Table of contents
ii
iii
iv
List of boxes
v
vi
Abbreviations
vii
viii
Executive Summary
1 Background and approach to the strategy
1
2
2 Sector-development dynamics (SECTION 5)
3
3 Enterprise development (SECTION 6)
4 Spatial development (SECTION 7)


4


5 Strategic LED projects (SECTION 8)
5
BOX 9.1
LED-strategy elements
A1
A2
A3
Basic facts and trends
Profile LED drivers and players
Spread the vision of a
transforming metro south-east
C
E
Local and provincial
forces and support
B
Khayaplain LED strategy and
its implementation process
* Airport proximity
* CoCT LED strategy
* CoCT project priorities
* CoCT department
strategies
* Provincial development
strategies
* Provincial project
resourcing
* Institutional options to increase
the implementation capacity
* Marketing Khayaplain
* Monitoring and evaluation of
progress
National forces and support
* LED incentives
* LED strategies
* LED programmes (incl. URP)
* Mega-projects
* Developmental initiatives
* Sharing LED expertise
KEY STRATEGY DIMENSIONS
D1
D2
D3
D4
Sector development
Enterprise development
Spatial development
Lead Projects
Opportunities and
challenges
Opportunities and
challenges
Opportunities and
challenges
Private, public and
PPP
6 Implementation challenges (SECTION 9)
6
7
SECTION 1
Introduction and background
1.1
The task and key role players
8
BOX 1.1
Lessons from URP pilot programmes
Critical factor
Lessons
1
Choice of centre
Initial pilot cases included only nine places, with Cape
Town the only city with two (adjoining) townships. The
URP approach of focused township LED strategising is
now spreading across the country, as part of the
national LED process.
2
Diversity of LED environments
Every township has a particular (unique) development
environment related to its history, spatial
characteristics, infrastructure development,
demographic dynamics and sectoral activity pattern.
Proper understanding of these dynamics is critical for
LED strategising.
3
LED as public-private partnership
Although the URP process has been governmentdriven, it is generally realised that successful LED
needs the proactive co-operation of all partners in all
spheres of development.
4
Diversity of developing sectors
Township businesses and local employment include
much more than just trade, craft production, township
tourism and urban agriculture – although these are
highly significant. LED strategising has to address all
relevant sectors and work towards a systematic
broadening of the local employment base.
5
Core projects to be locally decided
While much of the initial URP action focused on
township CBD developments, retail nodes, housing
and key infrastructure projects the selection of further
projects has to evolve out of intensive local planning
and consultation processes.
6
Need to secure the sustainability of
projects and initiatives
Attractive development projects (like small-business
incubators) are often only viable if subsidised on a
continuous basis, which calls for long-term
commitments of public entities. Thus, LED support
should not be seen as a “quick-fix solution”.
7
Communicating plans, projects and
progress
Effective communication of development needs, plans,
projects and programme outcomes is critical for the
wider mobilisation of local development.
8
Utilising and strengthening networks
Through the projects the co-operation between
development players/partners and local stakeholders
can and should be strengthened. This can lead to
increased overall development momentum.
9
Capacitating local actors
Key projects should help to capacitate local enterprises
and local development actors (e.g. through local
procurement and SMME involvement).
URP is linked to local LED-institution
building
The URP process (i.e. the channelling of centralgovernment funds) is just one part of the wider process
of LED implementation for which each city/township
has to develop and evolve a somewhat different
institutional structure.
10
9
MAP of Mitchell’s Plain and Khayelitsha
Nolungile
Mandalay
Nonkqubela
Lentegeur
Liberty Promenade
Mitchell’s Plain
Town Centre
Khayelitsha
CBD
Khayelitsha
Mitchell’s Plain
Kapteinsklip
Wolfgat Nature Reserve
10
1.2
Transformation of the townships



Growth and spread of the townships
11
BOX 1.2
Basic facts1 about Khayaplain
Indicator
2
Population 2010 estimate
Annual increase
Mitchell’s Plain
3
4
Households
Labour force
%
350 000
7 500
2,1
15 500
135 000
3
4
5
6
7
8
%
900 000
2,9
24 000
230 000
205 000
340 000
100
2,7
100
Formal employment
80 000
60
82 000
40
162 000
47
Informal engagement
34 000
25
85 000
42
119 000
35
7
21 000
15
38 000
18
59 000
18
Local business enterprises
8
(formal and informal)
18 000
Unemployed
2
TOTAL
5
145 000
100
1
%
550 000
85 000
6
Khayelitsha
32 000
50 000
This table does not reproduce official (national, provincial or local) data or estimates but constitutes rough
guestimates by the authors, taking into account diverse, often contradictory estimates. Section 1.5 explains
the data “dilemma” and challenge.
There are many other LED indicators, as shown in Box 1.4, with the few in this box the most critical ones for
an understanding of the proposed strategy.
Assumed for mid-2010. It is important to note that in contemporary media reports and position papers
estimates for Khayelitsha’s population range between 400 000 and a million. There are also reports
suggesting a higher population for Mitchell’s Plain than Khayelitsha. In this report the total population for
Khayaplain is seen to be “close to a million people” if all informal settlements and informal sublettings are
included.
Estimates about annual increases show even wider variations, in particular if foreign (“illegal”) refugees are
also included. Compared to the national population growth rate of about 1%, the 2,7% postulated for
Khayaplain is high, but may be realistic, also taking into account the outmigration of people moving from
Khayaplain to middle-class suburbs and older people returning to the Eastern Cape Province.
One would expect an average household size of more than four people for Khayelitsha. However, the close
link to Eastern Cape families and the high HIV factor suggest a lower household size.
The labour force includes all those “able, willing and interested to be employed”, covering both the
employed (formally and informally as well as self-employed) and the unemployed. The labour force is
usually about 36% to 40% of the population.
Popular assertions put unemployment in Khayaplain at “40 to 50%” of the labour force … if not higher, but
this is practically impossible since households need earnings for their members to stay alive. In practice
most of those projected as unemployed are relying on some informal earnings (or self-employment) as well
as social grants.
There are no official data about the total number of small, medium and micro-enterprises (both formal and
informal as well as illegal) in the area. Some sector-focused estimates are provided in Section 5.
12
Socio-economic transformation
Spatial-development clustering in the metro south-east





13
1.3
LED in broader socio-economic context


14



1.4
Approach to the strategy
15
BOX 1.3
Socio-economic development in Khayelitsha
Sector
growth and
development
Corporate
involvement
in LED
(Small and
informal)
business
development
Spatial
economic
development
I
II
III
IV
A Local economic development (LED)
1 Water
2 Electricity
5 Street
signs
6 Parks
C Infrastructure
4 Rail
Vision
Legacies
Resources
D Social
development
3 Roads
Socio-economic development
in Khayelitsha
13 Education
14 Recreation
16 Social
grants
8 Sewage
9 Waste
removal
12 Health
15 Sports
facilities
Drivers
7 Crime
prevention
11 Housing
B External links and lead projects
10 Parks
V
VI
VII
VIII
Access to
other job
markets and
CBDs
Local publicsector lead
projects
Local privatesector lead
projects
Metro
initiatives
(e.g. crime,
environment)
16


17









1.5
Data dilemma



18



19
BOX 1.4
Range of socio-economic data relevant for LED strategising
and progress evaluations
1
Demographic data





2
Education
 Size of school-age population (and annual growth)
 Adult literacy level
 Skill levels/education standards of local population
(incl. foreigners/refugees)
 Capacity of local educational facilities (annually updated)
3
Employment
 Number and trend of employment of locals outside Khayaplain
(incl. areas proximate to Khayaplain)
 Formal (public sector, corporate and formal SME) employment inside
Khayaplain, incl. local employment of “outsiders”
 (Self-)Employment or engagement in Khayaplain-based informalsector activities (see estimates in Section 5)
 Measurable unemployment in Khayaplain
(with and without social-grant incomes)
4
Household income
 Breakdown of household income by major income levels (incl. formal
and informal earnings, social grants)
5
Housing
 Full (annually updated) breakdown of formal as well as informal
settlements, incl. backyard and other joint accommodation
 Estimates of the full range of formal/informal housing construction,
incl. upgrading, extensions and other densification
6
Health
 Health facilities and respective capacities (annually updated)
 Key disease indicators
7
Sports, recreation
 Total capacity of formal and informal facilities spread across the area
(incl. school- and corporate employer-linked facilities)
8
Local business
 Annually updated estimates of the number of small, medium, larger
and micro-enterprises (by sector) across Khayaplain
 Regularly updated estimates of business closures
 Estimated number of locally-based business-finance and businessservice suppliers (incl. bank branches)
9
Infrastructure
 Key supply and backlog data related to the area-specific supply of
 water
 electricity
 refuse removal
 street upgrading and maintenance
 drainage
 street lighting
 pavements, street signage
 crime control
 fire protection
 municipal administrative services
Investment
projects
 Number, estimated investment level, location and sector spread of
planned and ongoing projects
10
Population, including gender
Age structure
Annual net increase (fertility, mortality, in-/out-migration)
Household size/number and family structure
Spatial spread of the population across Khayaplain
20
BOX 1.5
Challenges related to the measurement and evaluation of
LED progress in Khayaplain
1
Develop meaningful data for the full range of LED variables (see Box 1.4 for the range)
2
Annually review, revise or update estimates of those relevant data
3
Regularly highlight significant trends and data changes (to indicate the development
dynamics), e.g. the estimated number of formal and informal micro-enterprises in various
subsectors
4
Explain special circumstances underlying data deviations in Khayaplain from conventional
patterns (e.g. absence of Eastern Cape-linked Khayelitsha residents)
5
Compare Khayaplain data, ratios and trends with those in other parts of Cape Town (to better
understand specific LED challenges)
6
Reveal and explain differences in ratios and trends between Khayelitsha and Mitchell’s Plain
(and between areas within these large townships)
7
Align Khayaplain data with estimates and ratios currently used in the different CoCT
departments
8
Explain relationships between different LED data series as part of the dynamic LED process
(e.g. income levels, health status, HIV mortality, household size, informal employment, microenterprises)
9
Release key data and trend information in easily accessible ways with explanations (e.g. via
regular Khayaplain LED Fact Sheets)
10
Establish a Khayaplain LED data workgroup to monitor and guide the process and assure
links to other data suppliers
21

1.6
Structure of the report





22
23
24
SECTION 2
Drivers of local economic development in Khayaplain
2.1
The LED process
25





2.2
Drivers in the LED process
26
BOX 2.1
Categories of stakeholders in the LED process
A
Business (sub-sectors)
B
Civil society, incl.
D
Public sector
The
 municipality
LED
 provincial government
Process
 national-government
departments
 business associations (KBF,
Nafcoc, Fabcos, Wecbof, etc.)
 community organisations
 volunteer groups
 education and training institutions
 parastatals
 civic associations (e.g. KDF)
C
Households and
ward representatives
BOX 2.2
(Sub)Sectors relevant to the Khayaplain LED scene
Retail
Personal services
Social care













Corner shops
Spazas
Chain stores
Street traders
Domestic work
Hairdresser
Funeral services
Religious activities
Child care
Old-age care
Private tuition
Sports organiser
Medical care
Motor trade
Catering
Tourism













Garages
Taxis
Car and cycle repairs
Spare parts
Delivery services
Shebeens
Restaurants
Take-aways
Street vendors
Tour operators
B+B, home-stays
Tour guides
Events organisers
Construction
Financial services
Agriculture
 Ready-made buildings
 Repair workers
 Contractors




 Home agriculture
 Food-processing
 Veterinary care
Furniture and crafts
IT and ICT services
(Home) Industry












Trade
Repair
New products
Carpentry
Banking
Micro-finance
Insurance
Professional services
Cell-phone-related
IT-related
Radio- and TV-related
Other media-related
Clothing
Leatherwork
Agri-processing
Electricity generation
27

