Somali businesses are well known for an unusual pace when it comes to their business growth and development. Many wonder what their secret is to this growth and even though this community believes that they have none, they are still willing to expand and share their business skills with the rest of the small business community.
“Andazikubabenzanjani, velenjee bona bayaphumelela,” [I don’t know how they do it, but they are very successful”], said Lindelwa Mdanyana “ngingajabulaukwazi pho,” [“I’d love to know, hey”] as she changed seats outside her two-room house, running away from the sun while waiting for her midday customers to come and quench their thirst.
Mdanyana, 40, is a South African businesswoman who is the co-owner of ispoti (an illegal tavern) situated in an informal settlement called Ellias Motsoaledi behind Chris Hani Baragwanath Hospital in Soweto.She once owned a spaza shop but said the establishment of Somali businesses in the area killed her shop.
With bigger versions of a typical South African spaza shop but smaller versions of a supermarket, Somali “cash and carry” businesses in South Africa are growing. In all parts of the country, Somali shops are popular for offering goods and services at cheaper rates than most South African shops.
Welcome to Little Mogadishu
Eighth Street in Mayfair, popularly known as “Little Mogadishu”, in the west of Johannesburg, is no different.
From travel agents to barbershops, from cash and carry to clothing shops, success is assured. In 8th Street, where Somali nationals seem to dominate, many of them have flourished as entrepreneurs. Even though their businesses provide similar goods and services, this is considered less of a competition or threat but rather a benefit.
When Mdanyana followed her boyfriend to Johannesburg from the Eastern Cape in 1992, she struggled to find employment in Gauteng. And when she got married in 1994, Mdanyana said that she agreed to stay home and start her business.
When they started their business it was a normal spaza shop where she sold essential household goods. Instead of selling full packets of teabags, she would sell a single teabag for 15 cents, candle lights, paraffin, half a loaf of bread and many other items typically found in a spaza shop. Mdanyana believed she was doing well until 2010 when her business started failing.
Mdanyana described this phase and associates it with “ukufikakwamaKula [the arrival of foreign nationals]” who became her toughest competitors.
She said her competitors’ goods and services were very cheap, so she understood why she started losing customers.
“Bona ilitre ye paraffin yayi yiR4, njeba kum iyi R6,” [“Their litre of paraffin was R4, while I sold it for R6”], she said.
Mdanyana said she needed something that could sell fast, and in this case it was cold drink and beer. However, even though there’s less competition in the ispoti business environment, it is highly regulated as there are serious consequences for those who sell alcohol without a liquor licence.
“Amapoyisa mawefika ungena license, ngelinye iskhathi avele abuchithe, amanye amke nawo athi awusa ePolice stations,” added Mdanyana “ingaske kum njee, babuchithe.”[“If the police arrive and you don’t have a licence, they either pour the alcohol on the floor or some of them leave with it, and say they are taking it to the police station” Mdanyana said. “I’d rather have them pour it on the floor, hey.”
‘No secrets hidden in Somali traders’
According to Abidririzak Ali Osman, general secretary of the Somali Community Board South Africa and a member of the Township Business Association South Africa (TBASA), there are “no secrets hidden in Somali traders”. But “their perseverance and persistence is what distinguishes them from other nationals”, including South Africans.
“They have to work hard beyond the limit of their capabilities,” said Osman, “because of their responsibilities.”
In a blog article by Neil Pate, an American business analytics expert, he shares his lived experiences where he goes beyond what is identified by Osman.
Firstly, he said, “immigrants stick together”. Sharing his experiences as an immigrant child who arrived in the United States of America when he was only seven years old, he said:
“One thing that I never forgot is that when my parents immigrated here, other immigrants helped them out.
“From providing free temporary living accommodations to helping a fellow immigrant to find a job, establishing businesses, immigrants help each other succeed,” he added.
Secondly, Pate said, many immigrants who work in foreign countries understand the notion that “It’s easier to save money than it is to earn it”, hence they find ways to save and invest more.
“They are never afraid to ask for discounts, buy in bulk or even on sale.”
Research conducted by the African Centre for Migration & Society (ACMS) states that not many have explored why Somali businesses are prosperous and how they achieve growth at such a rapid pace. But many Somali business traders are willing to share their skills.
The story of Ebrahim Qaxwo
Ebrahim Muhammad Ali, a father of 17 children and owner of Ebrahim Qaxwo (qaxwo means “coffee” in Somali), a convenience shop in Mayfair, Johannesburg, is one of them.
Ebrahim and his brother come from a very poor family in Somalia and never got the opportunity to go to school. However, as soon as he was old enough, Ebrahim joined his older brother in the city of Kismaayo where they opened a panel beating business.
In 1992, during a civil war, the Ali brothers fled Somalia to Tanzania for safety. This did not stop them from opening a business in Tanzania, and within eight years their panel beating business was fully established. They continued to work there until the political climate shifted. Media reports at the time suggested that refugees from Somalia were being targeted as foreigners.
