This includes using a combination of assets and resources to craft a sustainable and meaningful livelihood (Chambers, 1995). The sustainable livelihood approach (SLA) is one of the many frameworks used in analysing and addressing the relationship between poverty and development. The SLA is a development approach that goes beyond the traditional and reductionist understanding of poverty and poverty reduction based on a monetary basis at the exclusion of other social and economic aspects of poverty-such as vulnerability and social exclusion (Krantz, 2001). This led to an increasing focus on multidimensional drivers of poverty, such as social, economic, ecological and political factors that inhibit people's ability to have a decent life. Based on these observations, the United Nations Development Programme (2017) summarises the SLA as a framework used by individuals and communities to craft ways to survive and sustain their lives, including factors that influence subsistence decisions and the interplay of these factors United Nations Development Programme, 2017.
At the household level, the SLA views a livelihood as comprising of assets and activities needed to fulfil a socially and economically sustainable life (Krantz, 2001). The sustainability element is underpinned by people's ability to cope and recover from stress, shocks, volatilities, vulnerabilities and to improve capabilities for better livelihood opportunities for the future generation (Chambers & Conway, 1992;United Nations Development Programme, 2017. Various shocks such as the global economic crisis experienced in 2008 may undermine the sustainable livelihood of citizens by bringing episodic poverty. For example, the increase in food prices during the 2008 financial crisis undermined the livelihood of the poor as the rural and urban poor spent 50-70% of their income on food (Hadley et al., 2007). The global financial crisis also resulted in 22 million people losing their jobs (International Labour Organisation, 2020a). In this context, the stagnation in wages for the unskilled labour, with the majority working in the agricultural sector, led to increasing vulnerabilities in the livelihood of the poor.
The SLA depends on five types of capital to improve people's ability to sustain their livelihood; natural capital, economic and financial capital, human capital, physical capital and social capital United Nations Development Programme, 2017. These types of capital are useful resources, with their combination likely to increase the capabilities of the poor to be resilient in the face of shocks. The expected livelihood outcomes from various sources of capital are, increased income, improved socio-economic well-being, reduced vulnerability, improved food security and the sustainable use of natural resources (United Nations Development Programme, 2017). The expected developmental outcomes from the sustainable livelihood framework can also be linked to the sustainable development goals, particularly focusing on ending poverty (SDG 1), zero hunger (SDG 2), good health and well-being (SDG 3) and building sustainable cities and communities (SDG 11). Thus, it can be argued that the sustainable development framework has a potential role in attaining sustainable development goals.
Studying the relationship between livelihood assets and livelihood risks is essential in understanding their associated impact on the socio-economic development landscape. Shocks and risks such as health risks have a significant bearing on the sustainable livelihood of citizens because they undermine the utilisation of available livelihood assets. In a study focusing on the relationship between livelihood risks and livelihood capitals, Su et al. (2018) find that health risks and social risks directly affect livelihood capitals. Sustainable livelihood in a risk context depends on the ability to access the various sources of capital that can be used to mitigate the risks (Su et al., 2018). Livelihood risks have a detrimental effect that could destroy or reduce the capacity to cope, thereby leaving people in vulnerability. As such, vulnerability decreased with enhanced capabilities inherited from the availability of assets and resources (capital). It also increases with the absence of assets and resources to improve capabilities to cope (Du Bois & Rousseau, 2008). Therefore, livelihood assets are an important source of reducing the impact of livelihood risks and vulnerabilities (Shahbaz, 2008).
