A township and rural economy summit will be held in June to discuss issues affecting rural economy development, Department of Trade and Industry (DTI) Rural and Township Industrial Economic Development programme director Mbofholowo Tsedu revealed on Wednesday.
“By the end of the year, we want a clear and informed action programme moving forward in achieving the National Development Plan’s (NDP’s) 2030 vision of creating 11-million jobs,” he stated during a seminar on the DTI’s Rural and Township Industrial Economic Development programme.
The seminar, held in Pretoria, served as a platform to deliberate on topical issues that impact on the rural and township economy, which Trade and Industry Minister Dr Rob Davies said is struggling, especially from an industrialisation perspective.
The seminar sought to point out opportunities, challenges, alternate financial interventions and practical business implementation models.
“The discussions and ideas from the seminar will assist us a great deal in enriching the department’s Rural and Township Industrial Economic Development programme which we are in the process of developing. This will be our flagship programme characterised by a drive to broaden economic participation in the lagging regions,” the Minister said.
Meanwhile, Indeyo Investments chairperson Dr Thamsanqa Mazwai, delivering a presentation on behalf of the National Planning Commission (NPC), lamented that 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,” he said.
Mazwai added that small, medium-sized and microenterprises (SMMEs) are vital for economic development by generating employment and fostering growth. “SMMEs contribute 45% of total employment and almost 33% of national income in emerging economies.”
However, challenges that affect or restrict SMME development include South Africa having the “microwave approach” by giving small companies funding, education and training, and expecting the business to be a sustainable success.
Mazwai said this approach does not consider the three legs of entrepreneurship – person, environment and institutional framework.
The NDP 2030 vision of creating 11-million jobs requires that 90% of those jobs should come from the small business sector.
Research done by the NPC last year across seven provinces in townships including Diepsloot, Khayelitsha, Mamelodi, Hluhuwe and Thohoyandou, 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; not considering peculiar needs; and a lack of coherence.
Mazwai explained that some of these issues stem from government and some stem from the general mindset in the township, which is often a victim and dependence mentality – the complete opposite of entrepreneurship – that is also prohibitive.
Meanwhile, other speakers attending the seminar shared business models for the township economy and discussed the private sector as an enabler and innovation-led interventions for the township economy.
Among these were representatives from research organisation, the Council for Scientific and Industrial Research, which uses science and technology solutions to address poverty and underdevelopment in South Africa, including through its Enterprise Creation for Development (ECD) programme, which is geographically organised in four regional offices to aid sectors such as manufacturing, agroprocessing, the built environment, the green economy and information and communication technologies.
The ECD programme includes an enterprise development process (from feasibility phase), financial modelling and an incubator development process. These programmes are vital for rural and township economy growth.