And Ebrahim said this is what forced him and his brother to move again.
Before coming to South Africa, he moved to Zambia where he stayed for two years, and worked hard to build up another business and bring his two wives and their children to Zambia. Finally, in 2000, accompanied by his brother and one of his sons, Ebrahim made his way to South Africa. He was given quarters in Mayfair and taken to get an asylum seeker’s permit.
According to Ebrahim, it took him and his brother four years to save up and open their panel beating workshop.
“One man gave me a welding machine, in exchange I fix his car,” he said.
At first, the Ali bothers worked on the pavement and from people’s backyards, but soon he linked up with two fellow Somali countrymen, an electrician and a mechanic, and they started a workshop. Working day and night, they built up a strong clientele among the Indian community in Fordsburg.
However, during the 2008 xenophobic attacks his panel beating workshop was destroyed and his brother was killed. This left Ebrahim with no choice but to start again from scratch and restructure.
Ebrahim said a panel beating shop was too expensive and “it was going to take time”.
“When I started selling coffee, I was selling from a flask,” he said.
Since then he has opened his coffee shop in Mayfair. His walls are decorated with a collection of items from Somalia that he said remind him “about home and keeps me going”. Within 15 years, 47 Somerset Street in Mayfair has developed from a panel beating shop to a coffee shop and now a convenience store that sells a variety of things, including homemade juice and fast food.
“I employ six people now, one at home and five here at the shop,” said Ebrahim.
In 2013, research conducted by the African Centre for Migration and Society in the Western Cape suggests that it is the business strategies that Somali traders employ and the effects that Somali trade has on a range of stakeholders. While Somali spaza shops compete with their South African counterparts, the report finds that Somali spaza shops also provide a range of benefits to local economies.
A report released in 2012 by the Migrating for Work Research Consortium (MiWORC), an organisation that examines migration and its impact on the South African labour market, found that “people born outside the country [South Africa] were far less likely than those born in South Africa to be employees, and far more likely to be own account workers [self-employed without employers] or employers”.
The research further states that 31% of these traders employ South Africans. This has enabled more job creation in the informal employment sector.
Economic development: The Township Business Association South Africa
In addition to employment benefits, research done by African Centre for Migration and Society in the Western Cape states that skills transfer is another way that Somali business owners contribute to the South African economy. And with the newly launched initiative of skills sharing programme and the establishment of Township Business Association South Africa, “more sustainable economic benefits are expected”.
Abasi Mkhize, a local businessman from Soweto and chairman of the Township Business Association, said the establishment of the association came “earlier in 2015 when mass looting was taking place in Soweto which spread to various parts of the country. There was a lot of communication and interaction between local businesses and foreign nationals.”
After numerous interactions, Mkhize said the association was then established with the aim of trying to change “the image and the face of a migrant trader in the township”. “In a manner which fosters cohesion with the broader community and society where our migrant trades in.”
There are also a number of developmental activities that are put in place to create a healthy competition with South African businesses.
“We have in place a programme to train any aspiring entrepreneurs to enhance their skills free of charge,” said Mkhize. “We even go as far as availing R50 000 start-up capital.”
The road to this has, however, not been smooth. Both the Somali Community Board South Africa and the Township Business Association have identified a few potential stumbling blocks that hinder the process of skills sharing and challenge the development going anywhere further with the idea.
“As the foreign component of this initiative we have managed to sit down together and realised that we are finding ourselves in the same boat,” said Osman, “but we pride ourselves to say we managed to create one voice for all foreign nationals operating in township spaces.”
According to Osman and Mkhize, it is now the local associations that seem to fall short when it comes to decision-making.
“They have their own issues which include the inability to work together or collaborate to establish a single body,” said Osman.
According to Osman, a memorandum of collaboration with the South African Spaza Shop and Township Association (SASSTA) has been put on hold after various organisations asked SASSTA who they were to sign on their behalf.
But chairperson of SASSTA Rose Nkosi has rejected the accusation that the organisation has any issues that are delaying the collaboration. She said she is waiting for a planned roadshow where she is going to propose the idea to her members and see if they agree.
‘South African business people do not need more help’
Nkosi said South African business people do not need more help in developing their skills. She said further training is not necessary.
“The skills training is not a problem but it’s already done by the University of Johannesburg,” said Nkosi. “Whoever comes and trains people now, it’s just his own thing where they are trying to get money from CETA.”
Although many Somali entrepreneurs such as Ebrahim have lost many things in their journey to seek refuge in South Africa, their future business plans are looking beyond that.
“I hope to grow my business, like franchise, like Mugg and Bean or something,” said Ebrahim “imagine Ebrahim Qaxwo everywhere in the world.
FEATURED IMAGE: OVER THE WINDOW: She sits from 5.30am until 10pm in the evening, hoping and praying that someone will come and buy one or two items. The street is buzzing with similar businesses to hers, but Madina Umar says the money she makes every day is enough. Photo: Anelisa Tuswa
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