Plan to turn taxi ranks into mini-CBDs in South Africa

 ·16 Feb 2022

The Gauteng provincial government will hold hearings this week to discuss the Gauteng Township Economy Development Bill, which includes proposals to turn townships into key business hubs.

“The Bill seeks to create a conducive environment for promotion and development of the township economy and makes it possible for people living in townships to establish a viable and thriving business, small enterprise organisations and co-operatives,” the provincial Portfolio Committee on Economic Development, Environment, Agriculture and Rural Development said.

“It also introduces an enabling framework to ensure that township-based retail malls and supermarkets partner with local township-based enterprises – including the sourcing of some of the products and services from local township-based producers, service providers and manufacturers.”

Some of the key proposals in the bill include:

  • Developing taxi ranks into micro central business districts and to support the taxi economy to use its scale to grow supporting value chains and industries;
  • Support the development and promotion of a township-based real estate development model to convert areas with high commercial densities into township high streets;
  • Support the development of representative associations of township-based enterprises and non-profit organisations.

An estimated 17% of South Africa’s total employment is through the informal economy or so-called ‘township economy, data from Investec shows.

Informal businesses operate within a multitude of industries and offer goods and services that meet various social and economic needs within township communities.

Retail dominates the informal township economy, with spaza shops, fast food outlets, bakeries, shebeens and hawkers. Additional businesses include backroom rentals, minibus taxi operators, mechanics and panel beaters, metal fabricators, childcare services, barbers and hair salons among others.

Typical earnings for informal sector employees are less than half those in the formal sector. According to Stats Statistics South Africa, the median income of workers in the informal sector is about R2,000 per month, compared to R4,300 in the formal sector. Self-employed workers, particularly men, earned more – R6,700 per month, on average.

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