Gauteng efforts to boost township businesses pay off
Entrepreneurs get a leg-up thanks to province’s procurement support
When Grace Hinana noticed travel and tourism were booming in her township, Mamelodi in Pretoria east, she closed down her liquor business and opened a bed and breakfast. Today Hinana runs three B&Bs and employs nine people. This is part of Gauteng premier David Makhura’s plan to empower township business. Businesses owned by historically disadvantaged people are paid R22bn to provide products and services to the Gauteng government departments. This is a milestone, considering that before 2014, the provincial government only spent about R600m in procurement from township businesses
“One of the areas in which the provincial government has made irrefutable progress is in the township economy,” said Makhura.
“Gauteng is the pioneer, laboratory and leader in the revitalisation and transformation of township enterprises into sustainable and job-creating businesses,” said the premier. “We have provided financial and nonfinancial support, assisted with access to markets and invested substantial resources in industrial infrastructure such as agri-parks, industrial parks, automotive hubs and eKasi Labs [which provide business development support for start-ups].” Hinana benefited through the township revitalisation programme, receiving money
from the Gauteng Enterprise Propeller.
“I started my business in 1999 as a pub and I went into tourism after I saw demand for tourism accommodation growing in Mamelodi due to the annual Moretele Park Jazz Festival, workshops which are organised by schools, and church events. We also host weddings,” said Hinana. For her diligence, Hinana was one of the entrepreneurs commended by Makhura in his state of the province address.
“Grace’s business has received lots of support from the Gauteng Enterprise Propeller and the private sector,” said Makhura. Hinana said that her longterm goal was to secure funding and open the township’s first hotel.
“My challenge is currently finding more land and funding,” she said.
“I hope the government and private sector come on board in terms of funding my dream, which would result in the employment of more people.” The Township Entrepreneurship Awards and the Pitching Booster are platforms to showcase the entrepreneurial spirit, creative energy and innovation within the township economy. Erie Bee-Shabangu, from Rust Ter Vaal in Sedibeng, is one of the 181 entrepreneurs who have benefited from the Pitching Booster programme. Bee-Shabangu won R40,000 from the Pitching Booster and used it to buy new equipment for her fashiondesign business. “I have the best sewing equipment in the world. I have a bigger space; it’s heaven,” said BeeShabangu.
“One of my biggest achievements that means a lot to me is to be able to teach young aspiring youth [who are] without funds to study fashion. I have enough equipment to take two to three students a year.
“The most important thing next year is that I’m finishing off my degree in clothing and
textiles and will finally have a formal qualification.” Another beneficiary is Reuben Nkosi of Reunko Steel Suppliers in Katlehong, east of Johannesburg. Nkosi runs a manufacturing business that is also supported by the Gauteng Enterprise Propeller. His business produces 20,000 metal bolts a month and employs 11 people from around Katlehong.
Its customers include Forester Timber, Summit Associate Industry, Anglo Ashanti and Ingwe Mines. Gauteng finance MEC Barbara Creecy said the province had registered 32,616 township businesses, “many from as far afield as Limpopo, Mpumalanga and Free State, on the Gauteng SAP System, which is linked to the central supplier database”.
“Of the Gauteng-based township enterprises, we have used 7,192 in the provincial supply chain. Two-and-a-half thousand Gauteng-based township enterprises have received training through our supplier-development programme since 2014,” she said. “In an effort to ensure that our procurement opportunities do not undermine the cash-flow stability of township and other enterprises, Gauteng has made significant
strides in paying our suppliers on time.
“One of the successful programmes that helped us achieve this has been our e-invoicing application, which won a bronze award at the premier’s service excellence awards last week.”
She said most of the departments, in compliance with the Public Finance Management Act and as a direct response to supporting small enterprises, now paid 92% of their invoices within 15 days.
“The department of health now pays 68% of its invoices within 30 days and makes an effort to ensure small enterprises are prioritised.” Makhura said that one of the great stories of the township economy was how the transformative partnership between retail chain Pick n Pay, the Old Mutual Masisizane Fund, Gauteng Enterprise Propeller and township spaza shop owners moved 11 spaza shops from survivalist to sustainable businesses. “The programme has enabled spaza shops to be converted into decent retail shops that have grown, on average, from making R10,000 per month to R300,000 per month in profit. In addition, the 11 township retailers have collectively created more than 200 new jobs in the townships as a result of their growth.”