IF THERE is one thing that Lebogang Maile has achieved in a short space of time as Gauteng MEC for Economic Development it is that he has shone a light on an otherwise neglected township economy.
The township economy that was well understood and well served by Richard Maponya of Soweto and Zitulele “KK” Combi of Gugulethu fell off the radar as democracy unhinged a plethora of opportunities and deals for black entrepreneurs in the formal economy.
The democracy birthed by 1994, spawned a new type of black entrepreneur a 25.1 percent shareholder with his sharply pointed shoes ready to kick open formal business doors that were previously closed to black entrepreneurs.
But as the skilled black entrepreneur jettisoned the much-loved accessory of gold chain necklace in the townships for cufflinks in the air-conditioned offices in town, the spending power of township residents was spotted as a lucrative opportunity by big retailers and Somali entrepreneurs.
In 2015, the township economy and its potential is ensconced in the government’s economic agenda. The concept has gained currency with our public officials and is now in vogue.
Thriving
President Jacob Zuma and Finance Minister Nhlanhla Nene seek to embroider township economic development and township enterprise creation as an important cog into the quilt-like government plan to grow the country’s economy.
Our starting point in developing thriving township economies should be about establishing structures and buildings from which these enterprises can be located. Finding suitable located and affordable working space remains a bane for township entrepreneurs.
Apartheid town planners imagined townships serving as dormitories for cheap labour, nothing like the thriving economy we are imagining today.
Affordable and suitably located working space is difficult to find in the townships as newly built shopping malls are expensive and suitable land unavailable, especially for small local producers of goods and services.
All three spheres of government can make these a reality. Minister of Economic Development Ebrahim Patel’s department can make upfront contributions for the development of these workspaces, with provincial government providing the initial subsidy to chosen entrepreneurs and the last leg of government providing serviced land at the local level.
Many small contractors tell of deteriorating marriages as the family living room is transformed into storage space for wood, plumbing equipment, tools and so on.
It need not be the case. Given the renewed focus on township economy, one thing we need to do is to develop and build suitable, affordable working space for local township entrepreneurs. Working space is a missing link for township entrepreneurs.
We have spent money in attracting foreign investors to be located in some of our industrial development zones; we have dangled tax breaks as carrots to lure international investment into these spaces. The countries success has been phenomenal as Coega has attracted over R150 billion with a growing pipeline.
The Special Economic Zones Act will also attract more investment from Atlantis in the Western Cape to Bojanala in the North West. We need to deploy the same strategy for the development of township enterprise. Through grant donations and similar tax incentives, we can ignite local enterprise creation within these townships. Fortunately, the talk is already in this direction.
Tembisa micro-enterprises and tradesmen are operating under a shade of a tree, exposed to the elements, just to make ends meet. With suitable and affordable working space some of these businesses could grow, generate more business and thereby employ more locals.
It’s time we move township entrepreneurs from the economic margins to the centre, from the periphery and squalor to proper structure that earns them dignity and decent revenue. After all, the central tenet of our post-1994 public policy is about the marginalised and poor people.
Such community physical infrastructure, as we envision it, can be used for many other purposes like education and training or arts and culture, these are also important in imbuing pride and community cohesion and moulding the sort of communities we often talk about.
Aesthetically designed and constructed workspaces will be the necessary catalyst for township revitalisation.
From the demand side, many entrepreneurs will take up the offer of a working space if rent is low and the space is secure. Many of these are tradesmen who operate from home or in open space and pay no rent.
But what will drive the demand side for the working space we envision is that the space will be low-cost and also be a selling space.
Think of a mall for small local entrepreneurs, where products are made or fixed and sold at the same space.
It’s a destination for local consumers who are seeking products or services from local tradesmen. This category of entrepreneurs actually does not have the financial wherewithal to develop their own workspaces or cannot afford to commit to long-term leases required by private landlords.
Regeneration
What can be even more beneficial is agglomeration of such enterprises in one space, as this creates competition and offers consumers choice and alternatives.
It is important to note that such workspace cannot be developed by commercial landlords as the profit motive will place an emphasis on the “exchange-value” of such buildings as opposed the “use-value” – which is our overriding concern.
Lastly, within this programme of creating local enterprise workspaces in the township is an opportunity to redefine the contours of our townships, create better spaces, develop sustainable neighbourhoods, and increase the value of property for the direct benefit of local people.
To develop these spaces is the best way of creating resilient neighbourhoods capable of regenerating into producer economies, which is a departure from current consumption-led economic activity in the townships. These spaces will assist with the national agenda of creating a diversified, sustainable, equitable and inclusive economy. Lack of suitable and affordable workspace is a major impediment to the growth of these local enterprises and the provision of affordable workspace can remove a major barrier in their growth.
In a global economic context where multinational corporations seek to locate themselves where it is most favourable for their business objectives and therefore quick to relocate whenever a “better” new location comes up, it has become important for governments to nurture small local enterprise creation.
The establishment of these working spaces will create a new generation of thriving township entrepreneurs who unlike their predecessors will be supported not neglected by government policies.
Gauteng townships should be the first place to spearhead this project. Maile will do well to blaze the trail in developing low-cost and affordable workspaces for township tradesmen and building contractors. It will be a perfect living symbol that demonstrates real commitment to sustainable development of township economy.
Thembelani Tukwayo is a founder and director of Local Enterprise Workspaces. Follow him on Twitter: @LocalventuresSA