T T R I TT TR RI I T T ra ining fo r T o wnship Re ne w - - PowerPoint PPT Presentation

T

T TT T TR R RI I I

T ra ining fo r T

• wnship Re ne w a l Initia tive

October 2007

This presentation is incomplete without the accompanying commentary

Day 1 --- Overview of Township Markets

Illana Melzer: 19 October 2007

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Agenda

• 1. I ntroduction
• 1. I ntroduction
• 2. Income and LSM
• 2. Income and LSM
• 3. Financial services
• 3. Financial services
• 4. Housing
• 4. Housing
• 5. Shopping and entertainment
• 5. Shopping and entertainment
• 6. Crime
• 6. Crime

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What is a township?

2,479 2,695 1,058 1,514 612 174 1,561 262 640 366 489 598 425 207 114 71 14 7 1,000 2,000 3,000 4,000 Ethekwini Municipality City of Johannesburg Metropolitan Municipality City of Cape Town City of Tshwane Metropolitan Municipality Nelson Mandela AFRICAN/BLACK COLOURED INDIAN/ASIAN WHITE

Thousand people

Largest Metros/ urban areas: 2006

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Total estimated people in large urban areas: 13.4 million* (28% of the population)

Source: GHS 2006 * 8.4 million black, 2.2. million coloured, 750 000 Indian and 2.1 million white people

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What is a township?

805 886 301 456 159 46 368 59 178 159 174 237 155 73 33 22 4 2 300 600 900 1,200 Ethekwini Municipality City of Johannesburg Metropolitan Municipality City of Cape Town City of Tshwane Metropolitan Municipality Nelson Mandela African/Black Coloured Indian/Asian White

Thousand households

Largest Metros/ urban areas: 2006

13 8

Total estimated households in large urban areas: 4 million (32% of households)

Source: GHS 2006 * 2.6 million black, 520 000 coloured, 213 000 Indian and 798 000 white households

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Age

There are significant differences in age distribution by race

Source: StatsSA Mid-year population estimates, South Africa 2005, Statistical Release P0302, LFS 2005 persons database 23% of the black population is under the age of 10. 13% of the white population is under the age of 10. 7% of the black population is over the age

• f 60. 17% of the white population is over the age of 60

6% 4% 2% 0% 2% 4% 6% 0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80+

Males Females

6% 4% 2% 0% 2% 4% 6% 0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80+

Males Females

White Black African

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44% of black people in large metros are between the ages of 15 and 34

10% 9% 8% 9% 11% 13% 10% 7% 5% 5% 3% 2% 2% 2% 1% 0% 0% 0% 6% 6% 6% 7% 8% 10% 8% 7% 7% 7% 6% 5% 3% 3% 2% 1% 1% 7% 0% 2% 4% 6% 8% 10% 12% 14% 16% 00 - 04 05 - 09 10 - 14 15 - 19 20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 64 65 - 69 70 - 74 75 - 79 80 - 84 85 + AFRICAN/BLACK WHITE

Urban* : Age distribution

Migration?

Source: GHS 2006 Persons database * 2006 – Big 5 metros: City of Cape Town, City of Johannesburg, City of Tshwane, Nelson Mandela, or eThekweni

Age groups

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Key trend: migration and urbanisation - various factors drive migration

519,900 224,400 4,000

• 23,900
• 38,700
• 55,500
• 57,700
• 249,300
• 323,200
• 600,000
• 400,000
• 200,000

200,000 400,000 600,000 Gauteng Western Cape KwaZulu-Natal Northern Cape Mpumalanga North West Free State Limpopo Eastern Cape

Estimated net migration (number of people): 2001 - 2006

Key drivers

Economic opportunities and access to amenities History of migration in a community Household structure and composition (part of household’s risk management) Household assets (e.g. land) Individual characteristics (e.g. age, marital status etc.)

