Joburg’s digital economy – a boom or a bust?

Thirty-seven percent of South Africa’s population is missing out on the progress of a digital economy because they do not have an internet connection.

There is a digital skills gap in South Africa resulting in the outsourcing of over 300 000 jobs and the loss of R8,5 billion in export revenue each year. This is according to Derek Davey.

South Africa is one of Africa’s top five economic hubs according to Ventures Africa, but does the City of Johannesburg (CoJ) have what it takes to bridge the digital skills divide and become one of the continent’s leading tech hubs with a thriving digital economy?

Before we can dive into this question, we first need to understand what the digital economy is about.

According to Bukht and Heeks, the term digital economy simply refers to the effect that digital technologies have on economic activities. These digital technologies include but are not limited to, digital infrastructure and media platforms. Within the digital economy, people produce and consume goods and services obtained from these digital technologies.

Head of Digital Skills at Wits University’s Tshimologong Precinct, Carol Jaji, describes people as being “users embedded at the core of bringing together economic activities.”

The digital economy, which is mainly supported by information and communication technologies (ICTs) – defined as “a diverse set of technological tools and resources used to transmit, store, create, share or exchange information” by Unesco – is the driving force behind economic growth in both developing and developed countries.

A study conducted by the World Economic Forum in 2015 found that emerging markets are experiencing a growth of 15 to 25% yearly in the digital economy. Furthermore, the WEF’s 2023 Digital Transformation Framework states that digitally enabled technologies and business models will carry approximately 70% of the world’s economy over the next ten years. It is therefore essential that all economic hubs worldwide adapt to the digital transformation, considering its potential to offer a new form of economic growth and employment opportunities.

There are five pillars proposed by the World Bank that can help countries benefit from digitalisation, and be fully engaged in the digital economy according to a report compiled by the Brookings Institution on the digital divide in Africa.

The first pillar is about access to the digital infrastructure needed so that people can engage in digital activities. For the digital economy to succeed, there needs to be high-quality and affordable internet connectivity.

Approximately 37 % of SA’s population have no access to the internet according to the IOL. Furthermore, a survey conducted by the 2023 Digital Quality of Life Index on 121 countries making up 92 % of the world’s population ranks South Africa 63rd in internet quality and 52nd in internet affordability. This shows that the country still has a long way to go before it can achieve the high-quality and affordable internet connectivity needed for the success of a digital economy.

The second one relates to digital entrepreneurship which shows the strength of the digital economy through entrepreneurs’ ability to easily find new products and work opportunities in the digital sector. This is determined by the access to venture capital and credit.

In the past five years, the South Africa Investment Conference (SAIC), companies have pledged a total of R200 billion in the country’s digital services and ICT sectors. In addition, the National Skills Fund (NSF) will allocate R800 million to fund digital skills training for unemployed youth. This was announced in one of President Cyril Ramaphosa’s weekly newsletters.

Digital finance is the third component of digitalisation. It measures people’s access to financial services that enable them to conduct digital transactions thus enhancing financial inclusion. 

The fourth determining factor is access to digital public platforms where the government can digitally provide public services and engage with citizens.

Lastly, there is the digital skills component which looks into the skills and education capacity necessary for an active digital ecosystem. Countries need to prioritise equipping their people with digital skills because digital technologies can only be useful if people are taught how to use digital infrastructure and platforms. A digitally competent workforce and government will not only allow the digital economy to flourish but will also enable an efficient transition into digitalisation.

According to the Department of Economic Development, it “ has two main areas of responsibility; it is tasked with ensuring that the right environmental framework and initiatives are put in place to foster economic growth and job creation in the province. Secondly, it is responsible for ensuring that sound financial management policies and structures are in place.”

Various policies and strategies have been implemented through the work of the department’s units, activities and programmes to achieve this.

As one of the department’s key performance areas, the Sustainable Employment Facilitation (SEF) directorate aims to decrease youth unemployment by providing skills development training programmes for youth with various skill levels. To facilitate these programmes, the department has entered into partnerships with private and public companies, other government departments, and educational institutions.

The SEF directorate states that the skills development training programmes subunit aims to:

  • Obtain internal and external funding sources
  • Have precise training records and constantly check training progress
  • Make sure that they look for the appropriate training providers
  • Track the city’s training interventions and compile annual reports from the COO’s office training and development forum
  • Have a database registration for opportunity seekers that can connect unemployed individuals to public and private companies

Wits Vuvuzela tried contacting the department of economic development to access the data on the progress of the policies mentioned above but did not receive a response by the time of publication.

In an attempt to keep up with the rapidly growing digital economy, the city has partnered with organisations such as WeThinkCode and MTN to offer various digital literacy and e-learning programmes designed to train the youth in digital skills.