Two distinctions of vulnerabilities are made, external vulnerabilities that include shocks, seasonalities and internal vulnerabilities caused by a lack of capabilities to cope (Globalisation And Livelihood Options Of People Living In Poverty, 2008). These problems are often resolved by improving social capital by investing in infrastructure improvement, health resources, skills development and educational outcomes, whiles social capital is enhanced by ensuring the participation of the vulnerable in decision-making and strengthening local institutions. There is a call to ensure skills development become the epicenter of sustainable livelihood strategies (Palmer, 2007). Physical capital is enhanced by ensuring accessible infrastructure, such as roads and transport, decent water and sanitation, access to affordable energy, and the provision of sustainable housing United Nations Development Programme, 2017. This is in line with the awareness that poverty goes beyond low income to include other social and economic factors such as access to services, education, and health. For example, the South African Multidimensional Poverty Index reveals that outside of unemployed, education levels, a lack of social and economic services, lack of energy and clean water are some of the leading drivers of poverty in South Africa (Statistics South Africa, 2016).
The UNDP has been consistently calling to develop strategies that link sustainable livelihood to economic recovery, crisis prevention and poverty reduction (United Nations Development Programme, 2013). Given that this paper is concerned with the vulnerabilities of the poor in the informal economy during COVID-19, it becomes important to focus on the relationship between the informal economy and the sustainable livelihood approach. Hovsha and Meyer (2015) note substantial benefits of creating sustainable livelihood within the informal economy as an opportunity to contribute to growth and poverty reduction. In Nigeria, Nzeadibe and Mbah (2015) observe that there has been an increasing trend of using the informal economy as a means to sustainable livelihood for millions excluded from safety nets by neoliberal policies. Thus, the sustainable livelihood strategies adopted by the poor cannot be divorced from the prevailing social and economic structures. However, few studies have focused on the economic vulnerabilities of the informal economy during economic volatilities because it is regarded as being insulated from any financial crisis.

Social and economic implications of COVID-19 in developing economies
The impact of COVD-19 in developing nations will be felt from a multidimensional angle as the pandemic is complemented by the destruction of all social and economic ties. Using the IMF's growth prospects, Valensisi (2020) observes that developing nations will be disproportionally affected by the pandemic as those who live below the poverty line of US$1.90 a day will likely increase by a further 68 million. In a separate study, Diop and Asongu (2020) find that the middle and upper poverty line of US$3.20 and US$5.50 will experience the highest increase in poverty by 57.55% and 76.42% respectively. All of these figures signal that the world will likely regress in the ambition to meet the SDGs. A major concern is that most of the world's poor are in sub-Saharan Africa, where the least developed countries are found, while other regions such as Asia have decreased their poverty levels (World Bank, 2015). Because of COVID-19, projections suggest that 9 out of 10 of the new poverty cases emerged out of sub-Saharan Africa (Diop & Asongu, 2020). Further to this, estimates reveal that 65% of the new poverty cases are caused by the COVID-19 lockdown (Teachout & Zipfel, 2020).
The lockdown regulations implemented by most countries throughout the world meant reduced working hours, unlocked employment losses and many other uncertainties in the global labour market. Many of the recorded employment losses (71%) were primarily driven by low economic activity rather than unemployment. While there was a record of 114 million job losses in 2020, the ILO (2021) observes that employment losses were higher in the Americas, and lower in Europe and some parts of Asia because of the availability of schemes that supported work-reduction programmes. These work-reduction programmes are in various forms, such as government unemployment insurance funds, income protector and other social security schemes that support workers when they cannot work. These schemes tend to favour formal workers, and further marginalise those who are already in poverty and mired in unemployment and destituteness. The International Labour Organisation (2020) identified these groups as the margianalised, the previously disadvantaged, women, those in the informal economy, the disabled, casual workers, wage labourers and the elderly to be the most disproportionally affected by COVID-19.
The lack of employment, lack of steady and adequate income, wealth disparities coupled with the current COVID-19 pandemic mean that the poor, marginalised and vulnerable population are increasingly expected to modify their means of livelihood with little or no alternative source of income during the lockdown period. The International Labour Organisation (2020) revealed that 1.6 billion workers-representing the most disadvantaged in the labour market-have suffered massive damage to their capacity to earn a living, with the income drop of informal workers amounting to 60% in the first month of the coronavirus pandemic. Evidence of this trend is notable in Bangkok, Thailand, where 82% of informal economy respondents reported a reduction of household income because of the lockdown restrictions (2021). The severity of the loss of household income should also be understood with the increase in food prices recorded worldwide at the height of the global lockdown and decline in economic activities. With diminishing income capacity and limited savings, informal workers and their families find it hard to survive and ultimately fall prey to poverty. The impact of the lockdown has been disastrous for the informal economy, which remains the largest employer throughout developing nations.