Source: Stats SA mid year population estimates, May 2005

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Key trend: I nternational migration

• 284,000
• 325,000
• 139,000
• 48,000

81,000 145,000 192,000 205,000

• 500,000
• 300,000
• 100,000

100,000 300,000 500,000

1991 - 1995 1996 - 2000 2001 - 2005 2006 - 2010

Non-African African

Estimated international migration (Official): 1991 - 2010

Source: Stats SA mid year population estimates, May 2006 Genesis Analytics report on remittances

Current estimate of lawful entry, lawful stay: 450 000 – 550 000

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0.1 0.5 1.2 3.9 0.6 1 2 3 4 5 < R5 [R5, R10) [R10, R20) [R20, R140) R140+ 0.2 0.8 3.1 1.4 0.9 1 2 3 4 5 R1 - R499 R500 - R999 R1000 - R4999 R5000 - R9999 R10000+

There are various income measures that can be used to segment the market. Using per capita income, around 29% of black adults in large urban areas are poor (Less than R20 per day)

1.4 0.6 1.0 2.2 0.9 0.3 1 2 3 4 5 No income R1 - R499 R500 - R999 R1000 - R5000 R5000+ Refuse

Monthly personal income Monthly household income Daily per capita income

Source: AMPS 2007, Eighty20 analysis * Large urban areas – community size of 250 000 or more Note: Average incomes exclude refuse / don’t know categories. Per capita income calculated using the midpoint of the household income band divided by the number of adult equivalents in the household. Children under 10 are regarded as half an adult

Million adults (16+ )

Average: R5215 Median: Less than R4000 Average: R2350 Median: Less than R1100

TOTAL: 6.42 million black adults*

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Main source of income – 2006 vs. 2004

63.0% 15.8% 12.5% 2.7% 5.4% 0.5% 6.7% 4.2% 2.6% 1.1% 15.4% 69.4% 0% 20% 40% 60% 80% Salaries and/or wages Pensions and grants Remittances No income Other non-farm income Sales of farm products 2004 2006

Urban* , black: main source of income Households

Source: GHS 2006 Household database * 2006 – Big 5 metros: City of Cape Town, City of Johannesburg, City of Tshwane, Nelson Mandela, or eThekweni 2004 – Urban areas

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Money from family / friends and government grants are significant income sources

1,787 1,348 906 858 848 500 1,000 1,500 2,000 Work for a salary/wage from a company Money from family member/friends Work for a salary/wage from an individual e.g. domestic worker/farm worker Child grant I do not get money

Urban* , black: Top 5 income sources Thousand adults (18+ )

Source: FinScope 2006 * Metro area

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39% of economically active black adults in the five major metros are unemployed according to the expanded definition

• f unemployment

1,770 2,718 2,138 1,186 2,718 1,554 500 1,000 1,500 2,000 2,500 3,000 Employed Not economically active Unemployed Expanded definition Official definition

Thousand adults (18+ )

Urban* , black: employment status

Source: Labour Force Survey 2006 September, workers database * Big 5 metros: City of Cape Town, City of Johannesburg, City of Tshwane, Nelson Mandela, or eThekweni

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Definition of unemployment (Official and expanded)

“The unemployed are those within the economically active population who: a) Did not work in the seven days prior to the interview b) Want to work and are available to work within two weeks of the interview and c) Have taken active steps to look for work or to start some form of self- employment in the four weeks prior to the interview (The expanded definition of unemployment excludes criterion c)” - StatsSA

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78% 63% 41% 28% 25% 16% 9% 12% 0% 4% 6% 82% 35% 26% 21% 8% 47% 33% 12% 12% 59% 27% 11% 5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 15-19 20-24 25-34 35-44 45-54 55-64 African/Black Coloured Indian/asian White

Unemployment rate

Urban* : Unemployment (expanded definition) by race and age

Source: Labour Force Survey, September 2006, workers database * Big 5 metros: City of Cape Town, City of Johannesburg, City of Tshwane, Nelson Mandela, or eThekweni Note: Unemployment rate is calculated as the number of unemployed divided by the economically active population (employed plus unemployed)

Unemployment among black adults is high in large metros. I t is highest among the youth

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Of those who are employed, one third of black workers do not work in the formal sector

White workers aged 15+ by sector of work Informal 4% Formal 95% Domestic workers 1% Black workers aged 15+ by sector

