Soweto - Economy

Economy

Many parts of Soweto rank among the poorest in Johannesburg, although individual townships tend to have a mix of wealthier and poorer residents. In general, households in the outlying areas to the northwest and southeast have lower incomes, while those in southwestern areas tend to have higher incomes.

The economic development of Soweto was severely curtailed by the apartheid state, which provided very limited infrastructure and prevented residents from creating their own businesses. Roads remained unpaved, and many residents had to share one tap between four houses, for example. Soweto was meant to exist only as a dormitory town for black Africans who worked in white houses, factories, and industries. The 1957 Natives (Urban Areas) Consolidation Act and its predecessors restricted residents between 1923 to 1976 to seven self-employment categories in Soweto itself. Sowetans could operate general shops, butcheries, eating houses, sell milk or vegetables, or hawk goods. The overall number of such enterprises at any time were strictly controlled. As a result, informal trading developed outside the legally-recognized activities.

By 1976 Soweto had only two cinemas and two hotels, and only 83% of houses had electricity. Up to 93% of residents had no running water. Using fire for cooking and heating resulted in respiratory problems that contributed to high infant mortality rates (54 per 1,000 compared to 18 for whites, 1976 figures.

The restrictions on economic activities were lifted in 1977, spurring the growth of the taxi industry as an alternative to Soweto's inadequate bus and train transport systems.

In 1994 Sowetans earned on average almost six and a half times less than their counterparts in wealthier areas of Johannesburg (1994 estimates). Sowetans contribute less than 2% to Johannesburg's rates). Some Sowetans remain impoverished, and others live in shanty towns with little or no services. About 85% of Kliptown comprises informal housing. The Soweto Electricity Crisis Committee argues that Soweto's poor are unable to pay for electricity. The committee believes that the South African government's privatization drives will worsen the situation. Research showed that 62% of residents in Orlando East and Pimville were unemployed or pensioners.

There have been signs recently indicating economic improvement. The Johannesburg City Council began to provide more street lights and to pave roads. Private initiatives to tap Sowetans' combined spending power of R4.3 billion were also planned, including the construction of Protea Mall, Jabulani Mall, the development of Maponya Mall, an upmarket hotel in Kliptown, and the Orlando Ekhaya entertainment centre. Soweto has also become a centre for nightlife and culture.