The precariousness of the informal economy is exacerbated by the conditions of selfemployment, dependency on daily wages and the lack of social security in many African countries (Schwettmannm, 2020). As such, the lockdown regulations meant that those in the informal economy suffer loss of income used to craft livelihoods, while also dealing with the lack of social security to protect against shocks. The ripple effect of the lockdown on the informal economy goes beyond those informally employed as it extends to those who receive remittances. These shocks are estimated to cause severe food deprivation to levels last observed in the 1980s (United Nations Development Programme, 2020). The relationship between high informality and COVID-19 in Africa suffices to explain the expected high COVID-19 related poverty rates observed in some early studies on developing nations. For such reasons, countries such as Cameroon, Togo and Lesotho adopted various interventions to guard against those in the informal economy falling into poverty (Schwettmannm, 2020).
Local responses to the pandemic need to be informed by existing local resources, social structures, values and practices, and domestic conditions that are best known by local state institutions. This brings forth the role of local governments, particularly in the context of rural areas that lack sufficient health infrastructure and capacity to manage the pandemic. Based on a study on the local governance of the pandemic in three Indian local states (Rajasthan, Odisha and Kerala), Dutta and Fischer (2020) find the emergence of cross-sectoral and multi-scalar coordination between different levels of government in coordinating pandemic responses, with local governments taking control of managing the disease and the provision of social protection schemes. In one of the local states, Kerala, the deepening and consolidation of democratic principles through prioritising women's rights ensured public trust and cooperation between different levels of government and citizens. The importance of this approach is that it emphasised institutional arrangements built from a bottom-up approach based on using local stakeholders to build effective pandemic responses and management policies.
There are clear cases where intergovernmental relations played an essential role in strengthening institutional arrangements to deal with pandemic responses. In emphasising an "all government" approach in response to a pandemic, Taiwan reinforced "cooperation between state, local government and non-state institutions, particularly neighborhood committees, [which] has resulted in a strengthened, holistic epidemic preparedness and response infrastructure" (Schwartz & Yen, 2017, p. 125). The "whole-society" approach adopted by the Taiwanese government led to better management, preparedness and capacity, rather than depending on the state of public health. This approach diverges from what was observed in Brazil and the US, where there were contradictory reactions and strategies between national and subnational governments handling the pandemic. These countries were disproportionally affected by the health impact of the pandemic in mortality terms. In Taiwan, it is argued that municipal and country authorities had equal responsibilities in formulating policies to manage and respond through the Influenza Pandemic Preparedness Plan 2005-2010 (Taiwan Communicable Disease Control Act, 2015).

Methodology and case study
This study is based on a survey administered to 75 informal economy participants in KwaDukuza Municipality in the province of KwaZulu-Natal, South Africa. The broader research study focused on the socio-economic impact of COVID-19 on the South African informal economy. This study utilised the inductive approach because it does not involve a hypothesis, but is based on a set research question and aims and objectives. To respond to the aims and research question, the survey questionnaire focused on demographic information, socio-economic data, the impact of COVID-19, government support towards the informal economy and social security for the informal economy. This research study was ethically approved by the University of KwaZulu-Natal's Humanities and Social Sciences Research Ethics Committee (HSSREC). The study's protocol reference number is: HSSREC/00002385/2021. In line with this ethics approval, the study maintained the highest ethical compliance because of the sensitive nature of the topic for informal workers and the need to maintain social distance to limit the spread of COVID. The number of participants in this study was limited by the need to ensure social distancing as the data were collected in the midst of the pandemic.
