Gauteng Committed to Boosting Township Businesses
Townships are always booming with commerce. The small (and often informal) economy (spaza shops, school lunch vendors, car washes, seamstresses and so on) forms an integral part of the foundation of our economy by supplying directly to communities. Where would any of us have been without the local veggies vendor or the security of knowing that even when your parents’ salary falls short, with all that month still left, you could go to the local spaza and get essentials on credit growing up? The informal township economy is often an undermined source of job creation. But Gauteng province government has finally taken a notice of this sector of the economy and big things are brewing.
In his state of the province address in late February 2016, Gauteng premier David Makhura addressed both the legislature and Gauteng residents. The sitting took place in one of South Africa’s most historic places: Sedibeng district, home to many tragic parts of our history, including the Sharpeville Massacre in 1960.
Makhura was especially happy to highlight a big stride that the Gauteng government had taken in 2015. During last year’s state of the province address, he introduced a 10-pillar strategy for taking Gauteng forward as an economic hub and improving living conditions. The strategy spoke of infrastructure as much as it spoke about community development and finally beginning to disrupt the geography left behind by apartheid.
It was no surprise then that during the 2016 address the 10 pillars made another appearance. Makhura was proud of the strides made in the past year, especially in the sector termed “township enterprise.”
Township enterprises form a big part of the 10-pillar strategy outlined in the 2015 Gauteng state of the nation. In the 2015 address, Makhura was emphatic about the role this branch of our economy could play in “radically transforming” the economy in Gauteng, and by extension the whole country.
“We have firmly placed the township economy revitalisation on the national agenda. We have put a policy in place and set aside resources” said Makhura in his 2016 address.
The numbers were promising and tangible:
- 6-billion procuring from township enterprises;
- The number of township enterprises benefitting from the Township Economy Revitalisation strategy grew from 400 to 1 805 in 2015 alone;
- 5 321 businesses registered on the procurement database; and
- 577 businesses from the West Rand and 250 from Sedibeng are benefiting from provincial government.
What does all this mean for township-based business?
Gauteng government wants to procure a total of 12% of its goods and services from township businesses. It’s to this end that finance MEC Barbara Creecy presented a proposal to the Gauteng Province legislature saying that all procurements under R500 000 should be set aside for township businesses.
This means if a contract is less than half a million rand, government procurement procedure will give preference to small, township businesses with the hope that this will give the township economy a boost. Not only that, if contracts are too big, the policy will also then be to facilitate collaboration between township business and bigger industry players, this way the smaller business will benefit as a subcontractor.
It’s an exciting time when you can see small businesses in your hometown begin to grow and reach the next stage. This is especially good news for those of you who mentor small business, the potential for growth has become big. This, done correctly and implemented well, is where economic transformation can begin.
How businesses get involved
It’s in the interests of informal business to become compliant and register as suppliers in the Gauteng region as township-based enterprises. Qondis’ Ishishini Lakho (fix your business) is an initiative by the Gauteng department of economic development that helps township-based business owners formalise their businesses and be registered in the province’s procurement database.
Lebogang Maile, MEC of economic development, says: “once the process of registering township enterprises across different sectors of our economy is complete, there will be no excuse for any government department or agency to overlook township businesses in procurement processes”.
Gauteng province is open for business and township-based entrepreneurs are a big part of the province’s economic future.