Current Edition >> Archives Section >> Leading Stories >> May 2001

Plea for drastic change in shopping spread in South Africa

- by Prof. Wolfgang Thomas, Chief Economist of Wesgro, Cape Town

Since the ending of the apartheid era, much - if not most - of the attention around urban business development has centered around “city CBDs”, viz. city centres and major shopping centres or nodes scattered around the larger urban areas. Thus, recent years have seen ever larger, more attractive and more aggressively marketed shopping complexes vying with each other for black and white consumer spending from all over the urban sprawl. Latest additions are Canal Walk (Century City) in Cape Town and Gateway Centre north of Durban - both marketed as “shoppertainment megacentres” with each about 125 000 m² shop floor space, i.e. “the largest in Africa”.

With inner cities loosing economic momentum, steps are now underway in some cities to give them a major facelift, whilst adjusting to a new range of business clients and customers. These include informal and small traders and crafters, light industry, professional services focusing on predominantly black markets, low cost accommodation and backpackers, as well as lower middle class entertainment.

Township business development
But what happens to township business development, once the primary object of black business development efforts in the urban areas? Located outside inner cities and generally distanced from the glamour shopping centres (which nowadays are frequented by black customers as easily as by whites), township businesses still suffer the classical obstacles of remote location, poor infrastructure facilities, the dormitory character of settlements, an exodus of dynamic and well-educated entrepreneurs, extremely low household spending inside the townships and a lack of significant mixed business clusters. The results are little different now than a decade ago: Thousands of barely visible micro-enterprises interspersed with only a few shopping centres or business activity strips.

CBD attempts
Thanks to pressure from local politicians, keen to have a representative “CBD” evolve in their constituency area, attempts are currently underway in places like Khayelitsha (Cape Town's 400 000-strong “Soweto”) to attract investors for the development of a multi-complex of retail, office, transport and (light) industry "central business area". Town planners, financial institutions, Wesgro (the Western Cape Investment and Trade Promotion Agency), the metro-authority and even the provincial government are involved, in the hope that an attractive package for investors can be put together. Creative ideas to facilitate this process include plans for a local “CBD Development Corporation” and new sets of incentives.

New thinking
Yet, success is still in the far distance - and the same may apply to centres in other cities. Underlying this is a fundamental contradiction, which calls for new thinking about “township development”, just as North America's ghettos in the late 1960's (after a series of “explosions” of ghetto violence) needed a new approach to overcome decades of structural malformation. In a nutshell:
• Most of the modern shopping centres outside the townships try their best to attract black spenders away from their home area - and succeed, thanks to the glitz and glamour of modern shopping environments.
• Really large and equally ultra-modern shopping centres cannot be justified inside the townships and will not come there on the basis of market returns on investments given the low household incomes.
• Single CBD's inside townships are harmful to the evolution of smaller, more decentralized neighbourhood “centres”, which are backed by local entrepreneurs unable to initiate, finance or manage CBD-size firms; at the same time, getting “outsiders” into a single CBD raises other potential conflict levels.

Catch 22 situation
Thus, we have a classic Catch 22 situation, which places great doubt on easy or successful CBD developments inside townships. An alternative way, may, however, be both feasible and developmentally and socially preferable, viz. the acceleration of bottom up, decentralized business development inside townships, even though it lacks the glamour and political prestige of a (new) “CBD”. Franchises like 7/11, Kentucky Chicken and hosts of others, consolidated “intersection clusters” (as one would find it in Europe in working class areas), strategically located “markets”, public sector supported industrial hives/incubators, expanded house-shops (evolving into double storey shops/offices) and new business clusters around community halls, sport stadiums, taxi ranks and stations. Those are the avenues for a bottom-up evolution towards larger scale local business development, with outside franchisors and chain operators challenged to find the most convenient local partners and “emergent centres” to suit their goal of low risk combined with sufficient return.

Ultimate solution?
There is, of course, always a way to speed up this process and to advance faster towards fashionable “business centres” in townships: It is the provision of (far) large(r) amounts of public money to speed up the development of the business infrastructure, increase crime surveillance (i.e. install a few dozen cameras as in the existing business areas) and co-fund emergent entrepreneurs keen to move into such centres. But, alas, too few town councils either have such funds or seem willing to mobilize them.

Thus, while the ultimate solution is not yet in sight, it is clear that thinking and planning towards a new dispensation in urban shopping in South Africa is inevitable. Perhaps the best vehicle for such new thinking and planning would be the Integrated Development Plans (IDP's) now in a process of being drafted for every municipality in the new local government set-up.