Since its establishment in 2015, WeThinkCode has had 500 graduates, with 93 % of whom have found full-time employment. MTN on the other hand, has enrolled 900 unemployed youth throughout the country into its “Digital Skills for Digital Jobs” programme.

“Our ‘Digital Skills for Digital Jobs’ programme will enhance the link between digital skills training and demand for jobs”, says Nompilo Morafo, who is the Chief Sustainability and Corporate Affairs Officer at MTN.

Given its growing penetration into the city’s economic activity, measuring the digital economy has become an essential process, which is unfortunately flawed considering the lack of available data sets. There is not a lot of data on the country’s digital economy (let alone of Johannesburg) and the little that is available is not of the best quality. The city’s directorates acknowledge the growth of the digital economy but the exact size is not clearly outlined.

However, considering the evident gap in the digital sector and the pace at which digital skills training programmes are being facilitated, it is clear that more partnerships need to be formed as the government cannot tackle the 60% youth unemployment rate on its own.

Homelessness a hot potato for the city and NGOs

Various city departments and non-profit organizations in Johannesburg have become entangled in a cycle of shifting responsibility and pointing fingers at each other when issues of homelessness are brought up.

“All that glitters is not gold” is a well known aphorism that conveys the idea that appearances can be deceiving, thus some things are too good to be true. The city of Johannesburg, often dubbed the City of Gold, serves as a vivid illustration of this saying as it grapples with significant disparities stemming from political instability, macro-economic challenges, and persistent social problems.

A typical morning in the bustling streets of Johannesburg is characterised by the noise of car horns, as frustrated taxi drivers weave through traffic, disrupting the flow of traffic. For those who call the pavements on either side of the road home, this commotion is their unwelcome alarm, while the early risers are already up, sifting through garbage bins in search of food or items to exchange for a few coins at recycling centres. This is the daily reality of a homeless person in the city, however, it becomes even more daunting during winter or rainy days.

For some shelters provided refuge, only three government shelters are operational in Joburg. Three Kotze Street Shelter in Braamfontein is the largest, accommodating 350 males and females, followed by the 1 Dan Street shelter which has a bed capacity of 60 for males only and lastly, 21 Windsor West which has a bed capacity for 40 males only.

Despite this, homelessness receives little to no attention in annual budgets and planning, census data cannot even accurately capture the number of people on the streets in the municipality. Consequently, careless estimations have been made, such as when Homeless Solutions, a non-profit organisation based in Pretoria said that there were a combined 600 000 homeless people in Joburg and Tshwane. Africa Check denounced this claim after finding out that it was based on opinion rather than evidence.

Moreover, the municipality releases an Integrated Annual Report where overall city governance such as management, service delivery, financial performance and more are covered. This report also did not have any programmes or funding outlined for displaced persons. Instead, homelessness was identified as a hinderance to the public sector housing plan.

In April 2020, Gauteng premier, Panyaza Lesufi said that Johannesburg had 15 000 homeless people while Tshwane had 10 000. Yet, in a recent interview with News24 the CEO of Johannesburg Homeless Network, Mary Gillet-de Klerk said the number is currently more than 20 000 in Johannesburg.

Evidence shows that the municipality has made no financial investments in statistical research which could help to determine the accurate number of displaced persons. The director of research of the Gauteng Department of Social Development, Sello Mokoena confirmed that there are currently no plans to invest in such research. Therefore, speculations will persist.

On the contrary, the City of Cape Town (CPT) conducted an extensive study which not only found an approximate number but also the racial make-up and health status of its homeless population. This type of research required collaboration between various departments and NGOs and ultimately assisted the local government to plan for this vulnerable group’s basic needs.

The departments of Social Development, Financial Development, Human Settlements, Public Safety and Transportation are some of the city’s key drivers of social change. But when questions about shelters, budgets and healthcare for the homeless are raised, the finger pointing begins.

The Johannesburg Department of Social Development (DSD) defines homelessness as “displaced persons who live on the streets, under bridges or open spaces and are unable to provide themselves with shelter at any given time or place.”

The above definition proves that housing is a huge problem, however, Shiraaz Lorgat who oversees social housing funds under Human Settlements said they do not “play in the homelessness space” as they only fund affordable rental projects.

When enquiring about the inadequate health facilities and services provided for homeless people, the deputy director of the District Health Services Dorothy Diale, told Wits Vuvuzela that homeless people are attended by “social development,” but did not comment on the health department’s mandate on displaced persons.

Ultimately, the department of social development acknowledged that they are accountable for the homeless population, but clearly indicated that against popular belief, their mandate is not to remove people from the streets but rather to create awareness and to work closely with those who are willing to be assisted. “Human Settlements is not doing what they should be doing, its mandate is to provide housing, our [social development] mandate is not to build,” said Kebonye Senna, the head of the Migration, Displaced, and Children’s Services Unit in the department.