The data were collected and captured using google forms, an online survey data collection tool. The data collection was done face-to-face using digital devices, as the researchers had to abide by the social distancing regulations. The variables of this study were directly linked to ending poverty (SDG 1), zero hunger (SDG 2), good health and well-being (SDG 3), building sustainable cities and communities (SDG 11) and ending poverty (SDG 1), zero hunger (SDG 2), good health and wellbeing (SDG 3) and building sustainable cities and communities (SDG 11) and decent work and economic growth. As such, based on the multidimensional impact of COVID-19, the two dominant variables focused on income and poverty.
The results and discussion are captured with a particular focus on the impact of COVID-19 on the informal economy. The data analysis and graph presentation were done through an excel spreadsheet. The study was motivated by the high poverty rate (55.5%) in South Africa and the growing need to study the lives of informal workers in the country's deteriorating socio-economic conditions to meet the sustainable development goals. Further to this, with over 3, 7 million cases and more than 99,700 deaths by 16 March 2022, South Africa has recorded the highest COVID-19 cases in sub-Saharan Africa. The period of analysis is from 26 March 2020 to 1 June 2021, as the data was collected between February-June 2021.
The series of lockdown measures introduced by the government to combat the spread of COVID-19 had far-reaching consequences as the country's GDP contracted by 51% in the second quarter of 2020 (Statistics South Africa, 2020a). This contraction worsened the country's economic position and ability to recover from the recession experienced due to sustained negative growth in the previous two quarters leading to the COVID-19 related contraction. Further to this, it should be noted that the extreme GDP contraction occurred in a setting where more than 31% of the population remains unemployed, the majority being the youth, and more than 55% of the country's population living in poverty (Statistics South Africa, 2020b). Thus, South Africa's contraction exceeds the 6.1% recorded during the first quarter of the 2009 global financial crisis. Labourintensive industries experienced the sharpest decline in economic activities, with construction declining by 76.6%, manufacturing by 74.9%, mining by 73.1% and transport and communication shrinking by 67.9% (Statistics South Africa, 2020a).
In some cases, as in Figure 1 and 2, Figure 3 and Figure 4 and 5, the respondents were allowed to choose more than one response because of the multidimensional impact of COVID-19. As such, it was important for the study not to limit the participants to one response, whereas there are other responses that are equally important to note. The study was limited by the number of participants because of COVID-19 restrictions and the need to abide by government regulations.

Findings: the socio-economic implications of COVID-19 in South Africa's informal economy
Millions of the country's population that use the informal economy as a livelihood strategy struggled to sustain their livelihoods because of COVID-19 as per figure 1. Cities, towns and  business centers and places of economic activity came to a halt during the series of strict lockdown periods. The majority of South Africans in the informal economy work as street vendors, waste-pickers, food vendors, market traders and many other enterprises to make a meaningful livelihood (Fourie, 2018), and were bound to be affected by the lockdown.
Based on the location of business activities, 41.3% of the respondents operated in business premises (stalls), followed by 34.7% in improvised posts on the road, 12% in a trading market, and 8% in municipal designated posts. A grave concern is that more jobs were reportedly lost in the informal economy jobs 640000(21.9%) in comparison to the formal sector's 1.2 million (10.8%) as a share of employment (Stats SA, 2020a). Because of the lockdown period, Rogan and Skinner (2020) find that 31% of informal workers who were not completely displaced from their livelihoods could not work under the level 5 lockdown regulations, while this only affected 26% of the formally employed. The impact on the informal economy was largely unavoidable as the general public was The study also found that all of the respondents were affected by the COVID-19 pandemic.
