Migration remains one of the most debated issues in South Africa today.
Public discussions often focus on borders, documentation, employment competition, service delivery pressures and social tensions.
While these concerns are real, they can sometimes obscure a more fundamental question: Why are some entrepreneurial ecosystems succeeding while others struggle?
This question matters because migration and employment are often discussed through the language of competition. Yet sustainable development requires us to examine the systems that create economic opportunity in the first place.
The township economy is not a sideline to South Africa's economic story. It is a cornerstone.
Valued at between R900 billion and R1 trillion annually, it contributes approximately 6% of national GDP and accounts for an estimated 17% of total employment. The market itself is remarkably diverse, with key drivers including spaza shops (approximately R190 billion), fast-food outlets (R90 billion), the taxi industry (R50 billion) and savings clubs and stokvels (R44 billion).
These figures suggest that the township economy should not be viewed simply as a collection of informal activities. It should be viewed as one of South Africa's most important entrepreneurial ecosystems.
The question is: What lessons does it offer for employment creation?
Much of the public discourse surrounding township economies has centred on the success of migrant-owned spaza shops and informal businesses.
For some, this success is viewed as evidence of unfair competition. For others, it is seen as a natural outcome of entrepreneurship and market dynamics. Both perspectives contain elements of truth. However, neither fully explains what is happening.
The more important question is not who owns a business. The more important question is: What systems enable certain businesses to succeed under difficult conditions?
This shift in perspective changes the nature of the conversation. Rather than focusing on competition between individuals or communities, attention turns to the underlying structures that support entrepreneurial success.
One explanation lies in what may be described as an entrepreneurial infrastructure gap.
Many successful township enterprises do not operate as isolated businesses. Instead, they frequently benefit from: Collective purchasing arrangements; Pooled capital structures; Shared logistics systems; Coordinated supply chains; Information-sharing networks; Informal mentorship structures; and Strong community-based support systems.
In effect, they operate as ecosystems rather than stand-alone enterprises.
This distinction is important. Business success is not always the result of individual effort alone. It is often the product of systems that reduce costs, improve resilience, strengthen market access and create economies of scale.
The strategic challenge facing South Africa is therefore not how to restrict entrepreneurial activity. It is how to build entrepreneurial infrastructure at scale.
South Africa's unemployment challenge remains one of the most severe in the world. Millions of people continue to search for opportunities in a labour market that struggles to absorb new entrants.
Under these conditions, competition inevitably intensifies. Migration often becomes the visible manifestation of deeper structural pressures.
Yet employment creation cannot be achieved solely through labour market interventions. It also requires entrepreneurial pathways capable of generating opportunity outside traditional employment structures.
The township economy demonstrates that economic participation can emerge even under difficult circumstances when entrepreneurial systems are present. With approximately 17% of total employment already linked to township economic activity, the question is no longer whether such systems work. The question is whether they can be replicated and scaled.
Perhaps one of the most important developments within township economies is the rise of financial technology.
For decades, access to finance represented one of the greatest barriers facing township entrepreneurs. Nearly 80% of township businesses remain unregistered and therefore struggle to access conventional banking products and business finance.
Fintech is beginning to change that reality.
Digital payments, electronic transfers, merchant-focused point-of-sale systems and mobile financial services are increasingly becoming part of township commerce. While cash remains dominant, digital adoption continues to accelerate.
The scale of this transformation is significant. Altron Fintech now processes approximately R220 billion in transactions annually. Lesaka Kazang processes roughly R72 billion in annual transaction throughput.
At the same time, fintech lenders and micro-financiers are increasingly providing inventory finance and working capital to township enterprises that would otherwise struggle to survive. For many small businesses, access to short-term finance is often the difference between stagnation and growth.
Viewed differently, fintech is doing more than processing transactions. It is quietly building entrepreneurial infrastructure.
To understand why some entrepreneurial ecosystems succeed while others struggle, we must first diagnose the institutional landscape.
Employment and entrepreneurship outcomes are influenced simultaneously by education systems, industrial policy, municipal development strategies, financial institutions and regulatory frameworks.
No single institution controls entrepreneurial success. Yet South Africa possesses numerous enterprise development initiatives — the challenge often lies not in policy design but in implementation. Many support programmes remain fragmented, difficult to access or poorly coordinated.
This diagnostic view reveals that the township economy's success is not accidental. It is the product of systems that have evolved to fill gaps left by formal institutions.
Diagnosis alone is insufficient. The question is whether the machinery exists to translate understanding into action.
Successful entrepreneurial ecosystems depend on the effective interaction of finance, skills development, logistics, markets, technology and business support services. Where these systems operate in isolation, entrepreneurial growth becomes difficult.
Building entrepreneurial infrastructure requires cooperation between government, business, development finance institutions, municipalities and communities. Coordination is often the missing ingredient.
The township economy demonstrates that when these systems align — even informally — economic participation flourishes. The policy challenge is to create the institutional machinery that enables such alignment at scale.
The ultimate question is not whether the township economy is growing but whether its growth is contributing to employment and economic inclusion.
The township economy involves numerous stakeholders: entrepreneurs, consumers, suppliers, municipalities, community organisations, financiers and development agencies. Balancing these interests requires thoughtful governance rather than reactive responses.
Development-Linked Financial Architecture (DLFA) offers a framework for aligning capital with productive economic participation. Rather than viewing finance solely as a source of commercial returns, DLFA seeks to link capital directly to employment creation and entrepreneurial development.
This could include: Township enterprise funds; Cooperative purchasing platforms; Shared distribution infrastructure; Entrepreneurial incubators; Digital market access systems and Local manufacturing ecosystems.
The objective is not merely business creation. It is a scalable opportunity creation.
Public debates often focus on competition between groups. The township economy suggests a different perspective.
The real challenge may not be competition itself. The challenge may be unequal access to entrepreneurial capability.
If this diagnosis is correct, policy responses should focus less on restricting participation and more on expanding opportunity.
This means strengthening Entrepreneurial education; Enterprise finance; Business incubation; Cooperative purchasing systems; Logistics networks; Digital market access; and Local manufacturing ecosystems.
The objective should be to enable more South Africans to participate successfully in economic activity.
Migration will remain an important policy issue. So too will employment.
Yet the township economy reminds us that sustainable solutions are unlikely to emerge from enforcement alone. They will emerge from expanding opportunities.
South Africa's long-term success will depend not only on how effectively it manages migration pressures but also on how successfully it develops entrepreneurial ecosystems capable of generating employment and economic inclusion at scale.
Perhaps the most important lesson from the township economy is that jobs are not only created by firms. They are created by systems.
Where entrepreneurial systems are strong, opportunity tends to follow.
The township economy is not a problem to be managed. It is a system to be understood, financed and scaled.
Dr Lehlohonolo Gabriel Mambona is an implementation systems architect specialising in institutional delivery systems, governance integration and development execution frameworks.