Summit on townships economy walks the talk

Updated on 8 October 2014

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Summit on townships economy walks the talk

The Gauteng provincial government has taken a firm stance in supporting township-based businesses in a bid to include them in mainstream economic activity of the country.

At the Township Economy Revitalisation Summit held yesterday in Soweto, Gauteng Premier David Makhura confirmed that the province will, in this financial year, invest R160 milion in revitalising and building business hubs in the townships.

“We will invest R160 million for the current financial year to build infrastructure for township entrepreneurs to do their work properly,” Makhura said.

The purpose of the summit was to give local entrepreneurs, SME’s and cooperatives an opportunity to contribute towards the Township Economic Revitalisation Strategy.

The summit was a culmination of a province-wide consultation process in over 50 townships, initiated by the Department of Economic Development to strategise how best township SMEs can be supported.

“We will start to put into action the creation of a state bank that will support the township economy”

Cash injection to townships

Makhura says the provincial government will spend over a billion rand over the next five years to improve infrastructure for township businesses since the environment is not conducive.

“Many township entrepreneurs are doing work in their homes. Some of them make lots of noise, as many of them are producing furniture, and very often they make noise even to children who are trying to study. Given a chance they would want to do more under better conditions out of their homes,” he said.

Makhura said the province wants 30 percent of the Gauteng economy to be composed of township enterprises.

“We will start to put into action the creation of a state bank that will support the township economy,” he said.

Makhura also appealed to municipalities not to penalise township entrepreneurs but assist them to comply with set regulations.

“We want to ensure that there is an appropriate legal and regulatory framework, we need to review some of the laws that don’t promote the growth of SME’s and township entrepreneurs.”

A City of Joburg’s programme called “Operation Cleansweep” that tried to enforce proper bylaws by removing licenced informal traders from their existing trading spaces in the CBD was successfully challenged in court.

“Let us create an ecosystem to ensure spending power is trapped in the township”

Township stock exchange proposed

Deputy president Cyril Ramaphosa proposed the idea of establishing a “Soweto Stock Exchange” as a solution to funding obstacles that many SMEs face.

“Have we ever thought of a township stock exchange?” Ramaphosa asked. “People who go to the JSE to raise billions of rands to fuel and run their businesses. Why can’t we think of a stock exchange in the townships?”

Ramaphosa also urged businesses to comply with companies regulations and labour relations laws. Makhura said his government was studying different stock exchange models to identify a suitable one for townships.

Business ecosystems a way forward

Thami Mazwai, the Director for University of Johannesburg Centre for Small Business Development, called on township businesses to create an “ecosystem” that would see money circulate in their areas to ensure growth.

He appealed to businesses to support one another as the socio-economic benefits accompanied by such a move were immeasurable.

“Let us create an ecosystem to ensure spending power is trapped in the township,” he said. “Soweto residents spent more than a R1bn a year, but less than 20% of this is spent in the township.”

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