Informal economy expert GG Alcock said there is a false narrative regarding South Africa’s economy, which is healthier than what people are told.

Alcock said most South Africans associate the country with inequality, adverse poverty, and people living in shacks.
“We are bombarded by terms like South Africa being the most unequal society on earth, surrounded by poverty.”
“There are pictures in Time magazine of rows of shacks right next to fancy houses. We see the same shacks as we fly into Cape Town International Airport.”
Therefore, people believe that poverty, inequality, and living in a shack is true for most South Africans. However, Alcock said it is untrue for most South Africans.
He highlighted an example of this false narrative in a recent headline, “Cash-crunched consumers turn to alcohol and clothing”.
The article was centred on Shoprite’s alcohol business growth of 17% and Pick n Pay’s clothing business growth of 12%.
Alcock said the growth had nothing to do with consumers struggling; it was because consumers had more money to spend on alcohol and clothing.
There are also many stories of a grandmother living on the breadline struggling to feed the eight children she looks after.
Although the story is true, it is not representative of the majority of South Africans who are living far more comfortably.
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Alcock said there had been a tremendous transformation of housing in townships across South Africa.
Over 86% of South African households live in formal dwellings. Only 12% of households live in informal dwellings, like shacks.
“If you go into townships today, you will find that most houses are impressive formal houses,” he said.
In Orange Farm, for example, there used to be rows and rows of shacks a decade ago. Today, most people live in nice houses.
It is striking that none of it has happened through official home loans. These houses were mostly built using lay-bys, stokvels, and informal loans.
Another misconception is that South Africa is characterised by large households with many people living under one roof.
Alcock said the average household has 3.3 people. 23% of households in South Africa have only one person, and 18% have two people.
“People are moving out of their communal households into their own homes, creating a massive sector of backroom rentals,” he said.
The backroom rental economy has grown to an estimated R20 billion annually. “That is a conservative figure. It is most likely double that,” he said.
This is part of the move to smaller households with more disposable income and where people spend more money on themselves.
The result can be seen in shopping patterns where there is a decline in buying large bags of flour, sugar, and rice.
“This decline is sometimes mistakenly attributed to consumers struggling when the real reason is that smaller households don’t require large pack sizes,” Alcock said.
He said while some South Africans are struggling, the reality is that most people are not.
“People in South Africa are largely under budget pressure, not income pressure,” he said.
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He said South Africa’s black middle class is now estimated at 3.4 million people, accounting for nearly half of South Africa’s total middle class.
“There are a lot more incomes out there than what the official unemployment figures suggest,” he said.
Alcock said the informal economy, often left out of official national figures, is booming in South Africa.
● South Africans earn R20 billion per year in backroom rentals.
● Salons and hair extension sellers earn R10 billion per year.
● Spaza shop rentals earn R25 billion per year.
● The spaza shop market is worth R160 billion annually across
100,000 spaza shops.
● The informal fast-food market is worth around R50 billion annually
across 45,000 outlets.
● 45,000 licensed taverns and shebeens earn R110 billion each year.
● The taxi industry earns R50 billion per year.
He said the first business unemployed young people start in a township is car washes. It shows the booming car market in these areas. There is also a boom in township mechanic businesses.
Many other examples of thriving informal economic sectors exist, which are overlooked by mainstream reporting and media articles.
“There is incredible growth in entrepreneurship and independent businesspeople in South Africa,” Alcock said.
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Sourced and adapted from: MyBroadband. 2023. The false narrative about South Africa. 20 August 2023. [Online] (Accessed 13 April 2024)
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TEXT B
Text reads: the driving force .... informal economy / Formal Economy - Africa
Sourced from: Ndula, V. 2017. CARTOON: Informal economies. 1 October 2017. [Online] (Accessed 13 April 2024)
QUESTIONS: TEXT A
1.1
Refer to paragraph 1. In your own words, explain what is meant by a “false narrative”.
(2)
1.2
Refer to paragraph 3. What does the word "bombarded" suggest about the way information about South Africa's economic situation is presented to people?
(2)
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1.3
Refer to paragraph 4. Explain how the juxtaposition of images of shacks alongside fancy houses in Time magazine (lines 8-9) contributes to the perception of South Africa's living conditions.
(2)
1.4
Refer to paragraph 9. In your own words, define the term “breadline” (line 20).
(1)
1.5
Refer to paragraphs 21 and 22. Explain what factors contribute to a reduced need for large pack sizes of groceries in smaller households.
(2)
1.6
Refer to paragraphs 24-26. Based on Alcock's discussion in the text, what can you infer about the key distinctions between "budget pressure" and "income pressure"?
(3)
1.7
Refer to paragraph 27. Why do you think South Africa has a thriving informal economy? Support your answer with evidence or examples from the text.
(4)
1.8
Refer to paragraph 27. What do you think the writer's intention is in challenging the false narrative about South Africa's economy and highlighting the growth of the informal sector?
(2)
1.9
What effect might the author's choice of a positive and informative tone have on the reader's perception of South Africa's economy?
(2)
QUESTIONS: TEXT B
QUESTION: TEXT A AND B
1.10
What do the pile of boxes on top of the car represent? Explain your answer.
(2)
1.11
Discuss how the visuals support the text and provide reasons for your answer with reference to BOTH visuals and text.
(4)
1.12
To what extent does Text B support Text A? Substantiate your answer with close reference to BOTH texts.
(4)

