South Africa’s townships and the associated informal, Kasi economy have been hard hit by the coronavirus pandemic and the lockdown. So the government announcement that the lockdown will be eased starting May 1 comes as a welcome relief for informal sector guru GG Alcock, who warned at the beginning of the lockdown that it would be dangerous to deprive the informal sector from their livelihoods and placing people who now had to travel and stand in long queues at risk of contracting the virus. As a guest on Biznews’ inaugural Rational Radio webinar, GG – who says he was named after a government truck, in fact a bulldozer – expounds how the loss in income and the increase in social grants will change the family dynamics of the tight-knit communities in SA’s vast townships. – Stanley Karombo
It’s a warm welcome to everybody who’s attending our very first edition of Rational Radio, the webinar version. I’m Alec Hogg. In our virtual studio is GG Alcock. GG, we’ve spoken a little about the formal market. Let’s talk about the informal markets. We did have that discussion over the weekend that we going from Level 5 to Level 4 from Ebrahim Patel, the economic affairs minister. What was interesting was that he was talking quite a lot about the informal sector, informal traders and so on. Was there enough in the to make you feel like we’re getting on the right path again?
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Yes, I think what has happened is that when this whole thing, the first lockdown, happened they really thought about supermarkets and that’s kind of where it ended and suddenly realised that there’s a whole other world as well. So I think that that realisation and the ability to to bring in that centres is important. And if you look at this stage I think there’s basically winners and losers as well. The current thing is that fast food outlets will be allowed to open, which is a massive sector of the informal economy. The idea is that they have to do deliveries, which is not a problem in a township because most of the fast food outlets serve it to the local suburb in walking distance. You’ll find they’ll be going to deliver the quarter from the local Shisanyama or whatever it might be. So I think that’s going to be a positive move from a consumption perspective. We saw the fresh produce market, their potato sales dropped by 30% with the closure of the fast food outlets. So the veg traders and farmers should benefit from that.
The spazarette sector – smaller supermarkets and spaza shops – are definitely benefiting from this. We’ve seen probably about around 20% decline in mid-month over and above the typical monthly decline. I think you can anticipate between 20% and 30% decline over probably the next six months I guess. The spazarette sector is definitely get a lot more business. Because they’re in the neighbourhood and offering an array of products, you don’t have to pay for transport and obviously the risk of infection when you’re in a taxi or a queue is minimised when walking to the closest supermarket. So I think the Pick n Pay’s and shops like that that are in the neighbourhoods and not in a mall will definitely benefit at this time. They are obviously not in the informal sector but if they are servicing the Kasi economy.
I also think that the increase in the social grants means that the gogo and the mom are going to become the new breadwinner as other incomes have dropped off, whether people are in informal or other formal businesses. We’ve almost had a probably between 50% odd increase and social grants that pay R500 per recipient – a gogo pensioner gets about R1650 a month and a social grants lady gets about R250 grand a child averaging about three children. So that’s a big jump, if you had R700 you’re receiving and now getting extra R500 and if you’re earning R1,650 you’ll also get another R500 so that’s going to benefit to the informal economy to a large extent – the spaza and the local outlets.
But what it also means is that in the family it is suddenly the social grants recipient and the pensioner that’s the primary breadwinner and decision-maker.
It’s really interesting stuff in the way that you’ve integrated that into, if you like the formal economy. GG I’d love you to come in here because you do work in the area where people are still not quite believing it – as Alan (Whiteside) said a moment ago that the fire is burning but you don’t see any flame yet.
I think one of the mistakes we’re making is that we looking at the township as one uniform space and we see all these dramas showing Khayelitsha, Diepsloot, Alexandra townships. If you look at the SA household survey 2018, it shows that only 12% of our population live in informal dwellings, 82% odd of our population live in formal dwellings. So I think we have to look at that differently… we have this historical bias about looking at our population – if we look at the shacks settlement, in essence it’s almost impossible to restrict people if you look at the priority of risk – the priority of dying of hunger and other dramas is much higher than contracting Covid so I would say it becomes less of a concern, and that’s a problem.
If we look at the more traditional township spaces, places like Soweto and Umlazi and Gugulethu, there are much more formal homes in yards. What I’m hearing that in a place like Umlazi people are quite afraid because there have been incidents, so it really does vary. I think that this is one of the problems with kind of a uniform lockdown application is that you have to take into account do you lockdown by street, do you lockdown by house, how do you do this?
And overall there’s quite a split between township areas – I spoke to someone in Soweto today, he was saying that they’re afraid. They’re aware that suddenly it’s not just something that’s in high-income people or travellers, that it’s now in townships. I spoke to someone in Umlazi over the weekend – once you start knowing someone in the neighbourhood or someone’s friend or someone – these are small, tight communities and the word starts spreading fast, so there is that risks there. But I just think that the application of risk mitigation needs to look differently to a different kinds of segments within that Kasi environment.
You’ve got to tell Alan and the rest of us how you got the name.
My parents were political activists and brought us up in a mud hut with no running water or electricity in this new village. I was in essence named after GG trucks because the government bulldozers that were bulldozing people’s homes all had a registration of GG. In Zulu you’re either named after a characteristic and I’d like to think the characteristic was power and stability of the trucks, so I was named after a government truck.
Well there we go, Alan Whiteside, I’m sure you’ll appreciate that as well. Thanks GG for your contribution today.