The lack of accountability propelled the provincial government (Gauteng Department of Social Development) to rely on Non-Profit and Non-Governmental Organisations to care for homeless beneficiaries, and allocated R87 million to the NPOs in 2022 and in 2023. Budgetary constraints saw the same allocation two years running.

Nonetheless, during the state of the province address on February 20, 2023, Lesufi announced that R2 billion was allocated to NGOs without specifying whether this was in addition to the R87 million. In response to this, Senna expressed her dissatisfaction and lack of trust for NPOs, noting that the government is wasting money by funding them. She further referenced an article published on November 6, 2023, about corrupt NPOs using resources provided for the poor for their personal benefits. “The money given to NGOs is meant to assist shelters. R 289 000 should be given to 3 Kotze Shelter per month and R 55 000 to 21 Windsor West, but theres only R 20 000 provided for both shelters.”

The 2022 social development policy document on homelessness has an alphabetical list (A-Z) of objectives. Three specific goals stand out. The first states that the department should “institute regular research (every two years) to establish the nature and extent of homelessness in the city”. The second states that the department should “facilitate access to housing through advocacy programmes for the homeless,” and the third that there should be a “special allocation of a percentage of houses to rehabilitated homeless people”. These objectives have not been realised and there are currently no plans in place to pursue them.

The slogan for the Johannesburg Health Department is, “one city, one health system” thus the assumption is that displaced people are included in healthcare services, especially because they are more prone to contagious, respiratory and cardiovascular diseases.

The city has 40 public clinics and hospitals, however, according to a report by the National Institute of Health, homeless patients face discrimination, marginalization and stigma when accessing public hospitals. Moreover, there are no programmes in the department of health tailored to the needs of displaced persons, particularly if they are immigrants or do not have identification documents. For example, the latest HIV counselling and testing policy, dates to December 2003 but does not make mention of homeless people.

Twenty three yearold Sandile Letsoele told Wits Vuvuzela that he does not go to public hospitals because the nurses look down on him and other homeless people. “They’ll just look at you and tell you to stand very far, so we normally wait the whole day before we get help,” said Letsoele.

In partnership with the Holy Trinity Church in Braamfontein, University of the Witwatersrand (Wits) students established the only clinic for homeless people in South Africa in 2004.

However, the leader of the church, Father Bruce Botha told Wits Vuvuzela that the clinic has not been operating since covid-19 due to “institutional problems” which he did not wish to elaborate on. The Health Sciences Faculty at Wits did not respond to queries around this either. “When it does run, it provides basic health screening, medical consultation, providing free prescription medication, wound dressing and HIV screening,” said Botha.

The issue of stigmatization goes beyond health care facilities, it is also seen in local communities.  Senna said that social development looks for hotspots before establishing a shelter, “We tried in Lenasia but there were issues of security, people don’t understand homelessness- they associate it with criminal activities.” She added that they are currently building another shelter in Freedom Park which will accommodate both males and females.

Displaced persons sometimes complain about the accessibility and treatment in NGOs and shelters.  Thirty year old Nicholas Mncube, from Zimbabwe said he went to 3 Kotze shelter in Braamfontein, but they refused to take him in without a social worker. “I really don’t know why they wanted me to bring a social worker, but now I’m staying at MES [an NGO for the homeless] which is also here in Braam.” Mncube said staying at MES costs R30 per night which he cannot afford regularly, he can only go on days he has raised enough money from begging.

Apart from this, the homeless also try to forge their own homes, be it on the streets or by occupying abandoned buildings. Mncube who left Zimbabwe at the age of 23 said he lived and slept next to Joburg Theatre but was chased away by the police before going to MES.

Letsoele, who ended up on the streets due to drugs said he stayed at 3 Kotze but they kicked him out before his due time, “I was attending my sessions and recovering but they kicked me out during the weekend when my social worker was not there so I couldn’t even speak to him.” Contrary to this Senna said, the beneficiaries go through a three to six months programme which includes assessments and rehabilitation, and only released once their social worker believes they are ready for the outside world.

Councillor of Braamfontein, Sihle Nguse told Wits Vuvuzela that the homeless affect all sectors “everybody must play a role to assist the homeless, they are such smart guys they deserve a second chance at life”. He added that Braamfontein has approximately 500 displaced people.

Although the health and social development departments are jointly responsible for the city’s homeless pupulation, it is crucial to note the African phrase, “It takes a village to raise a child.” This implies that the upbringing and development of a child are not solely the responsibility of their parents or immediate family. Instead, it suggests that a community, including extended family, neighbours, and friends, play a crucial role in nurturing, guiding, and supporting a child as they grow and learn-this same analogy could be used in the case of homeless persons.

Alexandra: A microcosm of the Joburg’s housing crisis

Corruption, inequality, mismanagement, and most importantly, the rapid growth of informal settlements—are all testament to the city’s flawed housing system.

