The National Treasury, together with its implementation partner the Sustainable Livelihoods Foundation (SLF), has completed the first phase of its Metro Township Economic Development (TED) programme.

The TED programme is a component of the Cities Support Programme (CSP), which is funded by the Treasury.

The programme is a three-year technical support intervention launched in 2020 to provide five metropolitans with technical support for formulating and resourcing effective township development strategies at a pilot site in each participating metro.

The five participating metros are eThekwini, in KwaZulu-Natal; Tshwane and Ekurhuleni, in Gauteng; Nelson Mandela Bay, in the Eastern Cape; and Cape Town, in the Western Cape.

The CSP, along with the TED programme, endeavours to develop a theory of change for TED through a holistic approach that includes spatial transformation, developing business high streets, strengthening the business ecosystem by reducing policy obstacles, enhancing skills and improving access to business support services.

It also aims to improve safety and security within townships, improve their “liveability” factor and their contribution to effective urban management.

TED will be implemented in three key phases; the first of which involved research and engagement to establish an evidence base to identify TED opportunities for each pilot; and the second of which will support metros to co-develop eight TED projects.

The programme’s third phase will involve advising metros on institutionalising the TED strategies and project implementation.

Throughout the phases, the TED team will analyse, evaluate and monitor the project development process to ensure good practice and enable replication across more sites in the country.

SLF co-director Andrew Charman believes the TED strategies can contribute towards the socio-spatial transformation of the pilot sites towards inclusive, productive, safe and connected communities.

He notes, however, that the success of the programme will depend on proper metro leadership, strong transversal collaboration between partnering metros, meaningful partnerships across government to mobilise technical and financial resources, partnerships between non-State entities and proper participatory engagement to include community input.

The Treasury, which already works on the TED programme in synergy with its Neighbourhood Development Partnership Programme, has formed partnerships with the Department of Small Business Development, the Small Enterprise Development Agency, the Small Enterprise Finance Agency, the World Bank and the Aspen Network of Development Entrepreneurs to realise the TED programme.

Charman says these partnerships will bolster technical expertise, improve access to specialist services, foster project alignment and enable metros to access resources for TED projects.

The TED evidence situational analysis examined the five pilot sites’ existing development plans, surveyed the needs of microenterprises and the community, and evaluated housing, transport and public infrastructure networks in the areas.

From 2 200 surveys conducted between September and November 2020, including 1 226 surveys completed by microenterprises, across New Brighton, Thembisa, Hammanskraal, Pinetown South and Delft, the SLF found that half of male-owned businesses are engaged in car repairs and services, grocery retail, cooked food, hair care and snacks and cigarettes, while 68% of female-owned businesses are engaged in cooked food, hair care, greengrocer retail, snacks and cigarettes and clothes. 

Four points from the surveys emerged as challenges to business in the areas. These are the need to access finance, crime and the risks it presents to owners and shoppers, access to infrastructure such as storage for goods and the issue of competition.

The business structures mostly comprise of stands and containers.

Only one in three businesses surveyed has formal access to water and electricity, while all businesses are, for the most part, poorly connected to digital networks.

The TED team finally determined eight project opportunities at each pilot site, which involve township tourism, cultural economy and recycling market developments, as well as initiatives to enable access to finance for businesses.

To this end, national government and metros will work together to resolve policy blockages, help develop nodal areas, enhance spatial integration and connectivity, provide social and community infrastructure, and help grow the housing and property market.

These projects will also touch on mixed-use transport hubs and enhanced recreational facilities in the townships.

PROGRAMME RATIONALE

With irreversible processes of urbanisation under way within South Africa, townships and informal settlements are the entry point for many.

Unfortunately, the experience is one of a living environment that is spatially fragmented from the rest of the city, with infrastructure and service delivery backlogs or decay, high levels of poverty, tenure insecurity and unemployment, and many localised and competing microentrepreneurs or survivalist enterprises.

Townships remain highly vulnerable city spaces and although metros have direct planning, regulatory, delivery and management responsibilities within townships, they are not the sole development and economic actors within these spaces and are, therefore, pursuing a more coordinated approach to TED.

National Treasury director-general Dondo Mogajane says the original CSP was lacking until it started addressing the issue of TED as it does now.

“The recognition that our cities still bear spatial legacies of the past, leaving townships marginalised, provides a foundation for informal settlement integration going forward.

“The civil unrest experienced by the country in July has re-emphasised the need for integration of townships within the broader city fabric so that all can enjoy a better life.”

He adds that the eight metros in South Africa contribute to more than 50% of the country’s gross domestic product (GDP) and employment and, within metros, townships are fast densifying and bearing the brunt of inward migration into cities.

Government has recognised that metros need to be supported technically and financially in this regard, Mogajane advances, adding that the Treasury will continue to drive TED as a priority across government departments.

In a similar vein, Mangaung Metro manager and CSP programme manager Sibongile Mazibuko ascribes the current township challenges stemming from devastating civil unrest, shrinking gross domestic product, a widening budget deficit, growing inequality, deepening poverty, national credit downgrades, increasing debt service costs and growing levels of crime.

“For us to chart a way forward, we need to admit that serious leadership and governance failures have taken place, while key structural constraints remain unaddressed even 27 years after Apartheid,” she says.

These structural constraints include bulk infrastructure capabilities, the performance of State-owned entities, fiscal and sector-level policy and investment misalignment, inability to keep pace with urbanisation and inability to leverage the full potential of cities to the advantage of communities.

At metro- or city-level, Mazibuko suggests the focus be put on spatial and development planning instruments towards economic inclusion, targeted crowding-in of public and private sector investment, climate resilient infrastructure investment, delivery of services and effecting transversal management of urban spaces.

The National Treasury hosted a Metro TED Symposium on August 18 and 19 to discuss progress made with the TED programme.