Township economies should unlock job opportunities

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Residents stand outside a spaza convienience shop in Cape Town's Imizamo Yethu township. The government should aid the myriad budding entrepreneurs who face obstacles to business development due to the lack of affordable workspaces, says the writer. Photo\: Reuters

Township and rural dwellers account for the bulk of millions of unemployed people in the country. More than a centenary since the 1913 Natives Land Act drove and dumped black families in townships and rural areas, their situation has become grimmer.

The government of the day has not attempted to change the makeup of the township and rural areas. Despite slogans to reduce poverty, unemployment and inequality, townships have largely remained the same. Every day, hopeless and desperate army of most young women and men roam the streets of townships without work.

The proliferation of shopping malls and foreign-owned spaza shops in townships, point to the government that has failed to protect the local entrepreneurs. During the heydays of apartheid, albeit illegal at the time – black people used to run successful supermarkets, general dealers, panel beating business among others.  The latest unemployment figures show the large number of the unemployed people are from the rural provinces of Eastern Cape, Mpumalanga and Free State.

After 1994, the democratic government failed to create or nurture a mass-based economy to diversify the sources of employment and job creation. There was a great reliance on formal employment focusing both on public and private sector. This contrasts with many countries in the world, where there is a strong focus on developing artisans and merchant economy. 

These countries have a multi-pronged stream of employment opportunities: public service, private sector, co-operatives, artisans and the mass merchant economy. They have a clear policy that protects the micro-economy for the benefit of the local people. In South Africa there is a glaring neglect of the village, township, dorpie and inner-city economies. There are no strong control regulations relating to migrant communities such as asylum seekers, refugees and economic migrants. There is also no structured assistance to local communities to participate in the local economy in both rural and urban areas. Our people are the spectators in their economy.

Some of the deep underlying factors behind foreign-owned shops being targeted in townships, include severe poverty, high levels of unemployment, general feeling of marginalization and government simply not coming to the party to protect the local businesses and invest in real social and economic infrastructure. 

The government must urgently take bold steps to introduce legislation that protects the local business, build township and rural economies. In Ghana, Democratic Republic of Congo, Nigeria and Zimbabwe, foreigners are by law restricted from participating in micro economy. For instance in Ghana, the government passed the Ghana Investment Promotion Center (GIPC) Act in 2013 in order to protect its people who are in the informal economy. Local township spaza shops are facing a double-edged sword. Not only are they competing against foreign shop owners, now they are being completely taken out of business by big retailers such as Shoprite and Pick n Pay. Shoprite recently announced its plans to aggressively roll out “container-shops” in townships.

If as a country we are to seriously reduce the unacceptably high unemployment rate and poverty; the National Development Plan recognizes that about 90% of jobs will come from small businesses by 2030. But this won’t happen if we don’t first protect and prioritize the locals in the micro economy. Only locals must trade in micro economy as it’s done in other countries.


Vuyolwethu Zungula is the ATM President and is a Member of Parliament.