Johannesburg
A decade after the removal of restrictions Soweto remains a ghetto but a development plan is on the cards, writes Charlene Smith
In the 1980s, when the vision of the creation of a black middle class became fashionable, businesspeople almost salivated at the tremendous opportunities they saw opening up with the removal of apartheid business restrictions. As is often the case, the fantasy proved better than the reality.
Almost a decade after the removal of restrictions on trading in the township for white business, and in and outside the township for black business, Soweto, but for minibus-loads of tourists, proliferating fast-food outlets and the occasional small shopping area, is still the same old ghetto. Growth has been strangled by poverty, the remnants of the boycott culture and the endless community interest groups that want to vet every move business or the public sector makes.
Bohani Shibambu, investment office manager for Soweto, which falls under the Southern Metropolitan Local Council, says the lack of a solid development plan for Soweto has hampered investment. “The private sector cannot commit resources because it cannot see what will happen in 10 or 15 years’ time.”
However, this shortfall is being remedied. The council’s planning department is finalising a Soweto development framework and Wits University has almost completed a sociological survey of Soweto, which will help guide future strategies. A similar survey conducted by Vista University gives a dismal view of the shadow city:
*Of the estimated 1-million population (an estimate that hasn’t changed in almost two decades), Vista says 600 000 people live in council houses; 90 000 in private homes; 328 000 in backyard rooms or shacks; 65 000 in informal settlements; 50 000 in hostels and 44 000 in site and service homes;
* 84% of homes have electricity;
* 52% of the population are female and 48% male, around 40% of households are headed by women, 57% of whom had their first child before marrying with many not marrying at all. One in five of married women said they were beaten by their husbands;
* 42 of employed Sowetans are in service industries, 34% are manual workers and 18% are in middle-class occupations;
* The median household income is between R1 000 and R1 250;
* 31% of adults are unemployed and looking for work;
* 74,2% of youth between 16 and 25 are unemployed and looking for work;
* The unemployed have on average been seeking jobs for 30 months.
Based on this picture of acute poverty and social deprivation there is little wonder that businesses are not flocking to Soweto, and those that have are finding it an uphill battle. But the future is never static and perhaps the clearest and most optimistic vision comes from Sanlam general manager for investments, Alan le Roux. Although Sanlam’s Dobsonville shopping centre was held up as an example of the dismal failure of shopping centres in townships, he remains unfazed and says that developments in new previously under- resourced areas form the most exciting portfolio in property today.
“We have developments worth about R900- million in underdeveloped areas. The Chatsworth centre in Durban is an example; it and the centre in Phoenix have been adopted by the communities they are in, and are doing very well,” says Le Roux.
“In Dobsonville and Daveyton the centres are doing reasonably well; the main challenge is to get people to shop at their local shopping centre. In the 1970s when shopping centres were first built in the suburbs, white people would still go to town. It took a long time to get them to switch their shopping habits to shopping centres.”
Le Roux notes: “People are leaving townships and finding life is not better in the suburbs, they miss that community spirit and their social life disappears. The middle to upper class will move away and settle in richer suburbs, but as the townships develop and improve, more people will stay in their communities.
“We are all on a steep learning curve. Retailers are learning to stock the right goods for the community they are in. Dobsonville is a very specific market in Soweto, they need to understand their community well.”
Le Roux says that over time other developments will spring up around shopping centres such as small office blocks.
“There is more growth in the Dobsonvilles and Daveytons, however, than at a Fourways or a Sandton City, which have less potential for growth because the rich population they serve is finite, while in Soweto more of the population are likely to double their income over the next five years.”
Kenneth Masuku of the Soweto Investment Office notes that Jabulani central business district will soon see Checkers and OK Bazaars stores opening. The OK is also planning a store in Orlando West and developments are expected around a new sports and recreation centre to be built in Naledi.
