Govt moving to accelerate measures to boost township economy

10th August 2018 By: Sydney Majoko

One of the most frustrating realities of government operations is the red tape that entrepreneurs experience when they seek assistance. The slow wheels of government-led initiatives tend to drive many entrepreneurs to despair before they even embark on the first step of their economic endeavours. So, it is a welcome develop- ment when government itself steps out of its normal beaurocratic operations to take part in initiatives that are meant to sidestep the red tape and accelerate the implementation of measures that will grow the township economy.

Two extraordinary summits were held recently, with both focusing on the township economy. Early July saw Deputy President David Mabuza address the Township and Rural Economies Summit in East London. Over the past two years, there has been more and more government rhetoric regarding the township economy. While this has been matched in some cases by improved spending on procurement from township-based industries by government, nothing concrete and measurable has happened – it has been just talk. Indeed, in his speech, Mabuza alluded to this when he pointed out that “certain industries need to be ringfenced and the procurement of particular goods and services for those industries be solely from [the] township economies”. This column has in the past indicated that there are low-hanging fruits when it comes to initiatives like those suggested by the Deputy President: a simple register of which services exist in a particular township can go a long way towards ensuring that government sources goods and services from those townships.

Department of Trade and Industry (DTI) director-general Lionel October stressed at the summit that only “clear and concrete implementation mechanisms” mean anything. The DTI has thus agreed to the setting up of a project management unit that will turn township and rural economies into hives of economic activity and also ensure the production of goods and services. The establishment of the project management unit means that, finally, government has seen the need for deadline-driven projects to uplift the township economy. Also, the fact that the Council for Scientific and Industrial Research has been roped in to assist with the implementation of government strategy means that the unit will be basing all its activities in the townships on proven data.

October also emphasised the need to close the gap between procurement opportunities and the delivery of services by township businesses on the ground. Again, this points to a desire to undo the red tape that has always been a hindrance to entrepreneurs. Although I am not convinced that the Premier’s office in the province is the right place to locate a clearing house for procurement, it is quite encouraging that this much-needed service is going to be replicated in all nine provinces of the country. This, coupled with the suggested one-stop shops that will be located in the townships themselves and will assist entrepreneurs in applying for funds from the Small Enterprise Development Agency and the Small Enterprise Finance Agency, is a definite step in the right direction. Strategic partnerships with the right private-sector businesses were also cited as quite important.

In fact, the first of the two summits that focused on the township economy was the Township Investment Summit, held at the Soweto Theatre in June and focused on the need for these strategic partnerships between township economy entrepreneurs and the private sector. This summit attracted the likes of the City of Johannesburg, financial services industry giants like 1Life Insurance and Old Mutual and legal firm Bowman Law, all of which provided one-on-one opportunities to the more than 150 businesses that attended the summit. In fact, a number of businesses got the opportunity to make presentations to select panels with the aim of allowing these businesses to acquire funds and the necessary help from these businesses. Johannesburg mayor Herman Mashaba even tweeted from the summit about the irony that “the townships which we were meant to be banished to now hold the hope of South Africa’s economic freedom”. We all know he is right. The question remains, though: Is government doing enough to ensure that all these summits’ recommendations become reality? Only time will tell.