This paper explores how land management systems impact on enterprise formalisation (and
economic growth) in South African townships and informal settlements. Our starting point is
the contention that current land management systems are inappropriate to the socio-legal
and economic context of these settlements, the state of human and financial capital resources
in poor households, and the centrality of informal micro-enterprise activities in livelihood
survival. We argue that land use management systems impact on business formalisation and
retard enterprise development. There exists a complex web of legislation (which transverses
the three tiers of government) through which the state aims to manage land, control building
developments, and determine the places and forms in which people can conduct business
and operate an enterprise. The paper argues that compliance with land management systems
is near to impossible for informal micro-enterprises in townships. For these entrepreneurs,
the land related process through which people have to navigate to obtain business
compliance resembles a Kafkaesque world: one in which the rules are nightmarishly complex,
incomprehensible and illogical. Partially as a result of these challenges, the great majority of
township informal micro-enterprises do not comply with land management system
requirements and gain little or no benefits. They have no alternative to trading illegally. Yet
the state is unable (due to the scale of the problem) to act against all informal business.