On how they were affected by the pandemic, Figure 2 shows that 96% of respondents reported mainly having lost their business income, followed by 33.3% with the loss of personal assets such as stock and home-based assets, while 37.3% indicated that they temporarily lost their employment. Lower-income households, with most of this group being women, day workers and the youth were disproportionately affected by job losses than any other group (Köhler & Bhorat, 2020;Ranchhod & Daniels, 2020). Evidence from Stats SA (2020) shows that the previously marginalised, Africans in particular, remained largely affected than any other population at 26.3%. Women experienced approximately double the decrease in working hours than men, and with those who are self-employed disproportionally affected as women experienced nearly a 70% decrease in earnings during the strictest lockdown regulations (Rogan & Skinner, 2020).
The concentration of COVID-19 pitfalls on disadvantaged groups is likely to amplify the existing social, economic and spatial inequalities, particularly along gender and racial lines because of the country's historical legacy of economic exclusion. From these results, it can be deduced that the lockdown measures implemented by the government undermined the ability of informal workers to use their human, physical and social capitals as sustainable livelihood approaches in the face of the pandemic. This predicament is linked to the impact of health risks on the various capitals used by informal workers (Khambule, 2020a). The COVID-19 lockdown produced widespread social and economic vulnerabilities that directly impacted the livelihood approaches of some of the most marginalsied groups. These results support the International Labour Organisation's (2020) observation that informal workers, mainly consisting of unprotected workers, the self-employed, women, migrants and casual workers stand to be disproportionally affected. In the case of this study, the impact is attributed to the lockdown measures that restricted the livelihood activities of informal workers without any alternative plans for business continuity.
Most respondents (76%) reported that the months (March-April) of the strictest level 5 regulations were the hardest because they could not conduct the businesses essential for their livelihoods.
A lower share of respondents (8% and 2.7%) reported that the period between July to December was also very hard for their businesses, while 28% of the participants indicated that the entire COVID-19 period has been hard for their businesses. One participant went as far as explaining that "it has been very hard for our business, our sales have plummeted and we not make half of what we used to make before the pandemic" (Informal Worker 1). Evidence from Wave 1 of the National Income Dynamics Study-Coronavirus Rapid Mobile Survey (NIDS-CRAM) in South Africa reveals that millions of people lost their jobs in the first two months of the lockdown and one in three income earners did not earn an income in the first month of lockdown (Ranchhod & Daniels, 2020). Rogan and Skinner (2020) find that the average informal worker was locked out of employment and income-generating activities during level 5 of South Africa's lockdown, leading to decreased income and working hours. This can be primarily attributed to the fact that informal economy workers were initially not considered essential workers by the South African government despite their dependency on this sector for their livelihood.
Given the importance of using counter-cyclical policies to mitigate the vicious impact of COVID-19 on the poor, the government introduced various programmes to protect jobs and stimulate the economy based on the R500 billion stimulus package. However, as per figure 4, most of the respondents (73%) reported not receiving any government support (other than social grants), with the majority of the 26.7% who received relief funds benefiting from the R350 unemployment COVID-19 relief fund.
The KwaDukuza Municipality provided a once-off R1500 relief to informal economy participants, but only 5.6% of the respondents had received this funding, while a further 5.6% of the participants indicated that they did not received it because they are foreign nations. A municipal official responded, indicating that "we are a small-town and rural municipality, and could only afford to give registered informal workers a once-off R1500. We believe the grant assisted in stocking up what they sell in the streets". This reveals a gap in the funding of foreign nationals during pandemics. At the opposing end of the spectre, those formerly employed and with social security were cushioned by the government's Unemployment Insurance Fund (UIF), which was tasked with assisting struggling companies to pay salaries (The Presidency, 2020).
The lack of social security in the informal economy exposed millions of South Africans in the informal economy to socio-economic vulnerabilities because of the loss of income and the limited social policies aimed at cushioning the informal sector. Responding to the lack of targeted funding to the informal economy from the national government, 97.3% of the participants reported that the government was supposed to release funds for the informal economy. The South African government's failure to prioritise financial assistance to the informal sector needs to be blamed on applying formal instruments such as tax registration, income statements and business registration for informal enterprises. This is noted in that 37.2% of the participants cited the cumbersome application requirements as the leading reason for not applying for the COVID grant introduced by the government. This was followed by 11.6% of the participants who cited the lack of knowledge about existing funding for businesses, and 9.3% cited that most of the requirements were designed to exclude the informal economy.
