Simelane Calls for Transformation of Informal Settlements to Drive Growth

Human Settlements Minister Thembi Simelane has stressed that investing in formal housing and transforming informal settlements are not only about improving living conditions but are also vital drivers of infrastructure development, inclusive growth, and economic transformation.

The Minister was speaking at the Urban 20 (U20) Mayors Summit held in Sandton on Saturday. The U20, which operates as an engagement platform between the G20 and major global cities, aims to raise the profile of urban issues on the G20 agenda and create a unified city perspective to influence international negotiations.

Linking Housing, Infrastructure and Growth

Simelane told delegates that addressing South Africa’s urban and spatial challenges requires a paradigm shift in how informality is perceived by policymakers, investors, and financial institutions.

“Investments in supporting the township economy are a contribution to economic growth with potential positive spin-offs such as job creation, improved living standards, and quality of life,” she said.

Simelane warned that financial exclusion of informal enterprises remains a critical barrier to growth and innovation. Many promising small businesses and start-ups operating in townships are unable to scale up or compete with established enterprises because they lack access to finance and resources.

“Addressing these barriers through micro-investment ecosystems and enabling entrepreneurial innovation can unlock sustainable township economic development and greater inclusion in national growth,” she added.

Policy Interventions for Human Settlements

To advance this agenda, the Minister referenced the 2024 White Paper for Human Settlements, which outlines a number of developmental interventions:

• Transit-Oriented Development (TOD): Infrastructure projects targeting areas with concentrated growth around public transport hubs, ensuring housing, offices, shops, schools, and services are located near bus and metro corridors.

• Township Transformation: Converting townships established in the 1980s into sustainable human settlements by eliminating spatial monotony, improving environmental conditions, and unlocking the residential property market through streamlined land transfers and planning.

• Greener and Integrated Communities: Introducing greening projects, improving living environments, and turning low-income dormitory suburbs into vibrant spaces with mixed-use development.

These interventions are intended to bridge spatial and economic divides, while supporting urban resilience and climate-friendly growth.

Municipalities as Engines of Development

Simelane also challenged municipalities to adopt a more proactive role in shaping their local economies. She argued that municipalities must not only focus on delivering basic services but also actively support economic planning, industrial growth, and entrepreneurship.

She urged them to harness inclusive stakeholder participation in integrated development models to ensure local residents benefit from new investments and opportunities.

“Despite these differences, cities must take their own initiatives, as espoused in our Constitution, to share and distribute the economic benefits to their residents,” she said.

Addressing Spatial Inequality

The Minister emphasised that municipalities continue to face entrenched economic and spatial disparities — a legacy of apartheid and a reality of geography and environment. Correcting these injustices requires inclusive policies that link people not just to cities as employment centres but also to opportunities in housing, manufacturing, skills development, and entrepreneurship.

“People should not only be connected to cities for employment but also for opportunities linked to decent and adequate housing, better living conditions, skills development, and entrepreneurial endeavours that generate inputs for production and expand commercial networks,” Simelane explained.

A New Vision for Inclusive Cities

Her remarks came during a panel discussion on “Local Economies as Engines of Inclusive Development: A New Vision for Governance and Informality through Equitable Climate Action and Public Service Provision.” The session highlighted how cities across the globe must rethink governance frameworks to ensure growth is inclusive, climate-resilient, and socially equitable.

By repositioning informal settlements as potential hubs of growth and recognising the role of township economies in national development, the Human Settlements Ministry hopes to drive a new era of sustainable and inclusive urbanisation in South Africa.