Johannesburg's cost of hawking

Posted On Tuesday, 05 March 2002 03:01 Published by
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Johannesburg is losing R1,2 billion nett in terms of excessive office vacancies and depressed rentals - both office and retail space – as a result of hawking, says Neil Fraser, executive director of the Central Johannesburg Partnership (CJP).
Johannesburg is losing R1,2 billion nett in terms of excessive office vacancies and depressed rentals - both office and retail space – as a result of hawking, says Neil Fraser, executive director of the Central Johannesburg Partnership (CJP).

He writes in his weekly newsletter that for the past few decades the economy of the city has been shrinking and therefore it has not been a 'better city' nor provided 'a better quality of life' for its citizens.

He says this cannot all be blamed on informal trading, but it is very much part of the problem and part of the decline.

'There have been many factors that have led to the city's deterioration - poor planning decisions, lack of urban management, lack of enforcement, crime and a host of other issues. How does one quantify the earnings capacity of informal trading on the one hand with the cost to the city on the other?

'I'm no economist but I did attempt to at least get a feel for the answer to that question. Although there are a number of blanks which require one to make judgement calls I came to a conclusion that:

• The nett income - profit - derived by hawkers in the CBD could be between R50 and R100 million per annum (which is untaxed in terms of both city rates and taxes and personal tax.)

• The nett loss to the city in terms of excessive office vacancies and depressed rentals - both office and retail space - is R1,2 billion per annum.

• This figure excludes (a) the reduced economy in the city through both lack of 'feet' and through (b) lack of 'quality of feet', (c) additional costs of cleaning, repairs and maintenance of the city's infrastructure and, (d) the 50% reduction in rates income through the new valuations.

'I don't know how these would all be quantified but the R1,2 billion could well be R2 billion per annum. The judgement call is how much of the 'cost to the city' is purely brought about by informal trading? If only 10%, then the negative impact of informal trading could be R200 million per annum; if 25%, then the negative impact could be R500 million per annum.

'Based on my calculations, it would appear that the annual income of R50 to R100 million in the pockets of informal traders in the CBD has been 'bought' at a price of anything from R200 to R500 million per annum,' Fraser writes.

Publisher: Rode
Source: Rode

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