A 2017 study commissioned by the Johannesburg Inner City Partnership and headed by urban planner Dr Tanya Zack, on the scope and nature of cross-border shopping in the Johannesburg CBD, had some interesting findings.
It revealed that cross-border shoppers spent over R10 billion in the inner city every year – twice the annual turnover of Sandton City. For the last 15 years, Johannesburg has grown to become a powerful wholesale and retail centre for local hawkers and traders from across sub-Saharan Africa. This has resulted in billions of rands’ worth of fast fashion sold annually in the traditional CBD, and over twenty large Chinese shopping malls west of the inner city.
There are however downsides, as retailers and shoppers face enormous risks. The dependence on cash poses a big risk in an area rife with crime and corruption, and where law enforcement agencies appear to be complicit in illegal activities.
Over 60% of retailers interviewed in the study said they had been physically attacked or assaulted and 38% had regularly “gifted” police officers. This reality points once again to governance failures depressing the potential for job-intensive economic growth within the city. According to the study, a third of shoppers had been exposed to violent crime, and while shoppers spent an average of 2.5 days per trip, they spent little on accommodation and almost nothing on entertainment because they are too fearful of being swindled by the police and criminals.
With local elections on the horizon, tackling the corruption and crime in the inner city should be high on the agenda for whichever party or coalition wins the elections. The potential economic benefits are astronomical. If the inner city can become safer, and corruption and violence are curbed, the benefits of this below-the-radar behemoth will spill over into the tourism and entertainment sectors of the inner city, creating wealth and jobs for those who live there. A commitment to policing, community safety, and service delivery will also encourage investment that could encourage middle-class migration into the city and accelerate developments like the ABSA Towers, Maboneng, and Jewel City.
Another potential avenue of job creation would be to designate “industrial zones” in Johannesburg’s townships which are either free of the minimum wage or have a competitive minimum wage of between R1 500 and R1 800. Bangladesh’s minimum wage is around R1 500 (8 800 Taka) and it is a popular destination for the production of fast fashion. While this might be politically unpopular amongst certain actors like labour unions, it is a better solution than the proposed Basic Income Grant which starts at the lower poverty rate of R585 p/m to the upper poverty rate of R1 268 p/m. Having the garment factories within townships would also cut down on transport costs for the young people employed in those factories. I believe it is important to prioritise employing young people in those jobs.
In other words, if whichever party or coalition that ends up governing the City of Johannesburg can leverage the untapped potential of the inner city’s retail might, this could have spill-over effects which would make a significant dent in (youth) unemployment, and encourage investment into the inner city which could bring in more middle class residents and shoppers, creating even more jobs. Linking the retail sector to garment-making factories in the townships would also create linkages between the inner city and townships and accelerate wealth creation and job creation in townships as well. Considering Johannesburg has relatively good infrastructure, it may very well be appropriate to turn this city’s townships into the factory of Africa where both private and public investment can lead to infrastructure development (from government) and job creation (from the private sector).
Economic engine of the continent
Johannesburg already accounts for 5% of Africa’s GDP, but the City of Johannesburg can do so much more to create an environment in which wealth creation and job opportunities for countless young South Africans who are desperate to work and earn an income can develop. A commitment to service delivery, to curbing police corruption and malfeasance, and to working with both private developers (and their security teams) and social housing advocates to create a city environment ripe for investment will send positive ripples into our townships as well.
The views of the writer are not necessarily the views of the Daily Friend or the IRR
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