Big retail shopping malls and supermarkets in Gauteng townships could soon be forced by law to source some of their products and services directly from township-based producers, manufacturers and service providers. That is envisaged in the Gauteng Township Economic Development Bill, currently before the Gauteng Legislature.
Gauteng Premier David Makhura says the current regulatory environment, including municipal by-laws, punishes and disincentivises small businesses operating in townships.
Following the recent unrest, the provincial government is under pressure to not only ensure that township businesses are assisted to rebuild but that they also benefit alongside big retailers.
“This is intended to diversify SMME participation in food products, packaging and bottling, healthcare and pharmacy, household cleaning products, electrical appliances, auto components and others. So, we are looking at incubating and supporting local community-based enterprises to be able to access the shop-floor and the shelves and that adequate support is provided to these both in terms of industrialisation and commercialisation of the products and ensure that these are accessible in the shopping centres and so on,” says Gauteng Economic Development MEC Parks Tau.
What the bill proposes
The Bill seeks to introduce a framework to ensure that township-based retail malls and supermarkets – source some of their products and services from local township-based producers, service providers and manufacturers.
Municipalities may also have to develop taxi ranks into micro business districts and convert areas with high commercial densities into township-high streets.
The Bill will also establish the Gauteng Township Development Fund to support and capacitate township-based enterprises through credit or loans.
DA Member of the Provincial Legislature Makashule Gana has some reservations about the Bill in its current form.
“Our biggest issue with the Bill is that it seeks to create another entity that is going to do the same task that the Gauteng Enterprise Propeller is doing. So, we believe this is unnecessary. Secondly, there is a provision which we think is coercive in nature where it forces businesses that get contracts from the Gauteng government to source from township enterprises and we think that’s a coercive provision that at the moment we are not in support of.”
Role of the Gauteng Enterprise Propeller
Cathrine Mvelase from the Gauteng Economic Development Department says the Gauteng Township Development Fund will be managed by a newly established board that will work with the Gauteng Enterprise Propeller (GEP). The Enterprise Propeller has had many challenges including failure to recoup some of the millions it loaned to small businesses. Some of the money has never been paid back. Mvelase says the GEP is receiving attention.
“There’s a process looking at how GEP is working. Are we supposed to reconfigure it, or which direction are we taking? But we are aware that it will be overwhelmed if we add this on top of what they are doing now because things were not easy for them at that particular time. So, there is a process to try and reconfigure GEP.”
The process to get the Bill passed
Makhura says this Bill must be passed soon.
“We will pass the Township Economic Development Act as soon as possible. If it was in my hands not in the Legislature, I would pass that Bill on the 1st of August. Lawmaking is a legislative mandate, it is not an executive mandate. We will ensure that our Legislature understands that new law is a very powerful and enabling law to change how business is done in Gauteng.”
It is hoped that through this legislation, the Gauteng government will be able to support and capacitate businesses that have suffered due to the recent unrest or due to the effects of the various lockdowns that have seen many small enterprises close shop. Gauteng has already done roadshows on the Bill. The next step is public hearings before they can be passed into law.
Makhura hopes to see the Bill passed by September.