1 answer

1.1 A "false narrative" refers to a misleading or inaccurate story or depiction of a situation that is not entirely true.

1.2 The word "bombarded" suggests that information about South Africa's economic situation is presented to people in an overwhelming and relentless manner, possibly leading to a skewed perception.

1.3 The juxtaposition of images of shacks alongside fancy houses in Time magazine contributes to the perception of South Africa's living conditions by highlighting the stark contrast between poverty and wealth, reinforcing the idea of inequality and hardship.

1.4 A "breadline" refers to a situation where someone is barely able to afford basic necessities like food.

1.5 In smaller households, there is a reduced need for large pack sizes of groceries because there are fewer people to feed, leading to less consumption and wastage.

1.6 "Budget pressure" refers to the need to manage and allocate limited resources efficiently, while "income pressure" is the struggle to earn enough money to sustain one's lifestyle. In this context, most South Africans face budget pressure, where they need to make smart financial decisions rather than being in a constant state of financial struggle due to inadequate income.

1.7 The thriving informal economy in South Africa can be attributed to factors such as entrepreneurship, innovation, and a high demand for goods and services within local communities. Examples from the text include the growth of sectors like backroom rentals, spaza shops, and the taxi industry, which cater to the needs of the population and provide opportunities for small businesses to flourish.

1.8 The writer's intention in challenging the false narrative about South Africa's economy and highlighting the growth of the informal sector is likely to provide a more balanced and accurate portrayal of the country's economic landscape. By showcasing the success and potential of the informal economy, the writer aims to shed light on overlooked aspects of South African society and challenge negative stereotypes.

1.9 The positive and informative tone of the text may help to challenge preconceived notions about South Africa's economy and paint a more nuanced picture of the country's economic reality. By presenting facts and statistics that highlight the thriving informal economy and debunking misconceptions, the text encourages readers to reconsider their perceptions and see the complexity and diversity of South Africa's economic landscape.

1.10 The pile of boxes on top of the car in Text B represents the informal economy, as people in the informal sector often transport goods and conduct business using vehicles like cars.

1.11 The visuals in Text B support the text by illustrating the concept of the informal economy through the depiction of a car loaded with boxes, symbolizing the activities and businesses in the informal sector. This visual representation complements the information provided in the text about the informal economy's growth and significance in South Africa.

1.12 Text B supports Text A by visually representing the key theme of the informal economy, as discussed in Text A. The cartoon in Text B portrays the informal economy's role and impact in driving economic activity, aligning with the text's emphasis on the growth and importance of the informal sector in South Africa. Together, both texts provide a comprehensive perspective on the country's economic landscape, showcasing the nuances and dynamics of formal and informal economic activities.