• f work

Domestic workers 11% Formal 67% Informal 22%

Source: Labour Force Survey, September 2006, workers database

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Wages for formal sector workers are significantly higher than those in the informal sector

21% 33% 37% 4% 2% 0% 10% 20% 30% 40% 50% < = R500 (R500, R1000] (R1000, R2500] (R2500, R4500] > R4500

Percent of workers

Urban* , black, informal sector: I ncome distribution

Percent of workers

Urban* , black, formal sector: I ncome distribution

Monthly I ncome Monthly I ncome

Source: Labour Force Survey, September 2006 Note: Data for informal sector workers includes domestic workers. No wage data for 3% of informal and 5% of formal sector workers

2% 9% 44% 19% 21% 0% 10% 20% 30% 40% 50% < = R500 (R500, R1000] (R1000, R2500] (R2500, R4500] > R4500

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LSM is calculated based on ownership of household assets, location and access to services

• Do you have / or is there a … in your household?

Hot running water Fridge/freezer Microwave oven Flush toilet in house or on plot VCR Vacuum cleaner/floor polisher Washing machine Computer at home Electric stove TV set(s) Tumble dryer Telkom telephone Hi-fi or music center Built-in kitchen sink Home security service Deep freeze Water in home or on stand MNet and/or DStv Dishwasher Metropolitan dweller Sewing machine DVD player House/cluster/ town house 1 or more motor vehicles No domestic worker No cell phone in household Only 1 Cellphone in household None or only one radio Living in a non-urban area outside Gauteng or the Western Cape

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According to AMPS 41% of black adults living in large urban areas are in LSM 2-5

51 398 829 1,359 1,985 932 454 298 115 500 1,000 1,500 2,000 2,500 LSM 1 LSM 2 LSM 3 LSM 4 LSM 5 LSM 6 LSM 7 LSM 8 LSM 9 LSM 10

Urban* , black: LSM distribution Thousand adults (16+ )

Total black urban adult population 2007: 6.42 million

Under- serviced or poor?

Source: AMPS 2007 * Large urban areas – community size of 250 000 or more

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Since 2003 there has been a noticeable decline in the percentage of black urban adults in lower the LSMs

5 1 1 54 47 40 34 40 45 7 12 14 0% 20% 40% 60% 80% 100% 2003 2006 2007

Percentage of adults (16+ )

LSM 2 LSM 3-5 LSM 6-7 LSM 8-10

Urban* , black: LSM over time

Source: AMPS 2003, 2006, and 2007 * Large urban areas – community size of 250 000 or more

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Other measures may be more useful for assessing living standards

43% 40% 27% 22% 22% 17% 8% 2% 0% 10% 20% 30% 40% 50% 60% Cash income Felt unsafe from crime in your home Medicine or medical treatment that was needed Food to eat Electricity in your home (apart from powercuts) Fuel to heat your home or cook food Clean water to drink and cook Shelter

Percentage of adults (16+ )

Urban* , black: I n the last 12 months, how often has your family gone without enough … Percentage responding often or sometimes

Source: FinScope 2006 * Metro area

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I n terms of hunger, black urban households seem better off in 2006 then they were in 2004

74% 84% 74% 83% 6% 5% 6% 4% 14% 9% 14% 10% 3% 2% 3% 2% 3% 1% 2% 1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2004 2006 2004 2006 Never Seldom Sometimes Often Always

I n the past 12 months how often have children in the household gone hungry

(Black, urban* )

Adults Children Percentage of households* *

Source: GHS 2006 Household database * 2006 – Big 5 metros: City of Cape Town, City of Johannesburg, City of Tshwane, Nelson Mandela, or eThekweni 2004 – Urban areas * * Children – households include only those who have children (< 18) in them Adults – households include only those who have adults (18+ ) in them

I n the past 12 months how often have adults in the household gone hungry

(Black, urban* )

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Penetration of financial products is very low in township markets

63% 26% 22% 10% 9% 8% 6% 5% 3% 2% 1% 89% 45% 3% 0% 42% 38% 53% 48% 22% 12% 22% 0% 20% 40% 60% 80% 100% Banked Funeral insurance policy Belong to a burial society Stokvel/umgalelo/savings club Retirement savings Life Insurance Asset Insurance Medical cover Investments Fixed Deposit bank account Loss of earnings insurance Black White 70% of Financial Diaries households in Langa belonged to a stokvel

