Growing township economy essential
Webinar speakers stress need to support SMMEs
For the ailing SA economy to grow at a desirable rate and create much-needed jobs, more effort has to be made to grow the township economy.
This was the message from speakers at a Proudly SA webinar on the township economy this week.
The government has pinned its hope on small, medium and micro enterprises (SMMEs) to grow the economy and create jobs.
But failure to pay SMMEs within 30 days of submitting invoices for work done, especially in the Eastern Cape, has resulted in businesses closing their doors.
Speaker after speaker at Wednesday’s webinar spoke about the importance of having a thriving township economy.
Gauteng Tourism Authority spokesperson Barba Gaoganediwe said holding more events in the townships, grading township restaurants and having better internet connectivity to make township life a lifestyle were just a few ways the township economy could be revamped.
“The township tourism sector has a lot to offer and is important for investment and trade,” he said.
Absa’s enterprise development head, Kgalaletso Tlhoaele, said while some sectors had been adversely affected by the lockdown, others had shown improvement.
These included construction, trade and hospitality, the finance and business sector, service industries, manufacturing and transport services.
“This is critical because these sectors are good employers, especially manufacturing and the mining sector,” he said.
Tlhoaele said business confidence had also increased.
He said this translated to the township economy and suggested the construction industry could carry the township economy.
“As we know, there has been a significant investment from a legacy point of view in townships in terms of infrastructure.
“This infrastructure can be revitalised with the partnerships of grants from the IDC [Industrial Development Corporation] and the DBSA [ Development Bank of Southern Africa] that can actually increase the supply chain opportunities for infrastructure.
“If you look at Gauteng as an example, it has over R10bn earmarked for expenditure in the housing element alone... and if we start to create light industries that can support the value chain, whether it is doors or whatever inputs there are,” he said.
Tlhoaele said available municipal and provincial land should be used to create technologically driven agro-enterprises for small-scale farms.
While the importance of supporting SMMEs was stressed, Proudly SA has painted a bleak picture of how most small businesses are battling to stay afloat.
By the 10-year mark, only 9% are still in business.
A shocking 70-80% never make it to celebrate one year in business.
On consumer spending, Tlhoaele said there had been a noticeable increase as the recovery had been strong.
“There is a pleasant surprise in terms of disposable income and it pays testimony to the fact that though there was a net employment drop of 1.5million jobs, this has been prevalent in the lower skill and income bracket.
“The middle class, as we term it, and higher income groups have seen quite a resilience and we would have seen a pleasant uptake in terms of disposable income.
“Hopefully this will be able to fuel the consumer-led demand in the next couple of quarters.”