The inequality gap between the rich and the poor is one of the largest in South Africa. According to the 2014 Oxfam report Even it Up, South Africa has the highest gini-coefficient in the world at 0.69. The gini-coefficient measures inequality where 1.00 signifies absolute inequality and 0.00 shows absolute equality – a state where most countries wish they were closest to.
In an interview with the Mail & Guardian, Lebogang Maile, the MEC for economic development in Gauteng said inequality reflected more than just unemployment and the wealth gap but led to deep social issues such as drug use, alcoholism, teen pregnancy and criminality.
Maile was referring to the recent sprouts of service delivery protests around Gauteng, most of which ended in lootings of foreign-owned shops, an act that government officials dismissed as acts of criminality and not xenophobia.
“The highest number of unemployed people are in the townships. An overwhelming number of people in Gauteng reside in the townships. People were placed far from economic zones, and townships were used a dormitories,” said Maile.
Maile said Gauteng is currently working on a township revitalisation project to transform, modernise and re-industrialise townships in the next five to fifteen years. “We will look at radical economic transformation, social transformation, spatial transformation and modernisation of local economy ndash; not just spaza shops, chisa nyamas or the informal businesses but bring in formal business into the township. We need to integrate the township economy into the mainstream economy,” Maile told the M&G.
Maile said townships should not just be a dumping ground for goods from outside but must reflect class character of the whole society.
“Capital alone cannot be left to decide and continue progress. Our townships cannot be a dumping ground for capital. We need to have a dialogue and introduce a number of policies because the inequality gap is widening so we need to change the structure of the economy,” said Maile.
While he said the lootings and service delivery protests had not affected investor confidence because “those things are not sustainable in the long run,” he acknowledged that young people need help. “Their burden goes beyond unemployment and money. Young people are not homogeneous. There will be those young people who are demoralised and that is why we have started the Tshepo 500 programme.”
One of those young people is 30-year-old Karabo Sekgodi who has been unemployed for 10 years. “I spend R30 on nyaope everyday, that’s all I need. So I go around and ask random people for two rand and one rand coins,” said Sekgodi.
Sekgodi is one of the many jobless youth often found hanging out at street corners in townships. He now stands outside Hafiz Uddin’s shop, a foreign business owner whose shop was looted by some of the Protea Glen community members in Soweto. Sekgodi’s thin body could easily be that of a teenage boy.
His dreadlocks are hidden under a beanie. His eyes are red; his lips are dry and his nails – bitten close to the cuticles – are covered in dirt. Sekgodi said he completed his matric in 2003 but has been unemployed for more than 10 years.
“I have four criminal records and have been in a juvenile detention centre twice. I started in 1998 when I was 14 or 15. It was mainly house breaking and petty crimes. But I spent seven months at a juvenile centre again after I hijacked a car. I came out and decided to complete school,” he said. Sekgodi told the M&G he started smoking nyaope because he could not find a job after he completed matric. He said the environment in which he grew up frustrated him.
“I started stealing and using drugs because of poverty and starvation. I would go to bed hungry every day, ne re sokola [we struggled].
“And also, not being as fortunate as others you start to get frustrated. Even these townships, they aren’t the same. Maybe it is the way government settled us. Some areas are better than others like Protea Glen outshines Tshepiso. Those things become frustrating,” he said.
Maile told the M&G that the Tshepo 500 programme was part of the township revitalisation programme designed to bring hope to those young people who graduated but cannot find jobs and those who are demoralised.
“Others don’t have skills. We want to mentor and identify entrepreneurs around them and mentor them because we need to reduce the inequality gap,” Maile told the M&G.
Maile said his department was looking at the funding of small to medium enterprises and is also looking at the monopolistic nature of the economy. “There are still lots of barriers to entry in different sectors. The same people and families own and dominate value chains of different sectors. In each sector, there are usually 10 dominant players and this does not help with redistribution,” he said.
Maile said that his department was looking to establish a township stock exchange. He said billions of rands leave the townships and end up at banks where it is not reinvested.
“Like the stokvel money and funeral policy money, this money can be redirected into the township stock exchange. Lots of billions come out from stokvels, burial societies and sitting at banks and not making money.”