Township Business Hubs to Stimulate Local Economy
The City of Ekurhuleni has embarked on a programme to develop township hubs in support of the township economic development. The hubs are centres where small businesses are supported to engage in a fruitful economic activity.
This development is manifested by providing trading space, incubation facilities, shared industry production facilities, light manufacturing workshops, business networks platforms and mentorship or handholding sessions.
Township economy is the bedrock of the informal economy and refers to enterprises and markets based in the townships. These enterprises are operated by township entrepreneurs to meet primarily the needs within and beyond the township and therefore can be understood as ‘township enterprises’ as distinguished from those operated by entrepreneurs outside the township. Township enterprises are diverse, with high rate of informality and provide a range of goods and services to meet the needs of township communities and beyond, said Nkosindiphile Xhakaza, Member of Mayoral Committee for Finance and Economic Development in the City of Ekurhuleni
He said, “The significant participation and meaningful inclusion of the people in the township into mainstream economy of the City through their own township enterprises that are supported by the government and big business will be one of the key game changers. The townships must be self-sufficient and vibrant economic centres.”
The City’s role is to create the environment in which township enterprises can flourish. Ekurhuleni’s Department of Economic Development, with its strengthened agenda on local economic development in collaboration with national departments and agencies, will do this through a coordinated programme of action.
Enabling and supportive environment will be based on the following strategic focus areas:
- Ensuring that there is an appropriate legal and regulatory framework
The City is determined that the regulatory and administrative framework should not hinder the development and growth of township enterprises. The regulatory framework for township enterprises as it relates to licensing, permits or registration will be simplified, efficient and cost effective.
- Promoting manufacturing and productive activities
The City will develop a systematic approach to expand the productive capacity of township enterprises by identifying and promoting new opportunities for township-based production for goods and services and clustering of township enterprises as way to concentrate public and private support for the township economy.
The City recognises the productive potential of township enterprises, especially in light manufacturing, to support government programme of procuring at least 75% of locally produced goods and services as codified through the Localisation Accord. Whilst different legal forms of these enterprises will be supported, industrial cooperatives and related cooperatives will be prioritised in the selection and development of township industrial enterprises.
The focus on production and related business services will need to be supported by measures that promote the breaking down of the monopoly domination in the value chains. The City will mobilise industrial partners to ensure that they have dedicated supplier development programmes on goods and services that are consumed largely in the townships. Furthermore, the market strength (consumer population dividend) of the township should be used as an advantage to ensure that monopolies cede some of its productive activities to the township enterprises
- Economic infrastructure support and clustered enterprise development
The City will support the facilitation of clustering of enterprises within the township space, as way of promoting inter-co-operation among township enterprises, rather than cutthroat competition. This will go a long way in improving their productivity and support the process of formalisation.
Such clustered development approach will consist of a critical mass of enterprises located in geographical proximity to each other and enterprises with common features. In addition, the cluster will include enterprise support institutions. Government will support clustered enterprise development through combination of light touch and heavy touch infrastructure support.
Working with partners, the government will prioritise the infrastructure support for the development of street-level enterprise nodes for micro-enterprises; industrial parks, business parks and sectoral incubation hubs; consumer-owned and controlled retail and wholesale stores and making land available around the township space to enable township enterprises to operate.
- Promoting entrepreneurship development
Government is committed to support all types entrepreneurship – necessity and opportunity entrepreneurs, business and social entrepreneurs. Special attention will be paid to the identification of talent from township entrepreneurs for enrolment in the township economy revitalisation programmes.
- Financing and investing in the township economy
The City is committed to expanding access to finance for township enterprises and ensure greater movement towards self-financing by township enterprises.
- Promoting access to markets
Despite intense competition, with government support township enterprises have an opportunity for turning their fortunes around and grow their market within and beyond the township. They can be supported to secure community markets through formation of consumer cooperatives (incorporating spaza shops and others) that will mobilise and organise community-buying power to procure (and produce) needed goods and services at competitive prices and good quality. Government is committed to ensure that linkages are established in the supply chain by connecting township enterprises with production networks that operate on a larger scale in the mainstream economy.