On the fateful morning of August 31, 2023 the City of Johannesburg was jolted awake by a harrowing inferno that engulfed a building at 80 Albert Street, claiming the lives of nearly 80 people. This tragic incident spotlighted the alarming reality of numerous hijacked buildings scattered across Johannesburg. These buildings often house the poorest of the poor and are typically overcrowded, unregulated and unsafe.

Though much of the discourse centred on hijacked buildings, it illuminated a more pressing concern – Johannesburg’s staggering housing backlog. Currently, the city faces a backlog of roughly 400 000 homes. With the current rate of delivering sitting at approximately 3 500 housing units per year, it would take the city 100 000 years to address the backlog.

While these figures are staggering, they barely scratch the surface of the problem. In 2022, former member of the mayoral committee (MMC) for human settlements, Mlungisi Mabaso, revealed that the backlog exceeded half a million when factoring in informal settlements and hostels.


Four facts about the housing backlog in Johannesburg. Graphic: Terri-Ann Brouwers

Although South Africa’s Constitution guarantees the right to access adequate housing for all, prioritising, “those living in extreme conditions of poverty, homelessness or intolerable housing,” the country’s social housing system remains deeply flawed.

In a nation grappling with a staggering 32.6% unemployment rate,  and where 18.3 million South Africans between the ages of 18-59 are living below the food poverty line, the social housing system mandates households to have a minimum income of R1 500 in order to qualify.

According to Stat SA’s General Household Survey (GHS) South Africa faces a severe dependence on social grants, with social grants constituting the second most significant source of income for households, accounting for 50.2%. Additionally, 20% of households suffer from food insecurity. These statistics raise a critical question: If millions of South Africans rely on social grants and live below the food poverty line, where are they expected to find the means to participate in social housing programmes?

When faced with a housing backlog of this magnitude, people are compelled to take matters into their own hands. This is precisely what numerous South Africans have done at various informal settlements across the city. Therefore, it is conceivable that the housing backlog is intricately connected to the emergence and rapid increase of informal settlements.

While the city lacks a formal definition for informal settlements, they operate under the following working definition: “An impoverished group of households who have illegally or without authority taken occupation of a parcel of land (with the land owned by the Council in the majority of cases) and who have created a shanty town of impoverished illegal residential structures built mostly from scrap material without provision made for essential services and which may or may not have a layout that is more or less formal in nature.”

In 2010, the city reported 180 informal settlements scattered throughout its various regions. Fast forward to 2023, and that number has surged to approximately 320 informal settlements citywide. This raises the question: What is being done to address the situation of those residing in these informal settlements?


The increase in informal settlements in Johannesburg over a 13 year period. Graphic: Terri-Ann Brouwers

Alexandra, Alex, Gomora

Situated across from Sandton, the wealthiest square mile in Africa, and separated only by the M1 freeway, lies the township of Alexandra also nicknamed Alex or Gomora. Upon observing this area, one is struck by the makeshift structures, known as shacks, and even more astonished by the high population density. Hundreds of thousands of people have been residing in this informal settlement for many years. They have turned to this option while waiting to be provided housing by the City of Johannesburg, with some having been on the waiting list for nearly 50 years.

Ward councillor Floyd Ngwenya represents ward 107 in Alexandra and states that the settlement is hugely overpopulated. “When we look at the books Alex was supposed to have at least 60 000 thousand people staying in Alex, but we are [almost] a million now,” said Ngwenya. It is estimated that Alex currently has roughly 700 000 residents. Alexandra is clearly in urgent need of social housing, but not much has been done to address this issue.

Mabaso told Wits Vuvuzela that, “The backlog in fact started in 1996, in fact prior to 1996 because there are people with B forms that have [still] not been allocated [homes].”

When questioned about when he applied for social housing, Modise Christopher Bosielo (55) an Alex resident and father of three said, “I don’t remember [exactly] when, but it’s about twenty years.”

To add insult to injury, Boiselo and his wife are both unemployed and, and in his words, ‘”struggling to make ends meet”. However, he is aware that besides the housing backlog, he and his wife do not qualify for the existing social housing programmes due to not meeting the financial requirements.

While residents wait to be formally housed, their current living conditions are deplorable.

“Living conditions, I can describe it as the most challenging and I think for obvious reasons,” says Mabaso. He continues “They do not have proper houses; they are living in temporal structures that get affected in whatever condition of the weather. If it’s heavy raining it gets flooded and if it’s too hot, then you can’t stay inside. Above that there are no proper basic services that are provided. I mean all the services, the provision is on [a] temporal basis, the electrification, water, you know there is not proper sanitation.”

