Abstract

The COVID-19 pandemic disrupted informal food trading activities, weakened access to critical livelihood assets, and restricted diversification of livelihoods. Understanding how traders adapt through livelihood diversification is important for designing policies that strengthen resilience in the informal economy in developing countries. This study examines how livelihood assets influence the adoption of diversified income strategies among informal food traders in the Polokwane Local Municipality, South Africa. Guided by the Sustainable Livelihood Framework, survey data from 120 traders were analysed. Composite indices for human, financial, physical, natural, and social assets were constructed using the entropy method to capture differences in access to these assets. These indices were then incorporated into a Multinomial Logistic Regression model to assess their effects on the likelihood of adopting alternative livelihood strategies beyond informal food trading. The findings indicate that physical assets played a significant role in promoting livelihood diversification, despite traders having moderate access to physical resources. Conversely, human assets were found to inhibit diversification despite relatively high levels of human capital, while financial assets similarly constrained diversification, reflecting traders’ limited access to financial resources. In contrast, natural and social assets did not significantly affect diversification strategies, despite traders having moderate to high access to them. Overall, the study provides empirical evidence on post-pandemic livelihood adaptation in the informal sector and highlights the need for targeted policy interventions to strengthen access to assets and support income diversification, resilience, and sustainable livelihoods in peri-urban areas.

Keywords: livelihood assets; livelihood strategies; informal sector; COVID-19