South Africa faces a high food insecurity rate as 55.5% of the population lives below the poverty line. The strain induced by the COVID-19 lockdown on the informal economy is likely to increase vulnerabilities. This study found that 22.7% of respondents indicated that there were days they went without food/experienced hunger, while 77.3% indicated that they never went a day without food/experiencing hunger. On the number of days experiencing hunger, 17.8% reported having gone 2-4, whereas 4.1% indicated up to 5 days. Results from the NIDS-CRAM Wave 1 data show that 47% of the respondents indicated that they ran out of financial means to afford food in April, increasing the number of food-insecure households (Wills et al., 2020). On the probability of falling into poverty due to COVID-19, the United Nations Development Programme (2020) estimates that approximately 3.2 million people in South Africa's middle class are likely to stagnate in poverty. The various scenarios increase the probability of falling into poverty based on changing characteristics. These issues may be hard to solve because of the institutional incapacities facing subnational governments in South Africa (Khambule, 2020b;Khambule & Mtapuri, 2018).
The precariousness of the informal economy is reflected in the millions of South Africans locked out of the means of sustaining their livelihoods. To survive the pandemic, various forms of support were introduced by the government for low-income household, such as the delivery of food parcels to the poorest in communities. This study found that 56.8%% of those in the informal economy reported to have used their savings to sustain their livelihoods.
Based on coping strategies, 20.3% of respondents highlighted having received food parcels, whereas 16.2% received donations, with 29.7% reported to have struggled to sustain their livelihoods. Other participants, although at a smaller share (9.5%) as evident in Figure 5, reported having depended on their government grants to sustain their livelihoods. This demonstrated that the COVID-19 lockdown laid bare the precariousness associated with the informal economy, particularly the lack of social protection and the absence of a decent living wage. The International Labour Organisation (2020) expects the strain on incomes for many citizens to lead to an additional 8.8 million people working in poverty, with the numbers likely to increase up to 20.1 million and 35 million more people classified as working poverty under the mid and high scenarios based on the unmitigated effects of COVID-19.

The governance of the informal economy in the post-COVID era
Although developed countries have effectively responded to the lockdown through stimulus packages that enhance job protection in the formal economy as observed in Australia and many other countries, developing countries face an uphill battle because of the widespread informality and the working poor. This is evident in this study's findings that a significantly higher share of those in the informal economy have not received comprehensive government support, with the R1500 provided by the KwaDukuza Municipality falling way behind the stipulated minimum wage of R3500. The significant number of people active in the informal economy without social protection creates fertile grounds for breeding unprecedented levels of poverty and unemployment and may undermine the attainment of the SDGs on ending world hunger and poverty. King and Shackleton (2021) also find that the daily remuneration of the informally employed in Eastern Cape towns in South Africa was not adequate to cover essential needs and reflects the survivalist nature of the informal sector. In addition to the COVID-19 restrictions for informal workers to make an income, the rate of those working in poverty may increase due to limited stimulus packages (as a share of GDP) adopted by developing countries and small domestic financial resources. This many inevitably reverse the gains made in attaining the SDGs, in the same manner that the 2009 global financial crisis reversed the gains made by the Millennium Development Goals (MDGs).
The United Nations Development Programme (2020) concluded that South Africa's stimulus package lacks proactive interventions targeted to the informal sector. This is also evident in that 97.3% of respondents indicated the need for a governance that promotes social security in the informal economy to sustain their livelihoods. Only a few countries (such as Cameroon, Togo and Lesotho) have adopted measures aimed at protecting those in the informal economy in the height of precariousness (Schwettmannm, 2020). As with many other countries dominated by informal economy activities, the informal sector's fundamental problem is that informal workers and traders do not make enough to guarantee decent living conditions. This suggests the failure to follow the United Nations Development Programme's (2013) recommendation to develop effective strategies that link sustainable livelihood approaches to economic recovery and poverty reduction. It may be difficult to build sustainable cities and communities (SDG 11) without interventionist approaches that build resilient structures for communities to achieve decent work and economic growth promoted by SDG 8.