A Missed Opportunity – Alexandra Renewal Project

Despite the grim situation, policies and programmes have been implemented over the years to address housing issues in Alexandra. One of the programmes implemented was the Alexandra Renewal Project (ARP). The ARP, initiated by the national government in 2001, and received a budget of R1.3 billion. Its purpose was to enhance the “physical, social, and economic environment of Alexandra.” A key goal was to augment housing and reduce population density in the area. The question is whether it has delivered on its intended promise, and the answer is no.

This resulted in what was termed the #TotalShutDownofAlex protests in August and July 2019. Residents of Alexandra mobilized in protest against the lack of service delivery in their community, specifically emphasizing the acute housing shortage. Subsequently, a collaborative investigation conducted by the South African Human Rights Commission (SAHRC) and the Public Protector was undertaken to address the myriad issues raised by the protestors. A pivotal aspect of this investigation focused on scrutinizing the management of funds allocated to the ARP.

The investigative team gathered submissions from numerous Alexandra residents. Many of them contended that the total funds allocated for housing under ARP were unaccounted for by the relevant government authorities. Residents of Alexandra further asserted that despite substantial spending under ARP, the housing outcomes in their area were disproportionately inadequate.

A submission presented by the Auditor-General of South Africa (AGSA) to the investigation team underscored the numerous gaps during the audit of the ARP. The AGSA noted inadequate project planning and a lack of proper documentation for project assessment. Moreover, the individual projects within the ARP were not efficiently executed and supervised. Due to a lack of documentation submitted by ARP, AGSA could also not verify if the funds allocated to the ARP were exclusively used for the project.  

Further submissions were made by the Group Forensic Investigation Services of the city of Johannesburg and they highlighted the following:

(a) Evidence of criminality, conflicts of interest on the part of certain service providers

(b) That the ARP management was marked by procurement fraud, post facto approvals, irregular awards, advance payments, unauthorised expenditure, fruitless and wasteful expenditure of up to R40 million;

(c) Projects not optimally managed thereby leading to poor work quality, late delivery of projects, project overruns;

(d) Tender and contractual disputes where contractors defaulted, filed for insolvency, contract terminated and court challenges, etc.

A Sector Vulnerable to Corruption

Wits Vuvuzela spoke to Marie Huchzermeyer who is an associate professor at the Wits School of Architecture and Planning and has done extensive research on informal settlements within the City of Johannesburg. Huchzermeyer says, “In the housing sector there’s long been a discussion about the RDP housing system not being fair and not being a good way of government spending its money, although it must also be recognised that at least the government is doing something, it does have a housing programme, it is rolling and it is allocating budget to it, but because it’s allocating such a lot of budget to housing, housing is also the most vulnerable to corruption.”

She also says that detecting corruption in this sector is challenging. “There are so many housing projects that are incomplete, where contractors have disappeared, and whether its corruption or whether its poor project management, budgets not being properly planned for and allocated, the capacity to actually deliver housing seems to be very fragile at the moment,” says Huchzermeyer.

The level of corruption is not lost on the residents of Alex and other informal settlements. “They know that the allocation processes are so fraud that when a housing project gets built politicians somehow interfere in the allocation of units and the people that were supposed to benefit from them don’t,” says Huchzermeyer.

“With corruption, it’s a reality, we cannot run away from it, and I think that’s the conundrum that the sector is facing,” says former human settlement MMC Mabaso.

He continues “I can tell you; you have a cartel in the construction [industry] that is operating, taking charge of the budget, and not delivering the good and the quality work that is expected. So, people are interested in the sector because you know you get rich quicker when you are a developer and that’s where their area of interest is actually at.” He says that it is the main challenge that is hindering the performance of the department.

While there appears to be significant mismanagement in the city’s housing sector, specifically Alex, the key question is what actions the city is taking to address this issue and whether those actions are enough.

Speaking on actions taken by the city Councillor Floyd told Wits Vuvuzela: “Currently the city of Johannesburg has implemented a project called UISP which is [the] Upgrading of Informal Settlement Programmes. That programme aims to identify informal settlements around Johannesburg and try and formalise those settlements within the spaces they are currently in. My ward with the informal settlements that we have, we have consultation meetings with residents of those informal settlements to say [ask] what is the best way you [the residents] think the government can assist you.”

A graphic detailing what a UISP is and the four phases of a UISP. Graphic: Terri-Ann Brouwers

Mabaso’s sentiments are that the city has not done enough. “The city has not done enough to address the housing backlog and the informal settlements; we have not done enough,” he says.

Mabaso says while grants are in place to address informal settlements they are not being used correctly. “If you look at the performance of the city now, I can tell you they are not spending the grants [on] the programmes they should be spending them [on].”

He also highlights the alarming fact that construction has not commenced on recent housing projects that were implemented. He explains that this is due to the city’s capital budget being allocated to projects that were started years ago.

