The sweeping slums of Khayelitsha outside Cape Town are a stark reminder of the endemic inequality that continues to haunt South Africa almost twenty years since the end of apartheid. Here we find around half a million people living in a sea of shacks that are often associated with urban blight across the developing world. Yet, the sight of these shelters made of corrugated steel and wood in an informal settlement should not necessarily evoke fatalism about this land. The typical South African shack is a versatile piece of simple engineering that only costs around $400 to buy and meets the basic needs of shelter for its residents. Nevertheless, the government recognizes the need for providing more stable housing through its Reconstruction and Development Programme (RDP) which has provided around 3 million homes to South Africans since the end of apartheid. Those living in the shacks on less than an inflation-adjusted amount per month are entitled to apply for RDP housing, though the waiting period can be as much as 10 years. Unlike high-rise low-income housing in China, the demand in South Africa is to have a small tract of land and a hut as the residence. Human ingenuity and resilience beams through through many residents in these areas as they traverse their life journeys from shacks to RDP huts.
During a recent visit to Khayelitsha, while tutoring an advanced social management course (in collaboration with Cambridge University’s Sustainability Leadership Programme), I witnessed entrepreneurship in many forms that gives me renewed hope about South Africa’s development path in these settlements. At the heart of such a development trajectory is access to electricity which would allow for safe lighting; computing; and consequently opportunities for small businesses to flourish. Contrary to popular belief, most of the informal settlements in South Africa’s urban periphery do have government control in terms of basic energy access infrastructure and some level of sanitation and waste management provisions. The power utility has provided small metered boxes for prepaid electricity credit to these shack-dwellers, and unlike most slum areas of India or Brazil, the power is largely paid for by the destitute customers as well. However, these utility connections are by no means adequate for the population density and people are forced to be creative in finding ways to serve their needs. The slum dwellers of Khayelitsha have come up with an informal market for electricity and share connections between homes which have a connection and those which do not. There are entrepreneurs who are selling small solar-powered lighting with battery packs through organizations such as the Micro Energy Alliance.
A key challenge for such efforts is the potential for scaling up the initiative and a visit to the Kuyasa district in this region provided us with further confidence that South Africa is making progress in that regard. Through a partnership between an NGO called SouthSouthNorth, the local electricity utility Eskom and the government, a large scale delivery project of solar water heaters and retrofitting of homes has given rise to one of the largest Clean Development Mechanism (CDM) projects in Africa. Covering over 2300 homes, the project provides a means of improving quality of life at multiple levels. Reducing load on the grid through energy conservation is attractive to Eskom which offers to provide a rebate for the installation of copper piping and mixed flow taps connected from the solar water heaters. The solar heating installation in the home augments its value for RDP housing which can eventually be sold at a premium after the minimum residency requirement has elapsed, thus creating equity in the asset base for low-income households. Furthermore, the solar water geysers are now also being manufactured in South Africa and have created an employment and business opportunity where none existed before.
Yet, the Kuyasa project also provides some cautionary tales regarding transferability. The success of the heaters and the home insulation effort largely depends on the reliability of the product and initially the installation of poorer quality heaters or improper plumbing created concerns in the community about the project’s efficacy. Careful follow-up of each installation was thus essential to ensure the infrastructure delivery was well-received by the community. An effort to replicate the project at a much faster pace in Port Elizabeth proved to be more contentious because such safeguards were not ensured in the rush to show greater impact.
As such projects to improve energy delivery and home quality further develop, the residents of these slum areas feel more empowered to also invest in the service sector. Before departing Khayelitsha, we stopped by for lunch at Lungi’s B & B in Makhaza – a modest series of shacks which an enterprising mother-of- two had made into a hotel. With assistance from some European micro-philanthropists and effective internet marketing she is able to get a steady income from tourists staying at her B&B to invest in a local low-income business. Mama Lungi has made arrangements for 24-hour security from all the men in her neighbourhood block to make sure foreign visitors feel comfortable in an otherwise notorious area, and has transport arranged with her neighbour who has a car to provide the conveyance into town. Such are the trials and triumphs of the new South Africa. Security remains a challenge but entrepreneurs find their way once they have some basic infrastructure support to move forward.
Alleviating energy poverty in such impoverished areas necessitates that we acknowledge the challenges at hand but not be daunted by them into cynicism. Smart technology businesses, targeted philanthropy and government facilitation are generating both monetary and social capital that merits optimism for development.
Special thanks to our host for the field visit to this site Pierre Coetzer, the cofounder of an organization called Reciprocity that helps to start such business for development ventures in low-income areas; Elspeth Donovan, Development Director – South Africa, CPSL University of Cambridge for coordinating the field programme; and Jonathan Samuel, Head of Social Performance at Anglo American PLC for his support of such efforts.