Without access to income and means of sustaining livelihoods amid lockdown regulations, informal economy participants struggled to maintain their livelihoods and depended on donations and other alternative ways of survival. The major concern is that 5.6% of the respondents reported that they did not receive any financial assistance because they are foreigners. South Africa is one of the favourite destinations for migrants that seek to improve their socio-economic conditions and is a source of remittances. Remittances are significant because they reduce poverty and have income-equalising effects in sub-Saharan Africa (Akobeng, 2016). The COVID-19 implications on remittances have cascading effects as many foreign nationals in the informal economy send money home, which they struggled to do during the level 5 lockdown period. In this context, it is clear that the pandemic undermined the sustainability element of the SLA by wiping out the savings of informal workers and limited the ability to cope and resist the COVID-induced shocks and vulnerabilities.
The expected loss of employment in many sectors of the economy resuscitates the need for governments across the world to implement inclusive social protection policies and governance models to reduce the socio-economic impact of the pandemic on informal workers. The precariousness of the informal economy is evident in the lack of social security, safety net and protection of wage workers to mitigate the COVID-19 effects because it remains unregulated and does not contribute to tax necessary to be prioritised by the state (Mróz, 2015). It is pertinent to understand that pandemics increase the vulnerabilities of those who have lesser capacity and capital to cope in the face risks, while those who have social security may have increased capacity to resist risks to their livelihood as evident in the results of this study. This is noted in the significant number of informal workers that did not work during level five and those struggling to recover their pre-COVID income. In Thailand, WIEGO (2021: 1) also reports that informal workers struggle to recover their pre-COVID income, which stood at "46% for home-based workers, 49% for massage therapists, 57% for waste pickers, 58% for motorcycle taxi drivers, and 64% for street vendors". Visagie and Turok (2020) also noted that COVID-19 amplified rural-urban inequalities, with metropolitan municipalities recovering faster than small-town and rural municipalities.
From this study's findings, the implications point to a need to link counter-cyclical responses with the United Nations Development Programme's (2013) utilisation of the sustainable livelihoods strategies to economic recovery, crisis prevention, and poverty reduction. This implies the need for better economic governance models that promote sustainable development through prioritising low-income households, as current models failed to respond to the plight of informal workers. The newly gazetted Green Paper on Comprehensive Social Security and Retirement Reform (Department of Social Development, 2021) that seeks to introduce a National Social Security Fund (NSSF) is an important milestone towards creating a universal grant and enhancing the social security for low-income households. However, the country's economic governance crisis and crippling corruption have resulted in criticism of the policy because of the failure of the government to promote good governance. This implies the need to shift to a governance model that supports a good governance agenda to accelerate the coordination of policies that bring social and economic progress in the post-COVID era.
Post-COVID, governments should not only treat the informal economy as a safety cushion for the unemployed, but should also be proactive in ensuring that the safety cushion is protected against the vulnerabilities in the sector. Fourie (2018) argues for recognising the informal sector as an integral component of the entire economy to enable smart policy options. The absence of the needed smart policy options is likely to increase poverty rates in sub-Saharan Africa and other developing nations to levels observed by Diop and Asongu (2020). In relation to social security, a smart policy approach may involve a social security net for the informal economy, either by small contributions from the employers or the self-employed, to increase livelihood resilience in line with the sustainable livelihood approach's various capitals. In our survey, 77.8% of the respondents indicated a willingness to take up a social security scheme to cover their needs during a crisis. These contributions can be invested and used to protect informal workers during pandemics or other volatilities that may threaten the livelihoods of the working poor.