“There are no construction of houses in the mega project that we are currently implementing so, every expenditure that is on our capital budget now is for the work that started [a] long time ago, so there are no new developments that are taking place. I know there is one that will be launched that we started three years ago, so the city has not really done enough.”

Over the years, various policies and programs have been implemented, whether they have been successful or not, to address the city’s housing needs. Changes have certainly taken place; however, Huchzermeyer says, “What hasn’t changed is the need for people to resort to informal settlements.”

FEATURED IMAGE: Seated on a bench, three friends gaze out over the landscape they call home—Alexandra. Photo: Terri-Ann Brouwers


R10 billion spent on entrepreneurs since 2017, but little to show for it

The City of Johannesburg invested billions in business incubators, policy changes and partnerships with the private sector to boost entrepreneurship as a solution to unemployment, but these efforts have been considered “inadequate” on a global scale.

The Roodepoort Civic Centre has a hidden entrance behind the glitz and glamour of the Roodepoort Theatre. It is here, just inside a small, gated door, where hopeful entrepreneurs can find the unassuming sign that reads, “Isiqalo Opportunity Centre.” 

A short trip to the fourth floor of the building and down a long corridor reveals a medium sized room, clean and tidy but especially quiet. The only sound the tapping of keys as two women work at administrative desks and one client, a man, uses one of the dozen available computers which neatly line the bottom left corner of the space to browse Facebook. According to the freely available brochure, this is the City of Johannesburg’s “concrete solution” to unemployment, stunted economic growth and informal trading.

Johannesburg has a rising unemployment rate of 26,5% according to the Cooperative Governance and Traditional Affairs profile on Johannesburg and a provincial youth unemployment rate of 63,9% according to a 2023 media release from the Gauteng office of the premier. The latest Global Entrepreneurial Monitoring Report (GEM), a 25 yearlong project which maps entrepreneurial ecosystems globally through direct interviews with entrepreneurs in over 50 countries, states that it is a lack of employment which drives 90% of entrepreneurs in South Africa to start their own business. 

Johannesburg is home to around a third of South Africa’s small, medium and micro enterprises (SMME’s) according to a 2022 study on Investigating SMMEs strategic planning techniques in Johannesburg central business district post-COVID-19 lockdown, and this number is growing. The City of Joburg’s definition of an SMME includes not only formal entrepreneurs but also informal traders, this is according to the Small Enterprise Development Agency’s research note on the South African SMME sector.

A market for women entrepreneurs was held in Johannesburg on May 7, 2023 at
Constitution Hill. Photo: File

The Department of Economic Development (DED) is responsible for entrepreneurship in formal and informal sectors, which they refer to “the backbone of any economy” on their website. The department’s mandate promises to, “Support the city towards achieving a 5% economic growth rate and to bringing down unemployment by 2021.” This includes promoting SMMEs, informal traders and streamlining regulation.

However, the department is yet to achieve the economic growth target in the City of Johannesburg, only seeing 0,79% growth in 2018, while the unemployment rate continues to grow, as jobs cannot be created fast enough for a growing population. In addition, the support laid out by the city for entrepreneurs and informal traders is regarded as inadequate by the GEM, who lists South Africa as the worst of over 50 participating countries in entrepreneurial framework conditions. 

This means that South Africa, and Johannesburg in particular, has no adequate framework conditions. These conditions include financing, policy, taxes and bureaucracy, city programmes, school-level entrepreneurship education and training. In addition, despite the department spending R10 billion in the last seven years towards these aims, they have consistently underspent their budget allocated by the city treasury, according to their annual and quarterly reports.

In the “Young Entrepreneurship Policy and Strategy Framework,” the vision is to make Johannesburg “the leading city in entrepreneurial development in the developing world by 2025” through removing barriers of poverty and unemployment. The policy was drawn up in 2009.

According to Leah Knott, Johannesburg Ward councillor and MMC for Economic Development between 2016- and 019, the Johannesburg policy on entrepreneurship has not been amended since. Knott said that this document is outdated, “we should be renewing policy every five years. But it takes 18 months to two years to be approved by council and this can’t happen when the Johannesburg government changes every five minutes.” Referring to the frequent changing of hands in the city’s coalition government, Knott added that, “when government changes, policies in the process go back to the beginning.”

In an effort to support entrepreneurs in Johannesburg, the DED launched ten opportunity centres throughout the city. Knott, who held the role of MMC during the rollout of the centres, said: “The majority of small businesses fail in their first three years, and so the centres give a leg up to entrepreneurs and give them the necessary tools to succeed, like how not to eat profits before seeing a return.”  The opportunity centres serve as entry points to local communities to access guidance and cut the red tape of bureaucracy when starting a business or growing an informal business into a sustainable, formal business.

