The New South Africa

This is great, natural segregation. What a way to give back to the neighborhood, profit from the poor.
As this women waashes her clothes in the street along with millions of others on Soweto. Developers and Retailers will exloit the nieve new "middle class". Look for futher articles regarding how the new "middle class" is financially over  extended.

 

By Jan Hennop

South Africa's famous Soweto township is undergoing an economic metamorphosis as more and more blacks join the middle class, creating a demand for top quality consumer goods.

Plans are afoot in the township - which once grabbed world headlines as a political hotbed in the fight against apartheid - to build a world-class shopping mall as well as an upmarket hotel.

Construction started two months ago on the shopping centre the size of eight football fields which will open its doors to the public next year, while the government unveiled a project last month to build a luxury four-star hotel.
The mammoth Maponya Mall and the Freedom Square hotel a few kilometres away will be able to compete with the best of Johannesburg's posh - and mainly white - northern suburbs have to offer, an analyst said.

"The Maponya Mall is the first of its kind to be opened in Soweto. It's black-owned and an indication of the growing buying power of the black middle class," said Mzamo Masito, a marketing and consumer analyst.

"It shows that big brands are starting to take notice of this group and are starting to chase them, instead of the other way around," he said.

According to the most comprehensive study to date, the emerging black middle class in South Africa has nearly a quarter of annual cash buying power of R600-billion.

Soweto residents have spending power estimated at around R4,3-billion, of which R3,4-billion is spent outside the township, said the Unilever Institute at the University of Cape Town.

Ultra-modern complex

"You will never have development in Soweto if 75 percent of the people spend their money outside the township," added Masito. "Money doesn't flow and doesn't stay around in the township at the moment."

"These investments are the best things that could have happened," he added.

The R500-million Maponya Mall, named after one of Soweto's best-known business families, are to house some of the top consumer names in South Africa and Soweto's first fully-fledged cinema complex.

"People in the township want access to shopping malls and other things which have been previously only been found in white areas - and they demand the same quality," said Masito.

"For many years, there has been the perception, sometimes rightly so, that what people got in Soweto was inferior to that of white areas," he said.

At Freedom Square, where the freedom charter in the struggle against apartheid South Africa was first framed in 1953, a 48-room four-star hotel is soon to change the landscape for ever.

The ultra-modern complex will spearhead economic revival in the area and will boast a tourism office, an open-air museum, shops, a market and several restaurants.

Both the Maponya Mall and the Freedom Square hotel are expected to create hundreds of new jobs.

"These projects are encouraging economic growth and development to South Africa's largest township," said Johannesburg mayor Amos Masondo last week at a function to introduce Maponya to potential retailers.

"It puts pride back into our community," added Richard Maponya, chairperson of the Maponya Group, who is developing the shopping centre.

Added Masondo: "It will encourage people to see Soweto as a place that you can go back to - not just a place where you come from." - Sapa-AFP

 

Christelle Terreblanche
    May 21 2006 at 12:23PM

South Africa's controversial Black Economic Empowerment (BEE) programme is set to come in for vigorous criticism from a blue-ribbon panel about its potential for cronyism and elite enrichment.

Cyril Ramaphosa, Auditor-General Shauket Fakie, Public Service Commission (PSC) chairperson Stan Sangweni and Deutche Bank chief executive Martin Kingston are among a surprisingly diverse group of leaders in business, politics and administration who have joined forces to scrutinise "potential distortions" in the unique policy which is drawing increasing flak.

They are to reveal their concerns in a set of detailed papers next month, which include not only the limited nature of even broad-based BEE and social responsibility, but are understood to stress its potential for cronyism and the nature of deals which often leave beneficiaries without any real, long-term assets.

Their concerns come at a time when ANC alliance partners have upped the ante over BEE's negative consequences, with both the South African Communist Party (SACP) and Cosatu expected to make further critical pronouncements in the coming week after respective meetings among their leaders. 'Potential distortions' BEE's potential loopholes were also highlighted this week by the revelation that tycoon Mzi Khumalo's Metallon Ventures scored a whopping R70-million in an eight-month deal in contravention of the share lock-in agreement with construction company Basil Read, leaving it with diminished black shareholding. Civil society groups have also started flexing their muscles over the "unholy alliances" of those holding "entrusted power" in both business and state, in the wake of disclosures like slain magnate Brett Kebble's alleged multi-billion fraud in the name of BEE, and other controversies such as the alleged bribes involving an arms company, businessman Schabir Shaik and politician Jacob Zuma. It also comes in the wake of a controversial audit report by Fakie of non-declaration of interests. This, in turn, was based on concerns raised last year by Sangweni over perceived wide-spread non-declaration of shares and other business interests by officials - and revelations that even judges could be among them. But the convener of what could be called an ad hoc think-tank, ANC member of parliament Dr Ben Turok, emphasised that all key players favoured BEE as being essential to deracialise and transform the economy. 'Unholy alliances' "The criticism centres on elite enrichment and (BEE's potential for) opening the doors to cronyism. Those are the two key elements of the critique," said Turok, who is also the editor of the policy review journal New Agenda, which is due to publish the detailed critiques. "The other issue is whether these (BEE) transactions add value to the economy. They may add value to individuals, but do they add value to the economy? And most people feel that BEE should do so. Does it actually transfer assets to black power players? "Certainly, in some cases it does, but in others it does not," the MP said. He said in his own investigations of BEE, he discovered that many financial transactions involving transfers of equity to black partners are so bound with conditions "that there may have been no transfer at all". This led him to contact the top thinkers. "And indeed, they surprised me," said Turok. "Some top business people from big companies insist that the old clauses about social responsibility were not enough. "There has to be a degree of transformation in the economy, including ownership and management and also across all layers of staff where black participation must increase." Politician-turned businessman, Ramaphosa, often seen as a main beneficiary of BEE, said that his concerns centred largely on the fact that BEE was still not broad enough. "As always in SA, we are doing something first and unprecedented and it's a huge transformation issue and we are learning as we go along, but I am satisfied BEE will achieve, in the end, what it is intended to do," he said. But potential for self-enrichment through public office lies at the heart of the latest public statements and concerns over BEE underscored by the alleged high incidence of non-declaration of interests by top officials. It involves the provision that companies wishing to be considered for government tenders need BEE scores, which opened the door for crony arrangements by which a company would seek influence with public servants to get a tender. Sangweni, who is also writing a paper, said he welcomed the intervention by his peers. He said the PSC was preparing to present parliament and the cabinet with a comprehensive report on proposals for stricter measures to ensure that conflicts of interest were reported. In addition, work with tenders aimed at further regulating BEE in the public and private sectors.