Urban* : Formal and informal financial products:

Source: FinScope 2006 * Metro area

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Almost half of township adults are involved in some form of savings activity

Not currently saving 52% Currently saving 48%

Source: FinScope 2005 Core (Finsproducts)

Savings activity and reason for savings: Urban black (18+ )

1% 2% 3% 3% 3% 5% 7% 7% 10% 14% 16% 28% 0% 10% 20% 30%

Lobola Holidays Retirement Other Car/vehicle Medical expenses Provide your family if you die Furniture or appliances School fees Funeral costs Food Emergency

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Credit usage is significantly understated by surveys

33,569 157,917 914,812 1,052,711 500,000 1,000,000 1,500,000 Loan from a micro-lender for housing Loan from a micro-lender (Capitec / African Bank) Personal loan from a bank Loan from a micro lender or a personal loan 14,615 19,214 25,398 31,047 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Dec 2002 - Nov 2003 Dec 2003 - Nov 2004 Dec 2004 - Nov 2005 Dec 2005 - Nov 2006

Total loan book as at Feb 2007: R29.2 billion Total loan clients: 8.3 million

CAGR 2003 – 2006: 29% Source: FinScope 2006, NCR, May 2007 CAGR: Compound Annual Growth Rate. Micro loans are defined as loans of R10 000 or less paid back over 36 months or less

Annual disbursements

SA micro lending industry (2003 – 2006)

Stated loan usage: Have now

Various survey questions (2006) Number of adults R millions

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Of the 2.5 million black households in large metros, 50% live in inadequate dwellings

135,722 885,050 66,495 169,292

1,256,559

300,000 600,000 900,000 1,200,000 1,500,000 Shack Traditional hut Overcrowded formal Weak structure Total inadequate

Source: General Household Survey 2005. Note there is no double counting. Categories are mutually exclusive Note: Overcrowded dwellings are those with more than two people per room. Structurally weak houses are those where the condition of the walls or roof is weak or very weak

I nadequate housing in large metros Number of main dwellings / households I nformal dwellings Formal dwellings

35% of black households in metros live in shacks

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Basic services: Black urban households

18% 4% 3% 2% 38% 35% 0% 10% 20% 30% 40% 50% Flush toilet in dwelling Pit latrine or bucket

• n site

None

Number of households

Flush or chemical toilet on site Flush or chemical toilet off site Pit latrine or bucket off site

Urban* , black: Household characteristics

15% 4% 43% 38% 0% 10% 20% 30% 40% 50% Piped (Tap) water on site or in yard Piped (Tap) water in dwelling Public tap Other

Toilet facility Source of drinking water

Source: GHS 2006 Household database * 2006 – Big 5 metros: City of Cape Town, City of Johannesburg, City of Tshwane, Nelson Mandela, or eThekweni

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Urban* , black: Household characteristics

Source: GHS 2006 Household database, data for friges and microwaves from 2005 GHS * 2006 – Big 5 metros: City of Cape Town, City of Johannesburg, City of Tshwane, Nelson Mandela, or eThekweni

Basic services: Black urban households

No 20% Yes 80% 76% 67% 66% 53% 22% 13% 0% 20% 40% 60% 80% 100% Radio Cellular telephone Television Fridge* Microwave* Have a car

Connected to mains electricity Household assets

(58% of shacks in major metros have electricity)

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There is a significant variance in composition of households in large urban areas across race groups

Source: GHS 2005 Note: A household is a nuclear household if and only if it consists of a household head, spouse and children. Extended nuclear families comprise siblings, grandchildren, grandparents, parents and other extended family of the head of the household

29% 16% 23% 19% 36% 41% 34% 10% 13% 10% 6% 8% 9% 10% 25% 22% 15% 12% 4% 13% 18% 12% 9% 12 0% 20% 40% 60% 80% 100% Black Coloured Indian White

Percentage of households

Single member household Traditional nuclear family Single parent and one or more children Couple no children Extended nuclear family Non-relative

