Keeping township businesses in the family

Simon Moloi is an octogenarian with the energy of a beaver.

At 83, the Soweto businessman says he’s not considering retirement.

He still works regular hours at his retail empire, Moloi Shopping Centre in Emdeni, deep in the heart of the legendary township.

With barely any formal education but armed with the determination to leave a mark in the world of retail business, Ntate Moloi left his job as a messenger when he realised that selling vases and pot plants was more rewarding in a day’s sales compared to his weekly salary.

“I became more business-minded when I realised that I was getting good profits from this business,” he recalls.

“The dividends made it possible for me to venture into retail.”

He rented space in Molapo, another section of Soweto, where he ran a butchery using a paraffin-operated refrigerator to keep his stock fresh.

The meat business grew into a grocery shop based in Orlando East.

“In 1978, about three years after I had decided to venture into retail, I applied for a R30,000 bank loan to build Moloi Shopping Centre right here on these premises.”

When immigrant traders from countries such as Somalia, Ethiopia, Bangladesh and Pakistan started establishing businesses in the townships in the early 2000s, Moloi says he had the option to offer them space to rent when they came knocking on his door asking.

“I turned them down for two reasons. I have always created jobs for locals but they were not interested in hiring South African citizens. Secondly, I realised that whenever they were attacked by locals for whatever reasons, my property will be affected and I will be the loser.”

History has proven him right. In May 2008, the first wave of attacks against immigrants broke out in Alexandra, north of Johannesburg, and rapidly spread to neighbouring townships like Soweto and eventually across the country.

According to Human Rights Watch, 62 people believed to be African immigrants were reportedly killed during the violence in Johannesburg, Durban and Cape Town.

However, closer scrutiny indicated 21 of the casualties were in fact locals caught in the crossfire or wrongly identified as foreigners. An estimated 40,000 foreign nationals left the country.    

The others included Mozambicans, Zimbabweans and Somalis. Thousands were dispossessed of their properties and displaced during the maelstrom of violence and looting frenzy.

The government was criticised for a delayed reaction and its inability to find a solution to the recurring attacks that it terms criminal instead of xenophobic.

Another major flurry reached its climax on April 19 2015 after Emmanuel Sithole was cold-bloodedly stabbed to death in Alexandra, a Johannesburg township with a high number of immigrant residents.      

Moloi has welcomed a bill aimed at regulating business by foreign nationals living in Gauteng. They will be expected to obtain permanent residency status to operate some businesses in the townships.

The Gauteng Township Economic Development Bill released for public comment by the province’s economic development department and premier David Makhura’s policy unit aims to reserve certain economic activities in townships for SA citizens and people with permanent residency status.

It is hoped that the proposed bill will benefit township-based enterprises in a number of sectors including tourism, transport and retail.

Stakeholders making submissions on the bill are expected to suggest the sectors that should be reserved for locals and permanent residents.

Reggie Makhetha is one of the local entrepreneurs who have welcomed the bill.

He believes that attacks against immigrant traders are motivated by criminal tendencies rather than by anti-immigrant sentiments.

“When they first came into the townships, locals embraced them with warm, open arms despite the fact that their arrival happened quickly and without introductions from the authorities,” recalls the Soweto-born entrepreneur.

“Even in business chambers, there was no word about them – why they were here and how we in the local business community were expected to work with them.”

According to Makhetha, township shoppers welcomed them because they priced their goods cheaply compared to their local counterparts.

They also sold on credit and also because of bulk buying from wholesalers, they could make good profits.

Their costs for rental and general running of their grocery businesses were less in comparison.

They didn’t have to shoulder the burden of paying salaries because they didn’t hire locals and they still don’t create jobs for South Africans.

However, they had enough money to pay fines or bribe health officials as in most cases they didn’t observe basic rules of hygiene, he says.

For instance, at night they would use the same space for storing foodstuffs as sleeping facilities. As a result, Makhetha argues, the immigrants brought unfair competition to the game.

“That’s why I welcome this bill. It is necessary and will make it possible for aspiring local entrepreneurs who want to open businesses in their own communities. There’s a need for serious regulation of the township retail sector to enable fair competition among all those involved.”

Like the Tshabalalas and Molois, the Makhetha family name is synonymous with retail business in Soweto. Reggie’s father, Balfour Makhetha opened the family grocery store in 1976.

Today the two-storey structure still stands majestically on its original premises in Central Western Jabavu, shouting distance from Morris Isaacson High School from where pupils marched into the history books in the same year.

The business has since grown into a bottle store, butchery, fish and chips outlet and fruit-and-vegetable stall.

As a youngster, Makhetha would serve customers from behind the counter. After school he  studied advertising and went on to work for one of the country’s top advertising firms, winning several awards for his brilliant and worthwhile contribution to the industry.

His passion for his roots inspired the establishment of Roots Restaurant & Gallery, a state-of-the-art eatery that houses 100 patrons and an art gallery. Also situated on the historic site, the venture earned him another prestigious award.

When his father died in 2011, he took over the management of the business to honour a proud family legacy.

At the time immigrants had already secured a number of the traditional corner shops for their own businesses as well as garages that they occupied as tenants.

The township shop owners were already feeling the competition posed by the immigrant merchants from East Africa and the Indian sub-continent.

Mostly Muslim, they were not into liquor trading and according to Makhetha, that’s how most township bottle stores were able to stay in business.    

In 2016, the Gauteng department of economic development in cooperation with Pick n Pay and Old Mutual initiated partnerships with township businesses such as Makhetha Shopping Centre.

This development has enabled Makhetha and similar entrepreneurs to offer their customers with a wide range of services normally accessible at malls. These include ATMs, money transfers, bill payments and prepaid electricity. On the other hand, the partnerships have boosted township businesses with quality service, timely delivery and efficient stock management. As a result, monthly turnover and net profits have grown significantly.

Mandla Tshabalala is another name that’s associated with preserving a proud family legacy. His father and former mayor of Soweto, the late Ephraim “Mshengu” Tshabalala, founded Eyethu, the first cinema in Soweto. It opened in 1969.

Now Mandla is the founder and director of Eyethu Lifestyle Centre, an entertainment venue and cultural hub situated in Mofolo Village, just a stone’s throw from the old cinema. 

Tshabalala says such a bill is welcome news because it will assist local entrepreneurs – especially emerging ones – to claim some space in their own neighbourhoods.

“South Africa is an open economy to do free trade,” he says.

“However, the government has a responsibility to protect certain sectors of the economy, especially emerging businesses in the township and rural economies. Globally, every nation protects certain sectors of their economy that are strategic to those nations against foreign competition.

"For instance, unskilled jobs should be reserved for local youth and the unemployed. The same should apply in the retail sector as there’s currently unfair competition.”

A spokesperson of the Somali business community in SA promised to comment on the proposed bill but later reneged on her promise.

Embassies of Somalia and Ethiopia had also promised to respond but hadn’t done so at the time of print while a spokesperson for the Bangladeshi embassy indicated it didn’t have a mandate to comment on SA’s laws, including those that affect immigrants.