Cities and suburbs may be at level 4, but the informal sector is at lockdown level 1
Some grant recipients don’t want the lockdown to end because they are getting more money; as for the rural areas and informal businesses — what lockdown?
The media is full of contradictory public opinions on easing or ending the lockdown. The narrative is that the rich want it to serve their selfish and capitalist needs, and the poor want it to stay out of fear and risk.
I would like to give some perspective to this based on recent surveys in townships and rural areas of SA, through my kasi township network and a survey done with more than 500 small rural farmers by the Goat Agribusiness Project in KwaZulu-Natal, which works with thousands of mainly female livestock farmers.
It is important to understand the dynamics of townships and rural areas and, in particular, the difference between those that are economically active, whether in formal or informal areas; and those that are not economically active at all. In between are people who are on social grants but supplement their incomes with informal incomes, whether from small businesses or rentals from back rooms, or small jobs such as baby-minding or laundry.
For now let’s keep it to two simple groups of people: those who are economically active (formal and informal economies), and those who are economically inactive, the truly unemployed and social grant recipients.
Eleven-million recipients earn social grants monthly for handicaps, child grants or pensions. About 3-million earn old-age grants of about R1,860, and now receive an additional R500 a month — almost a third more, a big difference. About 9-million child grant recipients (mothers receiving on behalf of their children) receive R440 per child, with an average of just less than two children per mother.
They receive an additional R500 per mother, so assuming R880 a month, a little more than 50% more a month. In total, 18-million recipients receive a social grant, out of a population of 59-million. It’s unclear how many will qualify and receive the R350 Covid-19 unemployment grant, but probably about another 10-million people. In essence, between one in two and one in three SA citizens will receive a grant.
So do social grant recipients want the lockdown to end? There are two answers from the various surveys. Most do not care one way or another as they receive a grant irrespective of the lockdown. But here is an interesting thing: many were very afraid the extra money (that R500, or one third or 50% more, depending on the individual) would end the moment the lockdown goes to level 2 or 1. These people said they wanted the lockdown to continue as long as possible as they earned a lot more money during it.
An interesting dynamic was revealed by the rural survey: many parents said that costs for food have gone up dramatically now their children are at home 24/7. This is because in some cases children had lunch (or breakfast) at crèches or schools with feeding schemes. Now parents have to feed their children at home. Plus, as all parents know, children hanging around the house generally snack or eat more. Checking with kasi [a neighbourhood in a city or area around a city occupied predominantly by black South Africans] parents the same emerged — this factor is a major burden on many parents.
This sector doesn’t just want the lockdown to end, they have ended it because they have no other choice. When livelihoods are at risk, people ignore health protocols or restrictions en masse
Let’s check on the economically active side, that is, informal sector businesses and rural farmers and their responses. In essence, all economically active people are desperate to go back to work. The formally employed are afraid that jobs will end, and they will be retrenched. Rural small farmers reported no or very few sales as they cannot find buyers for goats or even chickens. Rural auctions are restricted to 10 people and buyers are prevented from travelling without permits.
The Mdukatshani rural development project runs the unique Goat Agribusiness Project in five KwaZulu-Natal rural districts. In these districts, theprogramme of rural goat farmers, rural community vets and community-based feed suppliers, along with goat auction sites and events, is building a huge goat farming sector. In 2019, this programme generated R80m in incomes from sales of goats in just five districts. There are 11 districts in the province. The project estimates R250m in lost goat sales for rural small farmers throughout the 11 districts over the lockdown to date.
On the township side, there is a huge informal business sector, outlined in some detail in my book, Kasinomic Revolution. In brief there are about 100,000 spazas; 50,000 kasi fast food outlets; 500,000 table top and roving hawkers; 50,000 hair salons; and 100,000 muti sellers, not to mention taverns, caterers, taxi owners and drivers, builders, electricians, kasi bakeries and so on. And many of these employ three to five staff, who also feel the impact. Not to mention more than R30bn in spaza and back-room rental incomes to township homes.
Kasi businesses are saying they have no choice and are already returning to work en masse. Members of my township network said township and informal businesses “are at level 1 and suburbs and cities at level 4”. I have pictures taken during the survey to prove this: upholsterers out on the street; hair salons open; shisanyamas operating from backyards and selling through the front fence; car washes open, and so on. On weekends, yard parties are becoming common.
This sector doesn’t just want the lockdown to end, they have ended it because they have no other choice. When livelihoods are at risk, people ignore health protocols or restrictions en masse. While the same is starting to happen to a limited extent outside the kasi, the reality is that it is still furtive and limited. In the townships it is not so furtive, to put it mildly, and it’s as if the police and army have thrown their arms in the air.
The large immigrant community in SA — which has fueled a massive money transfer economy sending funds home to Zimbabwe, Malawi, Mozambique, Somalia and elsewhere — is also highly negatively affected by the lockdown, in both the informal sector where many are street traders, and in the formal sector where they work mainly as waiters and gardeners. These immigrants receive no social grants or any other relief beyond the odd food parcel, and are returning to work in any way they can. For them it is also not a choice.
Across the board, all informal businesses report that even when they reopen people have no money to spend, or have a lot less and turnovers are down. In the spaza sector, for example, turnover is down by between 20% and 30%.
In both formal and informal retail sectors consumers are buying what they call “essentials”, and there is strong growth in staples such as rice, bread, pasta, flour, maize meal and sugar. Outside these essentials, shoppers are buying few luxuries as money is tight. “Bum-fences” are common — lines of people leaning into community centres palisade fences with their bums outside, to get the free Wi-Fi on their phones as airtime has run out and is expensive.
All the surveys reveal that fear is pervasive, but, at the same time, the ability to prevent infection is not easy in rural areas and urban townships. Masks are now ubiquitous in townships and rural areas, even among children in rural areas. The same cannot be said about social-distancing at grant queues, funerals, clinics (queues outside) and public transport. Distancing protocols are observed in the home or township suburb only.
Public transport is a problem, especially in rural areas where social distancing regulations are seldom followed. As much as there is fear and a general acceptance of the dangers of the coronavirus, the realities of life outside the home in rural areas and townships are hard to mitigate.
• Alcock is an author and marketing consultant specialising in the informal and township economies.