But there is still resistance to white business coming into black areas. Developers find that months of negotiations with the community may ensue and sometimes community leaders change and negotiations have to recommence. One major emerging black company that has tried to make headway in township developments has found it a struggle, with the rewards lower than if they had stuck to already developed areas.
“There are too many interest groups involved; everyone says they want the development and then goes out of their way to hamper it with ever-changing demands,” the managing director complained. The low incomes earned by many of those who live in townships and a culture where rentals have never been paid by shopowners mean that property managers may find they spend month after month chasing rentals, and that shopkeepers complain of low returns because shoppers have limited buying power.
Hilton Dukes, a leasing consultant for developer Colliers RMS, which has three convenience shopping centres – Dobson Point and Protea Point and Meadow Point in Meadowlands, opening in March next year – says there “was a lot of excitement at first about entering the township market, but it has not been easy.
“While supermarkets tend to do well, fashion tenants complain that people still prefer buying clothes in the city. People still tend to make a whole day’s outing going to a large city shopping centre at the weekend with the whole family for shopping, lunch and a movie, so most big expenditure is still taking place outside the township.
“We have longer operating hours in our centres to accommodate commuters; Score closes at 8pm, as an example. We are looking at other sites, but are cautious. A lot of the bigger national tenants are not interested in small developments, but at this stage we do not believe large developments will be sufficiently profitable.”
The Southern Metropolitan Local Council has been good at setting up investment offices for Soweto, but tardy in creating an investor-friendly environment with other than weak incentives, such as low assessment rates and loan schemes for small- and medium-sized businesses from the Industrial Development Corporation.
The poverty of the residents of Soweto should force the council to jump into gear and find ways to attract big business, but the council is cash-strapped and councillors lacklustre. The people of Soweto are also contributing to their ongoing misery. Masuku says “a culture of non-payment is hampering development. There has been non-payment for a long time and some projects have been suspended. The development of swimming pools and parks, as an example, will remain on hold until payment increases.”
Two new developments Masuku highlights are “a R10-million investment by Phambile Investment Company which wants to develop the parks and set up refreshment stands, and a R12-million furniture factory with advanced plans to open here”. Still nothing to write home about.
One major project that offers hope is the slow-moving Baralink economic development node, underwritten by the Greater Johannesburg Metropolitan Council. Baralink project manager, Alan Hackner, says it has “completed 99% of the work and is busy pulling together the final document for circulation and approval to committees in the Greater Johannesburg Metropolitan Council; it will be ready for public access in November. We are already working on various projects in the area, it is not that we are waiting for approval for all.”
Nonetheless, he and most of the Baralink underwriters are cautious about what they reveal. Some highlights are expected to include the area vying to be a candidate site for the athletes’ village in 1999 for the All Africa Games, hosted by Johannesburg. The games are three weeks long, and accommodation is needed for 5 000 to 6000 athletes, meaning about 2 000 units. Once the athletes leave, the units are sold to the community and form an instant village of well-designed houses with well laid-out parks. A second project is the upgrading of Elias Motsoaledi informal settlement to the west of Baragwanath hospital. At present the Johannesburg council is negotiating with the ponderous Department of Public Works, the landowner, about erecting desirable accommodation – whether site and service, or more permanent structures – for the 1 200 people living in the settlement.
Fortunately not all the news is gloomy. Soweto, surprise, surprise, is the seventh- biggest tourist attraction in South Africa, more popular than Sun City, with tourists forking out R6-million a month or about R200 each to tour operators for the privilege of being guided around one of the most important historical venues in modern South African history. Unfortunately, however, except for stops at taverns, Soweto inhabitants receive none of this money. However, if Sydney Phuti, head of Tourism Johannesburg, has his way, that will change. Tourism Johannesburg – part of the Johannesburg Metropolitan Council – has a R22-million project that will see Hector Petersen Park transformed into a site with an amphitheatre, shops, an art gallery and parking; Regina Mundi will have a face lift; Orlando West, the site of so many historic homes, will become an important tourist site, with the Ubuntu centre near the river a site for tourist information and souvenirs.