Gauteng’s “township” bill: economic sense or pure xenophobia?

Some experts believe the bill is an important step towards stimulating township economies, particularly the informal sector, while others say it scapegoats migrants and is possibly unconstitutional.

The Gauteng Township Economic Development Bill, or the “township” bill as it’s commonly known, was released for comment earlier this month, and it is deeply controversial. While the bill is premised on the idea that township economies need a boost, it also promises to exclude migrants from doing business in townships, in certain industries.

Much is still uncertain, and we don’t know exactly which industries will be affected. But SA has seen a nasty surge in xenophobic sentiment on social media recently, and with the country’s history of xenophobic violence, there are concerns that the bill will only heighten tensions. This is because the bill plays into perceptions that migrants are stealing jobs from South Africans.

Read our take on a number of stories with xenophobic undertones published by the Sunday Independent here.

In September, in what we now know was a coordinated campaign, (thanks, DFR Labs!), a twitter storm erupted which drummed up more support amongst bigots for the exclusion of migrants from society. There were also marches to the Nigerian and Zimbabwean embassies, calling for the government to “Put South Africans first”.

In this context, some experts are worried that the bill scapegoats migrants for SA’s economic troubles, against evidence showing that they are not responsible for job losses.

Here’s what you need to know:

What’s the bill about?

The bill’s stated purpose is to invigorate township economies – a goal that’s central to government’s plan to rescue SA’s economy (although we’ll find out more when President Cyril Ramaphosa announces government’s economic recovery plan on Thursday).

The bill states that its objective is to make it possible for people living in townships to establish businesses there. It sets out ways in which government must help township businesses, including assisting them in getting funding.

But some activities (it’s not clear which ones, yet) will be reserved for only people who have South African residency, and citizens of SA.

Who supports it?

Some experts believe the bill is an important step towards stimulating townships and particularly the informal sector, which has been hard-hit by Covid-19 and job losses. Writing in the Business Day, National Planning Commission member Thami Mazwai argued that foreign-owned businesses are hurting township economies.

He said, “the flooding of the township market by foreign-owned spaza shops and mega shopping malls has led to the decline, if not collapse, of many township businesses.”

Who is against it?

A number of activist groups and experts are concerned. On the one hand, the draft bill still leaves many questions unanswered, like, what is a township economy, and will migrants living outside of townships be allowed to do business there?

Amir Sheikh, spokesperson for the African Diaspora Forum, told TimesLive that the bill appeared to be scapegoating migrants because other township invigoration plans had failed.

Writing in the Daily Maverick, constitutional law expert Pierre de Vos has even argued that the bill might be unconstitutional. He points out that a list of business activities supposedly reserved for South Africans and those with permanent residency is absent from the bill, so we can’t really say for sure how township economies would be affected by it at all.

He also points out that the bill discriminates on the ground of citizenship, which is unconstitutional. He says the Constitutional Court has specifically found that discrimination on the grounds of citizenship is not allowed in our law.

Are migrants stealing South African jobs?

Nope, and the World Bank, no less, says so. (note: the World Bank refers to “immigrants” *see our definitions guide below) In November 2018, the bank released a study which found that:

  • Immigrants have a positive impact on job creation. Every immigrant worker actually creates two jobs, rather than stealing any.
  • Immigrants and locals don’t really compete for the same jobs at all. Rather, they have different skill sets which often complement each other. The diversity of skills that immigrants have has multiplier effects on the economy, which means more jobs.
  • Immigrants are typically highly entrepreneurial, once against showing that they are actually contributing to job creation. In fact, 25% of immigrants are entrepreneurs, versus 16% of South African citizens.

Another study conducted by the Organisation for Economic Co-operation and Development (an intergovernmental economic organisation comprised of 37 states) found the same thing. A June 2018 report by the organisation states: “In contrast to popular perception, immigration is not associated with a reduction of the employment rate of the native-born population in South Africa, and some groups of immigrants are likely to increase employment opportunities for the native-born.”

Our take

Violence against migrants, which has tragic consequences as seen during the terrible 2008 xenophobic attacks and on numerous occasions thereafter, is often based on the assumption that they are stealing jobs. This bill seems to buy into that perception against the available evidence. There are what appear to be legitimate concerns that this will only embolden xenophobic groups to give justification to their hatred and violence. And that’s a big worry.


We at explain don’t use the term “foreign nationals”, although it is commonly used in SA to refer to migrants. This is because we believe the term is othering, and further stigmatises migrants who are seen to be “foreign” – that’s often a euphemism used when what people really mean is “alien” or “illegitimate”.

Language really matters when dealing with something as sensitive as xenophobia.

In this piece, we use the term “migrants”, while the World Bank and the OECD use “immigrants”. The terms can safely be used interchangeably, we think. Here are the definitions:

Migrant: Someone who moves from one country or region to another (Collins English Dictionary).

Immigrant: A person who moves from one place to another to settle there (Collins English Dictionary).