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Tough times ahead for township entrepreneurs


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Tough times ahead for township entrepreneurs

5th May 2017

By: Sydney Majoko


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Only the most ignorant entrepreneur would go into the future without trepidation. All businesses in South Africa’s current economic and political climate are bound to be hugely affected by the recent economic status downgrades by international ratings agencies S&P Global Ratings and Finch.

Township businesses are not immune to what affects the mainstream economy. In fact, because the township economy is primarily retail based, it is most likely going to feel the long-term effects of the downgrades more than any other sector. Whenever consumers decide to tighten their belts, it is retailers that suffer the most because the money spent on goods sold by retail businesses is the money over which consumers have the most control. So, a bumpy ride ahead awaits township businesses. And add to that the fact that the economy itself has not seen any significant growth in years. The picture for township entrepreneurs looks quite gloomy.


But it is not all doom and gloom. The recently concluded Township Entrepreneur Awards, which even had a reality show running on free-to-air national television station, are a perfect example of what government should be doing to encourage entrepreneurship and excellence in the township economy.

Although the awards are still in the development stage, they have the potential to grow into a driving force behind innovation and growth in the township economy, if they receive the right kind of publicity and management. The reality show can serve as a reference point for any budding township entrepreneur to know that others like him or her have overcome the problems of doing business in the townships and encourage him or her to stay the course. The awards can be broadened to become a national phenomenon and also be spread to all local municipalities, which must then ensure that entries come from every single township in the country. This would not only encourage entrepreneurs but also ensure that local government is at the coal- face of local business.


In the midst of all the upheavals in national politics that our country has been experiencing, it was heartening to hear the country’s Deputy President, Cyril Ramaphosa, suggesting that entrepreneurship should be added to the national school curriculum.

Statistics have consistently shown that the townships continue to have some of the highest unemployment rates among the youth. In other words, most of the youth who fall by the wayside during their school careers immediately join the ranks of the unemployed. Sadly, they also do not have any skills that would enable them to create their own employment. Thus, the introduction of entrepreneurship as a school subject would immediately turn the situa- tion around. Instead of the townships teeming with young people looking for work, they would be overflowing with young people looking to create their own work opportunities.

Despite slow growth in the world economy, China, which, like this country, is a member of the Brics bloc of Brazil, Russia, India, China and South Africa, is still recording growth rates of about 6.5% of its gross domestic product. The structure of the Chinese economy continues to allow for pheno- menal growth because of the country’s entrepreneurial culture. If, like China and India, our children were taught from an early age that being economically active is a matter of choice, and that it is not necessarily dependent on whether one is employed or not, then our economic growth figures would change to reflect our education and thinking.

Like high-density areas in India and China, our townships can then turn around and have thousands and thousands of economic hubs. Even though townships are not necessarily best suited to major economic activities, owing to spatial limitations, settlements in India have shown that entrepreneurial creativity can blossom almost anywhere. This is where most of the economic growth that the country is looking for should be coming from. Big multinationals are great investors in any economy and provide much-needed employment, but the unemployment rates in the township economy will, in the main, be solved by solutions emanating from the township economy itself.

This, of course, does not suggest that fixing our politics is secondary – it is still of great importance that government provide a stable, well-resourced environment for the township economy to flourish. Property and land ownership have been shown to increase entrepreneurial activity, owing to stability. Such problems can only be solved at provincial and national levels.


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