Households in large urban areas by race

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Almost 60% of urban black adults are interested in soccer – compared to 15% of whites

19% 11% 58% 40% 42% 15% 0% 10% 20% 30% 40% 50% 60% 70% Interested in Soccer Interested in Rugby Interested in Cricket Black White

Percentage of adults (16+ )

Urban* , black/ white : Sporting I nterests

Source: AMPS 2007 * Large urban areas – community size of 250 000 or more

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Funerals plays a dominant role in the lives of most black urban adults

57% 30% 20% 17% 57% 6% 56% 69% 53% 68% 1% 2% 4% 5% 23% 62% 49% 41% 32% 22% 45% 24% 0% 20% 40% 60% 80% Attend place of worship Attend a funeral Shop for pleasure Send SMSs Visit a hair salon Braai Attend a burial society meeting Attend a stokvel meeting Visit bars/shebeens/ taverns Attend traditional gatherings Singing e.g. choir Black White

Percentage of adults (16+ )

Urban* , black/ white activities – weekly/ monthly

Source: AMPS 2007 * Large urban areas – community size of 250 000 or more

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Fast foods: Urban black vs. white

49% 16% 16% 13% 12% 0% 10% 20% 30% 40% 50% KFC Nando’s Chicken Licken McDonald’s Pie City

Percentage of adults (16+ )

Urban* : Top 5 most frequented fast food outlets (past four weeks)

43% 25% 21% 20% 18% 0% 10% 20% 30% 40% 50% KFC McDonald’s Wimpy Spur Steers

White

Percentage of adults (16+ )

Black Fried chicken: crossing the racial divide

Source: AMPS 2007 * Large urban areas – community size of 250 000 or more

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Shopping: Urban black vs. white

69% 20% 9% 2% 11% 32% 12% 45% 0% 20% 40% 60% 80% One bulk shop once a month and fill-ups Shop twice a month Shop weekly or almost weekly Shop twice weekly or almost daily Black White

Percentage of adults (16+ )

Urban, black/ white: shopping patterns - if wholly or partly responsible

Source: AMPS 2007 * Large urban areas – community size of 250 000 or more

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Shopping: Urban black vs. white

3% 2% 1% 0% 0% 3% 0% 0.5% 42% 15% 5% 5% 26% 42% 8% 0% 0% 10% 20% 30% 40% 50% 60% Checkers / Hyperama / Shoprite Pick n Pay (All outlets) Spar Score Local supermarket Township Supermarket Woolworths Spaza Shop Black White

Urban* , black/ white : Groceries – spend most

Percentage of adults (16+ )

Source: AMPS RA 2007 * Large urban areas – community size of 250 000 or more * * GHS 2006

35% of black adults living in large urban areas do their convenience (including usual fill- up) shopping at a spaza shop

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Key trend: Formalisation of retailing in townships

• Soweto

– 65 000m² , R650 million Maponya Mall (2007) – Dobsonville shopping centre – R55 million Baramall shopping centre (2006) – R106 million Protea Gardens Mall (2005) – 45 000m² , R350 million Jabulani shopping complex

• Alexandra

– R80 million, Alex Plaza (2005) – additional development planned – R250 million Alexandra shopping centre

• Cape Town

– Nyanga Junction Mall – Westgate Mall – Towncentre complex – Vangate Mall – Khayelitsha Mall

Shopping centre development: Some examples What impacts do malls have on local economies?

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Transportation characteristics of black people living in large urban areas

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Train Bus Private transport* * Mimibus taxi/taxi 1 2 3 to 5 6 t0 10 > 10

Source: AMPS 2007 * Large urban areas – community size of 250 000 or more * * i.e. yours or someone else's motor vehicle/motorbike

Urban* , black: On how many occasions in past 7 days have you used…?

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17% 9% 0% 4% 8% 12% 16% 20% Non-violent crime Violent crime

Urban* , black: During the past 12 months, personally been a victim of:

Exposure to crime

Source: AMPS 2007 * Large urban areas – community size of 250 000 or more

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Contact details

Illana Melzer Eighty20 Consulting 021 421 3019 083 271 3764 illana@eighty20.co.za