Township Economies

What is the role of infrastructure in government’s strategy to revitalise township economies
29th  September 2015, DBSA 13h30 for 14h00

South African townships, most which were created during apartheid to serve as labour reservoirs for the mainstream economies, remain largely the same today after more than two decades into democracy. The National Development Plan acknowledges that South Africa remains a divided society of which such division is mostly pronounced in its spatial make-up. Townships and their economies are not developing at the pace envisioned by government at the dawn of democracy and this is particularly because the spatial divide continues to hobble inclusive development. Gains of economic growth over the last two decades have rarely trickled down into townships hence social problems of poverty and unemployment remain prevalent.

A number of development initiatives have been implemented for years now, some still currently underway, in an effort to transform townships and their economies. During the democratization period of 1994-2004, two programmes were rolled out, namely the Special Integrated Presidential Programme (SIPP), launched in 1994 and the Urban Renewal Programme (URP), launched in 2001. Through these programmes, the government visibly demonstrated its commitment and capacity to improve living conditions with significant support from the Reconstruction and Development Programme (RDP). However, the SIPP programme was criticized for having too much of an infrastructure focus at the expense of other social and economic challenges experienced by township dwellers. The URP, on the other hand, had institutional related challenges which contributed to poor private sector investment in the projects.

With the introduction of the Neighbourhood Development Partnership Grant programme in 2006 driven by National Treasury, infrastructure remains the key focus for improving the quality of life in townships and it is believed this would leverage third party public and private sector investment for future and more sustainable development. Furthermore, the first province to develop a strategy for revitalizing township economies, Gauteng, puts focus on infrastructure as its first pillar for revitalizing townships in Gauteng.  This brings to the fore the fact that government prioritizes the role of infrastructure in revitalizing township economies. Whether the objective is meaningfully achieved remains a question to be answered.

One would argue that infrastructure delivery in townships as part of government’s strategy, should be used to facilitate mainly spatial transformation as this would create opportunities for enterprises in townships to be viable, thus enabling them to participate meaningfully on the market which would eventually strengthen the value chains, both downstream and upstream. This would sustainably create a positive impact on poverty and unemployment in townships. It is argued this should be an imperative for government’s strategy in revitalizing township economies.

Therefore, this dialogue brings together a panel of speakers from both government and the private sector to unpack the challenges and opportunities associated with revitalizing township economies through infrastructure development. The Infrastructure Dialogues are hosted jointly by the Development Bank of Southern Africa, the South African Cities Network, the National Business Initiative, the Performance Monitoring and Evaluation Department in the Presidency, and the Department of Economic Development, with the Engineering News as Media Sponsor.

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  • townships need radical ideas for the potential to be exposed, more focus should be aimed at the youth ( this is not just a cliche as to say the future is in the youths hand). Young/ small business contributes mostly to our economy.

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