How local government could boost township businesses
“Over the next five years the Gauteng government will invest more than R1billion to build and improve infrastructure for township economies,” said Gauteng premier David Makhura at the Gauteng township economy revitalisation summit in Soweto.
Furthermore, Makhura announced that there would be a large cash investment this year in order to help township entrepreneurs: "We will invest R160m for the current financial year to build infrastructure for the township entrepreneurs to do their work properly," said Makhura.
Education for entrepreneurs
Sentiments for change were carried through when others believed that the townships needed to change. The member of executive council (MEC) in Gauteng, Lebogang Maile said: “We must change our townships into centres of production, rather than centres of consumption.”
Khayelitsha and Mitchells Plain residents are also receiving help, but through educational channels. The Small Business Academy (SBA) initiative comprises a nine month business development programme which covers small business essentials, marketing, financial management, personal development, computer training as well as business plan writing and presenting.
The programme, which is now presented for the second year, starts in March 2014 for participants from Khayelitsha and Mitchells Plain. The participants will be part of the USB SBA for nine months, after which they will graduate with a National Qualification Framework (NQF) level five certificate from Stellenbosch University.
Big malls; small business
However, the gap between the rich and the poor in South Africa is ever growing and MEC for road and transport, Ismail Vadi believe that fixing this gap will help boost the economy. “The gap between the rich and poor in South Africa is growing; we have to find a way of rescuing the economy and making sure that it [the economy] grows”, said Vadi.
This gap is trying to be bridged through commercial property development in order to bring more goods and services to township residence. Soweto has three major malls which have seen a boost in the economy.
Furthermore, earlier this year Nedbank Corporate Property Finance showed support towards property development the townships with the opening of the R360 million KwaMnyandu Shopping Centre in Umlazi, a township south-west of Durban, reported Property24.
However, big malls in township areas have pros and cons, with many stating that small businesses shut down due to the large competition. "We were thinking that they [the shopping malls] would create opportunities. Instead, most of the small businesses have closed down," said Churchill Mrasi, chairperson of Greater Soweto Business Forum, to Mail and Guardian.
Township entrepreneur’s problems
Several pillars underpin the strategy which is aimed at addressing the main challenges faced by township entrepreneurs. These include access to land, industrial space and economic infrastructure; funding and technical assistance; manufacturing and production as well as market access and competitiveness. Many townships entrepenurs, across the country, work from home, as they do not have the funding nor space to open up a commercial property.
Makhura said over the last three months he had consultations and engagements with townships entrepreneurs across the province. “We visited more than 65 townships in Gauteng and gained insider perspective and first-hand information from more than 50 000 township entrepreneurs about their plans and aspirations,” said Makhura.
Adding to the revitalisation and investment into the townships, Makhura said that in October government would invest several billions of Rands into the revitalisation of the public transport infrastructure as well.
Furthermore, in Cape Town, more routes have been added to the MyCiti busses in order to better services residents in Khayelitsha and Mitchells Plain.
“The plan has always been to bring MyCiTi to Khayelitsha and Mitchells Plain. Successful negotiations with public transport operators, including the bus and minibus taxi operators, and building stops and stations was needed first. Now that there is agreement and construction is underway, we are delighted that we can finally introduce MyCiTi,” said Councillor Brett Herron, part of the mayoral committee member for Transport in Cape Town.
With added resources and better transportation routes South Africa’s townships can become thriving economic hubs. Small business owners and entrepreneurs will have more resources at hand, and be able to expand their ventures, thus not only providing more goods and services, but also creating more jobs.