2.3
The role of drivers in the LED process
28
29
2.4
Public-private partnership in the LED process





30
SECTION 3
Towards a common LED vision for Khayaplain





31
32
BOX 3
Elements of an evolving local economic development vision for
Khayaplain
A tentative 10-point vision statement for Khayaplain
1
The communities of Khayaplain are a significant, growing share of the metropolitan society,
with their population currently exceeding 25 per cent of Cape Town’s total population.
2
Their history in the Cape Town metropolis is shaped by painful apartheid legacies, but they
are steadily overcoming those hurdles.
3
A spatially consolidated Khayaplain includes the areas of Mitchell’s Plain, Khayelitsha, the
coastal belt, the Philippi area (edging on to the airport) and the corridor between
Khayelitsha and Mitchell’s Plain.
4
Increasingly complex economic and business links are evolving with the airport industrial
area, other adjoining townships (like Nyanga), the Macasser-Somerset West townships
and the R300 belt towards Bellville.
5
Khayaplain’s sector-development pattern is rapidly broadening and deepening, thereby
stimulating local job creation, inward investment and the establishment of new enterprises.
6
Private-sector developments increasingly incorporate the full spectrum of small, medium
and large enterprises with the sizeable informal sector assisted in its upliftment process.
7
The interaction between public and private development players moves towards increasing
partnership relations in the tackling of comprehensive lead projects.
8
Khayaplain needs (and receives) major publicly co-funded development projects, facilitated
by the URP and other agencies.
9
Equally far-reaching social-development processes focus on education and training, health
services and recreational facilities.
10
In the unfolding of this multidimensional local economic-development process, concerted
efforts will increase the constructive co-operation between relevant players in the national
and provincial governments, the different sections of the City of Cape Town, civil-society
bodies and the private business sector.
33
SECTION 4
Development dimensions relevant for Khayaplain
4.1
Introduction
34
BOX 4
Dimensions of the socio-economic development of
Khayaplain residents
1
1.1
1.2
1.3
1.4
1.5
Reduce poverty
Job creation (inside/outside Khayelitsha-Mitchell’s Plain)
Increasing access to higher-paid jobs
Upgrading of informal (self-)employment
Access to poverty-relief programmes (incl. EPWP)
Accommodating the continued influx of poor households into the area
2
2.1
2.2
2.3
2.4
Improve housing
New (sub-)economic housing
Upgrading/expansion of (in-)formal housing
Increasing housing densities
Releasing more land for private housing
3
3.1
3.2
3.3
3.4
3.5
3.6
Expand the urban infrastructure
Water supply
Electricity supply
Sanitation/sewage
Refuse removal
Local road grid and street signage
Street lighting
4
4.1
4.2
4.3
4.4
Expand affordable transport
Rail links
Bus network
Taxi facilities
Integrated transport systems
5
5.1
5.2
5.3
5.4
5.5
Expand and improve education and skills acquisition
Adult literacy
School education (local and external)
Higher education (FET/university)
Private and employer-driven skills training
Preschool education/care
6
6.1
6.2
6.3
6.4
Expand health services
Access to hospital facilities
Expansion of local clinics
Doctors’ facilities
Increase of old-age, HIV and other care
7
Strengthen crime control
7.1
7.2
7.3
7.4
Theft and violent crime
Drug abuse
Rape and sexual abuse
Liquor abuse
continued
35
Box 4 cont’d
8
8.1
8.2
8.3
8.4
Increase facilities for recreation, sports and youth
Parks (neighbourhood and central)
Recreational and sports facilities
Beach facilities
Youth and family centres
9
9.1
9.2
9.3
9.4
9.5
9.6
Stimulate and support business development
Broaden and deepen sector developments
Increase access to premises and land
Expand access to capital
Broaden access to business opportunities
Strengthen entrepreneurship development
Create business clusters
10
10.1
10.2
10.3
10.4
Enhance socio-political stability
Strengthen racial integration (coloured/African)
Stabilise interaction between social and political players
Consolidate BEE gains
Normalise relations between locals and foreign in-migrants
11
11.1
11.2
11.3
11.4
11.5
Raise the image and standing of Khayaplain in the metropolis
Transform Khayelitsha-Mitchell’s Plain’s urban structure (1970 – 2020)
Create integrated development clusters
Increase marketing of the metro south-east
Support closer economic interaction with neighbouring areas
Expand public-sector service points in the metro south-east
12
12.1
12.2
12.3
12.4
Strengthen environmental sustainability
Protect unique vegetation
Safeguard the coastal edge
Contain urban agriculture
Normalise residential densities
36
4.2
The range of development dimensions
Reducing poverty
Improving housing
Expanding the infrastructure
37
Education and skills acquisition
Supply of health services
Crime containment
Recreation, sport and community facilities
Local business development
Socio-political stability
Khayaplain’s standing in Cape Town
38
Environmental sustainability
4.3
Interaction of the dimensions
39
SECTION 5
Sector-development dynamics


40
5.1
Trade
41
42
BOX 5.1
Trade facilities in Khayaplain
No.
1
2
3
4
5
6
7
8
9
10
11
12
Mega-shopping malls
Smaller shopping centres
Neighbourhood shopping clusters
Corner shops
Home shops, mobile shops
(In)Formal markets
Street sellers
Door-to-door vendors
Sector-focused retail (e.g. garages/filling stations)
Events-related trade (sport stadium)
Trade-related services (agents, consultants)
Wholesale-store facilities
Total
Est. jobs
2
8
15
50
14 000
6
7 000
800
100
12
1 000
50
3 000
2 000
300
200
14 000
1 500
7 000
1 600
1 200
150
1 000
1 000
23 000
32 650
BOX 5.2
Township retail clientele
1
Local resident households (incl. nearby informal settlements)
2
Up-market tourists
3
Visitors from rural areas, (e.g. the Eastern Cape)
4
Purchases for “home trips” (e.g. to the Eastern Cape)
5
Local purchases by the locally employed (e.g. taxis)
BOX 5.3
Obstacles faced by local retailers
1
2
3
4
5
6
7
8
9
10
External operators (branches, franchisees) in mega-malls can offer cheaper, better quality,
better branded, more diverse goods, thus drawing local clients away from non-mall outlets
Rules and regulations constrain local (new) enterprises
Informal-sector activities are (drastically) constrained
Little scope for advertising at affordable costs
Difficult for start-ups to get external finance
Lack of affordable nearby premises/storage facilities (outside homes)
High crime levels add to business costs
Popular (TV/DStv) advertising draws public to larger and branded outlets
Poor infrastructure in suburbs (electricity, street lighting, ablution, etc.)
Competition high among retailers of basic household goods (in particular from foreign
entrepreneurs)
43






44
5.2
Construction
45
BOX 5.4
Construction-related activities
1
New housing – formal and informal
2
Commercial structures and public-sector buildings
3
Renovations, upgrading and expansion – exterior and interior
4
Building material
5
Ready-made buildings – formal and informal
6
Construction for infrastructure facilities, incl. repair and
maintenance
BOX 5.5
Khayaplain employment in the construction sector
Est. employment
1
Khayelitsha-Mitchell’s Plain contractors operating outside the area (but in
greater Cape Town) with workers or entrepreneurs from Khayaplain
5 000
2
External construction firms engaged in Khayelitsha-Mitchell’s Plain,
using local labour/managers
4 000
3
Local sub-contractors for external firms
4 000
4
Local construction firms operating locally in Khayelitsha-Mitchell’s Plain –
housing, commercial, public sector, infrastructure
6 000
5
Local informal construction operators engaged locally in

informal housing and business premises

upgrading and renovations

infrastructure facilities
14 000
Total 33 000
BOX 5.6
Obstacles in the expansion of Khayaplain
construction enterprises
1
Difficulty for local sub-contractors to get larger contracts
2
Storage sites not easily/affordably available
3
Lack of building-sector incubators
4
Limited awareness of and attention to the informal construction sector
5
Lack of wider awareness of and support for second- and third-storey extensions of
houses/businesses at affordable cost
6
Regulatory/zoning frameworks too rigid
7
EPWP programmes need to encourage entrepreneurship
8
Shack-upgrading strategies neglected
46



47

5.3
Manufacturing


48
49
BOX 5.7
Manufacturing-related activities relevant to Khayaplain
households
1
Food preparation and/or processing (formal and informal), incl. (i.a.) fish-processing, dairies,
cheese-making, confectionaries
2
Clothing and textile production, incl. wedding gowns, baby wear, school uniforms, linen, CMT
products, curtains, blankets
3
Leather work, incl. shoe repairs, leather furniture
4
Furniture-making, incl. built-in cupboards, beds and foldable furniture (i.a. for shacks)
5
Production of toys (from different materials)
6
Craft products, incl. timber ware and jewellery
7
Building material and components, incl. windows, doors, panels for house structures, cement
slabs/bricks
8
Telecommunication-related repairs and installations
BOX 5.8
Engagement of Khayaplain workers/entrepreneurs in
manufacturing
Est. employment
1
Involvement in industries outside the Khayaplain area, e.g. in the CBD, Epping,
Airport Industria, Somerset West
12 000
2
Involvement in the Philippi-East area
1 800
3
Engaged in the Mitchell’s Plain hive, Philippi hive and other (quasi-)incubator
projects
2 000
4
Informally engaged in residential areas as home industries (in established
suburbs and informal settlements)
8 000
5
Informally engaged in open fields
700
Total 24 500
BOX 5.9
Challenges on the road to increased industrial activities
in/around Philippi
1
Develop Philippi as core industrial area for Khayaplain (complementing Airport Industria)
2
Establish a diversity of industry incubators spread across Khayaplain
3
Greater recognition (and measurement/documentation) of what is already happening
(esp. in the informal sector)
4
Designate other (smaller) areas as industry zones or sector clusters
5
Initiate local training, apprenticeship and mentoring schemes for local industrial activities
(linked to local colleges, incubators and corporate engagement)
6
Relax regulations around home industries
7
Utilise the corridor between Khayelitsha and Mitchell’s Plain for (i.a.) industrial-development
initiatives
50
51
5.4
Tourism
5.4.1 Township tourism
52
5.4.2 Coastal tourism
53
5.4.3 Nature-based tourism
54
5.4.4 Domestic tourism
55
BOX 5.10
Tourism segments relevant for Khayaplain
Est. employment
Foreign tourists
General township “detours”
Focused township tours
Visits to craft markets, shebeens and homes
Staying in “related” ethnic communities
1 000
Eastern Cape visitors
VFR for short visits, festivals, funerals, sports
events, holidays and business
3 000
Other domestic visitors
Township tours and brief visits
Events, business, VFR
1 500
Total estimated employment 5 500
BOX 5.11
Challenges facing Khayaplain’s tourism sector
1
Lack of transformation of the tourism sector combined with gate-keeping actions of whiteowned tourism operations
2
Lack of partnerships between external tour operators and locally-based operators
3
Unlicensed vehicles and illegal guides
4
Perceived inadequate involvement of local tourism entrepreneurs in planning for tourism in
the area
5
Lack of representation, and hence a “voice” for Khayaplain tourism businesses in tourism
structures in the city
6
Factions and divisions within local tourism forums
7
Lack of defined routes and route signage
8
Inadequate safety and security
9
Inadequate awareness of operating standards and regulations on part of some operators
10
Inadequate market research and proper marketing plans that counter the effect of
seasonality and target currently untapped market opportunities (e.g. the domestic market
and the potential for local hotels)
11
Smaller operators struggle to compete with established, external operators as they have
relatively limited market knowledge, skills and resources and have difficulty breaking into the
distribution channels used by most travellers to South Africa for bookings and information
12
Excessive focus on a limited international market. Tourism in Khayaplain cannot succeed if
it is merely directed at foreign tourists; it has to target people in other parts of Cape Town as
well as other parts of South Africa in order to generate more consistent demand for tourism
products and services
13
Lack of protection of historically significant sites
14
Under-utilisation and deterioration of the city-owned tourism infrastructure in the area
15
Lack of creative packaging with the broader metro experiences/products
56
BOX 5.12
Action needed to meet tourism-development objectives
Objectives
1
2
3
4
5
Khayaplain is an appealing
place to visit (physical
capital)
Actions

Maintain and improve the area’s existing infrastructure (i.e.
electricity, roads, water, waste management, other utilities)

Maintain and improve the area’s public services (i.e. health
care, police, fire and emergency services)

Provide basic tourist amenities, such as toilets and secure
parking

Ensure safe and secure environments for visitors and
tourism businesses

Identify domestic and international niche markets related to
the area’s community as well as natural and cultural
resources

Focus tourism activities either along routes or at nodes. A
small number of facilities and experiences thinly spread
over too wide an area will not be feasible or sustainable.

