With a penchant for the fine things in life, a prodigious taste in fashion and wise waters, accelerated consumerism and political connections, the South African bourgeoisie is on a mission to enhance the township economy.
The recent unrest in the country saw various businesses and shopping centres in townships get looted and destroyed. These actions, on a social level, exposed the social inequalities and poverty existing in the imagined rainbow nation.
At a commercial level, the unfortunate events have led to a decimation of both aspirations and business bottom lines. The sad reality is the bulk of black owned businesses in townships can’t afford insurance. Therefore, they won’t be able to recoup any losses made.
However, the black bourgeoisie is rising to the occasion. They’re instituting a conversation on rebuilding, restoring, and revitalizing the township economy in the wake of recent events.
The history of townships in South Africa
Apartheid is primarily a tool of economics that thrives on exclusion and cheap labour. During the apartheid years, the mining and manufacturing sectors boomed. Corporates needed labourers to be stationed in areas where they’ll have ease of access to their workplaces.
Also, there was an upward trend in home ownership in suburban bliss areas which gave rise to the need for domestic work. This led to the government and Town Planners to strategically re-map cities leading to the development of townships.
Townships are basically houses built near each other to allow for the extreme use of available space. One could call it the “stack them up all” model.
Naturally, the townships later transformed into high population density areas buoyed by rural – urban migration and more child births. Townships were specifically built to house labourers. Residents needed to go to the city centre and other business areas to shop for groceries and other basic needs.
The evolution of the township into an economic zone
Southwestern Townships, otherwise known as Soweto, is a combination of different townships. In its plurality, it somehow managed to develop a singular identification.
It’s South Africa’s biggest and most populous township, and home to Nobel Laureates like Nelson Mandela and Desmond Tutu. Soweto is also home to the country’s biggest soccer clubs Orlando Pirates and Kaizer Chiefs.
At the dawn of independence, big property businesses and retail merchants built shopping centres in townships to scale their operations. The first major shopping centre, hailed as an economic breakthrough, was Dobsonville Shopping Centre in 1994. This breakthrough development opened the door for constructing more shopping malls. These include the more popular Maponya Mall in 2007 and Jabulani Mall in 2006.
South Africa has 5 major retailers -Pick n Pay, Shoprite Group, Spar Group, Woolworths, and Massmart- the face of Walmart in Africa. These retail chains have a strong presence in all the shopping centres in townships and outside.
There are many other sectors people in townships are venturing into. However, there’s been a prolonged, deliberate assertion that shopping centres are a major part of the township economy. This is untrue because an economy is so massive that it can’t be reduced to consumerism.
Instead, what’s happening is the already privileged are extending their reach to the townships. Capital gains are invested in trusts, overseas holiday homes and trips, and other developments in the plusher areas of the country. Township residents are bankrolling the lifestyle of the already privileged.
Businesses operating in townships aren’t harnessing the services of locals in both their value and supply chains. With the systemic structural inequalities still firmly in place, and natives not owning the means of production, the playing field remains uneven. More so, this means there are more barriers to entry into the supply and manufacturing markets.
Those few natives that own means of production are also unable to determine the prices for the goods as they don’t enjoy the economies of scale. They are at the mercy of the monopolistic entities.
The shop rental costs at these shopping centres are exorbitant. So much so that the bulk of local businesses can’t afford to station their businesses there. In the last few years, we’ve seen an increasing number of Asian establishments cementing their position in the shopping centres, itself a subject of a future article.
This introduces us to the element of ownership. The shopping centres are owned by rich property companies characterized by a combination of shareholders serving the interests of predominantly white monopoly capital. Let us take the case of three shopping centres.
Dobsonville Shopping Centre is owned by Reit Vukile Shopping Fund including Public Investment Corporation, Encha Group, Eskom Pension Fund, Old Mutual, Stanlib, Satrix Managers, Ninety-One UK, and Dimensional Fund Advisors.
Jabulani Mall is owned by Masingita Group. Shareholders include Nedbank, an Old Mutual company. Maponya Group partnered with Investec and ZenProp in building Maponya Mall. The latter is arguably the only mall in Soweto not affected by the looting, as certain people took it upon themselves to guard and protect “their mall”. An interesting feature of these shopping centres is that facility management outsource services aren’t given to local companies. Retail expansionism is being referred to as township economy.
The Black Bourgeoisie Offering
The advent of independence in 1994 saw educational and economic opportunities opened to the natives, albeit at an extremely low level particularly because systemic ills haven’t been addressed.
Increasingly, black people from townships managed to acquire good education and well-paying jobs. Some have been fortunate to forge value-adding and profitable business partnerships. The internet also made it possible for startup companies to seek funding from international companies and sell their services and offerings to different markets.
Most importantly, townships are experiencing a huge brain drain where the ‘high achieving’ blacks are moving in droves from townships to well-manicured suburbs. These blacks evolved into bourgeoisies with a hint of misinformed arrogance and unfortunate ignorance.
They’re at the forefront of dismissing township protestors as hooligans. Also, they believe they’re better positioned to argue what a township economy ought to be.
This past week, a group of affluent black people converged at Dimension Data Campus in Bryanston to make representations on how the township economy can be rebuilt, restored, and revitalized. The custodians of the ground-breaking event are holding another Township Economy seminar, Association of Black Securities & Investment Professionals (ABSIP) in Tembisa too.
For context, Bryanston is one of the most expensive and posh suburbs in Johannesburg. Tembisa is a township in Ekurhuleni. Unsurprisingly, the place holding the event is quite a hit with the government and other celebrity events. To host an event on township economy in a suburban area is the height of low. In addition, not using the venues in townships owned by upcoming and struggling entrepreneurs for a discussion on government regulation is questionable too.
At the event in Bryanston, one of the delegates, founder of 3Sixty Global Solutions, was clad in regalia purchased from black owned businesses. His pair of jeans were from Hyde Park’s Tshepo Jeans, sneakers from Newton’s Bathu, socks from SkinnySbu, and sweater from Rosebank’s Mandla Wale.
While was a noble thing to do, a terrible constant reared its ugly head. These businesses, though owned by blacks, aren’t based in townships, maybe save for SkinnySbu whose business HQ could not be found at the time of writing this article.
To be fair, the business owners have justifications for the locations, and I’m not suggesting black owned businesses must not set up shop outside of townships. Scaling is the guiding principle of business, for there lies future opportunities and profits.
However, the question should be asked why these business owners aren’t setting up their HQs and centralizing their operations in townships. If they did, they’d begin to realize a truly township economy.
If people, local and foreign, can travel to Soweto just to enjoy culinary dishes in Vilakazi Street, surely, they can travel to the same place to buy their favorite brands. The modern supply chain is not limited by perceived geographical constraints.
Altogether, the proposition of the black bourgeoisie is defeatist, if not a waste of an opportunity to create a real township economy. Rebuilding, restoring, and revitalizing takes us back to square one where the imagined township economy will still find its way back to the hands of the privileged groups.
It can’t even begin to be a township economy when there’s not black-owned competitive investments and businesses in the areas of education, health, food, and logistics.
All these will make for a vital support mechanism for the other tenets of a true township economy.
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