This project began with the transformation and expansion of what used to be “business centres” according to Knott, who managed small advisory desks in regions E and A, Diepsloot and Alaxendra. The opportunity centres were created in collaboration with various Johannesburg-based communities, who said they did not visit the centres previously because they could not access them due to their placement. The department has since opened 10 opportunity centres in Diepsloot, Montclare, Florida Park, Soweto, the Johannesburg CBD, Alexandra, Braamfontein, the Joburg Market, Elderado Park and a mobile centre which travels to remote areas. The latest annual report from the department said that the rollout is only partly complete, with a goal to open 14 centres.

The DED’s website states that “the purpose of the opportunity centres is to create an environment where entrepreneurs and small businesses can thrive”. Knott said that the centres provide help and advice on finances as well as tax returns, accounting and registration with the CIPC. Workers at these centres are not required to have any entrepreneurial experience themselves, according to the department’s job description.

They do not provide funding to clients, but they do assist with access to funding, mostly through the Gauteng Enterprise Propeller. According to assistant key accounts manager, Nomonde Zulu, access to funding can be secured by applying on the propellers website or by visiting one of their offices.

Including training, events and workshops, the centres have supported 14,294 entrepreneurs in the last financial year. This means that less than five entrepreneurs visit a centre per day. The department acknowledged this low number in their latest report and said it would be able to make more of an impact and reach more clients if they were granted a locomotive allowance. This request has been put forward in the past two financial years and denied due to no budget being available. The department is set to resubmit the request in the next financial year. 

Contrary to the statement provided, the financial performance of the department, which is listed in the same quarterly report, states that the department was granted an advertising budget of R1,084,000 for the last financial year but spent only R257,000 of it.

The complicated issue of informal trading 

Twenty one percent of the Johannesburg workforce is in what the DED refers to as a “thriving, vibrant informal sector”. MMC of the department in 2021 Lawrence Khoza said in his speech for the opening of the Joburg Market Opportunity Centre that the centres provide informal traders with, “non-financial assistance on how to formalise their businesses.” The policy on informal trading in Johannesburg boasts that the city supports informal traders in a way that is more progressive than others, “it looks good on paper,” said Doctor Mamokete Modiba, a senior researcher at the Gauteng City Region Observatory. 

“But there is a translation issue when it comes to practice,” she continued. The city has goals such as the “sharing of public space” and “the regulation of competition” as well as “enabling access to entrepreneurial activities.” In this regard, the opportunity centres exist to take members of the informal economy into the formal economy and provide advice on business growth so they might expand to create jobs and benefit the macro-economy. “On one hand this is effective because it gives resources and training to people with a specific focus on disadvantaged groups and disadvantaged areas,” said Modiba. 

“On the other hand, informal trade is not regarded as a real business by the City of Joburg, it is regarded as something they want to make into something else.” Modiba continued to say that not all informal traders have the ambition to become successful businesses. Some are simply survivalists who want to make enough money to keep bread on the table, and they need a different kind of support from the city. 

Sakhile Pehana is an informal fruit trader, who sells his fruit to passing cars at this
Linden intersection

Modiba suggested adequate services and infrastructure as an intervention strategy for the informal sector, “some traders have no shelter and then when it rains, they lose money because they can’t do their job. Others waste time looking for ablution facilities.” Louis Botha, a Parkview based entrepreneur, said that his main problem with running a business in Johannesburg is electricity. In running his mobile coffee business, Perfect Cup, he said, “I think our main challenge is power. With the loadshedding, at markets in particular, we constantly have to keep an eye on the Eskom schedules.”

The DED had budgeted R3,9 million towards the goal of allocating appropriate areas for informal traders in Joburg, but by the end of the 2022/2023 financial year, no areas were allocated and only R212,000 was spent towards informal trading.

In addition, the city emphasizes training for informal traders to improve their skillset through opportunity centres, however, Modiba states, this training can be inappropriate, “some people in the informal sector do not have an education, others are engineers, for example, who cannot find employment elsewhere. You cannot train someone on writing skills if they already have a degree in engineering.” 

The question of why the DED did not utilize the advertising budget allocated to them and the reasons behind the underspending as well as the failure of the informal trading project were brought to the department, but Wits Vuvuzela received no reply by the time of publishing. 

Entrepreneurs in Gauteng Race, sex and education

Other Johannesburg initiatives: Public-private partnerships

The Johannesburg opportunity centres perform an advisory role, however, a 2022 study by Bantu Majaja and Jabulile Msimango-Galawe on mapping the needs and challenges of SME’s in Johannesburg found through interviews with 1,099 entrepreneurs that the main challenges facing entrepreneurs in Johannesburg is the city’s spatial divide, access to suppliers and access to equipment. These are beyond the resources and capabilities of the opportunity centres, however, national and provincial government attempt to bridge these gaps by partnering with private sector companies and NGO’s in Joburg. 

Moses Mogotlane, manager of the Transnet Matlafatšo centre told Wits Vuvuzela that this centre, based at the University of the Witwatersrand, was started with access to equipment in mind.

