The city
of Tshwane Metro has a healthy approach of enhancing entrepreneurship to achieve its objectives. For the uninitiated, entrepreneurship is the identification of an opportunity and this results in the creation of a business, small or large.
The city has implemented a number of projects in its township revitalisation programme, as have many other local and provincial government entities, to address the poverty and unemployment stalking these communities.
Some are short-term projects and give participants income in the immediate term, but greater chances of employability in the long term. If this is widespread and involves most government organs, why single out Tshwane?
Well, Tshwane’s initiatives are morphing into five full-blown businesses, two of them up and running. This is true and dynamic entrepreneurship and the millions invested in these ventures are now translating into much needed jobs.
Grassroots operation
The first initiative, launched as a fully-fledged business in last year, is a community bakery owned by a local co-operative and located in Soshanguve. This is a real grassroots operation as evidenced by an excerpt from a report that project manager Lufuno Tshikovhi made to the Metro executive.
The excerpt refers to the daily deliveries made by the bakery to various clients and here goes:
* Jabulani: to Tshepo 500k co-op doing renovations at the Father Smangaliso Mkhatshwa Centre (about 15 loaves a day).
* Leretlhabetse Tuckshop inside the Father Smangaliso centre (about 15 loaves a day).
* Six tuckshops in the area (10 to 12 loaves a day per tuckshop).
* Delivery to clinics (about 20 loaves a day).
* Crèche (about 10 loaves on Mondays, Wednesdays and Fridays).
* Child and Youth Care Centre at Father Smangaliso Centre (about 120 loaves a day).
* Legae la Bana orphanage (about 24 loaves a day).
* Delivery to hospitals and clinics, including Jubilee Hospital, through the Department of Social Development account.
On average the bakery is producing 500 loaves of bread a day. The bakery has now subcontracted another local co-operative to supply it with branded plastic packages and, a local small, medium and micro enterprise (SMME) has also been appointed to provide accounting, tax and financial management and record keeping. This is becoming a virtual empowerment value chain as business procures from next door or from like, something lacking in black South Africa.
To crown it all, a financial management system has been installed and the members have also been trained in the use of the system.
Members of the co-operative are currently training three youths in baking, which should have Minister Blade Nzimande smiling broadly that skilling is also happening at grassroots.
Expansionary measures for the bakery are being investigated, which will include additional product lines, for example, confectionery goods, etc; and also increased equipment capacity and additional employees.
The other project
The other functioning project is an integrated car washing facility in Mamelodi, owned by a local co-operative, and employs 38 people.
A plastic manufacturing factory in Refilwe township in Cullinan, is to be launched this year, and a paper towel manufacturing and brickmaking facilities in Mabopane are under construction.
Tshwane executive mayor Kgosientso Ramokgopa has upped the ante and the rest of the country should go this route as such projects must predominate when we talk about black economic empowerment.
The post-1994 model based on share participation, black-white mergers or consortiums did not do that much in transforming the structure of the economy as envisaged in the Reconstruction and Development Programme.
It touched on it here and there and, unsurprisingly, produced a few successes, which we are naturally proud of.
In any case, whether we like it or not, we cannot expect the private sector to cultivate and grow its competition when its mantra is profit maximisation. Most in the private sector will do so if it means economic returns to them.
Self-interest
As Adam Smith said in 1765: self-interest is the name of the game.
Thus, when Pick n Pay links up with and helps some township spazas to grow, it is not being a Santa Claus, but the retailer is deepening its presence in the market. It is part of its competition with Checkers, Spar and several other retailers.
It is in fact an overall strategy for businesses the world over to go for the fortune at the bottom of the pyramid. The late Coimbatore Krishnarao Prahalad, a professor of business and management strategy at Michigan State University, expounded on this in his seminal 2005 book, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits.
In conclusion, and to repeat, Tshwane’s model is an exciting approach in stimulating entrepreneurship in our areas to combat unemployment and poverty.
As stated above, entrepreneurship unleashes the creativity of people whose ideas then grow into the businesses of the day. More importantly, it is these small businesses that are the midriff of the economy as they in turn also become consumers of producer goods, leading to a dynamics multiplier effect in the economy.
Very few people are aware that the strength of the US economy lies in small entities that employ two to 10 people, many of whom are driven by innovation, but make up 70 percent of the business community.
We can never go wrong if the emphasis is on entrepreneurship, and growing the small businesses that emerge.
* Dr Thami Mazwai is the special adviser to the Minister of Small Business, but writes in his personal capacity.
** The views expressed here do not necessarily reflect those of Independent Media.
BUSINESS REPORT