In a debate on the township economy in the National Council of Provinces (NCOP), Members of Parliament spoke about how unemployment has allowed criminal syndicates to run rampant in township economies, which has contributed to the collapse of legitimate economic developments in South Africa’s townships.
Deputy Minister of Trade, Industry and Competition Ms Nomalungelo Gina told the NCOP that the ministry has discussed measures to unlock the full potential of the township economy in a briefing debate. “This has become the demon that affects all the provinces. This crime syndicate is something that we will try and respond to and we are going to see it getting lesser and lesser with all the efforts we are putting,” Ms Gina added.
Other challenges she identified include information asymmetry, lack of facilities for logistics and distribution, poor linkages to value chains and an uncoordinated approach on financial support. She identified the absence of a coherent policy and strategic alignment to address townships and rural economies as a challenge affecting all three spheres of government. However, the department is working on this. The reimagined industrial strategy represents a multipronged approach that emphasises partnerships with the private sector.
NCOP Chairperson Mr Amos Masondo had earlier informed the sitting that the ministerial briefing was about measures to unlock the full potential of the township economy. “The limited growth of townships-based enterprises is due to a number of challenges, like informality, registration challenges, access to funding from banking institutions and access to markets, enterprises finance agencies, lack of value chain, red tape and legislation.” Mr Masondo also highlighted abuse by metro police who often demand kick-backs as another problem.
Ms Gina said existing manufacturing is characterised by short value chains and minimal integration with external markets. “Most products sold by township enterprises are exclusively produced by large companies outside the townships.”
The Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour had earlier heard that millions have been spent on the Dimbaza Industrial Park. There are 13 such industrial parks in the country and significant efforts have been made to revive nine of these. “What we are doing there is to provide competitive industrial infrastructure to support local manufacturing and enterprises,” said Ms Gina.
Sibongile Maputi
10 November 2022
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