This centre consists of two halves, the ideation space and the innovation space. The ideation space follows the same model as the opportunity centres of non-financial support. The innovation space, on the other hand, gives entrepreneurs access to equipment such as 3D printers, computers, software and woodwork machines. “All of this equipment has been made as simple as possible,” according to Mogotlane, who said that, “if you can use a computer, you can use the technology here.” 

The centre was built in partnership with the South African government owned enterprise, Transnet, who sponsored the operations until 2020. It became a popular innovative space for local entrepreneurs, “anytime you visited the centre, there were always people in the space, creating or thinking of ideas”, Said Mogotlane. 

In 2020, however, the contract between Transnet and the University of the Witwatersrand expired and was not renewed by Transnet. Since then, the centre has become absorbed into the Wits Innovation Centre and serves only the Wits community. The number of visitors to the centre has since been on the decline and in the month of September 2023, only 72 people visited the centre at all. 

In addition to this gap in support with regards to equipment, research by the Gauteng City Region Observatory found that historical inequalities continue to persist in the world of entrepreneurship in Johannesburg. In 2021, the percentage of entrepreneurs who are white increased from 10% in 2015 to 20% while the percentage of entrepreneurs who are African increased only from 7% to 15%. This is a trend which applies to gender and education as well.

In response to this, youth employment accelerator Harambee has turned their focus specifically onto young, African women in Johannesburg with lower levels of education in the hopes of bridging this historical divide. “We refer to it as make your own money” says Xolile Sepuru, programme manager at Harambee. 

According to Seperu, this programme consists of social media interaction to stimulate entrepreneurship, looking at a platform-based approach for young entrepreneurs as well as policy, incentives and licensing, “the goal is to remove the barriers to young people starting businesses,” said Seperu. The organization is supported through the Gauteng government. “I think the City of Joburg is doing a lot. They’re doing well in trying to bridge the gap and help entrepreneurs. What we need is for more private organizations to step in” he continued. 

FEATURED IMAGE: The Khoebo Opportunity Centre, based in Braamfontein, is temporarily located at the department of economic development’s building due to disrepair at their previous location. Photo: Kimberley Kersten


Witsies dirty their hands for a cleaner Johannesburg

Wits DASO along with Witsies and community members came together to partake in the first clean-up in Braamfontein

Witsies, members of Wits Democratic Alliance Student Organisation (DASO), the City of Johannesburg and community members got down and dirty to clean up the streets of Braamfontein for the #AReSebesteng clean-up campaign on Saturday, September 30. 

 Volunteers and members of Johannesburg Metro Police cleaned outside Noswall Hall and around Bertha Street, picking up even the smallest items, like cigarette butts, and pulling out weeds.

First-year BA general student, Neo Makobo, who passed by during the clean-up said, “Braam is dirty and we want cleanliness, I think this concept should be encouraged broadly.” She was not aware that the clean-up was taking place around Braamfontein on Saturday, but seeing the volunteers encouraged her to join next time.

Chahracan Amod, Councillor of Ward 60 in Johannesburg, said that the volunteer campaign “strives to encourage residents to take care of the environment by promoting a culture of reducing, re-using and recycling of waste to ensure that Johannesburg becomes one of the cleanest cities in Africa”.

He added that by taking part in this initiative, Johannesburg residents can connect with one another while creating a space that they can be proud of. “Cleanliness is not next to godliness, cleanliness is godliness, and we need to encourage especially young people to take back the city collectively,” he said.

The monthly campaign was launched by Johannesburg Mayor Herman Mashaba last month. A Re Sebetseng, which means “let’s work”, is based on the African Clean Cities initiative established in Maputo, Mozambique, in April 2017.

Economic growth and increasing populations mean African cities are facing growing waste issues, one of the initiative’s partner organisations, the Japan International Cooperation Agency, said in a press statement. The African Clean Cities initiative aims to provide support in solving waste issues so that cities are able to achieve healthy living conditions and grow in an environmentally sustainable way, it added.

South Africa is not part of the 24 African signatories to the initiative.

Mashaba noted that he was also inspired by how clean Rwanda is and he said that country’s initiatives had influenced the A Re Sebetseng campaign. “I am a strong supporter of a model that promotes the city’s residents as the agents of change,” he wrote in the Daily Maverick.

Floyd Nyalungu, campaign manager for Daso Wits, encouraged more students to join the campaign to ensure a cleaner Johanneburg. “It’s an open invitation and everybody, not only Daso members should join,” he said.

The next clean-up will take place on Saturday, October 28, and the last Saturday of every month after that.


Wits Vuvuzela,  April 2016, Who’s going to Pikitup?

Wits Vuvuzela, August 2017, Johannesburg mayor Herman Mashaba heckled at DASO business indaba