Keep The Bus Moving: SMME Inclusion in the Construction Sector

The “construction mafia” has become the subject of numerous news headlines, as disputes, disruptions, and violence on building sites across the country increasingly threaten the construction sector and urban development. Through the media, “construction mafia” has become a popularised catch-all phrase referring to practices that involve violence, extortion, or threats by organised associations of small, medium and micro-enterprises (SMMEs) in the construction industry. These associations self-identify as “local business forums”, which in popular rhetoric have become synonymous with extortion, such as demands for work or protection money. Both the private construction industry and the public urban development sector are struggling to manage this growing phenomenon, and disruptions to construction sites are affecting many different city departments and entities, such as development planning, human settlements, transport, water, and sanitation.


In 2020, research by the South African Cities Network (SACN) found that site disruptions on large-scale City projects were a major factor in the slow rate of infrastructure delivery, with many projects dragging on for much longer than intended.2 These practices by “local business forums” result in huge amounts of public money and resources being wasted and threats to the lives of city officials caught in the crosshairs.3 Yet there has been little academic and empirical research into the phenomenon, apart from two reports that are discussed later in the report.4 Furthermore, most research has focused on the impact of these practices on the private construction sector, rather than on public development projects and how public officials plan, manage and respond to the complexities of SMME inclusion.


This paper argues that the term “mafia” does not accurately portray the nuances of SMME tensions in the construction sector nor its underlying drivers, and makes what should be an issue of economic development, a matter of crime and policing only. The “construction mafia” label conveniently shifts the blame away from a public and private sector that has neglected its developmental mandate of SMME inclusion in construction. The scarcity of opportunities in a context of extreme poverty and an unemployment crisis, coupled with the potential lucrativeness of each contract, creates a high-stakes and hostile environment. No cohesive vision outlining what SMME inclusion should look like or what it should achieve exists, and City departments and project managers are left to try to work it out on their own.


After examining the underlying causes for the rise in business forums and ways in which SMMEs are included in the construction sector, the report looks at the practitioner experience, through case studies of three different metropolitan municipalities (Nelson Mandela Bay, Mangaung and City of Johannesburg). The key question is: How are city governments using different approaches to engage with business forums in order to keep development projects moving? Through 19 in-depth interviews with city officials, the case studies explore the different challenges and approaches to the inclusion of SMMEs in the construction sector, and highlight innovative practices that are assisting cities to find ways to mitigate the challenges posed by business forums, to avoid project disruptions and “keep the bus moving”. It is hoped that other cities can learn from these case studies and be able to implement better practices in their own contexts. Ultimately, the solution lies in understanding and addressing the underlying failings of the construction sector to incorporate SMMEs in a transparent, regulated and developmental manner.