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State of the township economy


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State of the township economy

State of the  township economy

24th March 2017

By: Sydney Majoko


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During this year’s chaotic State of the Nation address (Sona), in February, President Jacob Zuma promised that, in line with the radical economic develop- ment that government is embarking on, the State will use its buying power to boost and empower small business enterprises, especially rural and township enterprises. The deliberate focus on township economies during Sona and during State of the Province addresses continues to highlight the fact that the township economy is an important tool in the fight against unemployment.

Gauteng Premier David Makhura followed Zuma’s example by giving flesh to the President’s figures in his State of the Province address. Makhura highlighted the Gauteng government’s focus on the growth and stability of black-owned township enterprises. Besides ensuring that township businesses are given access to wider market opportunities, the provincial government will ensure that the empowerment that government has always trumpeted is made real by stipulating that “every rand that government spends on black-owned business development goes to township enterprises”. This will include money that is spent on expertise. In the past, it was not unusual that government would spend money upgrading township businesses, only for them to take a whole chunk of the money and spend it on expertise that could only be acquired from established businesses in the formal economy. Government has now recognised this loophole and aims to tackle it, ensuring that benefits aimed at township businesses are delivered to the right businesses.


Makhura went on to give figures that indicated that, in 2014, government spent only R600-million in the township economy, with the figure increasing tenfold, to R6-billion, in 2016. As of January this year, up to 2 800 township businesses were benefiting directly from government spend. This focus on the township economy is not limited to Gauteng only – other provinces have also benefited, with the Western Cape, for example, having partnered with established businesses like Neotel to ensure the successful delivery of broadband in the City of Cape Town and in other municipalities in the province. The City of Cape Town has gone ahead with the establishment of e-centres, which ensure that residents, including those in townships, also receive broadband so that they too can be in the information superhighway of the mainstream economy.

While all these are welcome efforts in ensuring that the township economy grows and truly help in eradicating the unemployment burden, it is of paramount importance that measurable efforts are made to uplift the township economy.


On the same day that Makhura delivered his State of the Province address, which appeared to champion township enterprises, talk radio stations in the province were abuzz with township entrepreneurs decrying the lack of access to programmers that government says are transforming the township economy. The entrepreneurs complained that institutions like the Gauteng Enterprise Propeller (GEP) were out of touch with the businesses that truly needed their help for them to succeed. It is about time that Mahkura and his MEC for Economic Development, Lebogang Mashile, came up with ‘measurables’ that an independent body can verify to ensure that true progress was being made in uplifting the township economy.

Because government has declared that, as part of its radical economic development, the township economy is going to receive up to 30% of its spend, it is only prudent that all provincial governments that have sizeable township economies put in place a system that consists of measurable business indicators (parameters) that can be independently verified so that there are no complaints of political leaders being all talk without their promises translating into practical action on the ground.

Tourism-based economies, such as those of the Western Cape and KwaZulu-Natal, have a solid base upon which measurable economic progress can be recorded. The number of jobs created in the tourism sector in each province in the townships can be easily recorded if great effort is put into registering those businesses in the townships. It is one thing to champion the development of the township economy, but quite another to demonstrate with figures that the development is taking place and anyone can verify the figures. Numbers talk for themselves.


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