In modern-day South Africa, the concepts of the spaza shop and the township economy have been subjects of considerable debate and controversy. They are often romanticised as symbols of black resilience and entrepreneurship as well as mechanisms to address the historical marginalisation of the black majority from the mainstream economy. However, it is important to recognise that these entities are a product of desperation and economic marginalisation.
Black South Africans have been forced to find creative ways to survive in a system that has historically excluded them from mainstream economic opportunities. Ghanaian economist George Ayittey was critical of the lack of serious economic thinking by post-colonial states in Africa. African leaders have been content to rely on foreign aid and hand-outs, rather than developing their own economies. This has led to a culture of dependency and a lack of innovation. If Africa is to develop, its leaders must start thinking seriously about economics and empowerment of its indigenous people, who remain the world’s laughing stock.
Unfortunately, post-apartheid South Africa is not an exception, as the country struggles to deal with colonial and apartheid continuities that are still responsible for the plight of the black majority and their non-involvement in the economy. In South Africa’s case, dependency has not been so much about foreign aid, but unsustainable hand-outs in the form of BEE have exacerbated the dependency syndrome.
The economy remains colonial and the old, white dominant players have a final say on the number of black people who can be allowed into the fold. For example, a few years ago, the mining industry stood its ground when it argued that “once empowered, always empowered”.
This simply denoted that the door leading to hand-outs for the highly economic dependent black people was forever shut and that the economy would forever remain unchanged. Therefore, it is important to create an economy that is inclusive and equitable, in which everyone has a fair chance to succeed.
Some analysts argue that BEE is a good idea in principle, but it has been implemented in a way that has benefited a small number of people, while leaving the majority of black people economically marginalised. It is unclear what is good about BEE as it has neither substantially altered the ownership of key economic assets such as land and capital, nor has it reshaped the production structure to empower black communities. The net result is that the country’s economy remains largely unchanged.
The ownership of the production means, particularly the land and capital, has not changed a bit in the last 30 years. Furthermore, the structure of production – from raw materials to finished products – is equally unresponsive and worsening. It is against this background that both spaza shops and the township economy are problematic and unsustainable through economic theory or other means.
During apartheid, black people were crammed into squalid townships far away from cities. Some residents began to sell staples such as maize meal and cooking oil out of their own homes. The informal stores became known as tuck shops or “spazas”, a slang word that connotes “just getting by”. Along with shebeens, or corner taverns, spazas are one of the most visible parts of township life and a major component of South Africa’s vast informalised economy.
However, the truth is that South Africa does not have an informal economy in the traditional sense because there is little or no value-addition taking place in black areas. Spaza shops and the township economy are not genuine economic opportunities for black people. Rather, they are just products of apartheid and colonialism. Therefore, it is illogical to argue for their retention because doing so means retaining the status quo in a country that requires serious recognition of black people and their rights. That is the reason uncanny behaviour and conduct of foreign nationals from Somalia, Ethiopia, Bangladesh and Pakistan flourish.
One argument in favour of the spaza shops ownership by black South Africans is that they represent a sizable economic opportunity. Research by Accenture SA indicates that there are more than 150 000 spaza shops in South Africa, with a market value of about R178 billion. Even the country’s major retailer Shoprite is said to be smaller in comparison.
However, it is essential to recognise that the majority of the goods sold in these shops are not produced in the townships and other impoverished black spaces. This highlights the persistent lack of involvement by the black communities in the broader production value chains and leaves them primarily as consumers and a source of cheap labour.
Furthermore, the dominance of external players, including large retailers such as Shoprite and Pick n Pay, presents a significant challenge. These retailers have implemented forward-integration strategies, attempting to capture the vast buying power in townships and rural areas. Every economic space in these areas is therefore dominated by merchandise from outside black or township control. This is unlikely to change since Tiger Brands, South Africa’s largest food company, recently announced its intention to tap into this market by partnering with 130 000 spaza shops. This situation is further compounded by the presence of shopping malls, established mega-economic players and large banks in the townships and rural areas.
Black people are awkwardly placed in defending or absorbing the onslaught, and their dependency, poverty and unemployment continue to surge uncontrollably without any imminent treatment for this ailment.
According to a 2019 study by the Human Sciences Research Council, most township businesses are small, unprofitable and focused on local markets rather than producing goods and services that can be sold more widely, create good jobs and generate higher incomes.
While black people may run car washes, beer halls, spaza shops and food outlets, these ventures often offer low profit margins and limited opportunities for sustainable economic growth. Townships and other black areas are confined on the peripheries of a flourishing white economy, a legacy of apartheid and colonialism.
This spatial apartheid creates several challenges for black communities, including limited access to economic opportunities, dependency and exploitation, as well as social and economic isolation. The talk about the township economy is not only misleading and disingenuous but lacks substance, regard for the subalterns and logical reasoning.
In summary, the concepts of the spaza shop and the township economy symbolise a complex and deeply rooted economic dilemma. These entities have become a visible part of township life but are an inadequate response to the enduring economic challenges faced by the black majority.
South Africa must move beyond the illusion of inclusivity and address the fundamental issues of economic transformation, ownership of key assets and participation in value chains.
As Ayittey highlighted, this country, like many post-colonial states, must seriously consider its economic policies and strategies if it is to achieve true development and empowerment for all its citizens.
That is essentially what the freedom and democracy dividend should all be about.
SOURCE: SIYABONGA P. HADEBE
