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Economic Development Bill to revive the township economy

A child playing near the door while his mother is busy with her hairdressing business in the Edendale township in Pietermaritzburg. Picture: Bongani Mbatha/African News Agency (ANA)

A child playing near the door while his mother is busy with her hairdressing business in the Edendale township in Pietermaritzburg. Picture: Bongani Mbatha/African News Agency (ANA)

Published Apr 11, 2022

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The Gauteng provincial legislature recently passed the Township Economic Development Bill that is designed and expected to help revive the township economy.

The bill will bring significant developments that will change the landscape of how businesses in Gauteng townships have been conducted, said the legislature. This will lead to dismantling barriers that have prevented the growth of township businesses for years as compared with upmarket neighbourhoods.

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"It will make it possible for people living in townships to start and run thriving businesses, enterprises and co-operatives in an improved enabling environment, such as the upgrading of trading zones into fully fledged business districts.

"The Gauteng Township Economic Development Bill promises to be the ‘answered prayer’ for many township-based businesses, entrepreneurs, taxi operators, real estate business and many others to enjoy equal opportunities as their counterparts in the CBDs and upmarket neighbourhoods of the province," the legislature’s statement read.

According to the provincial legislature, the bill has established procurement regulations that will enable the government and its contractors to buy from a large group of township enterprises.

Spokesperson for the Gauteng premier, Vusi Mhaga explained to IOL that the purpose of the bill is to make sure that township businesses are well revived within their areas. When asked whether the bill restricts foreign nationals from operating their businesses in the township, he said the essence of the bill is to promote companies that are South African based and "normally you need to have certain documentation in order for you to operate".

Mhaga made it clear that they are not excluding anyone, but there will be documents needed for operation. He said that the approval of the infrastructure will take place and that businesses should be licensed in order to benefit from the bill.

On vendors or informal traders, he said the idea is not to destroy their business but to create an inclusive economy. He encouraged people to buy more from the township so that the money circulates around the township.

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"Now it's a matter of fact that people should spend money in the township. Someone who is in a township running a business who needs funding, there's money that is taken to that bill," he said.

Mhaga said the bill undermines the fact that people should go work anywhere else. Instead they should wake up and work in the same area. "You can only go to Sandton because you want to go to Sandton, not because of employment," he said.

Meanwhile, Gauteng Finance and E-government MEC Nomantu Nkomo-Ralehoko during the Ntirhisano outreach programme on township economic development said the provincial government is fully committed to the development of township economies and transforming them into centres of production and commercial activity.

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Nkomo-Ralehoko said they have leveraged the provincial government’s massive procurement spend to drive meaningful economic transformation in Gauteng. “This has enabled provincial government to spend more than R20 billion procuring goods and services from township-based enterprises,” she said.

“But we believe that we must do more to further stimulate local economies, develop entrepreneurs and create much-needed jobs for people in areas where they live.

“To achieve this, we must continue to deal decisively with the monopoly structure of our economy and create space for a vibrant and thriving SME sector, including co-operatives and township enterprises,” she said.

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She urged the public to take advantage of the opportunities offered by the Township Economic Development Act to start or grow their businesses by providing goods and services to people in their area and beyond.

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