Building township economies: From top-down planning to enabling development

Most established townships in South Africa were designed as dormitory settlements on the urban outskirts with few local jobs and amenities. They remain detached from their core cities, forcing residents to endure long and costly journeys to work. Their internal layout leaves little space for business and commercial activities, and their basic infrastructure is ill equipped to cope with continuing population growth or job-creating investment. Underperforming township economies fail to retain the aggregate spending power of large local populations and convert it into entrepreneurial dynamism and vibrant communities.

The democratic government introduced a system of Integrated Development Plans (IDPs) to replace traditional town planning that produced these barren townscapes. Integrated plans were supposed to respond to community needs and promote more rounded and sustainable settlements.

The constitution gave municipalities a crucial developmental role to transform townships into more liveable and productive places. They were expected to collaborate in this endeavour with other spheres of government and the private sector. The constitution also called for local authorities to engage with communities to identify their genuine needs and priorities.

In practice, the IDPs have failed to galvanise action across municipal departments and other public entities. Government silos have prevented effective alignment between public investments in housing, transport and economic infrastructure. The IDPs have also done almost nothing to tap into the knowledge of local residents and to mobilise their energy on joint projects.

Elaborate spatial plans are often produced calling for economic opportunities to be created in strategic development nodes and high street corridors within each township. They promise to deliver important benefits through denser commercial precincts, dynamic business clusters and more efficient public transport connections. But most remain as paper plans gathering dust on the shelf because their priorities are not sufficiently clear and their implementation requires skills and capabilities that go beyond the delivery of routine services to a passive citizenry.

Township development is hampered by additional challenges, including a culture within government that is cautious and focused on regulatory compliance. Hence, attitudes to decision-making are risk averse, which can result in organisational inaction. Officials are fearful of being punished for making mistakes, so budgets often don’t get spent and creative thinking is discouraged.

Public servants are dissuaded from collaborating and sharing information with others because this raises expectations, departs from core mandates and is not written into performance agreements. Consulting with communities is seen as particularly hazardous because it can disrupt plans, undermine assumptions and create new demands for service delivery.

A crucial point is that townships are more complex and contested environments than suburbs and business districts. Conventional policies and practices don’t work well in such situations. For example, bureaucratic systems of land-use control and building regulation are driven by physical norms and standards that are too onerous, inappropriate and out of touch with realities on the ground. New ideas and approaches are essential to navigate this thorny terrain and deal with unanticipated challenges. There is a pressing need for municipal officials from different departments to work together in exploring new ways of providing services and setting rules in consultation with members of civil society.

In response to the faltering progress with township transformation, the treasury’s Cities Support Programme is supporting five metros with a novel and highly focused approach to building township economies. The emphasis is on practical problem solving and executing concrete projects, rather than formulating elaborate plans and designing new regulations and procedures. The starting point is a hard-headed assessment of current realities and opportunities in specific locations, rather than an idealised image of what township economies should be or might become.

Through a bottom-up, enabling approach, the idea is to build competencies and confidence through achieving tangible results on the ground in selective pilot sites. Small-scale actions and improvements should encourage participation by local communities and strengthen relationships across municipal departments and other entities. Stronger networks of trust and mutual accountability should help to break through the current institutional inactivity. Learning from these projects can spur wider improvements in municipal performance and help to stimulate further action and investments by other stakeholders.

Municipalities must learn to recognise and reward local agency and initiative. Harnessing the potential of township enterprise requires a different mindset from traditional systems of control and regulation, which tend to deter investment. All kinds of businesses, from spazas to hair salons, creches, mechanics, taverns and hot food suppliers need to be incentivised and empowered. By strengthening and building upon these kinds of enterprises, many local jobs and livelihoods can be created. Such activities can also help to upgrade township environments and improve liveability by providing essential goods and services.

Municipalities can also play a valuable role in enabling investment in housing improvements and generating wider economic spinoffs. Backyard dwellings are the fastest growing form of housing in the country, meeting a huge pent-up demand for affordable rental accommodation and providing an income to poor homeowners in the process. With appropriate advice and support, small-scale developers and builders could be trained to convert backyard shacks and other makeshift dwellings into safe and secure brick-and-mortar structures with internal ablutions.

These are just a few examples of constructive action on the agenda of township economic development. By working together on pilot projects to address real issues and opportunities, municipal officials, local residents and other actors can begin to overcome traditional mistrust and lay the foundations for bigger and bolder programmes of activity. Close monitoring of progress should provide valuable lessons to apply to other townships and municipalities.

The treasury’s involvement can help to garner support from wider stakeholders in the public and private sectors and encourage collaboration. Municipal leadership will be crucial to create an environment that rewards creativity and innovation on the part of officials, rather than compliance. The administration must shift from being seen as a service delivery machine to an enabler of local development in partnership with other actors. Unless municipal leaders endorse the spirit of flexibility and institutional collaboration, the chances of township transformation will remain remote.