Township Economic Development: Hope emerging from the South African melting pot

In the days following South Africa’s remarkable democratic transition, the country was often referred to as a cultural “melting pot”—a phrase laden with hope and promise. The phrase embraced and celebrated the country’s diversity, and attempted to shepherd it away from a long and dark history of deliberate and institutionalized segregation, towards a brighter future of sustained integration. This memory was conjured up in our reflections on the plight of South Africa’s townships and, more specifically, the persistent challenges they face, which are intricate, intertwined, and insidious.

These challenges require a multi-pronged, multi-dimensional and multi-sectoral lens to dissect and resolve. An effective developmental approach thus needs to recognize the interlinkages between youth, jobs, social protection, urban development, education, financial inclusion, financial stability, and various other pertinent topics -- and bring these together in a “melting pot” that not only offers hope but cements it in tangible, real and measurable gains.

A recent World Bank site visit to the township of Tembisa – in partnership with the National Treasury and with participation from strategic partners, local youth groups, entrepreneurs, and members of the community – offered a representation of the enormous potential of the developmental “melting pot.” As one drives into Tembisa township, the electric energy of enterprise is hard to miss. Plying their trade on the side of the road are brickmakers, carpenters, panel beaters, welders, hairdressers, tailors, and various vendors.

The apparent lack of access to adequate business premises, water and sanitation, and general infrastructure is incredibly stark. However, the resilience of the traders, despite this, is encouraging. The road, outlined with industry, leads us to Imbizo Shisanyama, an acclaimed restaurant in Tembisa, which has been operating for over two decades. Established by a female entrepreneur, fondly referred to by patrons as Mam’Rita, Imbizo offered the perfect location for us to congregate and deliberate on the topic of township economic development.

The discussion of the daily experiences of entrepreneurs in Tembisa was enlightening. Young people spoke about the challenges they encountered, as well as their efforts to navigate a difficult business terrain. “Working in the wine industry is not easy, particularly as a township-based enterprise…we navigated our way into the sector by partnering with an established wine farm that offered us mentorship and allowed us to learn everything from scratch. We are proud to create employment opportunities in rural areas and townships through our business,” said Ms. Mmatlali Lucia Motloung (39), CEO and Founder of Luc Mo Wines.

Talking about solutions

The need to address issues that bar access to information, finance, and markets, emerged as pivotal. These issues were highlighted as constraints of trade but, more importantly, as primary nodes with the potential to unlock opportunities for self-advancement for a dispirited youth.

Notable examples of early success were shared: the Youth and Employment Service (YES) – a youth development agency that seeks to create alternative opportunities for youth employment – gave an overview of their pilot program in Tembisa and the strong gains captured through their rigorous monitoring and evaluation framework.

YES weighed in on the crucial role of partnerships in developing the township economy, a point to which public and private sector stakeholders in the room unanimously agreed. Government officials provided an overview of city-level economic development targets – including those related to urban environment improvements and the development of a conducive business ecosystem – and highlighted the importance of youth participation in designing effective solutions of relevance.

Stimulating township economic development requires a bottom-up and top-down approach. The nuanced experiences on the ground need to connect to broad national strategic objectives. Education priorities must connect with economic opportunities. Spatially marginalized residential areas must connect with business centers. Capital, always in short supply, must flow to those pockets through which benefits extend over generations (i.e., urban infrastructure, digital infrastructure) to change the structural composition of townships in the country’s economy. Opportunities abound in Tembisa and with the “melting pot” of disciplines, public and private sector relationships, and macro and micro strategies, these will be realized over time.