Formalise routes and nodes with appropriate directional and
tourism signage, reinforced through brochures and
marketing material

Enhance and encourage clustering of tourism businesses to
create market-ready packages

Rejuvenate existing facilities which are run-down, neglected
or vandalised

Bring together works streams currently taking place in
various city departments regarding capitalising and
expanding on existing resort infrastructure through publicprivate partnerships
Khayaplain’s tourismsector stakeholders are
skilled, adaptable and
productive
(human capital)

Establish regular information and capacity-building sessions

Assist operators to address varying prices, product quality,
service quality and reliability in order to ensure the quality of
the visitor experience
Existing resources are coordinated so that there is a
seamless system for
economic development in
the area
(social capital)

Assist poorly co-ordinated forums to mature, based on
defined strategies and business plans

Assist tourism stakeholders to gain a voice and
representation within city tourism functions and structures

Encourage partnerships between locally-based and external
tourism operators

Encourage units within local government to partner with one
another in order to improve the provision of services and to
become more efficient

Enhance the experience of sites through signage and
interpretation

Promote Destination Cape Town’s Responsible Tourism
drive among Khayaplain residents and tourism businesses

Assist tourism businesses to develop responsible tourism
improvement plans, and to showcase their sustainability
activities
Khayaplain hosts a
diversified range of
tourism products and
experiences that deliver
sustainable livelihoods
(economic capital)
Khayaplain protects and
enhances its natural and
cultural assets (natural
capital)
57
5.5
Personal services
58
BOX 5.13
Activities related to personal services in Khayaplain
Est. employment
Hairdressers
11 000
Personal care: child, old-age and Aids-patient care
as well as private tuition
14 000
Cleaning services
4 000
Funeral services
5 000
Religious services
3 000
Hospitals, clinics and public-health care
2 200
Other categories
3 000
Total estimated employment 42 200
59
60
5.6
Sport, recreation, entertainment and events
Sporting activities
Recreational and entertainment activities
61
Events and entertainment

62
BOX 5.14
Activities related to sports, recreation, entertainment and
events in Khayaplain
1
Sporting activities (linked to venues)
Outdoor
Indoor
(2 000)*
2
Recreational activities
(12 000)*
3
Entertainment (i.a. in MPCs)
(4 000)*
4
Events (in larger venues and open
air)
(1 000)*
Soccer
Rugby
Netball
Cricket
Softball
Baseball
Swimming
Boxing
Wrestling
Martial arts
Volleyball
Pool/chess
Restaurants
Shebeens
Taverns
Braai facilities
Night/dance clubs
Sports/pool bars
Beach recreation
Church-linked activities
Concerts/theatre
Dancing
Choirs
Cinemas
Traditional culture events
School functions
Business socialising/marketing
Open-air entertainment
Major sports
events
Major school
events
Trade fairs/expos
Major church events
Conferences
Rallies
(boating, fishing, swimming)
* Estimated employment
BOX 5.15
Challenges facing the recreation and entertainment sectors

Ownership of and control over sports and recreational facilities

Maintenance and management of existing facilities

Mobilisation of sponsorships for major events

Recognition of sporting and other events-organising bodies

Negative neighbourhood spill-over effects of events

Funding for new facilities

Creating sustainable public-private partnerships
63




5.7
Financial, insurance, property and business services



64





65
BOX 5.16
Activity dimensions in the finance and business-services sector
Sub-sector
Services supplied
Financial services

Branch activities of major banks in malls

Smaller banking branches

ATMs (decentralised)

Branch services outside Khayaplain
but close to the area

Cellphone/internet banking

Branch services and agents in Khayaplain

Contact points outside Khayaplain

Indirect contacts related to life, funeral,
study, accident, pension and other
insurance policies and linked savings
schemes

Selling/buying of properties and land

Assistance with access to property
finance

Assistance with search for contractors

Facilitating access to informal/temporary
accommodation

Corporate and public-sector/NGO help
with problems of small and microenterprises

Informal advisors to local entrepreneurs

Business mentoring

Accounting and tax-advice services
Insurance
Property services
Business services
Employment
±400 in Khayaplain
±1 000 part-/full-time
linked to Khayaplain
±1 200 (mostly informal)
±400 in Khayaplain
BOX 5.17
Problems and challenges related to the financial and
business services sphere
1
Lack of financial and insurance literacy
2
Limited local network of banking services (branches)
[but cellphone and internet banking expands rapidly)
3
ATMs at risk due to high crime
4
Difficulty to get bonds for housing finance (household owners might not own
property)
5
Small-enterprise-support services too few and too formal for local clients
6
Informal business and financial advisors lack credibility
7
High interest and service fees make loan finance unaffordable
66
5.8
Supply of basic municipal services

67
BOX 5.18
Basic municipal-services activities
1
Supply of electricity
 to formal sites/structures: residential,
commercial, industrial, etc.
 to informal structures
2
Supply of water
 to formal structures
 to informal structures
3
Refuse removal and storage
 in formal settlements
 in informal settlements
4
Sewerage
 in formal settlements
 in informal settlements
5
Municipal roads
 paved and gravel
 pavements
6
Street signage and traffic lights
7
Street lighting
 in formal settlements
 in informal settlements


68
5.9
Transport-related facilities and services


69


BOX 5.19
Transport service activities in Khayaplain
1
Rail links to Mitchell’s Plain and to Khayelitsha, incl. Stations
2
Bus routes and bus stations
3
Taxis and taxi ranks
4
Motor transport, incl. filling stations and repair facilities
5
Airport (nearby)
6
Nearby N2 transit route and R300 link route



70




5.10
IT and telecommunication activities
71
5.11
Urban agriculture
72










73

74







75
BOX 5.20
NGO and civil-society engagement in urban agriculture
Abalimi Bezekhaya
This is an urban agriculture and environmental non-profit body that operates in the disadvantaged
societies of Khayelitsha, Nyanga and regions surrounding the Cape Flats. Abalimi assists
individuals, groups and community-based organisations to kick off and maintain organic food
growing and conservation projects. Abalimi works with over 50 community and institutional gardens
as well as hundreds of home gardens. Abalimi Khayelitsha Garden Centre serves as a registration
centre (where new members can sign up) and a distribution centre for gardeners' starter kits, which
include seedlings, compost and manure, and they run a workshop to get them started. The centre
also sells discounted plants to members and has some display gardens highlighting technical
aspects like drum-drip irrigation.
Harvest of Hope
With the help of the South African Institute of Entrepreneurship (SAIE) and The Business Place
Philippi and supported by the Ackerman Pick n' Pay Foundation, Harvest of Hope was launched at
the beginning of 2008. Currently the produce of 15 contracted community gardens are packed at a
packing store in Philippi and sold primarily through schools. The Harvest of Hope programme
represents the maturation of urban agriculture in Cape Town and is a step towards greater
commercialisation and potentially more substantial incomes for producers.
Ikamva Labantu
This organisation works with communities to access land, water, fencing, storage and supplies.
Food gardens often form part of larger projects and produce nutritious food for children in childcare centres, elderly people in senior clubs and orphans in foster-care homes. Large community
gardens are used as training sites. In excess of 35 food gardens in Blue Downs, Crossroads,
Dunoon, Eerste River, Gugulethu, Khayelitsha, Langa, Mitchell’s Plain, Nyanga, New Crossroads
and Philippi are associated with Ikamva Labantu.
Educational institutions
These institutions (e.g. schools) set aside portions of their grounds for community gardens (e.g.
Tsikarong Community Garden at Bulumko High School)
Academic organisations
Research institutes like Plaas (Institute for Poverty, Land and Agrarian Studies) also give attention
to urban-agriculture issues
Larger suppliers
and their organisations, who are directly involved in agricultural production and related processing
as well as marketing activities, may also support township-based operators
Local producers
of inputs such as grass, compost, equipment, transport and processors
Vendors
on streets and at local markets
76
BOX 5.21
Problems and issues related to urban agriculture in
Khayaplain

Limited contribution to household income and food security: Since the food produced does not
constitute the majority of what a household consumes, most urban agriculturalists still depend
on income earned from social-welfare grants for household food security

Availability of suitable vacant land

Land tenure: Many involved in urban agriculture do not own the land they use to grow food

Access to markets: Growers often find it difficult to market their locally-grown food to grocers,
restaurants and institutions

Low production levels of home gardens

Urban growers may lack the knowledge and skills in production, processing and marketing that
would bring about successful yields and food security

Integrated planning for urban agriculture: Despite the long-established municipal awareness of
the role and importance of urban agriculture as well as the existence of a well established
policy framework, urban agriculture is still not effectively integrated in city-development
planning and projects

Crop thefts and vandalism of gardens

High costs of (skilled) labour and other inputs

Lack of credit and investment-support services

Environmental and health risks from inappropriate agricultural practices

Public-health problems, including diseases from parasites or viruses

Pollution (smell, dust, noise, effluent) and waste accumulation in the streets as well as
congestion of waste-water drains related to slaughtering activities

High-density livestock production (due to space limits) creates health and welfare problems for
animals

Food safety related to street food, where poor conditions of transformation can lead to
contaminated food

Traffic congestion by vendors on streets and sidewalks
77
BOX 5.22
Objectives and action challenges of an urban-agriculture
strategy
Objectives
1
Khayaplain has the physical
capacity to support the
growing of food (Physical
capital)
Action

Use urban agriculture to make suitable vacant space
productive for all. In the same way the city creates green
zones for parks and sport fields, they could integrate
urban agriculture into planning of such open spaces

Create public community gardens in parks, public-open
space, road reserves and school grounds

Develop the rooftops of buildings (especially concrete
buildings) in such a way as to support greenhouses
and/or rooftop gardens capable of supporting the growing
of food

Provide balconies for multi-story housing units to
accommodate container gardens

Incorporate urban agriculture into the site planning and
design process for new residential and commercial
buildings/projects
2
Khayaplain hosts a diversified
range of agriculturalproduction activities
(economic capital)

Examine innovations in urban agriculture that do not
require large tracts of land
3
Khayaplain’s urbanagriculture stakeholders are
skilled, productive and
innovative (Human capital)

Partner with academic institutions and NGOs to develop
demonstration projects that test the feasibility of novel
technologies
4
Stakeholders co-operate and
existing institutional
resources are co-ordinated so
that there is a seamless
support system for urban
agriculture in Khayaplain
(Social capital)

Encourage partnerships and sharing of experience
between different urban agriculture support organisations

Encourage units within local government to partner with
one another in order to improve the provision of services
and to become more efficient
Urban agriculture practices
contribute to managing waste
flows in a more sustainable
manner (Natural capital)

Promote composting facilities in neighbourhood blocks as
source for community gardens

Provide information and assistance to groups overseeing
the management of community gardens or school
gardens regarding composting of landscape litter and
other organic wastes and their re-use in the garden areas

Integrate urban agriculture with urban greening (UG)
programmes, which can reduce urban pollution and
temperatures as well as offer recreation opportunities to
improve quality of life for all urban residents and in
particular for the youth and elderly people
5
78
5.12
Film, media and publishing
79


80
5.13
Education and training
81



82
BOX 5.23
Education- and training-related activities in Khayaplain
1
Pre-School
Early-childhood care (formal/informal)
Pre-school (public/private)
2
Primary-school level
Public schools
Private schools (only a few locally)
3
Secondary level
Public schools
Private school (only a few locally)
Other training at school facilities
4
FET colleges
Good Hope College (Khayelitsha)
Planned college for Mitchell’s Plain
5
Locally offered courses
Universities (UWC, US, UCT, CPUT, Unisa)
Private colleges
Sector-training programmes/learnerships (e.g. Construction
Academy)
6
Private tuition and
mentorship
School level, post-school level, vocational- and managementfocused
7
Corporate in-service
training
E.g. City of Cape Town staff training, corporate in-house training
PLUS Correspondence training and attendance of education and training facilities outside
Khayaplain (in Cape Town, other areas of South Africa and overseas)
BOX 5.24
Examples of applied training needed in Khayaplain
1
Adult literacy
6
Small-business management
2
Community work/leadership
7
Financial basics
3
Sports administration
8
Urban agriculture
4
Construction skills
9
Career guidance
5
LED planning
10
Project management
83
5.14
Public-sector services
84
BOX 5.25
Service points and local employment related to
public-sector services
1
Local offices (or agents) linked to national-government departments (e.g. police stations)
2
Local offices (or agents) linked to provincial-government departments (e.g. educational
services)
3
Local offices linked to parastatal service suppliers (e.g. Metrorail)
4
Municipal offices in Khayaplain (linked to different municipal departments and services)
5
Local operational depots of municipal service suppliers (e.g. building yards, storage depots)
6
Public-sector facilities or offices linked to broader metro south-east needs or activities
(e.g. airport, N2, coastal area, R300)
7
Deliberately decentralised offices of public-sector entities (“to strengthen local
employment”)
85
5.15
Sector growth and opportunities in perspective
86




