IN THE South African space economy, townships are often described as areas with low economic potential and a high population density. Alexandra township, developed a year before the Land Act of 1913 was passed, is one such township.
According to the City of Johannesburg’s Growth Management Strategy: Growth Trends and Development Indicators Report 2010-11, there are 47,481 households in Alexandra with an average household size of two and an average income of R32,298 per year. The area has a high concentration of one-bedroom households in backyard and informal household shacks, half of which are rented out. A fairly high number of households report that no member of the household earns an income, although researchers suspect that households do not count income earned from informal activity.
By many indications, Alexandra, despite its close proximity to Sandton, has low-income potential. Yet, according to recent reports, a multimillion-rand shopping mall is being constructed complete with "100 shops, taxi rank facilities and two flood-lit mini-soccer courts surrounding a 250-seater feature restaurant plus a children’s play area" in the township.
Literature on self-employment and entrepreneurship argues that there is a historical context that leads to the low levels of entrepreneurial culture that impede township economies and their ability to tackle high levels of poverty and unemployment. The political and economic subjugation of black people was a critical element to structuring the economy based on cheap labour to support the gold and diamonds mining boom, and entrepreneurial ventures were, therefore, curbed.
In addition to a range of other discriminatory policies and legislation such as the Group Areas Act of 1950, Population Registration Act of 1950, Bantu Authorities Act of 1951, Bantu Education Act of 1953 and other laws to ensure job reservation and economic and social exclusion, urban township economic activity was limited to general shops, butcheries, restaurants, hawking and the sale of milk and vegetables. Even when restrictions were lifted in 1977, a business licence was still required. This historical damage created an environment that was not conducive to small business growth or employment creation.
But there is a mall being built in Alexandra, so what are we missing? Why are mall developers moving into townships when township entrepreneurship and self-employment does not seem to flourish? There seems to be a schism between what we have come to know and expect from township economies and development within these economies. When we say small business cannot grow, the proliferation of foreign-owned spaza shops shows us otherwise. When studies tell us that the penetration of brands from large fast-moving consumer goods players such as Unilever and Procter & Gamble stifle light manufacturing, these same spaza shops are stocked with brands unknown to most.
Events in the township are overtaking our understanding of how township economies work, from consumer preferences to business models. There is a need to relook at what we think we know. Not only because of the attention that has been given to these economies in this year’s round of state-of-the-province and city addresses, but also because, in general, townships will continue to house the considerable number of people moving from the rural areas to urban areas.
If we are to shift ownership patterns, but the concentration of capital does not change, we need to interrogate these and other developments in the township more deeply, to understand the policy situation, craft the appropriate policy problems and then implement policies that shift spatial and economic inequality.
• Ndlovu works at the National Planning Commission secretariat and writes in her personal capacity
Alexandra township in Johannesburg. Picture: SUNDAY TIMES
IN THE South African space economy, townships are often described as areas with low economic potential and a high population density. Alexandra township, developed a year before the Land Act of 1913 was passed, is one such township.
According to the City of Johannesburg’s Growth Management Strategy: Growth Trends and Development Indicators Report 2010-11, there are 47,481 households in Alexandra with an average household size of two and an average income of R32,298 per year. The area has a high concentration of one-bedroom households in backyard and informal household shacks, half of which are rented out. A fairly high number of households report that no member of the household earns an income, although researchers suspect that households do not count income earned from informal activity.
By many indications, Alexandra, despite its close proximity to Sandton, has low-income potential. Yet, according to recent reports, a multimillion-rand shopping mall is being constructed complete with "100 shops, taxi rank facilities and two flood-lit mini-soccer courts surrounding a 250-seater feature restaurant plus a children’s play area" in the township.
Literature on self-employment and entrepreneurship argues that there is a historical context that leads to the low levels of entrepreneurial culture that impede township economies and their ability to tackle high levels of poverty and unemployment. The political and economic subjugation of black people was a critical element to structuring the economy based on cheap labour to support the gold and diamonds mining boom, and entrepreneurial ventures were, therefore, curbed.
In addition to a range of other discriminatory policies and legislation such as the Group Areas Act of 1950, Population Registration Act of 1950, Bantu Authorities Act of 1951, Bantu Education Act of 1953 and other laws to ensure job reservation and economic and social exclusion, urban township economic activity was limited to general shops, butcheries, restaurants, hawking and the sale of milk and vegetables. Even when restrictions were lifted in 1977, a business licence was still required. This historical damage created an environment that was not conducive to small business growth or employment creation.
But there is a mall being built in Alexandra, so what are we missing? Why are mall developers moving into townships when township entrepreneurship and self-employment does not seem to flourish? There seems to be a schism between what we have come to know and expect from township economies and development within these economies. When we say small business cannot grow, the proliferation of foreign-owned spaza shops shows us otherwise. When studies tell us that the penetration of brands from large fast-moving consumer goods players such as Unilever and Procter & Gamble stifle light manufacturing, these same spaza shops are stocked with brands unknown to most.
Events in the township are overtaking our understanding of how township economies work, from consumer preferences to business models. There is a need to relook at what we think we know. Not only because of the attention that has been given to these economies in this year’s round of state-of-the-province and city addresses, but also because, in general, townships will continue to house the considerable number of people moving from the rural areas to urban areas.
If we are to shift ownership patterns, but the concentration of capital does not change, we need to interrogate these and other developments in the township more deeply, to understand the policy situation, craft the appropriate policy problems and then implement policies that shift spatial and economic inequality.
• Ndlovu works at the National Planning Commission secretariat and writes in her personal capacity
Change: 1.16%
Change: 1.13%
Change: 1.58%
Change: 0.70%
Change: 4.08%
Data supplied by Profile Data
Change: 1.03%
Change: 1.42%
Change: 1.16%
Change: 0.00%
Change: 1.62%
Data supplied by Profile Data
Change: -0.23%
Change: -0.05%
Change: -0.04%
Change: 0.00%
Change: 0.40%
Data supplied by Profile Data
Change: 0.45%
Change: 1.56%
Change: 0.35%
Change: 0.65%
Change: 0.29%
Data supplied by Profile Data