Premier David Makhura on Monday said, during his state of the province address, that Gauteng was leading the revitalisation of the township economies, where spending on goods and services went up from a few hundred million rand to billions in just three years.
The premier said between 2014 and 2017 public procurement spend on township enterprises increased from R600 million to R17 billion.
“The number of township enterprises doing business with our government has increased from 642 in 2014 to 4 182 in 2017. We have also helped formalise many township enterprises,” says Makhura.
He said the introduction of the Township Economy Awards stimulated huge interest among businesses which compete to showcase their services and products. The awards have contributed to the growth of township businesses through financial support as well as access to markets.
“Our work, as the champion of the township economy, has given rise to a serious wave of entrepreneurial activity in the townships, especially among the youth,” says the premier.
The 2017 Ventureburn Tech Startup Survey shows that 44% of tech start-ups list Gauteng as their home, as compared to only 26% in 2015.
The survey also indicates that 53% of start-ups owned by Black young entrepreneurs are Gauteng-based while most of the Western Cape startups are owned by older white entrepreneurs.
Makhura said funding and access to markets were two of the most critical barriers facing Black start-ups and township enterprises. He said the initiative on the township stock exchange was in its final stages in partnership with the private sector.
“We have also completed a feasibility study on the establishment of a provincial state bank which will enable us to mobilise funding for SMMEs, township enterprises, women and youth businesses as well as for infrastructure development,” says Makhura.
Another major problem facing township businesses is the mushrooming of unregulated businesses owned by foreign nationals.
“This is a matter we must address boldly and decisively to enforce by-laws and trading regulations. Many township entrepreneurs are being squeezed out of businesses by this unlawfully operating foreigner-owned businesses,” said the premier.
He says he will send inspectors to townships and inner-cities where illegal businesses will be shutdown.
“The partnership we have with more than 40 corporates is opening new vistas of opportunities for township based businesses to participate in corporate supply chains, thus helping to transform these township enterprises into more sustainable businesses, without having to rely solely on government contracts,” explains the premier.
“We continue to invest in the development of cooperatives. To date, Gauteng has 14 registered co-operative banking institutions serving over 16,000 member-owners, with over R100 million in savings and R150 million in assets.
“We are working with these institutions to ensure that they become future financial providers to township enterprises.”
Makhura said in partnership with the Italian co-operative movement, the Gauteng provincial government is facilitating the formation of consumer co-operatives in the wholesale and retail sector.
He said the cooperatives will mobilise the collective buying power of 250,000 township households to purchase affordable goods at stores they own and control.
Makhura said women-led cooperatives, the majority of whom are in the townships, were producing dignity packs and school uniforms and have created more than 30,000 job opportunities.
“We remain consistent with our procurement strategy which must help drive re-industrialisation and the development of black industrialists,” says Makhura.
“Our province is determined to champion the use of public procurement budgets to stimulate local production. For example, the billions we spend on designated sectors like furniture must be used to procure goods sourced from local productive enterprises.”
He said the most departments were not complying with local content requirements.
“We will ensure that capacity is developed within government to procure goods that are produced or manufactured in this province,” says the premier.
“We have been working with private sector partners to unlock the potential of other sectors of the economy. For instance, we have agreed with the Business Process Outsourcing sector on creating 30,000 jobs in the call-centres and business support services by 2019.”
The premier said last year the sector created 6,000 new jobs.
“We have also set up joint Action Labs focusing on industries such as capital equipment and machinery, ICT, automotives, mining, food and beverages, agriculture and agro-processing.”
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