87
BOX 5.26
Summary of sector potential:
Sector profile of Khayaplain business development
Section
Informal sector
Centralised
Employment
inside the area
Growth
Sector
Development pattern
1
2
3
4
5
6
Decentralised
1
Urban agriculture
5.11
√
―
√
7 000
L
2
Manufacturing
5.3
√
√
√
12 300
H
3
Construction
5.2
√
√
√
33 000
H
4
Basic municipal
services
5.8
―
√
√
9 000
H
5
Trade
5.1
√
√
√
35 000
M
6
Tourism
5.4
√
√
√
5 500
H
7
Financial services
5.7
√
√
√
3 000
M
8
Transport
5.9
√
√
√
20 000
M
9
Telecommunications,
IT
5.10
√
―
√
3 500
M
10
Film and media
5.12
―
√
―
1 000
M
11
Public-sector services
5.14
―
√
―
12 000
H
12
Education, training
5.13
√
√
√
9 000
H
13
Sport, recreation
5.6
√
√
√
19 000
M
14
Personal services
5.5
√
√
√
42 000
H
L = low – M = medium – H = high
Total*
211 300
*



88
SECTION 6
Enterprise development
6.1
Enterprise categories and their interaction
BOX 6.1
Enterprise categories relevant for LED promotion in
Khayaplain
1
Survivalist activities in the informal sector
2
Micro-enterprises in the informal sector
3
Foreigner-managed micro-enterprises (e.g. Somali- or Zimbabwean-owned)
4
Small and medium enterprises in the formal sector
(incl. franchisees and externally-owned branches)
5
Larger locally-rooted enterprises
6
Local branches of national chains or corporates
7
External investors (e.g. property or venture capital)
89
6.2
Relationship between enterprises in Khayaplain



90





91
6.3
Small-business-support policies




92



BOX 6.2
Support needs of locally rooted SMMEs
1
Access to business information, advice and mentoring
2
Facilitation of business linkages and associations
3
Access to business education and practical skills training
4
Access to finance
5
Access to land or appropriate business premises at affordable cost
6
Effective crime control
7
Basic infrastructure services (electricity, water, street lighting and signs, etc.)
8
Access to preferential procurement [city, province, national government, corporates (BEE)]
93
6.4
Land availability and property development
94
BOX 6.3
Land use and property-development categories
relevant for Khayaplain LED
1
Residential development
Upmarket housing, low-rise and higher-rise
Middle-income housing
Low-income formal housing
Informal housing, upgradable and non-upgradable
Visitor/tourist accommodation in residential areas
2
Commercial developments
Shopping malls
Neighbourhood shopping centres
Intersection shopping clusters
Residential shopping facilities
Informal commercial structures
Guesthouses and hotels
Higher-density office parks to accommodate part of the
rapidly expanding service-sector needs
3
Industrial and service premises
Large/r factories: adjoining Khayaplain (e.g. Philippi) and
inside Khayaplain
Industrial parks and incubators
Activity-axis structures
Neighbourhood industrial/services facilities (formal and
informal)
4
Social, recreational and
educational facilities
Schools, crèches, churches, sports facilities, etc.
NGO structures
5
Public-sector structures
Administrative offices, service structures
Land needed for infrastructure
(roads, railway sidings, bridges, etc.)
6
Urban agriculture
Utilisation of open land infill space with only temporary
structures
7
Graveyards
―
8
Green fields, parks and open
land
―



95


6.5
Attracting investors
6.5.1
Which investors?




96



97
6.5.2
Creating the right investment environment
BOX 6.4
Factors shaping Khayaplain’s investment attractiveness
1
Overall development vision of the area
2
Comparative development data (i.e. Khayaplain compared to other parts of Cape Town or
other centres)
3
Expected availability of appropriately skilled labour and net cost of labour available in the area
4
Local infrastructure standards and relative cost – water, electricity, sewage, street lighting,
refuse removal, etc.
5
Local crime levels (compared to other parts of Cape Town)
6
Local political and social stability in the area (including xenophobia risks)
7
Cost and availability of business premises (or vacant land)
8
Availability of incubators or other centres with the necessary range of business-support
services
9
Municipal rates, taxes and service charges applicable to Khayaplain
10
Incentives specifically focused on new developments (taxation, Ipap and other programmes,
municipal incentive schemes)
11
Venture-capital mobilisation for new start-ups
98
6.5.3
Direct incentives
99
SECTION 7
Spatial-development challenges
7.1
From township to metro south-east
A landscape of exclusion
100
A landscape of isolation
A landscape of neglect
A landscape of duality
101



7.2
Supporting an integrated movement system
102


103
7.3
Strengthening and connecting CBDs
104
105
7.4
Develop Philippi as industrial zone


106







107



7.5
Connecting Khayaplain to the sea
108




109



7.6
Promoting suburban catalysts
110
111
SECTION 8
Strategic LED projects
8.1
Gradual development processes vs catalytic “lead” projects
112
113
8.2
Housing and infrastructure as lead projects




114
8.3
Sector clusters
115
116
BOX 8
Strategic incubator
partner
Sector activities with cluster potential in Khayaplain
Sector
Spontaneous
clustering
Facilitated
clustering
Formal
incubators
Scope for
1
2
3
4
1
Agri-processing (incl.
fish)
2
Construction equipment
and services
3
Manufacturing
3.1
3.2
3.3
5
√
√
Major foodprocessor
√
√
√
Large building
contractors
Crafts
Leatherwear
Clothing
√
√
√
√
} Shared
} work} space
CCDI
3.4
Building Material
√
√
√
Major corporate/s
3.5
Furniture
√
√
IDC
4
Motor repair and
services (incl. taxis and
bakkies)
5
Recycling
√
√
CoCT
6
Retailing
√
Malls
Retail developers
7
Finance and insurance
√
Malls
8
BPO, ICT, business
services
√
Office blocks
9
Education and training
√
10
Health and caring
√
√
Hospital/medical
supplier
11
Tourism, recreation,
entertainment
√
√
CoCT,
corporate/s
12
Film, media, publishing
√
√
Major corporate/s
√
√
√
IDC, corporate/s
√
Corporate/s
Higher-education
institutions
117
8.4
Spatial clustering






8.5
Conclusions
118
119
SECTION 9
Implementation challenges
9.1
The LED strategy in perspective



120
BOX 9.1
LED-strategy elements
A1
A2
A3
Basic facts and trends
Profile LED drivers and players
Spread the vision of a
transforming metro south-east
C
E
Local and provincial
forces and support
B
Khayaplain LED strategy and
its implementation process
* Airport proximity
* CoCT LED strategy
* CoCT project priorities
* CoCT department
strategies
* Provincial development
strategies
* Provincial project
resourcing
* Institutional options to increase
the implementation capacity
* Marketing Khayaplain
* Monitoring and evaluation of
progress
National forces and support
* LED incentives
* LED strategies
* LED programmes (incl. URP)
* Mega-projects
* Developmental initiatives
* Sharing LED expertise
KEY STRATEGY DIMENSIONS
D1
D2
D3
D4
Sector development
Enterprise development
Spatial development
Lead Projects
Opportunities and
challenges
Opportunities and
challenges
Opportunities and
challenges
Private, public and
PPP
121



122
9.2
Institutional (re-)structuring of LED support




123
Alternative One

Alternative Two

Alternative Three

124
Alternative Four




125
BOX 9.2
LED-supportive action needing distinct implementation
capacity
Task/s or action needed
Potential actors
1
Provide detailed statistics and trend analyses on the different
dimensions of Khayaplain LED and its broader transformation
process
Khayaplain LED
research team linked to
Z
2
Disseminate detailed information on Khayaplain’s development
process in an accessible format to all relevant LED players and
stakeholders
Z
3
Encourage and support in-depth, applied research on different
development challenges in Khayaplain and how they could be
tackled, taking into account world-wide LED experience.
Z in co-operation with
local universities,
consultants and relevant
public-sector
departments
4
Identify and profile relevant (public, private, NGO, etc.) LED
groups, leaders/drivers and stakeholders in Khayaplain’s LED
process as well as disseminate information about their activities
and plans.
Khayaplain LED
research team linked to
Z
5
Encourage and facilitate discussion and interaction between
players around LED challenges and how they can co-operate
towards joint co-ordinated action.
Z
6
Document, regularly update and widely disseminate (among local
LED players) details about national LED-support programmes,
mega-projects and other incentives relevant for LED in
Khayelitsha.
Khayaplain LED
research team linked to
Z
7
Utilise the URP team as an effective, proactive tool to access
national-government support for Khayaplain LED, and to report
progress to relevant government departments.
URP in co-operation
with Z
8
Document, regularly update and widely disseminate details about
municipal (CoCT) LED-support programmes, mega-projects,
infrastructure developments and incentives relevant to LED in
Khayaplain.
Z in co-operation with
the CoCT
9
Help to strengthen co-operation between CoCT departments and
Khayaplain LED stakeholders in order to streamline municipal
support for Khayaplain LED, and to address infrastructure
bottlenecks impeding local sector growth.
Z and the CoCT
Facilitate regular meetings between provincial departments coresponsible for Khayaplain LED support, in order to strengthen cooperation and the utilisation of available programme funds.
Z and PGWC
departments
10
continued
126
Box 9.2 continued
Task/s or action needed
Potential actors
11
Spread the facts and strengthen general awareness about (sub-)
sector developments in the Khayaplain area (and immediate
surroundings) as well as the need for focused public-private
partnership (PPP) action to further accelerate those processes
(e.g. via sector forums).
Z, the CoCT and sector
forums
12
Expand the implementation capacity of conventional SMMEsupport programmes (of Seda, Red Door, etc.) focused on
Khayaplain needs and local circumstances.
SMME-support
initiatives for
Khayaplain, working via
Z and Seda, Red Door,
Business Place, etc.
13
Encourage and help co-ordinate the unfolding of multi-dimensional
informal-sector-upliftment strategies relevant to Khayaplain
SMME-support
initiatives, Z and the
CoCT
14
Co-ordinate and streamline the (decentralised) planning and
implementation of lead projects in the
 two CBDs and the Spine Road corridor
 Philippi industrial area
 coastal tourism and recreational belt
 different suburban and transport-exchange cluster
developments
Different project teams
and local drivers (e.g.
KCT) with facilitation
by Z
15
Proactively support and facilitate the evolution of a streamlined
LED-co-ordination structure which incorporates current bodies and
initiatives to bring together all important players and drivers of the
process.
Z in co-operation with
the URP and CoCT
127
9.3
Areas for urgent action
9.3.1 Getting reliable, meaningful data about key indicators
128
9.3.2 Marketing the metro south-east
129







130
BOX 9.3
Critical elements in a Khayaplain marketing initiative
1
Present key data to put the area and its increasing significance in the metro-economy into
perspective
2
Explain the longer-run socio-economic transformation of Khayaplain
3
Highlight key elements of the new LED strategy,
e.g. Philippi/Airport Industria 2, coastal recreation and entertainment belts, booming CBDs
4
Develop effective communication and marketing channels to consistently drive home
messages (incl. web and core media channels)
5
Develop key branding points for the metro south-east
6
Co-operate closely with other metropolitan, Western Cape and national marketing channels to
reach the business community
7
Utilise Khayaplain-branded events to attract or address particular audiences, e.g.

