13 October 2004
Soweto celebrated 100 years of existence on 12 October 2004.
It was on 12 October 1904 that Klipspruit – some 25 kilometres south of Johannesburg’s city centre – was formally set up as a labour reserve to keep black workers, who worked mostly in the burgeoning mining industry, away from white Johannesburg.
Since the inception of its first township, Soweto has experienced phenomenal growth, mostly in ways that apartheid planners never anticipated, but it remains chiefly a working class neighbourhood.
Over the past 100 years, Soweto has seen generations of migrants to the city lose their tribal innocence as they were swallowed up by its cosmopolitan appeal, for better or for worse. It has grown to become an international trademark of South Africa’s struggle against apartheid.
Despite its rich history, its reputation as a hotbed of the struggle against apartheid, and its status as the most cosmopolitan township in the country, Soweto has remained economically underdeveloped – but that looks set to change.
Although it is home to just under 40% of Johannesburg’s population, Soweto’s contribution to the city’s gross domestic product stands at a negligible four percent, says Li Pernegger, programme manager of area regeneration in the city’s economic development unit.
Stimulating Soweto’s economy
In an effort to unlock the economic potential of the township, the City of Johannesburg has formulated and adopted the Greater Soweto Development Initiative (SDI), a plan to stimulate economic growth.
The initiative is aimed at providing a foundation for integrated development in Greater Soweto, says Pernegger, adding that in the long term Greater Soweto will no longer be a purely residential area, but will be an “integrated urban area in which people live, work, invest and recreate”.
Coordinated by Johannesburg’s economic development unit, the SDI will focus on economic sector support and business node development, the provision of appropriate infrastructure and services, planning, land use management and land release, social development, safety and security, and improving the natural environment
The City also recently set up the Greater Soweto Development Committee (GSDC) with a brief to take Soweto out of its economic stagnation.
The GSDC was set up as a Section 79 committee to make recommendations to council on developmental priorities. The committee is made up of 25 councillors from Region 6 and Region 10, which jointly comprise Soweto. The committee will be charged with “coordinating interested and affected parties and enlisting their support for the initiative”.
A study commissioned by the economic development unit in 2003, analysing economic activity levels in Soweto, found that residents do not use their buying power for the benefit of the area. Pernegger says: “We realised that Sowetans actually have an enormous buying power, but 80% of that money is spent outside Soweto and little of the demand for goods is matched by retail supply within Soweto.”
Pernegger puts the combined annual buying power of residents at over R10.5-billion, “with R4.3-billion of that available for consumer spending”.
The City of Johannesburg, according to Pernegger, is working on measures “to ensure that more of the residents’ buying power is retained within Soweto by facilitating the establishment of appropriate, and sustainable, retail development at the correct locations within Soweto. We want to get retail development going so that we have more money circulating inside Soweto, and more jobs being created”.
Pernegger is confident Soweto offers viable investment opportunities. “The private sector believes there are investment opportunities there, especially retail developers, and now the challenge is for other commercial developers to appreciate the huge potential for the provision of warehousing, factory and office space too.”
The development of Soweto, says Pernegger, will require that the neighbourhoods that make up Soweto be branded individually. “The SDI will become an enabling tool to start creating identities for the different parts of Soweto,” she says.
The initiative will also help identify priority areas. “We need to know more precisely where is it attractive and viable for developers to invest in the future.”
Pernegger says the economic development unit is finalising a retail demand analysis and drawing up strategies for retail development. “The consultants have developed an analysis and model of retail demand and supply (current and projected to 2014), as per different catchments, and we have developed a fairly sophisticated understanding of the potential consumer base per area.”
She adds: “Development strategies are being recommended and City priorities are being identified. The economic impact of the implementation of the proposed development strategies is also being considered.”
Council has already agreed to apply to the Industrial Development Corporation for grant funding to back the design of economic sector support programmes “as well as capacity for the coordination of the SDI”, according to Pernegger.
Such funding will help “get development going in the township. It will help us package bankable projects by managing some of the risks inherent in property development in the area”, says Pernegger, who is optimistic about the Industrial Development Corporation’s response.
Source: City of Johannesburg