Gauteng Township Economy Bill will be Makhura’s greatest legacy

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By Vusi Gumbi

Premier David Makhura has been at the helm of the Gauteng Provincial Government since 2014 and he is likely to vacate the post in 2024 considering that by the end of the year, he will be succeeded as Provincial Chairperson of the African National Congress (ANC) by either Panyaza Lesufi or Lebohang Maile – the two frontrunners at the moment – whoever succeeds him as ANC leader in Gauteng will be the automatic candidate for Premiership, unless there is a dramatic turn of events within ANC politics or a coalition government is formed. But the contention of this article is not about the Gauteng succession dynamics. It is about the Gauteng Township Economy Development Bill that Premier Makhura signed into law on April 29.

This Bill is a catalyst for change that has the potential to not only revive the township economy but address spatial injustice – which is one of the key issues in the lack of upward social mobility amongst black people and has deeply entrenched inequality – since the fundamental objective of the Bill is to ensure that township businesses are revitalized in their communities.

This is particularly important because South Africa is the world’s most unequal society: the divide reflects the country’s legacy of racial exclusion where Blacks still can’t access proper education, health and infrastructure. The spatial divides physically separate people from productive and economic activity, condemning them to a life where accessing work and opportunities is both difficult and expansive. The gulf between where many people live (black women in particular) and where resources are concentrated aggravates poverty and unemployment.

SA’s economy is spatially organised and the Gauteng Township Economy Bill can foster spatial integration to break the physical separation between people and productive activity. This would ensure that businesses in townships and in the peripheries together with their associated stakeholders are well connected to improve their prosperity and social cohesion. According to GEM National Expert Surveys, SA, with a ranking of 2.8 falls short of the global average of 3.7 and the Sub-Saharan African average of 3.1 for physical and services infrastructure that does not discriminate against SMMEs. This shows that South Africa’s total infrastructure support for SMMEs is weak and significantly prejudiced against them. This Bill can ensure that resources like transport networks, communication systems, provision of utilities and other infrastructure are optimally available for township businesses.

This would include ensuring that suppliers in previously disadvantaged areas receive the necessary supply development and enterprise development support – this finds expression in the fact that to accomplish commercial and industrial growth in townships, the Bill mandates the Gauteng Provincial Government to dedicate 40% of its procurement spend to township based enterprises to enable participation in value chain at different.

It is an undeniable reality that the townships and informal settlements in the country today remain largely the same as how they were before the democratic dispensation.  The structural transformation of townships and informal settlements from their apartheid function, primarily as residences for labour and spaces for consumption of commercial goods and services, has unquestionably not been achieved. With this Bill, the inherited spatial disparities can be a thing of the past where historically disadvantaged areas will be redesigned in an integrated way where people will be able to access job opportunities in close proximity to where they live and to actively participate in economic development and job creation themselves.

Not only will the Bill address spatial injustice, but it can also help break down the barriers to entry of small businesses characterised by oligopolies and the red tape – in addition to being organised around spatial injustice, the SA economy is driven by the domination of a few large firms in strategic sectors of the economy that make it difficult for any new players to have a realistic chance of making it. SMMEs play a particularly important role in developing countries and are productive drivers of inclusive growth. They have the power to change the country’s unemployment bloodbath because they drive innovation and job creation – with the Bill promising to give Gauteng township businesses preference in procurement and provision of services – this would allow small businesses to be developmental in order to grow sustainably. The ability of this Bill to grow SMMEs will negate the muted business climate and create jobs.

Vusi Gumbi is a Master’s Candidate in Politics and a Research Assistant at the Institute for Pan African Thought and Conversation at the University of Johannesburg.