A bill that could restrict businesses of foreign nationals in Gauteng townships has been flagged as having the potential to increase xenophobia, but there is some support for it as a means to achieve an inclusive economy nationally.
The Gauteng provincial government introduced the Gauteng Township Economic Development Bill for public comment recently. If passed, the draft bill could restrict where foreign nationals may set up formal and informal businesses in SA’s economic hub.
The country’s township economy is valued at R400bn, equivalent to almost 8% of GDP annually, and employs about 2.6-million people.
The bill, which has been described as unconstitutional by a pro-migrant lobby group, is intended to designate township areas as places that are “reserved for the exclusive and sole [benefit] of citizens and people who have permanent residency status in the republic”.
Business for SA (B4SA) chair Martin Kingston told Business Day that B4SA will support “several aspects” of the bill in national legislation.
“These include ... the focus on facilitating inclusive growth in townships through improved access to finance, technology and support, as well as improving data collection and availability,” said Kingston.
“However, B4SA would be concerned around provisions similar to section 7(2) of the bill, which restricts designated business activities to citizens or permanent residents, and would urge reconsideration of similar provisions.”
Whatever the specific exclusions the bill ultimately includes, it could well increase existing xenophobic sentiment and could result in recurrences of xenophobic violence
— Kaajal Ramjathan-Keogh, Africa director of the International Commission of Jurists
Kaajal Ramjathan-Keogh, Africa director of the International Commission of Jurists, said the bill will prohibit most non-citizens such as asylum seekers and refugees from large swathes of economic activity.
“Whatever the specific exclusions the bill ultimately includes, it could well increase existing xenophobic sentiment and could result in recurrences of xenophobic violence,” she said.
Foreign-owned spaza shops and their owners are regularly subjected to vicious attacks countrywide, with locals accusing them of stealing their livelihood.
Ramjathan-Keogh said though the provincial government has the power to promulgate provincial laws and municipalities may develop bylaws, the bill is premised on an “unproven assumption that the economic activity of non-citizens reduces work opportunities for South African citizens”.
“If the government cannot produce clear evidence of this stated assumption it should consider withdrawing the bill. There is much evidence that non-citizens are contributing to the economy,” she said.
According to research by author, marketer and brand specialist GG Alcock, who has studied the township economy for almost two decades, the sector comprises 30,000 spazarettes (local supermarkets) that are valued at R200bn a year and are dominated by Somalians, Ethiopians, Pakistanis and Bangladeshis.
Small business development deputy minister Nokuzola Capa said what Gauteng was doing was “very right”.
“We are also going to join them soon. [A similar] bill [at national level] will be processed through a parliamentary exercise,” she said.
Violet Sizani Siwela, chair of the parliamentary committee on small business development, said the matter “is currently on the table ... we really mean business”.
President Cyril Ramaphosa spoke about the need to boost rural and township economies during the ANC national executive committee (NEC) lekgotla earlier in October, Siwela said.
In his closing remarks at the lekgotla, Ramaphosa said the meeting resolved that the new economic strategy must focus on recovering from Covid-19 and “fundamentally and radically restructuring the economy to be more inclusive”.
DA national spokesperson Solly Malatsi said the matter will have to be discussed in the party’s caucus before deciding whether to support it.
IFP chief whip Narend Singh said rural and township economic development required political will more than legislation but “we will support such a bill if it comes before parliament”.
UDM chief whip Nqabayomzi Kwankwa said his party will support the bill at national level “so long as it is not done in a manner that is discriminatory and that does not destroy the livelihoods of those foreign nationals who are already in business”.
The African Transformation Movement (ATM) president Vuyolwethu Zungula said they support the bill.
EFF national spokesperson Vuyani Pambo did not respond to questions.
Court challenge
Sabelo Macingwane, national president of one of the largest business chambers in SA, the National African Federated Chamber of Commerce and Industry (Nafcoc), said the bill is “a trailblazing piece of legislation” that the rest of the country should adopt.
African Diaspora Forum spokesperson Amir Sheikh said if the government implements the bill nationally, they will challenge it in court.
“It is an attack on migrants’ interests, and we have seen in some parts of SA where migrants have come under attack after being told they are not meant to trade in townships,” he said.
Gauteng premier David Makhura’s spokesperson Thabo Masebe said the bill is not about foreign nationals, but a “development bylaw” aimed at assisting entrepreneurs in the province’s townships to start and operate their businesses.
Masebe did not explain how the provincial government will distinguish between what is a township and what is not.
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