A street sign on the corner of Klipfontein and Johnson Qona streets points the way to Gugulethu township in Cape Town. Picture: THE TIMES
A street sign on the corner of Klipfontein and Johnson Qona streets points the way to Gugulethu township in Cape Town. Picture: THE TIMES

One of the earliest reported townships in SA was Uitvlugt (later renamed Ndabeni) near modern-day Pinelands, Cape Town, where up to 7,000 black people were settled next to a sewerage plant in 1902 after being forcibly removed from in and around the city centre.

KwaLanga was established more than two decades later following the passage of the 1923 Native (Urban Areas) Act, which formally restricted black people’s access to the city. These forced removals inspired subsequent segregation laws and apartheid spatial planning, which still dominates SA cities more than 25 years after it was formally ended.

An estimated almost 40% of working-age people in the country live in townships, which are home to about 60% of the unemployed. It was reported in Statistics SA’s 2018 general household survey that more than 54-million minibus taxi trips were taken by South Africans monthly, 22.3-million of those within Gauteng. The province reported 22% of households spent more than 30% of their household income on transport alone, and it took 46.4% of them more than 30 minutes to travel to work daily.

One of the seven priority areas as mentioned in President Cyril Ramaphosa’s recent state of the nation address was spatial integration, human settlements and local government. The president is still to detail the various projects and programmes that will be undertaken to meet the objectives articulated in his speech, but on my wish list for township economies is the relocation of private and public sector service centres there and investing in “smart lokshins” before smart cities.

Globally the call-centre industry (also referred to as business process outsourcing and offshoring) is estimated to be worth $200bn and is expected to reach $407bn by 2022, according to CustomerServ. Locally, the call-centre sector contributes about $1.1bn to the economy annually, with 25% annual growth since 2012, twice the global growth rate.

Opportunities for ‘smart lokshin’ development also exist in the effective management of the waste that is generated by households and companies in the townships

In their 2007 industry report Benner, Lewis and Omar found that Gauteng accounted for 51% of the call centres in the country. Telecommunications accounted for 20% of these, with 50-plus employees, followed by insurance, retail and airlines, each with 15%. Additionally, Pandy and Rogerson found in 2014 that 50% of those employed by call centres were youths.

The growth and employment demographic profile of the sector suggests that there is an opportunity for the government to partner with the private sector to explore moving call centres to where most of their workforce lives. Such a move would not only have implications for new infrastructure development in the townships but provide wage and productivity benefits given the reduced time to get to work and reduced transport costs. An agreement to move the centres in the next five to 10 years could also influence retailers’ investment plans to support the corporate population growth that could be anticipated.

Opportunities for smart “lokshin” development also exist in the effective management of the waste that is generated by households and companies in the townships. The country is already being challenged in this area, with landfill space limited.

An efficient waste-to-energy strategy might help mitigate the energy crisis and facilitate a nationwide and large-scale move towards biofuels. The department of co-operative governance and traditional affairs has already started prospecting “from waste to wealth” as a drive to incentivise new and innovative waste management approaches.

An opportunity is now available for them to usher in a new wave of technological investment that could absorb labour through the waste collection and sorting process as well as partner with the private sector in getting the right industrial technology to ensure the economy benefits from the “wealth” part of the waste management process.

Reinvigorating the township economy needs sober reflection on how apartheid spatial planning continues to cause economic inefficiency, particularly as previously disadvantaged labour participants still have to travel hundreds of kilometres each week just to earn a living.

Townships have been unable to attract the scale of investment required to create growing and sustainable economic nodes within them. SA needs smart lokshins far more than it does smart cities.

• Skenjana (@sifiso_skenjana) is founder and financial economist at AFRA Consultants. He is completing a PhD in finance for development.