What the price of prostitutes can teach you about SA economy – Marius Oosthuizen

EDINBURGH — Life has been tough under Jacob Zuma. High unemployment rates, a symptom of an ailing economy, have meant that many young people find their only source of income in selling their bodies. What’s more, it’s a case of small change in the sex trade in small towns across the country. Marius Oosthuizen, a leadership, strategy and ethics expert at the Gordon Institute of Business Science, says he pays close attention to the price of prostitutes in his field work because it helps provide a nuanced sense of the micro-economy. What he sees is tragic and underscores a major block in kickstarting economic growth: South Africa has a largely consolidated economic sector that is unlikely to create jobs on a massive scale without significant policy change. – Jackie Cameron

By Marius Oosthuizen*

We asked a young man in a town on the outskirts of Gauteng, “how much for a prostitute?” His response, predictably, was “I don’t know… but my friend tells me … about R50”. He didn’t stop there. “You cannot find a girlfriend here… they are all nurses to the men working at Kusile”, he complained.

This conversation took place on a field trip during the Dynamic Competitiveness programme as part of the GIBS Executive MBA. The young man we spoke to was travelling on our bus and assisting our study group in meeting local stakeholders, business leaders and community leaders in the town of Bronkhorstspruit. We often ask this question to get a nuanced sense of the micro-economics of the town. Every year we travel to towns such as Zeerust, Sasolburg and Delmas etc., to study their local economic conditions. The goal is to teach the MBA candidates about grassroots economic development, competitiveness and inclusive economics. What we find is increasingly tragic.

South African money (Rand) bank notes sit in this arranged photograph.

Along the main road there is always a church with a neatly kept patch of lawn. You soon find a bottle store or three and a KFC. Always a KFC and sometimes a Wimpy. The neat suburbs near town, with streetlights and stop signs, look increasingly neglected. Across town and across the riverbed, the sprawling townships of cubical after cubical, of bland concrete homes dot the otherwise agricultural flatland. It is in this 20km chasm, between town and the Ekangala township, that the unemployed youths who trade their dignity for a pink R50 note, have to eek out a South African living.

This pattern of structural, spacial and systemic socio-economic exclusion repeats itself in almost all of South Africa’s towns. Brokhorstspruit is comparatively lucky. Construction of the Kusile power station less than 40km away has brought money into the town. Old suburban homes along the main roads are quickly turning into bed and breakfast businesses. Nothing fancy, just Tannie Koekie’s old curtains, dusty bedding and sunny side up eggs on brown toast with Ricoffy and powder milk to start the day. These entrepreneurs make a decent living in their little halfway town. Typically, the older ladies from Ekangala work in these suburbs as maids, and the young men move to the city.

But what happens when Kusile is completed? I imagine R50 will become R10.

Marius Oosthuizen

This is the challenge facing our newly minted President Cyril Ramaphosa. It is not “how to appease the Zuma faction or Zulu nation?” Nor is it “how to renew the ANC?” or “secure victory in the 2019 election?” The president’s challenge is how to turn an apartheid legacy of a largely consolidated economic system, which is increasingly uncompetitive, into a thriving hub of youth absorbing jobs. It can be done, but it will require a town-by-town, city-by-city intervention of massive proportions. It will also require an all hands on deck approach.

It will necessitate that the stagnant industrial area of Ekandustria, across the road from the township, becomes a hive of investment. A once thriving steel cluster, the area is now semi-derelict, with a small-scale uniform manufacturer, food packaging plant and a Chinese-owned tile maker standing out among the otherwise abandoned factories. While Ekandustria stagnates, the Nyaope gangs across the road thrive. No wonder a weathered EFF poster hanging on an overfull dustbin in the main road reads, “Your last hope for jobs and economic freedom”. As if nationalising the banks will give the teenagers of Bronkhorstspruit a better life. It will decimate the little hope they have to cling to.

We end our trip with a visit to the Chesa Nyama in Rethabiseng. A few beers and a debate about politics with a bearded 30-something Shebeen owner. “How is business?”, I ask him. “Good, we sometimes do R18 000 on a single night”. Our group leave Bronkhorstspruit after a brief visit to the Fo Guang Shan Nan Hua Buddhist temple. I wonder on the bus ride home, “who writes the national development plan for this town?”

There is huge potential in the towns that dot the South African landscape. Between agro-processing supply chains and beneficiation enabled by our iron, platinum and coal belts, South Africa is full of promise. One wonders though, whether we have the leadership to build our country with more efficiency and less unintended consequences than we have managed to do to date.

  • Marius Oosthuizen is a member of faculty at the Gordon Institute of Business Science. He teaches leadership, strategy and ethics. He oversees the Future of Business in SA project which uses strategic foresight and scenario planning to explore the future of South Africa.