Review of the Lockdown Regulations’ Impact on Informal Businesses during the COVID-19 Pandemic

Abstract

Globally, the COVID-19 pandemic lockdown regulations caused enormous changes in all business sectors because many businesses were not allowed to operate. Only a few were regarded as essential businesses, such as pharmacies and grocery shops, and allowed to operate. Lockdown regulations negatively affected the South African informal sector. As a result, it is difficult to provide accurate statistics on the entrepreneurs affected by the COVID-19 pandemic. There are no official statistics from the informal sector. This paper aims to examine how the informal sector was affected by the lockdown down restrictions within South Africa. The paper adopts a systematic review methodology using Google Scholar and Web of Science or Scopes to search for articles on informal entrepreneurship, COVID-19, and South Africa to draw a conclusion from the analysed data. The findings indicated that most of the businesses in the informal sector were negatively affected, including workers because some of them lost their jobs and others did not receive their usual salaries due to limited working hours. There were disruptions in the supply chain and pricing of goods and services, and people could not have sustained their income during the lockdown in South Africa. In conclusion, the informal sector is one of the most vulnerable sectors that lacks access to appropriate risk management structures, and most people live on a hand to mouth basis. COVID-19 has negatively affected the informal sector, mainly through distribution and marketing systems.