The study also found that 78.7% of respondents would want the social security scheme to cover retirement fund, loss of income during pandemics and injuries that affect their ability to work. This could potentially ensure that those in the informal economy have the means of sustaining themselves during volatilities and guarding against vulnerabilities. On the governance of the social security fund, 41.4% opted for the government as the custodian, whereas 31% opted for the banks, with 8.6% opting for the informal economy union and 15.5% opting for all the stakeholders to play a role in managing the scheme. This reveals the need for stronger governance structures in dealing with the social and economic needs of the informal sector to address the critical situation caused by the pandemic. Civil society organisations can play an essential role in helping with the formalisation of the informal economy and capacitybuilding initiatives that can be headed by the chamber of commerce in spearheading the economic recovery process.
The observed employment losses and increased poverty and hunger rates because of the pandemic threaten the attainment of SDGs. The exclusion of the informal economy from COVID-19 benefits such as support for informal businesses reveals the lack of recognition and support for the informal sector despite the existing precariousness. Smart policy options for improving the informal sector will only be enabled by recognising the sector as an integral component of the country's economy (Fourie, 2018). The current crisis suggests that there has been a paradigm shift to a welfare model of protecting those on the lowest socio-economic ladder. This requires a governance model that emphasises the inclusion of the informal economy in the crafting of counter-cyclical policies, particularly in adopting policies that will prioritise social security for the poor. From these results, policy implications include the need to develop a social security scheme and dedicated funding for informal workers and enterprises to mitigate against unexpected shocks and vulnerabilities. This will support the sustainable livelihood approaches of informal workers as evident in the COVID financial assistance in countries such as Cameroon and Lesotho.

Conclusion
Focusing on the precariousness of the informal economy, this paper explored the socioeconomic impact of COVID-19 on the South African informal economy using primary data from a survey conducted with informal workers in the small-town of KwaDukuza, in the province of KwaZulu-Natal, South Africa. The findings reveal that informal workers and lowincome households faced the greatest consequences of the ongoing COVID-19 pandemic. This is evident in that most participants cited various challenges, such as the loss of income because of the lockdown restrictions, running out of food and savings, inability to afford rent and other living expenses, loss of assets and setbacks in paying employees. These findings respond to the paper's research question by revealing the impact of the pandemic in the livelihoods of informal workers. Further impact can be noted in that over 50% of informal workers reportedly struggled to recover more than half of their pre-COVID income during the early phases of the economic recovery period.
It is observed that those in the formal sector have greater capabilities to withstand economic shocks because of higher levels of social security and government interventions, whereas those in the informal economy and without social security face the greatest risk of falling into poverty and extreme poverty. This is evident in that a higher share of informal workers reported not receiving support from the government and struggled to sustain their livelihood during the level 5 lockdown period. A worrying trend is that women and the marginalised in South Africa are disproportionally affected, which could likely exacerbate the already high levels of poverty, unemployment, and vulnerability. For countries that seek to use the informal economy as a shock-absorbing tool, the precariousness of the informal economy has been laid bare. It requires the rethinking of approaches to sustainable development and a new governance model post-COVID. The governance model requires active participation from all the spheres of government, civil society and the private sector in creating policies and social security schemes capable of sheltering the informal economy from unexpected shocks.
The economic decline experienced by sub-Saharan African countries and the inability to adopt responsive stimulus packages have created fertile ground for Africa to be the epicenter of the socio-economic impact of COVID-19 despite reporting lower cases than many regions of the world. In many developing countries, COVID-19 exposes the underdevelopment of the informal economy due to the lack of data on the activities of the informal economy and the lack of social security. There has never been a time where the welfare nature of the state has to be reconsidered in the midst of growing poverty levels, with a dire need for social programmes at the most volatile economic period in developing nations. In South Africa, there are greater chances that the responsive measures will only increase poverty and inequalities if the country does not introduce social and economic measures to spur economic growth. For such reasons, governments need to consider measures of protecting the informal economy against future volatilities, potentially through social security schemes. As such, future research can focus the development of a social security scheme for the informal economy in developing nations.