Township Economies During COVID-19; Resilience amid Volitality

Township Economies During COVID-19; Resilience amid Volitality

by Kopano Ntsoane
21 August 2020

By virtue of their sheer size, diversity and nature of business practices in all sorts of spaces and places, township economies can be regarded as the lifeblood and the future of city economies. While the Covid-19 pandemic has been accompanied by unprecedented levels of disruption in city economies, with townships being severely hit, the resourcefulness of survivalist businesses and micro-enterprises even in the absence of support cannot be overstated. Informed by various research outputs, stakeholder engagements and firsthand experience, this article makes observations about what has been the apparent culture and conditions within the township economic space during this pandemic and implications for the future. It posits the need to understand the character of township economies, advocate for the review of the regulatory environment pertaining to township businesses and recommend collaborative ‘action’ by role players.

Diversity, resilience and vulnerability.

The need to understand the nature of business practices in township economies should be underlined as it is key to avoiding misguided interventions. Township economies and markets are relatively self-sufficient networks of licensed and unlicensed commercial activities operated by township entrepreneurs across a variety of sectors to serve the needs of township residents. There is a widespread recognition that these economies are deeply embedded in governance systems of power and decision making, thus making them complex. The complexities associated with township economies also stem from the fact that townships were not necessarily designed for diverse commercial activity but for residential purposes. With limited movement during lockdown, some commercial activity has been limited to residential spaces. This situation makes townships high risk and most vulnerable to health and economic stresses and shocks, yet their economies have demonstrated some resilience and potential to survive despite the odds.

A scan on the regulatory environment.

The SACN has embarked on a three-part action research initiative intended to address key institutional barriers to the growth and development of township economies, particularly as it relates to enablement through regulation, with a focus on Gauteng. A key finding made in this regard is the cluttered and fragmented nature of legal and policy framework, scattered across sectors and government spheres and agencies. The legal requirements tend to act as an impediment that hampers participants in township economies. This is largely due to the regulatory burden, stringent legal requirements and control and command mechanisms. During this pandemic, it has been seen on the application processes and approval for trading permits and funding support for micro- businesses, which are often lengthy and out of tune with the circumstances on the ground. Corporate influences during this time are also worth scrutiny While there’s existing support from NGOs, public and private sector, gaps have been identified in eligibility requirements, exclusion of foreign nationals, misleading funding information and time lags. It is therefore imperative that any legislative, policy or Covid-19 related support instrument dedicated to township economic development carefully defines and targets the kinds of people, economic activity and sector it pertains to.

Response measures and future prospects.

Despite being masked by negative sentiments such as the rise of the illicit market and contraband goods, township businesses have demonstrated a sense of resilience and adaptability with shifted product and service offerings to respond to the changing circumstances. However, health risks, lack of access to information and limited support mechanisms continue to threaten business survival. It is therefore necessary to optimize existing measures.


Although not exhaustive, township economies can in the medium and longer term be supported through a combination of measures targeted at:

i. improving health and safety, service delivery and economic infrastructure,
ii. improving security of tenure over township properties,
iii. tailoring built environment regulations to suit the needs of township businesses (building standards, zoning, land use management etc.) and
iv. promotion of access to information and protection of social assets (social networks, participation etc.).


Covid-19 pandemic has revealed that while township economies are vulnerable and sensitive to disruption, they are also adaptable to different changing circumstances given their fluid architecture, and even more so in the presence of support. However, survivalist businesses remain highly exposed. Immediate measures need to be put in place to protect the health of participants and especially the most vulnerable, improve their access to Covid-19 related information, and increase their prospects of surviving Covid-19 related stresses and shocks. These measures need not be implemented in isolation. It is imperative that measures are coordinated and aligned potentially through a dedicated forum with participants at the center.

Kopano Ntsoane is a Research Intern in the Productive Cities Programme at the South African Cities Network. To contact him email