Strengthening the township economy is crucial for economic development in Gauteng
Townships in South Africa, initially established as labour reserves for black, coloured and Indian populations, are a feature of the country’s urban geographic landscape and play a critical role in the national and provincial economies.
Since 1994, the democratic government has invested significantly in improving the spatial design and infrastructure of townships. These interventions have aided significantly in ameliorating living standards for the almost 22-million people living in the 523 townships across the country.
But townships are more than just sites of historical deprivation and underdevelopment. They are spaces of opportunity that can unlock the potential of the economy. This is especially the case with townships in Gauteng, the nerve centre of the national and regional economy. Townships in Gauteng are uniquely positioned to contribute to the provincial economy. They possess the necessary human resources — men, women and gender nonconforming individuals — who have the skills, capabilities and potential to innovate and create value and meaning.
Additionally, even with their limitations, townships have resources and infrastructure with untapped potential, particularly as it relates to entrepreneurial activities. The number of micro and informal businesses in South Africa is about 3.3-million, with more than half of these located in Gauteng. Significantly, almost 20% of the country’s total employment is through the township economy.
The Gauteng Provincial Treasury, the department of economic development and agencies such as the Gauteng Infrastructure Funding Agency, The Innovation Hub, Gauteng Gambling Board, Gauteng Enterprise Propeller, Gauteng Growth and Development Agency and the Gauteng Tourism Authority are hard at work ensuring that funding and technical support is available to assist township enterprises to grow and access markets.
As a department, we are already working with state-owned companies, including Airports Company South Africa (Acsa), to include the most marginalised members of society in the mainstream economy. The capital investment programme of Acsa presents opportunities for many of our youth, particularly township youth, to participate in the Aerotropolis economy.
The private sector has also stepped forward through programmes such as last-mile delivery service, global business service, and installation, repair and maintenance, to help in creating an inclusive economy in Gauteng. In addition to this, the provincial government is providing financial and technical support to township enterprises within the key sectors of the regional and local economy. These sectors include but are not limited to: manufacturing, logistics, agriculture, agro-processing, transport (the taxi economy), backyard real estate (including student accommodation), hospitality and the arts.
Interventions the government has made for Gauteng township-based small, medium and micro enterprises and informal traders have included the opportunity to apply for a share of R450m from the Township Economy Partnership Fund. Through this fund, beneficiaries have been able to get loans or a combination of a loan and a grant of up to R10m.
The transformation of the provincial economy will also depend on the reorientation of government procurement spend. This spending has historically been concentrated in a few mainstream players. In this administration, we will use this lever to give effect to the Township Economy Development Act, which provides for the promotion and development of the township economy through mechanisms such as the licensing of township enterprises.
As a government, we recognise that it is unjust for township populations to be underproductive, with minuscule economic output. It is on this basis that building manufacturing capacity of townships will be particularly prioritised. The township economy is critically important because it can unlock growth, inclusion and long-term social stability.
We will take measures to facilitate the provision of funding, as well as suitable infrastructure, including worksites, social amenities, business information centres, and common usage facilities necessary for the development of township-based enterprises. It is only through such interventions that we can facilitate job creation and entrepreneurship, which will not only alleviate the cost-of-living challenge in the province but also foster social cohesion.
Maile is the MEC of finance and economic development in Gauteng