Townships must benefit from Brics relations, says Presidency minister

Government policies should be tailored to encourage investment in the township economy, minister of planning, monitoring and evaluation in the Presidency Maropene Ramokgopa said on Tuesday.  

“We must leverage on our country’s enabling legislation to capacitate, support and accelerate township economies. To harness the full potential of the township economy, it is essential to establish policies that encourage and support small businesses,” said Ramokgopa.  

Speaking during a Brics dialogue on the township economy in Orlando West, Soweto, Ramokgopa said the grouping provides a unique opportunity to develop mutually beneficial co-operation among its five member states.  

South Africa will chair the much-anticipated 15th edition of the summit from August 22 to 24 at the Sandton Convention Centre in Johannesburg.  

The department of small business development and the national planning commission are collaborating with President Cyril Ramaphosa’s red tape team to develop an agenda for regulatory SMME reform in South Africa aimed at improving the business-enabling environment. 

The minister said limited access to funding and lack of collateral hinder the growth potential of these businesses. “Therefore, it is crucial for financial institutions and policymakers to devise innovative ways to provide financial support to budding township entrepreneurs.”  

Infrastructure and basic services are inadequate in many townships and the inconsistent electricity supply, inadequate sanitation, increasing crime rates and poor road networks hamper the efficiency of businesses and can deter potential investors.

Ramokgopa said South Africa continues to use its voice in Brics to promote and contribute to sustainable growth and development. 

“This is done through increased intra-Brics trade, investment, tourism, capacity building and skills development, among others.”   

On the township economy, Ramokgopa said the aim is to take townships to Brics and vice versa.  

“Our nation’s townships are marred with historical inequalities and social challenges that have had far-reaching impacts on the livelihoods of our people and overall development.  

“Our townships, and Soweto in particular, hold a significant place in our history, representing the enduring legacy of apartheid and segregation.  

“Our townships were created to ensure the stark inequalities in access to basic services, education and economic opportunities exist.”

However, she said in recent decades townships have evolved into vibrant centres of entrepreneurship, cultural preservation, resilience and innovation.  

“This has led to the emergence of the township economy, which demonstrates the power of harnessing local potential to drive national growth, inclusivity and sustainable development.”  

In recent years, Ramokgopa said the township economy has become a focal point for local economic development, fostering entrepreneurship and community empowerment.  

“Small businesses have emerged, ranging from hair salons to grocery stores, tourism establishments and tech start-ups to arts and crafts workshops.”  

These enterprises generate income and create employment opportunities, she said, adding that despite the important contributions and potential of the township economy, it faces persistent challenges. 

Local economic development should be decentralised by devolving mandates and competencies to local municipalities, she said.  

“This will enable them to deliver business development services in partnership with provincial and national institutions, which are mandated to maintain an aggregated institutional system. Partnerships with existing institutions should be established to provide better infrastructure and technology development.”  

An intervention targeting local municipalities should address bulk infrastructure, small business facilities, technology transfer and other areas, she said. Addressing these infrastructural and social deficiencies requires a collaborative effort involving both public and private stakeholders.  

Ramokgopa said South Africa only has seven years to change the trajectory on the township economies by accelerating existing mechanisms to strengthen local economic development as envisioned in the country’s Economic Reconstruction and Recovery Plan.  

A multipronged approach was essential, she said.  

“Education and skills development must be prioritised. Providing quality education and training equips township residents with the knowledge and skills necessary to build, expand and explore new economic sectors.”  

Investing in a skilled workforce and partnerships between the government, private sector, and civil society are critical, she said. 

The Brics framework should consider establishing a township economic forum, she said. “This platform would be a repository of best practices, case studies and innovative policies, fostering cross-learning and co-operation among Brics member countries.”

Investing in township projects would accelerate the pace of development and upliftment, she added. 

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