Occasional Papers

Competition or Co-operation? South African and Migrant Entrepreneurs in Johannesburg

International migrant business owners in South Africa’s informal sector are, and have been for many years, the target of xenophobic attacks. This has led to public debates about their role in the South African economy and competition with their South African counterparts, with allegations including that they force the closure of South African businesses, harbour ‘trade secrets’ that give them the edge, and dominate the sector. As a result, there have been calls to curtail the rights of international migrants, particularly asylum seekers and refugees, to run informal enterprises.

This report explores the experiences of 928 international and South African migrant entrepreneurs operating informal sector businesses in Johannesburg. It compares their experiences, challenging some commonly held opinions in the process. The report compares each group, what kind of businesses they operate, and where they do business. It investigates their motives for migrating, their employment and entrepreneurial experience prior to and after migration, as well as their motivations for setting up their businesses. It also examine how they set up their businesses, rates of business growth, contributions to local and household economies, and challenges faced, as well as various interactions between informal sector South African and international migrant entrepreneurs.

This report is one of three being produced as part of the Growing Informal Cities (GIC) project, a partnership between the Southern African Migration Programme (SAMP), the African Centre for Cities (ACC) at the University of Cape Town, the GCRO and Eduardo Mondlane University in Maputo.

International migrants in Johannesburg's informal economy

The informal economy plays a significant role in the entrepreneurial landscape of the City of Johannesburg and is patronized by the majority of the city’s residents. A 2013 representative survey of Johannesburg residents found that 11% owned businesses of which 65% operated in the informal economy. Despite speculation about the penetration of migrant entrepreneurs in the informal economy, only 20% of informal economy business owners had moved to Gauteng from another country. This means that fully 80% of informal enterprises in Gauteng are South African-owned. Fears about the numbers of international informal economy entrepreneurs and their potential impact on South African businesses are undoubtedly exaggerated but they did escalate in intensity in the 2000s and found expression in violent xenophobic attacks. In Johannesburg, the most recent outbreak of xenophobic violence, including murder and razing of homes and business premises, in January and April 2015.

The rhetoric of politicians during and following the xenophobic attacks of 2015 was generally hostile to migrant entrepreneurs. The policy environment in the city is uneven especially for street traders who operate in the central business district (CBD). In 2013, the City initiated Operation Clean Sweep, which literally swept traders off the street. Although the operation removed all traders regardless of nationality, the municipal re-registration process attempted to limit access to South Africans only. Yet, despite this unwelcoming environment, migrants continue to own and operate businesses in the city. This paper is based on research conducted by the Growing Informal Cities (GIC) project, a partnership between the Southern African Migration Programme (SAMP), the African Centre for Cities (ACC) at the University of Cape Town, the Gauteng City-Region Observatory (GCRO) and Eduardo Mondlane University in Maputo.

Acid Mine Drainage and its Governance in the Gauteng City-Region

Acid mine drainage (AMD) has generated an enormous amount of media interest and public concern in the Gauteng City-Region (GCR) over the last decade. However, it has been framed as a narrow technical concern, with government action being directed towards securing the necessary engineering and processing solutions as quickly as possible to prevent decant and treat acid mine water to industrial standards. This has arguably limited the scope for full discussion and debate on the impacts of AMD, particularly for the environment, and this bears implications for how AMD has been managed in the GCR.

Government’s immediate, short and long term interventions to address AMD have been set out as a straight forward solution, but over time more complex environmental concerns have emerged. Becoming more evident over the last few years is that one of the main impacts of AMD will be its effect on the overall water security in the Vaal River System (VRS) on which the GCR relies for its supply of potable water. Limits on water abstraction from the VRS, together with the increasing need to maintain the overall water quality in the system through dilution and treatment activities, means that AMD is beginning to manifest as a binding constraint on economic development and a burden on society – in particular via escalating costs for water consumers. Fiscal constraints are likely to see GCR residents and businesses pick up more and more of the costs associated with the treatment of AMD, through the format of increased municipal tariffs. With final decisions on municipal tariffs now pending, the broader yet invisible impacts of AMD loom large.