Africa fashion shows (linked to the Western Cape clothing and fashion industry)

Innovative housing construction (incl. upgrading techniques for informal settlements)

Tourism expos

“Khayaplain Entrepreneur of the Year”

“Most innovative school in Khayaplain” (annual competition)

Annual ranking of SME incubators in the metro south-east
8
Publication and dissemination of a series of Khayaplain LED factsheets
9
Organisation of an annual Khayaplain-LED progress indaba
10
Creation of “emerging area partnerships” with places in Africa, Latin America, Eastern Europe,
Asia
131
9.3.3
Strengthening management efficiency






132
9.3.4
Strengthening monitoring and evaluation
133
134
BOX 9.4
The need for more comprehensive monitoring and evaluation
PROGRAMME ACTIVITIES
(Action model)
INPUTS
Resources
consumed by
the programme
OUTPUTS
The direct
products of
programme
activities
OUTCOMES
IMPACTS
Proximal effects
during and after
programme
Distal effects
resulting from
the programme
DESIRED FUTURE
CONDITIONS
CURRENT CONDITIONS
Programmes/projects generally aim to address perceived problems and to create a set of desired
future conditions. They typically consist of a series of inputs/interventions implemented by means
of various activities with a view to achieving certain immediate/proximate outcomes, which in turn
contribute to a range of impacts. During the course of implementation, certain outputs are usually
produced. The figure below illustrates the relationship between programme activities, inputs,
outputs, outcomes and impacts.
A key weakness of many public-sector programmes in South Africa is the lack of comprehensive
monitoring-and-evaluation systems, consisting of detailed programme and project plans, identified
performance indicators, continuous data gathering as well as analysis and reporting of changes.
Performance-based programme management (focusing on outcomes or impacts as opposed to
outputs) is not regularly applied in South Africa, and hence programme managers are not
necessarily equipped with the necessary evaluation skills.
An effective monitoring-and-evaluation system (MES) would be critical to ensure that the
Khayaplain LED strategy delivers against its objectives. Thus, it would help to

ensure design and delivery of robust interventions that make a difference,

facilitate learning from past performance, improve the evidence base for programme
and project development and as a result enhance effectiveness,

improve accountability to funders and stakeholders and

assist reporting to partners and stakeholders about performance.
Thus, whereas the evaluation of URP-funded programmes and projects have to date mainly
focused on the assessment of outputs on an ad hoc basis, the focus should in future shift to a more
comprehensive MES that will result in on-going data collection and more reliable reporting of
impacts.
135
9.4
Strengthening stakeholder co-operation: The ultimate challenge
136
137
ANNEXURE A
URP approaches across South Africa –
Benchmarking against other URP nodes
Contents
138
1
Overview of selected nodes
1.1
Demographic, socio-economic and settlement characteristics

139
*
140
141
1.2
URP node poverty levels #






142




1.3
Summary
TABLE 1
Poverty index scores for selected URP nodes, 2001
Alexandra
24,4
Inanda
40,5
KwaMashu
24,5
Khayelitsha
31,5
Mitchell's Plain
20,3
Motherwell
30,7
All URP nodes
27,1
143
TABLE 2
Key characteristics of the selected URP nodes
Alexandra
INK

Well located


Good physical
linkages
Young
population

Unskilled

Dense

Poorest

Need for more
rental
accommodatio
n

High
unemploymen
t


Vibrant
commercial
activity, limited
by poverty
Need for better
quality
commercial
infrastructure

Low economic
activity

Dependent on
city

Poor housing

Weak
infrastructure
and basic
services
Khayelitsha

Far from
Cape
Town’s CBD

Housing
very
informal and
very dense

Very poor

Housing
crisis,
worsened
by migration


Transport to
town is
available,
but not coordinated
Better virtual
linkages
needed
Mitchell’s Plain
Motherwell

Suburban

Poor

Far from
CBD

Low density
Low to
medium
density



Hidden
housing crisis
due to
overcrowding
Heavily
dependent
on external
employment
opportunities

Well
established
housing
stock

Levels of
business
viability are
low


Need for infill
housing and
new
development
s
Vibrant
commercial
centre with
excellent
infrastructure
144
2
Resource allocation and programme emphasis
145
3
Approach to local economic development
INK
 INK Job Shop,
a skills databank project that allows easy
access to prospective recruitment
 Co-operative development programme,
seeks to establish, train and support
co-operatives
 INK Business Fair,
provides a platform for SMMEs to showcase
their products at a wider and commercial
scale
 Sector-support programme,
focused on the nationally identified growth
sectors (tourism, manufacturing, retail,
agriculture, construction, research and
development)
 Business support and skills programme,
a business support network, with eventual
aim to set up an INK Chamber of Business
 Micro-Banking,
access to credit assists businesses to
access finance for development and
commercial enterprises
 Public education on property,
deals with property investment issues and
creating an environment for attracting
property investment to INK
 INK Business Directory
 Provision of shelters to street traders
 INK Local Economic Development Strategy,
to link all disparate economic-development
initiatives under one co-ordinated framework
Alexandra
 Small business development programme
The ARP working with its partner the
Business Place runs an advisory and skillsdevelopment office targeting small business
 Direct construction opportunities
in the wide portfolio of construction projects
managed by the ARP collectively
 Construction cluster
The ARP works with various training
agencies to train people to enter the
construction industry
 The ARP Employment information centre
supports youth to prepare to find work
through appropriate training programmes
 Auto cluster
focuses on the formalisation of the large
informal auto-based industries that are
prevalent both in Alexandra and the
surrounding industrial areas
 Tourism cluster
The ARP has facilitated the development of
the Alexandra Tourism Association. Tourism
businesses receive assistance in relation to
formalising their businesses, accessing
financial assistance and compliance with
grading requirements. Youth candidates
receive training through the Youth-InHospitality programme based in
Grahamstown and are placed at hotels within
the Sandton Area.
 Retail cluster
The ARP has assisted in the formation of the
Alexandra Manufacturers and Retail Forum,
consisting of five affiliated associations that
assist the ARP to identify needs and develop
targeted interventions. Businesses are also
assisted with formalisation and joining the
various associations.
146
4
Infrastructure
Structural





Provide a framework for crowding in public investment
Upgrade intersection and interchange points for public transport
Develop anchor development corridors
Provide convenient and accessible nodal concentration of public services
Improved road connectivity in urban areas has begun to shift spatial isolation
Institutional



Cultivate new urban management partnership institutions
Achieve heightened urban governance focus on the marginalised areas
Mobilise social capital towards concrete implementation
Developmental





Cluster economies to promote local economic development
Promote BEE and BBBEE through creative equity participation and
enterprise development
Retain local spending power
Enhance access to shopping opportunities
Private investment followed targeted public investment in the urban nodes



Create attractive public spaces
Promote a sense of pride
Enhance cultural identity
Perceptual
147
TABLE 3
Anchor projects in selected nodes
INK
Alexandra
Motherwell
Khayelitsha
Mitchell’s Plain
Bridge City
KwaMashu Town
Centre
P577 road
Safer Cities
Programme
Inanda Heritage
Trail
Alexandra Link
and Bridges at
Vasco
Da Gama and
Hofmeyer roads
Redevelopment
of Pan-Africa
Implementation
of electricity
masterplan
Far East Bank –
Ext. 9: 386
residential units
Far East Bank:
151 flats
Nokuthula
Special School
Rehabilitation of
Gordon Primary
School
Upgrading and
extension of
Altrec sport
facilities
Integrated
Transportation
Anchor Project
Tyinira: Major
Bus Route
Mission Road
Arterial
Xhosa Cultural
Village
NU2 Sports
Stadium
Ploughing fields
Environmental
Pilot Programme
Small-business
incubator
Employment
Centre
Stock farming
Khayelitsha
Central Business
District
Railway
extension to
Kuyasa
Health facilities
Housing and
access to land
Mitchell’s Plain
Central Business
District and
transport
interchange
Lentegeur Station
Precinct
Youth and Family
Development
Centre and
Tafelsig public
space upgrade
Housing
Swartklip regional
sports facility
Colorado multipurpose centre
R137,2 mill.
R274,7 mill.
R788,65 mill.
R253,7 mill.
Total
value R677 mill.
148
5
Institutional architecture
149
6
Key points from the comparative analysis
6.1
Trends




