Business 'changing the rules of the game

The Orlando Towers in Soweto. Gauteng’s townships are home to 80% of the province’s people, and their economic prospects must grow to match. (Photo: SA Tourism)

The Orlando Towers in Soweto. Gauteng’s townships are home to 80% of the province’s people, and their economic prospects must grow to match. (Photo: SA Tourism)

Amid the clinking of champagne glasses in celebration of winners at the annual Township Entrepreneurship Awards (TEAs) in Brakpan, Gauteng MEC for Economic Development Lebogang Maile emphasised the importance of township economies in Gauteng.

In the style of fiery speakers at politically-charged rallies, Maile’s voice boomed around Carnival City’s Big Top Arena, as he cried out: “Forward with township economy, forward!”

Resplendent in a tailored cocktail suit and multi-coloured socks at the highbrow Awards, Maile briefly outlined the importance of the township economy in the development of South Africa as a whole.

He said the development and upliftment of townships was a social, economic and political imperative for South Africa, and that it was perfectly in line with the government’s programme of Radical Economic Transformation and the National Development Plan.

The township awards is an initiative launched in association with the Gauteng department of economic development to revitalise the economy of the townships in Gauteng.

“Through the Township Entrepreneurship Awards, government is making a strong statement that we want to see more entrepreneurs who are willing to tamper with lily-white boardrooms and who can stand firm against tokenistic inclusion. We are looking for businesses that are committed to changing the rules of the game and to creating a new economic reality in which township businesses are no longer condemned to the margins,” said Maile.

“We are looking for partners who are as committed as we are to building an economic reality where black and township businesses occupy pride of place in South Africa’s economic landscape.”

Maile has said before that his department’s Township Economy Revitalisation (TER) Strategy placed township economies at the centre of the government’s plans to grow the economy and redistribute wealth.

He pointed out recently that the TER was anchored on several focus areas and interventions to support the township economy, including promoting market access; funding and entrepreneurial development and support; unblocking infrastructural bottlenecks; promoting the development of productive industries in townships; harnessing indigenous knowledge systems; and addressing prohibitive laws and regulations affecting township businesses.

“Our aim is to turn townships within Gauteng into productive nodes that capture a meaningful part of the mainstream economy in order to change the character and nature of our economy, reverse historically skewed and racial ownership patterns, and create the jobs that are needed to give our people the better life that they strive towards in all their activities on a daily basis,” said Maile.

“As part of our economic plan we have identified eleven sectors as focus areas for growing the Gauteng economy: ICT; creative; agro-processing; pharmaceutical; construction; mineral beneficiation; tourism; finance; automotive; manufacturing; and real estate. Within each of these, we want to create opportunities for township SMMEs to capture a greater share of the productive value chain and become mainstream economic players.

“We want our townships to become beehives of economic activity, not just for consumption, but for manufacturing, for wealth and asset-creating productive activities that will transform the economic landscape of this country and bring black people, women, youth and people with disabilities into ownership of the mainstream economy.”

The MEC re-emphasised that the Gauteng provincial government has already entered into partnership with the private sector as one of many significant stakeholders, to bring economic and spatial transformation that will improve the lives of black people in particular.

“The private sector has a significant role to play in sharing and transferring economic ownership and control as well as the necessary skills and capabilities to black people if we are ever going to succeed in our nation-building agenda as a people,” said Maile.

According to a comprehensive research commissioned by the Gauteng department of economic development, South African township economies (driven largely by embedded structural inequality), tend to rely on their residents working and earning wages outside of the township, and goods and services are often purchased outside of the township.

It shows that about 80% population in Gauteng lives in the townships, including old and new black residential areas and informal settlements, which are largely confined to the periphery of the Gauteng economy.

The townships, from the point of view of apartheid planners, were supposed to be mere dormitories and suppliers of cheap labour to the white-dominated mainstream economy.

This historical spatial separation of the townships from the main circuits of market exchange and production (the core of the economy) has been aggravated by the post-1994 urban policy programmes, which reproduced the apartheid geography in a new form.

“It was therefore important that a labour market is created close to where the unemployed reside,” said Maile.

“We want to see more and more affluent consumers from all over the country driving into our townships to buy certain products or to get a distinct service from a township business,” said Maile.

“These objectives explain why we are targeting township businesses that are distinguished by innovation, creativity, knowledge about the market they serve, sound financial management and as well as the potential to grow and generate employment.”

The research further shows that the key challenge in developing township economies is that even if there are positive developments in the broader economy, township economies are not positioned to take advantage of these as a result of, for example, infrastructural challenges and under-developed value chains.

However, during the 2014 launch of the Township Economy Revitalisation Strategy, Gauteng Premier David Makhura said the meaningful inclusion of the people of the township into the mainstream economy of Gauteng through their own township enterprises that are supported by the government and big business will be one of the key game changers.

“The townships must be self-sufficient and vibrant economic centres. The revitalisation of the township economy in Gauteng to create sustainable jobs, reduce inequality and defeat poverty must be propelled through a comprehensive approach that contributes to the radical transformation of the economy. Township economy revitalisation can influence the performance of the Gauteng economy in terms of labour absorption and social and economic inclusivity,” said Makhura.

“To achieve revitalisation of the township economy, there is a need to set the parameters of what is called ‘township economy’ and start from where township economic enterprises are. In this regard Gauteng government embarked upon an extensive consultation process in more than 65 townships involving more than 50 000 existing and aspirant township entrepreneurs.

“These consultations and contributions by township entrepreneurs were further consolidated through Regional Summits and the Township Economy Revitalisation Summit that followed. In between the summits there have been extensive engagements with sectors representing township enterprises and other big businesses in the mainstream economy to better understand the needs and challenges facing township enterprises.”

Charles Molele

Charles Molele

Charles Molele is a senior politics reporter at the Mail & Guardian. Charles joined the paper in 2011. He has covered general news, court and politics for the past 19 years, and also worked as a senior reporter for the Saturday Star, Sunday World, ThisDay, Sunday Times and is former politics editor of the New Age. Charles's other career highlights include covering Kenya's violent general elections (2007/08), Zimbabwe’s sham general elections (2008), Mozambique's food riots (2010) and the historic re-election of US President Barack Obama (2012). Read more from Charles Molele