This means that the debate has moved far beyond the issue of predicted decant in each of the Witwatersrand’s mining basins. Water security for the GCR, and who will carry the costs associated with the long-term treatment of AMD, have instead taken centre stage.

This paper carefully updates the historical record on AMD since the publishing of a GCRO Provocation on the issue in 2010. In doing so, it argues that the way in which AMD has been governed raises a flag around how the political economy of an issue such as AMD should be understood, publicly debated and managed. In particular, it suggests that the governance of an environmental challenge such as AMD is not only about finding a technical solution. The lack of platforms to ensure well-informed public deliberation, especially over such issues as who will pay and how, must be addressed to ensure more equitable and transparent decision-making. In light of the broader mine waste legacy inherited by the GCR, and the strong likelihood of environmental contamination becoming more commonplace in the future, these concerns are not only limited to AMD. They will only grow in importance over time.

The GCRO Barometer 2014

The GCRO Barometer 2014 depicts developmental progress in the Gauteng City-Region (GCR) in a single interactive graphic using 38 indicators across ten key sectors. It serves as a tracking and diagnostic tool to inform policy makers and the public on where development progress is being made, and areas of concern. It also serves as a tool for benchmarking Gauteng against other South African provinces and similar sized city-regions across the world.

The GCRO Barometer 2014 is the first release and shows progress in 2012 against three base years: 2002, 2007 and 2011. Overall, the Barometer shows that the developmental outlook for Gauteng is positive with significant progress realised between 2002 and 2012 in nearly all sectors. For instance, the poverty rate has fallen dramatically since 2002 and access to basic services has improved. However, there are challenges in areas such as Social Cohesion, Governance, the Labour Market and Sustainability. Sadly, people’s perceptions of government, as well as their unwillingness to participate in governance matters do not correspond to the achievements made by government during this period. This should be a cause for concern for policy makers in all spheres of government as it reflects dissatisfaction with the nature and quality of services being provided as well as the methods of provision.

The Barometer also shows that the impact of government programmes is minimal over shorter time spans – change between 2002 and 2012 is considerable, but change between 2011 and 2012 is insignificant. This is a cause for concern given the 5-year cycle of electoral terms for local government in South Africa. The Barometer’s outcomes underscore the need for government to step up policy and programme monitoring with a view to achieving immediate and positive short-term impacts on communities.

Towards more effective collaboration by higher education institutions for greater regional development in the Gauteng City-Region

Higher education institutions (HEIs) in the Gauteng City-Region (GCR) and elsewhere are increasingly being called upon to do more than their traditional roles of teaching and research. They are now expected to collaborate and engage with other stakeholders with a view to contributing directly and indirectly to social and economic development in their localities.

Such an orientation includes having HEIs actively fostering public-private partnerships and other initiatives that enhance equitable regional development. The adoption of such a focus has implications for all aspects of these institutions’ activities, as well as for the policy and regulatory framework in which they operate. This Occasional Paper reflects critically on the role of HEIs in regional development. It surveys current debates on the matter and draws out some of the implications on how we ought to think further about the current state of government-industryacademia interaction and collaboration for development in the GCR. It is motivated by an awareness of the increasing importance of higher education in the regional development discourse, alongside a body of international theory and practice on the contribution of HEIs to regional development. A cornerstone of this body of literature is the so-called ‘triple helix’ framework within which government, industry and academia work intimately, intensely and collaboratively towards a common vision of regional development. Within this framework, HEIs are considered to be a public good that must play a large, meaningful and relevant role in the development and improvement of the cities and regions where they are located.1, 2 They do not, and cannot, stand completely outside the realities of their geographic, social, cultural and political environment.

The intended audience for this report extends beyond academics and HEI administrators to include government officials, business and labour leaders, civil society and citizens, because a discussion on stimulating and improving the GCR must be much more than an academic exercise. The collaboration that is essential to regional development requires stakeholders to be familiar with a wide spectrum of issues of importance to individual constituencies. Each constituency must add value and insight to the discussion by drawing on their specific knowledge, experience and self-interests. Establishing this common ground is fundamental to initiating meaningful debate about what the GCR can and should be, and how regional HEIs can work more collaboratively, creatively and effectively to improve and advance the region.