150







6.2
Urban agriculture is a critical component of LED
6.3
Focus on expanding sectors
151
6.4
Sustainability concerns
6.5
Review plans critically
6.6
Packaging, profiling, communicating
152
6.7
Capitalise on experience and networks
6.8
Capacitate local actors
6.9
All local government actors on board
153
ANNEXURE B
Expanding (support for) Khayelitsha’s small-enterprise sector
Contents
Abstract ................................................................................................................ 155
PART ONE
Background
1
Introduction: Why Khayelitsha? .......................................................................... 157
Map 1: Cape Town’s metropolitan south-east ...................................................158
Map 2: Khayelitsha ............................................................................................159
BOX 1: Some material on Khayelitsha’s business development .........................161
BOX 2: Supporting SMMEs in Khayelitsha .......................................................162
2
2.1
2.2
2.3
Small enterprises in Khayelitsha: Progress and challenges ................................. 163
Macro-data ........................................................................................................... 163
Sector breakdown ................................................................................................ 163
Turnover and employment data ........................................................................... 163
BOX 3: Sector breakdown of Khayelitsha SMMEs ............................................164
BOX 4: Needs of Khayelitsha SMMEs: A generic list ........................................164
Needs of local entrepreneurs ............................................................................... 165
Types of enterprises ............................................................................................. 165
2.4
2.5
3
SMME supporters in Khayelitsha: Who are they? .............................................. 166
BOX 5: SMME support – Institutions and player categories ..............................167
PART TWO
Support areas and key players
4
Utilising public-sector-support programmes ....................................................... 168
5
Training for business ........................................................................................... 169
6
Information and advice: Working towards a grid ................................................ 170
BOX 6: Potential information and/or advice suppliers in the area ......................171
7
Corporate involvement at Khayelitsha’s BoP ..................................................... 172
BOX 7: Types of corporate involvement that can
strengthen local SMMEs and their development ....................................173
8
Financial institutions ........................................................................................... 174
9
Business organisations focusing on Khayelitsha ................................................. 174
PART THREE Partnerships and complementary efforts
10
A Khayaplain business-development agency ...................................................... 177
11
Conclusion: Towards greater partnerships .......................................................... 179
154
ABSTRACT
Expanding Khayelitsha’s small-enterprise sector
The suburb or township of Khayelitsha exists now for about 25 years. In a time-span of
just less than a generation it has grown to almost 600 000 inhabitants, making it by far the
largest suburb of metropolitan Cape Town. In fact, together with Mitchell’s Plain and
Philippi the ―
metro south-east‖ of Cape Town covers about a third of the total population.
Undoubtedly poverty alleviation and job creation are key challenges for present-day
Khayelitsha, with the small-business sector viewed as a critical area in efforts to stimulate
and expand local economic development.
Although the absence of in-depth statistics makes it difficult to quantify the size and
growth of the small-enterprise sector in the area, the estimated number of 30 000 to 55 000
small, informal, survivalist and micro-business activities illustrate the vastness of the task
of supporting SMMEs in Khayelitsha.
This position paper*, which evolved out of efforts at the University of Stellenbosch
Business School to strengthen corporate efforts in support of the Base of the Pyramid (via
a BoP Learning Lab), tries to put SMME-support efforts in the area (and the metro southeast) into perspective. This is done on the basis of a multi-dimensional support matrix and
the underlying belief that diverse support efforts are in process, but are poorly co-ordinated
and inadequately strategised.
To accelerate existing efforts it seems necessary that
 all role players become aware of current or ongoing efforts and their relative strengths
and weaknesses,
 the existing or evolving scope for increased momentum in these different areas is
proactively explored and facilitated,
 co-operation between the different actors or players in these areas is strengthened in a
systematic way and
 media attention as well as public awareness about these processes and ongoing efforts
to strengthen co-operation are enhanced.
Since the momentum existing in each of the different support areas may not be sufficient to
accelerate and effectively co-ordinate these interactive developments, it is proposed that a
―
Khayaplain business-development agency‖ is established. This should be a public-private
partnership, involving the City of Cape Town, leading corporates in the metro-area,
business interests and NGOS as well as parastatal and civil-society players in Khayelitsha
and Mitchell’s Plain.
*
Prepared by W. H. Thomas, March 2009
155
Such an agency should not be just another bureaucratic layer, but a lean, professionally
staffed and focused body comparable to the Inner City (Cape Town) Partnership, with the
main goal to bring together and facilitate diverse business-development efforts in the metro
south-east.
156
PART ONE
Background
1
Introduction: Why Khayelitsha?
With its current population exceeding 550 000 people or close to 20 per cent of metropolitan
Cape Town’s population, Khayelitsha is the youngest of the urban sprawls of the city and
has the largest number of informal dwellings as well as the highest share of recent inmigrants.
This also makes it an area likely to be seriously affected by the current recession and its
trigger effects.
In the absence of major industrial, commercial or services establishments in or close to
Khayelitsha, locals are either commuters to places of employment in other parts of the city,
or they rely on local small and micro-enterprises for subsistence earnings. Thus, more than
most other suburbs of Cape Town, Khayelitsha relies much on its ―
small-enterprise sector‖
for income generation and the economic advancement of its inhabitants.
Taking these and related factors together the theme of this BoP Learning Lab-initiated
position paper should be plausible and fully justified: How we view, understand and
approach Khayelitsha’s small-enterprise sector is quite critical for Cape Town’s overall
economic and social development.
We can add another dimension, which broadens the topic and makes the theme even more
important for Cape Town’s economic-development strategising. Close-by Khayelitsha is
Mitchell’s Plain (separated by an apartheid-style corridor of open land) as well as Philippi
(East), which together with Khayelitsha house close to one million of Cape Town’s
3,6 million inhabitants. Thus, almost a third of the inhabitants of the metropolis live in the
―m
etropolitan south-east‖ (MSE), which is 25 to 35 km away from the city CBD. Given
increasing urban densities and rising fuel costs it is essential that the internal economicdevelopment base of the MSE is strengthened. (Quite appropriately, participants at the May
2008 Urban Renewal Conference coined the name ―Khay
aplain‖ for this strategic section of
Cape Town.) Maps 1 and 2 detail the respective areas of Khayelitsha and the metro southeast.
Viewed in this broader context we can also make mention of the countrywide transformation
of South Africa’s townships (hitherto viewed as dormitory areas for poor blacks moved to
the outskirts of urban settlements) into vibrant suburbs of gradually integrating cities.
Soweto, with its increasing number of modern shopping malls and middle-class suburbs, is
seen as the most striking example of that transformation, with parallels evolving in many
other cities. In Cape Town the metro south-east would be the most logical area, even though
Khayelitsha is much younger and less settled than most parts of Soweto. Yet, such a
perspective should also shape forward planning in this area.
157
MAP 1
MAP 1: Cape Town’s metropolitan south-east
158
MAP 2: Khayelitsha
159
Given the far greater development challenges of Khayelitsha’s communities, this paper and
our discussions focus on Khayelitsha rather than the full MSE. Yet, it should be clear that in
many fields successful strategies will have to tackle the issues jointly or in close interaction.
In a similar way it should be clear that small-enterprise development cannot be the only
thrust of economic development in Khayelitsha (others relate to business infrastructure,
industrial development and skills development for the needs of the inhabitants of the area)
with the different thrusts hopefully interacting. This realisation is the reason why this paper
and other policy proposals emphasise the urgent need for the establishment of a ―
Khayaplain
Business-Development Agency‖, cofunded by the City of Cape Town and structured as a
public-private partnership along the lines of the Cape Town Partnership (and Wesgro of the
1990s).
In focusing on the small-enterprise sector (of Khayelitsha and the MSE) we should also be
aware of the far-reaching evolution of South Africa’s small-enterprise sector and the
country’s small-business-support strategy over the past two decades. The particular issues
and problems of ―t
ownship SMMEs‖ are but one dimension of the overall strategy and, for
that matter, probably one which may have gained insufficient attention over the past decade.
It is, however, not an explicit function of this paper to review this evolution, nor earlier
writings on township SMME support in Khayelitsha or other parts of Cape Town (see
references in BOX 1).
Finally, some comments about the abbreviation ―S
MMEs‖. This refers to small, mediumsized and micro-enterprises, both in the formal and informal sectors of the economy. To be
all-inclusive we should also include ―s
urvivalist activities‖ (be they legal or not, or
ethically/morally acceptable or less so), since all of them (try to) generate income. The exact
(quantitative) demarcations of these categories may be important to determine the eligibility
for grants, incentives or specific public-sector treatment, but these technicalities are not so
important in the broader context of this paper.
Against this background we focus on the different ways in which SMME development in the
Khayelitsha area is currently supported or facilitated, or could somehow be more intensively
or effectively supported. Box 2 provides in a schematic way the overall approach of this
paper, where the centre of the box shows segments of Khayelitsha’s SMME sector (as
detailed to some extent in section 2), and the four outside wings detail different players or
agents of support. The four areas include public-sector-support programmes (A), NGO,
community and other support initiatives (B), education and training efforts to strengthen
entrepreneurship in the area (C) and corporate involvement at the base of the pyramid (BoP),
specifically to strengthen local small enterprises (D). These four areas will be elaborated on
in later sections.
160
BOX 1
Some material on Khayelitsha’s business development
THOMAS, W. H. (January 1988)
―Busi
ness development and job creation in African townships: The case of Khayelitsha‖,
Development Southern Africa, 5/1, pp. 108–19
THOMAS, W. H. and D. Biggs (May 1995 and beyond)
―Econom
ic development and job creation in Khayelitsha‖, Wesgro, 15 pp.
THOMAS, W. H. and S. Downing (April 1997)
―K
hayelitsha business and economic development: Agenda for action and planning‖,
Wesgro, 11 pp.
THOMAS, W. H. (January 2003)
―Fac
ilitating economic development and job creation in the Philippi node‖, report
prepared by Wesgro for the Pedi Task Team, Cape Town, 58 pp.
BUSINESS TRUST and the DPLG (2006)
―Econom
ic profiling of the nodes: Mitchell’s Plain profile‖, Monitor Company, 92 pp.
— (2006)
―Econom
ic profiling of the nodes: Khayelitsha profile‖, Monitor Group, 98 pp.
CICHELLO, Paul, C. Almaleh, L. Ncube and M. Oosthuizen (October 2006)
―Per
ceived barriers to entry in self-employment in Khayelitsha‖, DPRU/Tips conference,
Johannesburg, 32 pp.
MCA Africa (December 2006)
―Pr
eliminary impact assessment for the Khayelitsha Mitchell’s Plain urban renewal
programme‖, DPLG, 104 pp.
THOMAS, W. H. and Z. Nyoni (October 2007)
―Fac
ilitating Khayelitsha’s business-development process‖, USB, Cape Town, 8 pp.
THOMAS, W. H. (May 2008)
―Acce
lerating LED in the Khayelitsha-Mitchell’s Plain area of Cape Town: Feedback
from the nodal economic-development workshop of 08/09 May 2008‖, USB, Cape
Town, 42 pp.
— (September 2008)
―T
he case for a Khayaplain business-development agency to co-ordinate and accelerate
LED in the metro south-east‖, USB, Cape Town, 11 pp.
161
BOX 2: Supporting SMMEs in Khayelitsha
Supporting SMMEs in Khayelitsha
Banks and
other financial
institutions
1
Businessservice
suppliers
D
Transportservice
suppliers
2
3
Corporates impacting on the BoP
Manufacturers
Construction
* food processing
firms
* clothing
* furniture
* drinks etc.
4
5
Specialised suppliers
(e.g. pharmaceuticals,
cosmetics, etc.)
6
Wholesale and
retail (incl.
chains)
7
5
Cluster sites
5
Survivalist activities
A
s u p p o r t
f o r
Foreign
donors
1
3
Foreign-rooted
entrepreneurs
Southern Africa
SSA and others
2
Community
initiatives, coco-operatives
3
Sectorfocused
initiatives
B
4
Consultants
S M M E - s u p p o r t
7
FET colleges
(GHC)
8
Private colleges
Group
sche
mes
1
Red Door,
Seda centres,
libraries
5
USB, Matie GD
6
UCT GSB,
Shawco
Fact
sheets
e.g. VPUU, GTZ,
Innovaid
4
Informal sector,
micro-enterprises
PGWC
City of Cape Town
National
govern-ment
4
Shopping
centre-based
4
UWC
5
Churches
6
SMME-focused NGOs
b o d i e s
2
* URP
* Seda
* BEE programmes
* Khula, etc.
2
External-rooted (SA)
entrepreneurs
MP–CT–WC–
EC, rest of SA
C
t r a i n i n g
3
Formal small
enterprises
a n d
3
Isolated
business sites
Focused
training
3
* KP-BDA
* City administration
* Regulatory
framework
* Procurement
* Markets
* Incubators
3
Setas,
apprenticeships
Dissertation
research
2
Franchisees
2
Sector-training
programmes
M
e
n
t
o
rin
g
2
Street-based,
door-to-door
1
Locally-rooted
entrepreneurs
Students – staff – researchers - mentors
P u b l i c - s e c t o r
1
Foreign projects
(Innovaid etc.)
1
Medium-sized
enterprises
1
Home-based
E d u c a t i o n
5
IDC, DBSA,
Business Partners,
etc.
4
* General
programmes
* Khayel.-focused
programmes
* Red Door
Case
studies
S M M E s
Parastatals
Khayelitsha SMMEs (± 57 000)
9
Mentor schemes
10
(Extended)
families
7
Business
organisations
b o d i e s
162
2
Small enterprises in Khayelitsha: Progress and challenges
Aside from often nebulous perceptions about different characteristics or trends with
regard to informal, small and larger enterprises existent in Khayelitsha, little concrete
facts are readily available about this dominant sector of the area’s economy. Here we
can merely highlight a few dimensions.
2.1 Macro-data
The dilemma starts with reliable facts about the number of (licensed and unlicensed,
legal and illegal) ―
enterprises‖ in the area. Based on a total of 550 000 inhabitants or
145 000 households (own guesstimates for 2009) and macro-ratios relevant across
South Africa, the following could be a rough breakdown (to be seriously examined in
future research) in line with category II in Box 2.
Medium-sized (formal) enterprises
Formal small and micro-enterprises (incl. franchises)
Informal micro-enterprises
Survivalist entrepreneurs
Total number of SMMEs
350
8 000
14 000
35 000
57 350
However rough an estimate it may be, this figure already highlights the need for
