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Local government central to job creation

26th August 2016

By: Sydney Majoko


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Elections have the effect of turning the spotlight on issues of importance for a set period of time. However, they can also turn the spotlight away from other issues that need to be constantly highlighted. Only one party was bold enough to make jobs created at local municipality level a focus of its election campaign and that is a cause for concern for the township economy. Major municipalities, and the metros, in particular, serve a number of townships, and their ability to generate jobs at local level is paramount.

If municipalities are at the coalface of service delivery, then it is a no-brainier that any role that government is going to play in the creation of jobs will come through local government.


The much-maligned black economic- empowerment (BEE) policy is a good example of a government policy whose roots and implementation strategy should be fully based in the local government sphere. While the campaign focus for one or two parties was on jobs, BEE should be focused on as a stimulant for local business growth.

Any jobs created directly by government through the Public Works Extended Programme will always have a defined timeframe. In other words, it will be a temporary form of employment or work opportunity. But proper implementation of BEE will ensure that funds used to create businesses in the township economy create a longer-lasting kind of work opportunity, one that is dependent on the longevity of the business created rather than a project that only lasts for a while.


The decision by the Gauteng Enterprise Propeller to focus on funding projects meant to benefit the youth and women will give the BEE policy an entry point into helping the most affected groups of people in the township economy – youth and women. The far-reaching effects of the programme will ensure that the constant criticism that BEE programmes only empower the already empowered becomes a thing of the past.

Save for the tornado that decimated several houses and businesses in the Winnie Mandela informal settlement, on the edge of Tembisa, the township economy was largely ignored during the campaign period. Had the tornado not lifted the roof off a shopping mall, I doubt that any media coverage of business would have taken place during the local government elections.

Because of the nature of township businesses, most of which are based in residential dwellings, it is very difficult to quantify the actual damage that is done to the township economy when a natural disaster or a riot strikes.

Although a long shot, these natural disasters should provide the formal economy with an opportunity to develop financial products specifically designed with the township economy in mind. Building structures in the township hardly ever meet professional standards, especially in areas that were formally informal settlements, but they do generate considerable business and there are opportunities for insurance or financial products to protect those businesses.

Although the South African government has committed to assisting the victims of the tornado by rebuilding their houses and businesses, one cannot help but wonder if a better way cannot be found.

For instance, if the Gauteng Enterprise Propeller had a database of all the businesses affected by the natural disaster, it would be very easy for government to respond to the disaster in the shortest time possible.

With the elections now over, it is time for municipalities that have been constituted already to take another long look at the programmes they have in place already and decide if these programmes contribute to the alleviation of the job burden on the formal economy.

Where election results have given a new party a chance to govern where it has never governed, the new party has a great opportunity to partner with entrepreneurs in the township economy in a totally new way that will give hope to both entrepreneurs and job seekers. There is no magic to the creation of jobs in both the formal and informal economies – the creation of new and sustainable businesses is the only way, in addition to boosting and supporting businesses that are already in existence.


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