South Africa’s informal township economy plays a genuinely critical role in the country’s job creation and economic growth, and township entrepreneurs remain some of the most resourceful businesspeople in the country, despite facing real, persistent hurdles.
Those hurdles range from a lack of resources and funding needed to start and expand a business, to limited access to infrastructure, expertise and support. Here are three challenges that continue to shape what it takes to build a successful township business, and what is being done about them.
Infrastructure
Inadequate infrastructure remains a significant constraint on township businesses’ ability to produce and deliver goods and services. Business hubs, office spaces and other facilities essential to running a business properly are still often in short supply. Basic services like electricity, transport and IT infrastructure remain harder to access for township-based entrepreneurs than for businesses elsewhere.
Internet access is a specific ongoing pain point. Many townships remain largely excluded from fibre networks, leaving mobile data as the only realistic option for staying connected. That gap keeps many small businesses from fully capturing the benefits of technology: a real online presence, operational efficiency, and genuine cost savings.
Related: Township Business Funding Opportunities, TREP
Support networks
Business incubators, hubs and support networks continue to play an outsized role in building successful township enterprises. These are where entrepreneurs go for training, mentorship, workspace and business development support, along with help sourcing funding from VCs, angel investors and government programmes.
Dedicated support networks have also kept growing. The Township Entrepreneurs Alliance (TEA), for instance, has expanded well beyond its original footprint and now runs an annual Township Economy Awards recognising entrepreneurs contributing to growth in their communities, alongside a recent partnership with the Franchise Association of South Africa aimed at building a dedicated SMME support programme. Networks like this give business owners a genuine route to meet fellow entrepreneurs, potential customers and investors.
Skills development
Many entrepreneurs launch with strong industry-specific skills, but building a successful business also demands broader entrepreneurial skills: sales and marketing, financial management, customer service and project management, developed over time rather than assumed from day one.
Soft skills matter just as much. Viresh Harduth, Vice President: New Customer Acquisition (Small & Medium Businesses) for Sage Africa & Middle East, has previously highlighted a set of skills he considers critical for small business owners:
- Negotiation
- Communication
- Teamwork
- Adaptability
- Problem-solving
- Critical thinking
- Conflict resolution
- Leadership
Frequently asked questions
What is the biggest challenge facing township businesses?
Infrastructure remains a consistent constraint, limited business hubs and facilities, patchy access to electricity and transport, and poor fibre coverage that leaves many businesses reliant on mobile data alone.
Where can township entrepreneurs find support and mentorship?
Business incubators and support networks such as the Township Entrepreneurs Alliance (TEA) offer training, mentorship, workspace access and help sourcing funding, alongside opportunities to connect with other entrepreneurs, customers and investors.
What skills do township entrepreneurs need beyond industry expertise?
Broader business skills, financial management, sales and marketing, customer service and project management, plus soft skills like negotiation, communication and adaptability that do not come automatically with technical or industry knowledge.
Is internet access still a challenge for township businesses?
Yes, in many areas. Limited fibre coverage means many township businesses still rely on mobile data as their primary connectivity option, which constrains their ability to build a full online presence.
Are there funding options specific to township businesses?
Yes, including programmes like TREP (Township and Rural Entrepreneurship Programme), alongside the broader incubator and support network ecosystem that helps connect township businesses to VC, angel and government funding.
Building on township entrepreneurial strength
Township businesses already show genuine entrepreneurial resilience. Closing the remaining infrastructure, support and skills gaps is what will let that potential translate into sustained, scaled growth across South Africa’s township economy.
Originally published in June 2022. Updated September 2026 to reflect current Stats SA informal sector employment figures. Figures are updated regularly by Stats SA, confirm the latest release before citing them.
