Creating Opportunities To Collaborate

The township economy can benefit from integration, capacity-building and collaboration with entities such as the Gauteng Enterprise Propeller (GEP), Small Enterprise Development Agency (SEDA), Small Enterprise Finance Agency (SEFA), and Southern African International Trade Exhibition (SAITEX). These connections are important for learning, cross-border opportunities and economic growth.

Dr Mthokozisi Tshuma, policy specialist on inclusive growth at the United Nations Development Programme, notes: “The government should partner with the private sector to implement support programmes and increase financial assistance” to small businesses. He adds: “In collaboration with the government, the private sector can revitalise decaying inner-city areas and implement mixed residential townships to facilitate adequate spatial planning.”

The issue of integrating the township economy has been on the government’s agenda for a long time. For instance, the Gauteng Township Economy Revitalisation Strategy recognises this aspect by noting that township enterprises “can be supported to secure community markets through the formation of consumer cooperatives incorporating spaza shops and others that will mobilise and organise community-buying power to procure and produce needed goods and services at competitive prices and good quality”. The strategy document adds: “Government is committed to ensuring that linkages are established in the supply chain by connecting township enterprises with production networks that operate on a larger scale in the mainstream economy.”

Connecting the informal sector

Phetogo Kubheka, event director responsible for the transport and trade portfolio at dmg events, which hosts the annual Southern African International Trade Exhibition, comments: “Effectively connecting the informal sector with government and corporate entities requires a multifaceted approach that includes improving access to information across all platforms and interacting directly with community business owners. SAITEX offers a dynamic arena for businesses to showcase their offerings, creating vital links with industry leaders and potential investors. By bringing together a broad spectrum of stakeholders under one roof, it accentuates the crucial influence of such platforms in nurturing business prospects and propelling economic advancement, particularly in the small, medium and micro enterprises (SMMEs) and township sectors.”

Kubheka states: “SMMEs’ engagement in the global economy is essential for driving innovation, accessing new markets and fostering economic growth.” She adds: “SAITEX exemplifies how platforms can bridge the gap between local SMMEs and global opportunities, empowering them to thrive in an interconnected economic environment.”

To a large extent, the infrastructure Khubeka suggests above is already in South Africa. For example, the Township Economy Partnership Fund supports Gauteng’s vulnerable small township businesses that would otherwise not be able to access funding from private funding institutions, government and other business support programmes. The fund is a partnership between the Industrial Development Corporation, GEP, and the Gauteng Department of Economic Development.

SEDA and SEFA are crucial in facilitating growth within the township economy. For instance, the Department of Trade and Industry’s agency SEDA is mandated to provide information, counselling and business support services specifically aimed at micro and small enterprises. On the other hand, SEFA ensures that small businesses unable to access commercial credit can get development finance.

In terms of cross-border opportunities, businesses in the township economy can benefit from the insights and learning opportunities at exhibitions such as the SAITEX. At the 2023 SAITEX trade expo, a dynamic three-day programme of masterclasses brought together business leaders, financial institutions and successful township entrepreneurs. These industry experts explored the latest innovations, creative ideas and actionable insights designed to propel business growth and empower local township economies. Themed sessions included eKasi Talks, SMME Focus Day and e-Commerce Workshops.