substantially more attention to this area and the SMME sector. Even if only 20 per
cent of these operators or entrepreneurs are dynamic and have the potential to grow
into viable, expanding enterprises that would be a significant growth factor for Cape
Town and the area.
2.2 Sector breakdown
Equally limited is the available information about the involvement of these local
enterprises in different sector activities. In BOX 3 a rough guestimate is given, mainly
to trigger debate and further research. It includes categories largely ignored in
standard sector classifications (like items 4, 7 and 10) which are however significant
in the context of formal and informal business activities in townships.
Deeper analysis of these subsector breakdowns as well as time trends should be
encouraged in order to increase our understanding of the dynamics of ―
township
business‖.
2.3 Turnover and employment data
No comprehensive data are available for either turnover or employment levels and
trends. At best such data are on hand for small samples of formal enterprises.
163
BOX 3
Sector breakdown of Khayelitsha SMMEs (2009)
Sector/activity
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Retail trade
Catering, liquor sales, tourism
Manufacturing, repair services
Urban agriculture
Construction
Water, electricity, paraffin supply
Waste reclaim and removal
Financial, professional and business services
Property-related services (incl. subletting)
Child, old-age and HIV care
Education and training
Transport services
Telecommunication (incl. cellphones)
Other
No. of
enterprises
12 040
4 015
4 600
1 720
3 500
2 300
1 150
1 700
2 300
9 200
1 700
5 800
2 200
5 125
57 350
%
21
7
8
3
6
4
2
3
4
16
3
10
4
9
100%
SOURCE: Writer’s estimates
BOX 4
Needs of Khayelitsha SMMEs: A generic list
To succeed or better manage daily
business problems, SMMEs in the
formal and informal sector need
1
2
3
4
5
6
7
8
9
10
Easier access to markets (where they can sell their
products or services)
Access to finance for start-up, expansion, risk and
working capital
Access to information, advice and mentoring relevant
for the business/sector
Skills needed in the enterprise
Access to appropriate technology
Infrastructure facilities
Effective crime prevention
Regulatory flexibility
Networking opportunities
Sector-specific support services
If we assume a very low employment level of the 57 000 ―
enterprises‖ [assume one
owner-entrepreneur and two ―
assistants‖ or employees (many of whom may be
relatives and/or part-time involved)] we reach a total employment of about 160 000,
which would be roughly 45 to 50 per cent of Khayelitsha’s labour force. Compared
to widely suggested ―
unemployment‖ levels of 40 to 50 per cent of the local labour
force, such a rate would seem feasible. After all, many of the local informal sector
(or survivalist) enterprises are the result of people failing to find a better paid job
elsewhere in the city.
Incidental feedback on the turnover and/or earnings of informal enterprises (e.g.
waste removal or street-corner fruit sales) suggests very low net earnings of R800 to
164
R3 000 per month. Compared to available social grants, this may be a good
indication of the potential and limitations of informal micro-enterprises and
survivalist activities.
2.4 Needs of local entrepreneurs
Any serious investigation of SMMEs, their performance, challenges and
development obstacles will reveal a wide range of issues. It will also reveal wide
differences in the seriousness of development obstacles as well as the success with
which different entrepreneurs are able to address or handle such challenges.
As a frame of reference for discussion later in this paper, BOX 4 briefly lists the main
problems, challenges or needs which a high percentage of SMMEs in an area like
Khayelitsha experiences. Ideally, each of these needs should be addressed through
supportive action or the natural functioning of the market economy. In line with the
schematic presentation in BOX 2 we will have to see which of the four support areas
can (help) address these needs.
2.5 Types of enterprises
As schematically outlined in the centre of BOX 2, the large number of SMMEs in
Khayelitsha can be broken down into three categories, viz. by their locational
business base (I), the size and degree of formality (II) and the background of the
entrepreneur (III).
I
This breakdown is self-evident, but also quite significant in as far as the needs,
problems and opportunities of (informal) street traders are totally different
from those operating from their homes and those renting premises in a
shopping centre or industrial area.
II
We already referred to different size and formality categories, which also have
a major influence on the problems and needs of enterprises.
III
Entrepreneurs operating in Khayelitsha may have grown up in the township
(III–1) or may be South Africans from Mitchell’s Plain or other parts of South
Africa (with Eastern Cape-rooted Africans a particularly strong group in
Khayelitsha (III–2). They may also be foreigners from other African countries
(or overseas) who came to Khayelitsha as refugees or business investors (III-3).
In addition to these different categories of locally active entrepreneurs (whose needs
and concerns quite obviously differ), there are also significant numbers of
Khayelitsha-rooted people who may run, own or be involved in businesses outside
the area (e.g. in Mitchell’s Plain, the CBD, Claremont or other parts of the Western
Cape – or in the Eastern Cape or Gauteng). This group is important in as far as some
of them may (want to) return to Khayelitsha after years of learning and practising
elsewhere (almost like the returning expatriates who have played a critical role in the
business development of some developing countries, e.g. Ghana or China).
To conclude this section it seems important to once again refer to the longer-run
165
transformation of the Khayelitsha business environment and the local business
community. A mere 25 years ago Khayelitsha was largely a vast open area, intended
to absorb Africans who could ―
no longer be evicted from or kept out of the greater
Cape Town area‖. Its population increased from a few hundred squatters in 1984 to
the current (almost) 600 000, which implies an extremely rapid settlement growth.
Much of this growth was of a dormitory- or informal-settlement nature, providing
little attention to business and industrial infrastructure facilities. It is only over the
past decade and with the evolution of the metro south-east that these aspects are
getting greater attention. In a similar way, some of the physical or spatial
characteristics of the area (its proximity to the sea, airport, Mitchell’s Plain and
Philippi industrial area) have not yet been fully incorporated in its businessdevelopment strategy.
3
SMME supporters in Khayelitsha: Who are they?
In discussions about support available for township enterprises ready reference is
often limited to the more visible information and advice centres like the Seda and
Red Door offices located in local shopping centres. Yet, once we look more carefully
at the different agencies and government or municipal departments who are (or
should be) involved in Khayelitsha, the list becomes quite long.
BOX 5 is an attempt to cover the full spread of bodies, agencies or private service
suppliers directly or indirectly engaged in this field. It will be one of the challenges
of a more focused and proactive strategy of SMME support in Khayelitsha (or the
metro south-east) to clearly profile each of these support-supplier categories, to help
spread databases about these suppliers and increase interaction as well as cooperation between them. With more than 50 000 SMMEs spread over the vast area of
Khayelitsha, it is essential that a wide range of such bodies exist and is well known
to local entrepreneurs.
PART TWO of this paper covers these services in the context of the different needs of
local SMMEs.
166
BOX 5
SMME support: Institutions and player categories
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
National-government department (DTI, Treasury, Agriculture, DPLG, etc.)
Provincial governments (Red Door, Tourism, Procurement, etc.)
Municipalities [CCT – programmes, infrastructure projects (e.g. markets) licensing,
incubators]
Foreign donors (GTZ, VPUU)
Parastatals (IDC, DBSA, Business Partners, Khula, Seda, etc.)
Organised business (Chamber of Commerce and Industries, AHI, Nafcoc, Fabcos,
Wecbof, etc.)
Sector associations (e.g. taxi, clothing, construction, traders)
Community initiatives (e.g. savings clubs, church groups)
Small-business consultants
Training centres (incl. FET colleges, universities, private training suppliers)
Research centres
SMME-focused NGOs (e.g. Library Business Corners)
Individual corporates (proactive at the BoP)
Financial institutions (banks, micro-finance bodies)
SMME-focused media (e.g. Big News)
(add other bodies active in SMME support relevant for Khayelitsha)
167
PART TWO
Support areas and key players
4
Utilising public-sector-support programmes
(refer to Section A of BOX 2)
Over the past 15 years public support for South Africa’s SMMEs has expanded and
diversified substantially. As listed in BOX 5 this includes support programmes and
specific projects at all levels of government (national departments, provincial
authorities and municipalities) but also support supplied via statutory bodies and
parastatals. In addition, broad-based BEE is pursued proactively by all public-sector
bodies, with several of the score-card elements specifically addressing issues relevant
to (black-owned or –managed) small enterprises. This applies in particular to
preferential procurement as well as spending on enterprise development.
Virtually all of these public-sector programmes also apply to SMMEs starting,
operating or expanding in Khayelitsha. The critical issues here are (i.a.) the
following.
 Do local entrepreneurs know about these programmes?
 Are they able to apply for or utilise existing support programmes?
 Where support consists of national or provincial support channelled via local
authorities, is the municipality proactively utilising such support in Khayelitsha?
 Are public SMME-support programmes fully adapted to local needs and the
ability of local SMMEs to utilise them?
 Is there effective co-operation between different (public and private) support
suppliers to optimise the benefit of these programmes?
The actual support programmes range from sector-focused incentives to training
support, infrastructure co-funding and different types of business-financing support –
to mention just a few categories. To increase the scope and effectiveness of those
support programmes in Khayelitsha it seems necessary that
 the different public-support suppliers get better acquainted with the needs and
processes of local SMME development,
 local business leaders and community developers become much more aware of
available programmes,
 the information and advice network or grid in the area is radically expanded (see
BOX 6 below),
 the media give more attention to actual programmes and how they are (or are not)
utilised,
 locally focused business-training bodies (see section 5 below) give explicit
attention to SMME-support programmes available from public bodies.
Naturally these efforts should also include SMME-support programmes initiated (or
co-funded) by foreign donor agencies (like the GTZ and VPUU). These programmes
often provide access to valuable experience in other South African cities/townships
168
or provinces.
Ideally, co-operation between these different public-support suppliers could benefit
from a forum-type regular get-together, where the focus falls on the specific needs
and operational challenges of Khayelitsha (or Khayaplain).
5
Training for business
(refer to Section C of BOX 2)
The estimated total of more than 50 000 SMMEs existing in the Khayelitsha area
(and probably a net addition of about 2 000 per year) should give us a good
indication of the vast need of business-related or –focused training needed in the
area. Such education and training should consist of the full range of formal and
informal facilities relevant for the different sectors and business types (as indicated
very briefly in Section C of BOX 2. In many cases the availability of training (e.g. for
survivalist entrepreneurs) may result in these learners changing their whole business
approach, rather entering some other formal business or shifting to other types of
employment.
Knowledge about existing business-focused training facilities in or around
Khayelitsha is quite superficial, just as existing training bodies probably only have a
superficial understanding of the actual needs and learning challenges of local
entrepreneurs and business operators. The same applies to training offered elsewhere
which could be made accessible to ―
business learners‖ of the Khayelitsha area.
Section C of BOX 2 suggests that a lot could be done by students, staff, researchers
and mentors linked to these training suppliers in order to expand the effective
coverage of training and make it more relevant. There are indications that there are
research and development initiatives in each of the four Western Cape universities to
address the training, coaching and mentoring challenges of Khayelitsha, but to date
actual progress is still disappointingly low.
In this context the question can also be raised what amount of ―
entrepreneurship
training‖ is provided in Khayelitsha schools via this and related school subjects. In
the same way the question has to be raised whether Good Hope (FET) College would
not (or should not) play a far more proactive role with regard to business-focused
training in the area. This could be via its courses or by co-operating with other
training bodies which might benefit from sharing GHC facilities in Khayelitsha.
Lately a lot has been written about the need and potential impact of mentoring
schemes as part of practical business straining. There are numerous schemes in
operation, yet the actual coverage of Khayelitsha’s 22 000 small and microenterprises is probably still minimal (not to even speak about the survivalist
operators). It may be in the provision or co-funding of mentors that corporates from
outside Khayelitsha, which want to get involved in development at the base of the
pyramid, could play a very significant role. It could, for example, be the provision of
mentors for township enterprises that met procurement needs of corporates. Yet, here
again there may also be the need to mobilise short training programmes for these
169
mentors in order to enhance the effectiveness of their efforts.
In order to increase the wider awareness and knowledge with regard to these training
needs and actual offerings, there is room for some business-training forum focusing
on the Khayelitsha or Khayaplain.
6
Information and advice: Working towards a grid
(refer to Section B of BOX 2)
With over 50 000 formal and informal businesses engaged in Khayelitsha and (due to
the high ―
mortality‖ rate of SMMEs) probably thousands of people trying to start a
new business each year, there is a vast need for information and advice about
business practices, problem solutions and related issues at any time. Much of that
need for information or advice may not be (well) articulated and may therefore
remain unanswered, but that does not dispute the nature and intensity of information
and advice needs in appropriate, user-friendly forms.
The most obvious response to these needs is the existence of one Seda information
office and one Red Door information office located in Khayelitsha. Yet, if we
compare staffing and attendance rates at these two centres with the likely needs and
diversity of information and advice needs across the area, the total inadequacy of
existing facilities becomes obvious.
To broaden our understanding of the wide range of potential information and advice
suppliers or channels, BOX 6 lists no less than 20 different sources or channels, all of
which could be relevant and useful in Khayelitsha.
To be effective these information and advice points would have to co-operate,
working like a grid covering the whole area and its 150 000 households. In addition,
the effectiveness of the information and advice supplied would to a large extent
depend on the








