The Department of Trade and Industry (DTI) has set-up the Township Industrial Economic Development programme as an action plan towards achieving the National Development Plan’s (NDP’s) 2030 vision of creating 11-million jobs.  The programme will establish opportunities, financial interventions and practical business implementation models across various Township regions with the hope of impacting and broadening economic participation. The DTI programme is headed by Mbofholowo Tsedu, a seasoned Economist and strategist on Trade and Industry policies.

Twenty-two million South Africans live in townships and informal settlements, accounting for 38% of working-age citizens. But these areas also account for 60% of the unemployed.

At a recent seminar to introduce the new DTI programme, Dr. Thami Mazwa, an adviser to the Minister of Small Business reflected on the potential of Townships to drive Economic growth. The biggest challenge of economic development in rural and township economies is transforming them from markets to economies.

“Markets entail a consumption-driven society. Townships have become a market for others, but there is little productive activity happening. We need to stimulate economic activity in rural and township areas,” Mazwai said.

Eighty percent (80%) of township businesses have turnovers of R70,000 a year. Formalisation and the development of small business is imperative in increasing business confidence. SMMEs are vital for economic development contributing 45% of total employment and almost 33% of national income in emerging economies.

Research done by the National Planning Commision (NPC) found the biggest obstacles in township economic development were a lack of productive activity; a limited understanding of the capability of township entrepreneurs; a limited demonstration of value-add government programmes. Poor access to finance, non-financial services, and a heavily regulated environment are some of the main impediments to a thriving Township Entrepreneurship environment.