This paper is based on research done on intercultural communication at Greenmarket Square in the heart of Cape Town, South Africa. The Square is well known as a market for informal traders (mainly from other parts of Africa), local people and tourists from all over the world. Using originally collected discursive evidence from market traders, the particular focus of this paper is to show how two groups of traders in the market--South Africans and Africans from other countries, respectively--discursively construct each other. By taking a critical discourse analysis (CDA) approach to transcribed interviews conducted with traders from both groups, we were able to extract discursive constructions of "the Other", which revealed considerable intergroup stereotypes, intra-continental racism and xenophobia. The paper considers the causes of these discursive constructions, such as dominant ideologies, the dominant political discourses emanating from the South African state itself as argued by Neocosmos in 2008, and the spaces (real and imagined) in which these different actors find themselves.