spatial spread of physical facilities,
the factual correctness and local relevance of information supplied,
the down-to-earth (non-academic) nature of the information,
the sector and niche focus and relevance of information,
sufficient level of detail of the information provided,
effectiveness of the chosen media (also taking into account widespread illiteracy),
choice of language for client contact and
use of case studies as illustration material.
These few points also illustrate the relevance and significance of interaction between
different information and advice suppliers as well as the need for co-operative action.
170
BOX 6
Potential information and/or advice suppliers in the Khayelitsha area
1
Formal small-business-service centres (Seda, Red Door, Business
Place)
2
Library Business Corners
3
Local newspapers, community papers and radio/TV
4
Local schools (entrepreneurship teachers/pupils)
5
Business chambers and sector/traders associations
6
Franchisors (for their local franchisees)
7
Internet services, websites and SMS services
8
Corporates passing on information and advice to black smallbusiness partners
9
SMME training bodies present in Khayelitsha
10
Community, gender and/or church groups catering for identified
needs of members
11
Local small-business consultants
12
(Local) Banks and other service providers
13
Municipal and other public-sector offices or service points
14
Relatives, business partners
15
Trade fairs and industry meetings
16
Financial, insurance and other business-service providers
17
Business-focused CDs or DVDs, books, theatre
18
Information pamphlets, posters and notice boards (also catering for
illiterates)
19
Information call-centres
20
Mentoring
171
In this context one would again hope for the evolution of some Khayelitsha or
Khayaplain business-information forum to help co-ordinate efforts and to more
effectively link up with metropolitan, provincial an national facilities and initiatives
driven by the public and the private as well as NGO sectors.
7
Corporate involvement at Khayelitsha’s BoP
As part of the increasingly wider spread of awareness with regard to corporate
responsibility, business ethics, corporate social investment, social entrepreneurship
and ―
corporate involvement a the base of the pyramid‖, there is also increasing
attention given to the actual (or potential) involvement of local, national and multinational companies on processes which directly impact on township business
development. This also applies to Khayelitsha and other townships in the Cape Town
metropolitan area.
Against that background BOX 7 lists ten examples of different types of such
involvement, each of which can either be found in the Khayelitsha businessdevelopment process or has lately been talked about or seriously considered.
As part of its activities as BoP Learning Lab, a small action group at USB tries to
capture these case studies through an ongoing programme of lunch-hour workshops,
where corporate representatives are invited to present their experiences as case
studies. These could be national, regional, Cape Town- or Khayelitsha-based. Where
possible these case studies are documented as BoP ―
Fact Sheets‖ for dissemination in
printed form or via the website (www.bop.org.za). Obviously, this is only the start of
a process that demands far greater attention in order to encourage those initiators and
to spread lessons of experience.
In BOX 2, our broad framework for SMME support in Khayelitsha, this category of
corporate supportive involvement is shown in section D, with a few examples
indicating the wide range of such interaction, involvement and potential support. In
line with the basic thinking underlying the BoP approach, viz. the large number of
households in the area (150 000+, growing at probably two to three per cent per
annum), corporates should be increasingly interested in such interaction, because it is
in line with BEE pressures, should be profitable and can reduce socio-economic
polarisation.
Once again it is clear that there is currently still little direct interaction between
corporates about the effectiveness of these efforts and/or how they could be
expanded or streamlined. Neither local nor regional business associations are so far
giving much attention to such interaction – which creates a further challenge for
future action.
172
BOX 7
Types of corporate involvement that can strengthen
local SMMEs and their development
1
Chain stores from outside the area opening local branches and procuring
some of their products locally
2
Nationally or regionally-based (externally located) corporates sourcing some
of their inputs from Khayelitsha suppliers (e.g. craft products, marketing
services, tour guides)
3
National property developers initiating shopping or office and service facilities
in Khayelitsha (ideally adapting the style to local needs and conditions for
optimal SMME involvement)
4
Corporates running (or sponsoring) Khayelitsha-focused mentoring schemes
(corporate-focused or in co-operation with a local service supplier)
5
Financial institutions opening “business-information centres” in Khayelitsha
(either under their own brand or via a local entity)
6
Corporates supporting SMME-focused training programmes offered in
Khayelitsha (possibly in co-operation with an existing local public or private
educational facility)
7
A corporate financially and/or organisationally supporting a local
(Khayelitsha-based) business or sector association (e.g. a clothing initiative
or co-operative)
8
External corporates forming partnerships with Khayelitsha-based or –focused
small/medium enterprises (as a variation of BEE initiatives)
9
Corporates (possibly in partnership with the municipality) help to upgrade or
more effectively run informal trading facilities (e.g. improve shelters, storage
facilities, signage)
10
Corporates get involved in local incubators or hives and related clustering
facilities
Although specific corporate examples could be cited for most of the above, this list is
deliberately kept generic.
173
8
Financial institutions
We mentioned earlier that the access-to-finance obstacle is perceived to play a very
central role in the process of SMME development – in particular in areas like
Khayelitsha, which in many different ways is still ―
transitional‖ and has high levels
of poverty and unemployment. Thus, although banks, insurance companies and other
business-service providers can be viewed as just another sub-category of corporates
engaged at the base of the pyramid, these institutions and their proactive role in
efforts to improve access to finance for local SMMEs are of critical importance for
SMME support in the area.
Once again different steps or initiatives can be distinguished and are briefly
mentioned here.
 Established banks, insurance companies and related firms can (and should) have
at least one branch in Khayelitsha (or its more immediate surroundings like
Mitchell’s Plain and Philippi).
 These branch offices should be properly staffed, with capacity to address typical
(local) needs in the most appropriate way (e.g. taking into account language and
literacy patterns).
 Suppliers of newer types of micro-finance, group savings and other financial
services should also be visibly present in the area. Practical steps should be
considered to enable these bodies to afford offices or business premises in
Khayelitsha, even though their own finances may not (yet) allow this. (This
could, for example, be done through the establishment of a ―
financial-services
cluster or hive‖ in a business section of Khayelitsha.)
 Externally-based financial institutions relevant in the sphere of SMME finance
should be encouraged to present their services in the Khayelitsha/Mitchell’s Plain
area.
9
Business organisations focusing on Khayelitsha
As soon as one talks about efforts to assist, support or facilitate growth and
development of business enterprises in a sector, town or otherwise delimitated space,
attention falls upon the existence, action-spread and effectiveness of business
organisations. The most logical examples are the (local) traders associations or
business chambers. From the experience accumulated elsewhere we know that, if
functioning properly, they could significantly help to
 make local business people aware of issues, challenges, ongoing support, etc.,
 strengthen communication and networking between local business people,
 improve contact between local businesses and different municipal, provincial and
national offices relevant to SMME activities (e.g. about zoning, business licenses,
amenities, street signage),
174
 articulate business development and infrastructure bottlenecks that need higherauthority attention,
 articulate training needs of local SMMEs and facilitate efforts by local or external
training suppliers to meet those needs,
 influence the nature and flexibility of regulatory controls affecting local SMMEs,
 strengthen BEE efforts related to local SMMEs,
 help cushion and overcome conflicts related to foreign entrepreneurs operating in
Khayelitsha (thereby also dampening xenophobia),
 negotiate with local and higher authorities about the availability of SMMEsupport programmes and the general functioning of SMME controls and
assistance,
 articulate the absence of specific business services in the Khayelitsha area and
consider steps (e.g. partnerships) to fill such gaps.
Several other potential efforts or roles of such associations could be listed, but the
general message should be clear: Their existence and, most importantly, their
effective functioning could significantly strengthen SMME support in an area like
Khayelitsha.
Unfortunately, (small-)business associations are fairly ineffective in South Africa
compared to the more developed countries. This applies in particular to local
development regions like rural areas, smaller towns, townships and informal
settlements, i.e. all areas where such development-facilitating structures are seriously
needed.
Sadly, Khayelitsha is no exception to this stark reality. Although several bodies have
a presence in Khayelitsha (like Nafcoc, Fabcos, the Cape Regional Chamber – but
lesser so the AHI and Wecbof) none has a well staffed or capacitated local office.
This also applies to the many locally-based traders associations (e.g. those focusing
on flea markets and taxis).
Small membership numbers, the inability to mobilise significant revenue via
membership fees (thereby getting too dependent on ad hoc donations or
sponsorships) and the absence of other sustainable revenue sources make it difficult
for these bodies to maintain even a minimum of professional staff. This again
reduces the respect which these bodies have in the eyes of local and other authorities
as well as the ability of these bodies to actually design or negotiate meaningful
strategies and programmes to tackle key SMME-support issues.
To make matters even worse, higher-level representatives and staff of the respective
business associations (i.e. Nafcoc, Fabcos, Regional Chamber) also have only a
175
limited capacity, so that they mostly seem incapable (or unwilling) to really help the
respective ―
Khayelitsha offices‖.
The overall result of this sad state of affairs is all too visible in the current state of
SMME support in Khayelitsha: Local representatives are not able to put sufficient
(and/or clearly focused) pressure on relevant authorities to actually move in the right
direction. This apparent ineffectiveness further harms the status and membership
recruiting capacity of the local associations – which completes the vicious circle.
Two steps seem to be critical to address this dilemma, which has implications in
many different spheres of SMME support in Khayelitsha.
 The absence of effective (bottom-up) business associations makes it all the more
important that a ―
Khayelitsha (or Khayaplain) business-development agency‖ is
created (as discussed hereafter in Section 10).
 Part of the action by the agency (and strategies then considered by the relevant
bodies) should include practical, public-sector-supported steps to create at least a
minimum operational capacity for those sector associations.
176
PART THREE
Partnerships and complementary efforts
Having briefly discussed a range of dimensions in the complex process of SMME
support in Khayelitsha we should realise that
 a lot of concrete support is already taking place, which is probably more than is
widely perceived on the basis of media reports and interview feedback,
 yet, notwithstanding these diverse efforts, the support intensity or spread falls far
short of what is needed by the 30 000 to 50 000 formal- and informal-business
activities (i.e. to make a significant and lasting impact) and, what is equally
important,
 the mere incremental spread of current efforts and activities is not going to lead to
an acceleration of the support process that is sufficient to meet those needs
(especially in a phase of global crisis and its local fallout).
In the final section of this position paper two steps will now be briefly discussed
which follow these conclusions and, if acted upon, may help to accelerate the
momentum, viz.
 the establishment of a Khayaplain business-development agency and
 proactive strengthening of partnership relations between the different support
players identified earlier.
Both of these aspects will only be covered very briefly, since serious efforts to
pursue them will in each case demand complex strategies.
10
A Khayaplain business-development agency
The origin of this proposal goes back to the May 2008 conference of the Urban
Renewal Project which focused on socio-economic-development efforts in Mitchell’s
Plain and Khayelitsha. During the discussions several delegates (i.e. representatives
of local communities in these areas) used the term ―
Khayaplain‖ to refer to the whole
area of Khayelitsha and Mitchell’s Plain and efforts of communities in those suburbs
to improve their living and income-generating environment.
The use of the combined term helped to overcome what in many people’s minds (and
in day-to-day bureaucratic processes and negotiations) is frequently a conflict of
interest between developments in the two areas. For example,
 the Promenade Mall in Mitchell’s Plain is seen to drain consumer or household
spending away from Khayelitsha shops (including the relatively new but less
glitzy Khayelitsha Town Centre),
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 established industrial areas linked to Mitchell’s Plain make it more difficult for
such (new) areas to evolve in Khayelitsha,
 the Mitchell’s Plain Town Centre, being more diversified and developed than the
few central buildings in Khayelitsha has the ability to be the ―
centre‖ for both
areas, with the strategically located Philippi area the second in significance –
leaving Khayelitsha’s ―
centre‖ as a poor third.
If one focuses on business-development needs in those three areas we actually talk
about the metro south-east (MSE), which covers about a third of Cape Town’s
population and quite a diversity of residential, commercial and industrial activities,
with the N 2, Cape Town International Airport and the False Bay coastline (and
nature-reserve sections) as further strategic factors.
Viewed as a totality, the MSE has a dynamic population, a diversity of growth
forces, major social and economic-development challenges – and a largely
underdeveloped, neglected or poorly supported SMME sector. With respect to the
latter, Mitchell’s Plain and Khayelitsha could (and should) be viewed as
complementary, though with both areas needing more and better co-ordinated
support.
One could also state that, notwithstanding lots of attention given to these two areas
by various city departments, there is (currently) no systematic, holistic businessdevelopment strategy, let alone co-ordinated implementation of it, for the MSE. This,
for example, is in stark contrast to the efforts that have gone into the City
Partnership, which covers Cape Town’s ―inn
er city‖.
Assuming that the need for such a facilitatory body is accepted, it is suggested that
practical steps should take into account (i.a.) the following points.
 The agency should be a public-private partnership, with the City of Cape Town,
the corporate sector and local business representatives key partners.
 A major part of the basic running cost of a 15- to 25-person agency would have to
be covered by the city.
 The agency should be business-development-orientated, i.e. not become a vehicle
for social care or NGO facilitation.
 Wherever possible development tasks should be left to specialised (market-based
or existing parastatal) establishments rather than to aim at the duplication of such
specialised roles.
 A major task of the agency would be to foster and facilitate co-operation between
the many development players as discussed in Part Two of this paper. For
example, the agency should not itself start to help finance SMMEs, but should
push for a process through which awareness about existing and emerging microfinance facilities is enhanced and more such bodies are attracted to the metro
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south-east.
 The proposed body should be proactive in the collation and dissemination of
relevant business statistics and related information, encouraging the appropriate
bodies to give greater attention to the needs of this area (rather than itself creating
such capacities).
 The agency should be flexible in its internal structure, in order to adapt to needs
and available resources, always guided by the need to maintain or enter
partnerships with other institutions (including the relevant sections of the City of
Cape Town).
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Conclusion: Towards greater partnerships
The current global recession is teaching us (in a rather painful way) just how
interdependent economies, economic sectors, regions and metropolitan areas are and
why proactive partnerships are essential in order to successfully tackle major
challenges.
The activation, deepening and broadening of business development in Cape Town’s
largest and hitherto still poorest suburb (Khayelitsha) constitutes such a challenge.
This position paper has tried to show that promising developments are visible, but
have to be strengthened through more effective, sustained and better co-ordinated
―
partnership action‖ between private, public, civil society and parastatal players.
No single institution can play that role of facilitator on its own. We have identified a
great variety of groups (see BOX 2), and we have suggested a business-development
agency as a capacity-enhancing institution. Most certainly, a university or businessschool initiative cannot fulfil such a critical role – at best we can sensitise the
different place and generally facilitate the process. It is now up to leaders in these
different bodies or player groups to work towards an integrated process.
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