Opinion O
Township Investment Opportunities
Writer Illana Melzer, independent consultant
With established asset classes under pressure to perform, the likes of impact and angel investors, crowd- funders and even traditional investors are looking to new places, people and products in which to invest. While interest in the world’s emerging markets is growing, the informal economies in these nations often remain veiled in mystery. But do they hold opportunities?
• Cities are at the heart of a country’s economy, yet in South Africa, cities still face significant challenges of economic and social integration.
• Absence of a coherent vision for the functioning of a township economy makes it difficult for businesses from the formal economy to enter this market.
• Township businesses are held back by a complete lack of political leadership and fundamental issues like pervasive crime.
• The transfer of property to poorer South African households is fostering the rise of a middle class.
• This transfer of wealth is, perhaps, the attraction needed to draw investors into this forgotten second economy.
In South Africa’smost recent Budget Speech, then Finance Minister Malusi Gigaba highlighted the importance of urban renewal and spatial transformation. He noted that cities are “at the heart of the national economy and hold the potential to drive our urban renewal”. The importance of our cities is likely to increase.
A quarter of a century after apartheid, however, despite enormous state investment, South African cities still face significant challenges of economic and social integration. Researchers point to deep flaws within the post-apartheid housing delivery programme, which located poor households on the urban periphery, away from jobs. They also note the unwillingness of the private sector to invest in poorer areas. To quote from a recent publication from the Socio-Economic Rights Institute of South Africa: “Municipal efforts to induce the private sector to invest in poor areas have generally been successfully resisted by developers in what is a concentrated and powerful industry, while property-owners have organised into strong lobbies to protect their interests.” It
Gradient Issue 2 41
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76